Full text of Budget in Brief : Fiscal Year 1967
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THE
BUDGET
IN BRIEF
FISCAL YEAR 1 9 6 7
E X E C U T I V E O F F I C E OF T H E P R E S I D E N T ' B U R E A U OF T H E B U D G E T
THE GOVERNMENT DOLLAR
Administrative Budget and Trust Funds
Where it goes . . .
Fixed Interest Charges
Social Security
Space
and Other Trust Funds
Agriculture
2i
International
Vietnam
34
Fiscal Y e a r 1 9 6 7 Estimate
For sale by the Superintendent of Documents. U.S. Government Printing Office
Washington, D.C., 20402 - Price 35 cents
FROM THE PRESIDENT'S BUDGET MESSAGE
We cannot fight for peace and freedom in Vietnam, while sacrificing individual dignity and opportunity at home. For it would be a hollow victory if
our pursuit of world peace were carried out at the
expense of domestic progress.
Yet we must also recognize that a truly Great Society looks beyond its own borders. The freedom,
health, and prosperity of all mankind are its proper
concern.
The struggle in Vietnam must be supported. The
advance toward a Great Society at home must continue unabated.
This budget provides the means for both these
goals.
I urge the support of Congress and all Americans
for its principles and its programs.
AWd 1
JANUARY 24, 1966.
1
GLOSSARY
Fiscal year.—Year running from July i to June 30 and designated by
the calendar year in which it ends.
N e w obligational authority.—Congressional approval to obligate the
Federal Government to pay out money. While usually voted each year, it
may be made permanent authority, as with interest on the public debt.
Appropriations are the most common form of obligational authority.
Obligations.—Commitments made to pay out money—as distinct from
the actual payment for the product or service. They must be made within
the amounts authorized by Congress and are incurred, for example, when
personnel earn salaries, purchasing contracts are made, or loan agreements
are signed.
Expenditures.—Consist generally of checks issued and cash paid. The
transactions of business-type activities which generate their own receipts
(such as the Post Office) are normally recorded as net expenditures—that
is, disbursements less receipts. If receipts exceed disbursements, the result
is shown as a negative expenditure.
Administrative budget.—Provides the framework for requesting and
approving authority to obligate funds owned by the Federal Government.
Trust funds.—Money held by the Federal Government in trust for
specified purposes. These funds are not included in the administrative
budget.
Consolidated cash statement.—Combines the administrative budget
with the trust funds, showing the flow of cash between the Government
and the public. This statement is often referred to as Receipts from and
Payments to the Public.
Gross national product.—Total market value of all goods and services
that the Nation produces in a single year.
CONTENTS
I N T R O D U C T I O N on page 4.
Page
P A R T 1. THE BUDGET: A MULTIPURPOSE TOOL
A Program To Meet National Needs
Budget highlights
Changing Federal programs
A Program for Better Management
Cost reduction
A Program for Growth and Prosperity
Taxes and the economy
Expenditures and the economy
The balance of payments
The Budget in Perspective
Growing public responsibilities
Public use of the Nation's output and labor force
Aid to State and local governments
Public debt
Investment
PART 2. THE BUDGET PROGRAM BY FUNCTION
National defense
International affairs and
finance
Space research and technology
Agriculture and agricultural resources
Natural resources
Commerce and transportation
Housing and community development
Health, labor, and welfare
Education
Veterans benefits and services
General government
Interest
P A R T 3. BUDGET FACTS A N D FIGURES
Measures of Federal
finances
The budget process
EXCERPTS FROM THE PRESIDENT'S B U D G E T
MESSAGE
TABLES O N THE BUDGET
5
5
6
8
9
10
11
12
14
15
16
16
18
20
21
23
25
26
29
32
34
36
38
41
43
47
50
52
53
55
56
61
64
66
Note.—All years referred to are fiscal years, unless otherwise noted. Detail In the
tables, text, and charts of this booklet may not add to the totals because of rounding.
3
INTRODUCTION
The 1967 budget, like its predecessors, has several important uses.
It is the culmination of many months of executive planning and
evaluation. As such, it embodies the President's plan for meeting
national needs. The budget is also an important instrument of economic policy, since Government taxes and expenditures influence the
spending decisions of individuals and businesses. It is a financial report
to Congress and to the people on how the Federal Government is
spending the funds entrusted to it. At the same time, the budget is
also a request for legislation, since congressional sanction is needed
before the proposals can be translated into action. Finally, the budget
brings together the facts and figures needed for the discussion, refinement, and declaration of many of our national goals—first within the
executive branch and finally in the Congress.
Congress begins its consideration shortly after receiving the budget
in January, about 6 months before the start of the fiscal year. This
is an arduous task, encompassing thousands of pages of supporting
material. Congress then passes judgment on the various revenue
and spending proposals. Once approval is granted, Federal agencies
undertake the programs which have been authorized. The Treasury,
as the Government's central receiving and disbursing agent, collccts
the taxes and pays the agencies' bills.
Two different sets of figures are often discussed in connection with
the budget—the administrative budget and consolidated cash payments and receipts. The administrative budget is the one most often
referred to in congressional discussions and in the press. The budget
totals on a consolidated cash basis are more comprehensive since they
include expenditures and receipts in both the administrative budget
and the trust funds.
This booklet discusses the budget program for fiscal year 1967, the
relationship between the budget and the national economy, and the
budget process—from formulation, through congressional enactment,
to final agency spending.
4
PARTI
THE BUDGET: A MULTIPURPOSE TOOL
The Federal budget serves many purposes. Consequently, it must
be examined from several points of view. Individual budget programs have the basic purpose of meeting the pressing national needs
of a growing and dynamic society. The budget is also an essential
instrument for more efficient administration of the Government's
programs. Beyond these more traditional roles, the overall relationship of total budget payments and receipts constitutes an important
factor in the achievement of an expanding and healthy economy
through its influence on private investors and consumers.
A PROGRAM TO MEET NATIONAL NEEDS
The programs in the 1967 budget reflect a balanced effort to meet
our heavy defense and foreign policy responsibilities and to continue
progress toward essential domestic objectives. The overall revenue
and expenditure totals in the budget are designed to accomplish these
objectives while maintaining steady economic growth.
Among the prime responsibilities of our government is defense
against aggression. Today we are incurring heavy costs both in actual
combat against those who would destroy the independence of South
Vietnam, and in maintaining and improving those forces needed to
deter potential aggressors elsewhere. As citizens in a world of shrinking distances, our own destinies are bound up with the fate of other
nations. Recognizing this fact, we are providing economic and military assistance to the developing nations of the free world to safeguard
their independence and to assist them in helping themselves to build
strong, healthy economies.
5
This budget presents a responsible fiscal program. It accommodates our foreign and domestic responsibilities in an environment of strong but noninftationary economic growth.—From the
President's budget message, January 24,1966.
The quickening tempo of social and economic change places mounting demands on the domestic programs of the Federal Government.
The rapid growth in population, higher standards of living, and the
expanding productive power of our society create new problems—
problems of urban decay and congestion, of air and water pollution, of
people and regions left behind in the general economic advance, of
rising aspirations for a fuller existence. The Congress in 1965 enacted
a series of important new measures to meet these objectives. The
budget provides substantial funds to move forward with the new programs. But because of the mounting cost of defending freedom in
Southeast Asia and the necessity to guard against inflation at home,
the rate of advance is less than would otherwise have been the case.
Even more importantly the budget reflects an especially careful review
of older and lower priority programs, many of which have been reduced or modified to lessen their demand for Federal resources.
Budget
Highlights
A detailed discussion of the budget program is presented in part 2.
In summary, that program will enable us:
• To meet our international commitments with unmistakable resolve—by constantly improving our powerful national defenses, by
helping South Vietnam defend its freedom, and by providing needed
assistance to less developed nations;
• To promote balanced, inflation-free prosperity—by insuring that
revenues and expenditures continue to be appropriate to the needs
of the economy;
• To continue the attack on poverty—by further strikes at its root
causes—ignorance, disease, unemployment, and discrimination.
6
• To enrich the quality of American life—by improving the education, health, and cultural opportunities open to our citizens;
• To create an environment worthy of a strong and prosperous
Nation—by enhancing its natural beauty, purifying its air and water,
and improving its housing and transportation facilities;
• To provide for future generations the bounties of rich natural
resources—by encouraging forward-looking conservation practices
and by harnessing our unsurpassed food production techniques to
better serve national objectives; and
• To meet our foreign and domestic goals efficiently—by improving
the management of Federal programs, cutting the cost of operations,
and pruning lower priority activities.
To meet these goals an estimated $145.0 billion of Federal payments
to the public will be required in 1967. This is an increase of $10.0
billion over the comparable amount in 1966. Estimated cash receipts
of $145.5 billion will yield a cash surplus of about $500 million in 1967
compared with a deficit of $6.9 billion in 1966.
FEDERAL R E C E I P T S F R O M A N D P A Y M E N T S T O T H E
PUBLIC
[Fiscal years. In billions]
Source
1965
actual
1966
estimate
1967
estimate
FEDERAL R E C E I P T S
Administrative budget receipts
Trust fund receipts
Deduct: Intragovernmental transactions and other adjustments
Total receipts from the public
$93.1
31.0
$100.0
33.5
$111.0
41.6
4.4
5.4
7.1
119.7
128.2
145.5
96.5
29.6
106.4
33.8
112.8
37.9
3.7
5.2
5.7
122.4
135.0
145.0
-2.7
-6.9
+0.5
FEDERAL P A Y M E N T S
Administrative budget expenditures
Trust fund expenditures
Deduct: Intragovernmental transactions and other adjustments
Total payments to the public
Excess of receipts (
) or payments ( — )
7
Changing
Federal
Programs
A dynamic world requires adapting budget programs to new or
changing needs. In response to this requirement, there will be significant changes in 1967 in the spending for individual programs.
Briefly the major components of total payments 1 in 1967 will be:
• I79.1 billion for national defense, veterans and interest. This is
55% of total payments, representing the costs of past wars and
current preparedness.
• $37.9 billion for the self-financed social security, highway and other
trust funds, accounting for 26% of total payments. More than
85% of these funds finance Great Society programs.
• $12.9 billion for the other essential Great Society programs in the
fields of health, labor, welfare, education, housing and community
development. This represents 9% of total payments and is the most
rapidly growing segment of the budget.
• $15.1 billion for all other Federal programs—about 10% of total
payments.
Composition of Federal Payments
Jocjjci!! Seouffiify swwfl
Other THIS* Fuwwdli
Total Payments
i d Interest
1
T h e sum of the following figures exceeds the net total of Federal payments to the public,
largely because some transactions, which take place wholly between Government agencies, have
not been deducted.
8
While one important aspect of the budget is the composition of
total payments, another important element is how it changes from
year to year. The chart below shows the relative growth in selected
portions of total civilian payments (excluding national defense) since
1965.
Changes in Civilian Payments 1 9 6 5 - 1 9 6 7
Health, Labor, Education, Housing and Community
Development,
E c o n o m i c O p p o r t u n i t y Program, a n d A i d to the N e e d y
irams
1967
Estimate
A PROGRAM FOR BETTER MANAGEMENT
The Federal budget is an important vehicle for both devising
and managing Government programs. Through the budget process, the President performs the difficult tasks of assigning priorities—
deferring, restricting, or rejecting some programs to provide funds
for more urgent tasks. The need for such priorities was particularly
acute this year. Some programs will rise less than would have been
the case in more normal times. Others, of lower priority, have been
reduced.
T o assist him in his decision-making role, the President has instituted
a new Planning-Programing-Budgeting system in the major agencies
of the Government and encouraged other agencies to apply its principles wherever practical. First, the appropriate goals or objectives
9
200-400 O-66-2
of the various Government agencies will be carefully identified in the
light of national needs, and explicitly stated in terms of programs and
alternatives designed to meet those needs. Next, wherever possible,
ways of measuring output or performance will be devised for each of
the programs. Finally, the accomplishments and costs associated with
each existing or proposed program will be evaluated and compared in
as precise and concrete terms as possible. This step is crucial. For
essential to good government is the ability of agency heads, the President, and Congress to choose among carefully formulated and compared alternatives. To be useful for decision-making, the analysis
of performance and costs must be complete. They should include,
for example, not only the costs of building a hospital but the continuing costs of operating and maintaining it once built. Moreover, the
future should be taken into account by assembling the costs and results
of developing and operating the system for a relevant time period—for
example, 5 years.
The Planning-Programing-Budgeting system will be an important
tool for insuring that Federal programs are undertaken only in response to real needs, that these programs are the most efficient means
of meeting these needs, and that approved programs are carried out in
the most economical way.
Cost Reduction
A significant byproduct of more systematic means of making
program decisions will be broader opportunities for cost savings—
savings which can be transferred to high priority Government activities,
or reflected in future tax reductions. The fruits of sound management
in Government are striking:
• The Department of Defense built its cost savings up to an annual
level of $4.8 billion by 1965, compared with 1961. Other measures
being taken will ultimately raise the annual value of these savings
to more than $6 billion.
* The civilian cost reduction program will reduce the cost of operating the Government by about $1 billion in each of the years 1966
and 1967.
For example, NASA saved $88 million in procurement mainly by
converting from reimbursement to incentive contracts; the Social
Security Administration is saving $12 million by further automating
the computation of benefits; and the Post Office will save an estimated
$23 million as a result of increased productivity in processing mail.
10
Efficiency and economy are promoted not only by cost reduction but
also by timely reorganization and the adoption of modern management systems, A number of important reorganizations were accomplished in the past year, and further changes will be recommended by
the President. Additional emphasis will be given to the improvement of productivity in Government operations and to the management of automatic data processing systems.
These are only a few of the many efforts underway to give greater
effect to every tax dollar. Efficient and economical Government use
of resources is essential to effective national policy, to continued prosperity, and to maintenance of the public trust.
A PROGRAM FOR GROWTH A N D PROSPERITY
Calendar year 1966 marks the twentieth anniversary of the Employment Act of 1946—which charged the Federal Government with
specific responsibility for promoting "maximum employment, production, and purchasing power." This declaration explicitly recognized, two decades ago, that the revenue and expenditure policies of
the Government have a major influence on the health and growth
of the Nation's economy. The President uses the budget as the principal vehicle to propose policies and programs to meet the Government's economic responsibilities.
The past 5 years of unprecedented prosperity are due in large part
to the attention given in recent budgets to the objectives of the Employment Act. For example:
6
Employment increased by nearly 5% million new iobs during the
period—a rate of growth one-third greater than during the preceding 5 years. Unemployment fell from a high of almost 7% to
just over 4% today.
* Production in the Nation rose an average of 5.5% each year—compared to less than 2.5% per year for the earlier 5-year period.
• Purchasing power has been protected against erosion. Prices
paid by consumers inched upward at an annual average of about
1.3%—a rate one-third slower than that of the preceding 5 years.
11
Our current success in nearly closing the gap between actual production, and that of which our economy is capable, requires that particularly careful attention be given to prices. The 1967 budget was drawn
up in full light of all the factors affecting the economy; its programs
are designed to meet the Nation's needs without sacrificing hardearned gains to inflation.
Taxes and the
Economy
Among the major forces at work in achieving this prosperous half
decade have been the Government's tax policies—influencing the
dollars available for consumers to spend and for businesses to invest.
In the past 3 years, taxes on individual and corporate incomes have
been cut substantially, many excise taxes have been reduced or eliminated, and several other investment incentives have been adopted.
In each instance, the size and nature of the specific tax policy were
carefully geared to the needs of the economy.
In the early part of the 1960's the economy was lagging behind its
potential. Unemployment was high and much industrial plant capacity was idle. By increasing the purchasing power of consumers and
business firms, the tax cuts promoted strong and continuing economic
growth, with a consequent reduction in unemployment and unused
plant capacity.
While tax revenues have an effect on the economy, the economy
has an equally important effect on revenues. Since the major Federal
taxes are levied as a percentage of income, revenues depend as much
on the level of the Nation's income as they do on the tax rates. Thus,
despite reduced tax rates, revenues have risen substantially throughout
the period as the economic base has expanded.
A growing economy provides rising Federal revenues and expanding economic resources both for meeting our military and
international commitments and for moving closer to our Great
Society goals. But this does not relieve us of the obligation to
weigh expenditure decisions carefully and carry them out efficiently. Inflation need not be the price of social progress; nor
should it be a cost of defending freedom.—From the President's
budget message, January 24,1966.
12
FEDERAL R E C E I P T S F R O M T H E
PUBLIC
[Fiscal years. In billions]
Source
1965
actual
1966
estimate
1967
estimate
ADMINISTRATIVE BUDGET RECEIPTS
Individual income taxes
Corporation income taxes
Excise taxes
Other
Total, administrative budget receipts
$48.8
25.5
10.9
7.9
S51.4
29.7
9.2
9.7
$56.2
34.4
8.9
11.5
93.1
100.0
111.0
16.9
3.1
3.7
7. 4
18.8
2.9
3.9
8.0
24.3
2.9
4.4
10.0
31.0
33.5
41.6
TRUST FUND RECEIPTS
Social security receipts (employment taxes)
Deposits by States, unemployment insurance
Gasoline and other highway excise taxes
Other
Total, trust fund receipts
Deduct: Intragovernmental transactions and other adjustments
Total, receipts from the public
4.4
119.7
5.4
128.2
7.1
145.5
The economic situation at the present time is quite different than
it has been in recent years. The unemployment rate has been substantially reduced. Much of the earlier years' idle plant capacity has been
absorbed by higher output. Because of the costs of meeting our responsibilities in Vietnam, the Federal Government's use of manpower
and industrial resources will rise more this year than in other recent
years. Under these conditions, fiscal policy must emphasize restraint
rather than stimulation.
The budget recommends several tax measures to increase revenues.
Without changing the amount of taxes corporations pay, the Government proposes to speed up the collection of those taxes, so that they are
paid closer in time to when income is earned. Similarly, reforms in
the withholding system on personal taxes are proposed, which will also
bring more individuals closer to a "pay-as-you-earn" position. Finally,
it is proposed to defer the reductions in excise taxes on telephone service
and automobiles which were scheduled for January i, 1966, and later
years. Combined, these measures will add $1.2 billion to Federal
revenues in 1966 and $4.8 billion in 1967.
13
In addition to these tax changes, a payroll tax and wage base increase to finance higher social security benefits and the new hospital
insurance programs were enacted by the Congress last year and took
effect on January i, 1966; another payroll tax increase is scheduled for
January 1, 1967. These increases will raise cash budget receipts by
$1.5 billion in 1966 and $6,2 billion in 1967.
Federal Receipts
$ Billions
150125-
100
50
0
1942
Fiscal Years
1967
1945
Estimate
In fairness to the taxpayers and to encourage efficient use of Government-financed transportation facilities, a number of new or increased
user charges are being proposed this year. These charges are designed
to assure that travelers and shippers who obtain special benefits from
Government air, land, and water transportation programs pay an
appropriate share of the costs. Increases are essential for completing
the Interstate Highway System on a pay-as-you-go basis and for financing certain additional services to highway users.
Expenditures
and the
Economy
Just as Federal taxes affect the Nation's economy, so also do Federal
expenditures.
Considerable attention has been given this year, as in
the past, to carefully weighing the needs of the Nation against what
it can afford to provide.
14
A better understanding of the economic significance of Federal
transactions can be obtained by examining a special set of figures,
summarized in the budget, called the Federal sector of the national
income accounts. These figures measure how Federal Government
finances affect the current flow of income and output in the economy.
(A description of these accounts is contained in part 3 of this booklet.)
On a national income basis, outlays of the Federal Government will
total $142.7 billion in 1967. Of this total, $74.4 billion will be spent directly by the Federal Government to purchase goods and services to
carry out its programs—mainly for national defense. The remainder
does not represent direct Federal purchases, but mainly payments to
individuals and State and local governments who, in turn, use the
funds for their own purposes. Examples are veterans' pensions, social
security benefits, and grants to State and local governments for highway construction, public assistance, fighting poverty, and other important programs.
While 1966 expnditures exceed revenues by $2.2 billion on a national income basis, the 1967 deficit on the same basis has been cut
substantially to only $0.5 billion. This reflects the movement toward
greater economic restraint on the part of the Federal Government.
The Balance of
Payments
Our foreign trade position, as measured by the balance of payments,
has benefited from economic growth and relative price stability. The
basic strength of our position is shown by the substantial excess of
our exports of goods and services over our imports—despite a temporary reduction in this excess in 1965. Voluntary efforts to curb
the flow of U.S. private investment overseas, coupled with strict controls over Government spending abroad, are largely responsible for
the substantial improvement in our balance-of-payments position in
calendar year 1965. In 1965, the payments deficit was cut in half from
the 1964 amount, to about $1.3 billion.
In the long run, a healthy balance of payments depends on a healthy
economy. Steady and balanced growth in an inflation-free economy
will bring increased domestic investment and greater productivity
with stable prices. These, in turn, will further improve our competitive position abroad and strengthen our balance of payments.
15
THE BUDGET IN PERSPECTIVE
The Federal Government provides a wide range of public services—from national defense to control of water pollution. The pattern
and quantity of public services provided at any given time are strongly
influenced by changing social and economic forces. Some of these
relationships are discussed below.
Growing Public
Responsibilities
The accelerating pace of growth and change in recent years has led
to expanding requirements for services from the Federal Government,
and for Federal assistance to State and local governments in meeting
the needs of their citizens.
Over the last decade alone, population increased by nearly 30
million people. Changes in the age distribution and location of our
people increase public service demands over and above what this
total growth, alone, would require.
First, population has increased markedly in age groups under 18
or over 65 which have greater need for such public services as education or social security. These groups have increased by more than
25% over the past 10 years and now constitute over 45% of our people.
Second, the number of people living in urban areas has increased in
this same decade more than 30%, and now makes up about 70% of the
population.
The quantitative changes outlined above paint only part of the picture of growing Federal responsibilities. Our society has changed
qualitatively, as well. The standard of living has risen dramatically.
One measure of this increase is real disposable income per capita,
which is simply the amount of money available for private spending
after adjustment for taxes, price increases, and population growth.
Using this measure, the Nation's standard of living rose nearly 25%
over the past decade. As our level of living increases we not only desire
better private goods and services, but we demand and can afford better
public services as well. Just as old automobiles or washing machines
have little appeal, outdated public health, substandard education, or
ineffective pollution control practices are also unacceptable.
The efforts to eliminate poverty, strengthen education in poorer
areas, and develop lagging regions of the country, all demonstrate an
16
increasingly acute social awareness—a force which not only demands
better public services, but wants them equally for all.
The soaring workloads of Federal agencies stem directly from these
steadily increasing requirements for more and better public services.
For example, between 19=57 and 1967:
• The number of active urban renewal projects will have risen by
3°5%* Visitors to our national parks will have increased by more than
110%.
• The number of occupied public housing units will have grown
by nearly 70%.
* Enrollees in vocational education programs will have risen by
more than 80%.
Selected Program Trends
F A A Operations
Social Security
Millions
Millions
OASDI
Beneficiaries
. T o t a l Landings and
Talseoffs Controlled
Bureau of the Mint
National Parks and Forests
Billions
15 —
Millions
0— 300
Visitors
1956
58
Fiscal Years • ;
60
62
64
66 67 1956
Estimate
58
60
62
64
66 67
Estimate
i7
200-400 O - 66 - 3
Public
Use of the Nation's
Output
and Labor
Force
The reasons for growth in Federal spending are clear. The relative
size of the increase, however, requires some comparisons to place it in
proper perspective. The national economy and State and local government activities serve as useful measuring rods since they are subject
to demands similar to those affecting the Federal Government.
For more than a decade, Federal cash payments have constituted a
remarkably stable proportion of gross national product ( G N P ) —
approximately one-fifth. This relationship will remain virtually unaltered in 1967, with Federal payments estimated to be 19% of G N P .
Considering only the administrative budget, which excludes the
rapidly growing trust funds, the ratio of Federal spending to G N P
will be 1 5 % in 1967, the second lowest ratio in 15 years. Only 1965
bears a smaller relationship to G N P . If the costs of Vietnam programs are excluded, regular Federal expenditures drop to 1 4 % of G N P
in 1967—lower than any recent year.
However, both administrative budget and cash figures do not fully
measure the economic impact of Federal spending largely because they
include transactions which do not directly affect current income or output (as explained on page 59 of this booklet). The national income
18
accounts make these and other necessary adjustments. On this basis,
the major classifications of Federal expenditures are: purchases of
goods and services, transfer payments, and grants-in-aid to State and
local governments.
Federal purchases of goods and services represent the amount of
national production actually used by the Federal Government.
In 1957, Federal purchases of goods and services were 1 1 % of G N P ;
in 1967, they are estimated to decline to about 10%. When all
defense programs are omitted, Federal use of the national output for
civilian purposes in 1967 constitutes less than 3% of G N P .
T h e N a t i o n ' s Real O u t p u t :
Public a n d P r i v a t e D e m a n d
Index
350
1942 = 100
State and local governments, in trying to meet their rapidly growing
responsibilities, will have increased their purchases of current output by
about 125% in the past 10 years—much more rapidly than the Federal
Government. A part of this increase has been financed by Federal
grant-in-aid programs. Private spending can also be expected to increase by an impressive 70% during the period. The accompanying
chart shows the relative growth in spending by the major sectors of
19
the economy since 1942. (The amounts are in real terms, which means
that the effects of price increases have been removed.)
The same trends are evident for Government employment. While
Federal civilian employment is expected to have increased only 12.9%
since 1957, the total labor force will have increased about 15%, and the
population more than 15%. As a result, Federal civilian employment
in 1967 will constitute a smaller proportion of total civilian employment (less than 4%) and of total population (less than 2%) than a
decade earlier. In the same period, State and local governments have
found it necessary to increase employment by about 60% to meet the
demands facing them. Federal employment, therefore, is also a declining portion of all governmental employment—24% estimated for
1967 compared to 3 1 % in 1957.
Aid to State and Local
Governments
The strain on State and local government resources, implied by the
expenditure and employment growth cited above, create an additional responsibility for the Federal Government—to assist these governments in meeting the burgeoning needs of their people. Federal
expenditures to aid State and local governments (including loans
and shared revenue as well as grants) will have grown from about $4.1
billion in 1957 to an estimated $14.6 billion in 1967—an increase of
256%.
These aids cover a wide variety of activities ranging from airport
construction to urban renewal. In 1967, about half of the funds
will be spent for highways and public assistance.
Federal aids to State and local governments have taken on added
significance in the last decade. As a proportion of total Federal cash
payments to the public, these aid expenditures rose from 5% in 1957
to about 10% currently. Federal funds have also become an important source of revenue for State and local governments, constituting
about 15% of total State-local general revenue in recent years. Many of
the newer Federal programs—in health, education, housing, and community development—involve the Federal Government in cooperative
ventures with State and local governments in communities across the
Nation.
20
Federal A i d to State a n d L o c a l Governments
Budget
and
Trust
Fund
Expenditures
[rams
.onstruction
|
E(ti mote
Federal expenditures for these purposes insure that many essential
public needs are met at the local level, thus maintaining a workable
cooperative federalism.
Public
Debt
The public debt of the Federal Government was incurred primarily
to defend the cause of freedom in World War II. About two-thirds of
the present debt level was incurred in the 8-year period from 1939 to
1947. In 1939, the debt was $45.9 billion. By 1947, it had risen almost
sixfold to $258.4 billion. At the end of 1966, it is expected to be $320.0
billion.
While the debt will increase $1.7 billion in 1967, to $321.7 billion,
it will continue to decline in relation to the size of our economy. As
a percentage of the gross national product, the publie debt has declined
sharply since 1947—from 1 1 8 % to less than 46% today. As the economy continues to expand, the public debt should become a continually
smaller proportion of gross national product.
Moreover, Federal debt has grown much more slowly than other
kinds of debt. The national debt has grown only 25% since 1947,
21
»A
134
Percent
Public D e b t
125
as a Percent of Gross N a t i o n a l Product
e
J
1X1
a®
,00-
75 -
7?
iff
fsiSRSS^flSSiSSsiB
SsflSff/^llpftJSKsSft S i l l
tiSth
in
50 -
58
43
•
BHHRBBHH
25 -
, .
0
i
i. } f
1942
Fiscal Yeara
>945
i
i
i
.
. | |
. •
•mt i ! $
f95G
1^111
mmmmimmms
1955
1
I960
f
1
I 1
1965
u ,vi
1967
"Estimate
Investment
In assessing financial position, it is important to consider assets as
well as liabilities. While the Federal Government does not budget
separately for capital investments and current o{>erating expenses, data
are made available in the budget to identify expenditures which are
of an investment nature. These expenditures add to our supply of
assets and produce benefits which extend over many years. Examples are the construction of highways and other public works, loans
to finance housing, and grants to build hospitals. In 1967, net Federal investment expenditures, other than for defense and space, will
total 8.4 billion. This total would be substantially higher were it
not for the sale of almost $5 billion of financial assets, as a result of
increased efforts to substitute private credit for Federal lending programs wherever appropriate.
Outlays for other developmental purposes are also grouped and
shown separately, since they yield benefits of increased productivity
over many years. These will total $7.4 billion in 1967 for such human
development programs as education, training, and research.
Net expenditures for investment and for other developmental purposes in 1967 will constitute 1 1 % of total Federal payments and about
20% of outlays excluding defense and space.
23
200-400 0-66-4
Our military needs are heavy. But they have not led us
to a short-sighted policy of abandoning the war on poverty,
ignorance, blight, and disease. We will continue to advance
toward our goals for a Great Society.—From the President's
budget message, January 24,1966.
24
PART 2
THE BUDGET PROGRAM BY FUNCTION
The expenditures of the Federal Government are
grouped into 12 functional categories according to the
general purpose served, even though programs are carried
on by many different agencies. The chart below 1 indicates the estimated scale of each of these functions.
The only activities not classified by purpose are those
covered under a special allowance for contingencies,
estimated at $350 million in 1967. This allowance, which
is separate from the specific appropriation requests
proposed in the budget, assures that the budget totals
make provision for needs and costs which are unknown
at this time, and for proposals now under study.
1 9 6 7 Expenditures by Function
N a t i o n a l Defense
H e a l t h , Labor, and
Welfare
Interest
Commerce and
Transportation
Veterans
S p a c e Research a n d
Technology
I n t e r n a t i o n a l — Including
F o o d for Peace
A g r i c u l t u r e — Not Including
F o o d for Peace
N a t u r a l Resources
Education
General Government
Housing and Community
Development
1
T h e figures in this section do not add to the net total of Federal payments to the public,
largely because some transactions which take place wholly between one Government agency
and another have not been eliminated, as they have been in calculating the totals.
25
NATIONAL DEFENSE
J-*
/Administrative Budget. $ 6 0 . 5 Billion
1 9 6 7 Expenditures | T r o $ t F u n d $
$ 0 . 9 Billion
This Nation is faced with two fundamental defense tasks. We must
maintain and continue to improve the powerful strategic and conventional war forces needed to meet all forms of threat to our vital
interests. At the same time that we seek peace, we must provide whatever forces and equipment are needed to fulfill our commitment in
South Vietnam. Funds requested in the 1967 budget and the supplemental requests for the current year will enable us to meet the requirements in Southeast Asia which can now be foreseen, without weakening forces devoted to other missions.
Principally because of the heightened conflict in Vietnam, expenditures for national defense in 1967 are estimated at $61.4 billion, $4.0
billion more than in 1966. Total expenditures are lower than they
might otherwise be, however, because of savings from vigorous costreduction efforts, prompt retirement of obsolete weapon systems and
unneeded installations, and postponement of certain activities not
critical to our efforts in Southeast Asia.
Aside from special Vietnam costs, regular national defense payments
would actually decline from $52.8 billion in 1966 to $51.1 billion in 1967.
Department of
Defense—Military
Expenditures by the Department of Defense, as shown in the
accompanying chart, are for the pay of military personnel, purchase
of weapons and equipment, operation and maintenance of equipment
and facilities, research and development, civil defense, and the construction of needed facilities.
However, for purposes of planning, the Department of Defense
has found it useful to consider its financial needs another way—in terms
of major programs. Each program groups all forces, regardless of
military service, according to major military mission.
Strategic retaliatory forces.—These forces are the primary deterrent to nuclear attack against the United States and its allies. In 1967,
we will begin procurement of the new Minuteman III missile for
future deployment. Current missile forces will be strengthened with
the addition of more Minuteman II and Polaris A-3 missiles. We will
begin purchasing the new F B - 1 1 1 bomber, which will be used to
replace bombers being phased-out in future years. Development of
26
the Poseidon submarine-launched ballistic missile and a new shortrange air-to-surface missile ( S R A M ) will continue.
Continental air and missile defense forces,—Our defense forces
include a combination of systems to warn against attack, weapons to
resist attack, and civil defense programs to increase the population's
survival from attack. Currently, the threat of bomber attack relative to
missile attack is declining, permitting further downward adjustments
in interceptor systems. Development of the N I K E - X antimissile
system will continue in 1967, and programs to identify more civil
defense shelters, as well as to increase the capacity of existing shelters,
will proceed.
N a t i o n a l Defense
Jg^
Administrative
Budget
$
f § H
Trust
Funds
MILLIONS
DEPARTMENT O F D E F E N S E - M I L I T A R Y
M i l i t a r y Personnel
Purchase o f G o o d s a n d E q u i p m e n t
Operation and
Maintenance
HHMHHflMBHH
6,400
Research a n d D e v e l o p m e n t
m
i
1,656
M i l i t a r y Construction, Civil D e f e n s e , a n d O t h e r
ATOMIC ENERGY
i
m
MILITARY
m
2,300
ASSISTANCE
• • 2 . mi
DEFENSE
RELATED ACTIVITIES
-591
General-purpose
forces.—Our ground, sea, and air forces are
equipped and trained to respond to conventional, limited, and guerrilla
wars. The 1967 budget provides for the needs of our forces in Vietnam. It also continues the progress already made in improving the
readiness, mobility, and firepower of the Armed Forces, and in particular includes further acquisition of modern supplies, equipment,
and nonnuclear ordnance. Significant additions include the lightweight Lance surface-to-surface missile, the first large-scale purchase
of the F - 1 1 1 A tactical fighter for the Air Force, and another nuclearpowered aircraft carrier.
27
Alrlift-sealift forces.—These forces include the ships and planes
required to concentrate our military forces rapidly and to sustain them
in combat. This ability may significantly reduce the duration and
destructiveness of a conflict. Procurement will begin for the new
C-5A transport aircraft and contracts will be awarded for designing a
new class of fast deployment logistic ships—involving a new concept
in ship construction and more efficient operation than existing ships.
Reserve forces.—Present defense planning requires highly trained
reserve units—not just large numbers of men—which can be mobilized
and deployed quickly in an emergency. To achieve needed combat
readiness, the Secretary of Defense has proposed a major realignment
of the Army reserve components, disbanding units for which there is
no foreseeable need, and improving required units through increased
manning and equipment levels. All remaining paid drill units would
be placed in the National Guard.
Research and development.—The 1967 budget will continue support of a vigorous research and development program. This category
does not represent the total research and development effort. Projects
approved for procurement, such as the C-5A, are included in appropriate mission-oriented programs. The 1967 budget provides for
projects for limited and conventional war—such as an armed helicopter
for close fire support and advanced air-to-air and air-to-surface missiles. Funds will be increased in 1967 for development of an
advanced surface-to-air missile (SAM-D). Development of the
manned orbiting laboratory (MOL) will also proceed.
General support.—Defense-wide support activities include training,
intelligence, security, command, control, and communications, as
well as supply, housing, and medical services. Improvements in communications—including those with South Vietnam—will continue to
be emphasized in 1967. In addition, the recent buildup in Vietnam
has necessitated increases in other support operations.
Atomic
Energy
The Atomic Energy Commission is responsible for developing and
manufacturing nuclear weapons, pursuing other military uses for
28
nuclear energy, adapting atomic energy to peaceful uses, and conducting basic research. Expenditures in 1967 will fall by $90 million to
$2.3 billion, as the procurement of uranium and the production of
special nuclear materials and nuclear weapons decline. Continued
emphasis will be given to civilian nuclear power reactor development
and to physical and biomedical research. Development efforts will be
intensified on the long-range objective of the civilian power program—
"fast breeder" power reactors, which would produce more fuel than
they consume. Work on the peaceful applications of radioisotopes
and nuclear explosives (Project Plowshare) will also continue in 1967.
Military
Assistance
The security of the free world cannot be guarded by one nation
alone. Recognizing that the loss of freedom anywhere is a vital concern to all free peoples, the United States provides assistance to nations
unable by themselves to support adequate military forces.
Today, our military aid is concentrated in the less prosperous and
more vulnerable countries close to Communist China and the Soviet
Union.
Defense-Related
Services
These programs include the Selective Service System, the strategic
and critical materials stockpile, the expansion of defense production,
and various other emergency preparedness programs outside the
Department of Defense and the Atomic Energy Commission.
INTERNATIONAL AFFAIRS A N D FINANCE
1 9 6 7 Expenditures {
^
I
^
B
^
-
U «
Billion
World peace, social and economic advancement, mutual understanding—these are the primary aims of the Government's international programs. The Department of State is responsible for conducting our foreign relations and advising the President on policies to
further the objectives of the United States and the free world. Overseas information and exchange programs acquaint people of other
lands with our people, our ideals, and our positions on world issues.
29
200-400 0-66-5
Economic assistance supports U.S. foreign policy objectives by strengthening the ability of developing nations to help themselves achieve
economic and social progress. To support our effort in Vietnam,
expenditures for Southeast Asia economic assistance will be increased.
Conduct of Foreign
Affairs
High caliber representation abroad and in international organizations is a continuing need for a world leader. Six years ago the State
Department maintained diplomatic and consular posts in 82 countries;
today it maintains representatives in 113 countries. In addition, the
United States is a member of the United Nations and participates in
over 60 other international organizations and programs.
Economic and Financial
Programs
These programs are based on the premise that both the security of
the American nation and the innate compassion of its people are
served by measures to help the millions of people in the developing
countries build strong economies and free societies. The basic approach is one of supplementing local resources in support of self-help
efforts—through long-term development loans and technical and supporting assistance. In 1967 particular emphasis will be given to
measures to improve the levels of the health, education, and agricultural production in these nations.
Development loans and technical cooperation.—Long-term,
low-interest loans supplement local resources for such key activities
as the construction of schools and transportation facilities. In the
coming year loan assistance will continue to be concentrated in a
relatively small number of key nations. The United States also pays
part of the costs of U.S. advisers, whose experience and technical skills
are needed in solving complex problems of economic and social
development.
Alliance for Progress.—The Alliance for Progress encourages the
economic and social reforms needed to promote orderly economic and
political development in Latin America. Financial and technical
assistance is provided in relation to each country's progress in undertaking necessary reforms.
30
International A f f a i r s a n d Finance
I Administrative
I|
N e t Receipts
Net
Expenditures
Budget
$
: Trust Funds
MILLIONS
F o o d for P e a c e
• • • I ,539
Economic a n d
Financial
Programs
1200
Technical Cooperation
j 157
Other
Foreign Information and Exchange Activities
1363
Supporting assistance,—The United States provides commodities,
equipment, and technical advice to countries facing immediate threats
to their stability and security.
Other programs.—Several
to U.S. development efforts:
other programs give additional support
* The Peace Corps will expand its work in less developed
countries in education, community development, health, and
agriculture.
* The Export-Import Bank finances and guarantees export loans and
insures U.S. exports. It also sells participating interests in loans to
private investors. Receipts from these sales and loan repayments
are estimated to exceed disbursements by $309 million in 1967.
* Continued U.S. support will be provided to the International
Development Association and the Inter-American Development
Bank's Fund for Special Operations, to enable them to make loans
on terms which developing nations can afford. Proposed legislation would permit the United States to become a charter member
of the new Asian Development Bank.
31
Food for
Peace
Agricultural commodities are made available to help feed hungry
people and contribute to economic development abroad. About twothirds of the Food for Peace program consists of sales of commodities
to foreign nations for their own currencies. Expenditures in 1967 are
estimated at $1.5 billion. The total volume of food shipped is expected
to exceed the 1966 level.
Since food production in the developing countries has not been
keeping pace with the requirements of expanding populations, we
are intensifying our efforts to promote increased agricultural production in the less developed countries themselves. To this end, legislation
will be proposed for a new Food for Peace program, which will be
closely coordinated with increased economic assistance for agricultural
development.
Foreign Information
and Exchange
Activities
The Department of State and the U.S. Information Agency conduct
various programs aimed at improving the world's understanding of
our Nation and our foreign policy. Motion pictures, radio and television broadcasts, and cultural and educational exchange activities
are some of the techniques used.
SPACE RESEARCH A N D TECHNOLOGY
1 9 6 7 A d m i n i s t r a t i v e Budget E x p e n d i t u r e s . . $ 5 . 3 Billion
The National Aeronautics and Space Administration's development
programs are the foundation for man's continued success in solving
the mysteries of space. Remarkable progress has already been made
toward the accomplishment of a manned lunar mission in this decade.
The space systems obtained through this program will provide the
capability for future manned space ventures. Other important programs will involve the continued use of complex unmanned spacecraft.
Because such progress has already been made in these programs, and
equivalent new programs have not been started, expenditures are
estimated to decline $300 million from 1966 to $5.3 billion in 1967.
Manned space flight.—In 1967, about two-thirds of the funds for
N A S A space programs will be for manned space flight activities. The
highly successful Gemini program will be concluded during 1967.
32
The next step will be the launching of the Apollo spacecraft for both
manned and unmanned testing. In the initial manned flights, the
Apollo spacecraft will be launched into earth orbit by Saturn IB
rockets. The first unmanned test flight of the powerful Saturn V
rocket also will occur in 1967. The Saturn V—which generates over
16 times the thrust of the rockets currently being used in the Gemini
program—will be used to launch the Apollo spacecraft on the manned
lunar mission before the end of this decade.
S p a c e Research a n d Technology
t
I
MILLIONS
I Manned Space Flight
IHHHHHH656
I Scientific Investigations in Space
•TOO
I Meteorology and Other Space Applications
HHHHHHHNII944
I Other Research. Technology and Supporting Operations
Scientific investigations in space.—In preparation for the manned
lunar landing, unmanned investigations of the moon will be intensified
in 1967—using the Surveyor spacecraft, which will land on the moon,
and the Lunar Orbiter, which will orbit and photograph the moon.
Large unmanned astronomical observatories will enable astronomers
to observe the universe from outside the earth's atmosphere. Mariner
spacecraft will travel to Venus in 1967 and to Mars in 1969. The
first unmanned Voyager landings on the surface of Mars in the 1970's
are now being planned.
Meteorology and other space applications.—The Nimbus satellite will test new data-gathering instruments for use in weather forecasting. Flights of the Applications Technology Satellite will be made
in 1967 for experiments on a variety of space applications—such as
communications, meteorology, and space science.
Other research, technology, and supporting operations.—These
activities include research in aeronautics and new spacecraft systems,
as well as operation of worldwide networks to track spacecraft.
N A S A will continue to provide research grants to colleges and universities, and training grants for advanced degree candidates.
33
AGRICULTURE A N D AGRICULTURAL RESOURCES
,r
/ A d m i n i s t r a t i v e Budget.
1 9 6 7 Expenditures ( T r u $ t F u n d $
*
4 ( U
$ 3 . 4 Billion
Bj„jon
$Q 6
Our increasingly efficient agricultural production is a source of
strength for the Nation. It provides us with an abundant supply of
high quality food. It also enables us to help other nations improve
their nutrition. At the same time, the reduced number of people
needed in farming creates special problems for the rural economy.
Federal programs are being adapted to the changes in agricultural
and rural conditions. Under the Food and Agriculture Act of 1965,
greater emphasis in farm commodity programs will be placed on
direct payments to farmers—rather than on high support prices
through commodity loans—to encourage cooperation in farm production control and to shore up farm income. Through broader Federal
programs to improve the opportunities of all low-income people, increasing assistance will be given to low-income rural families. The
recently established Rural Community Development Service is being
expanded to assist in this effort.
Farm income stabilization.—Expenditures in 1967 for farm income stabilization are estimated at $3.0 billion, $145 million less than
in 1966. Under the new cropland adjustment program, the Federal
Government is sharing the costs to farmers of diverting cropland from
cotton, feed grains, or wheat to recreational and other uses. The
President's National Advisory Commission on Food and Fiber will
review present farm programs in the course of its comprehensive study
of our agricultural and related foreign trade policies.
Farming and rural housing loans.—The Farmers Home Administration makes direct Federal loans and insures private loans to meet
the special credit needs associated with farming and rural life. In 1967,
there will be a substantial increase in grants and loans to finance rural
water and sewer facilities. Legislation is being proposed to authorize
sales of shares in direct loans made by the Farmers Home Administration. These sales will further increase private financing of rural credit
programs.
34
Agricultural land and water resources.—The Government provides assistance to farmers for undertaking selected conservation practices on their farms. Twenty resource conservation and development
pilot projects, aimed at promoting the economic growth of rural areas,
will be continued in 1967. Planning assistance for additional areas
will be initiated during the year.
A g r i c u l t u r e a n d A g r i c u l t u r a l Resources
Net
Receipts
Net
Farm I n c o m e
m
Expenditures
Administrative Budget f H w Funds
$
MILLIONS
Stabilization
A g r i c u l t u r a l L a n d a n d W a t e r Resources
HI196
Rural E l e c t r i f i c a t i o n a n d Rural T e l e p h o n e Loans
612
HHHHB
1 H P P P H P
592
Farming a n d Rural H o u s i n g Loans
BHH 4 8 2
Research a n d O t h e r A g r i c u l t u r a l Services
Rural electrification and telephone loans — The Rural Electrification Administration makes low-interest loans to furnish and improve
electric and telephone services in rural areas. Continued emphasis on
reasonable contracts for REA-financed systems to purchase power from
other suppliers will reduce the need for generation and transmission
loans.
Research and other agricultural services.—In 1967, the Department of Agriculture will continue to improve its research and other
agricultural services through construction of necessary facilities and
by increasing grants and contracts for research. Special research and
extension efforts will assist in the development of the Appalachian
region. Emphasis also will be placed on research on. environmental
problems, such as safe and effective methods of controlling the pests
and diseases that attack plants and livestock.
A system of user fees is proposed again to cover the cost of Federal
meat and poultry inspection. Since this inspection adds to the market
value of the products, its cost should not be made a general charge on all
taxpayers.
35
N A T U R A L RESOURCES
1 9 67
Expenditures { t t i : t r V e . B : d S e : : f&1 SiKZ
The prudent use and development of our vast resource endowment
are essential to future national strength. Resource development activities of the Federal Government are coordinated with similar programs of States, local governments, and private interests.
Land, water, and power resources.—These programs, which account for two-thirds of all expenditures for natural resources, provide
for the efficient development and use of the Nation's water resources.
They include flood control, irrigation, power development, navigation, water supply, and related water projects—representing national
investments which yield benefits for many years to come. The Water
Resources Planning Act of 1965 paved the way for the establishment
of joint Federal-State river basin planning commissions and for financial aid to the States for water resources planning.
N a t u r a l Resources
Hi
Administrative
Budget
%%%Trust
%
Funds
MILLIONS
2,127
I
L a n d , W a t e r a n d P o w e r Resources
l ^ g g g g g g : (3g
Forests
_ j 221
R e c r e a t i o n a l Resources
1143
Minerals
1125
Fish a n d
Wildlife
; General Resource Surveys a n d Other
The Corps of Engineers will spend an estimated $1.3 billion in 1967
to continue construction of water resources projects and to begin construction on 25 new projects—a decrease from the 41 new projects
proposed for 1966. An enlarged flood-plain information program
will help State and local governments and private citizens make better
36
use of flood-plain lands. The Bureau of Reclamation will undertake
four new projects. The Tennessee Valley Authority will begin construction of two water resource projects and an additional steamplant
unit. The watershed protection program of the Soil Conservation
Service includes 35 new projects in 1967, compared with 80 projects
in 1966.
The Office of Saline Water will intensify its research and development work on desalting water for municipal and industrial uses. Construction of a distillation unit, designed to advance the technology of
large-scale conversion plants, will be continued.
Programs of the Bureau of Indian Affairs will improve the economic
and social conditions of 380,000 American Indians. Emphasis will be
placed on necessary school construction and other education needs of
Indian children. Other programs will provide for irrigation development and roads on Indian reservations, and for expansion of industrial
activities and housing facilities.
Forest resources.—National forest lands are a major source of the
timber used by American industry. These forests also provide recreational opportunities for a large segment of our population.
Expenditures by the Forest Service for recreational facilities will increase to $36 million in 1967 to help provide for the increasing number
of visitors.
Recreational resources.—The Nation's outdoor recreation areas
are an important outlet for the leisure time of our growing population.
A nationwide Outdoor Recreation Plan is being developed by the
Bureau of Outdoor Recreation. The Land and Water Conservation
Fund will be used to make grants to States for recreation purposes as
well as to acquire new Federal recreation areas." The National Park
Service expects about 128 million visits to the 230 national park areas
in 1967.
Minerals, fish, wildlife, and other.—The Federal Government
will operate 90 fish hatcheries and 304 wildlife refuges in 1967. Assistance to commercial fishing will be continued. Three new research
and exploratory fishing vessels will be completed during the year.
Conservation efforts will also contribute to enhancing natural beauty
through two demonstration plants designed to convert junk automobiles into products usable by the steel industry.
37
COMMERCE A N D TRANSPORTATION
9 6 7 E x p* e n d i t u r e s
[' AI rdi im
i nri ns nt rHaet i v e Budget
c t Funds
Trust
$ 2 . 7 Billion
$ 3 . 9 Billion
The Nation's economic growth and stability is advanced by improvements in transportation and aids to businesses and to depressed regions
of the country. The Federal Government also promotes both the
public and private interest by encouraging effective competition and by
regulating certain key industries. Payments for commerce and transportation programs wil! decline by $418 million from 1966, largely because of increased sales of loans by the Small Business Administration,
termination of the temporary accelerated public works program started
in 1963, and lower net expenditures for the postal service.
Commerce a n d T r a n s p o r t a t i o n
N e t Receipts
Administrative
Net
Expenditures
Budget
$
Trust
Funds
MILLIONS
i 4,182
Postal Service
1193
A r e a and Regional
Development
A d v a n c e m e n t o f Business
b| 104
R e g u l a t i o n o f Business
F e d e r a l D e p o s i t Insurance C o r p o r a t i o n
Transportation
Development of a fast, safe, and economical transportation system
is important for the Nation's continued economic growth and for
meeting the needs of our increasingly mobile population. The Federal Government is increasing its efforts to improve intercity ground
transportation through research and testing of a high-speed system.
38
In addition, the 1967 program includes a recommendation for the
establishment of a Department of Transportation.
Highways.—Expenditures for federally aided highway programs,
which will increase by $135 million in 1967 to $4.2 billion, represent
about 63% of the total outlays for Federal commerce and transportation activities. Highway expenditures are financed primarily from
highway user charges, such as receipts from taxes on gasoline, which
are deposited in the highway trust fund. In addition to expenditures
of $3 billion on the Interstate Highway System, Federal aid for the
primary and secondary highway systems will approach $1 billion in
1967. More than half of the 41,000-mile Interstate System is now
complete. As a result of the Highway Beautification Act of 1965,
special efforts are being made to enhance the scenic and recreational
aspects of our highway system.
Aviation.—The Federal Aviation Agency is continuing to modernize and automate the air traffic control system. Despite substantial
progress in reducing costs through improved productivity and elimination of less useful services, expenditures in 1967 will rise $40 million
chiefly because of research and development on the civil supersonic
transport. The jointly financed Government-industry design competition for a safe and profitable civil supersonic aircraft will be completed
in 1967.
Water transportation.—Both operating and construction subsidies
are paid to maintain the competitiveness of our ocean shipping industry.
Funds will be provided for the construction of 13 new vessels as
part of the continuing program for replacement of old vessels in
the subsidized fleet.
The Coast Guard will receive five icebreakers from the Navy Department and will now be responsible for all U.S. icebreaking activities.
Postal
Services
Expenditures of the Post Office are estimated to exceed revenues by
$755 million in 1967, which is a decrease of $123 million from 1966.
The largest part of the revenue deficiency represents the cost of providing public services which are not chargeable to users of the postal
service. The remaining amount, the postal deficit, is the loss sustained
by the Post Office in its regular operations. The postal deficit is estimated at $187 million in 1967, compared to $375 million in 1966.
39
Advancement
of
Business
The Department of Commerce provides many services valuable
to American business. These include weather information, census
and economic data, civilian research and technology aids, and export
encouragement. Research and development, particularly in the fields
of weather prediction and modification, will be expanded by the new
Environmental Science Services Administration. Continued support
will be given to Government programs that encourage American
businesses to expand overseas markets for t heir products.
Commerce ond Transportation
$ Billions
—8
—7
Total
Expenditure*
Trust F u n d E x p e n d i t u r e s ,
Mainly
Highways
0
1967
Fiscal Y e a n
Estimate
The Small Business Administration ( S B A ) will continue to provide
loans and other aids to credit-worthy small businesses which are
unable to obtain funds elsewhere on reasonable terms. Wherever
possible, private credit will be substituted for public funds—through
Government loan guarantees and bank participation, for example.
The projected sale to the public of shares in a pool of SBA loans will
achieve greater private financing and will yield net receipts estimated
at $545 million in 1967. As a result of these sales, receipts for the
year for all S B A programs will exceed expenditures by $485 million.
40
Area and Regional
Development
Economic development expenditures in the Department of Commerce estimated at $183 million in 1967, will be more than double
those of 1966. The new Public Works and Economic Development
Act of 1965 will make loans and grants available to distressed areas.
In addition, financial aid will be made available to other areas when
coordinated efforts with surrounding depressed areas can best advance the economic development of the district. Encouragement also
will be given to multi-State economic planning. Expenditures for the
special economic development efforts in the Appalachian region will
increase about four-fold in 1967.
HOUSING A N D COMMUNITY DEVELOPMENT
1 9 6 7 Expenditures
^
S0.1 Billion
The new Department of Housing and Urban Development provides central leadership in strengthening and coordinating programs to
upgrade our urban areas—areas which contain 70% of our population.
Federal assistance also contributes to the ability of families to acquire a
suitable home and improve their living conditions. These programs
include grants, loans, purchases of mortgages, and insurance of private
loans and savings and loan accounts.
Urban Renewal and Community
Facilities
Federal programs help stimulate local efforts to improve our communities and to halt urban blight. Increasing emphasis will be
placed on renewal of cities without displacing large numbers of
families, and on the creation of parks and other efforts to beautify
the developed areas of cities. Other grants will help cities finance
mass transportation facilities, encourage comprehensive urban planning, and provide assistance for basic water and sewer facilities. Aid
for the construction of neighborhood facilities in city core areas will
help bring needed social services to low-income neighborhoods.
Public Housing
Programs
The Federal Government assists local housing authorities to provide
decent, safe, and sanitary housing for low-income families. New
contracts to support 60,000 more publicly-aided apartments and homes
4i
for low-income families are expected to be approved in 1967—an increase of nearly 50% over the est imate for 1966.
Aids to Private
Housing
The Federal Government encourages better housing for the Nation
primarily by assuring the availability of private credit on reasonable
terms. In total, these programs will generate more receipts than expenditures in 1967, primarily from insurance premium receipts on
savings and mortgages, and from sales of shares in Government held
mortgages.
Housing a n d Community Development
Aids
•
Administrative
Budget
W k
Trust
Funds
to
Private
<
Housing
f ederal Savings and Loan Insurance Corporation,—Federal in
surance of savings and loan accounts encourages individual savers to
pool their funds for home mortgage lending. Premiums charged for
Federal insurance and other income will exceed estimated expenditures in 1967 by $352 million, permitting the Corporation to strengthen
its reserve position.
Federal home loan banks.—These banks supplement private funds
which are available for financing home mortgages. They do this by
lending money to member savings and loan associations when loan
demands are temporarily greater than the funds available.
42
Federal Housing Administration.—To improve housing conditions and to broaden homeownership, the Federal Housing Administration insures certain housing loans against loss—thus encouraging a
larger amount of private financing. In 1967, receipts (mainly from
insurance premiums and sales of acquired properties and mortgages)
will exceed expenditures by $106 million.
Federal National Mortgage Association.—The Federal National
Mortgage Association influences the supply of funds for private housing by buying and selling federally insured or guaranteed mortgages.
The Association is expected to buy fewer mortgages in 1967 than the
record amount estimated in 1966. Decreased sales of mortgages are
also anticipated for 1967, even though the program of selling shares
in pools of mortgages has been popular and successful.
Other aids to private housing.—In 1967, loans will be made to
help build more housing for the elderly and the handicapped. In
addition, the new program of rent supplements for lower income
families will make it possible for more of these people to obtain better
housing.
National
Capital
Region
The District of Columbia government provides both State and local
government services for the residents and businesses of the National
Capital city. As the major landholder and employer in the District,
the Federal Government recognizes a special responsibility to bear its'
proper share of the costs of these services, as well as to provide longterm loans for needed capital improvements. The Congress has enacted legislation authorizing the initial phase of a rail rapid transit
system for the District and its surrounding area.
HEALTH, LABOR, A N D WELFARE
.oi, c
j..
/Administrative Budget. $ 1 0 . 0 Billion
1 9 6 7 Expenditures l T r u s t F o n d s
* . . $ 3 1 i 1 Billion
These programs provide retirement income, hospital insurance,
and other health services for older Americans. They also protect families against the possible loss of income that would result from the
unemployment, disability, or death of the wage earner. Other programs promote the well-being of the American people through
43
health research and care, manpower training, vocational rehabilitation,
and the Nation's attack on poverty. Payments for these purposes
will increase by $5.2 billion over 1966. About 75% of the total is
self-financed through trust funds.
Economic opportunity programs.—The Economic Opportunity
Act of 1964 provided the basic design for combating poverty in the
United States and eliminating its causes. In 1967, estimated expenditures of $1.6 billion—compared to $1.2 billion in 1966 and $0.2
billion in 1965—will be made to help break the vicious cycle whereby
one generation's poverty, ignorance, and disease breed the same painful conditions for the next. Economic opportunity programs are
aimed at helping the disadvantaged one-fifth of our population to
help themselves through development of their skills.
The organizations and methods used in this attack on poverty are
flexible and varied. Community action programs will coordinate
and focus local leadership and resources in about 900 cities and multicounty areas in 1967. These programs are intended to assure that adequate health services, employment counseling, literacy training, and
other services are provided in impoverished areas. Project Head
Start, which was so successful last year, will provide preschool instruction programs for over 700,000 poor children. Job Corps programs
will offer opportunity to more than 45,000 out-of-school youths who
need vocational and prevocational training and education. Wor\
and training programs will help over 400,000 youths and adults by
providing full-time and part-time jobs, basic education, counseling,
and vocational training. Other programs include aid to many of the
400,000 migrant farmworkers in the United States, loans to rural
families and farmers, assistance to the States for adult literacy training,
and services to the poor provided by 4,500 Volunteers in Service to
America (VISTA).
Social insurance.—In 1967, an estimated $24.9 billion in benefits
will be provided to the retired, the disabled, or their survivors under
the self-financed insurance and retirement programs which cover
almost all of the Nation's workers and their families. The old-age,
survivors, and disability insurance trust funds are the largest and will
pay out approximately $21.8 billion in benefits. Railroad and Federal
employees will receive benefits from special trust funds amounting
to $3.1 billion.
44
Legislation enacted in calendar year 1965 provides a 7% increase
in social security cash benefits.
Public assistance (excluding medical care for the aged).—Grants
to States for public assistance in 1967 will help meet the most basic
needs—food, clothing, and shelter—of almost 7.5 million of our poorest
citizens. The Federal expenditures of $3.3 billion, when matched
with State and local funds, will provide $5.7 billion in 1967 to provide
assistance to needy people. Increased emphasis will be placed on
encouraging public assistance recipients to become self-sufficient.
Health, Labor, and W e l f a r e
•
Administrative
Budget
$
Trust
Funds
MILLIONS
17 J 85
S o c i a l Security, U n e m p l o y m e n t , a n d R e t i r e m e n t Benefits
4,447
M e d i c a l C a r e f o r the A g e d
3,364
P u b l i c Assistance (E*eludi!>H M«S«S Cam for «w A j t d )
I 2,499
O t h e r H e a l t h Services a n d Research
|1,600
E c o n o m i c O p p o r t u n i t y Programs
| 531
L a b o r a n d M a n p o w e r Services
1338
S c h o o l Lunch, S p e c i a l M i l k , a n d F o o d S t a m p Programs
J
508
"Other
Health services and research.—An estimated $6.1 billion will be
spent by the Federal Government for the necessary leadership and
resources to improve the mental and physical health of our people.
Newly enacted programs will make better health care available to
the aged and to needy children and will provide for improved treatment of various illnesses.
Beginning on July 1, 1966, a large share of the cost of hospital and
medical care for older people will be met from the administrative
budget and trust funds. This assistance was provided for in the 1965
Amendments to the Social Security Act.
45
Increases in the level of health research supported by the National
Institutes of Health have stimulated a fourfold increase over the past
10 years in total national health research—both public and private.
Health research by N I H will comprise nearly 40% of the total national
effort in 1967.
Regional medical programs were recently approved to disseminate
the latest techniques for diagnosing and treating heart disease, cancer,
stroke, and related diseases. Through regional planning and utilization of specialized medical resources—manpower, equipment, and
facilities—improved diagnosis and treatment will be available.
Health, Labor, and W e l f a r e
I Billions
Total Payments
Trust F u n d Expenditures,
M a i n l y S o c i a l Security
In 1963, programs to aid construction of academic facilities and to
provide students with loans were initiated in order to increase our
supply of doctors, dentists, and other health personnel. In addition,
recent legislation provided for operating grants for health professional
schools, special grants for curriculum improvement, and scholarships
for needy students.
Efforts to improve the quality of our environment and to protect the
public from unsafe foods and drugs will be increased in 1967. Expenditures for these purposes are estimated to reach $331 million in 1967, an
increase of $92 million over 1966.
46
Labor and manpower.—These activities of the Federal Government play an important role in our economy by providing workers with
financial assistance when they are unemployed, and by helping them
to acquire new skills and find new jobs.
The Manpower Development and Training Act has become an important tool in helping the unemployed equip themselves to meet
up-to-date job requirements. In 1967, emphasis will be placed on those
who have little or no skills—by increasing on-the-job training and
combined job-classroom training—to enable them to share in the opportunities of a prospering economy.
The local offices of the Federal-State employment service help to
match the abilities of workers with the needs of employers. Increased
grants to State employment agencies in 1967 will be used primarily
for improving employment services for the disadvantaged, particularly youths, and expanding a pilot survey being made to identify
skill shortages in private industry.
The unemployment insurance program would be substantially improved by proposed legislation to raise benefits, cover more than 4V2
million additional workers, and authorize assistance for the long-term
unemployed.
Other welfare services.—In 1967, the Federal-State vocational rehabilitation program will restore an estimated 215,000 individuals to
employability. The school-lunch and special-milk programs will be
more specificially directed to improving the nutrition of needy children. The food stamp program will continue to expand as its benefits
are made available to more low-income families.
EDUCATION
1 9 6 7 Administrative Budget Expenditures . . $ 2 . 8 Billion
Education is essential to the material wealth of our Nation and
its social and cultural progress. It is our major weapon in the attack
on poverty. The Federal Government is providing increased assistance to assure that educational objectives critical to the national interest
are being met and that educational opportunities are available to all.
47
Expenditures in 1967 will rise to $2.8 billion—more than 80% above
the 1965 level. New programs emphasize the need to make a
special educational effort for economically disadvantaged children
to help break the chronic cycle of deprivation.
Assistance for elementary and secondary education.—In 1967,
$970 million will be spent for the special grants to low-income areas
authorized by the Elementary and Secondary Education Act of 1965—
more than four times the amount in 1966. The new programs are
focused on providing better educational opportunities for disadvantaged children and stimulating educational innovation. Special
attention will be paid to augmenting regular educational programs
through remedial instruction, guidance and counseling, and other
efforts needed to overcome learning handicaps.
Another $110 million will be spent for supplementary centers and
efforts to stimulate innovation in American education through projects employing new instructional techniques, curricular materials,
and organization of schools. There will be a $70 million increase in
grants for library and text books, and for improving and expanding
State educational agencies.
The special aid to school districts affected by Federal activities is
declining by $87 million in 1967 reflecting recent studies of this program and the impact of the large new Federal programs which meet
many of the same needs.
Assistance for higher education.—The Higher Education Act of
1965 provides additional financial support for qualified students who
need assistance to further their education. It is estimated that about
210,000 students will be assisted through work-study programs; 775,000
students will receive federally subsidized loans; and 220,000 will
obtain Government scholarships. This Act also authorizes funds to
improve college libraries and to aid smaller colleges which lack
adequate funds and staff.
Support will be given to an estimated 1,300 colleges for construction
of academic facilities. Almost $400 million will be spent for loans and
grants for these purposes. In addition, expenditures for the college
housing loan program will increase to an estimated $289 million in
48
1967. A proposed sale of shares in pools of housing and academic
facility loans will reduce expenditures by approximately $908 million.
The substitution of loan subsidies for direct National Defense Education Act loans to students will provide a further offset of $34 million.
The combined effect of these actions will be to reduce net Federal
expenditures for higher education to only $140 million in 1967, while
actually increasing the amount of assistance made available.
Education Expenditures for 1967
H
Administrative
Budget
$
I
%%%\ Trust
Funds
MILLIONS
1 Assistance for Elementary and Secondary Education
mmmmmm^
1 A s s i s t a n c e t o S c i e n c e E d u c a t i o n a n d Basic Research
mm
1 Assistance for Higher Education
iRBflHMHHHHHHHMH^
I Other Aid to
Education
Assistance to science education and basic research.—The National Science Foundation continues to perform a vital role in furthering science education and basic research. In 1967, expenditures by the
Foundation will rise by $60 million, to $425 million. Expanded support of basic research accounts for nearly two-thirds of the estimated increase. Grants will be made to selected academic institutions
to increase the number of centers of excellence in the sciences. Additional grants will be made to a wider range of institutions to improve
individual college and university science departments, and to increase
the effectiveness of undergraduate education activities.
Other aids to education.—The budget provides for expansion of
vocational education programs which support training for gainful
employment. Expenditures will increase $42 million for educational
research and demonstration projects to develop more effective methods
of teaching, particularly through regional laboratories authorized in
the Elementary and Secondary Education Act of 1965.
49
Through the new Teacher Corps and teacher fellowship programs,
over 3,700 teachers and interns will be available to serve in schools
with concentrations of children from low-income families, and 5,800
graduate fellowships will be awarded.
Provision is also made for additional expenditures for such programs
as public libraries, university community services, and the newly
authorized National Foundation on the Arts and the Humanities.
VETERANS BENEFITS A N D SERVICES
1 9 6 7 Expenditures
S5.7Bij.ion
The Federal Government provides special benefits and services for
the veterans of the Nation's wars or their survivors. Expenditures for
these programs will rise in 1967 largely as a result of the recently
enacted liberalization of compensation payments, the reduced sales of
housing loans and mortgages, and a proposal to provide education
and training assistance to veterans with recent military service.
Compensation.—Compensation payments of $2.3 billion in 1967
will be made to approximately 2.3 million veterans or their survivors
for disability or death arising from military service.
Pensions.—Payments are made to lower income veterans or their
survivors for disability or death from causes not related to military
service. In 1967, payments estimated at $2.0 billion will be made to
2.2 million recipients. World War I veterans and their survivors
comprise over 65% of all pensioners. However, an increasing number
of World War II and Korean veterans or their survivors are now
becoming eligible for pensions.
Hospitals and medical care.—In 1967, an estimated $1.4 billion
will be spent to furnish hospital and medical care for approximately
138,700 veterans per day. This includes the cost of improving the
facilities necessary to provide this medical care. In 1967, five new
replacement hospitals are to be opened, and construction will begin
on two others.
50
Loan guarantee and direct housing loan pro grams .— The Veterans Administration will guarantee 156,000 housing loans for eligible
veterans, and make 4,500 direct loans to veterans in rural areas and relatively small communities where sufficient private credit is not available.
From 1966 to 1967, the numbers of home mortgages guaranteed will
decline by 7%, and new loans will decrease by 1,500—as fewer veterans
remain eligible for these services. The excess of receipts over expenditures from these housing programs, estimated at $296 million, results
primarily from the sales of loans and shares in a pool of loans owned
by the Veterans Administration.
Veterans Benefits and Services
I Administrative
Nit ^gseipts
Budget
N a t Expenditure!
I
Fundi
MILLIONS
|2,307
Diiobility a n d Survivors
Compensation
1,978
Non-Service-Conneeted Pen*ion»
1,376
Hospital* and M e d i c a l Care
Housing Loan Program*
11,038
O t h e r Veterans Benefits a n d Service*
Education and training benefits,—Estimated expenditures for these
programs will increase in 1967, principally as a result of proposed legislation to provide education and training assistance to veterans of recent
service to ease their readjustment to civilian life. Benefits have been
liberalized for education and training of war orphans and children of
totally disabled veterans, and for the vocational rehabilitation of disabled veterans. The number of war orphans or dependent children
receiving education and training is estimated at 14,700 in 1967.
Other benefits and services,—The national service and U.S. Government life insurance trust funds finance about 5 million life insurance policies, primarily for veterans of World Wars I and II. Recently enacted legislation provides insurance coverage of up to
$10,000 for each serviceman on active duty.
5i
GENERAL GOVERNMENT
1 9 6 7 A d m i n i s t r a t i v e Budget E x p e n d i t u r e s . . $ 2 . 6 Billion
Expenditures for general government provide for Governmentwide service activities, for executive direction and financial management, and for the costs of the Congress and the Federal court system.
These general administrative, legislative, and law enforcement expenses of the Federal Government will require an estimated $2.6
billion in 1967, $115 million more than in 1966.
Tax collection and central fiscal operations.—The Treasury collects the revenues and pays the bills of the Federal Government. An
increase in expenditures in 1967 will permit the Internal Reve nue
Service to complete the nationwide master-file system for taxpayer
information. This system should add as much as $50 million annually
in revenue collections. The increase will also enable the IRS to handle
the additional 1.3 million tax returns expected this year.
General property and records management.—The General Services Administration is proceeding with its programs to provide more
modern and improved facilities for Government operations throughout the United States. Additional efforts also will be made to increase
the efficiency—while lowering the costs—of procurement, maintenance, and use of automatic data processing equipment by Federal
agencies.
General Government
HI
Administrative
Budget
|
m
Trust
MILLIONS
HKH9 41
Tax C o l l e c t i o n a n d C e n t r a l Fiscal O p e r a t i o n s
Property a n d Records M a n a g e m e n t
423
P r o t e c t i v e Services a n d A l i e n C o n t r o l
Legislative a n d Judicial Functions
C e n t r a l Personnel M a n a g e m e n t
| 207
Territories a n d Possessions, a n d O t h e r
52
Funds
Protective services and alien control.—Increased expenditures
for the law enforcement and related activities of the Department of
Justice will provide assistance to State and local law enforcement
agencies, finance prison construction projects, and provide for intensified efforts to rehabilitate Federal prisoners.
Central personnel management.—These expenditures include the
administrative costs of the Civil Service Commission. They also include the costs of accident compensation and the employer portion of
health benefits for Federal employees.
Territories and possessions.—The Federal Government provides
certain services and financial assistance to the Virgin Islands, American Samoa, the Trust Territory of the Pacific, and Guam. In addition economic aid is provided to the Ryukyu Islands. The activities of
the Virgin Islands Corporation will be terminated at the end of 1966
as a result of the increased self-sufficiency of the Islands.
INTEREST
1 9 6 7 Administrative Budget Expenditures . . $ 1 2 . 9 Billion
Expenditures in 1967 for interest on the public debt are expected
to be about $750 million above the 1966 level. This increase reflects
both the higher level of the outstanding public debt, and increases
in the market rate of interest. Of total interest expenditures, $2.3
billion will be paid to the Federal trust funds and agencies which
have their reserves invested in U.S. securities.
The table below shows the estimated ownership of the public debt
as of June 30,1965.
OWNERSHIP OF T H E PUBLIC DEBT
Amount,
in billions
Individuals
Federal trust funds and agencies
Commercial banks
Federal reserve banks
State and local governments ..
Corporations
Foreign and international
Other investors
Total
$71.2
63.4
57.9
39.1
23.6
15.9
15.7
31.2
317.9
53
[The] overall 1967 deficit in the administrative budget is $1.8
billion, sharply lower than in 1966 and the smallest deficit
in 7 years, despite the added costs we are incurring in Southeast Asia. . . . [0«] a consolidated cash basis—which is the
most comprehensive measure of budget totals—the 1967
budget will show a surplus of $0.5 billion.—From the President's budget message, January 24,1966.
54
PART 3
BUDGET FACTS AND FIGURES
The budget necessarily involves a great many numbers, usually accompanied by dollar signs. To have any
meaning, these numbers must be related to the Government programs and policies they represent, to the
process which brings them into being, to the size of the
economy, to the needs of society, and to a host of other
relevant considerations. In the first two sections of this
booklet, an effort was made to present the budget in
understandable and nontechnical terms and to limit the
use of statistics.
A more complete understanding of the budget, however, requires some knowledge of the different measures
of Federal spending, of the budget process, and of the
historical statistics which show how current amounts
compare with the past. Tables on the budget may be
found starting on page 66.
The following additional budget documents are available from the
Superintendent of Documents, U.S. Government Printing Office, Washington, D.C., 20402:
1. The Budget of the United States Government, 1967. Contains most
of the facts, figures, and analyses that general users of the budget would
normally desire or need. Price: $1.50.
2. The Budget of the United States Government, 1967—Appendix.
Contains the text of appropriation language, schedules, and narrative
statements for individual appropriations and funds. Price: $6.50.
3. Special Analyses of the United States Budget, 1967. Contains special
tabulations and analyses of budgetary data for those interested in selected
aspects of the total Federal program. Price: 50 cents.
55
MEASURES OF FEDERAL FINANCES
Federal financial activities are studied from several points of view
for many different purposes. No single measure serves all purposes
equally well. In the budget (as well as in this booklet), Government
income and spending are discussed in terms of the "administrative
budget," the "trust funds," the "statement of cash receipts from and
payments to the public," and the "Federal sector of the national income
accounts."
To gain an understanding of the different measuring concepts, it is
helpful to begin with the two basic sets of accounts used by the Government. The first covers administrative budget funds; the second
covers trust funds. Together they comprise the financial books of the
Government, recording in detail the expenditures of each agency and
the revenues of the Government. They are indispensable tools for the
proper management of Federal finances.
Administrative budget funds include most of the receipts and
expenditures of the Government. Administrative budget funds are
the property of the Federal Government—owned just as land and
equipment are owned. They include the transactions of Governmentowned enterprises of a business nature, such as the Post Office, the
Export-Import Bank, and the Federal Housing Administration.
The administrative budget—which covers only administrative budget
funds—is the oldest and most widely known measure of our Federal
finances. It is mainly within the framework of this budget that
Congress evaluates requests for funds and grants the authority for
Government agencies to carry out the President's program. Expenditures from this budget emerge as the result of Presidential requests,
congressional action, and administration of authorized programs by
Government agencies. Thus, the administrative budget is generally
used for control, administration, and execution of programs financed
with funds owned by the Government.
Trust funds are created when Congress designates certain receipts
to be set aside—in trust—for specified payments or programs. They
are also created, occasionally, when an activity is owned partly by the
Federal Government and partly by someone else. Trust funds may
be used only to finance the activities for which they are designated.
56
Most of the major trust funds finance insurance-type activities such
as social security (old-age and survivors insurance, disability insurance, and hospital insurance for the aged), unemployment insurance,
Federal employees' retirement, and veterans' life insurance. Trust
funds also finance the Federal-aid highway program and that portion
of the Federal National Mortgage Association ( F N M A ) which is partially owned by private stockholders.
Trust Fund Estimates for 1 9 6 7
t
MILLIONS
:,923
WKKKHMi'M
Social Security
Progr
<
U n e m p l o y m e n t Insurance
1102,110
MKM
,942
D i s a b i l i t y Insurance
' W M M 2,731
mttmz.m
H o s p i t a l Insurance
1,104
• 899
S u p p l e m e n t a r y M e d i c a l Insurance
Federal-aid
Highways
F e d e r a l Employees
Funds
Railroad
Retirement
Veterans
Life Insurance
FNMA
and
All Other
H,584
i1,274
Receipts
Expenditures
1723
1672
mm 2,021
Receipts of the trust funds come from sources related to their activities. For example, employers and employees covered by social security
pay the taxes to finance the social security trust funds; taxes related to
highway use—such as those on gasoline—provide the receipts for the
highway trust funds. In addition, the trust funds invest reserve funds
in U.S. bonds and receive revenue from interest on these investments
and other sources. Thus, "tax receipts" for the trust funds and "total
trust fund receipts" will differ by the amounts of revenue received from
nontax sources—largely interest on bond holdings. The chart above
57
lists the major trust funds along with their estimated receipts and
expenditures lor 1967. In many eases, current trust fund receipts
exceed expenditures, thereby providing the reserve funds needed to
meet the expected future payments.
S U M M A R Y OF FEDERAL RECEIPTS A N D P A Y M E N T S
[Fiscal years. In billions]
Description
1006
actual
1066
estimate
1067
estimate
FEDERAL RECEIPTS
$93.1
31.0
$100.0
33.5
$111.0
41.6
4.4
5.4
7.1
119.7
128.2
145.5
Deduct: Loans, differences in coverage, and other adjustments
Add: Cash to accrual basis and other adjustments
1.0
.9
.6
1.2
.7
-2.6
National Income accounts receipts—Federal
sector
119.6
128.8
142.2
96.5
(96.4)
29.6
106.4
c101.7)
33.8
112.8
(102.3)
37.9
Administrative budget receipts
Trust fund receipts
Deduct: Intragovernmental transactions and other adjustments
Total, cash receipts from the public
FEDERAL P A Y M E N T S
Administrative budget expenditures
Excluding special Vietnam costs
Trust fund expenditures
Deduct: Intragovernmental transactions and other adjustments (net)
Total, cash payments to the public
Excluding special Vietnam costs
Deduct: Loans, differences in coverage, and other adjustments
Add: Cash to accrual basis and other adjustments
National income account expenditures—
Federal sector
Excluding special Vietnam costs
5.2
5.7
135.0
(130.3)
145.0
(134.5)
4.0
1.6
-.7
118.3
(118. 2)
131.0
(126.3)
142.7
(132.2)
-3.4
-2.7
+ 1.2
-6.4
-6.9
— 2.2
— 1.8
+ .5
-.5
3.7
122.4
022.3)
5.8
1.7
EXCESS OF RECEIPTS ( + ) OR
PAYMENTS ( - )
Including special Vietnam costs:
Receipts from and payments to the public
National income accounts—Federal sector
58
Federal receipts from and payments to the public.—Basically,
this statement of cash flow between the Federal Government and the
public (often called the consolidated cash statement) represents a linking of the administrative budget with the trust funds. Payments between the administrative budget and the trust funds—such as interest
payments to trust funds on their investments in U.S. securities—are
eliminated from the statement, since they do not involve a flow of
money between the Government and the public.
The statement of receipts from and payments to the public is much
more inclusive than the administrative budget alone, and it is the best
measure of the cash needs and borrowing requirements of the Federal
Government. It also gives a truer picture of the total impact of the
Federal Government on the economy than the administrative budget.
The Federal sector of the national income accounts.—Like the
consolidated cash statement, this measure of Federal activities includes
both the administrative budget and the trust funds. However, it
excludes transactions of a purely financial nature (such as loans) and
purchases and sales of land.
The national income accounts also differ from the consolidated
cash statement regarding the time when receipts and payments are
recorded. Receipts are recorded in the income accounts as liabilities
build up, rather than on the date when the Treasury receives the money.
For example, corporations accrue Federal tax liabilities as they earn
profits—but pay the taxes only after some months have elapsed. Similarly, expenditures for purchase of most goods and services are recorded
in the income accounts when the goods are delivered or the services
performed, rather than when the actual payment is made. This timing
is considered to be a better reflection of the economic impact of Federal
transactions on spending decisions in the private sector of the economy.
Expenditures in the Federal sector of the national income accounts
are divided into five basic components that indicate the economic
nature of transactions. As the table on page 60 shows, the largest
item is purchases of goods and services, representing the amount of
our gross national product which is used directly by the Government
for public purposes. This category includes such items as military
equipment, new Government buildings, and the services of military
and civilian employees.
59
The second category, transfer payments, Covers Federal payments
for which no current services are rendered—unemployment and social
security benefits (including hospital care for the aged), veterans pensions, and similar programs. Transfer payments do not represent
Government use of resources, but rather the channeling of purchasing
powers to others.
Grants-in-aid to State and local governments also represent a transfer of funds. In this case, however, the transfer is to another level of
government which may then spend the funds in some other way—for
example, by purchasing goods and services (such as constructing highways) or by making further transfer payments to individuals (such
as public assistance payments).
NATIONAL
INCOME
ACCOUNT
EXPENDITURES—FEDERAL
SECTOR
[Fiscal years. In billions]
Description
1965
actual
1066
estimate
1967
estimate
Purchases of goods and services
Transfer payments
Grants-in-aid to State and local governments
Net interest paid
...
Subsidies less current surplus of Government enterprises
$64.5
30.3
10.9
8.6
4.1
$70.7
34.2
12.8
9.0
4.3
$74.4
39.2
14.7
9.7
4.7
Total national income account expenditures—
Federal sector
118.3
131.0
142.7
Net interest consists of interest paid by the Federal Government less
interest received on Government loans to others.
Subsidies less current surplus of Government enterprises includes
Federal aid to business and agriculture and the net surplus or deficit
of Government business-type activities such as the Post Office and
Tennessee Valley Authority.
The Federal sector account, as part of the Nation's economic accounts which measure total national income and output, is particularly valuable in analyzing the impact of Federal activities on the
Nation's economy.
60
THE BUDGET PROCESS
Each January, the President recommends to Congress a budget
representing his judgment on the Federal programs required to meet
the Nation's needs during the coming fiscal year.
The budget is the culmination of many months of planning and
analysis. For example, the formulation of the 1967 budget began
in March of 1965. Ten months later, in January 1966, the budget was
sent to Congress—nearly 6 months before the beginning of the new
fiscal year. When the fiscal year comes to a close on June 30, 1967,
over 2 years will have elapsed since the start of the budget cycle.
These intervals of approximately 10 months, 6 months, and 12 months
correspond roughly to three basic steps of budgeting—executive formulation, congressional deliberation and enactment, and administrative
program performance.
Inevitably over such a long period, many changes will take place
in the original proposals: international and domestic situations may
vary from the assumptions made earlier; the President may amend
some of his own proposals; and Congress may modify the President's
requests or add new proposals of its own. There is a continuing need
for flexibility in the budget system so that Federal programs can
adapt to a constantly changing environment.
Executive budget formulation.—During the period of executive
formulation of the budget, there is a continuous exchange of information between the President, his staff, and the various Government
agencies. Policies and issues are evaluated, modified, and reevaluated. This process continues through December when final decisions
are made. At this point, the President's budget becomes a statement
of concrete proposals reflected in specific dollar estimates.
An important refinement in the methods for reaching program
and budget decisions was inaugurated recently. The major
agencies of the Federal Government are instituting a new PlanningPrograming-Budgeting system. The purpose of the new system is to
provide more and better information for decisionmakers at all levels
of Government—from individual program managers to the President
and Congress. It will focus on cdternative means to achieve carefully
defined goals, specifying the full costs and benefits of each alternative.
This will facilitate the identification of the most efficient combination
of Government programs and policies.
61
Congressional consideration.—Co^csyQ&afe review and enactment, the second phase of the cycle, commences when the budget is
sent to Congress. The Congress must authorize the programs—
usually for a period of several years—and their spending limits before
any other action is taken. Then, the actual amounts to be spent are
determined by the Appropriations Committees of both Houses of
Congress—within any limits set earlier by the legislative committees.
Budget requests are considered first in the House of Representatives.
New revenue measures are referred to the Ways and Means Committee. Spending proposals are sent to the Appropriations Committee
which, in turn, sends parts of the budget to its 12 subcommittees for
detailed study and recommendations. The Appropriations Committee and the Ways and Means Committee then recommend actions to
be taken by the House of Representatives. As parts of the budget are
approved by the House, they are forwarded to the Senate, where a
similar process is followed. In case of disagreement between the two
Houses of Congress, a conference committee (consisting erf Members
of both bodies) meets to resolve the issues. The conference report is
returned to both Houses for approval and then is transmitted to the
President for his signature or veto.
Budget execution and control.—As the budget is approved, it becomes the basis for the program of each agency during the fiscal year.
However, not all the funds approved by Congress are spent in that
one year. The funds authorized for some programs (such as the building of warships or other major construction items) will be spent over
a period of several years.
Therefore, when the Congress reduces or increases the amount of
new obligational authority requested by the President for a given year,
it does not necessarily alter expenditures in that year by the same
amount. Such a change may affect expenditures over a period of
several years.
The relationship between new obligational authority and expenditures estimated for 1967 is illustrated in the chart on the facing page.
62
1967
Administrative Budget
- R e l a t i o n of A u t h o r i z a t i o n s t o E x p e n d i t u r e s
S Billions
New Authority
Recommended
to Congress
T o Be U s e d in 1967
82.1
Expenditures
in 1967
112.8
121.9
T H E A D M I N I S T R A T I V E BUDGET
Unspent Authorizations
E n a c t e d in Prior Y e a r s
114.7
T o be held f o r E x p e n d i t u r e s
in L a t e r Y e a r s
82.5
Unspent Authorizations
for E x p e n d i t u r e s in
Future Y e a r s
122.3
63
EXCERPTS FROM THE PRESIDENT'S
BUDGET MESSAGE
To the Congress of the United States:
With this message I transmit to you today the budget of the United
States of America for the fiscal year 1967.
A budget is not simply a schedule of financial accounts.
It is a program for action.
The program of the Federal Government which this budget recommends is grounded on these fundamental premises:
• In international affairs we are determined to seek peace with every
means at our command
—but we are fully prepared to meet the costs of opposing
aggression.
• In domestic affairs we are determined to press confidently forward
toward the Great Society
—but we shall do so in an orderly and responsible way, and at a
pace which reflects the claims of our commitments in Southeast
Asia upon the Nation's resources.
The budget for 1967 bears the strong imprint of the troubled world
we live in.
It provides the funds we now foresee as necessary to meet our commitments in Southeast Asia. If our efforts to secure an honorable
peace bear fruit, these funds need not be spent. Yet it would be folly
to present a budget which inadequately provided for the military and
economic costs of sustaining our forces in Vietnam. And those costs
are substantial.
In this setting I have sought to frame a balanced program.
• We are a rich nation and can afford to make progress at home
while meeting obligations abroad—in fact, we can afford no other
course if we are to remain strong. For this reason, I have not halted
progress in the new and vital Great Society programs in order to
finance the costs of our efforts in Southeast Asia.
• But even a prosperous nation cannot meet all its goals all at
once. For this reason, the rate of advance in the new programs has
been held below what might have been proposed in less troubled
times, many older and lower priority activities have been reduced
64
or eliminated, and economies have been sought in every operation of
the Government.
• At the same time, I want to insure that the necessary increase in
budget expenditures is so financed as to promote economic stability.
For this reason, I am proposing several tax measures designed to increase Federal revenues.
With this balanced program we can:
• Meet our international responsibilities with firmness.
• Maintain continued prosperity and economic stability at home.
• Raise the productivity, earnings, and living standards of our
poorer citizens.
• Improve the quality of life for all citizens.
• Preserve and protect our national resources for the generations to
come.
And we can achieve these ends without unduly straining our economic resources or impairing our steady economic expansion.
This Nation has committed itself to help defend South Vietnam
against aggression. We are determined to fulfill that commitment.
This Nation has also committed itself to a major effort to provide
better economic, social, and cultural opportunities for all Americans.
We are also determined to fulfill this commitment.
Both of these commitments involve great costs. They are costs we
can and will meet.
The objectives we are seeking are interdependent.
We cannot fight for peace and freedom in Vietnam, while sacrificing
individual dignity and opportunity at home. For it would be a hollow
victory if our pursuit of world peace were carried out at the expense
of domestic progress.
Yet we must also recognize that a truly Great Society looks beyond
its own borders. The freedom, health, and prosperity of all mankind
are its proper concern.
The struggle in Vietnam must be supported. The advance toward
a Great Society at home must continue unabated.
This budget provides the means for both these goals.
I urge the support of Congress and all Americans for its principles
and its programs.
kJ g
lU^ii^jAiii!^!' >
JANUARY 2 4 , 1 9 6 6 .
|
7f
65
TABLES O N THE BUDGET
A d m i n i s t r a t i v e Budget a n d Trust Fund Expenditures b y Function, 1 9 6 0 - 6 7
The following two tables show administrative budget and trust fund expenditures since i960,
according to the functions they serve. The functional categories provide a meaningful
historical comparison because all expenditures for activities of a similar nature are grouped
together even if they are made by different agencies, or if—through reorganizations or
other actions—they have been shifted from one agency to another over the years.
ADMINISTRATIVE BUDGET EXPENDITURES B Y FUNCTION
[Fiscal years. In millions of dollars]
Actual
Description
1960
1961
Estimate
1966
1967
032 13,000 14, 195 14,771
532 16, 632 15, 351 11,839
594 11, 874 11,932 12,349
6,236
319 6, 376 7,021
16,600
13,880
14,160
6,370
18,150
15,970
14,980
6,400
978
1962
1963
1964
1966
National defense:
Department of Defense—military:
Military personnel
Purchase of weapons and equipment
Operation and maintenance
Research and development.
Military construction, civil defense,
and other
..
11,
13,
10,
4,
1,915
1,650
Subtotal, military.
Atomic energy
Military assistance
Defense-related activities
41,215 43, 227 46,815 48, 252 49,760 46,173 52,925
2, 713
2,625
2,390
2, 623
2, 806 2, 758
2,765
1,449
1,229
1,275
1,609
1, 390 1, 721
1,485
104
136
-30
244
92
24
172
57,150
2,300
1,150
-59
.
Subtotal.
738 12,085
334 13,095
223 10,611
710 6, 131
1,210
1, 305
13,
14,
11,
6,
1, 338
373
1,261
45, 691 47, 494 51,103
52, 755
54,181
50,163
56,560 60,541
International affairs and finance:
Food for Peace
Economic and financial programs:
Development loans
Supporting assistance
Alliance for Progress
Technical cooperation..
Other
Conduct of foreign affairs
Foreign information and exchange activities
Subtotal
1, 327
1, 653
1,726
1, 779
1,704
1,641
1,701
1,539
202
995
258
1,013
149
35
217
169
487
216
347
618
155
272
738
249
760
494
260
245
67
346
768
371
272
226
-158
297
754
387
367
227
359
346
669
509
420
204
-127
327
654
642
430
200
147
328
137
158
197
201
207
223
229
237
3,064
3, 954
4,301
4, 151
3,687
4,304
3,932
4,177
113
125
8
279
232
17
565
359
61
1, 516
483
92
2,768
641
112
3,538
662
89
3,810
735
101
3,600
656
100
154
217
272
460
650
804
954
944
401
744 . 1, 257
2, 552
4,171
5,093
5,600
5,300
Space research and technology:
Manned space flight
Scientific investigations in space
Meteorology andother space applications.
Other research, technology, and supporting operations
Subtotal
Agriculture and agricultural resources:
Farm income stabilization
Agricultural land and water resources
Rural electrification and telephone loans.
Farming and rural housing loans
Research and other agricultural services.
Subtotal
2, 370
324
330
289
293
2, 345
347
301
349
324
3,093
367
303
234
341
3, 954
324
342
300
391
4,144
324
342
251
414
3,438
341
392
268
457
3,134
374
193
90
522
2,989
348
196
-612
452
3,606
3, 667
4, 338
5,311
5, 475
4,898
4,313
3,372
1,279
220
74
65
68
51
1,444
331
91
61
73
55
1,623
280
94
68
81
60
1, 779
303
112
71
94
73
1, 832
332
130
91
105
73
1,922
374
134
105
120
94
1,985
421
194
114
123
84
2,098
409
204
141
123
86
1,757
2,056
2,206
2, 431
2, 563
2,750
2,920
3,062
Natural resources:
Land, water, and power resources
Forests
Recreational resources..
Minerals
Fish and wildlife
General resources surveys and other
Subtotal
66
—
ADMINISTRATIVE BUDGET EXPENDITURES B Y FUNCTION—Continued
[Fiscal years. In millions of dollars]
Actual
Description
1960
1961
1962
Estimate
1963
1964
1965
1966
1967
Commerce and transportation:
Aviation
Water transportation
Postal service
Area and regional redevelopment
Regulation of business
Highways
Advancement of business
568
508
525
716
569
914
59
38
265
67
36
271
781
654
797
7
74
33
427
808
672
770
101
84
41
366
835
658
578
401
91
39
401
875
728
805
398
98
39
557
879
749
878
217
101
77
301
913
756
755
193
104
102
-150
1,963
2,573
2,774
2,843
3,002
3,499
3,202
2,672
Urban renewal and community facilities.
130
Public housing programs
134
Aids to private housing:
Federal Savings ana Loan Insurance
Corporation
-20
Federal National Mortgage Association
-30
Federal Housing Administration and
other
—122
National capital region
30
162
150
261
163
222
178
306
149
420
230
477
249
571
261
-35
-237
-264
-248
-205
-262
-352
75
-123
-439
-540
-629
-466
-84
51
-347
*
211
74
167
70
59
-73
64
172
71
-19
127
122
320
349
-67
-80
-104
77
123
Public assistance (excluding medical care
for the aged)
2,061
815
Other health services and research
Health services for the aged
__
2,147
938
23
2, 331
1, 130
103
2, 631
1,354
157
2, 786
1,668
210
3,288
2,091
390
1,210
523
3,364
2,499
1,122
1,600
531
Subtotal
.
Housing and community development:
Subtotal
-
Health, labor, and welfare:
Labor and manpower
School lunch, special milk, and food
stamp
Vocational rehabilitation and other
Subtotal..
510
809
591
224
345
2,827
1,610
272
211
464
234
70
241
85
275
108
284
140
308
158
299
214
364
511
338
508
3,690
4,244
4,538
4,789
5,475
5,898
8,377
9,962
327
120
261
156
332
143
286
181
337
183
350
207
392
206
428
219
404
310
383
241
418
309
413
405
730
365
712
512
1,546
425
140
723
866
943
1,076
1,244
1, 339
1,544
2,318
2,834
2,049
1,265
961
383
328
281
2,034
1,532
1,030
237
312
268
2,017
1,635
1,084
142
236
287
2,116
1,698
1,145
88
-109
248
2,158 2,176
1, 743 1,864
1, 229 1,270
59
43
44 -100
259
241
2,311
2,001
1,342
37
-856
286
2,307
1,978
1,376
126
-296
230
5,266
5,414
5,403
5,186
5,492
5,495
5,122
5,721
558
372
263
158
84
108
607
372
289
170
140
131
653
419
300
192
153
158
715
444
323
194
142
160
791
576
335
192
174
211
825
606
366
218
174
213
872
581
397
250
173
202
918
614
423
256
173
207
1,542
1,709
1, 875
1,979
2,280
2,402
2,476
2,591
9,198
9,980 10, 765 11,435 12,104
12,854
75
350
647
712
Education:
Elementary and secondary education
Science education and basic research
Higher education
Other aids to education
Subtotal..
Veterans benefits and services:
Disability and survivors compensation
Non-service-connected pensions
Hospitals and medical care
Education and training
Housing loan programs
Other benefits and services
Subtotal
General government:
Tax collection and central fiscal operations
Property and records management
Protective services and alien control
Legislative and judicial functions
Central personnel management
Territories and possessions, and other
Subtotal
Interest
9,266
9,050
Allowance for contingencies
Deduct interfund transactions
694
654
633
513
664
870
Total administrative budget expenditures
76, 539 81,515 87, 787 92,642 97,684 96,507 106,428 112,847
67
T R U S T FXJND E X P E N D I T U R E S B Y
FUNCTION
[Fiscal years. In millions of dollars]
Estimate
Actual
Description
1960
256
48
National defense
International affairs and finance
Agriculture and agricultural resources
Natural resources
Commerce and transportation
Housing and community development
Health, labor, and welfare
Education
Veterans benefits and services.
General government
Deposit funds (net)
Deduct interfund transactions
Total trust fund expenditures
_.
..
1961
196
13
1964
1962
1963
366
15
679
44
458
416
398
507
116
183
112
122
2, 831 2,505 2,662 2, 877
1,439 -273 1,524
-36
16, 358 19, 236 20, 382 21, 855
1
1
1
2
673
811
733
835
17
16
20
19
-78
203 -544
146
908
515
528
505
1965
1966
1967
898
875
751
487
126*
62* - 1 6 0*
190*
623
927
496
600
142
134
137
144
3,482 3,864 3,780 3,895
1, 889 1,136 1,988 1,194
22, 733 23,186 26, 589 31,110
4
2
2
3
682
666
624
554
24
18
21
23
-48
-567 -210 - 1 6 6
767
521
638
795
21,212 22, 793 25,141 26, 545 28, 885 29,637 33,786 37,882
* Less than one-half million dollars.
Government Employment and Population, 1942-67
The following table presents data on employment and population. The figures for the
Federal Government include all employment—full-time and part-time—in the executive branch.
Legislative and judicial branch employment is excluded.
State and local employment have risen more rapidly than Federal executive branch employment in the past two decades. This trend is expected to continue in 1967.
Population
Government employment
Year
Federal
State and All governmental
executive local governbranch
units
ments
(thousands) (thousands) (thousands)
194 2
194 3
1944
194 5
1946
1947...
1948
1949
1950..
195 1
195 2
1953...
195 4
195 5
195 6
1957....
195 8
195 9
1960
196 1
1962
1963....
1964
1965..
1966 (estimate)
1967 (estimate)
NOTES:
2, 272
3, 274
3,304
3,787
2,666
2,082
2,044
2,075
1,934
2,456
2, 574
2, 532
2, 382
2,371
2, 372
2, 391
2, 355
2, 355
2,371
2,407
2,485
2,490
2,469
2,496
2,639
2,700
3,310
3,184
3,092
3,104
3, 305
3, 568
3, 776
3,906
4,078
4,031
4,134
4, 282
4,552
4,728
5,064
5, 380
5,630
5,806
6,073
6,295
6,533
6,834
7,236
7,659
5, 582
6,458
6,396
6,891
5,971
5,650
5, 820
5,981
6,012
6,487
6,708
6,814
6,934
7,099
7,436
7,771
7,985
8,161
8,444
8,702
9,018
9,324
9,705
10,155
Federal as
percent of
all governmental
units
40.7
50.7
51.7
55.0
44.6
36.8
35.1
34.7
32.2
37.9
38.4
37.2
34.4
33.4
31.9
30.8
29.5
28.9
28.1
27.7
27.6
26.7
25.4
24.6
24.6
24.0
Total
Federal
United
employment
per 1,000
States
(thousands) population
135, 361
137,250
138,916
140,468
141,936
144,698
147,208
149, 767
152, 271
154, 878
157, 553
160,184
163,026
165,931
168,903
171,984
174, 882
177, 830
180,684
183, 756
186,656
189,417
192,119
194,583
16.8
23.9
23.8
27.0
18.8
14.4
13.9
13.9
12.7
15.9
16.3
15.8
14.6
14.3
14.0
13.9
13.5
13.2
13.1
13.1
13.3
13.1
12.9
12.8
13.4
13.6
Employment data are for June.
Population data are for July 1 and include Hawaii and Alaska.
An official projection of population and of State and local government employment for 1966 and 1067 is
not available. The percentages and ratios shown for these years are consistent with a range of reasonable estimates based on recent trends in population and State and local employment.
68
Receipts From and Payments to the Public, 1960-67
T h e following table presents total receipts f r o m the public by source and payments to the
public by function. These data combine the administrative budget and trust f u n d figures,
and eliminate transactions taking place entirely within the Government. A few other adjustments are also m a d e to shift data recorded on an accrual basis to a cash basis.
[Fiscal years. In millions of dollars]
Actual
Description
Estimate
I960
1961
1962
1963
1964
1965
1966
40,715
21,494
11,676
11,067
1,606
1,105
41, 338
20,954
11,860
12,405
1,896
982
45, 571
20, 523
12, 534
12, 561
2,016
1,142
47, 588
21, 579
13,194
14, 862
2,167
1, 205
48,697
23,493
13, 731
16, 832
2, 394
1,252
48,792
25,461
14,570
16,905
2,716
1,442
51,400
29,700
13,028
18,819
2,932
1,655
56,240
34,400
13,257
24,339
3,301
1,845
2,167
2,398
2, 729
3,009
3,042
3,052
2,900
2,900
482
504
501
494
494
488
490
490
4,766
4,905
4,288
5,641
5, 596
6,274
7,229
8,766
97, 242 101, 865 109, 739 115, 530 119,699 128,154
145,539
National defense
45,915 47,685 51,462 53,429 54, 514 50,790 57,421
International affairs and fi4,583
nance
4,092
2,806
3,608
3,976
3,805
3,492
Space research and technology
5,093
5,600
401
744
2, 552
1,257
4,171
Agriculture and agricultural
resources
5,353
4,598
3,601
3,677
4,399
5,623
5,761
2,820
Natural resources
1,866
2,914
2,151
2,282
2,535
2,680
7,421
Commerce and transportation.
4,819
5,487
7,038
5,107
5, 777
6,545
Housing and community development
908
1,982
1,440
-103
1,691
-268
1,674
Health, labor, and welfare
19,107 22, 365 23,975 25,698 27, 285 28,292 34,115
Education
1,497
2,264
867
945
1,052
1,214
1,299
6,080
Veterans benefits and services.
5,642
5,907
6,187
5,971
6,092
6,107
8,605
Interest
9,304
7,233
7,257
6,940
7,427
8,011
2,341
General government
2,414
1, 558
1,677
1,953
1, 837
2, 221
—210
Deposit funds (net)
—166
-78
203
-544
-194
-567
Undistributed adjustments
-1,114 -1,960 - 2 , 2 2 4 - 1 , 771 -2,862 —1,170 —2,170
61,404
1967
Receipts from the public:
Individual income taxes
Corporation income taxes
Excise taxes
Employment taxes
Estate and gift taxes
Customs
_
Deposits by States, unemployment insurance...
Veterans life insurance premiums
Other budget and trust receipts
Total, receipts from the
public
95,078
Payments to the public:
Total, payments to the
public
Excess of receipts ( + ) or payments (—)
94,328
99,542 107,662 113, 751 120, 332 122,395 135,048
+750 -2,300 - 5 , 797 -4,012
-4,802 —2,696 —6,894
4,429
5,300
3,645
3,041
6,620
1,193
39,331
2,774
6,380
10,152
2,523
—48
—1,696
145,048
+491
69
Expenditures and New Obligdtional Authority by Agency
The following table indicates the 1967 expenditure estimates for the major agencies of the
Federal Government. It also shows the amount of spending authority being requested for each
agency. Because of the long lead time required to design, order, produce, and deliver such
complex goods as military and space equipment, and for other reasons, not all the new obligational authority granted will result in expenditures during the same year.
[Fiscal year 1967 estimate. In millions of dollars]
New obligational
authority1
Expenditures
Description
Legislative branch
The Judiciary
Executive Office of the President
Funds appropriated to the President:
Military assistance
Economic assistance
Office of Economic Opportunity
Other
Department of Agriculture
Department of Commerce
Department of Defense:
Military
Civil
Department of Health, Education, and Welfare
Department of Housing and Urban Development
Department of the Interior
Department of Justice
Department of Labor
Post Office Department
Department of State
Treasury Department
Atomic Energy Commission
Federal Aviation Agency
General Services Administration
National Aeronautics and Space Administration
Veterans Administration
Other
District of Columbia
Allowance for contingencies
Deduct interfund transactions
Total
AdministraAdministrative budget Trust funds tive budget
funds
funds
205
93
31
239
93
31
1,150
2,200
1,600
78
5,798
923
60
4,127
917
2,469
1,750
501
6,615
1,143
57,150
1,369
10,191
6
36
25,144
58,938
1,358
11,714
—414
1,322
405
522
755
405
14,247
2,300
840
633
5,300
5,718
275
111
350
500
86
63
2,947
1,435
1,390
405
673
836
402
14,299
2,263
758
628
5,012
6,060
1,373
104
500
712
767
112,847
37,882
891
1
11
29
673
3, 582
489
121,904
•Less than one-half million dollars.
1 Of which $15.6 billion in administrative budget funds and $40.9 billion in trust funds do not require
current action by the Congress.
70
Administrative Budget Totals and Public Debt, 1789-1967
The administrative budget surplus or deficit during a given year does not alone determine
the change in the public debt. Changes in the Federal Government's cash balance and a
few other factors also influence the change in the debt. A significant part of the public debt is
held by Federal Government trust funds.
As explained in this booklet, the administrative budget totals are not as comprehensive as
the totals for Federal receipts from and payments to the public. However, for most years
prior to the commencement of social security payments in 1937, the differences are insignificant.
[In millions of dollars]
Fiscal
year
Administrative
budget
receipts
1789-1849... 1,160
1850-1899... 13,895
Admin- Surplus Public
istrative (+jor debt at
budget deficit end of
expendyear1
(-)
itures
Fiscal
year
Administrative
budget
receipts
Admin- Surplus
istrative (+) or
budget deficit
expend(-)
itures
1,090
14,932
+70
-1,037
63
1,437
1933. ...
1934-...
1,997
3,015
4,598
6,645
-2,602
-3,630
3,706
3,997
4,956
5,588
4,979
6,497
8,422
7,733
6,765
8,841
-2,791
-4,425
-2,777
-1,177
-3.862
1900
1901
1902
1903
1904
567
588
562
562
541
521
525
485
517
584
+46
+63
+77
+45
-43
1,263
1,222
1,178
1,159
1,136
193 5
193 6
193 7
193 8
193 9
1905
1906
1907
1908
1909
544
595
666
602
604
567
570
579
659
694
-23
+25
+87
-57
-89
1,132
1,143
1,147
1,178
1,148
1940
1941....
1942....
1943. ...
1944.-
5,137
7,096
12,547
21,947
43.563
9,055 -3,918
13,255 -6,159
34,037 -21,490
79.368 -57,420
94,986 -51,423
1910
1911
1912
1913
1914
676
702
693
714
725
694
691
690
715
725
-18
+11
+3
1,147
1,154
1,194
1,193
1,188
1945 . . .
1946...
1947...
1948...
1949...
44,362
39,650
39,677
41.375
37,663
98,303 -53,941
60,326 -20,676
+754
38,923
32,955 +8,419
39,474 -1,811
1915
1916
1917
1918
1919
683
762
1,100
3,630
5,085
-63
746
+48
713
-853
1,954
12,662 -9,032
18,448 -13,363
1,191
1,225
2,976
12,455
25,485
1950...
195 1
195 2
1953 ..
1954...
36,422
47,480
61,287
64,671
64,420
39,544
43,970
65,303
74,120
67,537
1920
1921
1922
1923
1924
6,649
5,567
4,021
3,849
3,853
6,357
5,058
3,285
3,137
2,890
+291
+509
+736
+713
+963
24,299
23,977
22,963
22,350
21,251
195 5
195 6
195 7
1958...
1959...
60,209
67,850
70,562
68,550
67,915
64,389 -4,180
66,224 +1,626
68,966 +1,596
71.369 -2,819
80,342 -12,427
1925
1926
1927
1928
1929
3,598
3,753
3,992
3,872
3,861
2,881
2,888
2,837
2,933
3,127
+717
+865
+1,155
+939
+734
20,516
19,643
18,512
17,604
16,931
1960-1961...
1962...
1963-1964...
77,763
77,659
81,409
86.376
89,459
76,539
81,515
87,787
92,642
97,684
+1,224
-3,856
-6,378
-6,266
-8,226
1930
1931
1932
4,058
3,116
1,924
3,320
3,577
4,659
+738
-462
-2,735
16.185
16,801
19,487
1965...
1966 est
1967 est
93,072 96,507
100,000 106,428
111,000 112,847
-3,435
-6,428
-1,847
-3,122
+3,510
-4,017
-9,449
-3,117
'Less than one-half million dollars.
1 Includes Government enterprise debt guaranteed by the U.S. Treasury.
Refunds of receipts are excluded from administrative budget receipts and expenditures starting in 1913;
comparable data are not available for prior years.
Certain interfund transactions are excluded from administrative budget receipts and expenditures starting in 1932. For years prior to 1932 the amounts of such transactions are not significant.
71
Federal Finances and tbe Gross National Prodwct, 1942-66
Since the gross national product (GNP) is die total of a9 the goods and services produced
by the Nation in a given year, its trend is a mefsi mearare of the growth of the economy.
By calculating annual Federal outlays as a percentage of GNP, it is possible to tell at a glance
how these outlays have changed over a period of time in relation to the change in the economy
as a whole.
Only Federal purchases of goods and services represent the use of currently produced
resources by the Federal Government—in effect, the Government's direct share of the GNP.
In contrast, both administrative budget expenditures and Federal payments to the public
include funds lent or transferred to others, or channeled to State and local governments, which
do not represent the use of current economic resources by the Federal Government.
[Amounts in billions of dollars]
Fiscal year
Gross
national
product
Administrative
budget expenditures
Cash payments
to the public
Federal purchases of goods
and services
Public"debt at
end of year 1
Amount Percent Amount Percent Amount Percent Amount Percent
of GNP
of GNP
of GNP
of GNP
1942
1943
1944
139.2
177.5
201.9
34.0
79.4
95.0
24.4
44.7
47.1
34.5
78.9
94.0
24.8
44.5
46.6
29.9
72.3
85-6
21.5
40.8
42.4
77.0
140.8
202.6
55.3
79.3
100.4
1945
1946
1947
1948
1949
216.8
201.6
219.8
243.5
260.0
98.3
60.3
38.9
33.0
39.5
45.3
29.9
17.7
13.5
15.2
95.2
61.7
36.9
36.5
40.6
43.9
30.6
16.8
15.0
15.6
89.7
40.1
13-0
13.2
19.3
41.4
19.9
5.9
5.4
7.4
259.1
269.9
258.4
252.4
252.8
119.5
133.9
117.5
103.6
97.2
1950
1951
1952
1953
1954
263-3
310.5
337.2
358.9
362.1
39.5
44.0
65.3
74.1
67.5
15.0
14.2
19.4
20.7
18.7
43.1
45-8
68.0
76.8
71.9
16.4
14.7
20.2
21.4
19.8
19.0
25.1
46.6
56.1
53.2
7.2
8.1
13.8
15.6
14.7
257.4
255.3
259.2
266.1
271.3
97.7
82.2
76.8
74.1
74.9
1955
1956
1957
1958
1959
378.6
409.4
431.3
440.3
469.1
64.4
66.2
69.0
71.4
80.3
17.0
16.2
16.0
16.2
17.1
70.5
72.5
80.0
83.5
94.8
18.6
17.7
18.5
19.0
20.2
43.9
45.2
47.7
50.7
54.7
11.6
11.0
11.1
11.5
11.7
274.4
272.8
270.6
276.4
284.8
72.5
66.6
62.7
62.8
60.7
1960
1961
1962
1963
1964
495.2
506.5
542.1
572.4
609.6
76.5
81.5
87.8
92.6
97.7
15.5
16.1
16.2
16.2
16.0
94.3
99.5
107.7
113.8
120.3
19.0
19.7
19.9
19.9
19.7
52.7
55.5
60.9
63.4
65.8
10.6
11.0
11.2
11.1
10.8
286.5
289.2
298.6
306.5
312.5
57.8
57.1
55.1
53.5
51-3
1965
1966 (estimate)
648.7
700.0
96.5
106.4
14.9
15.2
122.4
135.0
18.9
19.3
64.5
70.7
9.9
10.1
317.9
320.0
49.0
45.7
i Includes Government enterprise debt guaranteed by tbe U.S. Treasury.
72
U.S. GOVERNMENT PRINTING OFFICE: 1 9 6 6
O—200-400
ORGANIZATION CHART OF THE
EXECUTIVE BRANCH
This foldout chart presents a graphic view of
the major components of the Executive Branch
of the Government. Included are the staff
offices that make up the Executive Office of the
President, the n executive departments, and
various agencies, boards, and commissions.
Temporary commissions, and interagency and
public advisory committees are not included.
New Agencies Created During Calendar
Year 1965t
• Department of Housing and Urban Development (replacing the Housing and Home
Finance Agency).
• Appalachian Regional Commission.
• National Foundation on the Arts and Humanities.
• Water Resources Council.
For further details on the organization and functions of Federal agencies, see the £7.5.
Government Organization Manual (for sale by the Superintendent of Documents,
Government Printing Office, Washington, D.C., 20402).
E X E C U T I V E
OFFICE O F THE PRESIDENT • B U R E A U O F THE
BUDGET
B R A N C H
OF
THE
G O V E R N M E N T
HHIHHi
J A N U A R Y 1, I 9 <
@FedFRASER