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.:

11¢
Individual
Income Taxes

~

Corporation
Income Taxes

13¢

39¢

:.:.

Social
Insurance
Receipts

29¢

Wlter, it

flP ($ ·

• •

National
DeFense

Direct
BeneFit
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2611

to Individuals

o¢

Interest

Grants
to States
and Localities

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Other Federal
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TABLE OF CONTENTS
Page ,

I.
II.
III.
IV.

THE PRESIDENT'S BUDGET MESSAGE. . . . . . . . . . . . . .
BUDGET OVERVIEW ................................
BUDGET RECEIPTS . ............................ ~ . . . .
THE LONG RANGE OUTLOOK. . . . . . . . . . . . . . . . . . . . . . .
THE FEDERAL PROGRAM BY FUNCTION............
National defense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International affairs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General science, space, and technology. . . . . . . . . . . . . . . . . . . . .
Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Natural resources and environment. . . . . . . . . . . . . . . . . . . . . . . .
Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commerce and transportation............................
Community and regional development. . . . . . . . . . . . . . . . . . . . .
Training, employment, and social services. . . . . . . . . . . . . . . . . .
Ed uca tion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Health. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Veterans benefits and services. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Law enforcement and justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General government.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue sharing and other fiscal assistance. . . . . . . . . . . . . . . . .
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed offsetting receipts. . . . . . . . . . . . . . . . . . . . . . . . . . .

V. THE BUDGET PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VI. BUDGET TABLES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GLOSSARY OF BUDGET TERMS.... . . . . . . . . . . . . . . . . . . . . . .

3
7
11
15
21
22
24
26
27
28
30
31
33
34
36
38
39
42
43
44
45
46
47
48
49

55
73

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.
Back-up data for charts in this book can be obtained from the Office of Management and Budget, Washington, D.C. 20503.




1




Budget Totals Since· 1975
$ Billions

$ Billions

Receipts

400

3942

373.5

Outlays

400

324.6
300

300

200

200

100

100

0---

1975

1976
Estimate

Fiscal Years

Shares of the Budget
Percent

Percent

60~----------------------------------~60

50

/

50

National Defense
"Benefit Payments to
Individuals and Grants

40

40

30

30

20

20
Percent of Total Outlays

10

o

1967 68
Fiscal Years

,2

10

0
69

70

71

72

73

74

75

76

77

Estimate

BUDGET MESSAGE OF THE PRESIDENT
To the Congress of the United States:
The Budget of the United States is a good roadmap of where
we have been, where we are now, and where we should be going
as a people. The budget reflects the President's sense of priorities.
It reflects his best judgment of how we must choose among competing interests. And it reveals his philosophy of how the p- blic
u
and private spheres should be related.
Accordingly, I have devoted a major portion of my own time
over the last several months to shaping the budget for fiscal year
1977 and laying the groundwork for the years that follow.
As I see it, the budget has three important dimensio- s. One is
n
the budget as an element of our economic policy. The total size
of the budget and the deficit or surplus that results can substantially affect the general health of our economy-in a good way
or in a bad way. If we try to stimulate the economy beyo'n d its
capacity to respond, it will lead only to a future whirlwind of
inflation and unemployment.
The budget I am proposing for fiscal year 1977 and the direco
tion I seek for the future meet the test of respt nsible fiscal policy.
The combination of tax and spending changes I propose will set
us on a course that not only leads to a balanced budget within
three years, but also improves the prospects for the economy
to stay on a growth path that we can sustain. This is not a
policy of the quick fix; it does not hold out the hollow promise
that we can wipe o- t inflation and unemployment overnight.
u
Instead, it is an honest, realistic policy-a policy that says we can
steadily reduce inflation and unemployment if we maintain ~
prudent, balanced appt oach. This policy has begun to prove itr
self in recent months as we have made substantial headway in
pulling out of the recession and reducing the rate of inflation; it
will prove itself decisively if we stick to it.
A second important dimension of the budget is that it helps to
define the boundaries between responsibilities that we assign to
governments and those that remain in the hands of private institutions and individual citizens.
Over the years, the growth of government has been gradual
and uneven, but the trend is unmistakable. Although the predominant growth has been at the State and local level, the Federal Government has contributed to the trend too. We must not
continue drifting in the direction of bigger and bigger govern-




3




mente The driving force of our 200-year history has been our
private sector. If we rely on it .and nurture it, the economy will
continue to grow, providing new and better choices for our
people and the resources' necessary to meet our shared needs.
If, instead, We continue to increase government's share of our
eco~omy, we will have no choice but to raise taxes and will, in
the process, dampen further the forces of competition, risk, and
reward that have served us so well. With stagnation of these
forces, the issues of the future would surely be focused on who
gets what from an economy of little or no growth rather than,
as it should be, on the use to be made of expanding incomes and
resources.
As an important step toward reversing the long-term trend,
my budget for 1977 proposes to cut the rate of Federal spending
growth, year to year, to 5.5%-less than half the average growth
rate we have experienced in the last 10 years. At the same time,
I am proposing further, permanent income tax reductions so
that individuals and .business can spend and invest these dollars
instead of having the Federal Government collect and spend
them.
A third important dimension of the budget is the way it sorts
out priorities. In formulating this budget, I have tried to achieve
fairness and balance:
-between the taxpayer and those who will benefit by Federal
spending;
-between national security and other pressing needs;
-between our own generation and the world we want to leave
to our children;
-between those in some need and those most in need;
-between the programs we already have and those we would
like to have;
-between aid to individuals and aid to _
State and, local governments;
-between immediate implementation of a good idea and the
need to allow time for transition;
-between the desire to solve our problems quickly and the
realization that for some problems, good solutions will take
more time; and
-between Federal control and direction to assure achievement of common goals and the recognition that State and
local governments and individuals may do as well or better
. without restraints.

4

Clearly, one of the highest priorities for our Government is
always to secure the defense of our country. There is no alternative. If we in the Federal Government fail in this responsibility,
our other objectives are meaningless.
Accordingly, I am recommending a significant increase in defense spending for 1977. If in good conscience I could propose
less, I would. Great good could be accomplished with other uses
of these dollars. My request is based on a careful assessment of
the international situation and the contingencies we must be ,p repared to meet. The amounts I seek will provide the national
defense it now appears we need. W'e dare not do less. And if
our efforts to secure international arms limitations falter, we will
need to do more.
Assuring our Nation's needs for energy must also be among
our highest priorities. My budget gives that priority.
While providing fully for our defense and energy needs, I
have imp, sed upon these budgets the same discipline that I have
o
applied in reviewing other programs. Savings have been
achieved in a number of areas. We cannot tolerate waste in any
program.
In our domestic programs, my objective has been to achieve a
balance between all the things we would like to do and those
things we can realistically afford to do. The hundreds of pages
that spell out the details of my program proposals tell the story,
but some examples illustrate the point.
a
I am proposing th, t we take steps to address the haunting fear
of our elderly that a prolonged, serious illness could cost them
and their children everything they have. My medicare reform
proposal would provide protection against such catastrophic
health costs. No elderly person would have to pay over $500 per
year for covered hospital or nursing home care, and no more
than $250 per year for covered physician services. To offset the
costs of this additional protection and to slow down the runaway increases in federally funded medical expenses, I am recommending adjustments to the medicare program so that within
the new maximums beneficiaries contribute more to tne costs
of their care than they do now.
My budget provides a full cost-of-living increase for those
receiving social security or other Federal retirement benefits. We
must recognize, however, that the social security trust fund is
becoming depleted. To restore its integrity, I am asking the Congress to raise social security taxes, /effective January 1, 1977, and ,




5




to adopt -certain other reforms of the system. Higher social security taxes and the other reforms I am proposing may be controversial, but they are the right thing to do. The American people
understand that we must pay for the things we want. I know
that those who are working now want to be sure that money,will
be there to pay their benefits when their working days are over.
My budget also' proposes that we replace 59 grant programs
with broad block grants in four important areas:
-A health block grant that will consolidate medicaid and 15
other health programs. States will be able to make their
own priority choices for use of these Federal funds to help
low-income peo'p le with their health needs.
-An education block grant that will consolidate 27 grant pro'grams for education into a single flexible Federal grant to
States, primarily for use in helping disadvantaged and
handicapped children.
-A block grant for feeding needy children that will consolidate 15 complex and overlapping ptrograms. Under existing
programs, 700,000 needy children receive no bep.efits.
Under my program, al'l needy children can be fed, but subsidies for the nonpoor will be eliminated.
-A block grant that will support a community's social service
programs for the needy. This would be accomplished by
removing current requirements unnecessarily restricting the
flexibility of States in providing such services.
These initiatives will result in more equitable distribution of
Federal dollars, and provide greater State discretion and responsibility. All requirements that States match Federal funds will be
eliminated. Such reforms are urgently needed, but my proposals
recognize that they will, in some cases, require a p,e riod of transition.
These are only examples. My budget sets forth many other
recommendations. Some involve new initiatives. Others seek
restraint. The American people know that promises that the
Federal Government will do more for them every year have not
been kept. I make no such promises. I offer no such illusion.
,This budget does not shrink from hard choices where necessary.
Notwithstanding those hard choices, I believe this budget reflects a forward-looking spirit that is in keeping with our heritage
as we begin our Nation's third century.
GERALD R. FORD.
JANUARY 21, 1976.

6

PART I

BUDGET OVERVIEW
The President's budget is far more than an accounting document. It is the President's recommendations for the upcoming
fiscal ye ~r.
Budget totals.-The budget recommends total outlays of $394
billion in 1977, and receipts of $351 billion. This results in a
deficit of $43 billion.
The 1977 deficit, as well as other factors, will increase the
Federal debt held by the public from $484 billion at the end of
1976 to $558 billion at the end of 1977.
The size and composition of 1977 budget outlays are greatly
influenced by past decisions. Similarly, action in connection with
this budget will influence future years. Under the President's
proposals, the deficit will be reduced in 1978 and the budget
balanced in 1979.
The budget and the economy.-When the 1976 budget was
presented last year,. the economy was experiencing a severe
economic decline. A recovery is now underway. Sinc.e the second
quarter of calendar year 1975, the real output of our economy
has been growing at an annual rate of about 9%, and the number of employed has risen by about 1 million.
Nevertheless, real output remains considerably belo, the peak
w
that was reached at the end of calendar year 1973, and the unemployment rate is still too high. The rate of inflation has slowed
since 1973 and 1974, but it, too, is still high.
The budget is consistent with a healthy recovery witho, t acu
celerating inflation. It slows the increase in Federal spending to
about 5.5% over fiscal year 1976 and less than that when the
transition quarter is taken into account. The reduction in the
growth of spending makes possible further ,tax cuts. The President has proposed to reduce income taxes by $10 billion belo,
w
the temporary tax cuts that expire June 30, 1976, which is $28
billion below the 1974 rates. About three-quarters of the total
reductions will be for individuals, and one-quarter will go for




7




business. These tax cuts will increase the amounts the American
people have to spend themselves in accordance with their own
decisions, while the expenditure reductions will reduce the degree·
to which spending decisions will be mad.e by the Federal Go'vernment.
The estimated deficit for 1977 is $33 billion less than in 1976.
This reduction in the deficit is appropriate, as the economy recovers fro·m the recession. Achievement of the President's objectives to lower the deficit still further in 1978 and to balance the
budget in 1979 is vitally important to our economic growth.
Although additional spending might produce some short-run
marginal relief from higher levels of unemployment, it could
easily lead to a disorderly recovery that would trade a slightly
lower unemployment rate in the short run for more inflation and
a much higher unemployment rate later on.

Federal Outlays - Constant 1977 Dollars
$ Billions

$ Billions

400

400

300

300

200

200

100

100
Nationa I Defense

o----~~----------~------~~~-----------o
1950
55
60
65
70
75 77
Fiscal Years

Estimate

Budget trends.-Over the past two decades, there has been a .
significant shift in the distribution of Federal reso'urces. Nondefense spending on payments to individuals and grants to State
and local governments rose on average about 9.5ro per year, and
8

a total of about 500%, even when adjusted for inflation} over the
- 20-year period ending in 1975. Before adjustment for inflation,
the increase was over 13% per year, or over 1,0000/0. During the
same period, sp,e nding for defense with a comp'a rable adjustment
for inflation declined a total of 10%, although it increased
117% before adjustment for inflation.
Last year, the President initiated a reversal of this trend toward erosion of the defense budget. He has again proposed a real
increase in the defense budget this year. At the same time, the
President seeks to keep the Federal Government from increasing
its share of the economy. It is for these reasons that the President's Budget Message states, "In our domestic programs, my
objective has been to achieve a balance between all the things
we would like to do and those things we can realistically afford
to do."
Reform of the grant system.-The Federal Government cur'
rently administers more than 500 separate programs of grants to
State and local governments. While all of these programs provide some benefits, and some programs do the job well, the resulting fragmented and overlapping system has resulted in piecemeal attempts to solve urgent pro, lems and in an inequitable
b
distribution of resources.
Progress has been made in consolidating programs and delegating decisionmaking authority and responsibility to recipient
governments. General revenue sharing distributes funds to State
and local gov-ernme~ts with minimal restrictions. Block grants
have been established for community development, training and
employment, and law enforcement assistilnce. Legislation to
consolidate over 30 non-interstate highway assistance grants
into three broad programs has also been proposed by the
Administra tion.
This budget proposes four broad-based block grants: a Federal Assistance for Health Care Act, which will replace medicaid a,n d 15 categorical programs; a Federal Assistance for
Elementary and Secondary Education Act, which will replace
27 categorical programs; a Financial Assistance' for Community
Services Act, converting the existing program of social services
to the needy into a block grant by removing excessive Federal
requirements; and a Child Nutrition Reform Act (first proposed last year in a somewhat different form), which will replace 15 current programs with a single grant to enable States
~

I

9
210-400 0 - 76 - 2







to feed needy children. All of these proposals would eliminate
State matching requirements. The budget also proposes a number of other major reforms in grant programs.

Federal Grants to State and Local Governments
$ Billions

$ Billions

75~--------------------------------------~75

50
Revenue
Sharing

25

o

1967 68

Fiscal Years

10

0

69

70

71

72

73

74

75

76

77

Estimate

PART II

BUDGET RECEIPTS
This section describes the major sources of budget receipts and
discusses the legislative proposals affecting them. The economic
assumptions underlying these estimates are presented in Part III.
Total budget receipts in 1977 are estimated at $351 billion,
$54 billion more than the $298 billion estimated for 1976. About
900/0 of these receipts result from individual and corporation
income taxes and from payroll taxes levied on wages and salaries,
most of which are paid equally by employers and employees.

Enacted and Proposed Tax Changes
Two temporary tax reductions have been enacted in the last
year. First, on March 29, 1975, the Tax Reduction Act of 1975
was enacted. This act provided for a partial rebate of calendar
year 1974 individual income taxes, a number of temporary
proyisions that reduced individual and corporation inco- e tax
m
liabilities, generally for calendar year 1975, and a few permanent tax changes. The act also provided for a one-time $50
bonus to social security and certain other social insurance
recipients.
The individual income tax reductions in this act were reflected
in changes in withholding schedules beginning May 1, 1975.
Withholding rates were reduced then to reflect the full year's tax
reduction. These rate reductions were greater than would have
been necessary if such reductions had been made on January 1,
1975. As the following table shows, this act reduced receipts by
about $10 billion in both 1975 and 1976.
The second temporary tax reduction was the Revenue Adjustment Act of 1975, which was enacted December 23, 1975. This
act provided for tax reductions for the first 6 months of calendar
year 1976. For corporations, the rate reductions in the previous




11

-

act were extended. For individuals, however; larger tax reductions (at an annual rate) were ~nacted so that the withholding
rates in existence in the last 8 months of calendar year 1975 would
remain unchanged. In total, this act reduced individual and
corporation income tax liabilities by $8.4 billion, with about
three-fourths of the receipts loss in 1976.
The President is proposing income tax reductions-linked to
spending reductions as proposed in this budget-to become effective July 1, 1976. These tax reductions will be permanent and will
be about $10 billion larger at an annual rate than those effective
in the first half of calendar year 1976. They will reduce receipts
by about $28 billion in 1977, with about three-fourths of the
reductions going to individual taxpayers and one-fourth going to
corpora tions.
ENACTED AND PROPOSED TAX CHANGES 1
[In billions of dollars]
1975

estimate

Enacted tax changes:
Tax Reduction Act of 1975 ......... .
Individuals ..................... .
Corporations ................... .
Revenue Adjustment Act of 1975 .... .
Individuals ..................... .
Corpora tions. . . . . . . . . . . . . . . . . . . .

Total, tax change enacted in
calendar year 1975 .... ..... .
Proposed tax changes:
Individuals .................. ..... .
Corporations ..................... .
Social insurance taxes ............. .
Other 2 • . • • • • • • • . • . • . • . • . . . . . . . • . .




Total, proposed tax changes ....

-10.2
(-9. 4)
(-.8)

-10.2

1976

estimate

TQ

estimate

-0.2

1977

estimate

-9.8
(-7.8)
(-2. D)
-6.0
(-5.4)
(-.6)

(-. 1)
-.5
(-.5)
( -*)

0.4
(-.6)
(1. 0)
-1.9
(-1. 5)
(-.4)

-15.8

-.7

-1.5

-*
-*

-4.6
-.8

-22.2
-6.2
5.4

.2

-*

.1

•2

-5.5

-22.8

(-*)

1 This ta:ble shows the effect of enacted and proposed tax changes on budget receipts
(i.e., cash collections) in comparison to the tax law in effect prior to the Tax Reduction
Act of 1975.
2 Includes proposed changes in miscellaneous receipts, estate and gift taxes, and airport
and airway excise taxes.
*Less than $50 million.

In addition to these changes, several tax incentives being proe
posed .by the President to encourage sp1cific economic activity
will reduce individual and corporation income taxes. Specifically,
legislation will be proposed to:
-provide a new tax credit on interest income received o· resin
dential mortgages as part of the Financial Institutions Act;
- - i, duce a broader ownership of common stock by providing
n

12

a tax deferral for funds invested in stock purchase plans
established by employers or directly by individuals; and
-provide accelerated depreciation on investments made in
areas of highest unemployment to stimulate employment in
such areas.
Together, these proposals will reduce individual and corporation income taxes by $0.8 billion in 1977.
Also, the President is proposing legislation to increase taxes
for the social security and unemployment trust funds to insure
that these funds are on a sound financial basis. An increase in the
social security tax rate (from 11.70/0 to 12.30/0) and the unemployment tax rate from (0.50/0 to 0.65%) and wage base (from
$4,200 to $6,000) are proposed effective January 1, 1977. These
changes will increase 1977 receipts by $5.4 billion.
Finally, legislation will also be proposed to ease the burden
of estate and gift taxes on farms and other small businesses. This
legislation will not result in a significant loss in receipts.
. RECEIPTS BY SOURCE

The table below shows budget receipts by source for 1975 to
1977; the estimates reflect the President's tax proposals discussed
above.
Individual income tax receipts are estimated at $130.8 billion
in 1976 and $153.6 billion in 1977. As discussed above, enacted
and proposed tax reductions reduce receipts from this source
by $13.2 billion in 1976 and $24.4 billion in 1977. In the absence
of these tax law changes, individual income taxes would increase

by $34.0 billion in 1977 rather than by $22.8 billion as projected
here.
BUDGET RECEIPTS BY SOURCE
[In billions of dollars]
Source

1975
actual

1976
estimate

TQ ·

estimate

1977
estimate

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

122. 4
40.6
86.4
16. 6
15.0

130. 8
40. 1
92. 6
16.9
17.2

40.0
8.4
25. 2
4.4
3. 9

153.
49.
113.
17.
17.

6
5
1
8
3

Total .. . .... . ...... . ..... . ... .

281. 0

297.5

81. 9

351.3

Corporation income tax receipts are estimated at $40.1 billion in 1976 and $49.5 billion in 1977. Enacted and proposed




13




tax law changes reduce these receipts by $2.7 billion in 1976
and $5.5 billion in 1977. In the absence of these changes, profits
taxes would increase by $12.2 billion, reflecting the large projected increase in corporate profits that is expected to accomp'a ny
the economic recovery.
Receipts from social insurance taxes and contributions are
expected to total $113.1 billion in. 1977, up by $20.5 billiort from
1976. Included in this total are social security and other payroll
taxes, unemployment insurance taxes, Federal employee retirement contributions and premium payments for supplementary
medical insurance. Proposed increases in social securhy and
unemployment trust fund taxes increase these receipts by $5.4
billion in 1977.
Other receipts, consisting of excise taxes, estate and gift taxes,
customs, and miscellaneous receipts, are estimated at $35.1
billion in 1977, an increase of $1.0 billion from 1976. The miscellaneous receipt estimate reflects elimination of those import
f~es on crude oil and petroleum products that were imposed in
1975.

Budget Receipts: 1967-1977 *
$ Billions
$ Billions
400 - - r - - - - - - - - - - - - - - - - ' - - - - - - - " - - - . , - - 400

300

300

Excise and Other
Social Insurance Taxes
and Contributions

200

100

200

rporation
Income Taxes

100

Individual Income Taxes

o--------------~------~----~~----~~· o
1967
70
72
73 74
75 76
77
Fiscal Years
*Assumes the President's tax proposals in 1976 and 1977

14

Estimate

PART III

THE LONG-RANGE OUTLOOK
To an increasing degree, Federal receipts and outlays are
directly linked to developments in the economy. Most retirement and many other social insurance benefit payments are tied
by law to the Consumer Price Index. Medicare outlays are
affected directly by the price of medical services. Interest on the
debt is linked to interest rates and the size of the budget surplus or
deficit, which in turn is influenced by economic conditions. Outlays for unemployment insurance vary directly with the unemployment rate. Similarly, budget receipts vary in accordance
with individual and corporation incomes, which respond to the
course of the economy.
Because of the effect the economy has on the budget, the economic assumptions used strongly influence the budget outlook.

The Economic Assumptions
The following table presents the underlying economic assumptions that were used for purposes of developing budget estimates. It should be emphasized that the short-term economic
assumptions have been developed in quite different ways from the
longer-run assumptions. The assumptions for calendar years 1975
SHORT RANGE ECONOMIC FORECAST
[Calendar years; dollar amounts in billions]

Item

1974
actual

Forecast

1975

Gross pational product:
Current dollars ............................. $1, 407 $1, 499
Constant (1972) dollars:
Amount ................................. $1, 211 $1, 187
Perc en t change ........................... -1.8
-2.0
Prices (percent change):
GNP deflator ...............................
9. 7
8.7
9. 1
Consumer Price Index ......................
11. 0
5.6
8. 5
Unemployment rate ...........................




1976

1977

$1,684

$1, 890

$1, 260
6.2

$1, 332
5. 7

5.9
6. 3
7. 7

6.2
6.0
6.9

15

(for which only three quarters of actual data were available at
the time the projections were made), 1976, and 1977 are forecasts
of probable economic conditions during these years.
In contrast, the longer-range assumptions for the period 197881 are not forecasts of probable economic conditions, but rather
assumptions consistent with moving gradually toward relatively
stable prices and ~ higher level of employment. The current state
of the forecasting art is much too crude to make accurate forecasts for years beyond 1977. Indeed, even the forecast for 1976
and 1977 is subject to considerable uncertainty.
LONG RANGE ECONOMIC ASSUMPTIONS
[Calendar years; dollar amounts in billions]
Item

1978

1979

1980

1981

$2, 124

$2,376

$2,636

$2,877

$1,411
5.9

$1,503
6.5

$1,600
6.5

$1, 679
4.9

6. 1
5.9
6.4

5.0
5.0
5.8

4.2
4.2
5.2

4.0
4.0
4.9

s

Gross national product:
Curren t dollars. . . . . . . . . . . . . ...........
Constant (1972) dollars:
Amount ............................
Percent change ......................
Price level (percent change):
GNP deflator ..........................
Consumer price index ...................
Unemployment rates (percent) .............

The Long-Range Budget Proiections
The effects of current budget decisions extend beyond the current fiscal year, establishing program trends that help to shape the
size and composition of budgets for years into the future. Just as
the comp,osition and level of the 1977 budget have been largely
determined by past decisions, so too the decisions and proposals
it embodies will strongly affect subsequent budgets.
The estimates presented here indicate the degree to which
resources would be committed by the continuation of existing
an.d currently proposed programs at the program levels recommended for 1977. Thus, these projections are not intended as
forecasts, or as recommendations. They are, however, consistent
with the objective of restraining the growth in Federal spending
in 1977 and 1978, and achieving a balanced budget in 1979.
Receipt projections, which assume current tax laws as modified by proposals in this budget, increase by an average of 13.6%
a year between 1977 and 1981, rising from $351 billion to $585
billion. Over the same period, outlays for current programs and
16



those proposed in the budget are projected to rise by an average
of 6.60/0 a year, from $394.2 billion to $509.9 billion. Thus, the
budget is projected to move into surplus in 1979 with increasingly large surpluses in subsequent years.
In general, the projections for outlays assume that program
levels remain fixed in current dollar terms except where there is
an explicit legal requirement or budget recommendation to
increase or decrease program levels over time. The projections
allow for changes in beneficiary populations of programs such
as social security, and also for future cost-of-living- adjustments
for most benefit programs, Federal pay raises, and other cost
increases. These allowances are consistent with the economic
assumptions outlined abov~.

The Fiscal Outlook to 1981
$ Billions

$ Billions

6OO-.----------------------------------~--~~600

Budget Surplus

500

500

400

400

300'

300

200

200

100

100

o--------------~~--~----------~~~~o
1975
76
77
78
79
80
81
Fiscal Years Estimate

Projection

The projected 67% growth in receipts between 1977 and 1981
reflects growth in tax bases, and an increase in the average effective tax rate on personal income as rising real incomes and inflation move people into higher tax .brackets. This increase in
effective tax rates, which is implicit in a progressive income tax
system, accounts for about $50 billion of the total increase in




210-400 0 - 76 - 3

17

individual income tax receipts between 1977 and 1981. Over the
past two decades legislated tax cuts have offset implicit increases
of this nature. Without these reductions, total Federal receipts
would have risen to a much larger percentage of gross national
product than they now claim.
On the basis of the economic assumptions presented in the
preceding section, individual income taxes are projected to reach
$287 billion by 1981, an increase of $134 billion, or 87% over
1977. Over the same period corporation income taxes are projected to increase by 45%, from $49 billion to $72 billion.
Increases in the taxable earnings base and rate under social
security, proposed increases in social security and unemployment
trust fund taxes in January 1977, and increases in other social
insurance taxes and contributions, will occur to fillance benefit increases. These increases, together with the growth in payrolls
over the next 5 years, are projected to raise social insurance taxes
and contributions from $113 billion in 1977 to $182 billion in
1981, a 61
increase. Estate and gift taxes, customs, excise
taxes, and miscellaneous receipts are projected at $45 billion in
1981, an increase of $10 billion from 1977.

ro

PROJECTED RECEIPTS BY SOURCE
[In billions of dollars]
1977

1978

1979

1980

1981

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

153.6
49.5

184.0
54.5

218.4
59.8

252.8
65.9

287.3

113. 1
17.8
17.2

130.8
18.4
18.8

147. 2
18.8
20.8

If2. 1

19.2
23.0

181. 6
19.6
25. 1

Total budget receipts.

351.3

406. 7

465.3

523. 1

585.4

71. 7

The major trend in the composition of the budget over the
past ·20 years has been the rapid growth of domestic assistance
programs-in such functions as health and income securityand the corresponding rela~ive decline in spending for direct
Federal operations, particularly for defense pro·grams. Over the
past two decades, outlays for domestic assistance have grown
much more rapidly than national output, and more rapidly than
total Federal outlays. The table below on budget composition
illustrates this growth. Direct Federal operations involve Federal purchases of g~ods and services for use in Government pro18



grams such as defense and space exploration, compensation of
Federal employees, and payment of interest on the public debt.
Domestic assistance programs, in contrast, include payments to
retired, disabled, or unemployed workers, to low-income families
and individuals, and aid to State and local governments.
BUDGET COMPOSITION
[Percent of total outlays]

Description

Actual
1956

1960

1964

Projected
1968

1972

1977

1981

Domestic assistance ............... . 22.3 29.4 30.6 32.5 45.7 55.4 53.9
Payments for individuals:
·
D lrect 1 ..................... . ( 17. 0) (21. 8) ( 22. 1) (22. 1) ( 30. 2) ( 40. 0) ( 40. 6)
Indirect (grants-in-aid) ....... . (2.5) (2.7) (3.0) (3.4) (6.3) (5.3) (5.7)
All 'other grants-in-aid 1 . . . • . . . . • . (2.8) (4.9) (5.5) (7.0) (9.2)(10.1) (7.6)
Direct Federal operations ......... . 77.7 70.5 69.4 67.5 54.4 44.7 46.1
National defense ......... . ..... . (56.4)(49.0)(44.5)(44.4)(33.4)(25.7)(28.0)
Net interest ................... . (7.2) (7.5) (6.9) (6.2) (6.7) (8.4) (7.2)
Other ........................ . (14.1)(14.0)(18.0)(16.9)(14.3)(10.6)(10.9)
Total outlays ............... 100.0 100.0 100.0 100.0 100.0 100.0 100.0
1

Excludes military retired pay and grants classified in the national defense function.

The detailed composition of the 5-year projections of outlays
is shown by major function on page 20. While total outlays are
projected to increase by 29ro between 1977 and 1981, outlays
for health, income security, and national defense are projected
to increase faster than total outlays. Outlays for other functions,
such as interest and general government decline in relative terms.
Outlays for the education, training, and social services function
decline slightly, both in absolute and relative terms, due to the
phaseout in 1977 of temporary programs enacted to provide
employment during the recession.
The recent large increases and additions to domestic assistance programs have, to some extent been offset by real reductions in direct Federal operations, particularly defense. Thus,
the rise in outlays for health and for income security-to 45%
of total outlays by 1981, compared to less than 25% in 1968indicates an increased response to human needs, but could present a long-range budgetary problem of fundamental importance if these programs were to grow in the future at the same
rate as they have in the past. The budget cannot accommodate




19

the same rates of growth in the future, and maintain an adequate
level of defense and other direct Federal activities, unless the
Federal Government takes an ever-increasing portion of GNP
through increase_ taxes.
d
Most Federal domestic assistance programs-and some Federal programs for other purp'o ses-create a legal entitlement to
benefits for all eligible recipients, and as such, are considered
9pen-ended programs and fixed costs. As recently as 1971 these
outlays amounted to less than 470/0 of the budget, but by 1981
they are projected to be 620/0. The degree of uncontrollability
in the budget has obvious fiscal policy implications. Without
changes in legislation, attempts to control total budget outlays
fallon an increasingly smaller proportion of the budget.
PROJECTED

OUTLAYS~BY

FUNCTION, 1977 TO 1981

[In billions of dollars]

1977

1978

1979

1980

1981

101. 1
6.8

112.9
7.8

121. 5
7.8

132. 3
8. 1

142.8
8.0

4.5

4.6

4.5

4.4

4. 1

13.8
1.7
16.5

14.4
2.6
19.4

15. 1
2.6
19. 1

14.9
2.8
18. 7

14.5
2.8
18. 7

5.5

6.0

6.2

6.0

6. 1

16.6
34.4
137. 1
17.2
3.4
3.4

15.3
37. 7
147. 1
17.2
3.3
3.9

15.3
40.3
158. 3
16. 7
3.3
3.6

15.3
43.4
170. 1
16.3
3. 3
3.6

15.3
47.0
182.9
15. 7
3.3
3. 7

7.4
41. 3
2.3

7. 7

7.9
46.5
8. 1
-21. 4

8.0

46.9
10.5
-22.1

8.2
46.9
12.8
-22.9

455.7

482.5

509.9

Outlays:
National defense ............. .
In terna tional affairs. . . . . . . . . . .
General science, space and technology ................... .
Natural resources, environment
and energy ................ .
Agricul ture. . . . . . . . . . . . . . . . ..
Commerce and transportation ...
Community and regional development ........... " .... .
Education, training, employment and social services ..... .
Health ..................... .
Income security. . . . . . . . . . . . .. .
Veterans benefits and services .. .
Law enforcement and justice ... .
General govern men t .......... .
Revenue sharing and general purpose fiscal assistance. . ...... .
Interest ..................... .
Allowances. . . . . . . . . . . . . . . . . . .
Undistributed offsetting receipts .

-18. 8

5.6
-20.7

Total ..... '.............. .

394.2

429.5

20



44.8

PART IV

THE FEDERAL PROGRAM BY FUNCTION
This section discusses the budget in terms of major functions
or purposes.The functional-in contrast with an agency- classification permits analysis and description of budget outlays for
each major purpose, regardless of which agency is carrying out
the activities.
While budget outlays are the most obvious measure of the
Federal Government's effect on resource-allocation, other fiscal
activities of the Government also have large effects on resource
allocation. Such activities include credit guarantees, off-budget
agencies, federally sponsored private enterprises, and tax
expenditures.
This year is the first time tax expenditures are discussed in the
Budget in Brief. Tax expenditures are those revenue losses attributable to provisions of the Federal income tax laws that allow
a special exclusion, exemption, or deduction from income or
provide a special credit, a preferential rate -of tax, or a deferral
of tax liability. Almost all tax expenditures are intended either
to encourage particular economic activities-or to reduce the taxes
of persons considered to be in adverse circumstances. Among the
economic activities encouraged are personal and business investment, spending by State and local governments, and support of
charities. Among the persons whose tax burdens are lightened
are the aged, those with large medical expenses, and recipients
of Government assistance and social insurance payments.
Tax expenditures generally can be viewed as alternatives to
other types of fiscal activity. Some major tax expenditures
are discussed in the programatic sections that follow. More information, including a discussion of important conceptual and
estimating issues, appears in Special Analysis F, "Tax Expenditures", in the Special Analyses volume of the Budget.




21

National Defense
The goal of national defense is to ensure the freedom and
security of the United States and protect its vital interests
throughout the world. To achieve this goal, our forces, together
with those of our allies, must be able to: deter any attack against
the ·U nited States, its allies, and other nations vital to U.S. security; maintain a worldwide military balance to reduce the threat
of war; and maintain control of the sea lanes to ensure the flow
of international trade vital to the welfare of the United States
and its trading partners.
United States forces as proposed in this budget, together with
allied forces, are sufficient to meet these ol jectives. Despite
b
increases in Soviet defense spending, an adequate military balance exists in the world today, due primarily to four factors:
• An effective strategic deterrent has been maintained through
selective force improvements.
• United States and allied forces have been strengthened by
the introduction of modern tactical aircraft, the co, tinuing
n
modernization of the surface fleet, and increased purchases
of tanks, antitank weapons, and other ground force equipment and munitions.
• The conversion of support resources into combat resources
has improved the fighting capability of the defense establishment without increases in overall personnel levels.
• Much of the Soviet military increase has been directed
, "toward the Chinese border.
The UnIted States seeks a reductio, of military expenditures
n
and international tensions through negotiations and discussions.
Effective agreements can be reached, however, only if United
States and allied forces remain at least as strong as those of potential adversaries.
To maintain the military balance in the interim, funds are
included in the 1977 budget to carry forward the increase in
Army combat divisions initiated in 1976, continue the modernization of ground, sea, and tactical air equipment, and improve
the readiness of the combat forces. These measures will require
continuing budget increases, over and above amounts needed to
offset inflation. Propt sed outlays will rise from $92.8 billion in
o
1976 to $101.1 billion in 1977. To moderate these increases,
actions are proposed to increase the efficiency of the defense
establishmellt. The growth in personnel costs would be restrained

22



and ' some civilian positions would be eliminated through the
consolidation of support facilities. Further reductions would be
made in travel, petroleum consumption,construction, and other
activities that do not contribute directly to combat effectiveness.
Budget increases are proposed to maintain U.S. force capabilities. Ground forces will be improved through continued production of helicopters and antitank guided missiles. Increased
tank procurement will rebuild inventories and allow the conversion of two light infantry divisions into mechanized divisions.
Tactical air forces will be strengthened through the continued
replacement of older aircraft with higher performance aircraft.
Procurement of 16 new ships in 1977 is proposed for the continued modernization of naval forces and the rebuilding of the
fleet. Three nuclear-powered attack submarines, designed to
hunt down and destroy enemy submarines, will be procured in
1977. Procurement of eight guided missile frigates will provide '
protection for amphibious force ships, replenishment ships, and
merchant convoys from air, surface, and underwater attacks.
Research and development for the strategic forces will continue on the Trident missile and submarine, the B-1 strategic

Defense Outlays
$ Billions

$ Billions

120~------------------------------------~120

100

100

80

80

60

60




Operation and Maintenance

40

40

20

20

o

1967 68

0
69 "70

71

72

73

74

75

76

77

Fiscal Years
Estimate
*Military Assistance, Atomic Energy Defense, and Defense Related Activities
I,

23

bomber, cruise missiles, a new intercontinental ballistic missile
for deployment in the mid-1980's, and on improving ballistic
missile warhead accuracy.
Research and development activity (or general purpose forces
will proceed on .a new battle tank, an attack helicopter, an infantry combat vehicle, and a new air combat fighter for the Navy
and Air Force.
Nuclear weapons development, production, and testing will
continue at about 1976 levels with increases necessary to provide
safety, environmental, and waste storage improvements~
Stockpile receipts in 1977 are estimated at $870 million, dependent upon market conditions and congressional approval of
$746 million in disposal authority for certain commodities in
excess of current requirements.
Military assistance programs are discussed in the section on
international affairs.

International AFFairs
The foremost international goal of the United States is the
attainme~t of world peace. The most immediate threat to peace
has been in the Middle East. Thus, American peace initiatives
in that area are a key aspect of the international affairs program.
America's prosperity and the health of the world economy are
closely linked. The United States is committed to wo-rk with
other industrial countries to promote the rapid recovery of their
economies, accelerate completion of trade negotiations, reform
the international monetary system, and foster economic growth in
the developing countries. Proposed 1977 outlays for the international affairs function are $6.8 billion.
Foreign aid is composed of military assistance-included in
the -national defense function and its functional budget totaland foreign economic and financial assistance.
Outlays for military assistance in 1977 are estimated at $739
million, excluding net trust fund outlays of - $200 million. Such
assistance supports the defense efforts of selected countries
through credit sales, training, and grants of U.S. materiel. The
requested budget authority for grant military assistance in 1977
is 290/0 lower than in 1976.
Outlays for foreign economic and financial assistance total
$4.7 billion in 1977. This assistance has four major components:
security supporting assistance, required largely to support efforts
24




toward a Middle East settlement; multilateral development
assistance, provided through contributions to international institutions such as the World Bank and the United Nations Development Program; bilateral development assistance, administered
primarily by the Agency for International Development; and
food for peace, through which the United States supplies over 6
million tons of food to the needy in the poorest group of countries.
One of _several smaller programs included in this assistance,
the Peace Corps, will suppo'r t 5,700 volunteers in 67 countries.
The Export-Import Bank promotes U.S. exports by extending
direct loans to overseas buyers, insurance to American exporters,
and discount loans and guarantees to Am,e rican banks. The
Bank's budget authority and outlays, excluded by statute from
the budget totals since 1971, is again included in 1977. Estimated
1977 outlays are $1.3 billion. Aid to exporting is also p,rovided
by the tax treatment of domestic international sales corporations.
The estimated receipts loss is $1.6 billion in 1977.
Estimated outlays of $385 million in 1977 will support foreign
information and exchange programs, and $910 million in estimated outlays will provide funds to conduct U.S. foreign affairs.

Outlays for International Affairs
$ Billions

$ Billions

8~----------------------------------------~8

r-_

/

6

Export-Import
Bank*

---"', /

X_

4

--

/--- --

.............

/

/

/

/

/

/

/

/

/

/

/

-

/

6

4

/

/

2

2

her Foreign Affairs Activities

o
1967 68

0
69

70

71

Fiscal Years

*Export-1m port Bank was excluded from
210-400 0 - 76 - 4




72

73

74

75

76

77

Estimate
the Budget from 8/1/72 through 9/30/76

25

General Science; Space, and Technology
This function includes programs to develop space research and
technology and to support expansion of basic scientific knowledge. Proposed outlays are $4.5 billion in 1977.
A balanced space p~ogram of $3.3 billion includes further
development of the manned space shuttle, space science activities to increase our knowledge of the llniverse, and the app,lication of space technology for such purposes as improved weather
prediction. The increase of $149 million in outlays permits an
orderly buildup in the space shuttle program. The shuttle is a
reusable space transportation system which will provide more
economical manned access to space in the 1980's and beyond.
To hold down spending, a third shuttle orbiter is being deferred.
The 1977 budget also includes funds for programs of the
National "Science Foundation and the Energy Research and
Development Administration to strengthen overall Federal support of basic research, and to acquire knowledge important to
the long-term development of advanced energy technologies.
Outlays for these purposes will total $1.2 billion in 1977.

Outlays for General Science and Space
$ Billions

$ Billions

8-.,...--~--"-----------------"----"----"---,-8

6

6

4

4

Manned
lLunar Program

2

2

General Science and Basic Research

1967 68
Fiscal Years

26



69

70

71

72

73

74

75

76

77

Estimate

Energy
The President's energy policy is a comprehensive program
directed toward developing the capability for energy independence by 1985. The recently enacted Energy Policy and Conservation Act takes a first step toward this goal. Among other things,
it provides for the gradual phase-out of controls on do·mestic oil
and the development of a strategic petroleum reserve. The
Administration will press for other needed legislation that provides for: establishment of the $100 billion Energy Indep·e ndence
Authority (EIA) to enco'u rage domestic energy resource development, deregulation of the price of new natural gas, authorization of production from the Naval Petroleum Reserves, initiation
of a private uranium enrichment industry, and amendments of
the Clean Air Act to provide a needed balance between environmental and energy go'als. In addition, the budget supports initiation of a synthetic fuels commercialization program through $2
billion in loan guarantees.
The EIA will have resources of $100 billion over a 10-year
period. It will provide loans, loan guarantees, and other assist-




Outlays For Energy*
$ Billions
$ Billions
4~----------------------------------------~4

R&D

3.38

Genera I Operating Programs

3

Regulatory
Programs

3
2.59

2
1.61

1

o.....- -....--~ -..----~-1975
1976
Fiscal Years

--------- ------0
1977
Estimate

* Excludes Full Effect of Energy Policy and Conservation Act

27

ance to domestic energy projects of critical importance. The
Authority will supplement and "
encourage private capital investment across a broad spectrum of energy supply, conservation,
and energy-related environmental projects. It will also work to
shorten the time required for energy .projects to obtain clearances
and permits from Federal regulatory agencies.
Projected 1977 net budget outlays for energy programs will be
$3.4 billion, including $2.7 billion for research and development.
Major efforts are being devoted to further development of the
breeder reactor; to research on fusion reactors; to advanced
methods for producing synthetic fuel from coal; and to solar,
geothermal, and conservation technologies.
The President's budget also provides for several other major
energy programs. Energy resources on Federal lands will be made
available for use to the maximum extent feasible consistent with
protecting the environment. Energy conservation programs will
encourage increases in the efficiency of automobiles and appliances, and industrial energy uses. Tax expenditures of over $2
billion will support the development and production of fossil
fuels.

Natural Resources and Environment
Programs in this area promote the utilization, management,
and preservation of our natural resources and environment.
Projected outlays for water pollution control and abatement
facility grants increase 60 % to $3.8 billion in 1977, primarily ·
reflecting prior-year commitments for construction of municipal
sewage plants. This budget proposes legislation. that will establish soun·d long-term policies for this grant-in-aid program, placing the highest priority on projects which are the most effective
in meeting national water quality objectives and striking an
appropriate balance between Federal and State responsibilities.
Since approximately $6 billion will be unobligated at the beginning of 1977, no new budget authority is required.
Outlays for water resources and power programs in 1977 will
increase slightly from $3.8 billion to $3.9 billion. To restrain
the growth of outlays, construction of some ongoing water development projects is being slowed and no new projects are recommended in 1977. However, planned dates for delivery of power
from hydroelectric projects will be met.
Conservation and land management outlays are estimated to be
$1.0 billion in 1977, supporting the management of 1 million

28



square miles of public lands in a fashion that provides both for
current production of resources and for conservatio·n. The de<::rease from 1976 outlays results from changes in forest fire costs
and estimated offsetting receipts plus a proposed reform of the
agriculture co'n servation program.
.
The Land and Water Conservation Fund will be fully funded
with $300 million to provide for acquisitio· of. recreation land
n
both by the Federal Government and through grants to States.
Outlays for other recreational programs will increase as visits to
Federal recreational facilities rise.
Outlays for other natural resource programs will be $934 million. These funds include support for the Geological Survey's
resource surveys and mapping, and for the National Oceanic
and Atmospheric Administration's weather forecasting and
marine and coastal programs.




Outlays for Environment and Natural Resources
$ Billions

$ Billions

12

12

10

8
6

4

Conservation,
Recreation
and Other

2
Water Resources and Power

2

o
1967 68
Fiscal Years

0
69

70

71

72

73

74

75

76

77

Estimate

29

Agriculture
The Administration's agriculture policy is to minimize Government restrictions on crop production, providing producers
with protection against severe price declines while permitting
market forces to work. Where this policy has not been followedin crops such as rice, peanuts, and tobacco-cumbersome mandatory programs have resulted in increasing prices and in building up surpluses at Federal expense. Additional major reductions
in farm income stabilization programs are contingent on enactment of the Administration's proposal to substitute an expanded
crop insurance program for disaster payments and on changing
the price supp1 rt program for peanuts. Projected 1977 outlays
0
fo'r these m~ndatory programs are $524 million.
Total 1977 outlays for the agriculture function are $1,729 million. This includes proposed increases for research to improve
production efficiency and for pest and disease eradication.

Outlays for Agriculture
$ Billions

$ Billions

6~~--~----------------------------------~6

5

5

4

4

3

3

2

2

1

1

o

0

1967 68
Fiscal Years

30



69

70

71

72

73

74

75

76

77

Estimate

I

Commerce and Transportation
Outlays for transportation will increase 6% to $14.9 billion
in 1977. Highway outlays will rise to $7.0 billion in 1977, the
highest level in history. Highway legislation will restrain the
level of authorizations, consolidate programs, and concentrate
interstate funds upon key interconnecting segments of the
system.
w
Mass transit outlays will gro· by 160/0 to $1.8 billion in 1977.
Their future growth will be moderated by limiting the proportion of formula grants that may be used for operating subsidies
and by reviewing pro'posals for major transit projects to ensure
that lower-cost, equally-effective alternatives are considered.
Outlays of $2.1 billion over the next 5 years will help restructure the Northeast-Midwest rail freight network. In addition,
the Administration has proposed a $1.2 billion upgrading of the
Boston-Washington rail passenger route. The subsidy to Amtrak,




Outlays for Transportation
$ Billions

$ Billions

16~----------------------------------~16

12

12

Mass lransit
and Railroads

8

8

Highways and Other
,4

4

Air

o------------------------~------~~-----o
1967
71 72 73 74 75 76
77
Fiscal Years

Estimate

31

which operates the Nation's rail ·passenger service, will rise by
$122 million to $462 million, but service reductions on the least
efficient routes will be necessary because of the very raP.i d
increases in operating deficits.
Air transportation legislation will make user fees more equitable and relieve the general taxpayer of part of the $1.6 billion
annual cost of operating the aviation system. Largely as a result
of prior year commitments, subsidies for u.s. shipbuilding and
ship operatio'ns will increase 160/ in 1977 to $662 million. Coast
0
Guard outlays will increase from $1.1 billion to $1.2 billion.
The Administration will continue its strong support of p,roposed nlajor reform of air, rail, and truck transportation regulation. Overregulation has generally led to higher prices by deterring competition and overprotecting regulated firms. Regulatory
agencies advise that they will modernize their procedures,
increase consumer representation, imp,rove analysis of regulation
costs and benefits, and speed decisions.
The Federal Government aids commerce through Small Business Administration (SBA) loans and loan guarantees, expected
to total approximately $2.6 billion in 1977, and several tax provisions. In 1977, under Administration proposals, these will
include a $6.2 billion tax expenditure for reduced tax rates on the
first $50 thousand of corporate profits, $9.3 billion to encourage
investment through a tax credit, over $7 billion for preferential
tax rates on capital gains, and several new tax aids. Assistance to
minority business will continue through the Office of Minority
·Business Enterprise and the SBA.
The most important thing the Federal Government can do for
housing is to control inflation through sound fiscal and monetary
policies. This requires spending restraint and smaller deficits.
While laying the foundation for stable prices, the Administration has acted to' alleviate temporary housing credit problems
through special mortgage purchase programs. In 1976, $3 billi9n will be made available to encourage construction of apartments. Most Federal support of housing is not reflected in- the
outlay totals. Go·v ernment-sponsored private enterprises supplied
$4.8 billion for housing in 1975, and tax expenditures resulting
from the deduction of mortgage interest and property taxes. are
estimated at $7.7 billion in 1977.
The subsidy to the Postal Service will decline by $231 million
to $1,459 million in 1977 as the gradual phasing-out of subsidized rates continues.

32



Community and Regional Development
The Administration's policies for community and regional development stress local initiative, with Federal assistance supplementing State and local resources. Outlays for co,m munity and
regional development are estimated to be $5.5 billion in 1977
and $6.0 billion in 1978.
Outlays for community developl ent will be $3.7 billion in
m
1977. New commitments under the community development
grant program, which replaced seven categorical grant and loan
programs, are estimated to be $3.2 billion, $446 million above
the 1976 level. Outlays for this program reflect the rate at which
communities carry out their projects and are expected to be $1.6
billion in 1977. Funds are allocated by a formula that considers
population, poverty, and housing overcrowding. Activities eligible for funding include land acquisition, publ~c construction, and
rehabilitation of structures.




Outlays for Community and Regional Development
$ Billions

$ Billions

8

8

6

6
Disaster
Relief and -~

4

4

2

o

1967 68

0
69

70

71

72

73

Fiscal Years
*Increase in 1973 and 1974 due to Hurricane Agnes

210-400 0 - 76 - 5

2

Community
Development

74

75

76

77

Estimate

33

There will be approximately 23,500 full-time and 203,000
part-time volunteers participating in domestic volunteer programs under ACTION, which will emphasize local involvement
in assisting the disadvantaged. The Community Services Administration, formerly the Office of Economic Opportunity, will
provide assistance aimed at meeting the needs of the economically disadvantaged. Implementation of the Pennsylvania Avenue Development plan in the National Capital will begin.
Area and regional development outlays will be $1.3 billion in
1977. Programs in this category provide support primarily for
rural development, American Indian Tribal governments, and
Appalachian development.
Assisting American Indian communities in their development
is a continuing concern. Outlays for Indian development programs in this function will be $737 million in 1977.
Outlays for disaster relief and insurance are estimated to be
$562 million in 1977. Although State and local governments and
the private insurance industry are primarily responsible for alleviating problems brought about by 11atural disasters, Federal
aid is available through the national flood insurance program
and the Disaster Relief Act. By the end of 1977, flood insurance
will be available in 17,000 communities.

Trainingl Employmentl and Social Services
Many programs that help individuals in obtaining jobs via
training and employment services or through the provision of
temporary public service employment are financed at the Federal
level. The Federal Government also enforces the minimum wage
and other standards regulating employment and labor-management relations practic€s. Outlays for Federal training and employment programs are estimated at $5.0 billion in 1977.
A temporary public service jobs program was authorized in
December 1974 as one part of a series of efforts to bring additional aid to the unemployed. Funds totaling $2.5 billion were
made available for about 260,000 jobs. An additional 50,000
jobs are funded under other employment and training programs.
The budget provides for additional budget authnritv of $1.7
billion for temporary employment assistance i11 1976. This authority will permit the continued operation of this program
through December 1976, with a gradual phaseout thereafter
through September 1977 as the economy continues to improve.

34



In order to focus this additional aid on areas with the greatest
needs, funds would be distributed in areas with rates of unemployment over 6.5
In 1977, States and localities are estimated to spend about
$2 billion in Federal funds on regular programs developed
under the Comprehensive Employment and T raining Act of
1973 (CETA). These funds would provide about 515,000 years
of institutional training, remedial education, on-the-job training,
job development, job matching, vocational counseling, and related services.
The budget also provides $440 million in budget authority for
summer youth jobs in 1976 and $400 million in 1977. Another
$400 million is provided for the Job Corps, programs for migrant
workers and Indians, and other national training and employment programs.
Legislation to modify the work incentive (WIN) program
would ensure that each employable recipient of aid to families
with dependent children (AFDC) actively seeks a job. No work
and training, and only limited child care and other supporting
services, would be paid for by WIN. With these changes, out-




ro.

Outlays for Training, Employment, and Social Services
$ Billions

$ Billions

10

10

8

8

Public Service
Jobs

6

6

4

4

2

2
Social Services

o
1967 68
Fiscal Years

0
69

70

71

72

73

74

75

76

77

Estimate

35

lays for this program are expected to total $260 million in 1977,
a reduction of $55 million.
The cost of operating State offices that provide job-matching
services to workers and employers is borne by the Federal Government. Outlays for the Employment Service in 1977 are estimated at $569 millio·n, $20 million more than in 1976.
Grants to States for social services provide support for the
delivery of services. to the needy, with the goal of reducing their
dependency. To promote greater flexibility and strengthen the
initiative of State and local governments, a Financial Assistance
for Community Services Act is proposed to eliminate the present
250/0 State matching requirement and other restrictions so States
can operate their social service programs in the ways they find
best serve the needy. Outlays for rehabilitation services are estimated to reach $775 million in 1977, and $401 million would be
provided under programs to serve the elderly and other special
groups.

Education
Public education is primarily a State and local responsibility,
but the Federal Government helps to assure educational opportunity and provides funds for special educational services for the
handicapped and disadvantaged. Outlays for Federal educational programs are estimated to be $7.6 billion in 1977.
Federal programs for elementary and secondary education provide grant-in-aid assistance, either through formula grants such
as the program to assist disadvantaged children under Title I of
the Elementary and Secondary Education Act, or specific, discretionary projects, to local and State educational agencies. Federal
outlays for elementary, secondary, and vocational education programs are estimated to be $4.4 billion in 1977. The 1977 budget
includes a proposed Financial Assistance for Elementary and
Secondary Education Act to consolidate 27 of these programs
into a single flexible grant to States, without matching requirements, primarily for use in helping disadvantaged and handicapped children.
The Administration is again proposing to refoTm the impact
aid program. Recognizing that Federal activities provide an economic benefit to host communities, the reform wo·u ld limit Federal aid to those school districts where free education is prov,i ded

36




for children whose parents both live and work on Federal property. Since Federal property is exempt from local taxes, these
families do not contribute to the cost of education, as other families do, and Federal contributions are fully justified. These prop10sals would save nearly $285 rnillion in 1977 and approximately
$330 million in 1978.

Outlays for Education
$ Billions

$ Billions

.8

8

6

6

4

4

2

2

o

0

1967 68

69

10

71

72

Fiscal Years

73

74

75

76

77

Estimate

The Administration's program for higher education will place
major emphasis on providing assistance directly to students,
rather than to educatio'n al institutions. Budget authority of $1.1
billion is requested for the basic educational opportunity grants
program. This program will provide grants of up to $1,400 each
to support approximately 1.3 million undergraduate students
in the 1977-78 school year. In addition, Federal funds are provided under the State student incentive grant program and the
work-study program to assist needy students. The guaranteed
student loan program will insure an estimated $1.3 billion in
loans to aid nearly 1 million students in the 1976-77 school year.
Tax expenditures of over $1.5 billion in 1977 also support higher
education.




37
.

Health
Health Outlays
$ Billions

$ Billions

35~~----~------------------------------~35

30

30

25

25

20

20

15

15
Financial
Assistance for
Health Care

10
5

o

Ig67 68
Fiscal Years

10
5

Medicare

0

69

70

71

72

73

74

75

76

77

Estimate

. federal health progra
ancing . and providing
health services (primarily f
d poor) , research, prevention of health problems, and training of health personnel.
Health outlays are expected to grow to $34.4 billion in 1977,
an increase of 70;0 over 1976, and to reach $37.7 billion in 1978.
The 1977 budget proposes the Financial Assistance for Health
Care Act which will consolidate medicaid and 15 categorical
programs into a $10 billion grant program with estimated outlays of $9 billion. The grants will be allocated to the States under
a formula based on factors, such as the low-income population,
that will assure a more equitable distribution of Federal health
spending. Funds must be used primarily to meet the health needs
of low-income persons, but may also be ·used for other health
purposes.
Proposed medicare outlays of $19.6 billion in 1977, $2.2 billion more than in 1976, will finance health insurance coverage
for an estimated 25 million aged and disabled Americans. The
proposed Medicare Improvements of 1976 will provide cata38



strophic expense protection under ' medicare by limiting beneficiaries' spending for covered expenses to $500 per year for
hospital and nursing home care and $250 per year for physicians'
services. The legislation will also increase beneficiaries' costsharing within these limits to provide incentives against excessive
use of services, and will place a ceiling on medicare payments
for hospital costs and doctors' charges. In total, these legislative
proposals will help significantly to slow the inflation of health
costs, reducing medicare outlays by $2.2 billion in 1977 and $3.5
billion in 1978.
Tax expenditures of over $6 billion in 1977 will provide incentives for the purchase of health insurance and reduce the outof-pocket costs of large medical expenses.
Health research outlays are estimated at $2.2 billion in 1977.
Growth in these programs will expand support of emerging fields
of study such as immunology, the process of aging, and the effect
of the environment upon health.
Outlays for training health personnel, estimated at $594 mil-lion in 1977, will emphasize programs that best meet national
needs by encouraging doctors to practice in areas with critical
shortages and by increasing the number of personnel in family
practice and other primary care fields.
Outlays for prevention and control of health problems are expected to be $936 million in 1977. The budget emp,hasizes occupational safety and health, and food and drug safety programs.

Income Security
Income security programs provide payments to prevent living
standards from falling below socially acceptable levels. Outlays
for income security programs are estimated to increase $8.6
billion to a total of $137.1 billion in 1977, and to $14 7.2 billion in
1978. About 35510 of the 1977 budget is for income assistance.
There are four types of Federal income security programs.
(1) Social security and retirement programs support retired
or disabled citizens and approximately 35 million persons will
receive benefits in 1977.
(2) Payments maintain basic family income during periods
of temporary unemployment and it is estimated that more than
9.6 million workers will receive such payments in 1977.
( 3) Cash benefits are provided to the needy not covered by
the retirement and unemployment programs.
.




39

Income Security Outlays
$ Billions

$ Billions

140~----------~------------------------~140

120

120

100

100·
Unemployment
Insurance

80

80

60

60

40

40

20

20

o

1967 68

69

70

71

72

73

74

75

Fiscal Years

76

77

0

Estimate

* Includes Other Income Assistance Such as Food Stamps and SSI

( 4) Finally, some income security assistance is provided
through services rather than cash, notably for food and shelter.
Programs closely related to income security programs are discussed in other functions, namely: health, education, training,
employment, and social services, and veterans benefits and
.
serVIces.
Income security benefits are generally excluded from income
in personal income tax computations. This exclusion results in
little or no loss of tax revenue from the poor, whom the income
tax system largely excludes. However, substantial amounts of
income security benefits go to persons with incomes above the
poverty line, and significant tax expenditures result from these
exclusions.
Social security is the world's largest retirement, survivors and
disability insurance program, providing an average annuity of .
$249 per month to retired workers in 1977. Total 1977 beneficiaries, including dependents and survivors, will be 32.6 million.
Outlays for social security will increase $10 billion in 1977 to
$82.7 billion. In order to reestablish the integrity of the social
40



security trust fund, an increase in social security taxes and other
reforms are proposed.
The Administration will request authority under a proposed
Income Assistance Simplification Act to improve and integrate
the various programs aimed at the poor and needy. Modifications would be within carefully pl escribed limits and subject to
r
congressional disapproval. The objective of this proposal is to
provide for an orderly transition from the present jumble of con'flicting and overlapping programs to a more rational, equitable,
and comprehensive approach to meeting these needs.
Other reforms are proposed in this budget. The proposed
Child Nutrition Reform Act will replace the 15 existing categorical child nutrition programs with a single consolidated block
grant to States. These programs have many conflicting, artificial,
and costly regulations. Also, they provide substantial Federal
subsidies to all children regardless of income. The new program
will replace the current programs and target aid o'n the poor,
including 700,000 children not now receiving program benefits.
The food stamp program will be reformed to provide a more
equitable distribution of benefits and restrict participation to
those truly in need.
Under proposed legislation that has been submitted to the Congress, the unemployment insurance system will be expanded to
provide coverage to 6 million more workers and to raise maximum unemployment benefits. Coverage of certain agricultural,
domestic, and State and local government workers is proposed.
Unemployment taxes will be raised to speed repayment of advances to the trust fund made to pay the Federal share of extended benefit programs.
Federal employees have a comprehensive retirement and
disability system that provides benefits for 1.5 million individuals.
This budget proposes to correct the automatic cost-of-living
adjustment for military and civil service retired pl y; the 1 pera
centage point bonus, which now results in retired pay increases
that exceed the rate of inflation, will be eliminated.
Housing subsidies will be approved for up to 506,000 dwelling
units in 1977. These approvals will obligate the Government to
make subsidy payments of over $25 billion. These payments will
be made over a 15-40 year period. The primary source of this
assistance will be the new lower income housing assistance program, which subsidizes the difference between market rents
and a percentage of tenant income.




41

Veterans Benefits and Services
The Federal Government provides benefits and services to
veterans, their dependents and survivors. Outlays for veterans
programs will total an estimated $17.2 billion in 1977.
Compensation benefits, which are provided to veterans who
are disabled as a result of military service, are expected to total
$5 .2 billion in 1977. Pension benefits, based on need, are provided
to wartime-service veterans who have non-service-connected disabilities or are aged and to their survivors. Outlays for pensions
will total $2.8 billion in 1977.
GI bill education benefits are designed primarily to assist veterans make the transition from military to civilian life by helping
them get the education they might have gotten if they had not
served their country in a national emergency. Pending legislation
will eliminate VA education benefits for future All-Volunteer
Force members and return education program eligibility for current active duty personnel to 8 years following separation. Outlays for veterans education benefits are estimated to be $4.2
billion in 1977.

Outlays for Veterans Benefits and Services
$ Billions

20

$ Billions

~-------'--"--~------------r-

20

16

16

12

12

8

8

4

4
Hospital and
Medical Care

o

1967 68

Fiscal Years

42



69

70

71

72

73

74

75

76

77

Estimate

0

The 1977 budget includes funds to complete medical care
staffing improvements recommended in the 1974 "Quality of
Care" survey. Pending legislation will require health insurers to
reimburse the VA for treatment of insured beneficiaries with nonservice··connected disabilities. With enactment of this legislation,
outlays for medical programs will be $4.5 billion in 1977.

Law EnForcement and Justice
I

Proposed outlays for law enforcement and justice programs
are $3.4 billion in 1977-nearly the same as 1976. This includes
$834 million in technical and law enforcement assistance grants
to State and local governments, which have the primary responsibility for law enforcement. Law enforcement assistance grants
will decline by 8 % in 1977, reflecting a more cautious and selective approach in this area. Emphasis will be placed on evaluation
to determine the impact of these grant programs on the level of
crime in the United States.
Within the Departments of Justice and Treasury, resources
will be reallocated to emphasize apprehension and prosecution of

Outlays for Law Enforcement and Justice
$ Billions

$ Billions

3.5 - , - - - - - - - - - - - - - - - - - - - - - - - - , - 3.5
3.0

3.0

2.5

2.5
Law Enforcement
Assistance

2.0

2.0

1.5

1.5
Judicial and
Correctional
Activities

1.0
0.5




1.0
0.5

Federal Enforcement
and Prosecution

o

1967 68
Fiscal Years

0
69

70

71

72

73

74

'75 ' 76

77

Estimate

43

criminals. Legal staff in the U.S. attorneys' field offices will be
expanded by 9 % to handle burgeoning civil and criminal caseloads. New resources will also be devoted to the strengthening
of antitrust enforcement programs. Vigorous enforcement of
firearms laws will complement the President's legislative proposals for mandatory sentences for felons con·v icted of using
.illegal weapons, prohibitions on the manufacture and sale of
"Saturday night specials," and a mandatory waiting period between purchase and receipt of handguns. Additional resources
are included for the Drug Enforcement Administration to curtail
sales and trade in .illegal narcotics and dangerous drugs. The
Immigration and Naturalization Service will redeploy staff to
emphasize apprehension, detention, and deportation of illegal
aliens.
Three correctional institutions will be activated and construction will begin on four new facilities to relieve overcrowding.
By law, the President's budget contains estimates of the judicial
branch as submitted by that branch. Proposed outlays for judicial branch activities in this function are $390 million.

General Government
General government programs encompass many fundamental
Federal activities including those performed by the legislative
branch, the Executive Office of the President, and administrative
activities that cut across many programs. Internal Revenue
Service programs make up nearly 50% of all outlays in this
function. Staffing levels will be reduced to reflect expected productivity and management improvements and modest reductions
in audit, collection, and other compliance activities.
By law, the President's budget contains estimates of the legislative branch as submitted by that branch. Proposed 1977 outlays for legislative branch activities in this function are $841
million. Other program highlights of this function are the
planned Office of Science and Technology Policy to advise the
President, the proposed new territory of the Commonwealth of
the Northern Mariana Islands, and the convening of a National
Women's Co'nference.
Federal Financing Bank transactions are excluded from Federal budget totals. The Bank will have an estimated $39 billion
of loans and advances outstanding to Federal agencies in 1977.

44



Outlays for General Government
$ Billions

$ Billions

4.0 - - - r - - - - - - - - - - - - - - ' - - - - - - - - - - - - . - 4.0

3.0

3.0

2.0

2.0

1.0

o

1967

1.0

Central Fiscal
Operations

0
68

Fiscal Years

69

70

71

72

73

74
I

75

76

77

Estimate

General 'Revenue Sharing and Other Fiscal
Assistance
General revenue sharing outlays will be $6.6 billion in 1977.
These payments are made to States and localities with minimal
Federal restrictions and controls, thus allowing regional and local
decisionmaking to better address regional and local needs. The
Administration has recommended that the current program,
which is scheduled to terminate during December 1976, be
extended through 1982.
The Federal Government also returns part of certain taxes,
and revenues generated from sale of timber, mineral leasing,
grazing permits and camping fees to the jurisdictions in which
they are collected .. In addition, the District of Columbia will
receive a payment of $283 million in 1977 to compensate that
government for burdens placed on it as the Nation's Capital.
The Treasury will make loans to New York City through the
New York City Seasonal Financing Fund. These loans will facilitate New York City borrowing during periods when outlays ex-




45

ceed revenues and must be rep,a id by the end of the City's fiscal
year.
Two major tax expenditures provide fiscal assistance. The
exclusion of interest on State and local debt instruments from
Federal taxable income allows State and local governments to
borrow at lower interest rates. The deductibility of State and
local taxes from Federal taxable income allows individuals to
partiqlly offset their State and local tax liabilities against their
Federal taxes. The associated revenue losses from these taxexpenditures are estimated to be ' $4.5 and $6.7 billion, respectively, in 1977.

Interest
Budget outlays fo~ the interest function are estimated to rise
by $3.9 billion in 1976, and by another $6.5 billion in 1977,
reaching $41.3 billion. These increases result primarily from the
financing of estimated 'budget deficits of $76 billion in 1976 and
$43 billion in 1977.
Interest paid on Government securities held by trust funds is
deducted from budget totals as an undistributed offsetting receipt

Interest Outlays
$ Billions

$ Billions

50~----------------------------------~50

40

40

.

30

30
Paid to Trust Funds

·20

20

10

10

o
1967 68
Fiscal Years

46



0
69 '

70

71

72

73

74

75

76

77

Estimate

to eliminate double counting of outlays. This deduction reduces
1977 interest outlays by $8.4 billion for a net budget total of $32.9
billion.
In addition, $6.2 billion of the interest paid on Federal securities held by the Federal Reserve banl(s will be returned to the
Treasury as miscellaneous receipts. Hence, the amount of interest
in 1977 that must be financed from receipts or additional borrowing will be $26.7 billion.
One significant tax expenditure is the optional deferral of
taxes on interest income from U.S. savings bonds. Associated
revenue losses are estimated to be $0.7 billion in 1977.

Allowances
Allowances are included in the budget to cover civilian agency
pay raises and contingencies. The outlay allowance for pay raises,
du~ to take effect in October 1976, is $760 million. Outlays for
contingencies are $200 million in 1976 and $1.5 billion in 1977.
By law, Federal pay is adjusted annually on the basis of comparability with the private sector. The President's Panel on
Federal Compensation has made a comprehensive review of the
current comparability system and has made major recommendations for changing it. Some of these changes can be adopted
through administrative action, while others require legislation.
The budget estimates assume administrative actions that will
reduce the average comparability increase, due in October 1976,
from the earlier estimate of 11.5 %, although the exact amount
cannot as yet be determined.
Legislation will be proposed to initiate other reforms recommended by the President's pay panel. These include splitting
the present General Schedule into two schedules and setting
salaries in the new clerical and technical schedule on a locality
basis. In addition, reform of laws governing wage-board pay rates
that result in blue-collar workers earning more than their private
sector counterparts will be proposed. The Panel also recommended further study to determine the feasibility of expanding
the comparability principle to include fringe benefits as well as "
pay.
Consistent with the President's program of fiscal restraint, it
presently appears necessary to limit the October 1976 pay
increas~s for white-collar employees to 5%. Smaller increases
may be received by some employees-coIlsistent with changes in




47

the comparability process. For purposes of making budget estimates, it is assumed th~t all employees will receive at least a 3%
increase. The President will make a final decision in late summer
on the need for, and nature of, the pay restraint.

Undistributed Offsetting Receipts

~

Three offsetting collections are deducted from the budget as
a whole, rather than within a function or account.
Employer share, employee retirement is composed of payments
by Federal agencies to retirement funds of its employees .. In 1977,
contributions are estimated to be $4.5 billion.
Most trust fund balances are-by law-invested in interestbearing Federal debt securities. The interest received by trust
nonrevolving funds is included as an undistributed deduction
rather than being offset against the interest function. In 1977
these payments are estimated to be $8.4 billion.
The Government plans to lease more lands off the west and
gulf coasts in 1976, along with, for the first time, lands in the
Gulf of Alaska. In the transition quarter, the Mid-Atlantic tracts
off the east coast will be opened to exploration. Additional sales
are planned in all areas in 1977 and will result in estimated
receipts of $6.0 billion in 1977.

48



PART V

THE BUDGET PROCESS
The budget sets forth the President's proposed financial plan
of operation for the Federal Government. The process through
which this plan is considered and put into effect is crucial to the
determination of national priorities. This section describes that
process, and the changes made in it by the Congressional Budget
Act of 1974. Thi,s Act establishes new congressional budget procedures, requires new information in the President's budget,
and-beginning with the upcoming 1977 fiscal year-shifts the
fiscal year to an October 1 through September 30 basis.
The budget process has four interrelated phases: (1) executive
formulation and transmittal, (2) congressional action, (3 )
budget execution and control, and (4) review and audit.
Executive formulation and control.-The President's transmittal of his budget proposals to the Congress is the result of
many months of planning and analysis throughout the executive
branch. Formulation of this budget, transmitted to the Congress
in January 1976, began in the spring of 1975. Each spring,
agency programs are evaluated, policy issues are identified,
budget projections are made, and preliminary program plans
are then presented to the President.
The President reviews the budget projections, and establishes
general budget and fiscal policy guidelines for the fiscal year that
begins over a year later, on October 1. Tentative policy determinations and planning targets are then given to the agencies as
guidelines for the preparation of their budgets.
In the fall, agencies formulate their proposed budgets, which
are reviewed in detail by the Office of Management and Budget
and presented to the President in the context of . overall fiscal
policy issues. This budget-submitted to Congress in January,
1976-reflects the President's recommendations for individual
programs, as well as total outlay and receipt levels appropriate




49

to the state of the economy. Supplemental budget requests and
amendments may be submitted later to cover needs unforeseen
at the time the budget was formulated.
As a result of the Congressional Budget Act, by November
10 the President must also submit current services estimates for
the upcoming fiscal year. These estimates are projections of the
budget authority and outlays required to continue existing programs in the upcoming fiscal year without any policy changes.
Congressional action.-The Congress, which has the power
to change any of the President's recommendations, begins its
formal review of the budget when the President submits his current services estimates. Review of these estimates is intended to
lay a base for consideration of the President's January budget.
'Before considering appropriations for a specific program, the
Congress first enacts ~egislation that authorizes an agency to carry
out that program. Such legislation authorizes an appropriation
for the program, and, in some cases, sets a limit on the amount
that can be appropriated.
Many programs are authorized for several years, or indefinitely; other programs, such as nuclear energy, defense procurement, and foreign affairs, require annual authorization. The
granting of budget authority usually is a separate, subsequent
action. In many cases, budget authority becomes available each
year only as voted by the Congress. In other cases, the Congress
has voted permanent budget authority, under which funds
b'ecome available annually without further congressional action.
Under new procedures mandated by t.he Congressio~al 'Budget
Act, the Congress is t~ consider budget totals prior to completing
action on individual 'appropriations. The act requires that by
March 15, the new House and Senate Budget Committees receive reports on budget estimates from all other congressional
committees, as well as a fiscal policy report from the new Congressional Budget Office, by April 1. By May 15, the Congress
adopts a concurrent resolution containing budget targets. By
September 15, the Congress completes action on setting budget
ceilings, and by September 25, the Congress completes action
on any required reconciliation bill or resolution. A summary of
the new congressional timetable is presented on the following
page.

50



CONGRESSIONAL BUDGET TIMETABLE

On or before:

Action to be completed:

November 10 ________________ _

15th day after Congress convenes 1_____________________
March 15____________________
April 1______________________ .

.

President submits current serVIces
budget.

President submits his budget.
Committees submit reports to budget
committees.
Congressional Budget Office submits
report to budget committees.

April 15 __________ .___________ . Budget committees r.eport first con . .
current resolution on the budget to
their Houses.
May 15______________________

Committees report bills authorizing
new budget authority.

May 15______________________

Congress adopts first concurrent resolution on the budget.

7th day after Labor Day ________ . Congress completes action on bills providing budget authority.
September 15_________________

Congress completes actions on second
required concurrent resolution on
the budget.

September 25-________________

Congress completes action reconcilia- .

tion process implementing second
concurrent resolution.
October 1___________________ ..

Fiscal year begins.

1 Public Law 94-186 required the President's 19"77 budget to be transmitted to Congress
on January 21, 1976, 2 days after Congress convenes.

Congressional consideration of requests for appropriatio·ns and
for changes in revenue laws follows an established pattern. They
are considered first in the House of Representatives, _
where the
Ways and Means Committee reviews proposed revenue measures and the Appropriations Committee, through its subcommittees, studies the proposals for appropriations. These COlTImittees then recommend the action to be taken by the House of
Representatives. As the appropriations and tax bills are approved




51
/

\

by the House, they are forwarded to the Senate, where a similar
process is followed. In case of disagreement between the tw'o
Houses of Congress, a conference committee (consisting of Members of both bodies) resolves the issues and submits a report
to both Ho'uses for approval. Measures are then transmitted to
the President, in the form of an enrolled bill, for his app,r oval
or veto. When action on appropriations is not completed by the
beginning of the fiscal year, the Congress may enact a "continuing resolution" to provide authority for the affected agencies to
continue operations until their regular appropriations are
approved.
Budget execution and control.-Once approved, the budget
becomes the financial basis for the operations of agencies during
the fiscal year. Most budget 'a uthority and other budgetary
resources are made available by the Office of Management and
Budget under an app,o rtionment system that assures the effective
, and orderly use of available authority.
The Impoundment Control Act of 1974 provides that the
executive branch may regulate the rate of spending by deferring
the availability or proposing the rescission of budget authority,
subject to the approval of the Congress. Deferrals, which are
temporary withholdings of budget authority, cannot extend beyond the end of the fiscal year, and may be overturned by either
House of the Congress at any time. Rescissions, which permanently cancel existing budget authority, must be enacted by the
full Congress. If Congress does not approve a proposed rescission_
within 45 days of continuous session, the withheld funds must be
made available for obligation.
Review and audit.-Individual agencies are responsible for
assuring that the obligations they incur and the resulting outlays
are in accordance with the laws and regulations. The Office of
Management and Budget reviews program and financial reports
and the General Accounting Office; a congressional agency,
regularly audits, evaluates, and reports on Federal programs.

52



Relation of Budget Authority to Outlays
The budget authority appropriated by the Congress for a fiscal
year generally exceeds the obligations or outlays from that
authority 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 number 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.
/

Relation of Budget Authority to Outlays -1977 Budget
. Figures in brackets represent Federal funds only
S Billions

New Authority •
Recommended
for 1977

433.4

To be spent in 1977

281.3
[231.8]

Outlays
in 1977

394.2
[286.2]

[311.9]

..

NOTE: The difference between the total budget Figures and federal funds shown in brackets consists of trust funds and interfund transactions between fund groups •




53

PART VI
BUDGET TABLESPage

1. Budget Receipts, Outlays, and Debt, 1967-77. . . . . . . . . . . . . . .
2. Budget Receipts by Source and Outlays by Function, 1968-77.
3. Percentage Distribution of Budget Receipts by Source and Outlays by Function, 1968-77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Budget Outlays by Function and Subfunction, 1968-77. . . . . . .
5. Budget Authority and Outlays by Agency, 1975-77. . . . . . . . . .
6. Outlays and Receipts of Trust Funds, 1975-77. . . . . . . . . . . . . .
7. Composition of Budget Outlays in Current and Constant (fiscal
year 1969) Prices, 1955-77. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Federal Finances and the Gross National Product, 1954-77....
9. Summary of Full-Time Permanent Civilian Employment in the
Executive Branch, 1975-77. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10. Budget Receipts and Outlays, 1789-1977 ..... : . . . . . . . . . . . . .

56
57
58
59
64
66
67
69
70
71

NOTES

• Backup data for charts in this book can be obtained from the Office of
Management and Budget, Washington, D.C. 20503.
• More detailed budget tables are included in Part 8 of the Budget oj the
United States Government, 1977.




55




Table 1. BUDGET RECEIPTS, OUTLAYS, AND DEBT, 1967-77 (in billions of dollars)
Actual
Description

196

1067

Receipts and outlays:
Receipts:
Federal funds ... ....... ..... .
Trust funds ................. .
Interfund transactions ........ .

Total budget receipts. . . . . ..
Outlays:
Federal funds ............... .
Trust funds ................. .
Interfund transactions .... .. .. .
Total budget outlays . . . . . . ..

Ill. 8
42.9
_

c;

v.

C)
L,

1970

1971

1972

1973

1974

143.3
52.0

143. 2
59.4
- 8.8

133.8
66. 2

148. 8
73. 0
- 13.2

161. 4
92. 2
-21. 3

_ 7 v
,. "

126. 8
36. 7
-5.2

14J. 1
41. 5
-5.8

148.8
43. 3
-7.5

158. 3
178. 8
184. 5
--- --- ----- --- ---28.4
3.2

-

1 1

C.

11. U

188. 4
-----

156. 3
49. 1
-8.8

163. 7
59.4
- 11. 6

196. 6
-----

211. 4

-----29.9
6.8

208. 6
----178.0
67. 1
-13.2
231. 9
-----29.1
5.9

232. 2
--186.4
81. 4
-21. 3
246. 5
---25.0
10. 7

1975

1976

TQ

1977

181. 2
104.8

187.5
118.6
-25.1

198.4
134.8
-35.6

54. 8
33.8
-6.6

230.8
157.7
-37.2

264. 9
-----

281. 0
---

297. 5
-----

81. 9
-----

351. 3

238. 5
Ill. 2
-25. 1

276.9
132.2
-35.6

69.8
34. 9
-6.6

286. 2
145. 2
-3 7.2

324. 6
-----

373. 5
-----

98.0
---

394.2

-51.0
7.4

-78.5
2.5

-15.0
-1. 1

-55.5
12.5

- 43. 6
---

- 76. 0
-----

- 16. 1
-----

- 43. 0
-----

198.7
90.8
-2 1. 1
268. 4
---

-5.5
8.7

-13.1
10.3

- 8. 7 - 25.2
--- ----- ---

3. 2
-----

- 2. 8
-----

.

341. 3

369.8

367. 1

382.6

409. 5

437. 3

468.4

486.2

544.1

633. 9

652.8

719.5

.
.
.
.

73. 8
267. 5
46. 7
220.8

79. 1
290.6
52. 2
238.4

87. 7
279. 5
54. 1
225.4

97.
284.
57.
227.

7
9
7
2

105. 1
304. 3
65. 5
238.8

113.6
323.8
71. 4
252. 3

125.4
343.0
75. 2
267. 9

140. 2
346.1
80.6
265.4

147. 2
396. 9
85.0
311. 9

149. 5
484.4

148.4
504.4

161. 3
558. 2

NA
NA

NA
NA

NA
NA

Total surplus or deficit. . . . . .

NA=Not available.

1960

149. 6
153. 7
187. 8
193. 7
--- --- --- ----- -----

Surplus or deficit ( - ):
Federalfunds ................ - 14.9
Trust funds.. .. .. .. .. .. .. . .. .
6.2

Outstanding debt, end of year: '
Gross Federal debt. ...........
Held by:
Govern men t agencies ........
The public .................
Federal Reserve System ....
Others ...................

114. 7
44. 7
-5 . v
Q

Estimate

- 23. 0 - 23. 2 - 14. 3
--- --- ----- ---

-17.5
14.0
- 3. 5
-----

Table 2. BUDGET RECEIPTS BY SOURCE AND OUTLAYS BY FUNCTION, 1968-77 (in billions of doIIars)
Actual
Description

Estimate

1968

1969

1970

1971

1972

1973

1974

1975

1976

TQ

1977

Individual income taxes ...................
Corpora tion income taxes .... . .............
Social insurance taxes and contributions .....
Excise taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estate and gift taxes .. . ...................
Customs duties .. . ........................
Miscellaneous receipts .....................

68. 7
28. 7
34.6
14. 1
3. 1
2.0

87.2
36. 7
39.9
15. 2 .
3.5
2.3
2.9

90.4
32.8
45.3
15. 7
3.6
2.4
3.4

86.2
26.8
48.6
16.6
3. 7
2.6
3.9

94. 7
32.2
53.9
15.5
5.4
3.3
3.6

103.2
36.2
64.5
16.3
4.9
3.2
3.9

119.0
38.6
76.8
16.8
5.0
3.3
5.4

122.4
40.6
86.4
16.6
4.6
3. 7
6. 7

130.8
40. 1
92.6
16.9
5. 1
3.8
8.3

40.0
8.4
25.2
4.4
1.4
1.0
1.5

153.6
49.5
113. 1
17.8
5.8
,-4.3
7.2

Total receipts .....................

153.7

187.8

193.7

188.4

208.6

232.2

264.9

281.0

297.5

81.9

351.3

79.4
4.6
5.5
4.0
4.5
10.6
1.9

80.2
3.8
5.0
3.9
5.8
7. 1
2.2

79.3
3.6
4.5
4.0
5.2
9. 1
3.2

76.8
3. 1
4.2
4.9
4.3
10.4
3.6

77.4
3. 7
4.2
5.5
5. 3
10.6
4.3

75. 1
3.0
4.0
5.9
4.9
9.9
5.5

78.6
3.6
4.0
6.6
2.2
13. 1
4.9

86.6
4.4
4.0
9.5
1.7
16.0
4.4

92.8
5. 7
4.3
11. 8
2.9
17.8
5.8

25.0
1.3
1.2
3.3
.7
4.8
1.5

101. 1
6.8
4.5
13.8
1.7
16.5
5.5

7.0
9. 7
33. 7
6.9
.6
1.7

6.9
11. 8
37.3
7.6
.8
1.6

7.9
13. 1
43. 1
8. 7
1.0
1.9

9.0
14. 7
55.4
9.8
1.3
2.2

11. 7
17.5
63.9
10. 7
1.6
2.5

11. 9
18.8
73.0
12.0
2. 1
2. 7

11. 6
22. 1
84.4
13.4
2.5
3.3

15.2
27.6
108.6
16.6
2.9
3. 1

18. 9
32. 1
128. 5
19.0
3.4
3.5

4.4
8.3
32. 7
4.4
.9
1.0

16.6
34.4
137. 1
17.2
3.4
3.4

.3
13.8

.4
15.8

.5
18.3

.5
19.6

.5
20.6

7.2
22.8

6. 7
28. 1

7.0
31. 0

. .....

2.0
9.8
.2
-3.6

7.4
41. 3
2. 3
-18.8

98.0

394.2

RECEIPTS BY SOURCE

2~5

OUTLAYS BY FUNCTION
National defense 1 . . . . . . . . . . . . . . . . . . . . . . . . .
In terna tional affairs. . . . . . . . . . . . . . . . . . . . . . .
General science, space, and technology. . ... .
Natural resources, environment, and energy ..
Agricul ture .......................... . ...
Commerce and transportation ............ . .
Community and regional development .......
Educa~iQn, training, employment, and social
serVIces ................. . .............
Health .................. . ........... . ...
Income security. ' ,' .......... . ............
Veterans benefits and services ...... . .......
Law enforcement and justice ..... . ...... .. .
General government. . ....................
Revenue sharing and general purpose fiscal
assistance ..............................
. Interest. . . . . . . . . ........................
Allowances 2 •• • . • • • • • • • • • . • • • • • • • • • . • . • • •
Undistributed offsetting receipts ..... . ......
U1
'-l




Total outIa ys ......................
1
2

,

. .....

......

-5.5

-6.6

......

-8.1

-12.3

-16.7

-14.1

7.2
34.8
.2
-15.2

184.5

196.6

211.4

231. 9

246.5

268.4

324.6

373.5

. . ... .

......

-5.5

178.8

-8.4

. .. .. .

. .....

Includes civilian and military pay raises for the Department of Defense.
Includes allowance~ for civilian agency pay raises and contingencies for relatively uncontrollable programs and other requirements.

,

I

Table 3. PERCENTAGE DISTRIBUTION OF BUDGET RECEIPTS BY SOURCE AND OUTLAYS BY FUNCTION, 1968-77

c..n

Actual

CO




Description

Estimate

1968

1969

1970

1971

1972

1973

1974

1975

1976

TQ

1977

Individual income taxes ..................
Corpora tion income taxes .................
Social insurance taxes and contributions ....
Excise taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Estate and gift taxes .....................
Customs duties ..........................
Miscellaneous receipts ....................

44. 7
18. 7
22.5
9.2
2.0
1.3
1.6

46.5
19.5
21. 3
8. 1
1.9
1.2
1.5

46. 7
16.9
23.4
8. 1
1.9
1.3
1.8

45.8
14.2
25. 8
8.8
2.0
1.4
2.0

45.4
15.4
25.8
7.4
2.6
1.6
1.7

44.5
15.6
27.8
7.0
2.1
1.4
1.7

44.9
14.6
29.0
6.4
1.9
1.3
2.0

43.6
14.4
30. 7
5.9
1.6
1.3
2.4

44.0
13.5
31. 1
5.6
1.7
1.3
2.8

48.8
10.3
30.8
5.4
1.7
1.2
1.8

43. 7
14. 1
32.2
5. 1
1.7
1.2
2.0

Total receipts ....................

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

44.4
2.6
3. 1
2.2
2.5
5.9
1. 1

43.5
2. 1
2. 7
2.1
3. 1
3.8
1.2

40.3
1.8
2.3
2. 1
2.6
4.6
1.6

36.3
1.5
2.0
2.3
2.0
4.9
1.7

33.4
1.6
1.8
2.4
2. 3
4.6
1.8

30.5
1.2
1.6
2.4
2.0
4.0
2.2

29.3
1.3
1.5
2.4
.8
4.9
1.8

26. 7
1.4
1.2
2.9
.5
4.9
1.4

24.8
1.5
1.2
3.2
.8
4.8
1.6

25.5
1.3
1.2
.3 .4
.7
4.9
1.5

25.6
1.7
1. 1
3. 5
.4
4.2
1.4

3.9
5.4
18.8
3.8
.4
.9

3. 7
6.4
20.2
4. 1
.4
.9

4.0
6.6
21. 9
4.4
.5
1.0

4.3
· 7.0
26.2
4.6
.6
1.0

5.0
7. 5
27.6
4.6
.7
1. 1

4.8
7.6
29.6
4.9
.9
1. 1

4.3
8.2
31. 5
5.0
.9
1.2

4. 7
8.5
33.5
5. 1
.9
1.0

5. 1
8.6
34.4
5. 1
.9
.9

4.5
8. 5
33.4
4.5
.9
1.0

4.2
8. 7
34.8
4.4
.9
.9

.2
7. 7

.2·
8.6

.2
9. 3

.2
9. 3

.2
8.9

2.9
9. 3

2.5
10.5

2.2
9.6

-3.5

-5.0

-6.2

-4.3

1.9
9.3
.1
-4.1

2.0
10.0
.2
-3.7

1.9
10.5
.6
-4.8

100.0

100.0

100.0

100.0

100.0

100.0

100.0

RECEIPTS BY SOURCE

OUTLAYS BY FUNCTION
National defense 1 . . . . . . . . . . . . . . . . . . . . . . . .
International affairs ......................
General science, space, and technology. . . ..
Natural resources, environment, and energy ..
Agricul ture. . . . . . . . . . . . . . . ... . . . . . . . . . . . .
Commerce and transportation .............
Community and regional development ......
Education, training, employment, and social
serVIces ..............................
Health ... ..............................
Income security. . ... . . . . . . . . .. ~ . . . . . . . . . .
Veterans benefits and .s ervices .............
Law enforcement and justice ..............
General govern men t .....................
Revenue sharing and general purpose fiscal
assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . ..
Interest .... ...... ............ . . ... .... .
Allowances 2. • . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed offsetting receipts ...........

Total outlays .....................
1
2

. .... .

......

......

-3.1

-3.0

......

-3.3

-4.0

100.0

100.0

100.0

100.0

......

. . . . . . . .....

Includes civilian and military pay raises for the Department of Defense.
Includes allowances for civilian agency pay raises and contingencies for relatively uncontrollable programs and other requirements.

......

Table 4. BUDGET OUTLAYS BY FUNCTION AND SUBFUNCTION: 1968-77 (in billions of dollars)
Function and subfunction

Actual

Estimate

1968

1969

1970

1971

1972

1973

1974

1975

1976

TQ

1977

19. 9
2. 1
20.6
23. 3
7. 7
4.0
-.2

21. 4
2.4
22.2
24.0
7. 5
.5
-. 1

23.0
2.8
21. 6
21. 6
7.2
1. 1
-. 1

22.6
3.4
20.9
18.9
7. 3
1.6
-. 1

23.0
3.9
21. 7
17. 1
7.9
1.7
-. 1

23.2
4.4
21. 1
15. 7
8.2
.9
-. 1

23. 7
5. 1
22.5
15.2
8.6
2.6
-.2

25.0
6.2
26. 3
16.0
8.9
2.8
-.2

25.5
7. 3
28.3
16.5
9. 1
3.2
-.1

6. 7
2.0
7.6
5.0
2.5
·7

25.2
8.4
30. 7
20. 3
10.4

-*

-.2

Subtotal, Department of DefenseMilitary .........................
Military assistance ......................
Atomic energy defense activities ..........
Defense-related activities .................
Deductions for offsetting receipts ..........

77.4
.7
1.3
.1

77.9
.8
1.4
.2

77.2
.7
1.4

74.5
1.0
1.4
-.1

75.2
.8
1.4

73.3
.5
1.4
-.2

77.6
.8
1.5
-1.3

85.0
1.0
1.5
-.9

89.8
1.4
1.6
-.1

24.5
·1
.4

-*

-*
-*

99.6
.5
1.8
-.8

Total national defense ..............

National defense:
Departmen t of Defense-Military:
Mili tary personn el. . . . . . . . . . . . . . . . . . . .
Retired military personnel. ............
Operation and maintenance ............
Procure men t .........................
Research and develop men t .............
Military construction and other 1 . . . • . . . .
Deductions for offsetting receipts ........

80.2

3.5
.4
..3
.8
~. 2

3. 1
.4
.2
.2
-.2

Total international affairs ...........




79.4

International affairs:
Foreign economic and financial assistance ..
Conduct of foreign affairs ................
Foreign information and exchange activities.
In terna tional financial programs 2 •••••••••
Deductions for offsetting receipts ..........

U1
<..0

-*

-*
-*

4.6

3.8

See footnotes at end of table.

-*

4. 7

79.3

,

-*

*
-*

76.8

77.4

75.1

78.6

86.6

92.8

25.0

101. 1

2.9
.,4
.2
.2
-.2

2.9
.4
.2
-.2
-.3

3.2
.5
.3

2.9
.5
.3

2.9
.6
.3

3. 7
.7
.3

5.0
.8
.4

1.0
.3
·1

-.3

-.6

3.6

3. 1

3.7

3.0

*

-*

-*

-*

-*

-*

-*

-*

......

-.2

-.3

-.4

-. 1

4. 7
.9
.4
1.3
-.5

3.6

4.4

5.7

1. 3

6.8

-*

OJ
0




Table 4. BUDGET OUTLAYS BY FUNCTION AND SUBFUNCTION: 1968-77 (in billions of dollars )-COntinued
Function and subfunction

Actual

Estimate

1968

1969

1970

1971

1972

1973

1974

1975

1976

General science, space, and technology:
General science and basic research ........
Manned space flight ....................
Space science, applications, and technology.
Supporting space activities ...............
Deductions for offsetting receipts ..........

.9
3. 1
1. 1
.4

.9
2.8

-*

-*
---

.9
2.2
1.0
.4

1.0
1.9
.9
.4

1.0
1.7
1. 1
.3

1.0
l.5
1.2
.3

1.0
l.5
1.2
.3

-*

-*

1.0
l.5
1. 1
.3

1. 1
1.7
l. 1
.3

-*

Total general science, space, and
technology. . . . . . . . . . . . . . ........

5.5

5.0

4.5

4.2

4.2

4.0

4.0

Natural
resources,
environment, and
energy:
Water resources and power ..............
Conservation and land management .......
Recreational resources ...................
Pollution control and abatement. .........
Energy ..................... . ..........
Other natural resources .................
Deductions for offsetting receipts ..........

1.8
.7
.3
.2
1.0
.4
-.4

1.7
.6
.4
.3
.4
-.4

1.7
.7
.4
.4
.9
.4
-.5

2. I
.9
.5
.7
.8
.5
-.5

2. 3
.8
.5
.8
1.0
.6
-.5

2.5
.7
.6
1. 1
1.0
.6
-.5

Total natural resources, environment,
and energy .....................

4.0

3.9

4.0

4.9

5. 5

Agriculture:
Farm income stabilization ...............
Agricul tural research and services .........
Deductions for offsetting receipts ..........

4.0
.5

5. 3
.5

4; 6
.6

-*

-*

3. 7
.6

Total agriculture ..................

4.5

5.8

5.2

Commerce and transportation:
Mortgage credit and thrift insurance ......
Postal Service ..........................
Other advancement and regulation of commerce ...............................

.9

.4

1.0

-----

*

---

*

1977

1.2
1.9
l. 1
.3

-*

.3
.5
.3
.1

-*

*

4.0

4.3

1. 2

4.5

2.5
.7
. 7·
2.0
.6
.7
-.7

3. 3
1.3
.8
2.5
1.6
.8
-.8

3.8
1.3
.9
3. 1
2.6
.9
-.8

1.2
.5
.2
.8
.6
.2
-.3

3.9
1.0
1.0
4.4
3.4
.9
-.8

5.9

6.6

9.5

11. 8

3.3

13.8 .

4.6
.7

4.1
.8

1.5
.8

1.9
1.0

.5
.3

-*

-*

-*

*

.8
.9

-*

-*

4.3

5. 3

4.9

2.2

1. 7

2.9

.7

1.7

*

-*

::=:)--

::=:)

TQ

---

---

-*

---

.7
1.0

-*

----- --- --- ---

2.8
1. 1

-.6
.9

.1
l.5

-.3
2.2

-*

1.8

-1.2
1.6

1.5
1.7

2.8
1.9

1.3
1.7

.3
.4

-.6
1.5

.5

.2

.5

.5

.5

.6

.7

.9

.9

.2

.9

5.2
1.8
1. 1

5.4
1.9
1. 1

5.6

5. 6

.9

4. 7
1.4
.9

2.2
1.2

*
-*

*
-*

*
-*

*
-.1

*
-*

10.6

7. 1

9. 1

10.4

1.3

1.6

2.6

.4
.1

.6

2.3
.6
.3

.4

.
.
.
.
.

4.4
1. 1

4.4
1.2

.9

Total commerce and transportation ..

Ground transportation .................
Air transportation .....................
Water transportation ...................
Other transportation ...................
Deductions for offsetting receipts .........

Community and regional development:
Community development ............... .
Area and regional development .......... .
Disaster relief and ins~rance. . . . . . . . . . . . .
Deductions for offsetting receipts ........ .
Total community and regional development ....................... .
Education, training, employment, and social
•
services:
Elementary, secondary, and vocational
education ....... ... ................ .
Higher education ................... ... . ,
Research and general education aids ..... .
Training and employment ........... . .. .
Other labor services. . . . . . . . . . . . . . . . . . . . .
Social services. . . . . . . . . . . . . . . . . . . . . . . . . .
Deductions for offsetting receipts ......... .
Total education, training, employment, and social services ........ .
Health:
Health care services .................... .
Health research and education .......... .
Preven tion and control of health problems.
Heal th planning and construction. . . . . ....
General health financing assistance. . . . . . .
Deductions for offsetting receipts ......... .
Total health ...................... .
See footnotes at end of table.




.7

-*

*
-*

-*

-*

1.9

2.2

3.2

3.6

2.8
1.4
.3
1.6

2. 7

3. 1

3. 5

1.2
.3
1.6

1.4
1.6

.1
.8

.1
.9

.1
1. 1

1.4
:5
2.0
.2
1.4

.5

-*

-*

-*

7.0

6.9

7.6
1.4
.3
.4

2.2
1.4

6.5
2.4
1.5

9. 5
2. 7

2. 7

10. I

.7

1.7

.4

2.8
1.9

.1
-. 1

.1
-. 1

.1
-.1

.1
-.1

*
-*

.1
-. 1

10.6

9.9

13. 1

16.0

17.8

4.8

16.5

3. 1
.8
.4

3. 1
.9

3.0
1. 1
.8

3.9
1.4

1.0
.4

-*

-*

-*

3. 1
.9
.4

.6

-*

-*

·1

-*

3. 7
1.3
.6

4.3

5.5

4.9

4.4

5.8

1.5

5.5

4.6

4.6>
2. 7

1.0
.4
.2
1.8

1.6

4.0
1.4

3. 7
1.5

3.8
1.3

.5

.7
3. 3
.2

.9

2.9
.2
2. 7

2.5

2.9
.2
2.5

2. 1
.9
4. 1
.3
3.3

-*

-*

-*

11.7

11.9

11. 6

.5

15.5
2.3
.6
.4

18.5

.5
.5

14.5
2.0
.5
.4

2. 3
.8
.5

-*

-*

-*

-*

-*

11.8

13.1

14.7

17.5

18.8

-*

-*

7.9

9.0

9. 5

10.6

12. 1

1.5
.3
.4

1.6

1.7

.4

-*
9.7

.8

6.9
.3
3.6

·1

.9

-*
----4.4
2.3
.8
5.0
.4
3. 7

-*

-*

-*

15.2

18.9

4.4

16.6

23.4

27.6

2. 7

7. 3

3.0

.7

.9
.7

1.0
.6

·3
·1

-*

-*

.... *

21. 3
2.8
.9
.4
9.0

-*

-*

22.1

27.6

32.1

8.3

34.4

Q')

Table 4. BUDGET OUTLAYS BY FUNCTION AND SUBFUNCTION: 1968-77 (in billions of dollars )-Continued

~




Function and subfunction

Income security:
General retirement and disability insurance.
Federal employee retirement and disability.
lTnemployment insurance ................
Public assistance and other income supplements ...............................
Deductions for offsetting receipts ..........
Total income security ..............
Veterans benefits and services:
Income security for veterans. . . . . . . . . . . . .
Veterans education, training, and rehabilitation ............................. .. .
Hospital and medical care for veterans ....
Veterans housing .......................
Other veterans benefits and services .......
Deductions for offsetting receipts ..........
Total veterans benefits and services ..

Actual

Estimate

1968

1969

1910

1971

1972

1973

1974

1975

1976

TQ

24.6
2. 7
2.4

28.3
L7
2. 6

31. 3
2. 7
3.4

37.5
3.2
6.2

42.0
3.8
7. 1

51. 7
4.5
5.4

58.6
5.6
6. 1

69.4
7.0
13. 5

77.2
8. 3
19.4

21. 1
2.3
4.0

87.4
10.0
16.9

4. I

4. 7

5. 7

-*

-*

8.6

-*

11. 1

-*

-*

11. 4

14. 1

18.8

23.6

5.4

22.9

-*

-*

33.7

37.3

43.1

55.4

63.9

73.0

84.4

108.6

128.5

32.7

137.1

4. 5

5.0

5. 5

6.0

6. 3

6. 5

6.8

7. 9

8.4

2. 1

8.3

.5
1.5
.2
.2

.7
1.6
. 1.
.2

1.0
1.8
.1
.3

-*

.4

.5

6.0
4. 1
-.1
.6

1. 1
1.0

-*

2.8
2. 7
-.4
.4

4.'6
3. 7

-*

2.0
2.4
-.3
.3

3.2
3.0

-*

1.7
2.0
-.2
.3

-*

-*

-*

4.2
4.5
-.4
.6

6.9

7.6

8.7

9.8

10.7

12.0

13.4

16.6

19.0

.5
·1

.6
·1

.7
·1

.8
.1

1.0
.2

1.2
.2

1.3
.2

1.6
.3

1.9
.3

.5
·1

1.9
.4

·1

·1

·1
·1

.1
.2

.1

.2
.6

.2
.8

.2
.9

.3
.9

·1
.3

.3
.8

-*

-*

-*

-*

-*

-*

*

-*

*

·1

-*
4.4

1977

-*

17.2

Law enforcement and justice:
Federal law enforcement and prosecution ..
Federal judicial acti vi ties. . . . . . . . . . . . . . . .
Federal correctional and rehabilitative activities .................... '..........
Law enforcement assistance ..............
Deductions for offsetting leceipts ..........

*

-*

*
-*

-*

-*

-*

.,?-*

-*

-*

-*

-*

-*

Total law enforcement and justice ...

·6

·8

1.0

1. 3

1.6

2. 1

2.5

2.9

3.4

.9

3.4

.2

.3

.3

.3

.5

.8

.1
1.2

.1
1.2

.1

.6
.1
1.8

.2

*

.4

.8

*

.4

General government:
Legislative functions ....................
Executive direction and management ......
Cen tral fiscal operations. . . . . . . . . . . . . ....

*

.8

*

.8

.9

1.0

.4

1.3

.1

1.9

*

.5

.1

1.9

.6

.6

.6

*
.2

*
.1

*
.2

-.2

-.2

1.7

sharing and general purpose fiscal
assistance:
General revenue sharing .................
Other general purpose fiscal assistance .....

-.1

.6
.1
.2
-.1

.7
.1
.2
-.1

1.6

1.9

2.2

2.5

. .... .
.3

· .....
.4

......
.5

· .....
.5

Total revenue sharing and general
purpose fiscal assistance ..........

.3

.4

.5

Interest:
Interest on the public debt ...............
Other interest ..........................

14. 6
-.8

16.6
-.8

Total interest ......................

13. 8

15.8

LO

.9
.1
.2
-.2

General property and records management.
Central personnel management ...........
Other general government ...............
Deductions for offsetting receipts ..........
Total general government ..........

.1
.4
-.2

.4
.1
.5
-.3

.3
.1
.6
-.2

.2

*
-*

.3
.1
.5
-.2

2.7

3.3

3.1

3.5

1.0

3.4

· .....
.5

6.6
.6

6. 1
.6

6. 1
.9

6. 3
.9

1.6
.4

6.6
.8

.5

.5

7.2

6.7

7.0

7.2

2.0

7.4

19.3
-1.0

21. 0
-1.4

21. 8
-1.3

24.2
-1.4

29.3
-1.2

32. 7
-1.7

37. 7
-2.9

10.4
-.6

45.0
-3.7

18.3

19.6

20.6

22.8

28.1

31.0

34.8

9.8

41.3

...

·. . .

......

. ...

.8

... .
. ... .

· .....
· .....

0

0

·.

.1

Reven~e

Allowances:
Civilian agency pay raises ...............
Con tingencies for:
Relatively uncontrollable programs .....
Other req uiremen ts ...................
Total allowances ...................
Undistributed offsetting receipts:
. Employer share, employee retirement. .....
Interest received by trust funds ...........
Rents and royalties on the Outer Continen tal Shelf. . . . . . . . . . . . . . . . . . . . . . . . . .

.

Total
undistributed
offsetting
receipts .........................
Total outlays ......................

0')
U:;;)




......

· ...

"

"

..

"

, " "

" " "

·. . .

.....
· . ...

· ....
· .....

. .

· .....

· ....

......

·" .
"

"

"

"

.. " " .
.. ..

·

" ,

"

."

"

"

"

..

" "

.

" " " " "

.

"

. . .
... " "

"

."

" "

.

· ... .

"

. ...

-1.8
-2.7

-2.0
-3.1

-2.4
-3.9

-2.6
-4.8

-2.8
-5.1

-2.9
-5.4

-1.0

-.4

-.2

-1. 1

-.3

-5.5

-5.5

-6.6

-8.4

-8.1

" "

.".

"

,

"

.

"

178.8

"

"

"

"

184.5

"

"

"

196.6

,

"

"

"

"

"

"

"

"

"

"

"

.2

.2

0
1.5

..

.2

.2

2.3

-3.3
-6.6

-4.0
-7.7

-4.2
-8.0

-1.0
-2.1

-4.5
-8.4

-4.0

-6.7

-2.4

-3.0

-.5

-6.0

-12.3

-16.7

-14.1

-15.2

-3.6

-18.8

246.5

268.4

324.6

373.5

98.0

394.2

"

"

"

"

"

"

"

,

211.4

231.9

*Less than $50 million.
1 Includes allowances for civilian and military pay raises for Department of Defense.
2 The Export-Import Bank, included in this subfunction, was excluded from the budget by law as of August 17, 1971, but is included in the budget as of October 1, 1976.

Table 5. BUDGET AUTHORITY AND OUTLAYS BY AGENCY, 1975-77 (in millions of dollars)

1975
actual

Legislative branch . . . ..... .. ... .... .. . ........ ....
The Judiciary . . ...... .. . . .......... ..... ... ..... ....
Execu tive Office of the President. . . . . . . . . . . . . . . . . . . .
Funds appropriated to the President ..... . ........ .. .
Agricul tl)re. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commerce .......................................
Defense-Mili tary 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Defense-Civil ................................. . .
Health, Education, and Welfare ............... ... ..
Housing and Urban Development .... . .. . ..........
Interior .........................................
Justice ...................................... . ...
Labor ...................... . ....................
State ...........................................
Transportation ...................................
Treasury. . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
Energy Research and Development Administration ....
Environmental Protection Agency ..... ', .............




Outlays

Budget authority

D epartment or oth r u nit

767
313
76
8, 726
15, 210
1,793
85,812
1,798
116, 729
53,934
3,818
2, 118
19, 785
1, 186
19, 119
41,365
3, 512
8,516

1976
estimate

887
347
70
9,055
14,680
'. 2; 282
96,202
2, 141
125,297
27,675
2,520
2, 161
20,586
951
8,314
47,588
5,021
771

TQ

estimate

218
87
18
214
2,388
480
22,980
658
34,495
431
833
561
3, 199
395
1, 015
12, 175
1,302
189

1977
estimate

936
394
73
6,447
11, 822
1, 659
111,250
2, 191
145,029
21, 714
2,566
2, 143
20,717
1, 137
11,734
51,394
6,047
718

1975
actual

726
284
93
3,988
9, 722
1,583
85,020
2,051
112,411
7,488
2, 139
2,067
17,649
829
9,247
41, 177
3, 165
2, 530

1976
estimate

902
342
89
5,142
14, 213
1,989
89, 763
2, 151
127, 709
7,204
2,582
2,281
26,350
1,247
12,253
45,308
4,078
3, 193

TQ

estimate

223
94
19
825
3, 261
553
24,471
710
33,678
1, 927
847
618
5, 796
382
3,363
12,207
1, 192
838

1977
estimate

959
391
73
3,958
10, 753
2, 162
99,561
2, 175
140,066
7,1742,594
2,250
22,080
1,034
12,867
51,369
5, 311
4,500




General Services Administration ................... .
National Aeronautics and Space Administration ..... .
Veterans Administration ....................... . .. .
Other independent agencies ..................... '.. .
Allowances 2 • . • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Undistributed offsetting receipts:
Employer share, employee retirement ............. .
Interest received by trust funds .................. .
Rents and royalties on the Outer Continental Shelf.

-747
3,229
16, 725
22,390

207
3,553
19,872
33, 168
225

47
932
4,514
4,374
150

-575
3,695
17,654
30,915
2,590

-624
3,267
16,575
17, 291

186
3,517
19, 016
19, 027
200

45
909
4, 358
5,072
175

-605
3,676
17, 179
21,290
2,260

-3,980
-7,667
-2,428

-4, 193
-8,015
-3,000

-979
-2, 110
-500

-4,468
-8,373
-6,000

-3,980
-7,667
-2,428

-4, 193
-8,015
-3,000

-979
-2,110
-500

-4,468
-7,667
-6,000

Total budget authority and outlays ......... .

412,099

408,365

88,065

433,409

324,601

373,535

97,971

394,237

Memorandum:
Portion available through current action by Congress 3 • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
Portion available without current action by Congress.
Outlays from obligated balances..... .. ...-._._._...." _._._ .. .... .
•.
Outlays from unobligated balances ............... .
Deductions for offsetting receipts:
Intragovernmental transactions ............. ... .
Proprietary receipts from the public ............. .

271,123
181, 134

258,341
204,290

52,226
46,570

268,350
227,427

145,674
92,908
56,580
65,598

163,016
119, 617
63,982
81, 186

29,208
20,226
29,627
29,640

173,550
144,939
79,467
58,649

-28,869
-11, 289

-40,562
-13, 704

-7,433
-3,298

-43,299
-19,070

-28,869
-11,289

-40,562
-13, 704

-7,433
-3,298

-48,299
-19,070

Total budget authority and outlays ......... .

412,099

408,365

88,066

433,409

324,601

373,535

97,971

394,237

1
2
3

Includes allowances for civilian and military pay raises for the Department of Defense.
Includes allowances for civilian agency pay raises and contingenci~s for relatively uncontrollable programs and other requirements.
Budget authority excludes appropriations to liquidate contract authorizations. Outlays from such appropriations are included as outlays from balances below.

Table 6. OUTLAYS AND RECEIPTS OF TRUST FUNDS, 1975-77 (in millions of dollars)
Outlays
Descri ption

1976
estimate

Federal old-age and survivors and disability insurance trust funds.
Health insurance trust funds ...............................
State and local government fiscal assistance trust fund .........
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 trust funds ..........................
Other trust funds (nonrevolving) ...........................
Trust revolving funds ....... . ...................... . ......

64,658
14, 781
6, 138
13, 211
3,077
7, 128
579
4,843
3,537
816
444
-801

73, 767
17, 433
6,272
18, 500
3,474
8, 506
820
6,625
5,900
728
658
-1, 054

Subtotal ............................. . .......... . .
Intrafund transactions .....................................
Proprietary receipts from the public .........................
Receipts from off-budget Federal agencies ....................

118, 412
-1,035
-5,240
-967

Total . .... . ................. ......................




1975
actual

111,171

Receipts

TQ

TQ

1977
estimate

1975
actual

1976
estimate

estimate

922
562
627
700
902
2, 331
278
1,924
1,564
129
165
-207

84,022
19,646
6,549
16, 500
3,678
10, 105
1, 131
6,915
7,000
750
612
-1,273

66,676
16, 904
6,205
8, 195
2,772
11, 468
1,058
6, 774
4,415
873
491
. . .. . . .

70, 782
18,559
6, 355
16, 700
3,255
13,032
1, 117
6, 328
6, 500
904
649
. ......

18, 864
5,059
1,626
3,400
494
2, 124
283
1,902
1,664
241
168
.. .....

84, 819
23,028
6, 542
16, 900
3, 771
15, 935
1,240
7, 115
7, 200
970
628
. ......

141,631
-1,092
-7,347
-988

36,897
-3
-1,886
-153

155,634
-1,295
-8,096
-1, 072

125,831
-1,035
-5,240
-967

144, 180
-1,092
-7, 347
-988

35,826
-3
-1, 886
-153

168, 147
-1,295
-8,096
-1, 072

132,205

34,855

145,171

118,590

134,754

33,783

157,684

estimate

19,
4,
1,
3,

----

1977
estimate

Table 7. COMPOSITION OF BUDGET OUTLAYS IN CURRENT AND CONSTANT (FISCAL YEAR 1969) PRICES: 1955-77
(In billions of dollars)
Current prices
Fiscal year

1955 ..............
1956 ...............
1957 ...............
1958 ...............
1959 ...............
1960 ...............
1961 ...............
1962 ...............
1963 ...............
1964 ...............
1965 ...............
1966 ...............
1967 ...............
1968 ...............
1969 ...............
1970 ...............
1971 ...............
1972 ...............
1973 ...............
1974 ...............
1975 ...............
1976 estimate .......
TQ estimate .......
1977 estimate .......
(j')

-......y




Total
outlays

68.5
70.5
76. 7
82.6
92. 1
92.2
97.8
106.8
Ill. 3
118.6
118.4
134. 7
158. 3
178.8
184.5
196.6
211. 4
231. 9
246.5
268.4
324.6
373.5
98.0
394.2

National
defense

39.9
39.8
42. 3
43.8
45.9
45.2
46.6
50.4
51. 5
52. 7
48.6
55.9
69. 1
79.4
80.2
79. 3
76.8
77.4
75. 1
78.6
86.6
92.8
25.0
101. 1

Constant (1969) prices

Nondefense
Total
nondefense

Payments
for
individuals

28.6
30. 7
34.5
38.8
46.2
47.0
51. 2
56.4
59.8
65.8
69.8
78.8
89.2
99.4
104. 3
117.3
134.6
154.5
171. 5
189.8
238.0
280.8
72.9
293. 1

13.0
13.8
15.6
19.4
21. 2
22.9
25.9
27. 1
28. 7
29. 7
30.4
34. 3
40. 1
45.9
52.8
59.8
74.5
85. 3
95.9
Ill. 1
142.5
168.2
42. 7
178.5

Net
interest

4.8
5. 1
5.4
5.6
5.8
6.9
6. 7
6.9
7. 7
8.2
8.6
9.4
10. 3
11. 1
12. 7
14.4
14.8
15.5
17.4
21. 5
23.3
26.8
7. 7
32.9

All

other

10.8
11. 8
13.5
13. 7
19.2
17.2
18.6
22.4
23.4
27.9
30.8
35. 1
38 . 8
42.4
38.9
43. 1
45.2
53. 8
58.2
57.2
72. 2
85. 7
22.6
81. 7

Total
outlays

109.8
109.0
112.4
116. 3
126.2
124.2
129.5
139.0
140.6
146.4
142.9
155.0
174.8
189.4
184.5
182.9 '
185.4
192.9
193. 7
192. 3
211. 5
225.8
56. 7
219.8

National
defense

61. 5
59.2
60.0
60. 1
61. 0
59.9
60.6
64. 3
64.0
64. 1
57.6
63. 1
75.6
82.9
80.2
74.0
66.8
62.8
57.2
55.5
55.3
53. 7
14.0
54.2

Nondefense
Total
Payments
nondefense
for
individuals

48. 3
49. 7
52.4
56.2
65.2
64. 3
68.9
74. 7
76.6
82. 3
85. 3
92.0
99.2
106.5
104. 3
108.9
118.6
130. 1
136.6
136.8
156.2
172.0
42. 7
165.5

17. 3
18. 3
20. 1
24.3
26. 1
27.8
31. 0
32.2
33.6
34.4
34. 7
38.3
43.4
48.2
52.8
56.4
66.9
73. 9
79.9
84.9
98. 1
107.9
26.4
106.5

Net
interest

14.2
13.6
12.9
12.9
13. 1
13.4
13. 3
13.6
13. 7
13. 7
13. 7
13.5
13.0
13.8
12. 7
12. 3
12.5
12. 5
12.4
11. 6
11. 8
13.6
3.4
14.5

All

otner

16. 9
17.8
19.4
19. 1
26.0
23. 2
24. 6
28. 9
29. 3
34. 3
36. 9
40. 2
42.8
44. 5
38. 9
40. 3
39. 2
43. 7
44. 3
40. 3
46. 3
50. 5
12.8
44.5

0')

Table 7. COMPOSITION OF BUDGET OUTLAYS IN CURRENT AND CONSTANT (FISCAL YEAR 1969) PRICES: 1955-77-Continued

CO

(In billions of dollars)
Constant (1969) prices

Current prices

Addendum: Payments for individuals and grants-in-aid 1

Addendum: Payments for individuals and grants-in-aid 1
Payments for individuals

Total
National
defense

1955 ...............
1956 ...............
1957 ...............
1958 ...............
1959 ....... ... .....
1960 ............ .. .
1961 .............. .
1962 ............ . ..
1963 ...............
1964 .......... ... ..
1965 ...............
1966 ...............
1967 ...............
1968 ...............
1969 ...............
1970 ...............
1971 ...............
1972 ...............
1973 ...............
1974 ...............
1975 ...............
1976 estimate .......
TQ estimate .......
1977 estimate .......
1
2
3




.4
.5
.5
.6
.7
.7
.8
.9
1. 1
1.2
1.4
1.6
1.9
2. 1
2.5
2.9
3.4
3.9
4.4
5.2
6.3
7.4
2.0
8.5

Nondefense

14.4
15. 7
17.7
22.0
25.0
27.2
30. 1
31. 7
33. 7
36.0
37.4
42.6
50.2
58.2
65.6
74.9
91. 8
106.2
124.6
140. 3
176.0
208.4
53.2
218. 1

Direct
National
defense

.4
.5
.5
.6
.6
.7
.8
.9
1.0
1.2
1.4
1.6
1.8
2. 1
2.4
2.8
3.4
3.9
4.4
5. 1
6.2
7.3
2.0
8.4

Indirect
(grants
Nondefense in-aid) 2

11. 2
12.0
13.6
17. 1
18.6
20.2
23.0
23.8
25. 1
25.9
26.5
29. 7
35.0
39.6
45.4
50.9
63. 7
71. 9
82.8
97: 1
126.4
148. 7
37. 7
157.6

. Total

I

1.8
1.8
2.0
2. 3
2.6
2. 7
2.9
3. 3
3. 5
3.8
4.0
4.6
5. 1
6. 3
7.4
8.9
10.8
13.4
13. 1
14.0
16. 1
19.5
5. 1
20.9

All other
grants 3

1.4
1.9
2. 1
2.6
3.9
4.3
4.2
4.6
5. 1
6. 3
7.0
8.4
10.2
12.3
12.9
15.2
17.3
21. 0
28. 7
29.3
33.6
40.3
10.5
39.6

National
defense

.6
.6
.7
.7
.8
.8
1.0
1. 1
1.2
1.4
1.6
1.8
2.0
2.2
2. 5
2. 7
3. 1
3.4
3. 7
4.0
4.3 '
4. 7
1.2
5.0

Payments for individuals

Nondefense

19.7
21. 4
23. 3
28. 1
31. 7
33.8
36.8
38.3
40. 1
42. 3
43.3
48.2
54.8
61. 2
65.6
70.5
81. 9
91. 0
101. 8
105.5
119.9
132.3
32.5
128. 7

Direct
National
defense

.6
.6
.7
.7
.8
.8
.9

1. 1
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2. 7
3.0
3.4
3. 7
3.9
4.3
4. 7
1.2
5.0

Nondefense

14.9
15..9
17.6
21. 3
22.9
24.5
27.5
28.2
29.5
29.9
30.2
33.2
37.9
41. 5
45.4
1'8. 1
57.2
62.3
69.0
74.2
87.0
95.4
23.3
94. 1

The nondefense payments for individuals and grants are referred to as "domestic assistance" in various places in the Budget and in the Budget in Brief.
All nondefense.
Includes a small proportion of grants in the national defense function, never totaling $100 million in any year.

Indirect
(grants 2
in-aid)

2.4
2.5
2.6
2.9
3.2
3.3
3. 5
3.9
4. 1
4.4
4.5
5. 1
5.5
6.6
7.4
8.4
9. 7
11. 6
10.9
10. 7
11. 1
12.5
3. 1
12.5

All other
grants 3

2.4
3.0
3.2
3.9
5.6
6. 1
5.8
6.6
6.6
8.0
8.6
10.0
11. 4
13.0
12.9
14. 1
15.0
17. 1
22.0
20. 7
21. 8
24.4
6. 1
22. 1

,--~--

-

Table 8. FEDERAL FINANCES AND THE GROSS NATIONAL PRODUCT, 1954-77 (dollar amounts in billions)

Fiscal year

1954 ..................... . ...........
1955 .................................
1956 .................................
1957 ......... . .......................
1958 .................................
1959 .................................
1960 .................................
1961 .................................
1962 .................................
1963 ........................ . ........
1964 ........................... . .....
1965 ............. . ......... . .........
1966 .................................
1967 ............ . . '...................
1968 .................................
1969 .................................
1970 .................................
1971 .................................
1972 .................................
1973 .................................
1974 .................................
1975 .................................

1976 estimate .........................
1977 estimate ....................... . .




Gross
national
product

363. 5
381.0
410. 9
433. 3
441.7
471. 3
498.3
509.0
545.8
577. 1
616.4
658.0
722.4
773. 5
830.3
904. 2
960. 2
1,019.8
1, Ill. 8
1, 238.4
1, 358.6
1, 440.0
1, 593. 0
1, 837. 0

Budget receipts
Amount

69. 7
65.5
74.5
80.0
79.6
79. 2
92. 5
94.4
99. 7
106.6
112. 7
116.8
130. 9
149.6
153. 7
187.8
193. 7
188. 4
208.6
232. 2
264.9
281. 0
297.5
351. 3

Percent of
GNP

19.2
17.2
18. 1
18.5
18.0
16.8
18.6
18.5
18. 3
18.5
18. 3
17.8
18. 1
19.3
18.5
20.8
20.2
18. 5
18.8
18.8
19.5
19.5
18. 7
19. 1

Federal debt, end of year

Budget outlays
Amount

70. 9
68. 5
70. 5
76. 7
82.6
92. 1
92. 2
97. 8
106.8
Ill. 3
118.6
118.4
134. 7
158. 3
178. 8
184. 5
196.6
211. 4
231. 9
246. 5
268.4
324.6
373.5
394.2

Percent of
GNP

19.5
18.0
17. 1
17. 7
18. 7
19.5
18.5
19.2
19.6
19.3
19.2
18.0
18.6
20.5
21. 5
20.4
20. 5
20. 7
20.9
19.9
19.8
22. 5
23.4
21. 5

Total
Amount

270.8
274.4
272.8
272.4
279. 7
287.8
290.9
292.9
303.3
310.8
316.8
323. 2
329. 5
341.3
369.8
367. 1
382.6
409.5
437. 3
468.4
486.2
544. 1
633. 9
719.5

Held by the public

Percent of
GNP

,

74.5
72.0
66.4
62.9
63.3
61. 1
58.4
57.5
55.6
53.9
51. 4
49. 1
45.6
44. 1
44.5
40.6
39.8
40. 2
39. 3
37.8
35.8
37.8
39.8
39.2

Amount

224.5
226.6
222.2
219.4
226.4
235.0
237.2
238.6
248.4
254.5
257.6
261.6
264. 7
267.5
290.6
279. 5
284.9
304. 3
323. 8
343.0
346. 1
396.9
484.4
558.2

Percent of
GNP

61. 8
59. 5
54. 1
50. 6
51. 2
49. 9
47. 6
46. 9
45. 5
44. 1
41. 8
39. 8
36. 6
34. 6
35.0
30. 9
29. 7
29. 8
29. 1
27. 7
25. 5
27.6
30.4
30.4

Table 9. SUMMARY OF FULL-TIME PERMANENT CIVILIAN EMPLOYMENT
IN THE EXECUTIVE BRANCH 1
Agency

As of June 30
- - - - - As of Sept. 30,
1975
1976
1977, estimate
estimate
actual

Change
1976-77

Agriculture .................... .
Commerce ..................... .
Defense-military functions ....... .
Defense-civil functions .......... .
Health, Education, and Welfare ... .
Housing and Urban Development ..
Interior ........................ .
Justice ........................ .
Labor ......................... .
State .......................... .
Transportation ................. .
Treasury ....................... .
Energy Research and Development
Administration ............... .
Environmen tal Protection Agency ..
General Services Administration ...
National Aeronautics and Space
Administration ............... .
Veterans Administration ......... .
Other:
Agency for International Development ...... " ............ .
Civil Service Commission ...... .
Federal Energy Administration ..
Nuclear Regulatory Commission.
Panama Canal ............... .
Selective Service System ....... .
Small Business Administration .. .
Tennessee Valley Authority .... .
United
States
Information
Agency .... " .............. .
Miscellaneous .................. .

79, 133
28, 711
954, 721
29,069
129, 285
15, 142
58,088
49,032
13,427
22, 324
70, 345
108, 138

80,400
28, 900
930, 700
29, 100
135,000
15, 000
59, 200
51,600
14,600
22, 900
72,400
113, 500

80,400
28, 700
924,000
29, 100
128,900
15, 700
59,300
51,700
14, 900
22,900
72, 600
110, 000

7,457
9, 160
36,400

8, 300
9,600
36, 800

8,400
9,600
36,000

-800

24, 333
184,502

24, 300
196,600

23,800
198, 100

-500
1,500

6, 185
6,670
2, 978
2,006
13, 768
2, 121
4, 127
14,084

6, 200
6,800
3,200
2, 300
13, 800
200
4, 300
15, 100

6,200
6, 900
2 1, 800
2,500
13,800
100
4,400
15, 500

8,662
37, 484

8, 800
40,200

8,800
40,200

Subtotal .............. '... .
·
.
C on tlngencles 3 ................. .

1,917,352

1, 929, 800
2,000

1,914,300
5,000

-15, 500
3,000

Subtotal ................. .
Postal Service .................. .

1,917,352
558, 311

1,931,800
542,600

1,919,300
543,600

-12, 500
1,000

Total. . . . . . . . . . . . . . . . . . . ..

2, 475, 663

2, 474, 400

2, 462, 900

-11,500

-200
-6,700
-6, 100
700
100
100
300
200
- 3,500
100

100
-1,400
200
-100
100
4-00

1 Excludes developmental positions under the worker-trainee opportunity program and certain disadvantaged youth programs.
2 Excludes the impact of the Energy Policy and Conservation Act of 1975. Allowance for any necessary
additional staff is included in contingencies.
3 Subject to later distribution.




70

Table 10. BUDGET RECEIPTS AND OUTLAYS, 1789-1977 (in millions of dollars)

Fiscal year

Receipts

Outlays

1789-1849. 1, 160
1850-1900. 14,462

1,090
15, 453

1901 ......
1902 ......
1903 ......
1904 ......
1905 ......

588
562
562
541
544

525
485
517
584
567

1906 ......
1907 ......
1908 ......
1909 ......
1910 ..... .

595
666
602
604
676

1911 ......
1912 ......
1913 ......
1914 ......
1915 ......

Surplus
or
deficit (-)

Fiscal year

Receipts

Outlays

Surplus
or
deficit (-)

+70 1939 ......
-991 1940 ......

4, 979
6,361

8,841
9,456

-3,862
-3,095

+63
+77
+45
-43
-23

1941 ......
1942 ... " .
1943 ......
1944 ......
1945 . . ....

8,621
14, 350
23,649
44,276
45,216

13, 634
35, 114
78, 533
91, 280
92,690

-5,013
-20,764
-54,884
-47,004
-47,474

570
579
659
694
694

+25
+87
-57
-89
-18

1946 ... " .
1947 ......
1948 ......
1949 ......
1950 ... " .

39,327
38, 394
41,774
39,437
39,485

55, 183
34,532
29, 773
38,834
42,597

-15,856
+3,862
+ 12,001
+603
- 3, 112

702
693
714
725
683

691
690
715
726
746

+ 11 1951 ......
+3 1952 ......
* 1953 ......
* 1954 ......
-63 1955 ......

51,646
66, 204
69,574
69, 719
65,469

45,546
67,721
76, 107
70,890
68,509

+6, 100
-1,517
-6,533
-1, 170
-3,041

1916 ......
1917 ......
1918 ......
1919 ......
1920 ......

761
1, 101
3,645
5, 130
6, 649

713
1,954
12, 677
18,493
6, 358

+48
-853
-9,032
-13,363
+291

1956 ......
1957 ......
1958 ......
1959 ... " .
1960 ......

74, 547
79, 990
79, 636
79,249
92,492

70,460
76, 741
82,575
92, 104
92,223

+4,087
+3,249
-2,939
-12,855
+269

1921 ......
1922 ......
1923 ......
1924 ......
1925 ......

5, 571
4,026
3,853
3, 871
3,641

5,062
3,289
3, 140
2,908
2, 924

+509
+736
+713
+963
+717

1961 ...... 94, 389
1962 ... " . 99,676
1963 ...... 106, 560
1964 ...... 112, 662
1965 ...... 116,833

97, 795
106, 813
111,311
118, 584
118,430

-3,406
-7, 137
-4,751
-5,922
-1, 596

1926 ......
1927 ......
1928 ......
1929 ......
1930 ......

3, 795
4,013
3, 900
3,862
4,058

2,930
2,857
2, 961
3, 127
3, 320

+865
+ 1, 155
+939
+734
+738

1966 ...... 130,856
1967 ...... 149,552
1968 ...... 153, 671
1969 ...... 187,784
1970 ...... 193, 743

134,652
158, 254
178,833
184,548
196, 588

-3,796
-8,702
-25,161
+3,236
-2,845

1931. .....
1932 ..... .
1933 ......
1934 ......
1935 ......

3, 116
1,924
1, 997
3,015
3, 706

3,577
4,659
4,598
6,645
6,497

-462
-2, 735
-2,602
-3,630
-2,791

1971. ..... 188,392
1972 ...... 208,649
1973 ...... 232,225
1974 . . .... 264,932
1975 ...... 280,997

211, 425
231,876
246,526
268, 392
324, 601

-23,033
-23,227
-14,301
-3,460
-43,604

1936 ......
1937 ......
1938 ......

3,997
4, 956
5,588

8,422
7,733
6,765

-4,425 1976 est ... 297, 534
-2,777 TQ est ... 81, 894
- 1, 177 1977 est ... 351,262

373,535
97, 971
394,237

-76, 001
-16, 077
-42,975

*Less than $500 thousand.
N otes.-Certain interfund transactions are excluded from receipts and outlays starting in 1932. For years
prior to 1932 the amounts of such transactions are not significant.
Refunds of receipts are excluded from receipts-outlays starting in 1913; comparable data are not available for prior years.
Data for 1789-1939 are for the administrative budget; 1940-1977 are for the unified budget.
Starting in calendar year 1976 the Federal fiscal year will convert from a July I-June 30 basis to an Oct. 1Sept. 30 basis. The TQ refers to the transition quarter from July I-Sept. 30, 1976.




71 .

GLOSSARyl
-A UTHORIZA TION-Basic substantive legislation enacted by Congress
that sets up or continues the legal operation of a Federal program
or agency. Such legislation is normally a prerequisite f'Or subsequent
appropriations, but does not usually provide budget authority (see
below) .
BUDGET AMENDMENT-A proposal, submitted to the Congress by the
President after his formal budget transmittal, but prior to completion of
appropriation action by the Congress, that revises his previous budget
request.
_
BUDGET AUTHORITY (BA)-Authority provided by law to enter into
obligations that generally result in outlays. It may be classified by the
period of availability (l-year, multiple-year, no-year), by the timing
of congressional action (cur~ent or permanent), or by the manner of
determining the amount available (definite or indefinite). The basic
forms of budget authority are:
Appropriations-budget authority provided through the congressional appropriations process that permits Federal agencies to incur obligations
and make payments.
Borrowing authority-statutory authority, not necessarily provided
through the appropriations process, that permits Federal agencies to
incur obligations and make payments from borrowed moneys.
Contract authority-statutory authority, not necessarily provided through
the appropriations process, that permits Federal agencies to enter into
contracts or incur other obligations in advance of an appropriation.
BUD'G ET RECEIPTS-Money, net of refunds, collected from the public
by the Federal Government through the exercise of its governmental
or sovereign powers and as premiums from voluntary participants in
Federal social insurance programs closely associated with compulsory
programs. Excluded are amounts received from strictly business-type
transactions (such as sales, interest, or loans) and payments between
Government accounts. (See offsetting receipts.)
BUDG ET SURPLUS (+) OR DEFICIT (-) -The difference between
budget receipts and outlays.
CONClJRRENT RESOLUTION ON THE BUDGET-A resolution
passed by both Houses of Congress, but not requiring the signature of
the President, setting forth, reaffirming, or revising specified congressional budget totals for the Federal Government for a fiscal year.
These definitions are based on the booklet "Budgetary Definitions," published by '
the General Accounting Office in November 1975.
1




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CONTINUING ,R ESOLU'T ION-Legislation enacted by Congress to provide budget authority for specific ongoing activities when a regular
appropriation for such activities has not been enacted by the beginning of the fiscal year.
CONT'R OLLABILITY-The ability of 'C ongress or the President to control outlays during a fiscal year without changing existing law. The
concept "relatively uncontrollable" includes outlays for open-ended
programs and ·fixed costs, such as interest on the public debt, and
social security and veterans benefits, as well as outlays to liquidate prioryear obligations.
CURRENT SERVICES ESTIMATES-Projections of estimated budget
authority and outlays fDr the upcoming fiscal year at the same program
level as and without policy changes from the fiscal year in progress. To
the extent mandated by existing law, estimates take intO' account the
budget impact of anticipated changes in economic conditions (such as
unemployment or inflation), beneficiary levels, pay increases, and benefit changes. The Congressional Budget and Impoundment ,C ontrol Act
of 1974 requires that the President submit current services estimates to
the Congress by November 10 of each year.
DEFERRAL-Any action or inaction by an officer or employee of the
United States that temporarily withholds, delays, or effectively precludes the obligation or expenditure of budget authority. Deferrals may
not extend beyond the end of the fiscal year and may be overturned at
any time by either House of 'Congress .
. FEDERAL FUNDS-Funds collected and used by the Federal Government for the general purposes of the Government., There are four types
of Federal fund accounts: General funds, special funds, public enterprise (revolving) funds, and intragovernmental funds. The major Federal fund is the general fund, which is derived from general taxes and
borrowing. Federal funds also include certain earmarked receipts, such
as those generated by and used for the operations of Governmentowned enterprises.
FISCAL YEAR-Through fiscal year 1976, the yearly accounting period
for tIie Federal Government that begins on July 1 and ends on June 30.
Beginning with fiscal year 1977, fiscal years for the Federal Government will begin on October 1 and end on September 30. The fiscal
year is designated by the calendar year in which it ends, e.g., fiscal year
1977 is the fiscal year ending September 30, 1977.
IMPOUNDMENT-Any action or inaction by an officer or employee of the
Federal Government that precludes the obligation or expenditure of
budget authority provided by the Congress (see deferral and rescission) .
INTERFUND TRANSACTIONS-A subcategory of intragovernmental
transactions (see offsetting receipts) that includes all payments from
the Federal fund group to trust funds or vice versa. These are shown
as payments by <?ne fund group and receipts by the other and are included as receipts and outlays of the appropriate fund group. Such
transactions are deducted prior to striking a budget total to avoid double
counting.

74




OBLIGA TIONS-Amounts of orders placed, contracts awarded, services
rendered, or other commitments made by Federal agencies during a
given period that will require outlays during the same or a future
period.
OFF-BUD'G ET FEDERAL AGENCIES-Agencies, federally owned in
whole or in part, whose transactions have been excluded from the
budget totals under provisions of law, e.g., the Federal Financing Bank.
The fiscal activities of these agencies are not included in either budget
authority or outlay totals, but are presented in the Budget Appendix
as "Annexed Budgets".
OFFSETTING RECEIPTS~Collections or deposits to receipt accounts
that are offset against budget authority and outlays rather than being counted as budget receipts. They are composed of (1) proprietary
receipts from the public derived from Government activities of a business-type or market-oriented nature that are offset against related
budget authority and outlays; and (2) intragovernmental transactions.
Intragovernmental transactions are payments from governmental accounts to budgetary receipt accounts. Since these payments are from
the Government to itself, they are offset against outlays rather than
being counted as budget receipts.
OUTLAYS-Checks issued, interest accrued on the public debt, or other
payments made, net of refunds and reimbursements.
RESCISSION-Enacted legislation canceling budget authority previously
provided by the Congress. Rescissions proposed by the President must
be approved by the Congress within 45 days to become effective.
SUPPLEMENTAL APPROPRIATION-An appropriation enacted as an
addition to a regular annual appropriation act. Supplemental appropriations provide additional budget authority beyond original estimates
for programs or activities (including new programs authorized after
the date of the original appropriation act) for which the need for funds
is too urgent to be postponed until the next regular appropriation.
TAX EXPENDITURES-Losse~ of tax revenue attributable to provisions
of the Federal tax law that allow a special exclusion, exemption, or
deduction from gross income or provide a special credit, preferential
rate of tax, or a deferral of tax liability.
TRANSITION QUARTER-The 3-month period (July 1 to September 30,
1976) between fiscal year 1976 and fiscal year 1977 resulting from the
change from a .July 1 through June 30 fiscal year to an October 1
through September 30 fiscal year beginning with fiscal year 1977.
TRUST FUNDS-Funds collected and used by the Federal Government
for carrying out specific purposes and programs according to terms of
a trust agreement or statute, such as the social security and unemployment trust funds. Trust funds are not available for the general purposes of the Government. Trust fund receipts that are not anticipated
to be used in the immediate future are generally invested in interestbearing Government securities and earn interest for the trust fund.




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