Full text of Budget in Brief : Fiscal Year 1973
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E OFFICE OF THE PRESIDENT
MANAGEMENT AND BUDGET
FISCAL YEAR
1973
Individual
Income Taxes
3S,
Social Insurance
Taxes and
Contributions
26,
Human
National
Resources
Defense
45'
32,
Human Resources include: Education & Manpower, Health, Income Security, and Veterans BeneAts and Services.
Physical Resources include: Agriculture and Rural Development, Natural Resources and Environment, Commerce and Transportation,
and Community Development & Housing.
Other includes: General Government, International Affain and Finance, Space Research & Technology, the Federal Government share
of Federal Employees Retirement & Allowances.
Interest is net of: Interest paid to the Trust Funds.
CONTENTS
PART 1. FROM THE PRESIDENT'S MESSAGE. . . . . . . . . . . .
PART 2. GOALS AND ACCOMPLISHMENTS. . . . . . . . . . . . .
PART 3. PERSPECTIVES ON THE BUDGET . . . . . . . . . . . . .
Page
3
17
35
35
39
42
43
44
47
49
50
52
54
56
58
60
62
64
66
68
69
71
71
74
75
76
The Long-Range Outlook ................ ~ . . . . . . . . . . . . .
The Nation's Research and Development Effort. . . . . . . . . . . .
The Federal Debt .......... ". . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 4. THE BUDGET PROGRAM BY FUNCTION. . . . . . .
National Defense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interna tional Affairs and Finance. . . . . . . . . . . . . . . . . . . . . . . . .
Space Research and Technology. . . . . . . . . . . . . . . . . . . . . . . . . .
Agriculture and Rural Development. . . . . . . . . . . . . . . . . . . . . . .
Natural Resources. . ....... '..................... ". . . . . . . .
Commerce and Transportation. . . . . . . . . . . . . . . . . . . . . . . . . . .
Community Development and Housing. . . . . . . . . . . . . . . . . . . .
Education and Manpower. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Heal th.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income Security. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .
Veterans Benefits and Services. . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Government. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In terest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Revenue Sharing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART 5. THE BUDGET SYSTEM.". . . . . . . . . . . . . . . . . . . . . . . .
The Federal Budget Cycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Relation of Budget Authority to Outlays. . . . . . . . . . . . . . . . . .
PART 6. BUDGET TABLES... . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Budget Receipts, Outlays, Financing and Debt, 1961-1973.
2. Budget Receipts by Source and Outlays by Funct~on, 19631973.............................................
3. Budget Outlays by Subfunction, 1963-1973. . . . . . . . . . . . . .
4. Budget Authority and Outlays by Agency, 1971-1973. . . . .
5. Outlays and Receipts of Trust Funds, 1971-1973. . . . . . . . .
6. Summary of Full-Time Permanent Employment in the Executive Branch, 1971-1973. . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Federal Finances and the Gross National Product, 19541972. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Budget Receipts and Outlays, 1789-1973................
84
85
GLOSSARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87
77
78
82
82
83
1
INTRODUCTION
The budget is designed to serve many purposes:
- I t reflects the fiscal policies of the Government for promoting economic
growth, high employment, relative price stability, and strengthening
of the Nation's balance of payments position;
-It sets forth the President's requests to Congress for appropriation ac-'
tion on existing and new programs;
-It reports to the Congress and the people on how the Government
has spent its funds, making readily available data on expenditure, and
revenues of the Federal Government; and
-It projects the future fiscal position of the Government and thereby
serves a clear warning that in considering new proposals we make the
hard choices necessary to assure that they can be financed within a
full-employment budget policy.
Since the budget serves so many purposes, it is a complex, technical document. Therefore, the Budget in Brief is published each year to present the
highlights of the budget in a nontechnical style.
We hope that the Budget in Brief will promote greater understanding of
the budget and will stimulate interest in and understanding of the major
economic and social issues before our Government.
GEORGE
P. SHULTZ,
Director, Office of Management and Budget.
Note.-All years referred to are fiscal years, unless otherwise noted. Details
in the tables, text, and charts of this booklet may not add to totals because
of rounding.
2
PART 1
FROM THE PRESIDENT'S BUDCiET MESSAGE
"The Budget of the United States for the fiscal year 1973 has as
a 'c entral purpose a new prosperity fo'r all Americans without the
stimulus of war and without the drain of inflation.
"To provide for the needs of our people.by creating ~ew peacetime jobs and revitalizing the economy, we are spending $38.8
billion more in the current (1972) fiscal year than our receipts.
"I make that estimate fully aware that it is a large deficit, but
one that is necessary in a year of reduced receipts, as we increase
jobs and bring the economy back toward capacity.
"I am able to project a 1973 budget, with rising revenues, that
cuts this year's actual deficit by $1312 billion and brings us
strongly forward toward our goal of a balanced budget in a time
of full employment.
"If we were to spend less, we would be 'too little and too late'
to stimulate greater business activity and create more jobs; if we
were to spend more, we would be spending 'too much, too soon'
and thereby invite a renewal of inflation. Instead, we must spend
'enough and on time' to keep the economy on a steadily upward
peacetime course while providing jobs for all who want them
and meeting the urgent needs of the American people.
"The budget for fiscal 1972 reflects this Government's confidence in the American economy's ability and capacity to
respond to sensible stimulation. The budget for 1973, held to fullemployment balance, diminishes stimulation as the new prosperity takes hold and, by so doing, acts as a barrier against the renewal of inflationary pressure.
"I strongly urge the Congress to respect the full-employment
spending guideline this year, just as business and labor are expected to respect wage and price guidelines set forth to protect
the earning and buying power of the American worker and consumer. In the long run, only the intelligent application of responsible fiscal and monetary poHcies, coupled with the breaking of
inflationary expectations, will bring about peacetime prosperity
without rising prices in a free market economy.
3
"Deficit spending at this time, like temporary wage and price
controls, is strong but necessary medicine. We take that medicine
because we need it, not because we like it; as our economy successfully combats unemployment, we will stop taking the medicine well before we become addicted to it.
"Preparing the Federal budget forces us to face up to the
choices and challenges before us-to decide what national interests take priority.
"The budget is a superb deflator of rhetoric because it calls
to account the open-ended promises heard so often in an election
year. Proposals, no matter how attractive, must be paid for,
and when spending is proposed that takes us beyond full employment balance, that payment must either be in the form of
new taxes or rising prices. As the budget submitted herewith
proves, I intend to resist the kind of spending that drives up
taxes or drives up prices.
"One priority that most Americans will agree upon is the
return of power to people, after decades of the flow of power to
Washington. One good way of turning rhetoric into reality is to
put that principle into practice in the tax area.
"Power in its most specific sense is spending power. My own
choice between Government spending and individual spending
has been clear and consistent: I believe some of that power
should be taken from the Federal Government and returned to
the individual.
"Accordingly, over the past 3 years, the rate of increase in
Government spending has been cut nearly in half compared to
the 3 comparable years before this Administration took office.
"From 1965 to 1968, Federal spending increased by 51 %-an
annual average of 17%; over the 3-year period 1969-72,
spending rose by 28%-an average of 9% per year. The increase
from 1972 to the spending level proposed in this budget is only
4.1 %. This slash in the momentum of Federal spending is all the
more dramatic when you consider that more than 71 % of Federal
spending is "uncontrollable"-that is, locked into the budget by
previous congressional decisions.
"By putting the brakes on the increase in Government spending, we have been able to leave more spending power in the
hands of the individual taxpayer. In 1973, individuals will pay
$22 billion less in Federal income taxes than they would
if the tax rates and structure were the same as those in existence
when I took office. To a family of four that earns $7,500
4
a year, that means a redl:lction of Federal income taxes of $272
this calendar year. I believe that the members of that family can
use that money more productively fOT their own needs than
Government can use it for them.
FEDERAL INCOME TAX REDUCTIONS FOR MARRIED
COUPLE WITH 2 CHILDREN, 1969-72
(Calendar year)
Reduction between
1969 and 1972
Taxes paid
Wage income
1969
$5,00(L ____________ _
$7,500 _____________ _
$10,000 ____________ _
$15,000 ______ ______ _
1972
Amount
Percentage
$290
$98
$192
756
1,225
2,268
484
272
905
1,820
320
66
36
26
448
20
"The basic shift in the Government's fiscal philosophy has
gone relatively unnoticed. The upward curve of Federal spending is beginning to flatten out, while the Federal income tax
"bite" out of the individual paycheck is becom"ing measurably
less. This change in direction is as remarkable as it has been unremarked. We are not only talking about returning powereconomic power, real power-to people and localities, we are
doing something about it.
"Throughout this budget, a clear trend can be seen that is
designed to return power to people-in real terms, in dollarsand-cents terms. It is a trend which is expressed by Federal income tax cuts, by more State and local participation in program
administration, and by more Federal funds going to 'S tate and
local governments without restrictions.
"This is the right course for the American people; it reflects
their will; I remind the Congress of its power and responsibility
to make revenue sharing and other returns of power to people a
reality in this current session.
"Another priority-one upon which so much of our progress
at home depends-is to create a peaceful world order. We
could never fulfill our hopes for a full generation of peace from
a position of weakness; we can only negotiate and maintain
peace if our military power continues to be second to none.
"A demagogue may find it easy enough to advocate that we
simply allocate necessary defense dollars to social programs, but
a responsible Congress and a responsible President cannot afford
such easy answers.
5
"Our success in reducing our involvement in Vietnam by 480,000 men before May 1, 1972 and comparable materiel reductions will enable us-for the first time-to spend more in the
Department of Health, Education, and Welfare than we spend
in the Department of Defense.
"But it wo,u ld be foolhardy not to modernize our defense at this
crucial moment. Accordingly, and still within our full-employment guideline, I have budgeted a $6.3 billion increase in budget
authority for military programs, ,including vitally needed additions to our strategic forces and out rlaval strength.
"In the 1972 defense appropriation bill, which the Congress
did not pass until December of 1971, the Congress cut my ap'propriation request by $3 billion. My 1971 defense request was
cut by the Congress by $2.1 billion. These were costly cuts
especially in the field of research and development.
"We must be prudent in our defense spending, making certain
we get the best defense for each taxpayer dollar spent. Productivity here too must be increased, but we cannot afford to be "pennywise and pound-foolish." Nothing could be more wasteful than to
have to pay the price of weakness. It costs far less to maintain
our strength than it would cost to fall behind and have to catch
up, even if that could be done. I urge the Congress not to make
the costly mistakes it has made in previous years in its defense
cuts; the budget as submitted represents America's actual military needs, and offers the best means to secure peace for the coming generation.
"Another priority of this budget is to direct the resources of
the Federal Government toward those needs the American people most want met and to the people who are most in need.
-Welfare Reform, with training and work incentives, with
a new fairness toward the working poor and a minimum
income for every dependent family, is a good idea whose
time has come.
-Revenue Sharing has been debated at length. The States
and cities urgently require this aid; individual Americans
need it for everything from improved law enforcement to
tax relief. This budget allocates $2.5 billion in 1972 and $5.3
billion in 1973 to make General Revenue Sharing a reality
now.
--Schools need emergency assistance now to make necessary
adjustments to provide equal educational opportunity. This
budget allocates $500 million in 1972 and $1 billion,in 1973
for this purpose.
6
-Government reorganization is needed now, to deliver more
services for each tax dollar collected.
-Health care must be improved and made available to all
Americans, without driving up medical costs.
-Drug abuse prevention must be intensified to curb narcotics
trafficking and to expand Federal drug rehabilitation efforts coordinated by the White House Special Action Office.
-A new commitment to the aging is long , overdue to add
dignity and usefulness to their lives. .
-Scientific research and technology, so essential to our national security, also must focus more directly' on solving our
domestic problems, increasing o·u r productivity, and improving our competitive position in international trade.
-Veterans of the Nation will receive the special consideration they deserve, with particular emphasis on those reentering civilian life after ser\rice in Vietnam.
SUMMARY O'F THE 1973 BUDGET
"For 1973, the Federal budget at full-employment is approximately in balance.
THE BUDGET TOTALS
(Fiscal years. I n billions)
Description
1971
1972
1973
actual
estimate
estimate
Budget receipts ____________________________________________ _
Budget outlays ____________________________________________ _
$188.4
211.4
$197.8
236.6
$220.8
246.3
Deficit (-) ______________________________________________ _
-23.0
-38.8
-25.5
Full-employment receipts ___________________________________ _
Full-employment outlays 1 __________________________________ _
214. 1
209.2
225.0
233. 1
245.0
244.3
Full-employment surplus or deficit (-) ______________________ _
4.9
-8.1
0.7
Budget authority __________________________________________ _
236.4
'249.8
270.9
$382.6
284.9
$409.5
304.3
$455.8
343.8
$493.2
371.3
51. 1
53.2
118.7
38.8
50.7
136.8
54.6
1970
Outstanding debt, end of year:
Gross Federal debt- ____________________________ _
Debt held by the public ________________________ _
Outstanding Federal and federally assisted credit, end
of year:
_________________________________ _
Guaranteed and insured loans 3 __________________ _
~rect loans by Government-sponsored agencies ___ _
~rectloans2
actual
105.4
37.5
1 These estimates reflect the fact that under conditions of full employment outlays for unemployment insurance benefits and the EmergencY .Employment Act program would be lower. Spending
under other programs are also affected by employment conditions. For example, outlays for food
stamps, social security benefits, public assistance, and veterans' pensions would also be lower under
conditions of full employ. ment, and interest would be higher. If adjustments were feasible for all
such items, full employment outlays probably would be lower.
2 I ncluding loans in expenditure account.
S Excluding loans by Government or Government-sponsored .agencies.
7
"Budget receipts in 1973 are estimated to be $220.8 billion,
which is $23 billion higher than in 1972. If the economy were
operating at full employment throughout the year, the revenues
produced would be $245 billion.
"Estimated receipts for 1973 reflect a reduction of $6.9 billion
as a result of the tax cuts proposed in the new economic policy
and incorporated in the Revenue Act of 1971. About $5 billion
of this reduction is in individuals' taxes. The resulting increase
in consumers' purchasing power will be a major source of
strength in the economy.
"Budget outlays in the coming year are expected to be $246.3
billion, an increase of $9.6 billion over the current year. This
outlay increase will also help provide jobs and business investment in the year ahead, while remaining within the limit set by
full-employment budget guidelines. If the economy were operating at full employment throughout the year, outlays for unemployment insurance benefits and the Emergency Employment
Act-and outlay totals-would be lower than the amounts included in the 1973 budget.
"This budget requests $271 billion of budget authority-the
right to make commitments to spend-in 1973. About $185
billion of this amount will require new action on the part of the .
Congress.
ECONOMIC SETTING AND FISCAL POLICY
"Economic setting.-In January 1969, the Nation's chief economic problem was mounting inflation. Anti-inflationary policies
that we adopted began gradually to lower the rate of price increases. However, progress was slower than we had hoped and
was accompanied by an unacceptable increase in unemployment.
This increase was, in part, a result of the transition of 2Y2 million
people from wartime to peacetime activities. Action was called
for and action was taken.
On August 15, 1971, a new economic policy was announced
that:
• imposed a 90-day freeze on wage and price increases;
• proposed a job development tax credit to increase employment;
• recommended repeal of the automobile excise tax and an
early increase in the personal tax exemption;
• reduced planned Federal spending in 1972 by $5 billion;
• suspended the convertibility of the dollar into gold; and
• imposed a temporary 10% import surcharge.
8
This policy has begun to move the economy toward full employment without inflation and without war, a condition we
have not experienced in this generation. The consumer price
index rose only 1.7% at an annual rate from August to November-the lowest rate of increase for a comparable period in 4Y2
years. Now we have moved beyond the wage and price freeze into
a transitional period of flexible wage and price controls and on
the way to a return to reasonable price stability under free
markets.
A Slowdown in InRation- Percent Change in the CPI (Annual Rates)
"Each element of the new economic policy has a vital role in
sustaining the momentum of our economy. The 1973 budget
carries out a fiscal policy that is responsive to the needs of the
Nation and responsible in holding down inflation.
"Budget policy.-The full-employment budget concept is cen,tral to the budget policy of this Administration. Except in emergency conditions, expenditures should not exceed the level at
which the budget would be balanced under conditions of full
employment. The 1973 budget conforms to this guideline. By
doing so, it provides necessary stimulus for expansion, but is not
inflationary.
480.-40.0. 0-72
2
9
Full Employment Budget
-Surplus or Deficit
A
.
. -10.7
"We have planned the 1973 expenditures to adhere to the fullemployment budget concept even though this has required making many difficult decisions. It now appears that the 1972 fullemployment budget will be $8.1 billion in deficit. While our
economy can absorb such a deficit for a time, the experience of
the late 1960's provides ample warning of the danger of continued, and rising, full-employment deficits. The lesson of 196668, when such deficits led to an intolerable inflation, is too clear
and too close to permit any relaxation of control of Government
spending."
BUDGET RECEIPTS
The basic economic assumptions underlying the estimate of
receipts in 1972 and 1973 are summarized in the following table:
ECONOMIC ASSUMPTIONS
[Calendar years. In billions]
Description
Gross national product ......................... .
Personal income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate profits before tax .................... .
10
1971
actual
$974. 1
803.6
75.4
1972
estimate
$1,047
857
85
1973
estimate
$1, 145
924
99
..
" Total budget receipts in 1973 are estimated at $220.8 billion,
compared with $197.8 billion in 1972, an increase of $23.0 billion. The anticipated expansion of economic activity and the
corresponding growth in individual and corporate income are
expected to provide increased budget revenues in 1973. Part of
the increase, however, will be offset by tax cuts resulting from the
Revenue Act of 1971, as shown in the table below.
EFFECT OF THE REVENUE ACT OF 1971 (PUBLIC LAW 92-178)
[In billions of dollars]
1972
Individual income tax:
Increased exemptions and deductions .................... .
Correction of withholding schedules ..................•...
Investment tax credit and revision of accelerated depreciation.
Total individual. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate income tax:
Investment tax credit and revision of accelerated depreciation.
Deferral of tax liability for certain corporations engaged in
foreign trade (DISC) .•...............................
Total corporate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excise tax: Repeal of auto and small truck excise taxes ....... .
Total. . . . . ...................................... .
1 Less
-2.7
o. 7
1973
O. 1
-2.6
O. 1
-0.4
-1.9
-2.9
(1)
-1.6
(1)
-0.1
(1)
-2.5
-1.7
-2.3
-4.4
-6.9
than $50 million.
The Federal tax system relies heavily on income taxesJ with
59% of total budget receipts coming from this source in 1973.
Individual income tax receipts are estimated at $93.9 billion in
1973, $7.4 billion more than in 1972. The increase results from
growth in taxable personal income, but is reduced substantially
by tax reductions enacted in the Tax Reform Act of 1969 and
the Revenue Act of 1971. Corporate income tax receipts are
estimated at $35.7 billion in 1973, an increase of $5.6 billion
over the previous year. This increase reflects the rising share of
corporate profits in gross national product that normally occurs
whenever the economy expands toward full employment.
Social insurance taxes and contributions are expected to total
$63.7 billion in 1973, up by $9.6 billion from 1972. This category includes payroll taxes to finance social security and hospital
insurance; unemployment insurance taxes; contributions to the
11
,1965
Fiscal Y~ts '
1966
1967
1968
1969
1970
197.
1972
' ":, . :tEstimate . .
railroad retirement system; civil service retirement contributions
by Federal employees and premiums for supplementary medical
insurance. The increase in receipts from this source reflects the
increase in the taxable earnings base from $7,800 to $9,000, that
became effective January 1, 1972, as well as proposed legislation
to increase the taxable earnings base to $10,200 effective J anuary 1, 1972, and to decrease the employer-employee combined
rate from 11.3% to 10.80/0 effective January 1, 1973 (under
existing law, the present rate of 10.40/0 is scheduled to rise to
11.3% effective January 1, 1973).
Excise taxes levied on a variety of manufactured products,
activities, and services, are expected to provide 70;0 of total
budget receipts in 1972. Receipts from this source are less in
1972 and 1973 than they were in 1971. This results from the
provisions of the Revenue Act of 1971 that repealed the auto
and small truck excise taxes, reducing revenues in both 1972
and 1973 by more than $2 billion.
All other receipts, including estate and gift taxes, customs
duties, and miscellaneous receipts, will amount to 50;0 of total
receipts in 1973.
12
BUDGET RECEIPTS
[Fiscal years. In billions,]
1971 actual
Source
1972
estimate
1973
estimate
.
.
.
.
.
$86.2
26.8
48.6
16.6
10.2
$86.5
30. 1
54. 1
15.2
11. 9
$93.9
35. 7
63. 7
16.3
11. 2
Total budget receipts ................. .
188.4
197.8
220.8
Under existing law. . . . . . . . . . . . . . . . . . . . . . . . . .
Under proposed legislation .................. .
188.4
197. 7
o. 1
220. 1
o. 7
Individual income taxes .....................
Corporation income taxes ...................
Social insurance taxes and contributions .......
Excise taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All other receipts ..........................
THE LONGER VIEW
In 1976, our Nation will celebrate its 200th birthday. Three
basic questions must be answered as we look toward a proper
celebration of our bicentennial.
• How can we best achieve our great national goals?
• What role should the Federal Government have in this
effort?
• How can we best rededicate ourselves to the ideal of personal freedom?
In considering these questions, we cannot ignore the hard fact
that the increase in uncommitted resources between now and
1976 will be small in comparison with the magnitude of the
tasks, forcing us to make difficult decisions about priorities.
My basic preferences in allocating our national resources are
clear.
First, I believe that, in order to avoid permanent inflation,
Federal spending must not exceed the level at which the budget
would be balanced if the economy were at full-employment.
Second, I believe that an increasing share of our national resources must be returned to private citizens and State and local
governments to enable them-rather than the Federal Government-to meet individual and community needs.
Last year, the budget margin projected for 1976-the potential Federal budget surplus, assuming full employment and only
proposed expenditures and taxes as then (1971) existing-was
$30 billion. Actions taken in the last 12 months and those proposed in this budget will reduce that margin to only $5 billion.
This margin is less than $25 from each man, woman, and child
13
in the expected 1976 population, and is less than 1.6% of pro ..
jected 1976 budget receipts. And yet, it must be sufficient to
cover the 1976 costs of all new proposals not included in this
budget.
The moral is clear. A strong fiscal discipline will be necessary
in the years ahead if we are to preserve the buying power of the
dollar. New spending programs must be evaluated against the
most stringent of standards: do they have enough merit to warrant increases in taxes or elimination of existing programs?
This Administration has measured its proposals against this
standard. I have made the hard choices necessary to assure that
they can be financed within a full-employment budget policy.
I urge the Congress to engage in a similar self-discipline in
making the hard choices that will be required during the next
few years. This Administration will vigorously oppose irresponsible and short-sighted spending proposals that would commit
large sums of Federal money to schemes that are politically
attractive but would endanger an inflation-free prosperity.
CONCLUSION
"There will be those who contend that in this budget their
favorite programs are not financed, or are not financed as much
as they want them to be.
"They will be absolutely right.
"Government expenses increase each year because special interest groups, representing only those who stand to benefit from
their program, persuade decisionmakers that more resources are
needed for those programs without regard to the effect on the
total budget. The cost is multiplied by geometric progression
when this tactic is repeated for literally hundreds of programs.
Seldom do any of these groups recommend additional taxes to
finance their proposed spending.
"Then inflationary factors, frequently induc.ed by the large
total volume of spending resulting from individual decisions made
without consideration of the larger picture, force the cost of
these programs upward. At the same time the special constituency benefiting from the program is enlarged and strengthened,
its demands are correspondingly increased, and the cycle continues to feed upon itself.
14
"Taken together, what is good for all the special interests is
bad for the pu:blic interest. Our strength is in our ability to act as
one Nation, not as a conglomerate of warring and greedy factions.
"For this reason my 1973 budget, large as it is, will not be
large enough to satisfy many. However, I hope the American
people will make their desire for less pervasive government
known in unmistakable terms to their elected representatives. It
is essential to preserve the private enterprise system, with its competitive spirit and its work ethic, which has done so much to inspire the independent and help the dependent and which has
made this Nation the economic example to the rest of the world.
"That system has enabled us to secure, for our people, a far
higher standard of living than any experienced, or even envisioned' by the rest of the civilized world.
"I do not wish it said of my Administration that we furthered
or encouraged the process of discarding that heritage. So, I have
emphasized fiscal responsibility and downward pressure on Federal expenditures, rather than simply accept all requests of all
special groups and hope that the inevitable need for new taxes
cOllld be delayed as long as possible.
"I am not averse to a day of reckoning, but when it comes, I .
want it to be said that this Administration foresaw the danger,
held spending to amounts that could be paid from full-employment revenues, and took all steps possible to reduce the need for
raising taxes so that the Federal Government plays a smaller, not
a larger, role in the life of each of us. In this way, every citizen
will have a larger share of the fruits of his labor to spend the
way he or she freely chooses."
15
PART 2
GOALS AND ACCOMPLISHMENTS
This section reviews , the most important goals of the Administration and
the progress which has been made toward them in the last 3 years. It is
intended to show how the 1973 budget proposals build on that progress.
TOWARD THE GOAL OF
A New Prosperity, Without Inflation and Without War
Recent Program Improvements
• Instituted the principle of the balanced full employment budget.
• Created the National Commission on Productivity and the Regulations
and Purchasing Review Board.
• Established the ·C onstruction Industry Stabilization COnimittee.
• Began the jobs for veterans program and increased summer jobs for
youth.
• Implemented the Emergency Employment Act of 1971.
The New Economic Policy Will
• Create more new jobs through:
-Accelerated personnel income tax cuts.
- Job Development tax credit.
-Repeal of the auto and small truck excise taxes.
• Reduce inflation through:
-Maintaining fiscal responsibility.
-90-day wage-price freeze.
-Phase 2 stabilization mechanism.
• Provide new stability for the dollar through:
-Realinement of international exchange rates.
-Suspension of gold and other reserve asset conversion.
-Negotiated changes in trade practices and barriers.
TOWARD THE GOAL OF
Simpler, F airer Taxation
•
•
•
•
•
•
•
•
Closed loopholes.
Simplified the mechanics of payment.
Increased personal exemptions and standard deductions.
Ended the 10% income tax surcharge.
Eliminated income taxes altogether for 9 million low-income people.
Liberalized and simplified depreciation regulations for business.
Established the Job Development credits.
Repealed the auto and small truck excise tax.
17
480-400 0-72
3
TOWARD THE GOAL OF
Making Government More Effective and More Responsive to the
People
Recent Program Improvements
The following were created• Domestic Council.
• Council on Environmental Quality.
• Office of Management and Budget.
• Council on International Economic Policy.
• Environmental Protection Agency.
• Office of Consu!l1er Affairs.
• Office of Telecommunications Policy.
• Action.
• National :O ceanic and Atmosp'h eric Administration.
1973 Budget Proposals
• Streamlined Cabinet with four new domestic departments.
• General Revenue Sharing-no strings aid for States and cities.
• Special Revenue Sharing-partnership of Federal dollars and State and
local decisionmaking for urban and rural communities, education, job
training, transportation, and law enforcement.
Program Results
• Joint funding and consolidation of grant programs.
• Establishment of 10 Federal regional councils to coordinate grant programs and develop interagency strategies at local level.
• Greater participation by State and local officials in the de tennin at ion of
how Federal funds will be used in their areas.
• The Federal assistance review program effectively working to decentralize and coordinate Federal decisionmaking.
• A strengthened policy development process, improved coordination of
executive branch activities, and establishment of a policy implementation monitoring system.
• Rapid response by our Government to such national disasters as the
coal mining disaster of 1971, and Venezuelan equine encephalomyelitis
epidemic of 1971.
General Revenue Sharing
•
•
•
•
•
18
Moves money and power closer to people.
Builds capaoity for better program perfonnance.
Relieves mounting fiscal pressure on State and local governments.
Responds quickly to critical needs.
Grows automatically.
TOWARD THE GOAL OF
Providing for the National Defense
Recent Program Improvements
• Formulated a new national security strategy.
• Initiated major development and modernization efforts.
• Reduced authorized American Forces in Vietnam by 87%.
• Set the goal of an all-volunteer force.
• Initiated reform to correct draft inequities for as long as we have the
draft.
1973 Budget Proposals
• Substantially improve our national defense.
• 1\1aintain strong and ready Active Forces.
• Strengthen our strategic nuclear deterrent.
• Preserve our technological superiority.
• Continue modernization of the general purpose forces.
• Continue transfer of Vietnam operations to the South Vietnamese.
• Upgrade the capability of the National Guard and Reserves to augment
the Active Forces.
Results
• A $6.3 billion increase in budget authority for military programs from
1972 to 1973.
• A 16% increase in strategic programs over 1972.
• An increase of $838 million in budget authority for research and development from 1972 to 1973.
• An increase in budget authority for shipbuilding of $1.1 billion over
1971 to $3.6 billion in 1973.
• All-volunteer pay legislation doubling the pay of first-term enlistees,
effective November 1971.
• Progress in Vietnamization permitting the South Vietnamese to take
over responsibility for ground combat, in-country naval, and substantial air operations and to assume additional responsibilities in the future.
TOWARD THE GOAL OF
Peace and International Development
Recent Program Improvements
• Established the 'C ouncil on International Economic Policy to provide
top level focus on international economic issues.
• Coordinated military and supporting assistance under the framework
qf international security assistance.
• Directed measures to strengthen the U.S. foreign intelligence organization and programs.
19
1973 Budget Proposals
• Adequately fund f'Oreign aid to carry 'Out the Nixon Doctrine.
• Continue the process of Vietnamization by prDviding economic and
military aid.
• Step up prDgralns fDr the international control 'Of narcotics productiDn
and traffic.
• Expand exchange prDgrams tD prDmDte beneficial cDntacts between
American and foreign individuals and institutiDns.
Results
• Acted to CDrrect the deficit in our internatiDnal payments and to lay
the ground\vork fDr basic reform 'Of the international monetary system.
• Provided econDmic and military aid making possible significant progress
tDward security in Southeast Asia.
• Established with the SDviet UniDn a framework for cDnti!lued progress
in strategic anns limitation.
• Responded \\'ith assistance fDr relief of disaster victims and refugees in
Peru and SDuth Asia.
TOWARD THE GOAL OF
Enhancing Environmental Quality, Combating Pollution
Recent Program Improvements
• Created the EnvirDnmental PrDtectiDn Agency and the Council 'On
EnvirDnmental Quality tD consolidate and better manage Federal environmental prDgrams.
• Implemented the Refuse Act permit prDgram, making it possible for the
first time, tD mDnitDr major discharges 'Of pDllutants int'O the Nati'On's
waterways.
• Increased grants tD strengthen pDllutiDn cDntrDI programs 'Of State and
IDeal gDvernments.
• Stepped up enforcement activities t'O prDtect the envirDnment and abate
pollution.
• Increased funding t'O contrDI p'Ollution at Federal facilities.
1973 Budget Proposals
• Continue the $6 billiDn, 3-year program of grants to assist in the construction of sewage treatment facilities.
• Bring pesticide use under greater contrDI.
• Restrict indiscriminate dumping of wastes in the ocean.
• Initiate programs to reduce nDise levels.
• Regulate use 'Of toxic substances.
• Levy a tax on sulfur 'Oxide emissions.
• Require more careful cDnsideration of environmental factDrs in land use
decisions and powerplant siting.
• Reduce damage t'O the environment resulting from mining 'OperatiDns.
20
Results
• A sixfold increase in budget authority for programs of the Federal
Environmental Protection Agency, from $431 million in 1969 to $2.5
billion in 1973.
• An increase in budget authority for municipal sewage treatment projects
from $214. million in 1969 to $2 billion in 1973.
• An increase in the population served by secondary sewage treatment
from 91 million in 1969 to 115 million in 1973.
• A ninefold increase between 1969 and 1973 in budget authority to
correct pollution problems at Federal facilities.
• A doubling of outlays for EPA air pollution control programs between
1969 and 1973.
TOWARD THE GOAL OF
Providing Recreation for All
Recent Program Improvements
• Initiated ' the Legacy of Parks program to bring parks to the people by
developing new parks in and near cities.
• Increased the authorized funding level of the Land and Water Conservation Fund from $200 million a year to $30.0 million a year.
• Authorized the donation of surplus Federal property to State and local
governments for parks, recreation, and historic purposes.
1973 Budget Proposals
• Fully fund the Land and Water Conservation Fund annual authorization at $300 million.
• Modify the formula for allocation of grant from the fund so that distribution among States is more nearly proportionate to population.
Program Results
• Purchase of an estimated 800,000 acres of land for Federal recreation,
historic, and natural preservation areas between 1970 and 1973.
• Purchase of an estimated 1.2 million acres of recreation land by State
and local governments with Federal grant assistance, between 1970 and
1973.
• Donation of an estimated 40,000 acres of surplus Federal property
between 1971 and 1973 to local governments for use as parks.
• Sale between 1970 and 1973 of an estimated 80,000 acres of public do..
main lands to local governments for recreation purposes, at the bargain
price of $2.50 per acre.
• Increase outlays for recreation programs from $372 million in 1969
to $640 million in 1973.
21
TOWARD THE GOAL OF
Providing for Human Needs
Recent Program Improvements
• Increased social security benefits by 15% in 1970, followed by a further
10% increase in 1971.
• Reformed the food stamp program, establishing national standards and
increasing benefits for the most needy.
• Increased unemployment benefits and expand coverage under the Employment Security Amendments of 1970.
• Provided further temporary emergency increases in benefits in high
unemployment States.
Budget Proposals
• Enact Welfare Reform to replace the present failing welfare system.
• Increase social security benefits by another 5% with future rises tied
automatically to the cost of living.
• Strengthens dramatically programs to help the elderly.
• Establish better audit and management controls over public assistance
payments and social services.
Results
• A one-third increase in social security benefits between 1969 and 1973.
• A ninefold increase in spending on the food stamp programs since 1969.
• A nearly threefold increase between 1969 and 1973 in needy schoolchildren receiving subsidized lunches.
• A sixfold increase in the budget authority for the Administration on
Aging to $100 million between 1969 and 1973.
• A 53% increase in the number of people helped by vocational rehabilitation from 1969 to 1973.
Welfare Reform
• Sets national eligibility standards.
• Establishes a national minimum Federal income standard of
$2,400 for a family of four.
• Emphasizes incentives for work, training, and self-sufficiency.
• Includes low-income working families for the first time.
• Reduces the fiscal burden on States of mounting welfare cost.
• Establishes a national administrative structure with high standards of control, service, and efficiency.
• Provides training and child care for welfare recipients.
22
TOWARD THE GOAL OF
Improving Health for Americans
Recent Program Improvements
• Intensified research intO' cancer and sickle cell anemia.
• Increased support of health manpower training and reformed assistance
to health professiDn schoDls and students.
• Directed health facility construction efforts toward less costly modes
of care.
• Expanded consumer safety and occupational health activities.
1973 Budget Proposf!-ls
• Establish guaranteed health insurance coverage fDr emplDyees and their
families.
• Provide special health insurance for low-income families.
• Eliminate monthly premium fDr supplementary medical insurance in
Medicare.
• Expand cancer, sickle cell anemia, and family planning research.
• Increase supply and improve distribution Df health manpower.
• Substantially increase consumer fDod and product safety activities.
• Refonn Medicaid and Medicare.
• Assist the development of health maintenance Drganizations.
• Improve nursing homes for the aged.
• Screen 1.5 million children fDr lead poisoning.
Results
• Obligations for cancer research raised from $185 million in 1969 to $430
million in 1973.
• ~ver 290,000 health professionals in training during 1973, compared to
233,000 in 1969.
TOWARD THE GOAL OF
Fighting Drug Abuse
Recent Program Improvements
• Created Special Action Office for Drug Abuse PreventiDn at the White
House under the leadership Df a distinguished professional.
• Recognized the prDblems of drug abuse in the military and directed
treatment be given.
• Instituted tough antiheroin programs in the Anned Forces, especially
in Vietnam.
• Established the National Clearinghouse for Drug Abuse Infonnation.
• Broadened effDrts to control illicit world drug trade, including ending
Turkish opium prDduction.
1973 Budget Proposals
• Additional manpower fDr enforcement agencies.
• Launching a combined Federal-State attack O'n drug traffickers.
23
Results
• The number of drug abuse prevention centers has increased to 81 in
1972 from six in 1969.
• Quadrupled the funds spent on drug abuse prevention.
• Distributed over 2 million copies of source books on drug addiction,
mainly to schools.
• Obligations for drug abuse prevention and treatment will rise from $46
million in 1969 to $365 million in 1973; with 49,000 addicts treated
in 1973, compared to 5,100 in 1969.
TOWARD THE GOAL OF
Insuring Equal Opportunity for All Americans
Recent Program Improvements
• Extended the vote to 18-year-olds under the Voting Rights Act Amend ..
ments of 1970.
• Created the Office of Minority Business Enterprise to encourage and
expand business opportunities for all minority groups.
• Strengthened the Office of Federal Contract Compliance, and the Equal
Employment Opportunity Commission.
• Created the Cabinet Committee on Opportunities for Spanish-Speaking People by s"tatute.
• Launched a series of actions to protect Indian resources and advance
Indian self-determination.
1973 Budget Proposals
• Maintain civil rights as a high-priority responsibility of the Federal
Government.
• Accelerate equal employment opportunities in the Federal service.
• Extend the life and authority of the Commission on Civil Rights for
5 years and expend its authority to cover sex discrimination.
Results
• Increased spending for civil rights enforcement by 700% between 1969
and 1973.
• Increased number of minority group members and women employed
in jobs for greater responsibility in both the public and private sectors.
• Implemented the "Philadelphia plan" and 24 other citywide construction plans, resulting in a goal of 28,000 new jobs for minority groups in
the construction industry.
• Increased funding for minority business enterprise programs by 236%
between 1969 and 1973.
• Implemented a fair housing program for military personnel who live
off base.
24
TOWARD THE GOAL OF
Reforming and Improving American Education
Recent Program Improvements
• Revitalized the administration of Federal aid programs to provide more
equal educational opportunity.
• Strengthened the O'rganization and management of the Office of Education.
• Began development of new techniques for career education to insure
that all students have an opportunity to acquire productive occupational
skills.
1973 Budget Proposals
• Enable State and local governments to assume a greater role in planning
and management of Federal education programs through education
revenue sharing.
• Furnish emergency school assistance to' alleviate problems of school
desegregation.
• Create a National Foundation for Higher Education to spur innovation
and needed change in our colleges and universities.
• Establish a Nat~onal Institute of Education to provide national leadership in education research and development.
Results
• A 71 % reduction in the number of children attending all-black schools
since 1969.
• More than doubled Federal aid fer college students between 1969 and
1973.
• A 46% increase in total Federal aid to elementary and secondary education between 1969 and 1973.
TOWARD THE GOAL OF
Providing Skills and Jobs for All Americans
Recent Program Improvements
• Provided transitional public service employment opportunities in State
and lor-al governments under the Emergency Employment Act of 1971.
• Reorganized the Manpo,ver Administration in the Department of Labor
to decentralize responsibility and simplify relationships between the
Federal Government and States and localities.
• Created a nationwide program of computerized job banks to match
jobseekers with job opportunities.
1973 Budget Proposals
• Enact manpower revenue sharing to reform manpower work and training programs through decentralization 'Of administrative responsibilities
to State and local government.
• Strengthen and reform manpower programs for welfare recipients, enabling those who participate to become self-supporting.
25
• Increase the number of transitional public service employment opportunities in State and local governments.
• Expand Federal and State occupational health and safety programs.
Results
• Increased the number of persons in work and training programs from
1,183,000 in 1969 to 1,496,000 in 1973.
• Increased work and training outlays 151 % between 1969 and 1973.
• Installed computerized job banks in most States.
TOWARD THE GOAL OF
Protecting the Consumer and Worker
Recent Program Improvements
• 'C reated the Office of Consumer Affairs.
• Established the Consumer Product Infonnation Center to channel government buying data to the public.
• Developed and implemented new standards for workers under the Occupational Safety and Health Act.
• Implemented the Federal Coal Mine Health and Safety Act to protect
.
mIners.
• Reorganized and revitalized the Federal Trade Commission.
• Implemented legislation requiring auto safety equipment installed in
new autos.
• Extended Highway trust fund financing to safety.
1973 Budget Proposals
• Improve product safety and testing.
• Provide better protection against fraud and deceptive warranties.
• Protect and encourage employee pension benefits.
Results
• A decrease in highway fatalities between 1969 and 1970, the first significant decline since 1958.
• Over 2,700 products withdrawn from the market in 1971, an increase
of 96% over 1969 due to vigorous enforcement of existing consumer
protection laws.
• 5,600 citations issued alleging nearly 20,000 safety and health violations.
• Coal mine deaths at a new low.
26
TOWARD THE GOAL OF
Combating Crime and Securing Equal Justice for All
Recent Program Improvements
• Strengthened the ability of law enforcement p.gencies to deal with a
wide range of criminal justice problems by enactment of the Administration's Omnibus Crime Control Act of 1970.
• Increased the Federal Government's ability to fight organized crime
under the Organized Crime Control Act.
• Consolidated and revised Federal drug laws through enactment of the
Administration's Comprehensive Drug Prevention and Control Act of
1970.
• Initiated a 10-year plan to improve the Federal Prison System.
1973 Budget Proposals
• Increase the effectiveness and flexibility of Federal grants to State and
local authorities, under any law enforcement revenue sharing.
• Expand expenditures for law enforcement at all levels of government.
• Continued emphasis on combating drug abuse through both law enforcement and treatment. .
Results
• A 253% increase in total outlays for law enforcement between 1969 and
1973.
• An increase from $104 million in 1969 to $923 million in 1973 for law
enforcement assistance to States and cities, and an increase from $554
million to $1,398 million for direct Federal programs.
• A 300% increase in the number of compliance actions by the Bureau
of Narcotics and Dangerous Drugs between 1969 and 1973.
• Training one-third more State and local police officers in 1973 than
1969.
• An increase in indictments of members of organized crime syndicates
from 813 in 1969 to 2,122 in 1971.
• An increase in seizures of dangerous drugs and narcotics by over 400%
between 1969 and 1973.
TOWARD THE GOAL OF
Providing Better Communities and More Housing for All Americans
Recent Program Improvements
• Provided major increases in subsidized housing for low- and moderateincome families.
• Initiated the GNMA tandem plan to limit the effects of high-interest
rates and facilitate financing of housing for middle-income families.
27
• Instituted aggressive policy of Federal Home Loan Bank System
advances to savings institutions to aid the conventional mortgage
market.
• Reorganized the Department of Housing and Urban Development to
better decentralize decisionmaking and serve overall community needs.
1973 Budget Proposals
• Replace five categorical grant programs with urban community development revenue sharing.
• Complete the transition to the new planning and management assistance program.
• Simplify and consolidate the complex and confusing array of housing
programs .and eliminate unwieldy program restrictions and conflicts.
Results
• Total housing starts of over 2 million achieved in calendar 1971-the
highest level in our history.
• Starts of subsidized housing for low- and moderate-income families increased almost fourfold from 156,000 in 1969 to 566,000 in 1973.
TOWARD THE GOAL OF
Providing for the Veteran
Recent Program Improvements
• Increased pension benefits by 17%; an average of 10% on January 1,
1971, and an additional 7% on January 1, 1972.
• Broadened eligibility for education and training, and increased benefit
payment from $100 to $175 per month for a single veteran.
• Improved medical care by adding over 12,000 staff, constructing seven
hospitals and adding 296 special care units since 1969.
• Established jobs-for-veterans program to help returning veterans find
job training and employment.
1973 Budget Proposals
• Increase education and training benefit level by an additional 8.6%, to
$190 per month for a single veteran.
• Raise average employment in VA medical facilities by 10,000, add 248
special care units, and emphasize appropriate alternatives to hospitalization.
• Modernize or replace seven hospitals and completely activate six new
hospitals.
• Broaden outpatient care for veterans with non-service-connected disabilities to avoid unnecessary hospitalization.
• Expand efforts to provide jobs for veterans.
• Improve level and structure of compensation benefits.
Results
• Raised veterans average compensation benefits by 30% and pensions
by 22% between 1969 and 1973.
• Increased total education and training benefits by 250% since 1969.
28
• Raised the staff/patient ratio in VA hospitals from 1.2 in 1969 to a
record 1.5 to 1 in 1973.
• Increased number of hospital and extended care patients treated with
VA funds by over 80,000 and raised outpatient visits by 4 million over
1969.
• More than doubled the number of GI bill trainees from about 900,000
in 1969 to over 2 million in 1973.
• Increased the number of guaranteed housing loans by 64% between
1969 and 1973.
TOWARD THE GOAL OF
Science and Technology Serving Man
Recent Program Improvements
• Initiated major new program ·to focus researc4 on domestic problems.
• Increased the support for fundamental research.
• Revitalized programs·to improve science education.
1973 Budget Proposals
• New emphasis on a strategic approach to research and development.
• Experiment to find better ways to stimulate private sector research and
development.
• Find ways to accelerate practical application of research and development efforts.
• Involve high technology agencies in solving human problems.
Results
• 15% increase in civilian research and development obligations over
1972 ; 65 % increase over 1969.
• Man-years of professional scientific research effort supported by the
National Science Foundation increased approximately 78% between
1969 and 1973.
• Over 1,500 additional man-years of professional scientific effort will be
focused on major national problems through NSF programs.
TOWARD THE GOAL OF
The Exploration and Explo,i tation of Space
--
-
-
---
Recent Program Improvements
• Redirected nuclear rocket and outer planets exploration programs to
provide a better balance in future space investments.
• Increased emphasis on programs that provide direct benefit, such as
weather, communications, navigation and earth resources satellites, and
on programs to increase s'Cientific knowledge.
1973 Budget Proposals
• Develop the space shuttle to reduce future cost of space operations.
• Prepare for unmanned exploration of Mars and Jupiter.
• Operate the first earth resources technology satellite.
29
• Develop a new generation weather satellite to provide major improvements in weather forecasting.
• Begin to utilize NASA's capabilities for earth-bound transportation
problems.
Results
• Achieved first successful manned landing on the m'Oon and successfully
completed three additional lunar landings.
• Sent unmanned spacecraft to photograph Mars.
• Demonstrated ability of experimental communications satellite to provide medical information directly t'O remote areas.
• Used multispectral pictures from aircraft to detect environmental
problems.
TOWARD THE GOAL OF
Providing for Future Power Needs
Recent Program Improvements
• Accelerated development 'Of liquid-metal fast-breeder power reactor to
meet future energy needs.
• Initiated program tD expand capability to enrich uranium for use as
nu·c lear fuels.
1973 Budget Proposals
• Emphasize research on controlled thermonuclear fusion and other projects to meet long-term needs for clean energy.
• Further accelerate fast-b·r eeder program.
• Intensify environmental research.
• Strengthen and improve regulatory activities.
Results
• A one-third increase by about 1979 in AEC's plant capacity to meet
future needs for enriched uranium fuels.
• Schedule for development of the fast breeder commenSurate with future needs.
TOWARD THE GOAL OF
Providing a Modern Transportation System
Recent Program Improvements
• Initiated a 12-year, $10 billion program to improve urban mass transportation.
• Accelerated efforts to improve the national airway system.
• Began lO-year 'p rogram to modernize the U.S.-flag merchant m;a rine.
• Extended Highway trust fund financing to highway safety programs.
• Increased emphasis on solution of urban highway problems through
higher funding for traffic operations improvements program and urban
highways.
30
• Established program to prevent skyjackings.
• Increased responsibility of the Coast Guard in the areas of boating safety
and pollution control.
1973 Budget Proposals
• Continue needed financial aid to States and localities pending enactment of transportation revenue sharing.
• Expand Federal asistance to reduce metropolitan highway congestion
and to improve urban mass transit.
• Modernize the Federal regulatory structure to improve surface freight
transportation.
• Encourage equipment modernization and eliminate tax inequities in
the railroad freight industry.
Results
• A nearly fourfold increase in the funds committed for urban transportation between 1969 and 1973.
• A decrease in highway fatalities between 1969 and 1970, the first significant decline since 1958.
• A decrease in the number of train accidents in 1970, the first decline in
9 years.
TOWARD THE GOAL OF
Promoting Opportunities in Business for All Americans
Recent Program Improvements
• Created the Office of Minority Business Enterprise to coordinate efforts
of the Federal Government and to exp·a nd the assistance provided
minority businessmen.
• Created the National Oceanic and Atmospheric Administration to bring
together, for more effective development and management, the many
scattered marine programs of the Federal Government.
1973 Budget Proposals
• Increase financial assistance to small businessmen, including direct assistance by the Small Business Administration.
• Expand financial and management assistance to minority businessmen.
• Expand research efforts to reduce losses from natural disasters and fires.
• Initiate efforts to find ways to stimulate research and development in
the private sector of the economy.
• Expand mapping of Continental Shelf to increase our knowledge 01
the resources located there.
Results
• Over 35,000 new or existing small businesses will receive financial
assistance in 1973, compared to 14,500 in 1969.
• An estimated 250 minority business development organizations will
receive grants or contracts in 1973.
• An estimated 10,000 new construction jobs will be created in areas of
high unemployment in calendar year 1972.
31
• Increased warning time on severe storms providing greater protection
of life and property.
• Stimulation of research and development that can contribute to productivity, exports, and employment.
TOWARD
THE
GOAL OF
.
.
Providing for the Farmer and Rural American
Recent Program Improvements
• Established more market-oriented commodity programs to allow farmers
wide freedom of choice in selecting the most efficient mix of crops
for their land.
• Increased the availability of credit for rural housing and for farmers.
• Created a federally assisted rural telephone bank and a private electric
utilities bank to help finance development in rural areas.
• Strengthened consumer protection through expanded meat and poultry
inspection and establishment of a new egg inspection program.
1973 Budget Proposals
• Create rural community development revenue sharing to provide funds
to States and local governments for the improvement of rural communities and public facilities.
• Create a new rural credit program to promote commercial, industrial
and community development in rural areas.
• Shift the farm operating loan program from direct loans to' insured
loans, thus significantly increasing the availability of credit.
• Expand the rural housing loan program for low- to moderate-income
rural residents.
Results
• Moved to strengthen farm income and farm prices in the face of
unexpected bumper grain crops in 1971.
• Expanded agricultural exports from $5.7 billion in 1969 to $7.8 billion in
1971.
• Increased the 1973 level of the rural housing programs for low- to moderate-income rural residents to 463% of the 1969 level.
• Increased the number of families benefiting from the rural water and
sewer grant and loan programs in 1973 by 75% over the number in
1969.
• Increased the number of federally inspected meat and poultry establishments by more than 56% since 1969.
TOWARD THE GOAL OF
Effective Government and Improved Quality of Life for the District
of Columbia
Recent Program Improvements
• Seating of the District's first congressional delegate in nearly 100 years.
• Establishment of the Commission on the Organization of the Government of the District of Columbia.
. 32
1973 Budget Proposals
• Aid in financing Washington mass transit development.
• Steps to clean up the Potomac.
• Upgrading higher education in the District.
• Stronger urban renewal and preservation measures.
• Reforms in the municipal revenue and financing structure.
• Programs to put city in forefront of the Nation's drug treatment and
rehabilitation effort.
Program Results
• Serious crime in 1971 down 14% below 1970.
• Narcotics treatment administration now has over 3,000 addicts in
treatment.
• Over 8 miles of track and 10 stations under construction for METRO.
480-400 0-72--5
33
PART 3
PERSPECTIVES ON THE BUDGET
This section discusses some special aspects of the budget that
are not elaborated in Part 1: the long-range budget outlook, the
Nation's research and development effort, and the national debt.
THE LONG-RANGE OUTLOOK
Federal activities have major impacts on the national economy
as a whole and on the welfare of individual citizens. The effects
of each year's budget decisions are felt for years thereafter. It is
therefore essential that the long-term consequences of these decisions be explicitly understood.
The fiscal outlook.-The budget margin projected for future
years is the potential Federal budget surplus, at full employment,
assuming current and proposed tax legislation and continuation
of all current and proposed expenditure programs. The projections assume no new Federal initiatives beyond those proposed in
this budget.
The margin is a ,'ery tenuous and precarious one. For example,
in last year's budget, the margin remaining in 1976 was projected
at $30 billion but now it is projected at $5 billion. In 1 year,
tax reductions and increased outlay commitments have consumed
$25.5 billion of the margin for 1976.
There is, of course, nothing ine,ritable about the current
estimate of the budget margin remaining for 1976. Some ongoing
programs can be reduced or eliminated in future years, thus adding somewhat to the $5 billion margin shown. Nonetheless, $5
billion is a small figure for 4 years in the future, if our immediate
past experience is any guide. Thus, actions ,vhich add to government spending must be constrained to a small fraction of former
levels. The only alternatives are higher taxes or higher prices.
The government must also face more squarely the long range
implications of decisions taken today. We can no longer afford
35
to accept proposals because "they do not cost much in the first
year." As is the case with uncontrollables, the problem of an inadequate margin for future initiatives will be with us until
we are willing to say no to proposals because, once started,
they will cost more than we will be willing to pay in future years.
In an age of complex problems requiring long range solutions,
the Nation can no longer afford an exclusive focus on one year
at a time in budgeting.
Social security legislation now pending before Congress schedules an increase in the payroll tax base and rate, starting in
January 1976. By 1977, the additional revenues resulting from
these changes and from growth in the economy will increase the
budget margin substantially, to $23 billion, in spite of continuing gro·w th in outlays. This 1977 margin is the difference between
projected revenues of $346 billion and projected outlays of $323
billion for existing and proposed programs. Though substantial,
this margin is $7 billion less than the margin projected last year
for 1976.
Thus, it is clear that new spending proposals must be evaluated
against the most stringent of standards: Are they sufficiently desirable to warrant increases in taxes or elimination of existing
programs?
The role of the budget in resource allocation.-Both the reverlue and outlay sides of the budget influence the way in which
llational resources are allocated. Taxes affect resource allocation
Jlrimarily because they divert to public use a portion of the income of taxpayers, which would otherwise be used for private
purposes.
'The effect of budget outlay decisions on resource allocation
varies with the type of expenditure:
• The influence may be fairly direct and identifiable, as in
the case of direct Federal purchases of goods and services for
a given function.
• Feder~l grants to State and local governments affect the
allocation of resources among various functions by influencing the budget decisions of these governments.
• Federal transfer payments increase the purchasing power
of the recipients. Resource allocation is affected to the extent
that the expenditure patterns of recipients differ from the
pattern of the average taxpayer.
Projected resource allocation.-The chart and table below
present projections of resource allocation patterns for calendar
36
year 1976 and comparisons with the 1969 patterns. The projections show the claims on resources that are likely to exist in
calendar 1976, given past trends and the current and proposed
tax rates and Federal program outlays.
For the purposes of this analysis, GNP has been divided into
eight functions, as indicated in the chart and table. For 1976,
the chart shows a portion of GNP equal to the projected budget
margin, plus general revenue sharing, as unallocated. Definitions
of the functions in terms of the national income accounts are
given in the appendix to chapter 3 of the 1971 Economic Report
of the President.
The following chart shows the resource allocation picture now
projected for calendar year 1976 compared with the corresponding pattern for calendar year 1969. The 7570 increase in current
Housin9
17.4
All Other
14.3
-;-
.
$929 Billion
dollar GNP expected between these years-from $0.9 to $1.6
trillion-will be accompanied by large increases in expenditures
for all eight functions. Some functions, however, are expected to
increase somewhat as a share of GNP; others are expected to
decrease. The relative differences between the two years reflect
shifting national priorities and changing demographic patterns.
37
• Business investment and net exports, for instance, are expected to increase relative to GNP.
• GeneIal g{)veInment expenditure i~ expected to rise rapidly
because of large increases in expenditures for law enforcement and environmental programs.
• Total health expenditure is projected to increase sharply,
largely as a result of increased Federal assistance for health
care costs.
• Expenditures ' for the "all other" function are estimated to
decline in relative terms, as defense, space, and atomic
energy programs grow less rapidly than GNP.
• Total national expenditures for basic necessities are projected to decline as a percentage of GNP as income levels
•
rISe
.
. Although rising in absolute amount, defense and space purchases of goods and services are expected to be a smaller percentage of GNP in calendar 1976 than they were in 1969. As the
table below indicates, the federally financed shares of the total
national expenditures for all functions except business investment
(which is exclusively private), transportation, and the "all
other" function are projected to increase.
FEDERAL, STATE AND LOCAL, AND PRIVATE SHARES OF TOTAL
EXPENDITURES, BY FUNCTION
Function
Heal th ................
General government .....
Housing investment .....
Business investment ......
Education ..............
Basic necessities ..... ....
Transportation .........
All other ...............
Total allocated
resources .....
Calendar 1969
Calendar 1976
state and
local 2
Private 3
23.0
19.6
5.5
16. 7
80.4
-0.1
60.3
8.6
13.8
6.8
54.2
75.2
2.9
12.9
0.9
94.6
100.0
16 2
83.3
80.8
44.9
420.4:
410.6
69.0
Federal l
.. ... .. .... ...
.. .. . . .
Federal l
state and
local 2
Private 3
55.6
28.8
23.5
9.4
15.6
76.5
O. 1
13.8
16.9
6.3
42.4
74.4
2.5
14.9
1.3
90.6
100.0
11. 8
80.6
78.8
56.3
420.1
412.4:
67.5
. . .. .. . .. . . . . .
.. .....
1 Includes grants and transfer payments. All transfer payments other than for medical, educational and
foreign aid programs are included in basic necessities.
2 EX5cudesnts.
3 Ex
ransfer payments.
_
4 Includes in rest;payments and subsidies not included above.
Total Federal expenditure projected for calendar 1976-under
the assumption of no new programs except those proposed in
this budget-is a smaller percentage of total allocated resources
than in 1969.
38
THE NATION'S RESEARCH AND DEVELOPME'NT EFFORT
The need for a more strategic approach to research and development.-It is clear that Federal investments in research and
development have a far-reaching impact on economic and social
progress. The implications go well beyond the contribution of
research and development to specific pro-g rams such as defense,
space, energy, health, environment, and transportation.
The scope and significance of research and development tends
to be overlooked in the Federal budgetary process since it is
scattered throughout the budget and since science and technology are often viewed as optional long run approaches to the
solution of specific problems which demand immediate attention.
This view of research and development hinders the development
of an overall-more strategic-approach to guide resource
allocation.
A major objective of this Administration has been and will
continue to be, a more strategic approach to our total national
research and development investment. To further this strategic
approach, we must spend more of our talent and resources in
more clearly understanding the research and development
process, particularly in how it works in the context of a representative form of government and a free market economy. This
budget proposes just that. In addition, the 1973 budget will move
us ahead in several critical areas where our knowledge is sufficient
to make wise investments in R. & D.
This budget accelerates our efforts to tum science and technology to the service of man through emphasis on solving important civilian problems, increases significantly our efforts in defense R. & D. to protect our national security, and strengthens
the support of basic research to increase our stock of knowledge
to draw on for the future.
Beyond these overall R. & D. thrusts in the budget, provision is
made for a beginning in several important areas. This budget:
-initiates a series of experiments to find better ways to encourage private investment in research and development
and to improve the application of R. & D. results.
-draws more directly on the capabilities of those agencies
that harnessed the atom and conquered space, AEC and
NASA.
-strengthens the partnership between government and industry in R. & D. to create innovative technologies and new
39
markets, thus creating new job opportunities, increasing the
Nation's productivity and strengthening the U.S. position in
international trade.
-provides an improved national capability to assess the importance of research and development to economic growth.
Through these and other efforts this Administration continues
to improve management of the Government to insure that the
overall level of R. & D. effort is adequate, that our R. & D. programs are focu~ed on top priority needs, that our considerable
R. & D. capabilities are effectively utilized, and that the American
people get a proper return on the dollars they invest in Federal
research and development.
Fiscal year 1973 funding for Federal R. & D.-The Federal
R. & D. effort will reach $17.8 billion in the 1973 budget, an
increase of $1.4 billion, or more than 8%, over 1972.
Included within this total are significant increases in research
and development to strengthen our national defense; to increase
the emphasis of the space program on useful applications; to
accelerate research and development to deal with key problems
in health, transportation, energy, environment, and natural
disasters; and to strengthen basic science.
The expansion of ongoing programs, together with new efforts
that move us to a longer range strategy for R. & D., will result
in a total increase for the civilian research and development
effort-exclusive of defense and space-of $700 million in 1973
or 15% over 1972. This makes the growth in civilian R. & D.
since 1969 65%, from $3.3 billion to $5.4 billion.
THE OVERALL FEDERAL R. & D. OUTLOOK
(Obligations for conduct of R. & D. in billions of dollars)
1969
Defense, including AEC. military related programs- - _______________ _
Space __________________________________________ _______________ _
· '1' programs _______________________________________________ _
CIVl1an
Total ____________________________________________________ _
1972
1973
8.4
8.6
9.4
3.8
3.3
3.1
4.7
3.0
5.4
15. S
16.4
17.8
Recent trends in Federal R. & D. are also depicted in the
following chart.
40
Conduct of Research and Development -
Obligations
..........................•••••Space
l
'" ••••••••
••••""
"" ',
.......
•••••••••••••••••••••••••
Special efforts to strengthen civilian R. & D.-This budget
includes special efforts to strengthen civilian R. & D. as
illustrated in the following table:
RESEARCH AND DEVELOPMENT
[Obligations in millions)
Program objective
Abundant electrical power without pollution __________________ _
Fast, safe, pollution-free transportation _______________________ _
Reduction in the loss of human life and property from natural
disasters ________________________________________________ _
Effective methods of curbing drug trafficking and of rehabilitating
drugusers ______________________________________________ _
Local demonstrations of effective emergency health care systems_
Experimental incentives program ___________________________ _
Total of these categories _____ - ________________________ _
Total 1973 increase __________________________________ _
1972
1973
$392
Percent
Increase
22%
456
$480
666
93
136
46
50
8
60
15
40
20
88
o
999
1,397
398
46
-----------
40
This increase of about $400 million is the first stage in about
a $2 billion R. & D. investment over the next 5 years in these
areas alone. These increases illustrate the efforts of the Administration to focus R. & D. on both short-run and longer range
goals in areas of national concern.
41
THE FEDERAL DEBT
The Federal debt is largely an internal debt, owed by the
Nation primarily to our own citizens. In a very real sense, then,
we owe the debt to ourselves.
The chart below shows gross Federal debt separately held
by the general public, by the Federal Reserve System, and in
Government accounts. Between 1963 and 1973, gross Federal
debt is projected to increase by $182.4 billion, or 58.7%. Debt
held by the general public, on the other hand, is projected to
increase by $81.1 billion, or 36.5 %.
General Public
1966
1961
June 30
The concept of debt held by the general public is important
for b·u dget purposes, because only this debt has a significant
effect on the unified budget surplus or deficit. Interest on debt
held by Government accounts has offsetting entries in other parts
of the budget while most of the interest on securities held by the
Federal Reserve System is returned to Treasury and shows up
as receipts. A more detailed discussion of interest on the public
debt can be found in the functional discussion in Part 4.
42
PART 4
THE BUDGET PROGRAM BY FUNCTION
The outlays of the Federal Government are grouped into 14 functional categories according to the
general purpose served, regardless of
the administering agency. This section describes the trends and administrative initiatives in the major programs under each of these functions.
In addition to the outlays estimated in the functional categories,
the budget includes several lumpsum allowances:
• $0.8 billion for pay raises for
civilian agencies (the national
defense total includes a comparable allowance of $2.7 billion for
military and civilian pay raises in
the Defense Department) ; and
• $0.5 billion for unforeseen contingencies and for programs on
which detailed proposals have not
yet been completely formulated.
The size and composition of
budget outlays have changed substantially over the last three decades
as shown in the table below.
CHANGING COMPOSITION OF THE BUDGET
(Dollars in billions)
Percent of total budget
Function
1973
outlals
197
1945
1950
1955
1960
1965
1970
National defense _________________ - _____ - ____
International affairs and finance ______________
Space research and technology _______________
85.7
3.5
•
30.4
11.1
.1
58.7
3.0
.1
49.8
3.3
.4
41. 9
3.7
4.3
40.8
1.8
1.9
31. 8
1.6
1.3
$78.3
3.8
3.2
Physical resources __________________________
Agriculture and rural developmenL _________
Natural resources and environmenL _________
Commerce and transportation ______________
Community development and housing _______
6.2
1.7
.3
4.4
-.2
13.7
6.5
2.9
3.9
.6
8.3
5.9
.7
l.6
•
10.9
3.6
1.1
5.2
l.1
12.3
4.1
1.7
6.2
.2
10.7
3.2
1.3
4.7
l.5
10.4
2.8
1.0
4. 7
2.0
25.7
6.9
2.5
11.6
4.8
Human resources ___________ ________________
Education and manpower __________________
Health ___________________ ________________
Income security ______ - _- _______________ - __
Veterans benefits and services ______________
2.9
.2
.2
1.2
1.2
32.5
.5
.6
10.9
20.5
21.1
.8
.4
13.3
6.6
27.6
l.1
.8
19.7
5.9
29.9
1.9
1.5
21. 7
4.8
36.9
3.7
6.6
22.3
4.4
45.0
4.6
7.4
28.3
4.8
110.8
11. 3
18. 1
69.7
11.7
General governmenL ___________________ -_ - __
Interest ________________ , ___________________
General Revenue Sharing _____ - _______________
Allowa nces ______________ - ____________ - _- ___
Undistributed deductions ____________________
.8
3.7
2.7
13.3
1.7
8.8
1.4
9.0
1.9
8.7
1.7
9.3
5.5
21.2
5.0
1.3
-8.6
246.3
Total ________________________________
-2.8
-3.9
-1.8
-2.5
-2.6
-3.2
2.2
8.6
2.0
.5
-3.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
------ ------ ------ ------ ------ ----------- ------ -- ---- ------ ------ ------
• Less than 0.05%.
43
NATONAL DEFENSE
National DeFense Outlays
Procur~m~nt, and Oth~r
Military and Retir~d P~rsonn~1
Military"A~~istanc~, Atomic En~rgy, and :
D~F~ns~-R~lat~d Activities ::::::::::::::::::::::::::::::
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
This Administration has formulated a new national security strategy of Realistic Deterrence designed
to move this Nation towards an era
of peace. Our strategy is based on
maintaining adequate strength, effective partnership with our allies,
and negotiations with our adversaries in order to secure and preserve
the peace. To implement this strategy successfully, the defense program must provide sufficient strategic retaliatory capability to constitute the free world's basic nuclear
deterrent. It must also provide general purpose forces strong enough,
together with those of our allies,
to deter or defend against tactical
nuclear or conventional threats.
'This budget proposes a substantial
increase in .budget authority to as-
sure our ability to continue to meet
these objectives in the futl!-re.
Recent Program Improvements
• Formulated a new national security strategy;
• Initiated major development and
modernization efforts;
• Reduced authorized American
forces in Vietnam by 87%;
• Set the goal of an all-volunteer
force; and
• Initiated reform to correct draft
inequities for as long as we have
the draft.
Budge-t Proposals
• Substantially improve our national defense;
• Maintain strong Active Forces;
• Strengthen our strategic nuclear
deterrent;
• Continue modernization of the
general purpose forces;
• Preserve our technological superiority; and
• Upgrade the capability of the
Guard and Reserves to augment
the Active Forces.
Progress in Vietnamization has allowed us to move toward termination of American combat involvement in Vietnam. Authorized U.S.
troop strength has been reduced
from 549,500 to 69,000 as of May
1, 1972. lJ.S. casualties are now
averaging less than 5% of the level
of 1968. With our assistance, the
South Vietnamese have assumed
responsibility for ground combat operations arid are now assuming other
mili tary responsibilities.
Department of Defense-Military
A $6.3 billion incease in budget
authority is planned primarily to
strengthen our nuclear deterrent
and modernize the general purpose
forces. Research and development
will be increased to preserve and
enhance our technological superioritv. National Guard and Reserve
programs will also be increased.
Programs proposed in this budget
will make a military career more
attractive. Pay for the new recruit
was almost doubled in November
1971. Other increases in pay and
allowances are budgeted for January 1972 and 1973. The costs of
attracting capable personnel are .
substantial. Although the military
personnel levels are about the same
as those of 1964, average military
pay and benefits have increased
from $4,570 per man in 1964 to
$9,500 in 1973.
Strategic forces.-Strategic forces
exist primarily to deter nuclear attack. This capability is provided
by an effective combination of offensive systems-intercontinental bal-
~
listie missiles, submarine-launched
ballistic missiles, and strategic bOlnbers. The continental air defense system and the Safeguard ABM system
now under construction also contribute to this capability.
We are negotiating with the
Soviet Union in the Strategic Arms
Limitation Talks (SALT) to limit
offensive and defensive systems.
However, until there are agreed
limits on strategic forces, we must
prepare to meet the growing Soviet
threat. Increases are planned in
1973 for the strategic forces to: (1)
Emphasize improvements to our seabased strategic deterrent force; (2)
continue the conversion of the ballistic missile forces to the more
capable Minuteman III and Poseidon systems which are equipped
with multiple warheads; (3) carry
forward the phased deployment of
the Safeguard ABM system; and
( 4) continue the development of a
new manned strategic bomber.
General purpose forces.-Our
general purpose forces also ·serve a
deterrent role. These forces, together
with those of our allies, must be
adequate to meet a major Communist attack in either Europe or
Asia, to assist our allies against other
threats in Asia, and to contend with
a contingency elsewhere.
Efforts to improve the firepower,
mobility, and reaction capability of
the land forces will continue in 1973
with additional procurement of
M-60 tanks, antitank missiles, and
ground-to-air missile systems. An enlarged troop-carrying helicopter and
a new heavy-lift helicopter are being
developed to increase the mobility of
the Army.
General purpose naval forces insure our abili ty to protect vi tal
shipping lanes and provide seabased airpower. This budget will
45
•
provide a shipbuilding program
which is double the annual average
program for 1966-69. New ships
will be constructed to further modernize the fleet, and greater emphasis will be placed on the
development of smaller ships with
grea ter firepower.
The modernization of the tactical
air forces continues with the initial
procurement of the F-15 fighter for
the Air Force and continued production of the F-14 carrier-based
fighter aircraft for the Navy. Close
air support for ground forces will be
strengthened through continued
procurement of Harrier aircraft for
the Marine Corps and the development of the A-X aircraft for the Air
Force.
Guard and Reserve.-These
forces are now designated the primary source of augmentation for the
l\ctive Forces in any emergency requiring rapid and substantial increases in general purpose forces.
Increased manning, training, and
equipping are essential to enable
National Guard and Reserve units
to fulfill this mission.
Research and development.-We
are proposing a significant increase
in our research and development
program to preserve our technological superiority, thereby providing
for effective response to changing
threats. New strategic and tactical
systems will be designed and the
technology that underlies future
systems will be strengthened.
Military Assistance
Military assistance and credit
sales programs supplement the efforts of other countries to provide
for their own defense, and ease the
46
transition of our allies and friends
to a position of greater self-reliance.
Atomic Energy
The Atomic Energy Commission
is responsible for developing and
manufacturing nuclear weapons
and improving nuclear power r~
actors for propulsion of naval ve~
sels. AEC also develops designs of
improved nuclear powerplants and
enriches nuclear fuels for such
plants. It pursues other peaceful applications of atomic energy, and
conducts basic and applied research
in the physical and biomedical
•
SCIences.
The 1973 outlays of $2,422 million reflect in part accelerated development of the "fast breeder"
power reactor concept and expansion of AE,C 's capability to enrich nuclear powerplant fuels. Intensified efforts to assure that
nuclear powerplants are environmentally acceptable will also be
made. In addition, AEC will accelerate its controlled thermonuclear fusion research program, seeking to develop another source of
clean energy for the future.
National DeFense
Fiscal year
Total \
Percent of
total budget
outlays
outlays
(in millions)
1973 estimate ... . $78, 310
1972 estimate ... .
78,030
77, 661
1971 ...... . .... .
1970 ......... . . . 80,295
1969 . .. . .. .. . .. .
81,232
1968 ........... . 80,517
70,081
1967 ..... . ..... .
56, 785
1966 .... ... .... .
1965 . . ... . ..... . 49,578
53,591
1964 . ... . . ... . . .
52,257
1963 ...... . .. . . .
51,097
1962 . .. ........ .
31. 8%
33.0
36.8
40.8
44.0
45.0
44.3
42.2
41. 9
45.2
46.9
47.8
INTERNATIONAL AfFAIRS AND FINANCE
International AfJairs and Finance Outlays
---------~~~--~~--~~~--~
<
. . . ......
r~_~mliS~:.::.':-:-:':-:-:-:-:-:-:-:':-:-..
... . .. . .... ... .... ........... ....
::If:'::::
::·ll:::I:\:::lll!:111\111ii:!1::·:-:::::·::
Econom
. .. Food for
eace ......... .
. :-: ......:-:<,:::r::::I·:··!I?{'::-· .
nee
Note.-The amounts above do not reflect otfsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
The United States is moving from
an era of confrontation into an era
of negotiation, with the goal of
achieving a generation of peace.
To meet this objective requires all
the instruments of our foreign
policy. In such a period, steadfastness of purpose must be reflected in
our programs and expenditures.
Recent Program Improvements
• Established the Council on International Economic Policy;
• Coordinated military and supporting assistance under the
framework of international security assistance; and
• Directed measures to strengthen
the U.S. foreign intelligence
programs.
Budget Proposals
• Adequately fund foreign aid programs;
• Continue the process of Vietnamization;
• Step up programs for the international control of narcotics; and
• Expand cultural exchange programs.
Economic and Financial
Assistance
International security assistance.-Security assistance actively
encourages friendly countries to
mobilize for their own defense. The
Secretary of State determines security assistance policy and coordinates the military and supporting assistance components.
Military assistance) included in
the national defense function, is an
47
integral part of intem~tional security assistance. Military assistance
grants supplement the defense efforts of countries unable to meet the
costs of equipping their military
forces until they are able to shift
to foreign military credit sales.
Economic supporting assistance
provides financial and technical aid
to countries whose defense requirements are an especially heavy drain
on their resources. ·O utlays are estimated to increase from $584 million
in 1972 to $796 million in 1973, primarily for Southeast Asia.
quiring economic, military, or humanitarian assistance. Budget authority of $100 million is requested
for 1973.
Food for Peace
The United States donates and
sells agricultural commodities on
favorable terms to friendly nations
to combat hunger and malnutrition,
promote economic growth in developing nations, and expand export
markets for U.S. commodities.
About half of the 1973 outlays of
$839 million will go to provide
food to South and Southeast Asia.
Multilateral development assistance.-International financial institutions and organizations have a
growing capacity to manage large
capital and technical assistance programs. Additional contributions are
being proposed so that the United
States may fulfill its international
obligations. Outlays are estimated at
$639 million in 1973.
Foreign Information and
Exchange Activities
Bilateral development assistance.-The Agency for International Development administers
bilateral development loans and
technical assistance. Loans support
the development efforts of lower income countries by financing specific
projects and general import programs. Outlays are estimated to be
$906 million in 1973.
Conduct of Foreign Affairs
Overseas operating costs of the
U.S. Government and assessed contributions to international organizations will increase slightly. The
Arms Control and Disarmament
Agency will increase activities in
support of arms control negotiations.
Other economic and financial assistance.-The Overseas Private
Investment Corporation provides
services to facilitate U.S. investments in developing countries. The
Export-Import Bank, removed from
budget totals by recent legislation,
has been given greatly increased
spending and credit authority to
help expand U.S. exports.
The President's Foreign Assistance Contingency Fund is used to
meet unforeseen circumstances re . .
48
Important mutual benefits flow
from widened contacts among the
people of the world. Cultural and
educational exchange activities of
the State Department will be expanded. Activities of the U.S. Information Agency will continue at
current levels.
International Affairs and Finance
Fiscal year
1973 estimate .. . .
1972 estimate ... .
1971 ... . . .. . ... .
1970 . . . . . . . . .. . .
1969 .... . .. .. .. .
1968 . ...... . ... .
1967 ...... .. ... .
1966 .... . ...... .
1965 ........... .
1964 .. . .... . ... .
1963 ...... . ... . .
1962 ........... .
Total
Percent of
outlays
total budget
(in millions)
outlays
$3,844
3,960
3,095
3,570
3, 785
4,619
4,547
4,490
4,340
4, 117
4, 115
4,492
1.6%
1.7
1.5
1.8
2. 1
2.6
2.9
3.3
3. 7
3.5
3. 7
4.2
SPAC'E RESEARCH AND lECHN'OLOGY
Space Research and Technology Outlays
Manned Lunar Program
Space Science and Applications
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
The 1973 budget continues the
transition from the era of the Apollo
manned lunar landings to the postApollo space program.
Recent Program Implovements
• Redirected nuclear rocket and
outer planets programs to provide
a better balance in future space
investments; and
• Improved weather, communications, and scientific satellites.
Budget Proposals
• Develop reusable space shuttle;
• Use NASA's capabilities for earthbound transportation problems.
Manned space flight.-The last
manned lunar visits will be completed within a year. In 1973, Skylab, an experimental space station,
will obtain scientific data about man
in space, solar astronomy, and earth
resources. By about 1979, the space
shuttle will begin to reduce the cost
of operations in earth orbit.
Space science and applications.Funds are provided for the unmanned exploration of the planets
and development of astronomical
observatories. The first earth resources satellite will be operated and
a new weather satellite developed.
Space and aeronautical technology.-Alternative advanced propulsion systems, including a small nuclear rocket, will be defined. The
current NERV A nuclear rocket program will be terminated. Aeronautical technology will be accelerated
on short takeoff aircraft and on the
reduction of aircraft noise.
The space program as a percent of
total budget outlays has declined
from 4.4% in 1966 to 1.3% in 1973.
49
AGRICULlURE AND RURAL DEVELOPMENT
Agriculture and Rural Development Outlays
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,'
and Other Agricultural Services
Note.-The amounts above do not reBect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
Agriculture and rural development programs help strengthen income opportunities for farmers,
eliminate hunger and malnutrition,
assure reasonably priced and wholesome food for consumers, and
foster development of rural areas.
Recent Program Improvements
• Established more flexible, marketoriented commodity programs
under the Agricultural Act of
1970;
• Increased the availability of credit '
for rural housing and for farmers ;
• Established a rural telephone
bank and a private rural electric
utili ties bank;
• Expanded agricultural exports
by 37% since 1969; and
50
• Established an egg inspection program and broadened meat and
poultry inspection.
Budget Proposals
• Create rural community development revenue sharing;
• Create a new credit program to
aid rural development;
• Substitute insured for direct fann
operating loans; and
• Substantially expand the rural
housing loan program for low- to
moderate-income rural residents.
In 1973, outlays for agriculture
and rural development will be $6.9
billion. Excluding net asset sales,
outlays will be $100 million over the
1972 level.
Farm income stabilization.-One
of the principal objectives of agri-
cultural programs is to enable
American farmers to earn incomes
consistent with their ability and
capital investments. But the programs also seek to assure adequate
production of farm products at reasonable prices to consumers, and to
avoid adverse effects on the environment from farming. Outlays
for farm income stabilization will
be $5.0 billion in 1973.
Agricultural
programs
have
played a major role in eliminating
hunger and malnutrition by donating surplus commodities to needy
families and schoolchildren. Outlays
for distribution of commodities and
other assistance to schools are increasing. However, distribution of
commodities to families, which is declining as the food stamp program
expands, partially offsets the in- .
crease. The food stamp program is
discussed in the income security
section.
Enactment of proposed legislation
to shift farm operating loans from a
direct to an insured basis will permit
a $75 million increase in the availability of credit in 1972 and 1973.
Rural housing and public facilities.-Loan levels for rural housing
will increase by $500 million in
1973. These loans win assist about
142,000 low-to-moderate-income ru.
ral families in acquiring homes In
1973. In addition, $300 million in
loans and $42 million in grants will
help 500,000 rural families correct
critical waste disposal and water
supply problems.
Creation of a private rural electric utilities bank and a federally
assisted rural telephone bank has expanded the availability of credit ~or
electrification and telephones, whIle
permitting -d irect Federal loans to
decrease.
Agricultural land and water resources.-The conversion of the ag-
rjcultural conservation program to
the rural environmental assistance
program has enhanced the environmental benefits realized by the
program. In 1973, outlays for this
program will increase to $196
million.
Funding for conservation services
to farmers and planning for resource
conservation and development projects will continue in 1973 at the expanded level established in 1972.
Research and other agricultural
services.-Total outlays for research
and other agricultural services will
increase in 1973 to ' $915 million.
Outlays for consumer protection
and regulatory programs will increase by $11 million. This will
permit better laboratory testing of
meats and sanitation inspection of
meat processing plants to protect
consumers from dangerous chemical additives. A new egg inspection
program will provide mandatory
nationwide uniform grade standards for eggs. Other outlay increases
are for research and extension services, preventing animal diseases, developing new pest control techniques, and expanding enforcement
of the Animal Welfare Act.
Agriculture and Rural Development
Fiscal year
1973 estimate ... .
1972 estimate ... .
1971 ........... .
1970 ........... .
1969 ........... .
1968 ........... .
1967 ........... .
1966 ........... .
1965 ........... .
1964 ........... .
1963 ........... .
1962 ........... .
Total
Percent of
outlays
total budget
outlays
(in millions)
$6,891
7,345
5,096
6,201
6,221
5,943
4,376
3,679
4,807
5, 185
5, 139
4, 123
2.8%
3. 1
2.4
3.2
3.4
3.3
2.8
2. 7
4. 1
4.44.6
3.9
51
~
NATURAL RESOURCES AND ENVIRONMENT
Natural Resources and Environment Outlays
-"...
""~~---~-,"~
Note.-The amounts above do not refle<:t offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
Natural resources and environment programs must protect and
enhance the quality of the environment and assist in the wise use of
natural resources. Gross outlays will
rise to $6.6 billion in 1973. After
deducting offsetting receipts, largely
from the sale of oil and gas leases,
net outlays will be $2.5 billion.
Recent Program Improvements
• Created the Environmental Protection Agency and the Council on Environmental Quality;
• Initiated monitoring of major
discharges of pollutants into
navigable waters;
• Increased pollution control funds
for Federal facilities ninefold
between 1969 and 1973; and
• Began a Legacy of Parks program,
52
to develop parks in and near
cities, and increased the authorized level of the Land and Water
Conservation Fund by 50%.
Budget Proposals
• Create a Department of Natural
Resources;
• Continue a $6 billion, 3-year program of grants for construction
of sewage treatment facilities;
• Fully fund the Land and Water
Conservation Fund; and
• Levy
a tax on sulfur oxides
.
.
emISSIons.
The budget also provides for new
programs for regulation of pesticides, land use, and powerplant
siting, protection of mined areas,
control of ocean dumping of wastes,
and noise control.
Pollution control and abatement.-These programs include air
and water polluti.on control, solid
waste management, and cDntrol of
pesticides, radiation, and noise. Appropriations of $2 billion are provided for grants for construction .of
municipa sewage treatment pants.
Outlays for these grants will increase
by $192 million to $1.1 billion in
1973. Outlays for other pollution
cDntrol programs will increase by
$62 milliDn to $441 million. Outlays of $272 million for abating
pollution at Federal facilities are
classified under .other budget functions.
Recreational resources.-Recrea-
construction work, resulting in program disruptions. The 1973 budget
prDvides substantial increases for
cDnstruction .of ongoing projects,
while limiting new construction
starts to a mDdest tDtal commitment,
in order tD avoid repetition of past
program d ' sr t '
Land management.-These programs manage the use and protectiDn .of public lands and natiDnal
forest lands. PrDposed legislatiDn
will assist States in imprDving the
regulatiDn .of land use to assure that
development is wisely planned.
Mineral resources.-Mineral resources prDgrams include research
on the conservation and development of minerals and fuels, and research in metallurgy and mining.
An outlay increase of $11 milliDn is prDposed fDr pilDt plant research on coal gasification.
tion programs include acquisition
and operation of nationally significant natural areas and historical
sites, and grants to State and local
governments for recreation areas.
The budget recommends appropriation of the full annual authorization of $300 million f.or the Land
and Water Conservation Fund in
1973. Of this amount, $197 milliDn
will be allocated for grants to State
and local governments, and $98
million for Federal park and recrea-
grams.-These programs include
water reSDurces investigations, geoIDgical and mineral resource surveys,
and topographic surveys and mapping. I ncreases in 1973 are provided
fDr processing data from the experimental earth resources technology
tion land purchases. Between 1969
satellite, for investigation of geo-
and 1973 the fund will assist in the
purchase .of an estimated 800,000
acres of Federal, and 1,200,000
acres of State and local recreation
lands, and help finance 6,200 recreation development prDjects.
thermal energy resources, and for
earthquake research.
Water resources and power.Water resources projects provide
navigation, irrigation, water supplies, electric power, and recreation.
They also help control floods, erosion, and water pDllution.
Corps .of Engineers and Bureau
of Reclamation construction projects were seriDusly underfinanced in
the late 1960's, while major new
commitments were made for future
Other natural resources pro-
Natural Resources and Environment
Total
Percent of
outlays
total budget
(in milUons)
outlays
Fiscal year
1973 estimate ...
1972 estimate ...
1971 ...........
1970 ...........
1969 ...........
1968 ...........
1967 ...........
1966 ...........
1965 ...........
1964 ...........
1963 ...........
1962 ...........
.
.
.
.
.
.
.
.
.
.
.
.
$2,450
4,376
2,716
2,480
2,081
1,655
1,821
1, 999
2,028
1,944
1,483
1,665
1.0%
1.8
1.3
1.3
1. 1
0.9
1.2
1.5
1.7
1.7
1.3
1.6
53
COMMERCE AND TRANSPORTATION
Commerce and Transportation Outlays
""""'·, -w---·..W",.------..,..''''...·.' ,..
Ground Transportation
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
A major effort is .being made to
improve and reform Federal programs which affect the Nation's
ground, air, and water transportation systems.
Recent Program Improvements
• Initiated 12-year, $10 billion
program to improve urban
mass transportation;
• Began 10-year merchant marine modernization program;
• Consolidated marine programs
under National Oceanic and
Atmospheric Administration
(NOAA); and
• Created Office of Minority
Business Enterprise.
Budget Proposals
• Create a Department of Economic Affairs;
54
• Provide more effective financial
aid to State and local government through transportation
revenue sharing;
• Aid cities in reducing highway_
congestion through increased
urban transportation funding.
• Modernize the surface freight
carrier regulatory structure;
• Initiate efforts to stimulate research and development in the
private sector of the economy;
• Expand financial and management assistance to small businesses.
Ground
transportation.-The
Administration's transportation revenue sharing proposal now before
Congress will place responsibility
for selected transportation programs
at the State and local level.
To help solve traffic congestion
and public transit problems, the Administration is proposing $1.7 billion for urban highways and mass
transit programs in 1973.
The Interstate. Highway System,
now 76% complete, is scheduled to
be finished by 1980 and at that time
is expected to carry about 20% of
all highway travel. Highway fatalities and train accidents have decreased for the first time in a decade.
Air transportation.-The Federal Aviation Administration will
continue the rapid modernization
and expansion of the Nation's system for handling airway traffic. Research and development will stress
the design of an entirely new system
of air traffic control that will increase capacity, safety, and produc. tivity.
Efforts are being intensified to
reduce aircraft engine noise and to
insure that advan~ed engines do not
adversely affect the atmosphere. In
addition, strict environmental standards are being applied to airport
development projects.
Water transportation.-The 1973
program for the U.S.-flag merchant marine will continue the renovation of our merchant fleet begun
in 1970. The program is designed
to obtain increased vessel operating
efficiency and to stimulate research
and development efforts throughout
the industry.
To protect the growing number
of recreational boaters and combat
pollution, the Coast Guard will emphasize safety and pollution control on waters under the jurisdiction
of the United States. The proposed
Ports and Waterways Safety Act
gives the Coast Guard explicit au-
thority to provide services which
will reduce accidents and increase
port and harbor traffic efficiency.
Postal Service.-Higher wage
costs and an expanded capital investment program will raise total
expenditures for postal services from
$10.2 billion in 1972 to $10.6 billion
in 1973. This increase will be more
than offset by a rise in postal revenues from $8.3 billion in 1972 to
$9.2 in 1973, primarily as a result
of an expected increase in postal
rates.
Advancement oJ business.-The
Department of Commerce will
further expand its program of assistance to minority business enterprises. The Small Business Administration will increase its direct and
guaranteed lending to over 35,000
small businesses. Research and development programs of NOAA and
NBS will be expanded .
A rea and regional develofJment.-The economic development
programs of the Department of
Commerce and the Appalachian
Regional Commission will be continued until the more comprehensive program of rural community
development revenue sharing is
enacted.
Commerce and Transportation
Fiscal year
1973 estimate ....
1972 estimate. . . .
1971 ............
1970 ............
1969 ............
1968 ............
1967 ............
1966 ............
1965 ............
1964 ............
1963 ............
1962 ............
Total
Percent of
outlays
total budget
(in millions)
outlays
$11, 550
11, 872
11, 310
9,310
7, 921
8,094
7,594
7, 171
7,399
6,511
5, 765
5,430
4.7%
5. 0
5. 3
4. 7
4.3
4.5
4.8
5.3
6.2
5.5
5.2
5. 1
55
COMMUNITY DEVELOPMENT AND HOUSING
Community Development and Housing Outlays
--~·~'''~·-~~~~~··~~~~·~~n~~--~~
,.
-Cow and, M~ckratc Income Housing Aids
.~
~"
Note.-The amounts above do not reflect offsetting receipts deducted by function and outlays for
the housing mortgage market. Detailed outlay numbers for the function are shown in part 6, table 3.
The Administration's policies
have four principal objectives: To
'meet the Nation's needs for adequate housing for all Americans; to
assist families who cannot afford
standard housing with their own resources; to assist State and local
governments to develop capacities
required to meet their community
development problems; and to improve the Federal administrative
machinery for community development and housing programs.
Recent Program Improvements
• Increased housing starts to a
record level of 2 million units in
calendar year 1971 ~
.
• Accelerated housing production
for low- and moderate-income
families to achieve fourfold increase from 1969 to 1973;
• Initiated a price support plan to
56
moderate the impact of high interest rates on home mortgages;
and
• Increased FHLBS lending to savings institutions to augment the
supply of mortgage funds.
Budget Proposals
• Create a Department of Community Development;
• Initiate a program of urban community development revenue
sharing;
• Establish a new planning and
management assistance program;
and
• Simplify and consolidate housing program statutes.
Outlays for community development and housing programs will
total $4.8 billion in 1973, an increase
of $805 million over 1972. Outlays
for most of these programs result
from commitments made in prior
years.
Low- and moderate-income housing aids.----,Families with lower incomes are assisted under the lowrent pu:blic housing and the rent
supplement programs. Families with
incomes too high for public housing,
but not high enough to afford new
standard housing, can receive assistance provided through the homeownership assistance and rental
housing assistance programs. Under
these four programs new subsidy
commitments will provide $566 million annually to support 500,000
additional housing units in 1973.
Families who could normally afford to buy housing without subsidy, but are unable to do so because
of high interest rates, can receive
assistance under the new tandem
plan of the ' Government National
Mortgage Association. This plan
holds interest costs down through
mortgage price support.
Maintenance of the housing
mortgage market.-The Federal
Government plays a key role In assuring that the private mortgage
market provides an adequate supply
of funds. In 1973, HUn will issue
mortgage insurance commitments
for about 1.6 million new and existing homes and apartments. In addition, the Federal Home Loan
Bank System regulates savings and ·
loan associations, insures their savings accounts, and provides loans
through the 12 privately owned
Federal home loan banks. These
loans are used to augment conventional mortgage lending, as well as
to meet unexpected withdrawals.
Urban community development
revenue sharing.-This program,
proposed last year, will give communities greater flexibility in meeting local needs. It will replace five
categorical grant programs: Urban
renewal, Model Cities, rehabilitation loans, neighborhood facilities,
and open space. The $2.3 billion
funding requested for 1973 will exceed the level of the replaced programs by $490 million.
Community planning, management, and development.-A new
planning and management assistance program will reform the existing comprehensive planning program to help State and local governments deal more effectively with
community development problems
at the local level. Commitments will
be $100 million in both 1972 and
1973.
In the research and development
area Operation Breakthrough is a
major effort in developing economical lnass production techniques for
quality housing construction.
The role of the Office of Economic Opportunity in community
development has been redirected
toward social research and development rather than operating programs.
In July 1971, volunteer programs
were consolidated into a n~w
agency,- Action, to utilize volunteer
services more effectively.
Community Development and Housing
Fiscal year
1973 estimate ....
1972 estimate ....
1971 ............
1970 ............
1969 ............
1968 ............
1967 ............
1966 ............
1965 ............
1964 ............
1963 ............
1962 ............
Total
Percent of
outlays
total budget
(in millions)
outlays
$4,844
4,039
3,357
2,965
1, 961
4,076
2,616
2,644288
-185
-880
589
2.0%
1.7
1.6
1.5
1. 1
2.3
1.7
2.0
0.2
..........
. .. ... ....
0.6
57
480-400 0-72
4
EDUCATION AND MANPOWER
Education and Manpower Outlays
Manpower
Education
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
Education, general science, and
manpower programs represent basic
investments in the development of
huma~~ resources. They serve to develop general scientific · and intellectual knowledge, and provide
needed skills to our work force.
Recent Program Improvements
• Enacted the Emergency Employment Act of 1971;
• Decreased the number of children
attending all-black schools 71 %
since 1968; and
• Focused major scientific research
program on domestic problems.
Budget Proposals
• Create a Department of Human
Resources;
• Initiate education revenue sharing and prepare for manpower
revenue sharing;
58
• Assist school desegregation;
• Increase public service jobs;
• Establish National Institute of
Education and National Foundation for Higher Education;
• Prepare for the Opportunities for
Families program;
• Expand .aid for low-income college students; and
• Stimulate investment in science
and technology.
Elementary, secondary, and vocational education.-The Administration's revenue-sharing p,r oposal
for elementary and secondary education will consolidate more than 30
separate categorical formula grant
programs into· five broad areas.
States and localities will have
greater latitude in administering
and planning for the use of these
funds to meet local problems. Out-
lays will be $3.2 billion in 1973, $224
million more than requested for existing categorical programs.
Under the proposed Emergency
School Assistance Act, $1.5 billion
would be made available in 1972
and 1973 to expedite school desegregation. Project grants will be
provided to local school districts desegregating under court order or attempting voluntarily to overcome
the disadvantages of minority
group isolation.
Higher education.-The Administration's proposed reform of student assistance provides aid to insure
that no qualified student will be
barred from college by lack of funds.
The proposed National Foundation for Higher Education will sup~
port innovation and reform at colleges and universities. In addition,
funds . to improve educational opportunities of minority group students attending developing institutions will be increased in 1973.
Other education aids.-The proposed National Institute of Education will serve as the focal point for
educational research and experimentation. The National Foundation for the Arts and the Humanities
will greatly expand its programs.
General science.-The Administration's initiatives to revitalize and
expand basic and problem-related
research efforts will be continued in
1973. An increase of $74 million in
obligations by the National Science
Foundation will permit a growth of
over 10% in basic research which it
sponsors. Research efforts addressing major social, economic, and environmental problems will be
expanded by 40%.
Manpower training and employment services.-Outlays for manpower training - and employment
services will be $3.9 billion in
1973, including $1.1 million under
the Emergency Employment Act of
1971, which supports public service
jobs when unemployment is high.
Manpower revenue sharing, proposed for inauguration July 1, 1973,
will place the primary responsibility
for manpower services with State
and local governments.
The Opportunities for Families
Program, included in the proposed
Welfare Refonn, will provide income support, training, and public
service employment to help welfare
families become self-supporting.
This will replace the present Work
Incentive program, which will expand in 1973 to provide job training
assistance to 149,000 welfare recipients, and child care services for an
estimated 186,000 children.
Other manpower aids.-Outlays
for occupational safety and health
programs will increase more than
50% in 1973 as major emphasis is
given to reducing the frequency of
work-related injury, disease, and
death. The Office of Federal Contract Compliance will intensify its
efforts to eliminate discrimination
in the workplace.
Education and Manpower
Fiscal year
1973 estimate ... .
1972 estimate ... .
1971 ........... .
1970 ........... .
1969 ........... .
1968 ....... •.. ..
1967 ........... .
1966 ........... .
1965 ........... .
1964 ........... .
1963 ........... .
1962 ........... .
1961 ........... .
Total
Percent of
outlays
total budget
(in millions)
outlays
$11, 281
10, 140
8,654
7,289
6,525
6, 739
5,853
4,258
2,284
1, 751
1,502
1,406
1,227
4.6%
4.3
4. 1
3. 7
3.5
3.8
3. 7
3.2
1.9
1.5
1.3
1.3
1.3
59
MEALTH
Health Outlays
O~~~MM~~~~MM~~~~--
__~~~~~~~~----~~~-
f963
"k.·.;[ F,i~Q(ii~~urs .
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
The National Health Strategy for
the 1970's is directed toward three
objectives: prevention of health
problems, assured access to medical
care, and greater efficiency within
the health care system.
Recent Program Improvements
• Intensified research into cancer
and sickle cell anemia;
• Increased support for health
manpower training;
• Increased services for family
planning, rehabilitation of drug
addicts and alcoholics; and
• Expanded consumer safety and
occupational health activities.
Budget Proposals
• Guarantee health insurance coverage for employees and their
families;
60
• Establish special health insurance
for low-income families with
children;
• Assist development of health
maintenance organizations;
• Improve nursing homes for the
aged;
• Increase product safety activities
by 300%, and food inspection
activities by 56 %; and
• Eliminate the monthy premium
for supplementary medical insurance in Medicare.
Development of health resources.-In 1973 the Administration will give high priority to development of the Nation's health resources. Outlays for biomedical research will increase by almost $200
million to $1.6 billion in 1973
with emphasis on cancer, sickle cell
anemia, and family planning.
Research to eliminate or control
cancer will be expanded by $93 million. Research will also be directed
to heart disease, drug and alcohol addict~on, and environmental
health .
. Outlays for health manpower
programs will rise by $107 million to
$727 million, and will provide increased support to health professions
schools based on their enrollment,
as well as assistance to students.
Medical school curriculums will be
improved and shortened, and the
number of students increased. Emphasis will be placed on enrolling
more students from minority groups
and low-income backgrounds.
Health facilities construction programs will encourage the construction of needed outpatient facilities
through grants, and provide loan
guarantees with interest subsidies for
inpatient facilities.
A major attempt will be made to
improve the efficiency of health
services delivery. Assistance will be
provided to encourage development
of organizations that ,d eliver prepaid comprehensive medical services, particularly health maintenance organizations. Federal support for State and local health
planning agencies will also be
intensified.
Providing or financing medical
services.-In 1973, Medicare, the
largest Federal health program, will
share the medical expenses for almost all of the 20 million aged in
the Nation. Medicaid coverage will
reach approximately 24 million poor
people. Legislation has been recommended to improve Medicare by
eliminating the monthly premium
currently required for supplementary medical insurance. Legislation
now pending before the Congress
would modify both Medicare and
Medicaid to introduce reforms and
cost-sharing features that will encourage use of more efficient modes
of treatment.
Maternal and child health programs will increase efforts to
reduce infant mortality and birth
defects. Family planning services
will be provided to 3.5 million
persons, an increase of 380,000 over
1972.
Medical, nutritional, and sanitation services for American Indians
and Alaska Natives will be
improved.
Prevention and control oJ health
problems.-Priority will be given
to disease prevention and con trol,
environmental health problems, and
consumer safety. Outlays for these ·
activities will rise by $236 million to
$619 million in 1973. Efforts to
combat drug abuse will be intensified through coordination of
Federal programs and expansion
of community-based rehabilitation
programs.
In 1973, Federal action to protect
the consumer through inspection of
foods, consumer products, and
medical devices will be expanded.
Occupational health hazards and
mental health will also receive increased Federal attention.
Health
Fiscal year
1973 estimate ... .
1972 estimate ... .
1971 ........... .
1970 ........... .
1969 ........... .
1968 ........... .
1967 ........... .
1966 ........... .
1965 ........... .
1964 ........... .
1963 ........... .
1962 ........... .
Total
Percent of
outlays
total budget
(in mlllions)
outlays
$18, 117
17,024
14,461
12, 995
11, 696
9,672
6, 721
2,543
1, 730
1, 737
1, 393
1, 139
7.4%
7. 2
6.8
6.6
6.3
5.4
4.2
1.9
1.5
1.5
1.3
1.1
61
INCOME SECURITY
Income Security Outlays
,'.':"
SBilllons
*
70 ·~----~----~----~----~~~------------------------~
<
Social and Individual Service
Social Security
o
'963
1964
1965
1966
1967
Fiscal Years
1968
1969
1970
1971
. 1'972
1973
Estimate
Note.-The amounts above do not reflect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
The Nation's income security programs provide essential income support to millions of individuals and
families. During the past 3 years important improvements have been
proposed to make these programs
more effective.
Recent Program Improvements
• Increased social securi ty benefits 25% since 1970;
• Reformed the food stamp program, increasing benefits most for
the neediest recipients; and
• Increased unemployment benefits under the Employment
Security Amendments of 1970.
Budget Proposals
• Enact Welfare Reform;
• Increase social security benefits
an additional 5%; and
62
• Strengthen dramatically
grams to help the elderly.
pro-
Retirement and social insurance.-Social insurance benefits
cushion the loss of income when
earnings are interrupted or terminated by old age, disability, death,
or temporary unemployment. Proposed improvements in social security will increase benefits by an
additional 5%, provide automatic
cost-of-living increases to make
benefits "inflation proof," raise
widow's benefits, and allow beneficiaries to earn more without a reduction in benefits.
The E m p loy men t Security
Amendments of 1970 provide 13
weeks of benefits on top of the regular 26-week period whenever the
national insured unemployment rate
exceeds 4.5%. Temporary legislation, passed in December 1971, will
extend benefits for still another 13
weeks in States with unemployment
rates of 6.5% or more.
Public assistance.-The Federal
Government provides cash assistance to those who have little or no
other means of support-one-parent
families with dependent children,
the aged, the blind, and the disabled. In 1973 the Federal Government will pay 56% of program
costs-an estimated $7.6 billionwith the reInainder paid by the
States.
A savings of $400 million in 1973
public assistance outlays will result
from increased quality control efforts, an increase in the number of
recipients employed as a result of
training, and a more rigorous audit
of State accounts and systems.
The Welfare Reform proposals of
this Administration would completely restructure the present, fail ..
. ing system. It would emphasize
greater incentives for work, training, and self-sufficiency. It would
also establish national eligibili ty
standards, a Federal income floor for
families with children, and provide
payments to low-income working
families for the first time. Funds
budgeted in 1973 for Welfare Reform are to pay the costs of planning
and preparation for benefit payments.
Federal food and nutrition programs ensure an opportunity for the
needy to obtain an adequate diet.
T'h e number of persons receiving
benefits under the Food Stamp program will quadruple between 1969
and 1973 and will exceed 13 million
persons in 1973. In addition, 8 million needy children will receive free
or reduced price school lunches.
Social and individual services.There are a number of services for
public assistance recipients designed
to combat rising dependency. The
Administration has intensified fiscal
management efforts and has sought
a fixed amount for these sharply rising services-uncontrollable under
current laws.
Vocational rehabilitation prepares physically and mentally disabled men and women to take a productive role in society. The program
is being expanded as part of a 2year effort to serve all trainable public assistance recipients by 1974.
The 1973 budget for the Administration on Aging will be increased
sixfold over 1969, in order to meet
commitments stemming from the
W'h ite House Conference on Aging
held in November 1971. New programs will emphasize independence
for the elderly.
A special effort will be made to
strengthen the delivery of human
services, particularly for those most
in need of assistance. Legislation will
be proposed to integrate planning
and provision of services, provide
limited transfer of funds among
HEW programs, and strengthen the
capacity of State and local governments to manage these programs.
Income Security
Fiscal year
Total
Percent of
outlays
total budget
(in millions)
outlays
1973 estimate ... . $69, 658
1972 estimate ... .
65,225
1971 .......... .
55, 712
43, 790
1970 .......... .
37,699
1969 ....... ~ .. .
34, 108
1968 .......... .
31, 164
1967 .......... .
29,016
1966 .......... .
25, 702
1965 .......... .
25, 110
1964 .......... .
24,084
1963 .......... .
22,530
1962 .......... .
1961 .......... .
21, 227
28.3%
27.6
26.4
22.3
20.4
19. 1
19.7
21. 5
21. 7
21. 2
21. 6
21 1
21. 7
63
VETERANS BENEFITS AND SERVICES
Veterans Benefits and Services Outlays
SBiflioM
Other BeneFits and Services
Education, Training and
Rehabilitation
Note.-The amounts above do not reflect offsetting receipts deducted by function and outlays for
veterans housing. Detailed outlay numbers for the function are shown in part 6, table 3.
The 1973 budget underscores the
Administration's commitment to
veterans programs that assist men
and women who have served their
country.
Recent Program Improvements
• Increased compensation, pension,
and education benefits;
• Improved medical care through
addition of over 12,000 staff, 296
specialized medical units, and
seven new hospitals; and
• Doubled veteran participation in
G I bill training since 1969.
Budget Proposals
• Increase educational benefits,
counseling, and job assistance;
64
• Provide more adequate compensation benefits; and
• Raise the staff/patient ratio in VA
hospitals to a record level of 1.5.
Income security Jor veterans.Income security benefits are provided to veterans and their dependents when family income has been
reduced by the disability or death of
a veteran. Outlays for these programs will total $7.1 billion in 1973.
Veterans who have incurred or
aggravated a disability as a result of
military service receive monthly
compensation payments that are related to the degree of the disability.
Survivors may also receive special
compensatory payments as a result
of a veteran's death during wartime.
In 1973, 2.6 million persons will
receive $3.8 billion in compensation
payments.
Veterans who are totally disabled
and have ::;erved during wartime,
may qualify for monthly pensions
based on financial need. Widows
and children of these veterans may
also qualify, depending on their income. Pension rates were increased
by an average of 6.5% in January
1972. During 1973, 2.4 million recipients will be paid $2.7 billion in
•
penSIons.
The families of 9.1 million
servicemen and veterans are protected by various life insurance programs. In 1973, they will have $92
billion in insurance coverage.
Veterans education, training, and
rehabilitation.-The G I bill provides assistance for education, training, and rehabilitation to enable returning veterans to reenter civilian
life with enhanced education and
jdb skills. In 1973, an estimated 2.0
million veterans, together with 55,000 dependent children or war orphans and 12,000 widows or wives,
will receive a total of $2.4 billion in
education and training benefits.
Veterans housing.-The Veterans Administration will assist nearly
360,000 veterans to purchase homes
in 1973 through its guarantees of
privately financed mortgages; The
Veterans Administration also will
make 4,000 direct loans to finance
housing for eligible veterans where
private mortgage credit is not generally available. Expanded sales of
loans to private investors will reduce
net outlays for housing credit programs in 1973.
Hospital and medical care for
veterans.-The Veterans Adminis-
tration provides comprehensive
medical services to eligible veterans.
Outlays for veterans medical care
will increase by $254 million from
1972 to an estimated $2.5 billionup $1 billion from 1969. VA
funds will provide for treatment of
949,000 veterans in its hospitals and
extended care facilities and over
11.5 million outpatient visits.
The quality of VA medical care
will be increased in 1973 by:
• Increasing the staff/patient ratio
in VA hospitals to a record 1.5;
• Adding 248 specialize<:J medical services-primarily for alcoholism and drug treatment, heart,
respiratory, and kidney disease;
and
• Providing planning funds for . replacement of four hospitals, and
activating six new hospitals.
Other veterans benefits and services.-The cooperation of Federal
agencies, State and local governments, voluntary agencies, and private employers will be utilized in a
special "six point program" to assist
Vietnam veterans to obtain job
training and employment.
Veterans Benefits and Services
Total
Percent of
outlays
total budget
(in nlillions)
outlays
Fiscal year
1973 estimate ...
1972 estimate ...
1971 ...........
1970 ...........
1969 ...........
1968 ...........
1967 ...........
1966 ...........
1965 ...........
1964 ...........
1963 ...........
1962 ...........
.
.
.
.
.
.
.
.
.
.
.
.
$11, 745
11,127
9,776
8,677
7,640
6,882
6,897
5,920
5, 722
5,681
5,520
5,625
4.8%
4. 7
4.6
4.4
4. 1
3.8
4.4
4.4
4.8
4.8
5.0
5.3
65
GENERAL GOVERNMENT
General Government..Outlays
Nattonal Capitol Region
...... •.. ·...... nel, Property and Fiscal Management
Law Enforcement and Justice,,;'
Note.-The amounts above do not reRect offsetting receipts deducted by function. Detailed outlay
numbers for the function are shown in part 6, table 3.
Effective law enforcement, a fair
and efficient judicial system, and
orderly administration of Government personnel, property, and fiscal
management activities are major
objectives of general government
programs.
Recent Program Improvements
• Improved ability to fight crime
and drug abuse under recent legislation; and
• Enacted legislation gIvIng 18year-olds the vote.
Budget Proposals
• Provide State and local governments increased resources to fight
.
crIme;
• Propose law enforcement special
revenue sharing;
66
• Expand Federal enforcement efforts, especially to curb drug trafficking and organized crime; and
• Accelerate equal employment opportunities.
Law enforcement and justice.Program improvements in 1973 are
designed to upgrade law enforcement, provide efficient administration of justice, and develop new approaches to criminal rehabilitation
at all levels of government.
Particular emphasis will be
placed on enforcing laws against
the manufacture and distribution of
illicit dangerous drugs, destroying
major criminal systems, and developing technological devices to assist
enforcement activities. The Law
Enforcement Assistance Administration will increase grants for support of State and local law enforcement programs, and , State correctional programs. Improvements in
the Nation's correctional programs
will emphasize improved rehabilitation programs and basic education,
with continued progress on the Federal prison system's construction
program and recruiting of minority
group employees.
The civil rights enforcement efforts of the Federal Government
will be substantially strengthened
to assure that there is no discrimination against minorities and wornen.
The administration of fair housing
protection will receive expanded re,sources. Expenditures under the proposed emergency school desegregation assistance program, discussed in
the education section, will increase
sharply to assist local communities
in the process of desegregating their
schools. The Department of Justice
will also continue to expand efforts
to assure the basic rights of all Americans in exercising their franchise
and assuring that Federal assistance
is rendered in a nondiscriminatory
manner. Outlays for these purposes
will grow by 105% in 1973.
again proposes that the construction
of Federal buildings be shifted from
direct Federal funding to private investment financing. This will permit
the $850 million unfunded backlog
of public buildings to be reduced /substantially by June 30, 1973.
Full-year funding is provided for
the Consumer Product Information
Coordinating Center which has responsibility for distributing Government data useful to consumers.
About 25 million catalogs listing
available Government consumer
public,ations will be distributed to
the public in 1973.
National Capital region.-Con-
struction of the Nation's most modem rail rapid transit system will
continue in the Nation's Capital. To
keep construction moving forward,
the budget proposes a Federal guarantee of the system's revenue bonds
to increase their marketability. The
budget also proposes increasing the
general Federal payment to the District by $11 million and financing
the city's capital construction program by locally issued bonds instead
of direct F ederalloans.
General Government
Central fiscal operations.-The
Internal Revenue Service (IRS)
accounts for over 65% of the outlays for central fiscal operations. It
will process nearly 114 million tax
returns in 1973 and increase the
number of returns audited to insure
that taxpayers comply with the law.
IRS will also provide field office
support in 1972 and 1973 for the
economic stabilization program of
the President.
General property and records
management.-The 1973 budget
Fiscal year
1973 estimate ... .
1972 estimate ... .
1971 ........... .
1970 ........... .
1969 ........... .
1968 ........... .
1967 ........... .
1966 ........... .
1965 ........... .
1964 ........... .
1963 ........... .
1962 ........... .
Total
Percent of
outlays
total budget
(in millions)
outlays
$5, 531
5,302
3,970
3,336
2,866
2,561
2,510
2,292
2,210
2,040
1,810
1,650
2.2%
2.2
1.9
1.7
1.6
1.4
1.6
1.7
1.9
1.7
1.6
1.5
67
INTEREST
Interest Outlays
$ BiUions
25 ·.·:-.. , . . . . - - - - - - . . . . : . . - - - - - - - - - - - - - - - - - - - . , -
20
Paid to Trust Funds
15
Paid to the
Federal Reserve Systems
10
5
O~~~~~~~~~~""""""~~~~~""""~~~~~MA-
'963
1964
1965
1966
1967
1968
1969
1970
1971
1972
Estimate
Fiscal Years
Interest costs, predominantly in,terest on the public debt, are expected to rise by $0.5 billion in
1972, and by another $1.1 billion
in 1973. The increases in both 1972
and 1973 result largely from increases in the public debt.
Of the estimated net interest outlays of $21.2 billion in 1973, $5.7
billion will be paid to trust funds
and other Government investment
accounts on Government sec·u rities
held by them. In addition, $3.5 billion of the interest paid on obligations held by the Federal Reserve
Banks will be returned to Treasury
as miscellaneous receipts through
the deposit of excess earnings by
such banks. Hence, the net impact
68
1973
on the 1973 budget of the interest
paid on the public debt will be about
$12.0 billion.
Interest
Fiscal year
1973 estimate ....
1972 estimate ....
1971 ............
1970 ............
1969 ............
1968 ............
1967 ............
1966 ............
1965 ............
1964 ............
1963 ............
1962 ............
Total
Percent of
outlays
total budget
(in millions)
outlays
$21, 161
20,067
19,609
18, 312
15, 791
13, 744
12,588
11, 285
10, 357
9,810
9,215
8,321
8.6%
8.5
9.3
9.3
8.6
7. 7
8.0
8.4
8. 7
8.3
8.3
7.8
GENERAL REVENUE SHARING
General Revenue Sharing will redress a major imbalance which has
existed for many years in the Nation's federal system of government.
State and local service needs have
outstripped the ability to finance
these needs, while the Federal categorical grants have become rigid
and cumbersome. The objectives of
general revenue sharing include:
• Making the federal system more
responsive and effective;
• Relieving State and local fiscal
pressures; and
• Introducing greater equity into
the Nation's overall tax system.
Rapidly growing demands for
such essential local services as education, public safety, urban renewal,
and environmental improvement
are leading to an increasingly serious State and local fiscal problem.
General Revenue Sharing would
provide hard-pressed State and local
governments with Federal assistance
without matching fund or programmatic restrictions attached to the use
of the funds.
If last year's General Revenue
Sharing proposal had been enacted,
it would ·have provided State and
local governments with $3,750 million in 1972. The Administration is
reaffirming its support for this important program by recommending
$5,300 million in budget authority
for 1973. The budget also provides
$2,500 million in budget authority
for retroactive payments in the last
half of 1972. The annual appropriation for revenue sharing will be
equal to 1.3% of the Federal per-.
sonal income tax base. Because it is
tied to the income tax base, the
amount appropriated for revenue
sharing will grow each year.
In essence, revenue sharing will
make basic changes in our system
of government:
-for the individual taxpayerJ it will
provide a stronger voice in how
his tax money is spent locally, and
the hope that the pressure of State
and local taxes may be eased;
-for State and local governmentsJ
it will not only help meet the
current financial crisis, but will
also wipe out rigidities and delays
in Federal aid and build their
capaci ty to respond to local needs;
-for the federal system J it will provide new strength by assigning
responsibility to the level of government best equipped to solve
domestic problems; and
-for all people~ it will provide a
means of encouraging local diversity and experimentation within the framework of national
purposes.
69
PART 5
THE BUDGET SYSTEM
The budget selVes as an important vehicle for determining national pri9rities. In the raising of tax
revenues and the making of various
payments, the Federal Government
allocates resources between the private and public sectors of the econ-
omy. Within the public sector, the
distribution of outlays among individual programs reflects the priorities that are determined through the
interaction of the President, the executive agencies, and the Congress.
THE FEDERAL BUDGET CYCLE
The "budget cycle" is a continuous process in which there are four
identifiable phases: (1) Executive
formulation and submission; ( 2)
congressional authorization and appropriation; (3) budget execution
and control; and (4) audit. Each of
these phases interrelates and overlaps with the others.
Executive formulation and submission.-The President's transmission of his budget proposals to the
Congress each year climaxes many
months of planning- and analysis
throughout the executive branch.
Formulation of the 1973 budget,
which covers the fiscal year beginning July 1, 1972, and ending
June 30, 1973, began in the spring of
1971. About 10 months later, in
January 1972, the budget was formally transmitted to Congress.
During the period when a budget
is !being formulated in the executive
branch, there is a continuous exchange of information, proposals,
evaluations, and policy detenninations among the President, the Office of Management and Budget,
.
and the varIOUS Government
.
agencIes.
In the spring, each agency evaluates its programs, identifies policy
issues, and makes budgetary projections, giving attention both to
important modifications, reforms
and innovations in its programs, and
to alternative long-range program
plans. After review in the agency
and by the Office of Management
and Budget, preliminary p1ans are
presented to the President for his
consideration. The President also
receives projections of the economic
'Outlook and revenue -estimates prepared jointly by the Treasury Department, the Council of Economic Advisers, and the Office of Management and Budget.
Following a review of both sets
of projections, the President establj'shes general budget and fiscal policy guidelines for the fiscal year that
will begin about 12 months later.
Tentative policy determinations
and planning targets are then given
to the agencies as guidelines for the
preparation of their budgets.
71
Individual budgets are fonnulated by each agency, reviewed in
detail by the Office of Management
and Budget throughout the fall and
early winter and then presented to
the President. Overall fisc-al policy
problems-relating to total 'b udget
receipts and outlays-are also reviewed again. Thus, the budget
process involves the consideration
simultaneously of individual program levels, and total budget outlays and receipts appropriate to the
needs of the economy. The budget
submitted to Congress reflects both
of these considerations.
Congressional authorization and
appropriation.-Congressional review starts when the President sends
'his budget to the Congress. The
Congress can change programs,
eliminate them, Or add programs
not requested by the President. It
can increase or decrease the
amounts recommended by the
President to finance existing and
proposed new programs. It also legislates the means of raising revenues.
For the past 3 years, the Congress
has enacted limitations on total
budget outlays. Generally, however,
the Congress does not vote on budget outlays directly. Rather it provides the authority to commit the
Govem1m ent to do certain things
that usually require the future
spending of money.
Under the traditional procedures,
the Congress first enacts legislation
which authorizes an agency to carry out a particular program and, in
many cases, sets a limit on the
amount that can subsequently be
appropriated for the program . .
Many programs are authorized for
a specified number of years, or even
indefinitely; other programs, including atomic energy and space exploration, require annual authorizing legislation.
72
The granting of budget aut'h ority-which pennits an agency to enter into obligations requiring either
immediate or future payment of
money-usually is a separate, subsequent action. Most budget authority is enacted in the form of appropriations, which may not exceed any
limit established in the basic authorizing legislation for the program. (In addition to appropriations, smaller amounts of budget
authority are granted in the form
of contract authority and authority to spend debt receipts. )
In most cases, budget authority
becomes available each year only as
voted by the Congress. For example,
this year $170 billion of the recommended $249 billion of new budget
authority for 1973 is dependent
upon action by the Congress. However, in some cases, the Congress
has voted "pennanent" budget authority, under which funds become
available annually without further
congressional action. Most trust
fund appropriations are "permanent," as is the appropriation to
pay interest on the public debt.
The consideration of requests for
changes in revenue laws and for appropriations follows 'a n established
pattern in the Congress. These requests are considered first in the
House of Representatives. The
Ways and Means Committee reviews all proposed revenue measures; the Appropriations Committee, through its 13 subcommittees,
studies the proposals for appropriations and examines in detail each
agency's performance. Each committee then recommends the action to be taken by the House of
Representatives.
As parts of the budget are approved by the House, the bills are
forwarded by the House to the
Senate, where a similar process is
followed. In case of disagreement
between the two Houses of Congress, a conference committee
(consisting of Members of both
bodies) meets to resolve the issues.
The conference report is returned
to both Houses for approval
and the measure is then transmitted
to the President, in the fonn of an
appropriation or tax bill, for his
approval or veto.
Budget execution and control.Once approved, the budget becomes
the basis for the program operations
of each agency during the fiscal
year.
Central control over most of the
budget authority made available to
the executive branch is maintained
through a system of "apportioning"
the authority. Under the law, the
Director of the Office of Management and Budget must distribute or
apportion appropriations and other
budget authority to each agency by
time periods (usually quarterly) ; or
by activities. Obligations may not be
incurred in excess of the amounts
apportioned. The objective of the
apportionment system is to plan the
effective and orderly use of available authority and-for annual appropriations--to prevent the , need
for requesting additional or supplemental authority where possible.
It is, of course, necessary to insure flexibility in case circumstances
change. If developments indicate
that an agency will not require all
the authority made available, "reserves" are established by the Office
of Management and Budget to withhold amounts not needed. Such reserves may be released subsequently,
if necessary, but only for the purposes of the appropriation. On the
other hand, changes in laws or other
factors may indicate the need for
more authority, and supplemental
requests may have to be made of
the Congress.
Audit.-This is the final step in
the budget process. The individual
agencies are responsible for assuring-through their own review and
control systems-that the obligations they incur and the resulting
outlays are in accordance with the
provisions of the authorizing and
appropriating legislation. The Office of Management and Budget reviews substantive and financial reports and keeps abreast of agency
progress in attainment of program
objectives. In addition, the General
Accounting Office conducts a continuing program of examination and
evaluation of Government activities
and their administration, with particular attention to aspects which
appear to be in need of improvement. Its findings and recommendations for corrective action are made
to the Congress and to the agencies
concerned.
The purpose of all these reviews
is to assure that programs are carried
out in an effective, efficient, and
economical manner.
73
RELATION OF BUDGET AUTHORITY TO OUTLAYS
The budget authority appropriated by the Congress for a fiscal
year is more than the obligations or
outlays within that year because:
• Budget authority for some major
procurement and construction
covers estimated full cost at the
time programs are started, even
though outlays take place over a
nurnber of years as the programs
move toward completion.
• Budget authority for many loan
and guarantee or insurance programs also provides financing for
a period of years or represents a
contingency backup.
• Budget authority for trust funds
represents mainly receipts from
special taxes, which are used as
needed over a period of years for
purposes specified in the law.
As a result, substantial unspent
budget . authority is always carried
over from prior years. Most of it is
earmarked for specified purposes,
and is not available for new programs.
As shown in the chart below,
$98.3 billion-almpst 40% of 1973
outlays will be made under budget
authority enacted in earlier years.
Conversely, almost half of 1973
budget authority will be used in
future years.
Therefore, when the Congress
increases or decreases the budget
authority requested by the President
for a given year, budget outlays
in that year are not necessarily
changed by the same amount. The
full effect of the change in budget
authority on outlays will be felt over
a period of years.
Relation of Budget Authority to Outlays-1973 Budget
Figures
in brackets represent Federal funds
only
.
,
'<'
"'".
.".:'
.~
New Authority
Recommended
For 1973
270.9
To be spent in 1973
148.0
[143.5J
Outlays
in 1973
246.3
[186.8J
[200.7] _ _
i ~~~~__
Unspent Authority
_
Enacted in
Prior Years
266.7
[123.9J
~.
To be spent
in Future Years
166.9
[79.1J
Unspent Authority
For Outlays in
Future Years
289.8
[136.3J
.
NO~: 1fte difference between tbe t4tal blldget figures and federal funds shown in bracleets consists of trust funds ond intragovemmental
tranlClctlons between fund groups
74
.~.
PART 6
BUDCiET TABLES
1.
2.
3.
4.
5.
6.
Budget Receipts, Outlays, Financing, and Debt, 1963-1973. . . .
Budget Receipts by Source and Outlays by Function, 1963-1973.
Budget Outlays by Subfunction, 1963-1973. . . . . . . . . . . . . . . . . .
Budget Authority and Outlays by Agency, 1971-1973. . . . . . . . .
Outlays and Receipts of Trust Funds, 1971-1973. . . . . . . . . . . . .
Summary of Full-Time Permaneht Employment in the Executive
Branch, 1971-1973. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Federal Finances and the Gross National Product~ 1954-1972. . . .
8. Budget Receipts and Outlays, 1789-1973. . . . . . . . . . . . . . . . . . . .
Page
76
77
78
82
82
83
84
85
75
Table 1. BUDGET RECEIPTS, OUTLAYS, FINANCING, AND DEBT 1963-73 (in millions of dollars)
Description
1963
1964
1965
1966
Receipts, expenditures, and net lending:
Expenditure account :
Receipts ____________________________ ------------------ ______________
Expenditu res (excludes net l ending) ___ ________________________________
106,560
111, 456
112,662
118,039
116,833
117, 181
130,856
130,820
Expenditure account surplus or deficit ( - ) ______ _____________________
-4,896
loan account:
loan disbursements_________________________________________________
loan repayments ____________________________________________________
9,646
9,791
Netlending ________________________________________________ _______
10, 237
9,693
---- 145
545
1968
10,911
9, 662
14, 628
10, 796
17,676
12,623
20,327
14, 297
1, 249
3,832
5,053
6,030
149,552
158, 254
106,560
111,311
112,662
118,584
116,833
118,430
130,856
134, 652
Budget su rplus or deficit(-) ______________________________ _________
- 4,751
-5,922
- 1, 596
-3,796
Budget financing:
Net borrowing from the public or repayment of borrowing (-) ___________ ___
Other means of financing _______________________________________________
6,088
-1,337
3,092
2,830
4,061
-2,465
3,076
720
Total means of financing __ ____ ______________ ____ ______ __ ___ __ ______
4,751
5,922
1, 596
310,807
254,461
316, 763
257,553
323, 154
261,614
1
1967
149,552 153,671
153,201 172,802
---- - - - - -5, 377
36 -3,649 -19,131
-347
Total
budget:
Receipts
______ _________________ ____________________ - ________________
Outlays (expenditures and net lending) ________________________________
Outstanding debt, end of year:
Gross Federal debt. _______ _______ ____ ___ ____ ______ ___ _______ _________ _
Held by the public _______________ ________ _____ __ ___ __ ____ _______ ______ •
Estimate
Actual
1970
1971
1972
187, 784
183,072
193, 743
194,456
188,392
210, 308
197,827
235,597
220, 785
246,463
-714 -21,916 -37, 770
-25,678
4,712
13,117
11,640
8,313
6, 182
8, 131
7,014
8,258
7, 246
8,354
8, 560
1,476
2, 131
1,117
1, 013
- 206
193, 743 188,392 197, 827
196,588 211,425 236, 610
---- ---3,236 -2,845 -23,033 -38,783
220, 785
246,257
- 25, 472
--- --- ---
153,671
178,833
---8,702 -25,161
187, 784
184, 548
2,838
5,863
23, 100
2,061
-1,044
-2,192
3,796
8, 702
25, 161
329,474
264,690
341,348
267,529
369,769
290,629
1
1973
1969
-3,236
367, 144
279,483
--
3,814
-969
19,448
3,585
39,500
- 717
27,500
- 2,028
2,845
23,033
38, 783
25,472
382,603
284,880
409,461
304,328
455, 784
343,828
493, 165
371,328
1
Excludes changes due to reclassification and to conversion of mixed-ownership enterprises to private ownership. See footnotes to table 9 in the 1971 budget and table 10 in the 1972 budget.
Table 2. BUDGET RECEIPTS BY SOURCE AND OUTLAYS BY FUNCTION 1963-73 (in millions of dollars)
Actual
1963
1964
1965
1966
1967
1968
1969
1970
47,588
21,579
48,697
23,493
48, 792
25,461
55,446
30,073
61,526
33,971
68,726
28,665
87,249
36,678
14,746
4,112
946
16,959
4,045
1,008
17,359
3,819
1,081
20,662
3,777
1,129
27,823
3,659
1,867
29,224
3,346
2,052
9,915
3,279
2,167
1,205
1,023
10,211
3,519
2,394
1,252
1,084
10,911
3,659
2,716
1,442
1,594
9,145
3,917
3,066
1, 767
1,875
9,278
4,441
2,978
1,901
2,108
106,560
112,662
116,833
130,856
149,552
1971
1972
90,412
32,829
86,230
26,785
86,500
30,100
93,900
35, 700
34,236
3,328
2,353
39, 133
3,464
2, 701
41,699
3,674
3,205
46,367
4,364
3,361
55,113
5,016
3,554
9,700
4,379
3,051
2,038
2,491
10,585
4,637
3,491
2,319
2,908
10,352
5,354
3,644
2,430
3,424
10,510
6,104
3,735
2,591
3,858
9, 175
6,025
5,200
3,210
3,525
9,735
6,565
4,300
2,850
4,052
153,671
187,784
193,743 188,392
198,827
220.785
Federalfunds ____________________________________________________
87,205
90,943 101,427 111,835 114,726 143,321 143,158 133,785
Trustfunds ______________________________________________________ 83,550
25, 799
28,518
29,230
32,997
44,716
52,009
42,935
59,362 66,193
Intragovernmental transactions _____________________________________ -2,788 -3,061 -3,339 -3,568 -5,218
-5,771 -7,547 -8,778 -11,586
OUTLAYS BY FUNCTION 1
National defense _________________________________________________________
52,257
53,591
49,578
56,785
70,081
80,295 77,661
80,517
81,232
International affairs and finance ____________________________________________
3,095
4,115
4,340
4,490
4,117
4,547
4,619
3,570
3,785
Space research and technology ___________ __________________________________
3,381
5,423
2,552
4,170
5,091
5,933
4, 721
4,247
3, 749
Agriculture and rural developmenL _________________________________________
5,096
5,138
5,184
4,805
3,676
4,373
5,940
6,218
6,201
Natural resources and environment _________________________________________
2,716
1,498
1,966
2,056
2,036
2,568
1,878
1,722
2,
169
Commerce and transportation ______________________________________________
5, 765
6,511
7,171
7,594
7,399
8,094
7,921
9,310 11,310
Community development and housing _______________________________________
3,357
288
2,644
-880
2,965
-185
4,076
1,961
2,616
Education and manpower __________________________________________________
8,654
1,502
2,284
1,751
4,258
5,853
6,
739
6,525
7,289
Health __________________________________________________________________
1,379
1,716
1,704
2,509
6,667
9,608
11,611
12,907 14,463
Income secu rity _____________________________________________ .: ____________ 24,084
25,110
25,702
29,016
31,
164
34,108
43,
790 55,712
37,699
Veterans benefits and services _____________________________________________
9,776
5,520
5,681
5,
722
5,920
6,897
6,882
7,640
8,677
Interest _________________________________________________________________
19,609
9,215
9,810
10,357
11,285
12,588
13,744
15, 791
18,312
General governmenL;-_ ___________________________________________________
1,810
2,040
2,210
2,292
2,510
2,561 . 2,866
3,336
3,970
General revenue sharlng ____________________________________________________________________________________________________________________________________________
Allowances __________________________________________________________________________________________________________ _____________________________________________
Undistributed intragovernmental transactions________________________________ -2,644 -2,877 -3,109 -3,364 -3,936 -4,499 -5,117 -6,380 -7,376
Total outlays __________ ___ ________________________________________ 111,311 118,584 118,430 134,652 158,254 178,833 184,548 196,588 211,425
1.;7,788
73, 163
-13,124
150,617
83,214
-13,046
78,030
3,960
3,180
7,345
4,376
11,872
4,039
10, 140
17,024
65,225
11,127
20,067
5,302
2,250
550
-7,878
78,310
3,844
3,191
6,891
2,450
11,550
4,844
11,281
18,111
69,658
11,745
21,161
5,531
5,000
1,275
-8,590
236,610
246,257
156,301 163,651 182,519
67,215
49,065 59,361
-8,778 -11,586 -13,124
186,784
72,519
-13,046
RECEIPTS BY SOURCE
Corporation income taxes __________________________________________________
Social insurance taxes and contributions (trust funds):
Employment taxes and contributions ______________________________________
Unemployment insurance ________________________________________________
Contributions for other insurance and retiremenL __________________________
Excise
taxes:
Federal
funds __________________________________________________________
Trustfunds ____________________________________________________________
Estate and gift taxes ______________________________________________________
Customs duties ______ -__________ __ _-_ -___ -_______ -___ -_-- -- -- --- _____ -_ --Miscellaneous receipts 1___________________________________________________
Total receipts ___________ ___________________________________ -______
1ndividual income taxes ___________________________________________________
Federal funds _________________________________________________ __
Trustfunds ______________________________________________________ 90,141
23,958
Intragovernmental transactions _____________________________________ -2,788
~
-.......t
-.......t
Estimate
1
Includes both Federal funds and Trust funds.
95,761
25,884
-3,061
94,807
26,962
-3,339
106,512
31, 708
-3,568
126,779
36,693
-5,218
143, 105
41,499
-5,771
148,811
43,284
-7,547
1973
-....,J
co
Table 3. BUDGET OUTLAYS BY SUBFUNCTION, 1963-73 (in millions of dollars)
Estimate
Actual
Function and subfunction
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
National defense:
Department of Defense- Military 1
Military personneL __________________________________________________
Retired military personneL ____________________________ _______________
Operation and maintenance ___________________________________________
Procurement ________________________________________________________
Research and developmenL _____________________ _____________________
Military construction and otheL _______________________________________
Allowances 2 ________________________________________________________
Deductions for offsetting receipts ______________________________________
22,300
22, 600
22,633
21,374
23,031
11,985
12,986
15, 162
17,956
19,859
13,387
4,326
3,928
3,386
2, 849
1,015
2,095
2, 444
1,209
1,384
1,591
1,830
20,450
20,
941
20,
500
21,609
20,578
22,227
11,874
ll,932
12,349
14, 710
19,000
16,082
17,944
18,858
21,584
23,988
16,632
15,351
19,012
23,283
11,839
14,339
7,923
7,303
7,780
7, 160
7,747
7,457
7, 166
6, 376
7,021
6,259
6,236
1,502
1,594
1, 552
525
1, 059
513
3, 975
1,236
928
2,279
2,636
3,425
800
-------- -------- -------- -------- -------- -------- -------- -------- - - - ----- 108
- 146
- 126
-164
- 143
-251
-159
-160
-148
- 138
-150
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Subtotal, Department of Defense- Military ________________________
75,900
75,000
74,546
48,143
77,373
77,872
77,150
49,577
45,973
54,178
67,457
I I ary assl.stance 1_______ ____________________________________________
MTt
600
800
999
1,406
654
1,209
1, 125
1,003
858
789
731
Atomic energy 1_____ _________ _____ _ ___________________________________
2,422
2,358
2,275
2,264
2,466
2,450
2,758
2, 764
2,625
2,403
2, 453
Defense- related activities _______________________________________________
79
90
- 70
24
172
139
136
260
79
-62
-17
Deductions for offsetting receipts 3 _____ ___ _______________________________
-692
- 218
- 89
- 74
-130
-281
-481
- 116
- 118
- 138
- 738
- - - ---- ---- ---- ---- ---- - - - ---- ---- ---- ---Total national defense ___________________________________________
78,310
78,030
52,257
77,661
53,591
49,578
56,785
70,081
BO,517
81,232
80,295
International affairs and finance:
Conduct of foreign affairs 1 _____________________________________________
Economic and financial assistance _______________________________________
Forelgn
· ·Informa fIon an d exchange actlvltles
· · · ______________________ _________
Food for Peace ________________________________________________________
Deductions for offsetting receipts 3 __ _ ____________________________________
Total international affairs and finance _______ ____________ _________
Space research and technology:
Manned spaceflight __ ____________________________________________ __ ___
Space science and applications ____________________________ ______ ________
Spacetechnology _____________ ____ __ ______________________ ________ _____
Aeronautical technology __________________ __________ ___ ___ __ _________ ___
Suppo rt·Ing space acf IVltles
. . ____ ______ ___ __ _____ ________ ________ ______ ___
Deductions for offsetting receipts _____ _________________ ___ ______ ________ _
346
1,968
201
2,040
-441
296
347
1, 756
2, 041
207
223
1,852
2,049
-191
-123
- - - ---- ---4,115
4,117
4,340
315
2,329
227
1, 784
-165
4,490
354
336
371
398
3,057
3, 053
2, 420
2,231
245
253
237
235
1,452
1,204
975
937
-542
-245
-217
-232
---- - - - - - - ---3,785
4,5U
4,619
3,570
405
1, 807
242
918
-276
3,015
459
2,376
277
1,114
-267
----
3,960
1,637
1,885
4,210
3,096
2, 768
3,538
3,649
2, 781
2,209
661
766
751
754
796
700
656
778
569
220
272
432
484
435
440
410
344
328
226
210
40
75
58
89
128
168
188
344
365
262
435
452
178
390
390
374
-13
-11
-1
-1
-2
-2
-3
-6
-6
-*
- - - ---- ---- ---- - - - ---- ---- - - - - - - ---Total space research and technology _______ ________________ _____ __
3,180
3,381
2,552
4,170
5,091
5,933
5,423
4,721
4,247
3,749
See footnotes at end of table.
1,516
576
303
36
122
487
2,495
292
839
-269
3,844
1,571
853
188
251
339
-11
---3,191
Agriculture and rural development:
Farm income stabilization ______________________________________________
Rural housing and public facilities _______________________________________
Agricultural land and water resources ____________________________________
Research and other agricultural services __________________________________
Deductions for offsetting receipts _____________________________________ - __
5,000
4,542
4,589
4,060
4,134
2,536
3,167
3,667
474
579
326
330
318
375
354
309
351
344
343
324
325
342
347
353
414
615
642
730
440
567
483
528
-41
-44
-42
-85
-36
-42
-42
-44
---- ---- - - - ---- - - - - - - - - ---Total agriculture and rural developmenL ________ - _- _- _________ - __
6,201
4,373
5,940
6,218
5,138
5,184
4,805
3,676
Natural resources and environment:
Water resources and power- _______________________________________ - _- __
land managemenL ____________________________________________________
Mineral resources ____________________________ -_ -_ - ___ -_ - _____ -_ - ___ --Pollution control and abatemenL ________________________________________
Recreational resources __________________________ - _- _- _-_ - ___ - _- _--- _- __
Other natural resources programs _______________________________________
Deductions for offsetting receipts _____________________________ -_ - _- ___ - __
1,646
1, 703
1,761
1,940
422
459
556
509
25
46
59
62
117
87
134
158
180
202
215
241
67
70
79
90
-929
-632
-701 -1,011
- - - ---- - - - ---Total natural resources and environment ________ - _- ___ -_ - _- _- _- __
1,498
1,966
2,056
2,036
2,041
1,983
754
643
94
71
350
303
370
372
122
107
-1,368 -1,105
- - - ---- ---- - - 1,878
1,722
2,169
2,568
2,025
618
73
190
285
93
-1,408
5,011
618.
388
915
-41
5,096
7,345
6,891
2,389
837
130
701
479
136
-1,957
3,005
935
121
1,287
642
149
-1,763
3,207
918
103
1,541
640
176
-4,135
2,716
4,376
2,450
808
672
3,057
770
239
242
82
-104
835
658
3,686
578
252
538
91
-128
875
728
4,092
805
405
557
98
-160
879
708
4,043
888
351
315
99
-112
945
765
4,093
1,141
332
318
118
-119
951
844
4,367
1,080
447
472
98
-165
1,042
864
4,413
920
152
584
107
-162
1,223
902
4,632
1,510
487
590
120
-154
1,602
1,041
5,070
2,183
738
717
181
-221
1, 742
1,200
5,412
1,943
744
816
174
-159
1,688
1,225
5, 720
1,409
642
857
153
-144
Total commerce and transportation __________________ -_ - ___ - ___ - __
5,765
6,511
7,399
7,171
7,594
8,094
7,921
9,310
11,310
11,872
11,550
2,486
2, 745
2,171
1,509
-------- -------- -------- -------1,243
1,674
1,280
871
-380
-319
-406
-487
-53
-13
-*
*
-1,961
2,965
3,357
4,039
3,009
490
2,066
-720
-*
4,844
Education and manpower:
Elementary and secondary education _____________________________________
527
566
645
3, 164
3,383
1,804
2,439
2,595
2,480
2,968
Higher education ______________________________________________________
419
383
414
1,428
1,442
705
1,
159
1,393
1,230
1,381
Vocational education ___________________________________________________
41
415
531
41
132
136
250
265
262
289
Education revenue sharing______________________________________________
-------- -------- -------- -------- -------- -------- -------- -------- -------Other education aids ___________________________________________________ -------534
632
98
110
158
155
264
429
334
373
General science _______________________________________________________
522
538
206
310
309
449
490
464
368
415
Manpower training and employment services _____________________________
2,380
3,318
209
1,602
299
534
989
1,236
1,587
1,560
Other manpower aids __________________________________________________
223
326
7
49
169
100
112
100
142
132
Deductions for offsetting receipts ________________________________________
-12
-29
-14
-5
-9
-5
-11
-11
-16
-13
3,619
1,371
568
110
745
596
3,918
387
-32
Total community development and housinl ________________________
(.0
5,501
608
375
901
-41
Commerce and transportation:
Air transportation 1 ____________________________________________________
Water transportation ________________________________________ - _-_ - ______
Ground transportation __________________________________________________
Postal Service __________________________________________________ - _- _- _Advancement of business _______________________________________________
Area and regional developmenL ________________________________________
Regulation of business ______________________________________________ - __
Deductions for offsetting receipts 3_______________________________________
Community development and housing:
Community planning, management, and developmenL _____________________
233
320
460
721
1,023
Urban community development revenue sharing ___________________________ -------- -------- -------- -------- -------Low- and moderate-income housing aids _________________________________
37
198
391
81
478
Maintenance of the housing mortgage markeL ____________________________
-1,289
1,545
-511
-237
1,133
Deductions for offsetting receipts ________________________________________
-22
-31
-16
-13
-19
'-l
2,069
639
85
249
331
102
-1,753
3,651
328
346
813
-42
Total education and manpower ___________________________________
-880
1,502
-185
-1,751
-
288
2,284
2,644
4,258
2,616
5,853
1,277
-------948
1,863
-12
4,076
6,739
6,525
7,289
8,654
10,140
11,281
co
o
Table 3. BUDGET OUTLAYS BY SUBFUNCTION, 1963-73 (in millions of dollars) -Continued
Function and subfunction
Health:
Providing or financing medical services:
Med ica re be nefits (H I, SMI) __________________________________________
Med icaid be nefits ____________________________________________________
Other ______ ____________________________ ________ ____________________
Subtotal. providing or financing medical services ______________________
Development of health resources ________________________________________
Prevention or control of health problems _________________________________
Deductions for offsetting receiptsl _______________________________________
Actual
1963
1964
1966
1965
-------- -------- -------- -------157
210
272
770
161
176
204
324
318
949
114
-3
386
1,170
161
-1
476
1,039
189
-1
1,094
1,212
204
-1
--1,704
2,509
1967
Estimate
1968
1969
1970
1971
-----1972
1973
3,172
1,173
521
5,126
1,806
523
6,299
2,285
731
6,783
2,727
834
7,875
3,362
709
8,974
4,401
839
10,436
3,705
592
4,866
1,556
247
-2
7,455
1,826
330
-3
9,315
1,918
380
-2
10,344
2,097
473
-6
11,946
2,201
319
-3
14,214
2,446
382
-18
14,733
2,787
619
-22
6,667
9,608
11,611
12,907
14,463
17,024
18,117
Total health _____ __ __ ___ ___ ____ __________________________________
---1,379
1,716
Income security:
Retirement and social insurance:
Social security benefits (OASDI} _________________ ________ ______________
Unemployment insurance benefits _____________________________________
Other reti rement programs ___________________________________________
15,015
2,979
3,484
15,830
2,837
3,567
16,618
2,505
3,407
19,793
2,062
3,708
20,746
2,072
4,533
22,826
2,146
4,594
26,175
2,158
4,207
29,045
2,886
5,344
35,874
5,324
5,123
40,053
6,454
6, 147
45,501
5,255
1,291
21,478
2,909
176
-,+-n,
22,234
3,085
199
22,530
3,119
249
,,,. .
25,563
3, 151
410
27,351
3, 180
692
29,566
3, 726
831
32,540
4,272
8881
37,275
5, 186
1,3311
46,321
7,775
1,617
10, III
52,654
57,047
10,335
2,297
security ____________________________________________
24,084
Veterans benefits and services:
I ncome security for veterans ________ ____ _______________ ______________ ~ __
Veterans education, training, and rehabilitation ___________________________
Veterans housilg ______________________________________________________
Hospital and medical care for veterans ___________________________________
Other veterans benefits and services _________________________ ____ _., ______
Deductions for offsetting receipts ________________________________________
Total veterans benefits and services ______________________________
Subtotal • re rIremen t an d socia
. I·Insurance _____________ ____ ____________
Publ ic assistance ______________________________________________________
SOCial and individual services ___________________________________________
QPJhJJ'JJnn.~
Total
fnli
'ifih1tt(l1~
inco~e
lt1t11IlJ'Us'l _______________________________________
, n"
- - - ---- - - -
-1:1:>
-1U:I
-r;.i?1
25,110
25,702
29,016
31.164
34,108
4, 706
101
-109
1, 147
176
-501
4,646
77
44
1,231
185
-502
4,710
58
1,271
179
-497
4, 700
54
169
1,320
196
-518
5,209
305
304
r, 393
195
-509
5,520
5,681
5,722
5,920
6,897
-~)
•
-'1'0
-1
-1
- - ----
-\
2,477
-'1'l,
-1\
37,699
43,790
55,712
65,225
69,658
4,997
478
210
1,472
218
-492
5,528
701
102
1,566
237
-493
6,021
1,015
54
1,802
260
-477
6,448
1,659
-179
2,038
294
-484
6,950
2,240
-306
2,422
322
-500
7,050
2,437
-289
2,693
349
-495
6,882
7,640
8,677
9,776
11,127
11,745
---
Interest:
I nte rest 0 n th e public debL ____________________________________________
Interest on refunds of receipts __________________________________________
I nterest on uninvested funds ____________________________________________
Deductions for offsetting receipts __________________________________ ~ _____
9,895
74
11
-765
10,666
88
11
-955
11,346
77
12
-1,078
12,014
104
14
-846
13,391
120
13
-936
14,573
120
10
-959
16,588
120
7
-925
19,304
113
6
-1,110
20,959
132
6
-1,487
21,400
158
6
-1,497
22, 700
158
5
-1,703
9,215
9,810
10,357
11,285
12,588
13,744
15,791
18,312
19,609
20,067
21,161
General Govenment:
legislative functions ___________________________________________________
Judicial functions ______________________________________________________
Executive direction and management. ____________________________________
Central fiscal operations ________________________________________________
General property and records managemenL ______________________________
Central personnel management 1 _________ .:. ______________________________
law enforcement and justice ____________________________________________
National capital region _______________________ __________________________
Other general government. _____________________________________________
Deductions for offsetting receipts 3 _______________________________________
131
63
21
733
416
110
323
70
139
-196
126
66
22
808
553
110
335
58
189
-226
142
76
23
844
565
107
366
61
190
-165
159
79
24
886
550
107
385
73
192
-162
167
87
25
968
617
116
426
84
218
-199
180
94
27
1,024
569
140
452
104
243
-272
192
110
31
1,094
567
146
534
162
268
-238
229
133
37
1,271
595
166
666
226
272
-259
256
146
45
1,414
613
218
959
241
340
-261
312
175
81
1,652
762
281
1,294
443
611
-307
332
193
96
1,718
830
302
1,543
537
323
-344
Total general government. _______________________________________
1.810
2,040
2,210
2,292
2,510
2,561
2.866
3,336
3,970
5,302
5.531
-------- --------
2,250
5.000
-------- -------- -------- -------- -------- -------- -------- -------- --------------- -------- -------- .-----.- -------- -------- .------- -------- --------
250
300
775
500
Total interest ____________________________________________________
General revenue sharing _______________________________________________
Allowance for:
Pay raises (excluding Department of Defense) ____________________________
COntingencies _________________________________________________________
Undistributed intragovemmental transactions:
Employer share, employee retirement ____________________________________
Interest received by trust-funds _________________________________________
Total outlays ____________________________________________________
MEMORANDUM
Federal funds _______________________________________________________
____
Trustfunds ________ _____________________________________________________
Intragovernmental transactions ____________________________________________
--
-------- -------- -------- -------- -------- -------- --------
-1,159
-1,485
-1,256
-1,621
-1,329
-1,780
-1,447
-1,917
-1,661
-2,275
-1,825
-2,674
-2,018
-3,099
-2,444
-3,936
-2,611
-4,765
-2,687
-5,190
-2,893
-5,697
111,311
118,584
118,430
134,652
158,254
178,833
184,548
196,588
211,425
236,610
246,257
90,141
23,958
-2,788
95, 761
25,884
-3,061
94,807
26,962
-3,339
106,512
31, 708
-3,568
126, 779
36,693
-5,218
143, 105
41,499
-5,771
148,811
43,284
-7,547
156,301 163,651 182,519 186,784
72,519
59,361
67,215
49,065
-13,124
-13,046
-11,586
-8,778
*less than $500 thousand.
Entries net of offsetting receipts.
Includes allowances for military retirement systems reform and civilian and military pay raises for Department of Defense.
3 Excludes offsetting receipts which have been distributed by subfunction above.
1
2
'-...
Table 4. BUDGET AUTHORITY AND OUTLAYS BY AGENCY
(in millions of dollars)
Department or other unit
Budget authority
1971
actual
1972
1973
estimate
estimate
567
68
5,610
12, 799
1,485
75,398
1,620
76,533
3,974
1,208
1,563
9,414
573
8,650
24,404
2,316
2,448
619
3,295
1,418
11,367
11,393
492
192
67
6,476
11,877
1,533
81,656
1,838
86,887
4, 755
-1,106
1,739
9,523
602
8,558
28,057
2,563
2,478
77
3,378
1,424
12,397
12,525
260
500
800
700
-2,893
-5,697
270,898
Legi slati ve Bra nch ____________________________ _
The Judiciary _________________________________ _
Executive Off. of the PresidenL _________________ _
Funds Approp. to the PresidenL ________________ _
Agricu Itu re ___________________________________ _
Co mme rce ___________________________________ _
Defense-Military 1____________________________ _
Defense-CiviL _______________________________ _
Health, Education, & Welfare ___________________ _
Housing & Urban Develop ______________________ _
Interior_- ____________________________________ _
Justice _______________________________________ _
Labor ______________________________________ ___
State ________________________________________ _
Tra nsportation ________________________________ _
Treasury _____________________________________ _
Atomic Energy Commission ______ _______________ _
Environ. Protect. Agency _______________________ _
General Services Admin ________________________ _
Nat'l Aero. & Space Admin _____________________ _
U.S. Postal Service ____________________________ _
Veterans, Ad mi nistration ______________________ _
Other Independent Agencies ____________________ _
Allowances for:
Pay increases (exc1. 000) ____________________ _
Conti ngencies _______________________________ _
Undistributed intergovernmental transactions:
Employer share, employee retiremenL _________ _
Interest rec'd by trust funds __________________ _
-2,611
-2,765
-2,687
-5,190
Total budget authority and outlays ________ _
236,406
249,777
436
152
50
5,426
8,591
1,274
71,232
1,343
65,829
3,355
524
1,248
6,559
488
11,262
21,007
2,308
1,289
651
3,311
12,577
10,219
14,653
Outlays
174
--
1971
actual
384
142
47
4,454
8,560
1, 188
74,546
1,376
61,866
2,890
225
916
7,923
468
7,247
20,990
2,275
701
501
3,381
2, 183
9, 756
6,785
1972
estimate
1973
estimate
477
171
63
4,433
11,610
1,289
75,000
1,655
71,911
3,462
1,053
1,230
10,466
545
7,851
24, 124
2,358
1,287
511
3,180
1,943
11, 101
8,216
505
189
71
4, 131
11,005
1,425
75,900
1,822
78,953
4,214
-1,138
1,476
9,589
576
8,155
27, 737
2,422
1,541
110
3,191
1,409
11,715
8,572
250
300
775
500
-2,611
-4,765
-2,687
-5,190
-2,893
-5,697
211,425
236,610
246,257
MEMORANDUM
Portion available through current action by Congress 2_____________________________________ _ 169,444 169,418 185,305 102,335 119,033
Portion available without cu rrent action by Congress_
85,255 100,763 109,508
36,921
42,536
Outlays from obligated balances _________________ _
48,500
49,670
Outlays from unobligated balances ______________ _
41,962
45, 775
Deductions for offsetting receipts: .
I ntrabudgetary transactions ______ ____________ _ -13,420 -14,981 -15,142 -13,420 -14,981
Proprietary receipts from the public ___________ _ -4,873 -5,423 -8,772 -4,873 -5,423
-Total ______________ ____________________ _
236,406
249,777
270,898
211,425
236,610
126, 780
45,086
52,877
45,428
-15,142
-8,772
246,257
Includes allowance for all-volunteer force, civilian and military pay raises, and military retirement systems reform.
Budget authority excludes appropriations to liquidate contract authorizations. Outlays from such appropriations are
included as outlays from balances below.
1
2
Table 5. OUTLAYS AND RECEIPTS OF TRUST FUNDS (in millions of dollars)
Outlays
Description
1971
actual
Funds to which receipts are appropriated:
Federal old-age and survivors and disability insurance trust funds _______________________ _
Health insurance trust funds __________________ _
Unemployment trust fund ____________________ _
Railroad employees retirement funds __________ _
Federal employees retirement funds ___________ _
Airport and airway trust funds ________________ _
Highway trust funds _________________________ _
Foreign military sales trust fund ______________ _
Veterans life insurance funds _________________ _
Other trust funds (nonrevolving) ______________ _
Trust revolving funds (table B-7)---------------Subtotal _______________________________ _
Interfund transactions _________________________ _
Proprietary receipts from the public ____________ __
Total __________________________________ _
82
1972
Receipts
1973
1971
1972
1973
estimate
35,874
7,875
6,132
1,919
3,259
287
4,689
970
743
294
-382
40,053
8,974
7,316
2,113
3,659
1,377
4, 782
1,200
861
323
-618
45,514
10,436
6, 127
2,098
4, 168
596
5,027
1,500
575
325
-663
38,892
8,534
4,321
1,880
5,851
1,184
5, 729
966
784
351
41,593
10,627
5,614
2,035
6,516
1,569
5,557
1,350
820
308
46,242
15,347
5, 786
2,181
7,271
756
6,052
1,650
831
283
61,659
-640
-1,659
70,041
-744
-2,083
75, 704
-814
-2,371
68,492
-640
-1,659
75,989
-744
-2,083
86,399
-814
-2,371
59,361
67,215
72,519
66,193
73, 163
83,214
actual
estimate
estimate
estimate
Table 6. SUMMARY OF FULL-TIME PERMANENT EMPLOYMENT IN
THE EXECUTIVE BRANCH
As of June 1
Agency
1971
actual
Agriculture _________ • _____ - -- __ -- - - - - - - - - - - -_ -Co ill me rce __ __________ - _- - - - - - - - - - - - - - - - - - - - - Defense-m!lita ry functions ________ - _____________
Defense-civil functions ________ _____ - - __ - - - - - - -Health, Education, and Welfare __________________
Housing and Urban DevelopmenL._______________
Interior _______________________________________
Justice
__ - - _______ - - - - - - - - - - - - - - - - - - - - - - - - -____
- -Labor ____________________________________
State _______ ____________ _____________ _________
Tra nsp ortation _____________ - - - - - - - - - - - - - - - - - - - Treasury ______________________________________
Atomic Energy Commission _____________________
Envi ronmental Protection Ag'ency __ - - - - '- - - - - - - - -General Services Administration _________________
National Aeron'autics and Space Administration - - -Veterans Administration ____ _____ _______________
Other agencies:
Agency for International DevelopmenL _- _- - - - -_
Civil Service Commission ___ ____ __ ___ ____ __ ___
Selective Service System ______ ______________ __
Small Business Administration __ - ___________ __
Tennessee Valley Authority ____________ _______
Panama CanaL ______ - - - - - - - - - - - - - - - -- - - -- - -U.S. Information Agency ______________________
Miscellaneous agencies __________ _____________
Subtotal ______ _____ ______ - - - - - - - - - - - - -:Allowances for conti ngencies 3 _____________ _____ _
Subtotal ________________________________
Postal Se rvice _____________ - _- - - - - - - - - - - - - - - ---
Total ________________________ ___________
1972 esti mate
In 1972
budget
estimate
Change
1972-73
84,252
28,435
1,062,741
30,063
104,283
16,030
57,570
42,662
11,352
23,398
68,489
90, 135
6,920
5,959
38,076
29,478
158,635
87,300
29,600
1,061,600
31,300
102, 100
16, 700
59, 100
46,800
12, 100
23, 700
71,900
100,400
7,000
8',900
41,600
28,,400
160,800
83,000
28,500
1,011,000
30,600
102,000
15,200
56,900
45, 100
11,800
22, 700
66,400
98i,500
6, 700
8,000
39,400
27,500
162, 700
83,400
400
29, 700
1,200
1,005,800
-5,200
31,300
700
299,500
-2, 500
16,000
800
56,900 ----------46,300
1,200
12,600
800
22,800
100
69,200
2,800
99,200
700
6,900
200
8,500
500
39,400 ____________
26,800
-700
174,100
11,400
13,477
5,324
5,569
4,004
13,612
13,967
9,773
31,332
11,100
5,900
6,500
4,200
13,300
14,900
9,900
33,700
12,400
5,600
6,200
4,000
14,000
14,200
9,400
34,300
11,800
-600
6,000
400
6, 100
-100
4,000
14,000 ----------14,000 -----------200
9,400 ----------34,600
300
1,955,536
1,988,800
10,000
1,916,100
2,000
1,998,800
629,500
1,918,100
613,400
1,933,300
618,500
2,628,300
2,531,500
2,551,800
---- ----
---------- - - - - - - - - 1,955,536
·603,782
4
1973
Current
2,559,318
---- -----
- - - - - -----1,928,300
5,000
12,200
3,000
-----
15,200
5, 100
----
20,300
Excludes disadvanta~ed worker-trainee in the Public Service Careers program.
Reflec s transfer of federally operated hospitals to local communities.
Subject to later distribution.
4 Adjusted to include approximately 39,000 employees previously erroneously classified and, under a labor-management agreement, to be reclassified as full-time permanents in 1972.
1
2
3
83
Table 7. FEDERAL FINANCES AND THE CROSS NATIONAL PRODUCT, 1954-72 (dollar amounts in billions)
Federal debt, end of year
Budget outlays
(expenditures and net lending)
Budget receipts
Fiscal year
Gross
national
product
Amount
1954 __________________________________________________________
1955 __________________________________________________________
Budget expenditures
(excludes net
lending)
Total
Percent
of GNP
Amount
Percent
of GNP
Amount
Percent
of GNP
Held by the public
Total
Amount
Percent
of GNP
Amount
Percent
of GNP
362.1
378.6
69. 7
65.5
19. 3
17.3
70. 9
68. 5
19.6
18. 1
(1)
(1)
(1)
(1)
270. 8
274.4
74. 8
72.5
224.5
226. 6
62.0
59. 9
409.4
431. 3
440. 3
469. 1
495. 2
74.5
80. 0
79.6
79. 2
92. 5
18. 2
18.5
18. 1
16.9
18. 7
70.5
76.7
82. 6
92.1
92.2
17. 2
17. 8
18. 8
19.6
18. 6
(1)
(1)
81. 0
89. 4
90.3
(1)
(1)
18. 4
19. 1
18. 2
272.8
272. 4
279.7
287. 8
290.9
66.6
63. 1
63.5
61. 3
58.7
222.2
219. 4
226. 4
235. 0
237.2
54. 3
50.9
51. 4
50.1
47. 9
5OG.5
542. 1
573.4
612. 2
654.2
94.4
99.7
lOG. 6
112.7
116. 8
18.6
18. 4
18. 6
18. 4
17. 9
97.8
lOG. 8
111. 3
118.6
118.4
19. 3
19.7
19. 4
19.4
18. 1
96. 6
104.5
111.5
118. 0
117. 2
19.1
19.3
19. 4
19. 3
17.9
292. 9
303. 3
310. 8
316. 8
323.2
57.8
55. 9
54. 2
51. 7
49. 4
238.6
248.4
254.5
257. 6
261. 6
47. 1
45. 8
44. 4
42. 1
40. 0
721. 2
769.8
826. 1
897. 6
953.2
130.9
149.6
153.7
187.8
193.7
18. 1
19. 4
18.6
20. 9
20.3
134. 7
158. 3
178.8
184. 5
196.6
18. 7
20.6
21. 6
20. 6
20. 6
130.8
153.2
172.8
183.1
194. 5
18.1
19. 9
20. 9
20.4
20. 4
329.5
341. 3
369. 8
367. 1
382.6
45. 7
44.3
44.8
40.9
40. 1
264.7
267.5
290.6
279. 5
284. 9
36. 7
34. 8
35.2
31.1
29. 9
1971 __ __ ______________________________________________________
2
1972 estimate _________ _______________ __________________________ 1,008.
1,089. 5
188.4
197.8
18.7
18.2
211. 4
236. 6
21. 0
21. 7
210.3
235. 6
20. 9
21.6
409.5
255.8
40.6
41. 8
304.3
343.8
30.2
31. 6
1956 __________________________________________________________
1957 __________________________________________________________
1958 __________________________________________________________
1959 __ __ __________________ ____________________________________
1960 __________________________________________________________
1961 ________________________ __________________________________
1962 __________________________________________________________
1963 ________________________________________________ __________
1964 __________________________________________________________
1965 ___________________________________________ _______________
1966 __________________________________________________________
1967 __________________________________________________________
1968 __________________________________________________________
1969 __________________________________________________________
1970 __________________________________________________________
1
Not available.
Table 8. BUDGET RECEIPTS AND OUTLAYS, 1789-1972 (in millions of dollars)
Fiscal year
Receipts
Outlays
Surplus
or deficit (-)
Fiscal year
Receipts
Outlays
Surplus
or deficit(-)
ADMINISTRATIVE BUDGET
85
GLOSSARY
FISCAL YEAR-Year running from July 1 to June 30 and designated by the calendar
year in which it ends.
AUTHORIZATION-Basic substantive legislation enacted by Congress which sets
up a Federal program or agency either indefinitely or for a given period of time.
Such legislation sometimes sets limits on the amount that can subsequently be
appropriated, but does not usually provide budget authority.
BUDGET AUTHORITY (BA)-Authority provided by the Congress, mainly in the
form of appropriations, which allows Federal agencies to incur obligations to
spend or lend money. Most budget authority is voted each year, but some becomes
available automatically under permanent laws, such as interest on the public debt.
Budget authority is compos'e d of:
• NEW OBLIGATIONAL AUTHORITY (NOA), which is authority to incur
obligations for programs in the expenditure account; plus
• LOAN AUTHORITY (LA), which is authority to incur obligations for loans
made under programs classified in the loan account.
OBLIGATIONS-Commitments made by Federal agencies to payout money for
products, services, or other purposes-as distinct from the actual payments.
Obligations incurred may not be larger than the budget authority.
OUTLAYS-Checks issued, interest accrued on the public debt, or other payments
made, net of refunds and reimbursements. Budget outlays are composed of:
• EXPENDITURES (Exp.)-Outlays relating to the expenditure account. The
expenditure account is the portion of the budget consisting of (1) budget
receipts, and (2) budget authority and outlays for all nonlending programs,
lending programs not classified in the loan account, and the administrative and
other net expenses of programs in the loan account; plus
• NET LENDING (NL)-Gross loan disbursements minus repayments in the
loan account. The loan account is the portion of the budget consisting of the
principal amounts of disbursements and repayments for domestic loans subject
to definite requirements for full repayment and for foreign loans made on
commerical terms.
BUDGET RECEIPTS-Money collected because of the sovereign or other compulsory
powers of the Government, net of refunds. (See offsetting receipts.)
BUDGET SURPLUS OR DEFICIT-The difference between budget receipts and
outlays.
FEDERAL FUNDS-Funds collected and used by the Federal Government, as owner.
The major federally owned fund is the general fund, which is derived from
general taxes and borrowing and is used for the general purposes of the Government. Federal funds also include certain earmarked receipts, such as those generated by and used for the operations of Government-owned enterprises.
TRUST FUNDS-Funds collected and used by the Federal Government, as trustee,
for specified purposes, such as social security and highway construction. Receipts
held in trust are not available for the general purposes of the Government. Trust
fund receipts which are not anticipated to be used in the immediate future are
generally invested in Government securities and earn interest.
OFFSETTING RECEIPTS-Composed of (1) proprietary receipts from the public
derived from Government activities of a business-type or market-oriented nature
which are offset against related budget authority and outlays; and (2) intrabudgetary transactions between one Government agency or fund and another
which are offset to avoid double counting.
UNDISTRIBUTED INTRAGOVERNMENTAL TRANSACTIONS-Composed of
(1) payments to trust funds by Government ag'encies, as employer, for their
employee's retirement; and (2) interest paid to trust funds on their investments
in Government securities. To avoid double counting, these transactions are
deducted from the budget totals.
87
EXECU
IVE
BRANCH
C F
THE
GOVERNMENT
THI
,.
PRESII: ~NT
~
oz
EXECUTIVE OFFICE
a
THE WHITE HOUSE OFFICE
COUNCIL OF ECONOMIC AD
COUNCIL ON ENVIRONMENT,
COUNCIL ON INTERNATtONA
ECONOMIC POLICY
DOMESTIC COUNCIL
NATIONAL AERONAUTICS Alii
NATIONAL SECURITY COUNC
OFFICE OF CONSUMER AFFA
OFFICE OF ECONOMIC OPf'Oft
OFFICE OF EMERGENCY PREI
OFFICE OF INTERGOVERNME
OFFICE OF MANAGEMENT Alii
OFFICE OF SCIENCE AND Tee
OFFICE OF TELECOMMUNICA
SPECIAL ACTION OFFICE FOF
PREVENTION
SPECIAL REPRESENTATIVE F'I
THE PRESIDENT
RS
QUALITY
&PACE COUNCIL
;
NITY
IEnNESS
~ RELATIONS
EDGET
• _OGY
~; POLICY
FG ABUSE
lADE NEGOTIATIONS
DEPT
OF
AGRICUL- IE
COST
OF
LIVING
COUNCIL
RAILROAD
RETIREMENT
BOARD
EXECUTIVE OFFICE OF THE PRESIDENT/ OFFICE OF MANAGEMENT AND BUDGET
EN"'RONMENTA.L
l'ROTECT'ON
"GENC"
RENEGOTIATION
BOARD
JANUARY. 1972
ORGANIZATION CHART OF THE
EXECUTIVE BRANCH .
This foldout chart presents a graphic
view of the major components of the Executive Branch of the Government as presentlyorganized. Included are the staff offices that
make up the Executive Office of the Presiqent, the 11 executive departments, and
various agencies, boards, and commissions.
Tem,p orary commissions, and iriteragency
and public advisory committees are not
includesI. A major reorganization of the
Executive Branch has been proposed by the
President.
For further details ·on the organization and functions of Federal agencies, see the U.S. Gover1Jment
Organization Manual (for sale by the Superintendent of Documents, Government Printing Office,
Washington, D.C. 20402).
'-
The following additional budget docum nts can be purchased from the
Superintendent of Documents, U.S. Gov rnment Printing Office Washington, D.C. 20402:
1. The Budget 0/ the United States Government, 1973. Contains most
of the facts, figures, and analyses that general users of the budget would
normally desire or need.
2. The Budget of the United States Government, 1973.-Appendix. Contains the text of appropriation Ian uagc. schedules, and narrative statements
for individual appropriations and funds.
3. Special Analyses, Budget of the United States, 1973.-Contains special
tabulations and analyses of budgetary data for those interested in elected
aspects of the total Federal program.
1
J
@FedFRASER