Full text of Budget in Brief : Fiscal Year 1980

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THE
UNITED STATES
IN BRIEF

FISCAL YEAR

13,

......

Individual
Income Taxes

43,

Social
Insurance
Receipts

30,

. .

Direct
BeneAt
Payments
For Individuals

39;

National
DeFense

24;
Net Interest

·9 ;

12,

TABLE OF CONTENTS

Page

BUDGET MESSAGE OF THE PRESIDENT ........................
I. BUDGET RECEIPTS..................................................................
II. THE LONG-RANGE OUTLOOK AND CURRENT SERVICES ESTIMATES ..................................................................
III. MEETING NATIONAL NEEDS: THE FEDERAL PROGRAM BY FUNCTION ...........................................................
National defense...........................................................................
International affairs .... .... ....... ..... ............. ......... ...... ........ ..... .... ...
General science, space, and technology ...................................
~nergy ............................................................................................
Natural resources and environment ........................................
Agriculture....................................................................................
Commerce and housing credit ...................... ... ........ ....... ... ... .....
Transportation..............................................................................
Community and regional development ....................................
~ducation.......................................................................................

Training, employment, and social services .............................
~ealth ............................................................................................
Income security ............................................................................
Veterans benefits and services....... ... ..... ............... ....................
Administration of justice............................................................
General government....................................................................
General purpose fiscal assistance .............................................
Interest...........................................................................................
Other ..............................................................................................
IV. THE BUDGET PROCESS .......................................... ...............
V. BUDGET TABLES ......................................................................
GLOSSARY OF BUDGET TERMS .........................................
GENERAL NOTES
1. All years referred to are fiscal years, unless otherwise noted.
2. Detail in the tables, text, and charts of this volume may not add to the
totals because of rounding.

3
9
15
25
27
29
31
33
36
38
40
42
44
46
48
51
54
57
59
60
61
63
64
65
70
86

Budget Totals, 1978-1982
$ Billions

$ Billions

700~--------------------------------------~700

653

Receipts

600

Outlays

500

400

300

200

100

0 .......
Fiscal Years 1978
Actual

1979

1980

1981

1982

Estimate

Budget Outlays and Receipts as a Percent of GNP
Percent

Percent

25~----------------------------------~25

Outlays

~ReceiPts
15

1970 71 72 73 74 75 76
Fiscal Years

77 78

79 80 81 82
Estimate .

BUDGET MESSAGE OF THE PRESIDENT
"To the Congress of the United States:
This budget for fiscal year 1980 is lean and austere. It recommends a spending level well below that suggested by the recent
momentum of Federal spending. It will disappoint those who seek
expanded Federal efforts across the board. It meets my commitment to a deficit of $30 billion or less.
This policy of restraint is not a casual one. It is an imperative if
we are to overcome the threat of accelerating inflation.
If that threat is realized it would severely disrupt our economy and
the well-being of our society. Americans with low and fIXed incomes
would suffer the most. Restraint would eventually become an inescapable necessity. But the longer we wait, the more severe and costly
the inevitable restraint will be. By contrast, this budget supports a
balanced fiscal policy. It is sufficiently restrained to ease inflationary pressures, but it will permit continued economic growth.
The Federal Government cannot overcome inflation by itself.
Success will require cooperation from business, from labor, from
consumers, from State and local governments-in short, from
everyone. I have called for that cooperation as part of my antiinflation program. "
However, only through its leadership and its
example can the Federal Government secure this cooperation. This
budget provides that leadership. It restrains Government's demand
on the economy. At the same time, it makes the Federal dollar"
work harder and better.
The key to effective Federal leadership against inflation, unemployment, and poverty lies in more effective allocation and management of available resources. We must reduce the growth of total
Federal spending while protecting the security of our Nation and
the well-being of the American people.
This budget provides the necessary discipline over Federal spending by:
-eliminating programs that are unworkable;
-improving programs to make them more effective;
-focusing assistance on the disadvantaged and the poor; and
-reorganizing and consolidating Federal activities to improve
efficiency and avoid waste, abuse, or mismanagement.
I believe this discipline represents an opportunity to reassess and
build strong foundations for future Government activity, an opport
"unity to change Government for tl1ebetter. It is my firm intention
to continue these policies in future years, to reduce the size of the
deficit, and to achieve a balanced budget as soon as economic
conditions permit.

THE BUDGET TOTALS
[In billions of dollars]

1978

actual

1979

estimate

1980

estimate

1981

estimate

1982

estimate

402
451

456
493

503
532

577
578

653
615

Surplus or deficit (-) ....................................

-49

-37

-29

-1

Budget authority .................................

502

560

616

651

696

Budget receipts ................................................
Budget outlays .................................................
-

My budget provides for total outlays in 1980 of $532 billion, an
increase of $38 billion, or 7.7%, over 1979, and receipts of $503
billion. For 1981 and 1982, it provides for total outlays of $578
billion and $615 billion, respectively. Budget outlays will decrease
as a share of the Nation's gross national product from 22.1 % in
1978 to 21.2% in 1980 and 20.3% in 1982. This reduction in the
share of our national product spent by the Federal Government is
a fundamental goal of my policy, equally as important as reducing
the deficit.
The expenditures I recommend are specifically focused on overcoming our Nation's crucial problems. Through rigorous zero-base
analyses, priorities have been established to help us get 'the best
Government possible for the resources we can afford. Careful attention to efficiency and productivity will enable Federal managers to
achieve our most important priorities with less money and fewer
people.
The spending restraint in this budget means that in some areas

the Government will simply not be able to do as much as it has in
the past. Inevitably, real sacrifices must be made if we are to
overcome inflation. In formulating this budget, I have made every
effort to spread that burden fairly and objectively. Restraint has
not been applied arbitrar~ly.
However, there are areas where we cannot make major reductions. I have sought to reconcile the need for extraordinary restrictions on Government spending with the need to maintain a strong
defense; to implement a national energy policy; to assist people in
need; and to continue iIJ?portant public services and investments.
First, as President, it is my central responsibility to ensure that
our defense forces are strong enough to deter aggression. This
budget does that.
In May of 1977 I met with our NATO allies and urged that we
work together to strengthen our common defense. They are meeting the goal that we agreed upon. We must and will do our share.

In total, the 1980 defense budget provides for growth in outlays
in real terms of 3% above the current year's spending. Most of this
increase will be for strengthening our NATO forces and maintaining the strategic balance. The budget continues my policy of steady
modernization of our strategic forces, and improved combat readiness of our tactical forces. It also emphasizes research and development to meet future challenges to our security. At the same time,
however, it restrains defense costs by jntroducing important economies in purchasing, supply management, and personnel costs and
numbers.
Second, the 1980 budget recognizes the vital importance of
energy to the Nation. Because of our dependence on foreign oil, we
continue to be in danger of having supplies disrupted as they were
5 years ago. It is essential that we continue to move forward with
an effective national energy program that will decrease our
demand for foreign oil and protect against disruption of foreign oil
supplies.
The 1980 budget provides for the continued buildup of the strategic petroleum reserve. It continues to assist in the development of
technologies to tap our domestic energy resources more effectively.
I have given special emphasis to developing advanced solar power
technologies. The budget proposals give increased attention to more
efficient use of uranium, to nuclear proliferation and environmental problems, and to effective measures to deal with nuclear waste.
Third, even when budget restraint is essential, we will continue
as a compassionate society to meet our commitments to the disadvantaged. Therefore, I have ensured that my budget include adequate funds for programs that help those Americans most truly in
need. To make these funds as effective as possible, the budget
includes recommendations for adjustments in direct payment programs, better targeting of existing programs, and improved management so that funds are not wasted but go to the people for
whom they were intended.
My administration is developing a national health plan. Consistent with the development of that plan, the budget emphasizes
programs to address critical health needs. As early steps toward
this plan, my proposals extend health services to 2 million more
low-income children and pregnant women who cannot afford
health care that they need, and bring new health care resources to
people who live in medically-underserved areas. · The budget includes new and expanded programs to reduce activities that cause
ill health, such as drug and alcohol abuse, as well as to protect
individuals and communities from pollution and other toxic substances; increased funding for mental health research; and expanded health-related services such as nutrition programs for lowincome mothers and children.

I am again proposing legislation to contain the exorbitant nationwide rise in hospital costs. The 320% rise in these costs in the past
10 years has been a major inflationary force and an unacceptable
drain on family incomes. The Congress must act on this problem.
Curbs on hospital costs will benefit State and local budgets-and
those of private citizens-as well as the Federal budget. They will
strike directly at inflation in a sector where price increases have
been chronically high.
The budget recommends a number of changes in the social security system to streamline it and eliminate unnecessary benefit
payments. They will reduce the future costs of this largest of all
Federal programs-and, ultimately, hold down the taxes imposed
on workers and employers. I will consider future social security tax
reductions in conjunction with these savings.
In the past 2 years, total employment in the U.S. has increased by
7.4 million. This is an average rate of 4.1 % per year, one of the most
rapid expansions in our history. The proportion of our civilian
population employed is higher, at almost 60%, than it has ever been
before. But despite these gains, unemployment, particularly among
the disadvantaged and minorities, remains too high.
Continued high structural unemployment in an inflationary
economy requires a redirection of our efforts. Programs targeted to
employ the truly disadvantaged are continued at their current
high levels as established by this administration. More
general employment programs, not directed specifically to those
most in need, must be reduced to reflect improvements in the
economy and our need to establish priorities. Our youth employment and CETA programs reflect my continued strong commitment to fight unemployment of the needy. The employment tax
credit enacted last year is encouraging the private sector to provide
increased employment opportunities for the disadvantaged, primarily youth. This incentive will be reinforced by a private sector
employment initiative, for which I am requesting a $400 million
supplemental appropriation for 1979.
This budget also provides strong support for economic development programs, and again proposes a National Development Bank
to help fund these efforts. The budget provides for a 36% increase
in assistance to minority business enterprises.
Finally, I believe that the Federal Government must lead the
way in investing in the Nation's future. This budget, therefore, continues my policy of providing real growth in Federal support of
basic research. This support amounts to a relatively small part of
the total budget-$4.6 billion in 1980-but it is vital to the future
of our Nation. The knowledge created through basic research holds
the potential for breakthroughs to the solution of problems we face
or may face in such critical areas as agriculture, health, environment, energy, defense, and the overall productivity of our economy.
6

Higher productivity gains in the future, moreover, will make an
important contribution to reducing inflation.

*
*
*
*
*
Meeting the essential needs of the Nation, while restraining
growth in overall spending, · makes efficient management not just
desirable, but essential.
In 1977 I proposed-and the Congress approved-a Cabinet-level
Department of Energy, a streamlined Executive Office of the President, and a consolidation of our international information
activities.
In 1978 I proposed-and the Congress approved-reorganizations
of the Federal civil service system, emergency preparedness and
disaster relief programs, civil rights enforcement, and the pension
plan insurance system in order to make them more responsive and
effective.
In 1979 I will resubmit my proposal to establish a Department of
Education and propose further reorganization and consolidation in
economic development assistance, natural resources management,
and surface transportation.
For the second year, my budget reflects detailed, Governmentwide, zero-base budgeting. Agency programs were explicitly ranked
by priority, and programs were ranked across agencies, in a new
interagency, zero-base budgeting process.
For the first time, the budget reflects the 3-year budget planning
system I have instituted to gain better control of the longer-range
effects and direction of Government policies.
In this budget I am proposing a new system to control the
growth of Federal credit activities, particularly federally-guaranteed credit.
Other important steps will be taken to improve the way the
Government operates and the way it affects the private sector. To
increase the efficiency of the private sector, the administration will
eliminate unnecessary regulation where possible, and will minimize the redtape involved in necessary environmental and safety
regulation. Further efforts will be made to reduce excessive paper
work. State and local governments, private institutions, and citizens will benefit from simplified conditions for receiving Federal
assistance. In particular, a number of programs have been consolidated to simplify the grant system, and more will be proposed in
the future. The Government's own management will be improved
through more effective cash management, application of the Civil
Service Reform Act, and use of new offices of Inspectors General to
identify waste and search out fraud and corruption.

Preparing this budget reminds me o~ce more of the overwhelming demands upon the Federal budget and of the limits on our
resources.
I believe that we must firmly limit what the Government taxes
and spends. We must balance public and private needs. We must
set priorities more carefully. We must change some old priorities
and establish new ones. We must defer some of our demands if we
are to meet adequately today's most critical needs.
These principles have guided my actions in shaping this budget
and they will continue to do so in the future:
-the budget must be kept within the bounds of what is appropriate in today's economic circumstances;
-the Government has no resources of its own, its only resources
are those it collects from the taxpayer;
-Government action must be limited to those areas where its
intervention is more likely to solve problems than to compound
them; and,
-we have an obligation to manage with excellence and to maintain proper priorities within the $532 billion proposed in this
budget.
I know that the Congress shares these beliefs. You, as well as the
exec tive branch, are sensitive to the American people's concerns
about the scope of Government, the burdens of taxes, the needs of
nll'r p;t_;~t:)nQ and the efficiency of public management. Indeed, the
~he last few years has taken important steps-in parugh the establishment of the congressional budget
nprove its own means of establishing priorities. I have
~~ .., ....____ _.. .., . . __ ly with the Congress, and will continue in this spirit of
cooperation.
I look forward to working with the Congress and its leadership
on this budget.
The decisions I have made are difficult ones. They involve, not
figures on a balance sheet, but the lives and future of the American people. I have chosen restraint in Government spending because inflation must be controlled. I have tried to be equitable in
ordering priorities. Yet I have continued to support those programs
that represent our most pressing needs. To do so I have terminated,
reduced, or deferred other programs.
It is difficult to maintain a sense of strong national purpose
when we do not face a clear and immediate crisis. But it is equally
important. These are times when responsible leadership means
anticipating those day-to-day actions that enable us to avoid crises
and to build toward the future. This has been the fundamental
purpose behind the decisions considered here, and that is the
intent of this budget.
JIMMY CARTER.
JANUARY

22, 1979.

Part I

BUDGET RECEIPTS
This section describes the major sources of budget receipts and
the legislative proposals and administrative actions affecting them.
The economic assumptions underlying the estimates are presented
in Part 2, together with projections of receipts through 1984.

Summary
Total budget receipts in 1980 are estimated to be $502.6 billion,
an increase of $46.6 billion from the $456.0 billion for 1979. Receipts in 1981 and 1982 are estimated to be $576.8 billion and
$652.6 billion, respectively. These estimates reflect the effects of:
-the real wage insurance proposed by the President as part of
the anti-inflation program;
-administrative actions and proposed legislative changes to collect taxes closer to the time the liabilities occur;
-other receipts proposals currently being made; and
-increases in social security taxes scheduled under current law.
The estimates of receipts for 1981 and 1982 do not include provision for possible tax reductions. The desirability of income tax
reductions in these years will depend on the future state of the
economy, especially progress in reducing inflation, and on the need
to reduce tax burdens. The administration will consider future tax
changes, including social security tax reductions in conjunction
with the savings resulting from benefit reforms and other cost
saving proposals.

Composition of budget receipts.-The Federal tax system relies
predominantly on income and payroll taxes. In 1980:
• Income taxes paid by individuals and corporations are estimated at $227.3 billion and $71.0 billion, respectively. Combined, these sources account for 59% of the estimated total.
• Social insurance taxes and contributions-composed largely of
payroll taxes levied on wages and salaries, most of which are
9

paid equally by employers and employees-will yield an estimated $161.5 billion, 32% of the total.
• Excise taxes are expected to provide $18.5 billion, 4% of the
total; and other receipts are estimated at $24.3 billion, the
remaining 5% of the total.

Budget Receipts, 1970-1982
$ Billions

$ Billions

800

700

600

500

500
Excise and Other

400
300

400

Social Insurance Taxes
and Contributions

300

200 - r -_____

100

200·

Corporation Income
Taxes

Individual Income Taxes

100

o
1970 71

0
72

Fiscal Years

Estimate

Enacted Legislation
Three major acts were passed in 1978 that have significant effects on future receipts: the Revenue Act of 1978, the Energy Tax
Act f 1978, and the Foreign Earned Income Act of 1978.
THE REVENUE ACT OF 1978 (Public Law 95-600)
The Revenue Act of 1978 reduced taxes for individuals and corporations, generally effective January 1, 1979, and included several of
the administration's tax reform proposals. In its absence, receipts
would have been increased substantially in 1979, because several
tem orary provisions of the Tax Reduction and Simplification Act
of 1977 were scheduled to expire at the end of calendar year 1978.
The effects of the Revenue Act on calendar year tax liabilities and
fiscal year receipts are presented in a comparison to those that
would have resulted under extension of most temporary provisions.
10

SUMMARY TABLE-EFFECT OF MAJOR TAX LEGISLATION ENACTED IN 1978 1
(In billions of dollars)
1979

1980

1981

1982

Revenue Act of 1978 23 •••.••••••••••••••••••••••••••••••••.•••.•.•••.•••••
Energy Tax Act ..................................................................
Foreign Earned Income Act ................................................

-20.6
-.8
-.2

-24.3
-.9
-.3

-28.7
-1.1
-.3

-32.0
-1.2
-.3

Total ........................................................................
Fiscal Year Receipts:

-21.6

-25.4

-30.1

-33.5

Revenue Act of 1978 23 ••••••••••••••••••••••••••••••••••••••••••••••••••••
Energy Tax Act ..................................................................
Foreign Earned Income Act ................................................

-11.5
-1.0
-.6

-22.8
-.8
-.3

-26.7
-1.0
-.3

-30.6
-1.1
-.3

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

-13.2

-23.9

-27.9

-32.0

-12.7
-7.5

-13.4
-13.1

-18.8
-15.9

-20.9
-19.8

Calendar Year Liabilities:

ADDENDUM

Effect of extending temporary provisions of the Tax Reduction and Simplification Act of 1977 (other than the
jobs credit): 3
Calendar year liabilities ......................................................
Fiscal year receipts ............................................................

1 These estimates are based on the direct effect only of legislative changes at a given level of income. They therefore exclude indirect effects caused
by changes in individual and corporation incomes. However, these indirect effects are taken into account when estimating the incomes upon which the
receipts estimates and the estimates of the effects of legislation are based. In this way, the indirect effects are included in the receipts estimates by
major source and in total.
2 The effect of this act on calendar year tax liabilities and fiscal year receipts is calculated in comparison to the liabilities and receipts that would
have resulted if all the temporary provisions of the Tax Reduction and Simplification Act of 1977 had been extended except the jobs credit, which was
enacted as a two-year economic stimulus measure.
3 Excludes earned income credit payments in excess of individuals' tax liabilities, which are recorded in the budget as outlays.

Individual income taxes.-The Revenue Act reduces tax liabilities
for individuals by $14.5 billion in calendar year 1979. The major
reductions were:
-a widening of tax brackets and a reduction in the tax rates
applicable to several of these brackets;
-an increase in the personal exemption from $750 to $1,000 and
expiration of the general tax credit;
-an increase in zero bracket amount (standard deduction) from
$3,200 to $3,400 for taxpayers filing a joint return and from
$2,200 to $2,300 for single taxpayers;
-an increase in and permanent extension of the earned income
tax credit; and
-reductions in taxes on capital gains.
The effect on receipts from these and other smaller tax reductions was partially offset by reform measures, mainly: repeal of the
non-business deduction for State and local gasoline taxes; and inclusion of unemployment compensation benefits in the adjusted
gross income of taxpayers above certain income levels.

Corporation income taxes.-The Revenue Act of 1978 made several significant changes to corporation income taxes, the largest of
which was a reduction in tax rates. Rates were reduced much more
for small corporations than for large ones. The average tax rate on
the first $100,000 of income was reduced by nearly 8 percentage
points; for income above $100,000, the rate was reduced by 2 percentage points, from 48% to 46%. These reductions in tax rates
will reduce corporation income tax liabilities by $5.0 billion in
calendar year 1979.
The investment tax credit, which had been scheduled to decrease
from 10% to 7% on January 1, 1981, was made permanent at the
10% rate. In addition, the percentage of tax liability that can be
offset by the investment credit was increased.
A targeted jobs tax credit was enacted to replace the jobs credit
provisions that were in effect in calendar years 1977 and 1978.
Employers who hire individuals from certain target groups, primarily dIsadvantaged youth, are eligible for the credit.
THE ENERGY TAX ACT OF 1978 (Public Law 95-618)
This act is an important part of the energy program enacted in
1978, which will reduce this country's energy problems. The major
components of the 1978 energy tax legislation are:
-A tax on the sale of automobiles whose fuel use faIls to meet
certain standards. The tax will apply to 1980 and later models.
-Tax credits for purchases of insulation and other energy-conserving items for the principal residence of a taxpayer.
-An extra 10% investment credit, in addition to the regular
10% investment credit, for certain energy conservation or conversion investments, such as solar or wind energy investments.
THE FOREIGN EARNED INCOME ACT OF 1978 (Public Law 95615)

Prior to 1978, a U.S. citizen was generally able to exclude up to
$20,000 per year of foreign earnings if the taxpayer was a resident
of a foreign country. After 3 years of foreign residence a taxpayer
coul exclude up to $25,000 per tax year of foreign earnings. The
Fore ~ gn Earned Income Act of 1978 replaced the exclusion provisionwith one based on the excess cost of living abroad. Under this
new law, the taxpayer may claim a cost-of-living deduction reflecting the amount by which overseas living costs, other than housing
and education, exceed living costs in the most expensive metropolitan area in the continental United States (except Alaska) as determined by the IRS.

Receipts Proposals
Real wage insurance.- Part of the President's anti-inflation program is the real wage insurance proposal announced last October.
Real wage insurance will increase compliance with the wage standard in the President's anti-inflation program, thereby reducing
inflation. Under this proposal, groups of employees whose compensation increases fall within the anti-inflation guidelines will be
eligible for a tax credit if inflation exceeds 7%.
The rate of the credit will be equal to the difference between the
percentage increase in the consumer price index (CPI) over the
applicable period (from October/November 1978 to October/November 1979) and 7 percent, with a maximum credit of 3 percentage
points. The credit will apply to qualified wages up to a limit of
$20,000 from anyone employer and will be included in the taxable
income of the employee.
The cost of real wage insurance, which is based on a projected
increase in the CPI of 7.5% over the applicable period, is estimated
to be $2.5 billion in 1980. Of this amount, $2.3 billion appear as a
reduction in individual income tax receipts; the remaining $0.2
billion are payments over and above individuals' tax liabilities and
are recorded in the budget as outlays.
Cash management initiatives.-The receipts estimates reflect several administrative actions and legislative proposals to require
income tax payments closer to the time when tax liabilities occur
and to require deposits of withheld taxes on a more timely basis.
These initiatives, which are being phased in over a 3-year period
to minimize the burden on taxpayers, will increase receipts by $2.2
billion in 1980, $5.0 billion in 1981, and $5.3 billion in 1982.
The only cash management initiative affecting 1980 receipts is
the acceleration of State and local deposits of social security taxes.
The administration has already published regulations to accelerate
these deposits. The other cash management initiatives, to be
phased in during 1981 and 1982, are accelerations of: deposits of
withheld income and payroll taxes by large employers; individual
income taxes paid through estimated tax payments; corporation
income tax payments; customs duties; and tobacco excise taxes.
These proposals will improve equity by achieving greater uniformity
in the collection of taxes.

13
280-400 0 - 79 - 2

Other proposals.-To improve resource allocation and the overall
efficiency and equity of the tax structure, the administration proposes that:
-Railroad retirement taxes be increased to alleviate funding
problems for this trust fund;
-A rport and airway trust fund taxes be extended in modified
form beyond their current June 30, 1980 expiration date.
-A fee of up to 3 cents per barrel of oil be imposed to establish a
fund of up to $200 million to assure adequate and timely
cleanup of oilspills in the Nation's waterways.
-TIle tax treatment of accrued capital gains on property passing
from decedents to estates or heirs be changed.
-The tax base be broadened to include certain fringe benefits.
The table below shows the effect of these and other tax proposals
on estimated receipts for 1979-1982.
0

EFFECT OF ADMINISTRATIVE ACTIONS AND PROPOSED LEGISLATION 1
[In billions of dollars]
1980

1982

1981

Individual income taxes:

Real wage insurance 2 .......................................... .
Cash management initiatives.................................
Other ....,.................................................................

-2.3

Subtotal, individuals .....................................

1.5

1.3

-2.3

1.6

1.3

Cash management initiatives................................. ............................
Other .....................................................................
*

1.8
.2

3.2
.4

2.0

3.5

2.2

.2
.6
.3

Corporation income taxes:

Subtotal, corporations ..................................
Social insurance taxes and contributions:

Acceleration of State and local deposits of social
security taxes (announced Nov., 1978) ..........
Other cash management initiatives .......................
Railroa retirement tax increase ...........................
Other .....................................................................

.3
.9
.2

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

Subtotal, social insurance ............................

2.4

1.5

1.1

Cash management initiatives: excise and customs
Airport and airway trust fund taxes 3 ...................
Oil pollution liability and compensation .................

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

.4
.2
.1

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

5.8

6.2

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

Other:

* 50 million or less.
These estimates are based on the direct effect only of legislative changes at a given level of income. They therefore exclude indirect effects caused
by changes in individual and corporation incomes. However, these indirect effects are taken into account when estimating the incomes upon which the
receipts estim and the estimates of the effects of legislation are based. In this way, the indirect effects are included in the receipts estimates by
ates
major source and in total.
2 This proposal also increases estimated outlays by $0.2 billion in 1980.
3 These estimates are for increases in airport and airway tax receipts over and above those that would result from extending the current tax rates
beyond their expiration date. Extension would add $0.1 billion in 1980, $0.8 billion in 1981, and $0.9 billion in 1982.
1

PART II

THE LONG-RANGE OUTLOOK AND
CURRENT SERVICES ESTIMATES
This section discusses the long-range budget outlook and the
current services estimates, as well as the economic assumptions
upon which both are based.

Economic Assumptions
The economy and the budget are interrelated. Economic conditions -significantly affect the budget, and the budget, in turn, influences economic conditions. Both budget outlays and the tax structure have substantial effects on national output, employment, and
inflation. Other Government activities outside the budget totals,
such as loan guarantees and regulatory requirements, also affect
the economy.
.
.
At the same time, outlays for many Federal programs such as
unemployment, retirement and other insurance benefit payments
are directly linked to developments in the economy. Interest on the
debt is linked to market interest rates and the size of the budget
surplus or deficit, both of which are strongly influenced by economic conditions. In addition, budget receipts vary with individual and
corporate incomes, which, in turn, respond both to real economic
growth and to inflation.
Because of the complex interrelationships between the budget
and the economy, budget estimates depend significantly upon assumptions made about the economy. Therefore, the administration's economic assumptions are presented to assist in understanding the budget estimates and projections and the administration's
fiscal strategy.
The short-range economic assumptions for calendar years 1978,
1979 and 1980 are shown in the table below. They represent forecasts of probable economic conditions consistent with the administration's budget proposals. Growth of real gross national product

(GNP) is projected to average 2.2% during the four quarters of
calendar year 1979 and 3.2% during 1980. The relatively low real
growth in 1979 will probably result in a small rise in unemployment during 1979 to about 6.2% by year-end. During 1980, the rate
of unemployment is expected to remain at about the same level. As
a consequence· of the administration's restrained budget policy and
the overall anti-inflation program, inflation is projected to decelerate in 1979 and 1980. The rate of inflation (as measured by the CPI,
December over December) was over 9% during calendar year 1978.
The projected rates for calendar years 1979 and 1980 are 7.4% and
6.3%, respectively.
SHORT·RANGE ECONOMIC FORECAST
(Calendar years; dollar amounts in billions)
Forecast
Item

Gross national product:
Current dollars:
Amount .........................................................................
Percent change: Fourth quarter over fourth quarter .... .
Constant (1972) dollars:
Amount .........................................................................
Percent change: Fourth quarter over fourth quarter .... .
Incomes (current dollars):
Personal income ................................................................
Wages a d salaries ...........................................................
Corporate profits ................................................................
Price level (percent change):
GNP deflator: Fourth quarter over fourth quarter ............. .
Consumer Price Index: December over December 1 •••••••••••
Unemployment rates (percent):
Total: Fourth quarter .........................................................
Insured, annual average 2 ••••••••••••••••••••••.••••..•.•.•.••.•.••.••••••.
Federal pay raise (percent) 3 •••••••••••••••••••••••••••••••••••••••••••••••••
Interest rate, 91-day Treasury bills (percent) 4 ••••• • •••••••••••••••

Actual
1977

1978

1979

1980

1,887
11.9

2,106
12.7

2,343
9.8

2,565
9.8

1,333
5.5

1,384
4.0

1,430
2.2

1,466
3.2

1,529
984
174

1,707
1,101
202

1,894
1,217
227

2,078
1,335
237

6.1
6.8

8.4
9.2

7.4
7.4

6.4
6.3

6.6
3.9
7.0
5.3

5.8
3.3
5.5
7.2

6.2
3.1
5.5
8.8

6.2
3.2
5.25
7.6

CPI for urban wage earners and clerical workers. There are now two versions of the CPI published. The index used here is that currently used, as
required by law, in calculating automatic cost-of-living increases for indexed Federal programs.
2 This meas res unemployment under State regular unemployment insurance as a percentage of covered employment under that program. It does not
include recipients of extended benefits under that program.
3 Pay raises become effective in October of each year-the first month of the new fiscal year. Thus the October 1979_pay raise will set new pay
scales that will be in effect during fiscal year 1980.
t Average rate on new issues within period. In the past, interest rates for the forecast period have been assumed to remain at the levels prevailing at
the time the estimates were made. Because it would be unrealistic to assume continuation of the current unusually high rates, these estimates assume, by
convention, that interest rates decline with the rate of inflation.
1

In contrast to the short-range economic assumptions, the 1981 to
1984, longer-range assumptions shown in the table below, are not
forecasts of probable economic conditions. Instead, they are projections that assume progress in moving toward the targets of a more
fully employed economy and greater price level stability. These
targets-in particular, the goals of 4% unemployment and 3% inflation by the end of calendar year 1983-are consistent with the
goals established in the Full-Employment and Balanced Growth
16

Act of 1978 (also known as the Humphrey-Hawkins Act). These are
very ambitious goals and will require successful long-term policies
to reduce both unemployment and inflation. The feasibility of
achieving these targets and the types of policies that might be
required during the 1981-1984 period to achieve them are discussed
in this year's Economic Report of the President.
LONG-RANGE ECONOMIC ASSUMPTIONS
(Calendar years; dollar amounts in billions)
Assumptions
Item

Gross national product:
Current dollars:
Amount .........................................................................
Percent change: Fourth quarter over fourth quarter .... .
Constant (1972) dollars:
Amount .........................................................................
Percent change: Fourth quarter over fourth quarter .... .
Incomes (current dollars):
Personal income ................................................................
Wages and salaries ...........................................................
Corporate profits ................................................................
Price level (percent change):
GNP deflator: Fourth quarter over fourth quarter ............. .
Consumer Price Index: December over December 1 ••.•.••.•••
Unemployment rates (percent):
Total Fourth quarter ......................................................... .
Insured, annual average 2 •••••••••••••••••••••••••.•••.•••••••••••.••••••••
Federal pay raise (percent) 3 •••••••••••••••••••••.••••..•.•••••••••••....••.
Interest rate, 91-day T ry bi lis (percent) 4 •••••••••••••••••••••
reasu

1981

1982

1984

1983

2,825
10.0

3,090
8.9

3,336
7.4

3,546
5.8

1,528
4.6

1,599
4.6

1,669
4.2

1,727
3.0

2,288
1,469
264

2,503
1,607
293

2,702
1,734
317

2,872
1,844
337

5.2
5.1

4.1
'4.0

3.0
2.9

2.7
2.7

5.4
3.2
5.0
6.6

4.6
2.6
4.75
5.4

4.0
2.2
4.5
4.4

4.0
2.1
4.25
3.7

1 CPI for urban wage earners and clerical workers. There are now two versions of the CPI published. The index used here is that currently used, as
required by law, in calculating automatic cost-of-living increases for indexed Federal programs.
2 This indicator measures unemployment under State regular unemployment insurance as a percentage of covered employment under that program.
It does not include recipients of extended benefits under that program.
3 Pay raises become effective in October of each year-the first month of the new fiscal year. Thus the October 1979 pay raise will set new pay
scales that will be in effect during fiscal year 1980.
4 Average rate on new issues within period. In the past, interest rates for the forecast period have been assumed to remain at the levels prevailing at
the time the estimates were made. Because it would be unrealistic to assume. continuation of the current unusually high rates, these estimates assume,
by convention, that interest rates decline with the rate of inflation.

Policies to Reduce Unemplogment.-A primary requirement for
attacking unemployment is continued economic growth, which will
require appropriate fiscal policies. While 1980 fiscal policy focuses
on the reduction of inflation, it is designed to maintain growth
sufficient to preserve most of the recent gains against unemployment. As explained in the 'President's Economic Report, fiscal
policy adjustments will probably be required in later years to maintain economic growth and further reduce unemployment. The appropriate magnitude and timing of such adjustments will depend
on future economic developments and cannot be determined now.
However, the administration will propose further fiscal actions-in
particular, further tax reductions-during the 1981-84 period if

such actions are required to sustain the progress of the economy
towards the goals of the Humphrey-Hawkins Act.
The act notes that "aggregate monetary and fiscal policies have
been unable to achieve" the economic goals established in the act,
"and therefore must be supplemented by other measures designed
to serve these ends." The administration is therefore acting to
reduce the sources of structural unemployment without increasing
inflationary pressures. The budget proposes maintaining the high
level of public service jobs for the structurally unemployed. This
program was recently revised to enhance the net employment
gains from the program and direct them more to the disadvantaged
and the long-term unemployed. In response to an administration
proposal, recently enacted legislation authorizes a special program
to help move participants, and especially younger workers, into
unsubsidized private sector jobs. In addition, the Revenue Act of
1978 included an administration proposal to create a targeted employment tax credit that will increase private sector employment
opportunities for specified groups of disadvantaged individuals, primarily youth.

Policies to Reduce Innation.-The budget proposals help combat
inflation in two ways: first, through overall budget restraint; and
second, through more specifically targeted measures that contribute to lowering rates of price increases in various sectors of the
economy.
Budget restraint plays an important role in the administration's
anti-inflation plan. Fiscal and monetary policies seek to avoid
adding an element of excess demand to existing inflationary pressures. They seek to create an economic environment in which
inflationary pressures will unwind. Some slowing of economic
growth is therefore necessary. Slowing economic growth while
avoiding a recession requires very careful consideration and balance between fiscal and monetary policies.
Monetary and fiscal restraint alone will not be sufficient to
unwind inflation. Moderation in private sector wage demands and
pricing behavior is also essential. Therefore, the administration has
established an anti-inflation program with explicit standards for
moderating wage and price increases. The standards include: a 7%
standard for annual wage and fringe-benefit increases; a price deceleration standard for individual firms consistent with the limitation on wage increases; a program of real wage insurance to encourage compliance with the standard; and expanded monitoring
and enforcement.
Numerous Federal programs and policies contribute, directly or
indirectly, to holding down rates of price increase in specific sectors
of the economy. Many programs regulate prices directly or promote
18

competition. Energy policies, including the National Energy Act of
1978, have shielded the economy from large and abrupt price increases that would have severe inflationary impact. Stabilization of
agricultural commodity prices has long been a major objective of
Federal policy. Regulation of "natural monopolies", such as electric
utilities; anti-trust law enforcement; and programs to foster small
businesses and greater competition all help reduce inflation. An
effort is now being made to increase competition for Government
contracts, in order to reduce prices paid on Government purchases
of goods and services.
The administration is currently developing policies to reduce
economic regulations in areas-particularly transportation-where
they serve to stifle competition and maintain unnecessarily high
prices. The Airline Deregulation Act was enacted last year, and
proposals for deregulation of rail and intercity bus transportation
are under development. Another significant policy directed against
inflation is the administration's proposal for hospital cost containment. This will reduce price increases in a sector that has experienced excessive price escalation for over a decade.
Federal subsidies, tax expenditures, guarantees, insurance, disaster assistance and loans all may help hold down many private
sector costs and prices. Housing programs afford examples of each
of these types of assistance. Federal warning and safety programs
(weather service, coast guard and air traffic control, for example)
also help hold down private sector costs by reducing economic
losses.
Restraints on Federal pay and employment will help reduce
upward pressure on private sector wage rates. Social security reforms will hold down the costs of this program and, ultimately, the
taxes it must levy-thus holding down labor costs. Policies to promote exports and stabilize the value of the dollar may help avoid
increases in the costs of imports.
An important set of Federal policies seeks to promote capital
formatio'n and increased productivity. These include investment
tax credits and support of research and development. In addition,
Federal education, training and employment programs, equal opportunity programs, and programs (such as housing) that contribute indirectly to labor mobility all help increase productivity, alleviate structural unemployment, and help make it possible to
achieve employment goals with less inflationary pressure.

The Long-Range Budget Outlook
The effects of current decisions extend beyond the budget year.
They establish program trends that have important influences on
the size and composition of budgets for years into the future. Just
as the composition and level of the 1980 budget have been largely
determined by past decisions, the decisions and proposals it embodies will shape subsequent budgets. These longer range effects
now receive more careful consideration than in the past due to the
establishment of a multi-year budget planning system. Under this
system, estimates for the first 2 years beyond the budget year (1981
and 1982) receive explicit policy review, and represent tentative
planning ceilings for executive branch agencies. Projections for
1983 and 1984 represent extrapolations of the Presidential policy
outlined in the planning base.

Basic assumptions.-The receipts projections are consistent with
the foregoing economic assumptions, and with continuation of current tax laws as modified by the proposals contained in the budget.
The outlay estimates indicate the degree to which resources would
be committed by the continuation during 1981-84 of existing and
currently proposed programs at the program levels recommended
for 1979 and 1980, and planned for 1981 and 1982. These projections are not precise forecasts of future budget authority or outlays. Nor are they intended as detailed, final recommendations as
to future budget levels. They are, however, generally consistent
with the objective of restraining growth in Federal spending and
moving toward a balanced budget as rapidly as economic conditions
permit. The multi-year planning base figures for 1981 and 1982
represent tentative - dministration plans for the long-term schedula
ing of major new initiatives, and program reductions or terminations. "fhe receipt levels shown for 1981 through 1984 do not reflect
the effect of major tax reduction proposals. The desirability of such
reductions in these years will depend on progress in reducing inflation and on the future state of the economy.
These planning base estimates and projections provide for future
cost-of-living adjustments to most benefit programs and anticipated
changes in numbers of eligible beneficiaries, Federal pay raises,
and other built-in cost increases (such as interest) consistent with
the economic assumptions outlined above. They provide for growth
in real terms in certain areas, primarily defense. The projections
generally assume that the other programs remain level in current
dollars except where there is an explicit budget or planning recommendation to increase or decrease program levels over time.

THE BUDGET OUTLOOK, 1978-84
(In billions of dollars)
Projection

Estimate

1978

actual

1979

1980

1981

1982

1983

1984

Outlays on a current services basis .........
Effects of proposed legislation ..................
Effects of discretionary changes ...............

450.8
...........
...........

491.3
.1
1.9

536.1
-1.9
-2.7

577.8
-2.7
2.8

610.6
-4.7
8.9

640.2
-6.9
12.3

667.1
-9.3
16.0

Total outlays .............................

450.8

493.4

531.6

578.0

614.9

645.6

673.7

Receipts on a current services basis ........
Effects of receipts proposals ....................

402.0
...........

456.0
...........

504.5
-2.0

571.3
5.5

646.6
6.1

715.3
3.0

777.8
2.4

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

402.0

456.0

502.6

576.8

652.6

718.3

780.2

-48.8

-37.4

-29.0

-1.2

37.8

72.7

106.5

Budget surplus or deficit
(-) .......................................

The budget outlook.-The table above summarizes the budget
outlook through 1984 based on current administration policy. Receipts are projected to increase by an average of 11.6% per year
from 1980 to 1984, rising from $502.6 billion to $780.2 billion. Over
the same period, outlays for current programs and for those proposed in this budget are projected to rise by an average of 6.1 % a
year, from $531.6 billion to $673.7 billion. Thus, the budget is
projected to move into surplus in 1982 with larger surpluses in
subsequent years.
It should be emphasized that the surpluses projected for 1982 and
beyond do not imply that such budget resources will in fact be
available in those years. These projected surpluses simply indicate
the resources now estimated to be available to the Government to
accommodate future fiscal and budgetary policy decisions.
Under current law and administration proposals, receipts are
estimated to increase as a share of GNP from 19.7% in 1978 to
20.9% in 1981. This increase reflects the effects of both the legislated increases in social security taxes and the progressive nature of
the income tax system. Outlays, on the other hand, are estimated
to decline as a percent of GNP, falling from 22.1 % in 1978 to 21.0%
in 1981. Thus, estimated receipts and outlays are both within the
President's limit of 21 % of GNP by 1981.

280-400 0 - 79 - 3

BUDGET RECEIPTS BY SOURCE
(In billions of dollars)
1978

1979

1980

1981

1982

1983

1984

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

181.0
60.0
123.4
18.4
19.3

203.6
70.3
141.8
18.4
21.9

227.3
71.0
161.5
18.5
24.3

269.1
76.7
185.2
19.4
26.3

311.2
86.0
208.0
19.5
28.0

352.2
92.6
223.4
20.0
30.0

392.1
98.6
237.1
20.6
31.8

T tal ...........................................

402.0

456.0

502.6

576.8

652.6

718.3

780.2

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

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

-2.3

1.6
2.0
1.2
.3
.3

1.3
3.5
.9
.2
.1

.4
1.8
.5
.2
.1

.3
1.2
.5
.3
.1

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

...........

-2.0

5.5

6.1

3.0

2.4

Mernoran urn: Effect of receipts proposals!

*50 million or less.
1 Effects in comparison to current services estimates.

Receipts.-Projected increases in receipts from 1980 to 1984 are
attributable largely to growth in incomes and increases in social
security taxes scheduled under current law. The table above shows
projected receipts by source and the effect on receipts of administration proposals.
Individual income taxes are projected to rise from $227.3 billion
in 1980 to $392.1 billion in 1984. Corporation income taxes rise by
39% over this same period, from $71.0 billion to $98.6 billion. Tax
proposals included in the budget reduce individual and corporation
income tax collections by $2.3 billion in 1980, but increase them by
$1.6 billion by 1984.
SOCIal insurance taxes and contributions, which increased from
only 2.5% of GNP in 1958 to 6.0% two decades later, are projected
to increase to 6.8% of GNP by 1984. The social security tax rate,
whic~ increased from 12.1 % to 12.26% on January 1, 1979, is
scheduled under current law to increase to 13.3% on January 1,
1981. The taxable earnings base is scheduled to increase annually,
rising from its current level of $22,900 to a projected $36,900 by
1984.
Estate and gift taxes, customs, excise taxes, and miscellaneous
receipts are projected at $52.4 billion in 1984, an increase of $9.6
billion from 1980.

Outlags.-The estimates and projections of outlays shown in this
section are extrapolations (based on assumed economic trends) of
program costs reflecting current administration policy-including
the 1980 budget proposals and multi-year budget plans for 1981 and
1982. They are estimates of the degree to which future resources are
committed by current policy.
22

PERCENTAGE COMPOSITION OF BUDGET OUTLAYS
Actual

Description

1968

1972

1.2
42.9

1.7
31.3

2.0
22.0

1980

1976

National defense:

Direct Federal payments for individuals ......
Other ..........................................................

Projection

Estimate

1981

1982

1983

1984

2.2
21.5

2.2
21.9

2.2
22.4

2.3
22.8

44.0

33.0

23.9

23.7

24.1

24.6

25.1

Direct Federal payments for individuals ......
Payments for individuals through States
and localities ..........................................
All other grants to States and localities .....
Net interest ................................................
Other ..........................................................

22.2

31.0

39.6

39.5

39.4

39.7

40.4

40.7

3.5
6.8
6.2
17.2

5.8
9.0
6.7
14.6

5.2
10.6
7.1
13.6

5.3
10.3
8.7
12.6

5.3
10.0
8.1
13.6

5.3
9.6
7.3
13.9

5.4
9.1
6.5
14.0

5.6
8.7
5.8
14.1

Subtotal, nondefense..........................

56.0

69.0

60.4

76.3

75.9

75.4

74.9

Subtotal, national defense..................
Nondefense:

Total budget outlays ......................

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

The major change in the composition of the budget outlays over
the last 10 years has been the rapid growth in payments for individuals and the corresponding relative decline in resources devoted
to other programs. Over the past decade, outlays for payments for
individuals have been growing more rapidly . than the national
output, and more rapidly than total budget outlays. Until 1976,
spending for national defense (in constant dollars) was declining.
This trend was reversed, and defense spending (in constant dollars)
is projected to continue increasing through 1984.
While total outlays are projected to increase by 27% from 1980 to
1984, projected outlays for health, income security, and national
defense are projected to increase faster than the total. Outlays for
these functions rise by 42%, 29%, and 34%, respectively. By way of
comparison, GNP is projected to rise by 40% from 1980 to 1984.

Controllability.-Outlays in anyone year are considered to be
relatively uncontrollable by administrative action when the program level is determined by existing statute or by contract or other
legal obligations. Relatively uncontrollable outlays are grouped
into two major categories: open-ended programs and fIXed costs,
outlays for which are generally mandated by law; and payments
from prior-year contracts and obligations, outlays for which are
required by past commitments. Open-ended programs and fIXed
costs are projected to remain at 59% of budget outlays over the
1980-1984 period. Relatively uncontrollable outlays are projected to
continue at about 75% to 80% of the total.

Current Services Estimates
Current services estimates represent the budget authority and
outlays that would be needed for the coming fiscal year if all
Federal programs were to continue operating at the current program
level. The estimates take into account the budget impact of anticipated changes in economic conditions, beneficiary levels, pay increases, and benefit changes. They do not take into account any
future policy changes either proposed by the President or contemplated by the Congress.
EFFECTS OF BUDGET PROPOSALS
[In billions of dollars]
Projections

Estimates

1978

1980

actual

1979

Current services .................................. ..
Proposed reductions ..............................
Proposed increases .............................. .

402.0
...........
...........

456.0
...........
...........

504.5
-2.3
.3

Budget receipts ...................... ..

402.0

456.0

502.6

Current services .................................. ..
Proposed increases .............................. .
Proposed reductions ............................ ..

450.8

491.3
1.9
.1

536.l
7.0
-11.6

1982

1983

1984

571.3
...........
5.5

646.6

6.1

715.3
-.1
3.0

777.8
-.1
2.5

576.8

652.6

718.3

780.2

577.8
610.6
14.8
22.2
-14.7 -17.9

640.2
27.0
-21.6

667.l
32.3
-25.6

1981

Receipts:

Outlays:

B dget outlays ........................ ..

-493.4
450.8

531.6

578.0

614.9

645.6

673.7

Surplus or deficit (-):

Current services basis..........................

-48.8

-35.4

-31.6

-6.5

36.0

75.l

110.7

Budget surplus or deficit
(-) .......................................

-48.8

-37.4

-29.0

-1.2

37.8

72.7

106.5

*$50 milli n or less.

Current services estimates provide a basis of comparison that
highlights proposed changes in program levels. Special Analysis A,
contaIned in a separate budget document, includes a detailed comparison of the President's budget with current services estimates.
The President's outlay recommendations for 1980 are $532 billion, 5 billion lower than the current services level. On a current
services basis, total outlays are projected to increase from $536
billion in 1980 to $667 billion in 1984. By 1984, the program
changes recommended in this budget would result in projected
total outlays of $674 billion, $7 billion higher than the projected
current services level for 1984.
Receipts under the President's tax proposals are expected to be
$503 billion in 1980, $2 billion below the $505 billion current services
estimate. Without changes in the tax law beyond those proposed,
budget receipts for 1984 are projected to be $780 billion, $2 billion
above the current services level.
24

PART III

MEETING NATIONAL NEEDS:
THE FEDERAL PROGRAM BY FUNCTION
This section discusses the budget in terms of national needs,
agency missions, and major programs. National needs are defined
in 16 broad areas that provide a coherent and comprehensive basis
for analyzing and understanding the budget. There are three additional categories discussed in this section-interest, allowances,
and undistributed offsetting receipts-that do not address specific
national needs but are required to cover the entirety of the budget.
The budget resources devoted to meeting national needs are classified by budget functions so that budget authority and outlays of
budget and off-budget Federal entities, · loan guarantees, and tax
expenditures can be grouped in terms of national needs being
addressed. To the maximum extent feasible, these groupings are
made without regard to agency or organizational distinctions. They
are also the categories used by the Congress in developing concurrent resolutions on the budget.
While budget outlays are the most obvious measure of the Federal Government's allocation of resources ' they are also allocated
through various fiscal activities outside the Federal budget. These
activities include outlays of off-budget Federal entities, guaranteed
loans, and tax expenditures. Major activities in some of these categories are discussed in the sections that follow. More detailed discussions are contained in the other budget volumes.
Off-budget Federal entities are federally owned and controlled,
but their transactions. have been excluded from the budget totals
under provisions of law. Their spending is part of total Federal
spending, but is not reflected in the budget totals, although Treasury
borrowing to finance their outlays does add to the Federal debt.
Spending by these entities (primarily loans) does not differ in
nature or effect from spending of other Federal programs.
Guaranteed (or insured) loans are loans for which the Government guarantees the payment of the principal or interest in whole
or in part. Loan guarantees may significantly affect resource allocation in the economy by diverting private credit from one activity

to ano her. Most guarantees support housing, although in recent
years they have been used increasingly for other purposes such as
student loans. In general, loan guarantees do not result in budget
outlays unless a default occurs. They are not subject to the same
review and control as budget outlays. The administration is proposing a credit control process that would subject both direct loans
and loan guarantees to greater budget discipline.
Tax expenditures are revenue losses attributable to provisions of
the individual and corporation income tax laws that allow a special
exclusion, deduction, or exemption from income, a preferential rate
of tax, a special credit, or a deferral of tax liability. Nearly all tax
expenditures are intended either to encourage particular economic
activities or to reduce the taxes of persons in special circumstances.
The major growth in budget outlays over the past decade has
been in payments for individuals and grants to States and localities. The payments for individuals occur mainly in the health and
income security functions, which are discussed below. The other
noteworthy trend is the decline in defense spending (in constant
dollars) over the 1968-1975 period. This trend was reversed and
defense spending is estimated to grow in real terms through 1982.

Budget Outlays - Constant 1980 Dollars
$ Billions

$ Billions

600 --r------------------~ 600

500

400
Other Nondefense

300

Payments for
Individuals
and Grants

200~

100

400

300

200

Net Interest

100
National Defense

o------------------~----------~--~------o
950
55
60
65
70
75
80 82
Fiscal Years

Estimate

National Defense
The national needs for defense are to protect America's people,
its institutions, and its lands; to preserve overall military balance
between the United States and its allies and the Soviet Union and
its allies; and to promote peace and security through arms limitations, more stable relationships among countries, and negotiated
settlements of disputes. The major programs supporting these national needs are shown in the following chart.
The budget proposes $138.2 billion in budget authority for defense
activities in 1980. Outlays for national defense are estimated at
$125.8 billion for 1980, an increase of about 3% in real terms. The
major defense proposals for 1980 would:
• maintain sufficient strategic forces to make it clearly disadvantageous for the Soviet Union to initiate nuclear war;
• improve the initial capability of our conventional forces defending NATO, in order to deter the Soviet Union or its
Warsaw Pact allies from initiating conventional war;
• maintain sufficient capabilities to deter conflict worldwide,
especially in such critical and potentially unstable areas as
Northeast Asia, the Middle East and the Persian Gulf;
• modernize our naval forces to maintain freedom of the seas
and to protect our capability to conduct military operations
wherever we are challenged;
• maintain reliable capabilities for monitoring foreign military
activities and for verifying international agreements on arms
control, including a new strategic arms limitation treaty;
• reform military pay "to help attract and retain military personnel in the coming years, as the population of young people
declines in numbers; and
• improve operating efficiency through reforms of the defense
supply system, greater competition in"the acquisition process,
and better utilization of civilian personnel.
A major determinant of U.S. defense policy is the challenge to
U.S. and Western European security presented by the military
capabilities of the Soviet Union and its allies. Over the past decade,
Soviet defense spending has grown as major components of Soviet
forces have been modernized. In May of 1977, the members of
NATO agreed that all should increase their defense spending to
help maintain the deterrent value of NATO as the Warsaw Pact
increases its military capabilities.

National Defense Programs (Budget Authority)
$ Billions

$ Billions

160~------------------------------------~~160

Atomic Energy
and Defense-Related
Activities

120

Strategic Forces
40

General Purpose
Forces and Related

o----------------------------~-----------o
82
79
80
81
78
977
Fiscal Years

Estimate

Strategic force improvements are proposed to assure that U.S.
force will always be able to deter a nuclear attack on the United
States and its allies. These improvements include full scale development beginning in 1979 of a large, more accurate intercontinental ballistic missile, continued procurement of Trident submarines
and submarine-launched intercontinental ballistic missiles, and the
competitive development and procurement of air-launched cruise
missiles.
The budget includes a variety of programs to improve our conventional forces. These programs would strengthen the forces that
deter or stand ready to respond to nonnuclear military threats
again t NATO or in other areas. They also include cooperative
programs with our NATO allies, including common purchase and
operation of a fleet of airborne warning and control aircraft, coproduction of the new F-16 fighter aircraft, and a common gun
design for new tanks. A sizable increase in the purchase of modern
equipment for our ground forces is proposed. Procurement of additional tanks, air defense systems, helicopters, armored personnel
carriers and ammunition are proposed. Significant upgrading is
proposed in artillery, anti-tank weapons and combat unit capability
for forces in Europe. In addition, naval forces will be strengthened
by the construction of 14 ships, including a conventionally-powered
aircraft carrier.
28

The budget also includes measures that would improve the efficiency of defense operations. One immediate objective is to increase
the degree of competition throughout the entire acquisition process.
Initiatives in the supply management area include correcting pricing inequities, disposing of excess stocks, making greater use of
commercially available equipment, and permitting earlier identification of obsolescent inventories.
Outlays for atomic energy defense activities are estimated to
increase by 18% between 1979 and 1980, primarily because of
increased nuclear warhead production and greater efforts to ensure
safe handling of nuclear waste.
\

International Affairs
The primary national needs in international affairs are a peaceful and stable world environment and a growing world economy.
Outlays to promote the ultimate achievement of these needs are
estimated to be $8.2 billion for 1980, an increase of $0.9 billion over
1979. Outlays for international affairs are relatively small in comparison to its importance because diplomatic and other non-budgetary policies are often more relevant to the needs.
Foreign assistance, the most significant cost in international
affairs, provides humanitarian ·assistance to needy people abroad,
promotes economic development in the third world, and supports
important foreign policy initiatives of the United States. Substantial long-term growth is projected in this area in support of the
administration's strong commitment to assist developing countries.
Outlays for foreign economic and financial assistance are estimated
to incre~e by $220 million to $5.5 billion in 1980.
Outlays for multilateral development banks are estimated to rise
from $0.9 billion in 1979 to $1.0 billion in 1980. Approximately 28%
of the $3.6 billion in 1980 budget authority sought for the banks
represents funds that were pledged for prior years, but which have
not yet been appropriated. It is very important that this country
bear its fair share of the funding responsibility by making good on
these past pledges. Outlays for voluntary contributions to international organizations and programs also are estimated to increase
from $251 million in 1979 to $272 million in 1980.
The Agency for International Development (AID) operates development assistance programs designed principally to help meet the
basic needs of the poor in developing countries through promotion
of economic growth. Outlays for AID's programs are estimated to
rise from $1.2 billion in 1979 to $1.3 billion in 1980.

29
280-400 0 - 7 9 - 4

P.L. 480 food aid constitutes the major U.S. program for humanitarian relief. The 1980 estimate of $1.0 billion in outlays would
perm·t shipments of approximately 6.7 million tons of food, over
two-thirds of the worldwide food aid target of 10 million tons.
. Security supporting assistance programs provide both balance of
payments support and development project financing to selected '
countries of importance to the United States. Most of the funds are
proposed for Middle Eastern countries in support of United States
efforts to promote a Mideast peace settlement. Outlays are estimated to fall from $2.1 in 1979 to $2.0 billion in 1980, in part reflecting
emphasis given to other forms of development assistance.
Outlays in 1980 of $173 million are estimated for refugee assistance. This level of support will, in particular aid the United Nations in providing care and maintenance for sharply increased
numbers of Indochinese refugees in Southeast Asia.
The military assistance program is shifting emphasis from grants
to foreign military sales credits as certain recipient countries with
improving economies assume a greater share of their defense costs.
Outlays for military assistance are estimated to be $516 million in
- 1980, a decrease of $61 million from the 1979 level.

Outlays for International Affairs
$ Billions

$ Billions

12~--------------------------------~~12

10
8

Other Foreign
Affairs Activities

2
-------i-O

1970 71 72 73
Fiscal Years

74 75

77 78 79

~ 81
Estimate

As a member of various international organizations, the United
States must share in their expenses. For 1980, outlays of $532

million are estimated to be required to meet our share. The United
States will continue to encourage these organizations to meet new
and expanded needs from reductions in low priority activities.
The newly established International Communication Agency
(ICA) has a central role in improving international communication
and understanding. Except for moderate increases for exchange
programs, ICA activities are proposed to continue at approximately
the 1979 level. Total outlays for foreign information and exchange
activities are estimated to be $529 million in 1980.
The mission of international financial programs advances U.S.
interests by improving the functioning of the international financial system. The Export-Import Bank provides direct loans, refinances export credits, guarantees loans and provides insurance in
order to facilitate the export of U.S. goods and services. In line
with the President's recently announced policy to encourage exports, the Bank's direct loans are estimated to increase 12% between 1979 and 1980. In addition, the Bank's guarantee and insurance programs are estimated to increase by 10-20% annually to
keep pace with the rapid growth in U.S. trade.
The foreign military sales trust fund facilitates sales of U.S.
military equipment and services to foreign governments. Its net
budget authority is estimated at $2.2 billion in 1980.
The primary tax expenditures in this function result from the
deferral of tax on one-half of the profits derived from domestic
international sales. The revenue loss resulting from this deferral
is estimated to be $1.3 billion in 1980.

General Science, Space, and Technology
Our national needs in general science, space, and technology are
to expand basic scientific knowledge, gain a better understanding
of the Earth and space through spa'ce exploration, and develop
practical applications of space technology. The missions and programs to support these national needs represent a relatively small
part of the Federal Government's total research and development
effort, most of which is classified under other budget functions such
as energy, health, and defense.
Within this function, the Federal Government pursues four
major missions: general science and basic research; space flight;
space science and applications; and supporting space activities.
Outlays are estimated to increase from $5.2 billion in 1979 to $5.5
billion in 1980.

The administration's strong support for basic research is reflected in t~e proposed budget authority increase of $136 million for the
general science and basic research mission. Total obligations for
basic research throughout the Government, including research
classified in other functions, are expected to reach $4.6 billion in
1980, a 9% increase over the 1979 level.
Key programs in the general science mission are administered by
the National Science Foundation (NSF) and the Department of
Energy (DOE). The NSF supports research in all fields of physical,
life, and social sciences. DOE is concerned primarily with studies of
the fundamental properties of energy and the environmental implications of alternative energy soqrces.
Total outlays for the three missions related to space are estimated to rise from $3.9 billion in 1979 to $4.1 billion in 1980. This rate
of growth reflects the beginning of operations for the space shuttle,
as well , as new emphasis on deriving practical applications from
space technology. When the shuttle fleet becomes operational, it is
expected to replace virtually all expendable launch vehicles currentl:y in use. Funding is also requested to support separate exploration of the polar regions of the Sun and the planet Jupiter, to
develop a space telescope that will permit observation of the universe unobscured by the Earth's atmospheric layers, and to develop
satellites that will improve our understanding of the Earth.
I

Outlays for General Science, Space and Technology
$ Billions

$ Billions

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

Apollo Lunar
Landing
Program

General Science and Basic Research

0-----------------------------------------0
1970 71 72 73 74 75 76
77 78 79 80 81 82
Fiscal Years

Estimate

Energy
Our national needs for energy are to reduce dependence on foreign oil in the near term; to prepare the U.S. economy to withstand
the effects of high energy prices, and to develop renewable and
essentially inexhaustible sources of energy for sustained economic
growth through the next century. The solutions that meet our
energy national needs must protect the environment, be fair and
fiscally sound, and limit the potential for international proliferation
of nuclear weapons.
The budget proposals that address our national needs in energy
are distributed among the major missions. Total outlays for these
missions are estimated at $7JL billion own from $8.6 billion in
1979.

The budget supports over
energy pricing policy that e ;

~Rll~~ ~

©@1mIr~~

ergency preparedness, an
€d1~estic energy production

:;f~Ci:t:U:~:or:~~r~er:~~re:J:u~~::!O~:e:: ~~C::~

ogies, and the rapid development of effective and efficient renewable energy technologies.

Outlays for Energy
$ Billions

$ Billions

10~----------------------------------~10

Emergency
Preparedness

Conservation

Energy Information,
Policy and Regulation
4

Energy Supply

o~--~-----------------------------------o
1970 71 72 73 74 75 76
77 78 79 80 81 82
Fiscal Years

Estimate

Energy supply programs encompass tax incentives and other assistance to encourage conversion to alternate sources of energy.
They also include the Federal Government's own energy production and distribution activities: the production of enriched uranium, the production of oil from the naval petroleum reserves, and the
distribution of electricity through the power marketing administrations. Net outlays for energy supply are estimated to be $4.4 billion
in 1980, compared with $4.9 billion in 1979.
Solar energy development is the only energy supply program
area for which a large overall increase is proposed in 1980. Government-wide outlays for solar energy R&D are estimated to increase
in 1980 by 40%, while outlays for the application of solar power
would rise by 22%. Emphasis is to be given to photovoltaics and
other technologies such as improved processes to convert organic
waste and crops to fuels.
Developmental work is to continue on nuclear fusion, geothermal, and other renewable energy sources.
The goals of the fossil energy supply program are to accelerate
development of environmentally acceptable technologies which can .
lead to the increased use of coal and expanded supplies of domestic
oil and gas. Because coal is the Nation's most abundant energy
resource, almost 80% of the fossil energy budget is directed to coalrelated research and development. Both budget authority and outlays for fossil researcp and technology development are estimated
to decrease in 1980. Estimated outlays total $754 million in 1980
and $802 million in 1979.
The nuclear fusion program continues to be oriented toward the
development of technologies that will provide for the use of nuclear
power as a safe, environmentally acceptable, economic source of
elect~icity. In support of the President's foreign policy objectives,
the program emphasizes technologies that reduce the risks of proliferation of nuclear weapons.
In an effort to help develop acceptable new energy technologies
and to reduce the environmental impacts of existing energy
sources, the budget supports research on the environmental effects
of energy production and use. Special emphasis will be placed on
the human health and ecological effects of developing technologies,
such as coal liquefaction.

(

Proposed net outlays for power marketing activities decline from
$1.9 billion in 1979 to $1.7 billion in 1980. Funding is requested for
construction and operation of transmission facilities at the five
Federal power marketing administrations of the Department of
Energy (DOE) and for continuation of the nuclear power plant
construction program of the Tennessee Valley Authority.
The administration's energy conservation program includes tax
credits, regulations, technical and financial assistance, and research and technology development. Tax credits for conservation
measures in homes and businesses, higher energy prices, and regulations for more efficient buildings, major appliances and motor
vehicles together will help slow the growth of energy consumption.
Total outlays for energy conservation are estimated at $660 million, a 35% increase above the 1979 level.
The emergency energy preparedness mission concerns the development of plans and measures to protect the Nation against possible petroleum supply disruptions. Efforts include the development
of contingency plans and emergency measures, including gasoline
rationing and other demand restraints.
The 1980 budget includes funds for continued development of the
storage component of the strategic petroleum reserve on a revised
schedule that calls for storage of 750 million barrels in the 19851986 time period. The administration plans a reprograming of $733
million in 1979 funds appropriated for oil purchases to start the
expansion of existing sites and acquisition of new sites. This would
bring the storage capacity of sites on which work is underway or
completed through 1980 to 608 million barrels. Should program
progress warrant, additional funds will be requested for starting
development of an additional 142 million barrels of facilities for a
total of 750 million barrels. Funds for this eventuality are covered by
the allowance for contingencies. Outlays for emergency energy preparedness are estimated at $2.0 billion in 1980, $406 million below
the 1979 level.
Passage of the National Energy Act has expanded Federal responsibilities in the area of energy information, policy, and regulation. Therefore, proposed outlays increase from $798 million in
1978 to $969 million in 1980.
The Energy Information Administration in DOE collects and
independently analyzes data from the private sector on energy
transactions, production, consumption, and imports.

The purpose of energy regulation is to assure that national
energy needs are satisfied safely, efficiently and equitably. An important aspect of both the 1979 and 1980 budgets is the exercise of
the new authorities provided in the various laws making up the
National Energy Act. Under this act, the Federal Energy Regulatory Commission has the key responsibility for implementing the
Natural Gas Policy Act. The Powerplant and Industrial Fuel Act
and the Public Utility Regulatory Policies Act are to be administered by the Economic Regulatory Administration. The powerplant
act strengthens the Government's authority to prohibit the use of
oil or natural gas in new, large electric utilities and industrial
boilers and encourages conversion to coal. The public utility act
encourages energy-conserving changes in electric utility rates.
The Nuclear Regulatory Commission regulates the siting, construction, and operation of all civilian nuclear reactors, nuclear
fuel storage, and waste disposal of radioactive materials. It also
conducts a nuclear safeguards program and develops analytic
methods that form the basis for nuclear licensing standards and
regulations.
Tax expenditures for energy conservation are estimated at $825
million in 1980. New tax incentives in the National Energy Act,
including both tax expenditures and other tax changes, are estimated at $631 million in 1980. New excise taxes will be imposed on
"gas guzzler" automobiles to penalize excessive gasoline consumption beginning with the 1980 model year.

Natural Resources and Environment
Our national needs in natural resources and the environment are
to pro ect public health by assuring a clean environment, to conserve and develop our natural resources and improve our understandi g of them, and to preserve our natural areas and historic
sites. To help meet these national needs the Federal Government
undertakes the following major missions: pollution control and
abatement, management of water resources, conservation and land .
management, protection of unique areas and recreational resources, and other natural resources. Outlays for these missions
are estimated at $11.2 billion in 1979 and $11.5 billion in 1980.
The Federal Government helps to control air, water, and land
pollution both directly and through Federal financial and technical
assistance to State and local governments. Outlays for pollution
control and abatement are estimated to increase by 14% from $4.1
billion in 1979 to $4.7 billion in 1980.
The administration is proposing increases in funds for control of
toxic substances, and for research on air quality, drinking water,
36

toxic substances and the effect of radiation on health. Initiation of
a rural clean water program to help control critical sources of
water pollution in rural areas is also proposed.
The Federal Government provides grants to State and local agencies for 75% of the cost of planning, designing, and constructing
municipal sewage treatment facilities. Under the Federal Water
Pollution Control Act of 1972 and the Clean Water Act amendments of 1977, the Federal Government has provided over $27
billion for this program. The Federal Government also ensures that
its own facilities meet environmental statutes and the budget includes funds for this purpose.
The Federal Government seeks to balance the benefits of water
resources projects against the need to preserve the environment.
Federal programs under this mission include flood control, water
supply development, irrigation, water conservation, development
and maintenance of inland waterways and harbors, hydroelectric
power development, recreation and wildlife preservation, and erosion control.
A major policy study was undertaken to improve the effectiveness, consistency, and contribution to environmental quality and
water conservation of Federal water programs. The budget provides
for carrying out the results of this study. Full-funding of 26 new
projects is proposed, together with resumption of work on replacement of Lock and Dam 26 on the Mississippi River.
The major mission of conservation and land management is carried out through a program of Federal land management that
strives for an optimal balance among various uses: the conservation and development of natural resources and the provision of
recreation opportunities. Technical and financial assistance is also
provided to conserve agricultural lands. The surface mining of coal
is regulated to prevent degradation of the land, and lands previously mined are reclaimed.
To preserve unique areas, to conserve fish and other wildlife, and
to meet the need for recreational areas, the Federal Government,
either directly or through grants to States, acquires, develops, and
operates parks, recreation areas, historic sites, visitor facilities, and
wildlife refuges. An urban recreation grant program was enacted
last year as one of the administration's urban initiatives. These
grants will provide for the rehabilitation of urban parks. Outlays
for recreational resources are estimated at $1.4 billion in 1980.
The administration has taken action to preserve 116 million
acres of lands of outstanding national interest in Alaska, including
emergency withdrawal of 60 million acres from mineral development. The land and water conservation fund outlays are estimated
at $0.5 billion for 1980.

37
280-400 0 - 79 - 5

Outlays for Natural Resources and Environment
$ Billions
$ Bi"ions
15~----------------------------------~15

3
Water Resources

Conservation,
Recreation,
and Other

o--------------------~-------------------o
1970 71 72 73 74 75 76 77 78 79 80 81 82
Fiscal Years

Estimate

Agriculture
The proposed budget recognizes the national need for a strong
agriculture. The Government seeks to moderate the swings in the
agricultural economy by supporting prices and by helping to create
farmer-held commodity reserves to be used in years of short supply.
The budget also reflects an increasing commitment to basic plant
research.
The cornerstone of the administration's agricultural policies is
the establishment of grain reserves to help stabilize prices and to
allow greater flexibility in responding to changing supply and
demand conditions. The Government has also established acreageset-aside programs for our major crops to help balance the supply
of agr"cultural products with the demand for them. The decrease in
outlays for this national need from $6.2 billion in 1979 to $4.3
billion in 1980 is due largely to the reductions in short-term export
credit outlays and in the projected costs of commodity price support programs in 1980.
Estimated outlays for price support and related programs are
projected to fall from $5.0 billion in 1979 to $2.6 billion in 1980.
Generally lower production of feed grains and improved markets
38

for grains are estimated for 1980, thereby lessening the need for
financial assistance. An $800 million outlay decrease is estimated
to occur in the short-term export credit program reflecting continued strength in export markets and anticipated availability of alternative means of export assistance in 1980. Outlays for agriculturalloans are also expected to decline from $3.3 billion in 1979 to
$1.3 billion in 1980, partly because of the expiration of the emergency livestock loan guarantee and economic emergency loan programs.
Federal Crop Insurance Corporation payments are estimated to
increase from $85 million in 1979 to $98 million in 1980 reflecting
the administration proposal to replace disaster aid programs with
insurance programs as the primary means of financial protection
from natural disaster.
Outlays of $1.2 billion are estimated for agricultural research
and services in 1980, about the same level as in 1979 when adjusted
for the one-time funding of the Israel-U.S. Binational Agricultural
Research and Development Fund. The administration recommends
that budget authority be redirected from selected crop, animal, and
post-harvest research to such areas as nutrition, conservation, and
basic plant research.

Outlays for Agriculture
$ Billions

$ Billions

1970 71
Fiscal Years

Estimate

Commerce and Housing Credit
National needs for commerce and housing credit include an adequate supply of mortgage credit, special credit assistance for economically distressed urban and rural areas, an effective postal
service, and oversight of and assistance to business to encourage
jobs and a sound economy.
To achieve these national needs the Federal Government supports major missions for mortgage credit and thrift insurance, payments to the Postal Service, and other advancement and regulation
of commerce. Outlays of $3.4 billion are estimated for these missions in 1980, compared to $3.0 billion in 1979.
The growth and stability of the private housing market are
supported by Federal mortgage credit and thrift insurance programs. The 1980 budget proposes an additional $2.0 billion in Government National Mortgage Association (GNMA) mortgage purchase commitments. These commitments would facilitate the development of an estimated 67,000 units of new multifamily housing,
some of which would be occupied by low-income tenants and others
by middle-income households in selected distressed central cities.
The effort to facilitate new middle-class housing in distressed cen~·
tral cities is a priority in this administration's effort to aid the
revitalization of urban areas.
The Federal Housing Administration's (FHA) mortgage and loan
insurance programs provide assistance to families who are not
adequately served by the private market. Insurance for mortgages
with graduated payment schedules, requiring lower initial monthly
payments, will be made to assist young, first-time homebuyers.
FHA outlays are estimated at $34 million in 1980, compared with
$111 million in 1979.
The Farmers Home Administration (FmHA) provides housing
loans and grant assistance to low- and moderate-income families in
rural communities of less than 20,000 in population. Outlays for
rural housing programs in 1980 are estimated at $362 million, a
$144 million increase over 1979 levels.
The Postal Service -is an independent Federal entity subsidized
by the Federal Govern~ent. Proposed payments to the Postal Service are $1.7 billion in 1980, $105 million lower than for 1979.
To meet the financial needs of small businesses, the Small Business Administration will provide $3.9 billion in 1980 for guaranteed
business loans. The proposed level of assistance to minority firms
in 1980 is 3.6% above the 1979 level.
The recently enacted National Consumer Cooperative Bank,
which will begin operation in 1979, is authorized to make loans at
market interest rates to finance cooperative food stores, pharma40

cies, garages, health maintenance organizations, and other cooperatively-owned businesses. The Bank's outlays are estimated to be
$90 million in 1980.
Another recently authorized lending activity, the Central Liquidity Facility under the National Credit Union Administration, will
begin operations in October, 1979. Facility lending, aimed at meeting the liquidity needs of member credit unions, is estimated to
total $200 million in 1980.
Outlays for the Bureau of the Census are expected to rise from
$219 million in 1979 to $583 million in 1980, reflecting the added
costs of the 1980 decennial census.
The Federal Government also aids business and individuals
through several tax expenditures. The 10% tax credit for capital
equipment, allowances for rapid depreciation, the new tax credit
for the rehabilitation of industrial structures, and the exclusion of
interest on municipal industrial development bonds aids business.
Small businesses receive an additional tax expenditure: preferential tax rates on the initial $100,000 of corporate income. Individuals receive benefits through favorable tax rates on capital gains
income and through Federal income tax deductions of interest
payments and property taxes.

Outlays for Commerce and Housing Credit
$ Billions

$ Billions

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

-2

Mortgage Credit and
Thrift Insurance
-4~--~--~~--~--~~~--~~--~--~--~~--4

1970 71
Fiscal Years

72 73

75 76

78 79

80 81 82
Estimate

Transportation
The national needs for transportation include: the development
and maintenance of the Nation's transportation system to meet the
needs of commerce and the public; the safe, reliable, and efficient
operation of that system; and the assurance that transportation
programs help meet the Nation's economic, energy, environmental,
and social goals. To help achieve these needs, outlays of $17.6
billion for ground, air, and water transportation systems are proposed for 1980, a slight increase from the level of $17.4 billion in
1979.
Federal funding for highways and mass transit was significantly
changed in 1978 with the enactment of the Surface Transportation
Assistance Act, which simplifies many categorical programs and
allows greater State and local flexibility in setting priorities and
carrying out programs. These changes should encourage more balanced State and local government transportation decisions. To complement the change in law, the Department of Transportation has
developed a plan to create a single Surface Transportation Administration that would consolidate the personnel and functions currently performed by the Federal Highway Administration and the
Urban Mass Transportation Administration. Total outlays for highways and mass transit are expected to increase from a level of $9.5
billion in 1979 to $10.0 billion in 1980.
The administration will propose legislation in 1979 to deregulate
the nation's railroad and inter-city bus industries. The administration also supports increasing competition in the truck industry.
These regulatory reform proposals are designed to increase significantly the efficiency of the surface transportation system, while
decreasing the paperwork and "red tape" associated with excessive
regulatory controls.
Of particular significance is the proposal to deregulate the Nation's railroad industry. The railroads have been strug~ling for a
long time to attain financial health, but have been hindered by an
out-dated regulatory system that prevents the economic allocation
of resources within the industry. As a consequence, increasing
Federal subsidies have been required to keep freight and passenger
rail service operating. Unless financial health can be restoredwith regulatory reform as an essential element-the railroads will
require greater subsidies with each passing year. The administration, therefore, will propose regulatory reform along with a phased
plan to reduce Federal railroad subsidies as the industry regains

financial health. Partly as a result of this plan, estimated outlays
for railroads decline from $2.4 billion in 1979 to $1.7 billion in 1980.
The budget request for the Federal Aviation Administration proposes major improvements in the ability to safely control airway
traffic. The administration's proposals will extend protection
against mid-air collisions. In addition, the administration will propose extending the airport and airways trust fund to further
expand the capacity and safety of the air transportation system
and to balance better the sources of revenue with the groups that
receive benefits. The President supports Civil Aeronautics Board
administrative actions to implement recent legislation deregulating
freight and passenger air traffic. Outlays for air transportation are
estimated at $2.5 billion in 1979 and $2.6 billion in 1980.
Recently enacted legislation establishes user charges for inland
waterway traffic. The receipts will be used to develop the inland
waterway system. Continued budget funding is requested for other
water transportation activities such as the Coast Guard and subsidies to the U.S. maritime industry. Outlays for water transportation
are estimated to increase by $151 million to $2.1 billion in 1980.

Outlays for Transportation
$ Billions

$ Billions

20~----------------------------------~20

4
Air

o~--~------~----------------------~~o
1970 71

73 74

Fiscal Years
* Includes a Small Amount of Outlays in Other Transportation

81 82

Estimate

Community and Regional Development
National needs for community and regional development include:
developing and maintaining economically and socially viable urban
neighborhoods and rural areas; strengthening State, local and private sector capacity to revitalize distressed areas; and providing
supplemental relief to areas that suffer from natural disasters.
Proposed resources for community and regional development are
increased substantially, despite overall budget austerity. Requested
budget authority increases from $8.1 billion in 1979 to $11.3 billion
in 1980.
The decline in outlays for community and regional development,
from $9.1 billion in 1979 to $7.3 billion in 1980, reflects the higher
level of outlays in 1978 and 1979 for anti-recession and disaster
assistance programs. These programs are phasing down in 1980 due
to improved economic conditions, a return to more normal levels of
disaster relief, and more effective management of disaster assistance programs. Federal programs in this area have not been uniformly increased, however.
Outlays for HUD's community development programs are estimated. to increase by nearly $400 million to $3.3 billion in 1980.
Community development block grants fund a variety of community
projects, including site acquisitions, public construction and the
rehabilitation of buildings. Urban development action grants aid
distressed cities and urban counties in redeveloping deteriorated
urban neighborhoods.
Rehabilitation loans are offered to homeowners, tenants and
businesses in distressed areas with subsidized interest rates no
higher than 3%. Estimated outlays of $125 million for 1980 would
rehabilitate 12,800 single-family and 4,500 multifamily units.
The National Development Bank is a major initiative to aid
community and regional development. The Bank would stimulate
private investment and increase private sector employment in
rural and urban areas experiencing diminished growth and persistent or increasing unemployment, and would provide incentives for
business development.
Rural areas receive Federal assistance in the form of ,development grants, water, sewer, and community facility insured loans,
and industrial development loan guarantees. Outlays for rural development and business assistance are estimated to be $475 million
in 1980 compared to $666 million in 1979.
The Economic Development Administration (EDA) will continue
to assist economically distressed areas through grants and loans for
public works and business development. Outlays for these EDA
programs are estimated to decline from $2.4 billion in 1979 to $0.8

billion in 1980 as the countercyclical local public works program is
completed. The budget request for 1980 does not include funding
for the labor intensive public works program, initially proposed in
the President's urban initiative.
Outlays for Indian programs in the area and regional development mission are estimated to be $730 million in 1980, $52 million
lower than for 1979.
To improve the Federal-State partnership in promoting regional
economic development, the administration will propose legislation
to reauthorize and improve the Appalachian Regional Commission
and to strengthen and modernize the other regional commissions.
In 1979, responsibility for administering the disaster relief programs and the flood insurance program will be vested in the new
Federal Emergency Management Agency. The Small Business Administration would continue to provide disaster assistance loans.
Outlays for disaster relief and insurance are estimated to decline
from $1.3 billion in 1979 to $0.5 billion in 1980.

Outlays for Community and Regional Development
$ Billions

$ Billions

12~--------------------------------------~12

Total
Local Public
Works Program

Disaster
Relief and

1970 71
Fiscal Years

72 73

74 75 76

79 80 81

Estimate

Education
The national needs for education are to assist State and local
governments in providing equal elementary and secondary educational opportunities for students of special concern to the Federal
Government, particularly the disadvantaged and the handicapped;
to assure that no one is denied access to higher education because
of financial barriers, and to promote the development and dissemination of knowledge concerning education theory and practice. To
help meet these needs, the Federal Government undertakes major
missions in elementary, secondary and vocational education, in
higher education, and in education research. Outlays for education
are estimated to increase to $13.3 billion in 1980 from $12.7 billion
in 1979, reflecting 1979 budget authority increases in forwardfunded programs. The budget request of $14.3 billion in budget
authority for education programs in 1980 is $276 million less than in
1979. Over half of this difference is accounted for by a reduction in
the budget authority required to continue current policies in the basic
educational opportunity grants program. While aggregate funding
is approximately the same as in 1979, individual program objectives have been refined and priorities have been adjusted. Therefore, increases are proposed for some programs, while reductions
and terminations are proposed for others.
Most of the $7.1 billion in estimated 1980 outlays for elementary,
secondary, and vocational education is to provide formula and discretionary grants to assist State and local educational agencies.
The largest share is for supplementary education services for lowincome and low achieving students under Title I of the Elementary
and Secondary Education Act. The administration recommends
that these general grants be continued in 1980 at the 1979 level
and that, in addition, $258 million be provided in 1979 and $400
million in 1980 for special assistance to areas with high concentrations of low income students. Budget authority is also sought for a
new program to assist States and localities in teaching the basic
skills of reading, writing, and mathematics.
Budget authority increases are proposed for the Indian education, education of the handicapped, bilingual education, and head
start programs. Continuation of the 1979 funding level is requested
for occupational and vocational education programs. On the other
hand, the administration proposes to limit the impact aid program,
which assists school districts affected by Federal activities, to districts that are clearly adversely affected by those activities. As a
result, the 1980 request is below the 1979 level.

In support of higher education? the 1980 budget includes $2.4
billion in budget authority for the basic educational opportunity
grant program. This amount would fully fund the program and
provide individual grants of up to $1,800 to 2.6 million undergraduates in the 1980-81 school year. Total budget authority of $867
million is requested for supplemental educational opportunity
grants, State student incentive grants, and part-time jobs for students under the college work-study program.
Budget authority of $960 million is requested to provide $2.5
billion in guaranteed loans in 1980 to 1.5 million higher education
students. The request includes funds to implement the provisions of
the Middle Income Student Assistance Act that extended interest
subsidies on guaranteed loans to all students regardless of family
•
Income.
Estimated outlays of $1.3 billion in 1980 would support education
research and development, as well as training, cultural activities,
and other general education aids.
To signify the high priority the Nation places on education and to
improve the management and accountability of Federal edllcation
programs, the administration will repropose a cabinet level Department of Education.

Outlays for Education
$ Billions

$ Billions

15~----------------------------------~15

o------------~~--------------------------o
1970 71 72 73 74 75 76
77 78 79 80 81 82
Fiscal Years

Estimate

Training, Employment, and Social Services
The Federal Government assists individuals-especially the unemployed, disadvantaged, and disabled-in becoming self-sufficient.
To help achieve this national need the Federal Government undertakes the major missions of training and employment, other labor
services, and social services. Outlays for these missions are estimated to be $18.0 billion in 1979 and~ $16.9 billion in 1980.
The employment situation has imp, oved substantially over the
r
past 2 years, with total employment increasing by 7.4 million since
December 1976. Proposed funding in 1980 for training and employment programs has been reduced somewhat and directed more
toward the economically disadvantaged and the long-term unemployed. Outlays for general grants to States and local governments
under the Comprehensive Training and Employment Act (CETA) of
$1.9 billion in 1980 would produce about 424,000 training or job
opportunities. Strategies for job development and job placement in
the private sector will be stressed, and a new private sector program provides $400 million in budget authority in 1979 for training, placement, implementation of the new targeted employment
tax credit, and other services designed jointly with the aid of
Private Industry Councils.
The continued growth in the economy, combined with constraints
on budget resources, call for focusing public service employment
(PSE) on the unemployed and most severely disadvantaged. Consequently, the administration is proposing that the less-targeted
countercyclical PSE program be phased down in 1980. The budget
request includes funding for an average of 267,000 PSE jobs for the
more disadvantaged structurally unemployed and an end of year
level of 200,000 jobs for the cyclically unemployed.
Outlays for programs designed specifically for youth are estimated to be $2.1 billion in 1980. This funding includes $400 million
under the Job Corps program to reach a level of 44,000 training
opportunities-double the 1977 level-and $545 million under the
summer youth employment program. Estimated outlays in 1980 for
programs authorized under the Youth Employment and Demonstratioll Projects Act equal the 1979 level of $1.2 billion.
The work incentive (WIN) program helps those receiving aid to
families with dependent children find and retain jobs. Estimated
outlays of $378 million in 1980 would place approximately 286,000
individuals in unsubsidized private sector jobs.

The administration plans to propose a new welfare reform initiative that integrates the delivery of cash assistance with an employment and training strategy, the new targeted employment tax
credit, and revisions in the earned income tax credit. The proposal
would ensure that individuals on public assistance have strong
incentives to seek and retain permanent unsubsidized employment.
Job-matching services for workers and employers are provided
free of charge by 2,400 State employment service offices financed
by Federal funds. The 1980 budget request maintains employment
service operations at the 1979 level. The Federal Government also
sets and enforces standards for wages and hours, welfare and pension plans, and other employer/employee relationships, including
collective bargaining, and publishes employment, wage and price
statistics. Outlays for other labor services are estimated at $520
million in 1979 and $525 million in 1980.
Social services grants to States and localities provide a broad
range of services to the poor, the elderly, the handicapped, the
mentally retarded, the drug-addicted or alcoholic, and homeless or

Youth Training and Employment Programs
$ Billions

$ Billions

6-.----------------------------------------~6

New Private
Sector Activities

Youth Employment
and Demonstration
Pro jects Act

4
3

HEW Training and
Work Programs

o----~------~~------~-*--~~--~~o
1970 71

73 74 75

Fiscal Years
* Department of Labor Only

79 80 81

Estimate

neglected children. The administration is proposing legislation to
significantly improve the services provided by States to children
and to improve the protection of the rights of children and their
parents.
The programs of the Community Services Administration finance
administrative support of local community action agencies that
deliver services to low-income individuals. These agencies receive
funding primarily from other sources, including other Federal
agencies. The Community Services Administration also supports
demonstration projects to test new methods of delivering services
to the poor.
.Proposed operations of two of ACTION's principal volunteer programs increase in 1980. Volunteers in Service to America (VISTA)
would increase by 600 volunteers, with new emphasis in development or rural programs, while the urban volunteer programs
would expand into 110 additional cities, mobilizing an estimated
75,000 local volunteers. Total outlays for social services programs
are estimated to be $5.4 billion in 1980, compared to $5.8 billion in
1979. This decrease refects a one-time payment in 1979 of $0.5
million in retroactive social service claims.

Outlays for Training, Employment, and Social Services
$ Billions

$ Billions

24~--------------------------------------~24

Total~

16
12

16
Public Service
Employment *

4
Social Services

o--~-------------------------------------o
1970 71 72 73 74 75 76 77 78 79 80 81 82
Fisca I Yea rs
* Programs Exclusively for Public Service Employment

Estimate

Health

The administration is developing a broad national health plan to
meet the national needs for health. The budget emphasizes improved access to medical care and mental health services, expanded
efforts to promote health and prevent illness and continued efforts
to reduce inflation in health care costs. Outlays for this national
need are estimated to rise from $49.1 billion in 1979 to $53.4 billion
in 1980.
Since 1965 Federal outlays for health have risen at an annual
rate of about 19%. The inflationary growth in health care costs has
been a major factor in this increase and a burden on both the
national economy and the Federal budget. Therefore, enactment of
cost-savings legislation is essential to the Nation's efforts to combat
inflation. The administration's hospital cost containment proposal
would limit increases in inpatient revenues to a rate consistent
with anti-inflation guidelines. Outlay savings for this proposal are
estimated at $1.7 billion in 1980. Cumulative savings over 19801982 are estimated at $9.8 billion.
Outlays for medicare, whose beneficiaries are either aged or disabled, are estimated to be $29.1 billion in 1979 and $32.1 billion in
1980. Included in these figures are legislative savings initiatives
totaling $1.8 billion in 1980 and increased mental health benefits
and disability coverage of $56 million. Outlays for medicaid, whose
beneficiaries are low-income adults and children, are estimated to
be $11.8 billion in 1979 and $12.5 billion in 1980. Included in the
1980 medicaid estimates are legislative savings initiatives of $319
million and program expansions totaling $301 million for a child
health assessment program (CHAP) and expanded coverage for
migrants and low-income pregnant women. The medicaid quality
control program is to be continued and should produce outlay
savings of over $500 million in 1980 as a result of reductions in
fraud and abuse. Other savings, which will affect the outlays of
both medicare and medicaid, come from proposals to limit reimbursements to some hospital-based physicians, eliminate payments
for chiropractic services and establish fines for fraud and abuse.
In addition to medicare and medicaid, the Federal Government
funds more than 30 other programs that support provision of
health care directly or through grants and contracts. Outlays for
these other health care services are estimated to rise from $3.5
billion in 1979 to $3.9 billion in 1980. The increases are expected to
help support 45 new community health centers and help the National Health Service Corps (NHSC) provide an additional 1,095

health professionals in underserved areas. An estimated $600 million in 1980 outlays would provide direct medical services to American Indians and Alaskan Natives. Estimated outlays of $328 million in 1980 would assist States and communities in the development and delivery of comprehensive mental health services. Other
Federal programs support a wide range of health services, including maternal and child health, family planning, health maintenance organizations, public health service hospitals, emergency
medical services, alcohol and drug abuse services, and St. Elizabeths Hospital.
Increased support for health promotion activities in 1980 underscores a growing recognition that future improvements in health
are more likely to result from changes in individual lifestyles than
from an expansion of traditional medical services. New initiatives
include expanded efforts in disease prevention, health information
and promotion, and health education. A new prevention initiative
for community water fluoridation is proposed in this budget
as well as new activities for the "anti-smoking" program, with
special emphasis . on high-risk individuals. The development of
model programs for prevention and treatment of alcohol abuse is
also proposed. Funding is requested in 1980 for a new prevention

Outlays for Health
$ Billions

$ Billions

70~--------------------------------~70

30
Medicare

0-----------------------------------------0
1970 71 72 73 74 75 76
77 78 79 80 81 82
Fiscal Years

Estimate

f.ormula grant pr.ogram and expansi.on .of the Nati.onal Health Inf.ormati.on Clearingh.ouse t.o increase the public's awareness .of helpful and resp.onsible health inf.ormati.on.
Federal .outlays f.or health research are estimated at $3.0 billi.on
in 1979 and $3.4 billi.on in 1980. Pr.op.osed Federal supp.ort c.ontinues t.o emphasize basic research in the study .of degenerative and
chr.onic diseases. Increased supp.ort w.ould als.o be pr.ovided in 1980
t.o carry .out research related t.o mental health and health services.
T.otal .outlays f.or health professions' training are estimated t.o be
$623 milli.on in 1980 c.ompared with $704 milli.on in 1979. During
the 1960's and 1970's there was a maj.or increase in the supply .of
health pr.ofessi.onals. Between 1975 and 1990 the supply is estimated t.o
increase an.other 70%. Since Federal subsidies are n.o l.onger required
t.o increase suPPJy, redirecti.on .of Federal supp.ort f.or health pr.ofessi.ons' training is pr.op.osed as part .of a nati.onal health plan strategy t.o
address the needs .of the p.o.or and medically underserved. T.o meet this
.objective, .outlays .of $76 milli.on are pr.op.osed f.or supp.ort .of 6,195
Nati.onal Health Service C.orps sch.olarships in 1980. Sch.olarship
recipients agree t.o serve in medically underserved areas in return f.or
this financial assistance. Federal pr.ograms that in the past have
pr.ovided instituti.onal subsidies t.o increase the supply .of health
pr.ofessi.onals with.out regard f.or speciality preference .or ge.ographic
l.ocati.ons are rec.ommended either f.or phase-.out .or terminati.on.
Outlays f.or consumer safety activities are estimated t.o increase
fr.om $637 milli.on in 1979 t.o $644 milli.on in 1980. Continued eff.orts
are pr.op.osed f.or 1980 t.o assure the safety and efficacy .of drugs and
medical devices. Initiatives, such as ref.orm .of existing drug laws,
c.ontinued emphasis .on ensuring f.o.od safety, and the f.ostering .of
c.o.operative regulat.ory activities, are expected t.o make existing
pr.ograms m.ore effective. Federal .outlays t.o impr.ove the safety and
health .of American w.orkers in the w.orkplace are estimated t.o
increase from $288 million in 1979 to $299 million in 1980.
In additi.on t.o direct Federal spending, Federal inc.ome tax laws
help finance health care by excluding health insurance premiums
paid by empl.oyers fr.om empl.oyees' taxable inc.ome, and permitting
itemized deducti.on f.or health care expenses and health-related
charitable c.ontributi.ons. The revenue l.oss in 1980 f.or these tax
expenditures is estimated t.o be $13.9 billi.on.

Income Security
The goal of the income security function is to help meet the
national need of assuring a reasonable income for poor Americans
and insuring against loss of family income due to unemployment,
retirement, disability, or death. Administration proposals in this
area will focus on simplifying program administration, increasing
program accountability, decreasing costs by reducing fraud and
abuse, and directing benefits to the most needy people. Proposals
are being designed to improve the welfare system. Outlays for
income security are estimated to rise from $158.9 billion in 1979 to
$179.1 billion in 1980. In the last five years, income security programs have grown by 65%, representing substantial growth in
benefits.
Social security is the largest single program in the budget.
Outlays for social security are estimated to rise from $102.3 billion
in 1979 to $115.2 billion in 1980. Social security beneficiaries in
1980 are estimated to number 36 million. Despite recent'reforms to
the system, the present social security benefit structure cannot be
financed over the long-run under currently legislated tax rates.
The administration will propose legislation to improve the program
and to eliminate unnecessary benefits. These proposals would reduce
1980 outlays an estimated $0.6 billion. Enactment of these reduction
proposals, as well as the hospital cost containment proposal, would
make possible the consideration of the social security tax reductions
starting in 1981.
Several other Federal retirement programs provide income security. Outlays for railroad retirement are estimated to increase from
$4.3 billion in 1979 to $4.5 billion in 1980 as a result of higher per
capita benefit levels. The higher benefit levels more than offset a
decline of 5,000 beneficiaries between 1979 and 1980. The administration proposes to increase the industry component of the railroad
retirement pension an additional 2% of railroad industry payroll
and reduce future benefits a like amount. These changes provide
an eq itable approach to sound fmancing of the pension system.
Estimated outlays of $1.5 billion in 1980 would provide special
benefits for coal miners disabled from "black lung" disease.
Outlays for Federal civilian employee retirement and for related
disability insurance are estimated to increase from $12.1 billion in
1979 to $13.8 billion in 1980. These programs are estimated to have
1.7 million beneficiaries in 1980. Outlays of $304 million are estimated to be required in 1980 to compensate approximately 49,000

Federal workers for job-related disabilities. Legislation is being
proposed to improve the rehabilitation incentives under this program.
The Pension Benefit Guaranty Corporation is an off-budget Federal entity that protects the vested benefits of workers in covered
pension plans in case their plan terminates. The corporation's
income is expected to exceed outlays by $24 million in 1979 and $31
million in 1980. Legislation proposing comprehensive termination
insurance for employees under multi-employer pension plans will
be submitted this year.
Unemployment recipients are estimated to number 2.2 million
per week in 1979 and 2.6 million in 1980. As a result, outlays for
unemployment compensation are estimated to increase from $10.3
billion in 1979 to $12.4 billion in 1980.
The administration's planned proposal for reform of the welfare
system would provide significant improvement in welfare programs
and in benefits for the needy. The basic components of the welfare
reform plan include establishing a national minimum benefit level,
expanding the earned income tax credit, providing added private
and public sector employment, and increasing fiscal :" relief to
the States through the improved operation of welfare programs.
Provision for this reform proposal has been made in the allowance
for contingencies beginning in 1981.
Outlays for the supplemental security income (SSI) program,
which provides benefits to the aged, blind, and disabled, are estimated at $6.3 billion in 1980. By 1980, the number of beneficiaries
is estimated to be 4.2 million. The initially high error rates in this
program have been markedly reduced, and would be reduced further under suggested legislation and administrative changes.
The aid to families with dependent children (AFDC) grants assist
States and localities in providing cash assistance to needy families.
Outlays are estimated to be $6.7 billion in both 1979 and 1980.
Although benefit levels are estimated to increase because of inflation
adjustments provided by the States, the administrative costs of the
program would be reduced under proposed legislation to promote
management improvement and enhance program accountability.
Errors and abuses in the program also are being reduced through
closer cooperation between the States and the Federal Government.
The earned income tax credit aids low-income workers by providing an income tax reduction (credit), or a payment if the tax credit
exceeds the individual's tax liability. The revenue loss in 1980 for
the tax reduction is estimated at $0.7 billion. Outlays for payments
in excess of tax liability are expected to be $1.5 billion.
The food stamp program provides needy families an opportunity
to purchase food for an adequate diet. Outlays to assist 17.4 million

Outlays for Income Security
$ Billio s
$ Billions
250~-----------------------------------~250

200

150

150
Unemployment
Compensation

100

o----~------~~--~------------------~O
1970 71

72 73

74 75 76

77 78

79 80 81 82

Fiscal Years
Estimate
* Includes Other Income Assistance Such as Food Stamps, SSI, and AFDC

recipients are estimated to be $6.9 billion in 1980 compared with
$6.3 billion in 1979. Legislation will be proposed to reduce program
error rates and improve the program administration.
Fifteen separate Federal programs assist States in feeding children and other needy persons. Outlays for these programs are
estimated to total $3.9 billion in 1980. Legislative modifications
designed to direct these resources more effectively to needy children will be sought. Outlays for the special supplemental food
program for women, infants, and children (WIC) are estimated to
increase by $191 million to $730 million in 1980. Recent studies
suggest that the program leads to significant reductions both in
infant mortality and in the incidence of low birth-weight babies.
Housing assistance is currently provided through three major
subsidized housing programs: low-income housing assistance, public
housing, and homeownership assistance. Total outlays for housing
assistance are estimated to rise from $4.5 billion in 1979 to $5.3
billion in 1980. The budget request would provide rental housing
assistance for up to 300,000 additional low-income families, and
homeownership assistance to an additional 25,000 moderate-income
households. Total proposed budget authority required to support
the long-term housing commitments is over $27.4 billion in 1980.
Proposed outlays for refugee assistance are $216 million in 1980.
These funds cover costs of cash assistance, medical assistance and
56

social services for needy refugees. Refugee needs will continue to be
monitored carefully by the administration over the next several
months in light of the continuing exodus from Indochina.
As part of the anti-inflation program, the President has proposed
insuring workers who voluntarily comply with the program against
wage loss through inflation. Under this proposal, groups of employees whose compensation increases fall within the anti-inflation
guidelines will be eligible for a tax credit if inflation exceeds 7%.
The Internal Revenue Service would reimburse such workers by
reducing their taxes for any loss to inflation above 7%. The $2.5
billion cost estimate for this proposal appears as a $2.3 billio~ loss
of tax revenues and an outlay estimate of $200 million. Outlays
result from cases where tax reductions are not enough to adequately compensate the workers for their wage loss.
The major tax expenditure provisions for the aged are the exclusion from taxable income of all social security and most railroad
retirement benefits, the extra exemption for taxpayers 65 and over,
and the tax credit for the elderly. The combined benefits for these
tax expenditures are estimated to be $6.7 billion in 1980.

Veterans Benefits and Services
I

The national needs for veterans are: to meet the Nation's obligation to compensate veterans disabled while in service for their loss
of earning power; to compensate families of veterans killed in
service or dying from service-related disabilities for their reduced
earning power; to provide veterans with medical care for servicerelated disabilities; to help veterans make the transition from military to civilian life; and to provide financial assistance to needy
veterans and their families.
While veterans benefits and services are generally adequate and
have been successful in meeting these needs, it is the goal of the
administration to improve the focus of veterans programs upon the
special needs of Vietnam-era veterans, organize the Veterans Administration (VA) medical system to achieve increased efficiency
and accommodate the imminent increase in the number of aging
veterans, and concen~rate needs-related financial assistance benefits on needy veterans. Outlays for veterans benefits and services
are estimated at $20.3 billion in 1979 and $20.5 billion in 1980.
The mission of income security for veterans is largely composed
of veterans compensation and pension programs. Compensation
benefits are provided to veterans with service-connected disabilities
and their survivors. Legislation will be proposed to provide a 7.8%
cost-of-living increase in compensation benefits effective in October
1979. An estimated 2.6 million beneficiaries are expected to receive
$7.3 billion in compensation benefits in 1980. Pensions are provided
57

to needy wartime service veterans, their dependents and survivors.
Recent legislation improves the focus of pension benefits and provides for automatic cost of living adjustments to these benefits. In
1980, 2.3 million needy veterans and their survivors are expected to
receive $4.2 billion in pension benefits.
The GI bill provides education benefits designed primarily to
assist veterans who entered military service before 1977 in readjusting to civilian life. The number of GI Bill trainees will continue
to drop i~ the future as the number of eligible veterans decreases.
Thus, outlays are estimated to decline from $2.7 billion in 1979 to
$2.2 billion in 1980. These estimates assume enactment of proposed
legislation to end enrollments in general flight training and correspondence courses and legislation extending the period of ~ligibility
from 10 to 12 years for certain needy and educationally disadvantaged Vietnam-era veterans.
The V A operates the largest nationwide medical care system. In
1980, the VA will continue to reorder its health care program to
provide efficient medical care for veterans with service-connected
disabilities and still accommodate the rapidly growing population
of eligible elderly veterans. Efforts to improve the quality of medical care for service-disabled veterans will continue. Outlays for
VA medical programs are estimated to be $5.8 billion in 1980.

Outlays for Veterans Benefits and Services
$ Billions

$ Billions

Pensions and
Other Income
Security

Education and
Other

4
Hospital and Medical Care

o~---------------------------------------o
1970 71 72 73 74 75 76
77 78 79 80 81 82
Fiscal Years

Estimate

Administration of Justice
National needs for justice include the representation of the
public in legal matters; the provision of fair and prompt prosecution and trial procedures; the maintenance of public order and
enforcement of Federal statutes; the provision of detention and
correctional facilities for those charged with or convicted of violating Federal laws; and provision of assistance to State and local
criminal justice systems. To meet these needs, the Federal Government supports programs in four major missions: Federal law enforcement activities; Federal litigative and judicial activities; correctional activities, and criminal justice assistance. Estimated outlays for these programs are $4.4 billion in 1979 and in 1980.
Law enforcement activities, including the Federal Bureau of Investigation, Drug Enforcement Administration, Customs and Immigration Services and Secret Service, represent the largest component of Federal expenditures for justice administration. Outlays for
these activities are estimated at $2.1 billion in 1979 and in 1980.
The budget request reflects administration efforts to establish a
better balance between different elements of the civil and criminal
justice system. The administration plans to reallocate Federal law
enforcement personnel to areas in which law enforcement efforts
are more effective: investigating white collar crime and apprehending major drug traffickers. The judicious reductions in law enforcement personnel would allow for much needed increases in litigative
staff.
The Omnibus Judgeship Act of 1978 improves the judicial
system. The act creates 117 new District Court judgeships and 35
new Circuit Court judgeships to help reduce the record high backlog of pending cases. The number of assistant U.S. attorneys will be
increased and a significant number of deputy U.S. marshals will be
reassigned to achieve the maximum advantage from the legislation.
Federal correctional system outlays are estimated to increase $10
million to $377 million in 1980. The use of community treatment
centers and other alternatives to institutional incarceration would
continue to be emphasized.
The administration will again propose legislation to consolidate
Federal criminal justice assistance in a new Office of Justice Assistance, Research and Statistics. While overall funding levels
would be reduced by about $100 million, the proposed changes will
minimize "red tape" and paperwork, and give cities and counties
more direct control over the Federal funds they receive. Special
emphasis would be given to funding programs that have proved to be
effective in strengthening the criminal justice system. Research
and statistical programs would be expanded to include civil as well
as criminal activities.

Outlays for Administration of Justice
$ Billions

$ Billions

5~--------------------------------~~ 5

4
Justice Assistan

3
Federal
Correctional
Activities

2
Federal Litigative
and Judicial Activities

Federal Law Enforcement
Activities

o--------------------------------------~-o
1970 71 72 73 74 75 76
77 78 79 80 81 82
Fiscal Years

Estimate

General Government
Much of what is classified under general government may be
considered as general support for other national needs. Yet in this
category, there are two national needs that can be clearly defined:
the p ovision of a legislative system that is responsive to the Nation's people and the provision of effective and efficient central
executive policy development and management. To help achieve
these national needs in general government, the Federal Government undertakes the major missions of legislative functions, executive direction and management, central fiscal operations, general
property and records management, central personnel management,
and other general government. Outlays for these missions are estimated to be $4.4 billion in 1980, about the same as in 1979.
The President has been granted authority by the Congress to
reorganize the Government to provide a more efficient and effective executive branch. One of the most important reorganizations,
that of the Civil Service Commission, will provide the most significant change in central personnel management in the Federal Gov60

ernment since the passage of the original Civil Service Act in the
1890's. The new Office of Personnel Management, Merit Systems
Protection Board, and Federal Labor Relations Authority will work
together to improve Federal personnel management and labor relations, while safeguarding the merit system from abuse.
In October of 1978, the President proposed a set of voluntary
wage and price guidelines as part of his anti-inflation strategy. The
increase in the Council on Wage and Price Stability staff required to
effectively administer the program is requested in the budget.
A number of changes have been made in the structure of the
General Services Administration to strengthen central control and
increase the number of investigations and audits. Among the
changes are increases in the staff of the Inspector General, the
establishment of an Office of Controller-Administration for centralized budgetary and financial control, the creation of an Office of
Acquisition Policy, and a consolidation of property disposal functions in the Federal Property Resources Service. These changes,
along with continued improvements in management, should go a
long way toward eliminating fraud and mismanagement in the
GSA.

General Purpose Fiscal Assistance
There are national needs to support the federal system by sharing Federal revenues with State and local jurisdictions and reducing the impact of economic fluctuations on States and localities. To
help meet these needs, the Federal Government carries out the
major missions of general revenue sharing and other general purpose fiscal assistance. Outlays of $8.8 billion are estimated for these
missions in 1980 compared to $8.9 billion in 1979.
General revenue sharing has been the primary means by which
the Fed~ral Government provides general purpose assistance to
State and local governments. Each jurisdiction may spend the
money for any purpose permissible under its own State and local
laws, subject to minimal Federal controls. Outlays for revenue
sharing are estimated at $6.9 billion in 1979 and in 1980. A decision on the extension of general revenue sharing programs beyond
the September 30, 1980 expiration date has not yet been made.
The budget proposes a transitional . highly targeted fiscal assistance program for those fiscally distressed juri~dictions most affected by the termination of antirecessionary fiscal assistance payments in 1978. The new program would provide assistance in 1979
and, to a lesser extent, in 1980 to the most severely affected governments. Budget authority of $250 million in 1979 and $150 million in 1980 is proposed.

A program similar to the antirecession fiscal assistance program,
but with a higher trigger, will be proposed to provide fiscal assistance in the event of recession. No outlays are expected to result from
this program in 1980.
The Secretary of the Treasury is authorized to guarantee up to
$1.6 billion of New York City obligations through June 30, 1982.
During 1980 an estimated $250 million will be guaranteed. The
loan guarantees are not included in the budget, but the administrative costs are.
Out ays for the Federal payment to the District of Columbia, in
recognition of the impact of the Federal establishment on the District's budget, are proposed at $317 million in 1980.
Tax expenditures also provide financial assistance to State and
local governments. The exemption from taxable income of interest
received on State and local securities has a twofold effect: State
and local governments can borrow at lower interest rates and
individuals can exclude the interest income from their Federal
taxes. Estimated revenue losses to the Treasury in 1980 are $5.9
billion. In addition, the deductibility of most State and local taxes
from Federal taxable income is estimated to add approximately
$12.5 billion to revenue losses in 1980.
I

Outlays for General Purpose Fiscal Assistance
$ Billions

$ Billions

10~--------------------------------------'-10

o~----------------------------------~~O
1970 71

Fiscal Years

72 73

77 78 79 80 81 82
Estimate

Net Interest
Interest is the premium connected with borrowing or lending. The
interest function includes interest paid on the public debt and on
refunds of tax collections, as well as interest collections from the
public and from revolving funds. In addition, a substantial portion
of interest outlays is paid to trust funds on securities held by the
funds. These amounts are deducted from both budget authority and
outlays before arriving at budget totals, since these payments are
not made to the public, but consist of offsetting transactions within
the budget. Net interest outlays are estimated to increase substantially, rising to $43.0 billion in 1979 and $46.1 billion in 1980.

NET IMPACT OF INTEREST OUTLAYS ON THE SURPLUS OR DEFICIT
(In billions of dollars)

1978

actual

1979

estimate

1980

estimate

1981

estimate

1982

estimate

Outlays for the interest function .................

44.0

52.8

57.0

59.1

59.5

Less: Interest received by trust funds ..........

-8.5

-9.8

-10.9

-12.4

-14.5

Net interest ......................................

35.4

43.0

46.1

46.7

45.0

Less: Deposit of earnings, Federal Reserve
System (budget receipts) .......................

-6.6

-7.6

-8.6

-9.2

-9.7

Net impact ........................................

28.8

35.4

37.5

37:5

35.3

In the past, the budget estimates for interest were based on the
assumption that interest rates would remain at the levels prevailing at the time the estimates were made. Because interest rates are
now unusually high, this assumption would produce artificially
high estimates of interest outlays. Thus, nominal interest rates are
assumed to change as inflation changes. Outlays for net interest
are projected to grow at a much slower rate in 1981, and then
decline in 1982. This pattern results from substantially reduced
growth in estimated Federal debt outstanding and from assumed
further declines in interest rates.
As part of their monetary functions, Federal Reserve Banks hold
Government securities. The Banks return a portion of the interest
they receive on those securities back to the Treasury as miscellaneous budget receipts. Deducting these receipts from net interest
shows the net impact of interest on the budget surplus or deficit.
That net impact is estimated at $37.5 billion in 1980.
A tax expenditure arises from the optional deferral of interest
income on U.S. savings bonds. Normally, the interest on these
bonds would be taxed each year as it is credited, but the holder
may defer paying the tax until redemption. The revenue loss
from this tax expenditure is estimated to be $0.6 billion in 1980.
63

Other
Allowances are included in the budget to cover statutory pay
increases for Federal civilian agency employees, future initiatives
and unforeseen requirements that may arise.
Significant changes were made in the Federal civil service this
past year with enactment of the Civil Service Reform Act of 1978.
The act creates new compensation systems for two classes of Federal civilian employees. Upper level employees will now be included
in a Senior Executive Service (SES) with five or more levels of
compensation. Special awards will be made, providing new incentives for efficient and productive employees. Mid-level managers
and supervisors will no longer receive within-grade step increases
but will be covered by a new merit pay system that will provide
rewards for performance and efficiency rather than for length of
•
servIce.
The administration will propose comprehensive legislation to
change Federal pay-setting systems and procedures.
As part of the overall effort to hold down inflation and to comply
with the national wage-price standards, the budget assumes an
October 1979 pay increase of 5.5% for Federal employees. A final
decision on the level of the October 1979 pay increase will be made
in late summer after the President reviews recommendations of his
pay agents, the Federal Employees Pay Council and the Advisory
Committee on Federal Pay, and after a review of the economic
situation at that time.
Funds are included in the allowances to cover the expected costs
of the planned welfare reform proposals. This allowance represents
the effect on the surplus or deficit. Decisions to be made at a later
date will determine the program level allocation, as well as the
mix between budget authority and outlays and revenues forgone.
In general, offsetting receipts are deducted from budget totals at
the function or agency level. Exceptions are made when such payments are extremely large and would mislead analysis of Federal
program trends. In the case of rents and royalties on the Outer
Continental Shelf, the payments are extremely large and to include
them in a particular function would present a distorted view of
Federal program costs. Four sales are scheduled for 1980, assuming
the necessary environmental studies and other requirements have
been completed. To eliminate double counting of outlays and,
therefore, to reflect properly transactions with the public, the payment that each agency makes as its share of employee retirement
costs is deducted as an undistributed offsetting receipt.

PART IV

THE BUDGET PROCESS
The budget sets forth the President's proposed financial plan of
operation for the Federal Government for the upcoming fiscal year
and planning ceilings for the two subsequent fiscal years. In raising and spending tax revenues, the Federal Government allocates
resources between the private and public sectors of the economy.
Within the public sector, the allocation of budget resources among
individual programs reflects the priorities that are determined
through the interaction of the President, the executive branch
agencies, and the Congress. The budget process is thus a crucial
focus for the determination of national priorities. This section describes that process, and its four interrelated phases: (1) executive
formulation and transmittal, (2) congressional action, (3) budget
execution and control, and (4) review and audit.

Executive formulation andtransmittal.-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, transn:titted to the Congress in January
1979, began in the spring of 1978. Each spring, policy issues are

identified, budget projections are made, and preliminary program
plans are presented to the President. In preparing for the 1980
Budget, a zero-based review (ZBB) of the entire budget was conducted.
The President reviews the budget projections in the light of the
economic outlook and establishes general budget and fiscal policy
guidelines for the fiscal year, that begins over a year later, and,
under the new multi-year budget planning system, for the two
fiscal years beyond. Tentative policy determinations for the budget
year and multi-year planning ceilings for the following two years
are then given to the agencies as guidelines for the preparation of
their budgets.
In the summer, agencies formulate their zero-based budget requests which are reviewed in detail in the fall by the Office of
Management and Budget and presented to the President in the
context of overall fiscal policy issues. The budget transmitted to

Congress thus reflects the President's recommendations for existing and proposed programs, as well as total outlay and receipt
levels appropriate to the state of the economy. Supplemental
budget requests and amendments may be submitted later to cover
unanticipated needs.
As a result of the Congressional Budget Act of 1974, the President must update this budget on or before April 10 and July 15,
taking into account newly enacted legislation, new executive
branch recommendations, and new economic assumptions. The act
also requires him to transmit current services estimates for the
upcoming fiscal year. These estimates represent the budget authority and outlays required to continue existing programs in the upcoming fiscal year without any policy changes, thereby providing a
base to compare program initiatives against current spending
levels. Current services estimates for fiscal year 1980 are transmitted with the President's budget. ~ee Special Analysis A, Special
Analyses, Budget of the United States Government, 1980.

Congressional action.-The Congress begins its formal review of
the President's budget proposals in January. Before considering
appropriations for a specific program, the Congress first enacts
legislation to authorize agency programs and provide guidance on
funding levels.
Many programs, such as social security and interest, are authorized indefinitely or for several years; other programs, such as education, health, nuclear energy, defense procurement, and foreign
affairs, require annual authorization. The granting of budget authority usually is a separate, subsequent action to program authorization. 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 become
available annually without further congressional action.
Under procedures mandated by the Congressional Budget Act of
1974, the Congress considers budget totals prior to completing
action on individual appropriations bills. The act requires that the
House and Senate Budget Committees receive reports on budget
estimates from the other congressional committees by March 15,
and a fiscal policy report from the 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 congressional timetable is presented
on the following page.

CONGRESSIONAL BUDGET TIMETABLE

On or before:
15th day after Congress convenes ....
March 15 .............................................. .
~plril

1 ................................................... .

~p1ril JLi> ................................................. .

May

If) .................................................. .

May

Jlf) ...•••••••••••.•.•.••.•••.••••.•.•.••.••.•.•.••••.•

7th day after Labor Day .................... .

September 15 ....................................... .
September 25 ........................................

Oc:~ber Jl .............................................. .

Action to be completed
President transmits his budget.
Committees submit reports to budget committees.
Congressional Budget Office submits
report to budget committees.
Budget committees report first concurrent
resolution on the budget to their
Houses.
Committees report bills authorizing new
budget authority.
Congress completes action on first concurrent resolution on the budget.
Congress completes action on bills providing budget authority.
Congress completes action on second concurrent resolution on the budget.
Congress completes action on reconciliation bill or resolution, or both, implementing second concurrent resolution.
Fiscal year begins.

Congressional consideration of requests for appropriations and
for changes in revenue laws are considered first in the House of
Representatives, where the Ways and Means Committee reviews
proposed revenue measures and the Appropriations Committee
studies the proposals for appropriations. These committees then
recommend the action to be taken by the House of Representatives.
After the appropriation and tax bills are approved by the House,
they are forwarded to the Senate, where a similar process is followed. In case · of disagreement between the two Houses of Congress, a conference committee (consisting of Members of both
bodies) resolves the issues and submits a report to both Houses for
approval. Measures are then transmitted to the President, in the
form of an enrolled bill, ( his approval or veto. When approprifor
ation action is not completed by the beginning of the fiscal year,
the Congress may enact a "continuing resolution" to provide authority so that the agencies affected may continue operations until
their regular appropriations are approved.

Budget execution and control.-Once approved, the budget becomes the financial plan for the operations of agencies during the
fiscal year. Most budget authority and other budgetary resources
are made available by the Office of Management and Budget under
an apportionment system designed to assure the effective and orderly use of available authority.

The Impoundment Control Act of 1974 provides that the executive branch, in regulating the rate of spending, must report to the
Congress any deferrals or proposed rescissions of budget authority-that is, any effort through administrative action to postpone or
eliminate spending authorized by law. 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
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 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. In addition,
offices of Inspectors General have been established by law in 12
major departments and agencies. Essential features of the legislation creating these offices have been extended by administrative
action to the rest of the executive branch. This is expected to
reduce substantially the amount of fraud, waste, and inefficiency in
Government, and assure that programs achieve their intended purposes.

Relation of Budget Authority to Outlays
Not all of the new budget authority for 1980 will be obligated or
spent in that year.
• Budget authority for most major trust funds is equal to receipts and is used as needed for purposes specified by law.
• Budget authority for most major construction and procurement programs covers the estimated full cost of projects at
the time they are started, although the outlays will occur
over a number of years as work on the projects progresses.
• Budget authority for many loan and guarantee (or insurance)
programs also provides financing for a period of years or
constitutes a contingency backup.
• Budget authority for Government-sponsored enterprises is
provided at their origin to be used for general capital purposes over several years.
As a result of these factors, a large amount of budget authority
carries over from one year to the next. Most is earmarked for
specific uses and is not available for any other program.

Relation of Budget Authority to Outlays - 1980 Budget
$ Billions

PART V

BUDGET TABLES
Page

1. Budget Receipts, Outlays, and Debt, 1970-82 .........................

2. Budget Receipts by Source and Outlays by Function,

1970-80.........................................................................................
3. Budget Outlays by Function and Subfunction,

1970-8~........

4. Composition of Budget Outlays in Current and Constant
(fiscal year 1972) Prices, 1958-82 ............................................
5. Budget Authority and Outlays by Agency...............................
6. Federal Finances and the Gross National Product, 1958-

81
82

8~...................................................................................................

7. Summary of Full-Time Permanent Civilian Employment
in the Executive Branch.. .......... ...............................................
8. Budget Receipts and Outlays, 1789-1982 .................................

84
85

NOTES

• Backup data for charts in this book can be obtained from the
Office of Management and Budget, Washington, D.C. ~0503.
• More detailed budget tables are included in Part 9 of the Budget
of the United States Government, 1980.

Table 1. BUDGET RECEIPTS, OUTLAYS, AND DEBT, 1970-82 (in billions of dollars)
Estimate

Actual

Description

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

241.3
152.8
-36.3

270.5
168.0
-36.5

306.1
189.5
-39.6

332.8
212.2
-42.5

382.8
240.2
-46.2

436.4
267.4
-51.1

357.8

402.0

456.0

502.6

576.8

652.6

Receipts: 1

Federal funds ..........................................
Trust funds ..............................................
Interfund transactions .............................

143.2
59.4
-8.8

133.8
66.2
-11.6

148.8
73.0
-13.2

161.4
92.2
-21.3

181.2
104.8
-21.1

187.5
118.6
-25.1

201.1
133.7
-34.8

54.1
32.1
-4.4

Total budget receipts .....................

193.7

188.4

208.6

232.2

264.9

281.0

300.0

81.8

Federal funds ..........................................
Trust funds ..............................................
Interfund transactions .............................

156.3
49.1
-8.8

163.7
59.4
-11.6

178.1
67.1
-13.2

187.0
81.4
-21.3

199.9
90.8
-21.1

240.1
111.2
-25.1

269.9
131.3
-34.8

65.1
34.0
-4.4

295.8
143.3
-36.3

332.0
155.3
-36.5

361.3
171.7
-39.6

381.8
192.2
-42.5

413.4
210.8
-46.2

437.9
228.1
-51.1

Total budget outlays ......................

196.6

211.4

232.0

247.1

269.6

326.2

366.4

94.7

402.7

450.8

493.4

531.6

578.0

614.9

(. ... .)
(196.6)

(. .... )
(211.4)

(. .... )
(232.0)

(.1)
(247.1)

(1.4)
(8.1)
(211.1) (334.2)

(7.3)
(313.1)

(1.8)
(96.5)

(8.1)
(411.4)

(10.3)
(461.2)

(12.0)
(505.4)

(12.0)
(543.5)

(11.5) (11.1)
(589.5) (625.0)

Federal funds ..........................................
Trust funds ..............................................

-13.1
10.3

-29.9
6.8

-29.3
5.9

-25.6
10.7

-18.7
14.0

-52.6
7.4

-68.8
2.4

-11.0
-2.0

-54.5
9.5

-61.5
12.7

-55.2
17.8

-49.0
20.0

-30.6
29.4

-1.5
39.3

Total surplus or deficit (-) .........

-2.8

-23.0

-23.4

-14.8

-4.7

-45.2

-66.4

-13.0

-45.0

-48.8

-37.4

-29.0

-1.2

37.8

(. .... )

(. ... .)

(-.1) ( -1.4) ( -8.1) ( -7.3) ( -1.8) (-8.1) (-10.3) (-12.0) (-12.0) (-11.5) (-11.1)

•

Outlays: 12

Outlays, off-budget federal entities
Outlays including off-budget...........
Surplus or deficit (-):

Deficit (-), off-budget Federal
entities.......................................
Surplus or deficit (-) including
off-budget ..................................
Outstanding debt, end of year:

Gross Federal debt ..................................
Held by the public ...................................

382.6
284.9

409.5
304.3

437.3
323.8

468.4
343.0

486.2
346.1

544.1
396.9

631.9
480.3

646.4
498.3

709.1
551.8

780.4
610.9

839.2
650.9

899.0
689.9

940.3
701.9

(26.1)

951.9
674.3

The amounts of earned income credit in excess of tax liabilities are shown as budget outlays rather than as negative budget receipts. Accordingly, the budget totals have been adjusted retroactively.
2 The 1976-78 data have been revised retroactively to include the exchange stabilization fund in the unified budget instead of with the off-budget Federal entities. Profits on gold sales are now treated as a means of financing rather than an offsetting
collection. The budget totals have been adjusted retroactively, starting with 1975.
1

-l

(-2.8) (-23.0) (-23.4) (-14.9) (-6.1) (-53.2) (-13.1) (-14.1) (-53.6) (-59.2) (-49.4) (-41.0) (-12.1)

Table 2. BUDGET RECEIPTS BY SOURCE AND OUTLAYS BY FUNCTION, 1976-80 (in billions of dollars)
Estimate

Actual

Description

1970

1971

1973

1972

1974

1975

1976

1977

1978

1979

1980

RECEIPTS BY SOURCE 1

90.4
32.8

86.2
26.8

94.7
32.2

103.2
36.2

119.0
38.6

122.4
40.6

131.6
41.4

38.8
8.5

157.6
54.9

181.0
60.0

203.6
70.3

227.3
71.0

39.1
3.5

41.7
3.7

46.1
4.4

54.9
6.1

65.9
6.8

75.2
6.8

79.9
8.1

21.8
2.7

92.2
11.3

103.9
13.8

119.7
15.9

139.2
15.9

2.7

3.2

3.4

3.6

4.1

4.5

4.8

1.3

5.2

5.7

6.2

6.4

Total social insurance taxes and
contributions ..............................

45.3

48.6

53.9

64.5

76.8

86.4

92.7

25.8

108.7

123.4

141.8

161.5

Excise taxes:
Alcohol ....................................................
Tobacco ...................................................
Highway ..................................................
Airport and airway ..................................
Other .......................................................

4.6
2.1
5.4
...............
3.6

4.7
2.2
5.5
0.6
3.6

5.0
2.2
5.3
0.6
2.3

5.0
2.3
5.7
0.8
2.5

5.2
2.4
6.3
0.8
2.1

5.2
2.3
6.2
1.0
1.8

5.3
2.5
5.4
0.9
2.8

1.3
0.6
1.7
0.3
0.6

5.3
2.4
6.7
1.2
2.0

5.5
2.4
6.9
1.3
2.2

5.5
2.5
7.3
1.4
1.6

5.6
2.6
7.5
1.6
1.2

Total excise taxes ..........................

15.7

16.6

15.5

16.3

16.8

16.6

17.0

4.5

17.5

18.4

18.5

Estate and gift taxes ...................................
Customs duties ............................................
Miscellaneous receipts .................................

3.6
2.4
3.4

3.7
2.6
3.9

5.4
3.3
3.6

4.9
3.2
3.9

5.0
3.3
5.4

4.6
3.7
6.7

5.2
4.1
8.0

1.5
1.2
1.6

7.3
5.2
6.5

5.3
6.6
7.4

5.7
7.5
8.7

6.0
8.4
9.9

Total budget receipts ..................

193.7

188.4

208.6

232.2

264.9

281.0

300.0

81.8

357.8

402.0

456.0

502.6

Individual income taxes ................................
Corporation income taxes .............................
Social Insurance taxes and contributions:
Employment taxes and contributions .......
Unemployment insurance .........................
Contributions for other Insurance and
retirement ...........................................

OUTLAYS BY FUNCTION 12

National defense 3 ........................................
International affairs ......................................
General science, space, and technology .......
Energy .........................................................
Natural resources and environment.. ............
Agriculture ...................................................
Commerce and housing credit.. ....................
Transportation ..............................................
Community and regional development ..........
Education, training, employment, and social
services ...................................................
Health ..........................................................

78.6
4.3
4.5
1.0
3.1
5.2
2.1
7.0
2.4

75.8
4.1
4.2
1.0
3.9
4.3
2.4
8.1
2.8

76.6
4.7
4.2
1.3
4.2
5.3
2.2
8.4
3.4

74.5
4.1
4.0
1.2
4.8
4.9
.9
9.1
4.5

77.8
5.7
4.0
.8
5.7
2.2
3.9
9.2
4.1

85.6
6.9
4.0
2.2
7.3
1.7
5.6
10.4
3.7

89.4
5.6
4.4
3.1
8.1
2.5
3.8
13.4
4.7

22.3
2.2
1.2
.8
2.5
.6
1.4
3.3
1.3

97.5
4.8
4.7
4.2
10.0
5.5

8.6
13.1

9.8
14.7

12.5
17.5

12.7
18.8

12.3
22.1

15.9
27.6

18.7
33.4

Income security:
Social security .........................................
Other .......................................................

29.7
13.4

35.2
20.2

39.4
24.5

48.3
24.7

54.9
29.5

63.6
45.0

Total income security .....................

43.1

55.4

63.9

73.0

84.4

108.6

Veterans benefits and services .....................
8.7
9.8
Administration of justice ..............................
1.0
1.3
General government .....................................
1.9
2.1
General purpose fiscal assistance .................
.5
.5
Interest ........................................................
19.6
18.3
Allowances 4 ................................................. ............... ...............
Undistributed offsetting receipts ..................
-6.6
-8.4
Total budget outlays ...................

196.6

211.4

14.6
6.3

105.2
5.9
4.7
5.9
10.9
7.7
3.3
15.4
11.0

114.5
7.3
5.2
8.6
11.2
6.2
3.0
17.4
9.1

125.8
8.2
5.5
7.9
11.5
4.3
3.4
17.6
7.3

5.2
8.7

21.0
38.8

26.5
43.7

30.7
49.1

30.2
53.4

72.7
54.7

19.8
13.0

83.9
54.1

92.2
54.0

102.3
56.5

115.2
63.9

127.4

32.8

137.9

146.2

158.9

179.1

4.0
18.0
19.0
20.3
10.7
16.6
18.4
12.0
13.4
.9
4.4
3.6
3.8
1.6
2.1
2.9
3.3
2.5
4.4
.9
3.8
2.4
3.4
2.6
3.2
3.0
3.3
2.1
9.5
9.6
8.9
.7
7.4
7.2
7.2
6.9
7.2
38.0
44.0
52.8
20.6
30.9
34.5
22.8
28.0
............... ............... .............. ............... ............... ............... ............... ............... ...............
-2.6
-15.1
-15.8
-18.7
-8.1
-12.3
-14.1
-14.7
-16.7

20.5
4.4
4.4
8.8
57.0
1.4
-19.0

232.0

247.1

269.6

326.2

366.4

94.7

402.7

450.8

493.4

531.6

* $50 million or less.
The amounts of earned income credit in excess of tax liabilities are shown as budget outlays rather than as negative budget receipts. Accordingly, the budget totals have been adjusted retroactively.
2The 1976-78 data have been revised retroactively to include the exchange stabilization fund in the unified budget instead of with the off-budget Federal entities. Profits on gold sales are now treated as a means of financing rather than an offsetting
collection. The budget totals have been adjusted retroactively, starting with 1975.
3 Includes civilian and military pay raises for the Department of Defense.
4 Includes allowances for civilian agency pay raises and contingencies for relatively uncontrollable programs, welfare reform and other requirements.
1

-l
~

Table 3. BUDGET OUTLAYS BY FUNCTION AND SUBFUNCTION: 1970-82 (in billions of dollars)

-.J
~

Estimate

Actual

Function and subfunction

1970

1971

1973

1972

1974

1975

1976

1977

1978

1979

1980

1982

1981

National defense:

Department of Defense-Military:
Military personnel ...............................
Retired military personnel ...................
Operation and maintenance .................
Procurement .......................................
Research and development.. ................
Military construction and other 2 •••••••••

23.0
2.8
21.6
21.6
7.2
.8

22.6
3.4
20.9
18.9
7.3
1.4

23.0
3.9
21.7
17.1
7.9
1.5

23.2
4.4
21.1
15.7
8.2
.7

23.7
5.1
22.5.
15.2
8.6
2.4

25.0
6.2
26.3
16.0
8.9
2.5

25.1
7.3
27.8
16.0
8.9
2.8

6.4
1.9
7.2
3.8
2.2
.4

25.7
8.2
30.6
18.2
9.8
3.1

27.1
9.2
33.6
20.0
10.5
2.7

28.2
10.3
35.9
22.5
11.7
3.3

28.4
11.4
38.7
25.7
13.0
5.4

28.6
12.5
40.1
30.0
14.6
7.8

28.7
13.5
42.1
34.4
15.4
10.8

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

77.1
1.4
.1

74.5
1.4

73.2
1.4
-.1

77.6
1.5
-1.2

84.9
1.5
-.8

87.9
1.6

21.9
.4

95.6
1.9

133.7
3.2
.2

144.9
3.1
.2

*
*

122.7
3.0
.2

*
*

111.9
2.5
.1

*
*

103.0
2.1
.1

*
*

75.1
1.4
.1

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

78.6

75.8

76.6

74.5

77.8

85.6

89.4

22.3

97.5

105.2

114.5

125.8

137.0

148.2

2.8
.6
.4

2.8
1.0
.4

3.1
.7
.5

2.4
.8
.5

2.9
1.3
.6

3.6
1.9
.7

3.3
1.1
.7

1.4
.9
.3

3.9
.6
1.0

4.6
.5
1.1

5.3
.6
1.2

5.5
.5
1.4

5.7
.5
1.5

6.1
.4
1.6

International financial programs ..............
Deductions for offsetting receipts ............

.2
.3
-.1

.2
-.2

.3
.2

.3
.6
-.1

.3
.5
-.1

.4
.1
-.1

.1
-.5

.3
.1
-.1

.4
-.9
-.1

.4
-.6
-.1

.5
-.2
-.1

.5
.3
-.1

.6
.8
-.1

.6
.9
-.1

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

4.3

4.1

4.7

4.1

5.7

6.9

5.6

2.2

4.8

5.9

7.3

8.2

8.9

9.5

1.0

1.1

1.2

1.3

1.4

International affairs:

Foreign economic and financial assistance ....................................................
Military assistance ...................................
Conduct of foreign affairs .......................
Foreign information and exchange activi-

ties .....................................................

General science, space, and technology:

General science and basic research .........

Space flight .............................................
Space science, applications, and technology .....................................................
Supporting space activities ......................
Deductions for offsetting receipts ............
Total general science, space,
and technology ........................

2.3

2.0

1.9

1.7

2.0

2.3

2.4

2.3

2.1

1.9

.9
.4

.8
.4

1.0
.3

.9
.3

1.0
.3

1.0
.4

.3
.1

1.0
.3

1.0
.4

1.2
.4

1.3
.4

1.4
.5

1.5
.5

4.5

4.2

4.0

4·.0

4.4

1.2

4.7

5.2

5.5

5.3

.9
1.1
1.0
............ .. ...... .... ............ ............

1.7

*
............

*
*

2.5
.1
.1

*
*

3.3
.1
.1

4.0
.2
.9

4.9
.5
2.4

4.4
.7
2.0

4.4
.8
1.6

3.8
.8
1.2

1.0
-.1

1.1

1.0
-.1

-.1

1.0
-.1

Energy:

Energy supply ..........................................
Energy conservation ................................
Emergency energy preparedness ..............
Energy information, policy, and regulation .....................................................
Deductions for offsetting receipts ............

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

I I •• I I ••••••

.6
-.1

1.0

1.3

1.2

2.2

3.1

4.2

5.9

8.6

7.9

7.8

6.8

Water resources ......................................
Conservation and land management ........
Recreation resources ...............................
Pollution control and abatement ..............
Other natural resources ...........................
Deductions for offsetting receipts ............

1.5
.7
.4
.4
.4
-.4

1.8
.9
.5
.7
.5
-.4

2.0
.8
.5
.8
.6
-.4

2.2
.7
.6
1.1
.6
- .5

2.2
.7
.7
2.0
.7
-.7

2.6
1.3
.8
2.5
.8
-.7

2.8
1.2
.9
3.1
.9
-.8

.8
.5
.3
1.1
.2
-.3

3.2
1.3
1.0
4.3
1.0
-.8

3.5
2.0
1.4
4.0
1.2
-1.1

3.6
2.0
1.5
4.1
1.3
-1.3

3.7
1.7
1.4
4.7
1.3
-1.3

4.1
1.8
1.7
5.1
1.3
-1.4

4.0
1.9
2.0
5.5
1.3
-1.4

Total natural resources and environment .................................

3.1

3.9

4.2

4.8

5.7

7.3

8.1

2.5

10.0

10.9

11.2

11.5

12.6

13.3

Farm income stabilization ........................
Agricultural research and services ...........
Deductions for offsetting receipts .......... :.

4.6
.6

3.7
.6

4.6
.7

4.1
.8

1.5
.8

.8
.9

1.6
.9

4.5
1.1

6.6
1.1

4.9
1.3

3.0
1.2

4.3
1.3

4.6
1.3

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

5.2

4.3

5.3

4.9

2.2

1.7

2.5

5.5

7.7

6.2

4.3

5.6

5.9

Total energy .................................
Natural resources and environment:

Agriculture:

-.:]

See footnotes at end of table.

-1

Table 3. BUDGET OUTLAYS BY FUNCTION AND SUBFUNCTION: 1970-82 (in billions of dollars) I-Continued
Actual
Function and subfunction

1970

1971

1973

1972

1974

Estimate

1975

1976

1977

1978

1979

1980

1982

1981

Commerce and housing credit:

Mortgage credit and thrift insurance .......
Postal Service ..........................................
Federal Financing Bank ...........................
Other advancement and regulation of
commerce ...........................................
Deductions for offsetting receipts ............

.1
1.5

1.5
2.8
1.2
.3
-.3
* -1.2
2.2
1.8
1.6
1.7
1.9
1.7
.9
............ ............ ............ ............ ............ ............ ............ ............

.2
-.3
-.5
-.3
-.1
1.6
1.7
1.6
1.8
1.8
............ ............ ............ ............ ............

1.1

1.3

1.6

· 2.0

1.8

1.6

.5
-.1

2.1

2.4

2.2

3.9

5.6

3.8

1.4

3.3

3.0

3.4

3.0

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

4.7
1.4
.9

5.2
1.8
1.1

5.4
1.9
1.1

*
*

6.5
2.4
1.5
.1
-.1

9.3
2.6
1.6
.1

10.4
3.3
1.9
.1
-.1

12.0
3.5
1.9
.1
-.1

11.9
3.6
2.1
.1

*
*

10.0
2.8
1.7
.1

5.6
2.2
1.4
.1
-.1

2.3
.6
.4

*
*

5.6
2.2
1.2
.1

13.3
3.9
2.2
.1
-.1

13.6
4.1
2.3
.1
-.1

Total transportation ....................

7.0

8.1

8.4

9.1

9.2

10.4

13.4

3.3

14.6

15.4

17.4

17.6

19.5

20.0

1.5
.6
.3

1.8
.7
.4

2.1
.9
.4

2.1
.9
1.6

2.1
1.2
.8

2.3
1.0
.4

2.8
1.4
.5

.9
.3
.1

3.5
2.1
.6

3.3
4.9
2.9

3.7
4.1
1.3

4.3
2.5
.5

4.7
3.3
.5

4.7
3.6
.5

2.4

2.8

3.4

4.5

4.1

3.7

4.7

1.3

6.3

11.0

9.1

7.3

8.4

8.8

Total commerce and housing
credit ........................................

-3.3
2.3
-.1

Transportation:

Community and regional development:

Community development. .........................
Area and regional development ...............
Disaster relief and insurance ...................
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 serv. ...........................................
Ices
Health:
Health care services ................................
Health research .......................................
Education and training of health care
work force ..........................................
Consumer and occupational health and
safety .................................................
Deductions for offsetting receipts ............
Total health ..................................
Income security:
General retirement and disability insurance ..................................................
Federal employee retirement and disability .......................................................
Unemployment compensation ...................
Public assistance and other income supplements .............................................
Deduction for offsetting receipts .............
II

-l
-l

See footnotes at end of table.

3.1
1.4
.5
1.6
.1
1.9

3.5
1.4
.5
2.0
.2
2.2

4.0
1.4
.5
2.9
.2
3.5

3.7
1.5
.7
3.3
.2
3.3

3.8
1.3
.9
2.9
.2
3.2

4.6
2.0
.9
4.1
.3
3.9

4.7
2.7
.8
6.3
.3
4.0

1.2
.7
.2
1.9
.1
1.0

5.1
3.1
.9
6.9
.4
4.6

5.7
3.5
1.1
10.8
.4
5.0

6.5
4.9
1.3
11.7
.5
5.8

7.1
4.9
1.3
11.0
.5
5.4

7.7
5.0
1.4
11.0
.5
5.5

7.7
5.4
1.4
11.0
.6
5.5

8.6

9.8

12.5·

12.7

12.3

15.9

18.7

5.2

21.0

26.5

30.7

30.2

31.0

31.5

11.1
1.1

12.6
1.1

15.0
1.3

16.0
1.6

19.1
1.7

24.2
1.9

29.4
2.3

7.7
.5

34.5
2.5

39.1
2.8

44.5
3.0

48.5
3.4

53.7
3.5

59.1
3.5

1.0

13.1

14.7

17.5

18.8

22.1

27.6

33.4

8.7

38.8

43.7

49.1

53.4

58.8

64.2

31.3

37.5

42.0

51.7

58.6

69.4

77.2

20.9

88.6

97.3

107.9

121.2

133.0

144.1

2.7
3.4

3.2
6.2

3.8
7.1

4.5
5.4

5.6
6.1

7.0
13.5

8.2
19.5

2.3
4.0

9.5
15.3

10.7
11.8

12.4
10.3

14.1
12.4

15.7
11.9

17.3
10.8

5.7

8.6

11.1

11.4

14.1

18.8

22.6

5.6

24.5

26.5

28.3

31.4

33.5

35.3

Table 3. BUDGET OUTLAYS BY FUNCTION AND SUBFUNCTION: 1970-82 (in billions of dollars) I-Continued

-..1

Actual
Function and subfunction

1970

1971

1972

1974

1973

Estimate

1975

1976

1977

1978

1979

1982

1981

1980

43.1

55.4

63.9

73.0

84.4

108.6

127.4

32.8

137.9

146.2

158.9

179.1

194.1

207.5

5.5

6.0

6.3

6.5

6.8

7.9

8.4

2.1

9.2

9.7

10.9

12.0

12.6

13.1

1.0
1.8
.1

2.0
2.4
-.3
.3

2.8
2.7
-.4
.4

3.2
3.0

4.6
3.7

3.7
4.7
-.1
.5

2.7
5.9
.1
.7

2.2
5.8
-.2
.6

1.6
6.5

.8
1.0
-.1
.1

1.8
6.2

5.5
4.0
-.1
.6

3.4
5.3

1.7
2.0
-.2
.3

8.7

9.8

10.7

12.0

13.4

16.6

18.4

4.0

18.0

19.0

20.3

Federal law enforcement activities ..........
Federal litigative and judicial activities ....
Federal correctional activities ..................
Criminal justice assistance ......................
Deductions for offsetting receipts ............

.6
.2
.1
.1

.7
.3
.1
.2

.8
.3
.1
.4

1.0
.4
.1
.6

1.1
.4
.2
.8

1.3
.5
.2
.9

1.5
.7
.2
.9

.4
.2
.1
.2

1.7
.8
.2
.8

1.8
.9
.3
.7

Total administration of justice ..

1.0

1.3

1.6

2.1

2.5

2.9

3.3

1.0

.4
.1
1.2

.5
.1
1.3

.6
.1
1.8

.7
.1
1.8

.4
.1
1.2

.6
.1
.2

.7
.1
.2

.9
.1
.2

1.0
.1
.4

.4
.1
.5

.1
.1
.5

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

20.5

21.2

21.7

2.1
1.2
.4
.7

2.1
1.3
.4
.6

2.1
1.4
.4
.6

3.6

3.8

4.4

.8
.1
1.9

.9
.1
2.1

1.0
.1
2.4

1.1
.1
2.5

1.0
.1
2.5

.1
.1
.5

.2
.1
.5

.3
.1
.6

.2
.1
.5

.4
.1
.5

.4
.1
.6

Administration of justice:

General government:

legislative functions ................................
Executive direction and management ......
Central fiscal operations ..........................
General property and records management ...................................................
Central personnel management.. ..............
Other general government .......................

.4
.1

Deductions for offsetting receipts ............

-.2

-.3

-.2

-.1

-.2

-.1

Total general government ..........

1.9

2.1

2.4

2.6

3.3

3.2

3.0

3.4

3.8

4.4

4.5

4.7

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

6.1
.8

6.1
1.1

6.2
1.0

1.6
.5

6.8
2.7

6.8
2.8

6.9
2.1

6.9
1.9

6.9
1.8

General purpose fiscal assistance:

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

............
.5

6.6
.7

7.4

6.9

7.2

2.1

9.5

9.6

8.9

8.8

8.7

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

19.3
-1.0

21.0
-1.4

21.8
-1.3

24.2
-1.4

29.3
-1.3

32.7
-1.8

37.1
-2.6

8.1
-.9

41.9
-3.9

48.7
-4.7

59.8
-7.0

65.7
-8.7

68.0
-8.9

67.8
-8.3

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

18.3

19.6

20.6

22.8

28.0

30.9

34.5

7.2

38.0

44.0

52.8

57.0

59.1

59.5

............ ............ ............ ............ ............ ............ ............ ............ ............ ............
.9
............ ............ ............ ............ ............ ............ ............ ............ ............ ............
.5
............ ............ ............ ............ ............ ............ ............ ............ ............ ............ ............

2.2
4.8
1.5

3.4
6.3
5.5

1.4

8.5

15.2

Total general purpose fiscal assistance ....................................
Interest:

Allowances:

Civilian agency pay raises ....................... ............
Contingencies for other requirements ...... ............
Welfare reform ........................................ ............
Total allowances ..........................

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

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

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

Undistributed offsetting receipts:

Employer share, employee retirement ......
Interest received by trust funds ..............
Rents and royalties on the Outer Continental Shelf ........................................

-2.4
-3.9

-2.6
-4.8

-2.8
-5.1

-2.9
-5.4

-3.3
-6.6

-4.0
-7.7

-4.2
-7.8

-1.0
-.3

-4.5
-8.1

-5.0
-8.5

-5.4
-9.8

-5.5
-10.9

-5.7
-12.4

-5.8
-14.5

-.2

-1.1

-.3

-4.0

-6.7

-2.4

-2.7

-1.3

-2.4

-2.3

-3.5

-2.6

-3.0

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

-6.6

-8.4

-8.1

-12.3

-16.7

-14.1

-14.7

-2.6

-15.1

-15.8

-18.7

-19.0

-21.1

-23.3

Total budget outlays ...................

196.6

211.4

232.0

247.1

269.6

326.2

366.4

94.7

402.7

450.8

493.4

531.6

578.0

614.9

See footnotes at end of table.
-J

\.0

Table 3. BUDGET OUTLAYS BY FUNCTION AND SUBFUNCTION: 1970-82 (in billions of dollars) l-Continued

00
0

Actual
Function and subfunction

Estimate

1979

1980

1981

1982

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

-.2
8.2

-.5
10.6

.3
11.5

.5
11.3

.1
11.3

-.3
11.3

1.8

8.0

10.1

11.8

11.4

11.0

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

1.4

8.1

l.3

1.8

8.1

10.3

12.0

11.5

11.1

24l.1

271.1

334.2

373.1

96.5

411.4

461.2

505.4

543.5

589.5

626.0

1970

1971

1972

Outlays of off-budget federal entities:
~nerg~' ~ner~ SUj1j1~ .............................

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

-.1

Commerce and housing credit·
Postal Service .....................................
Federal financing ~an)(.......................

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

.8
.1

1.1
6.4

1.1
5.9

-.1
2.6

Tota/, commerce and housing
credit .........................................

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

l.5

6.9

Transj1ortation: Ground transj1ortation .....

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

Community and regional develoj1ment·
Area and regional develoj1ment ...........

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

Income security: General retirement and
disability insurance .............................

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

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

Outlays off-budget Federal entities.

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

Outlays including off-budget federal entities ..................................

196.6

211.4

232.0

*$50 million or less.
1 See footnotes to Table 1 for changes in budget coverage.
2 Includes allowances for civilian and military pay raises for Department of Defense.

1974

1973

1975

1976

1977

1978

Table 4. COMPOSITION OF BUDGET OUTLAYS IN CURRENT AND CONSTANT (FISCAL YEAR 1972) PRICES: 1958-1982 (in billions of dollars)!
Constant (fiscal year 1972) prices

Current prices

Nondefense

Nondefense
Fiscal year

1958 ............................................................
1959 ............................................................
1960 ............................................................
1961 ............................................................
1962 ............................................................
1963 ............................................................
1964 ............................................................
1965 ............................................................
1966 ............................................................
1967 ............................................................
1968 ............................................................
1969 ............................................................
1970 ............................................................
1971 ............................................................
1972 ............................................................
1973 ............................................................
1974 ............................................................
1975 ............................................................
1976 ............................................................
1977 ............................................................
1978 ............................................................
1979 estimate .............................................
1980 estimate .............................................
1981 estimate .............................................
1982 estimate .............................................
00
~

See footnotes to table 1 for changes in budget coverage.

Total
outlays

82.6
92.1
92.2
97.8
106.8
111.3
118.6
118.4
134:7
158.3
178.8
184.5
196.6
211.4
232.0
247.1
269.6
326.2
366.4
402.7
450.8
493.4
531.6
578.0
614.9

National
defense

43.7
46.0
45.2
46.6
49.0
50.1
51.5
47.5
54.9
68.2
78.8
79.4
78.6
75.8
76.6
74.5
77.8
85.6
89.4
97.5
105.2
114.5
125.8
137.0
148.2

Total
nondefense

38.9
46.1
47.1
51.2
57.8
61.2
67.1
71.0
79.8
90.0
100.1
105.1
118.0
135.6
155.5
172.5
191.8
240.6
277.0
305.2
345.6
378.9
405.7
440.9
466.7

Payments
for
individuals

19.4
21.2
22.9
25.9
27.1
28.7
29.8
30.5
34.3
40.1
46.0
52.8
59.8
74.6
85.3
95.9
111.1
142.7
167.4
182.6
195.4
213.2
237.7
258.0
276.8

Net
interest

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
17.3
21.4
23.2
26.7
29.9
35.4
43.0
46.1
46.7
45.0

All

other

13.8
19.2
17.2
18.6
23.8
24.8
29.1
31.9
36.1
39.7
43.0
39.6
43.9
46.2
54.7
59.3
59.3
74.7
82.9
92.7
114.9
122.6
121.9
136.2
144.8

Total
outlays

141.9
153.9
150.8
157.1
168.7
170.7
177.4
173.3
187.9
212.1
229.5
223.1
220.8
223.0
232.0
233.2
231.9
253.5
266.6
272.7
283.2
284.1
286.2
294.2
299.9

National
defense

74.0
75.3
73.8
74.8
77.2
76.8
77.0
69.3
76.3
92.0
101.4
97.9
90.3
81.2
76.6
70.0
67.9
67.1
65.6
66.7
67.3
68.3
70.4
72.5
74.7

Total
nondefense

67.9
78.6
77.0
82.2
91.5
93.9
100.4
103.9
111.6
120.1
128.1
125.3
130.5
141.8
155.5
163.2
164.0
186.4
201.0
206.0
216.0
215.9
215.9
221.7
225.1

Payments
for
individuals

28.0
30.1
32.1
35.8
37.1
38.8
39.7
40.1
44.2
50.1
55.6
60.9
65.1
77.2
85.3
92.2
98.0
113.3
124.2
126.0
125.9
126.6
132.0
135.1
138.4

Net
interest

16.2
16.5
16.3
16.2
16.6
16.8
16.7
16.7
16.4
16.1
16.9
15.5
15.0
15.2
15.5
15.4
14.3
14.6
16.4
17.4
17.8
17.5
17.2
16.2
15.5

All

other

23.7
32.0
28.6
30.2
37.8
38.3
44.0
47.2
50.9
53.8
55.6
48.8
50.4
49.4
54.7
55.6
51.6
58.4
60.4
62.6
72.3
71.7
66.7
70.4
71.3

Table 5. BUDGET AUTHORITY AND OUTLAYS BY AGENCY
(In millions of dollars)

Budget authority

Department or other unit

1978

actual

legislative branch ............................ ..

~~c~~~~i~7tice·of··ihe··pres·iderli:::::::

Funds appropriated to the President ..
Agriculture .........................................
Commerce ..........................................
Defense-Military 1 .......................... .
Defense-Civil................................. ..
Energy ...............................................
Health, Education, and Welfare ......... .
Housing and Urban Development ..... ..
Interior...............................................
Justice ...............................................
labor .................................................

State ................................................. .

Transportation .................................. ..
Treasury .............................................
Environmental Protection Agency ...... .
General ervices Administration ........ .
Nati~n~1 Aefonautics and Space Administration ...................................
Veterans Administration ................... ..
Other independent agencies ...............
Allowances 2 ..................................... .
Undistributed offsetting receipts:
Employer share, employee retirement .........................................
Interest received by trust funds .. ..
Rents and roralties on the Outer
Continenta Shelf ..................... ..
Total budget authority
and outlays....................

1979

Outlays

1980

estimate

1,071
458
78
7,528
16,535
2,308
115,322
2,797
10,695
162,192
38,000
4,590
2,370
20,028
1,483
13,478
56,771
5,498
151

1,213
539
83
11,372
23,660
2,533
125,209
2,669
9,716
184,002
31,112
4,683
2,510
28,911
1,674
17,272
65,570
5,410
313

1,273
625
91
10,345
20,544
3,217
135,041
3,059
7,447
205,170
33,295
4,438
2,398
27,534
1,712
17,813
70,051
5,087
308

4,060
19,010
32,851

4,562
20,486
34,728
100

-4,983
-8,530

1978

actual

1979

1980

estimate

1,049
435
75
4,450
20,368
5,239
103,042
2,553
6,286
162,856
7,589
3,821
2,397
22,896
1,252
13,452
56,355
4,071
83

1,209
526
88
5,090
20,205
4,331
111,900
2,644
8,946
180,714
8,962
4,015
2,586
22,854
1,399
15,363
65,462
4,194
158

1,305
619
89
5,133
18,404
3,261
122,700
2,724
8,893
199,428
10,634
3,764
2,505
24,484
1,677
15,793
69,890
4,753
131

4,723
20,992
56,959
2,426

3,980
18,962
25,396

4,401
20,315
26,675

4,593
20,450
27,961
1,398

- 5,388
- 9,782

- 5,482
-10,940

-4,983
-8,530

- 5,388
- 9,782

- 5,482
-10,940

-2,259

- 3,500

- 2,600

-2,259

-3,500

-2,600

501,500

559,658

615,526

450,836

493,368

531,566

326,803

366,560

386,671

199,933

216,571

222,957

234,267
...............
...............

261,508
...............
...............

302,340
...............
...............

154,450
98,157
57,866

184,104
111,212
49,891

214,323
122,967
44,805

-43,635

-48,981

-53,429

-43,635

-48,981

-53,429

MEMORANDUM

Portion available through current
action by Congress ........................
Portion available without current
action by Congress ........................
Outlays from obligated balances 3 .... .
Outlays from unobligated balances 3 ..
Deductions for offsetting receipts:
Intragovernmental transactions .....
Proprietary receipts from the
public .......................................
Total budget authority
and outlays....................

-15,935

-19,429

- 20,056

-15,935

-19,429

- 20,056

501,500

559,658

615,526

450,836

493,368

531,566

Includes allowances for civilian and military pay raises for Department of Defense.
Includes allowances for civilian agency pay raises and contingencies.
3 Outlays from appropriations to liquidate contract authority are included as outlays from balances.
1

Table 6. FEDERAL FINANCES AND THE GROSS NATIONAL PRODUCT, 1958-82 (dollar amounts in billions)
Outlaysl

Budget receipts 1
Fiscal year

Gross
national
product

1958 .............................................................................
442.1
1959 .............................................................................
473.3
1960 .............................................................................
497.3
1961 .............................................................................
508.3
1962 .............................................................................
546.9
1963 .............................................................................
576.3
1964 .............................................................................
616.2
1965 .............................................................................
657.1
1966 .............................................................................
721.1
1967 .............................................................................
774.4
1968 .............................................................................
829.9
1969 .............................................................................
903.7
1970 .............................................................................
959.0
1971 ............................................................................. 1,019.3
1972 ............................................................................. 1,110.5
1973 ............................................................................. 1,237.5
1974 ............................................................................. 1,359.2
1975 ............................................................................. 1,457.3
1976 ............................................................................. 1,621.7
1977 ............................................................................. 1,834.0
1978 ............................................................................. 2,043.4
1979 estimate .............................................................. 2,289.4
1980 estimate .............................................................. 2,505.7
1981 estimate .............................................................. 2,758.6
1982 estimate .............................................................. 3,025.2
00
CiJ

* 0.05% or less.
1

See footnotes to Table 1 for changes in budget coverage.

Unified budget
Amount

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
300.0
357.8
402.0
456.0
502.6
576.8
652.6

Percent
of GNP

18.0
16.7
18.6
18.6
18.2
18.5
18.3
17.8
18.1
19.3
18.5
20.8
20.2
18.5
18.8
18.8
19.5
19.3
18.5
19.5
19.7
19.9
20.1
20.9
21.6

Amount

82.6
92.1
92.2
97.8
106.8
111.3
118.6
118.4
134.7
158.3
178.8
184.5
196.6
211.4
232.0
247.1
269.6
326.2
366.4
402.7
450.8
493.4
531.6
578.0
614.9

Percent
of GNP

18.7
19.5
18.5
19.2
19.5
19.3
19.2
18.0
18.7
20.4
21.5
20.4
20.5
20.7
20.9
20.0
19.8
22.4
22.6
22.0
22.1
21.6
21.2
21.0
20.3

Federal debt, end of year

Off·budget
Federal entities
Amount

Amount

Percent
of GNP

........ ,... ............

............
............
............
............
............
............
............
............
............
............
............
............
............
............
.1
1.4
,
8.1
7.3
8.7
10.3
12.0
12.0
11.5
11.1

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

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

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

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

*
.1
.6
.5
.5
.5
.5
.5
.4
.4

82.6
92.1
92.2
97.8
106.8
111.3
118.6
118.4
134.7
158.3
178.8
184.5
196.6
211.4
232.0
247.1
271.1
334.2
373.7
411.4
461.2
505.4
543.5
589.5
626.0

Held by the public

Total

Total
Percent
of GNP

18.7
19.5
18.5
19.2
19.5
19.3
19.2
18.0
18.7
20.4
21.5
20.4
20.5
20.7
20.9
20.0
19.9
22.9
23.1
22.5
22.6
22.1
21.7
21.4
20.7

Amount

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
631.9
709.1
780.4
839.2
899.0
940.3
951.9

Percent
of GNP

63.3
60.8
58.5
57.6
55.5
53.9
51.4
49.2
45.7
44.1
44.6
40.6
39.9
40.2
39.4
37.9
- 35.8
37.3
39.0
38.7
38.2
36.7
35.9
34.1
31.5

Amount

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
480.3
551.8
610.9
650.9
689.9
701.9
674.3

Percent
of GNP

51.2
49.7
47.7
46.9
45.4
44.2
41.8
39.8
36.7
34.5
35.0
30.9
29.7
29.9
29.2
27.7
25.5
27.2
29.6
30.1
29.9
28.4
27.5
25.4
22.3

Table 7. SUMMARY OF FULL-TIME PERMANENT CIVILIAN EMPLOYMENT IN THE EXECUTIVE
BRANCH 1
[Excluding the Postal Service]
As of September 30
1978
actual

1979 estimate
In 1979
Current
budget

1980
Estimate

Change
1979-80

84,923
29,641
904,109
28,962
18,863
143,644
15,963
54,798
52,870
21,211
22,680
71,160
108,598
10,156
35,137

84,000
29,800
904,900
28,600
19,100
145,100
17,400
56,000
55,100
20,800
22,800
73,100
112,500
10,800
36,000

85,000
29,500
892,600
28,700
19,600
143,000
16,100
55,000
54,100
22,300
22,500
71,800
110,500
10,700
34,700

82,700
29,600
883,700
28,300
19,000
143,900
16,200
54,400
54,600
22,300
22,600
71,800
110,700
10,900
34,400

-2,300
100
-8,900
-400
-600
900
100
-600
500

23,169
198,027

23,200
203,000

22,800
198,900

22,600
197,900

-200
-1,000

5,755
8,293
2,666
6,563
13,117
4,402
17,262
39,693

5,900
8,600
2,800
6,800
13,500
4,600
18,000
41,800

5,800
8,400
2,800
6,600
13,200
4,600
17,700
45,000

5,800
8,400
2,900
6,600
8,000
4,600
17,700
45,300

-5,200

1,921,662

1,944,200
2,000

1,921,900
500

1,904,900
2,000

-17,000
1,500

Subtotal ..............................................
Expected lapse..................................................

1,921,662

1,946,200
-14,600

1,922,400
-11,000

1,906,900
-11,000

-15,500

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

1,921,662

1,931,600

1,911,400

1,895,900

-15,500

Agency

Agriculture ........................................................
COmmerce ........................................................
Defense-military functions ..... ~ ...................... .
Defense-civil functions ................................ ..
Energy ..............................................................
Health, Education, and Welfare ...................... ..
Housing and Urban Development ......................
Interior .............................................................
Justice ..............................................................
Labor ................................................................

State ............................................................... .

Transportation ..................................................
Treasury ...........................................................
Environmental Protection Agency .................... ..
General Services Administration ...................... ..
National Aeronautics and Space Administration ..........................................................
Veterans Administration ................................... .
Other:
Agency for International Development ........ ..
International Communication Agency .......... ..
Nuclear Regulatory Commission .................. .
Office of Personnel Management 2 .............. .
Panama Canal ..............................................
Small Business Administration .................... .
Tennessee Valley Authority ...........................
Miscellaneous 2 .......................................... ..
Subtotal ..............................................
Contingencies 3 ............................................... ..

100
200
200
-300

100

300

1 Excludes Postal Service employment. Actual employment for 1978 was 525,343; employment for 1979 is estimated to be 522,700, and 521,600 for
1980. Also excludes developmental positions under the worker trainee opportunity program (wroP), as well as certain statutory exemptions.
2 Appropriate adjustments have been made to reflect establishment of the Office of Personnel Management (formerly the Civil Service Commission),
the Federal Labor Relations Authority, and the Merit Systems Protection Board, pursuant to the prOVisions of the Civil Service Reform Act of 1978.
3 Subject to later distribution.

Table 8. BUDGET RECEIPTS AND OUTLAYS, 1789-1982 (in millions of dollars)
Fiscal year

Budget
receipts

Budget
outlays

BUd~et

surp us
or
deficit (-)

Fiscal year

1789-1849 ......
1850-1900.:....
1901-1905 ......
1906-1910 ......
1911-1915 ......
1916-1920 ......

1,160
14,462
2,797
3,143
3,517
17,286

1,090
15,453
2,678
3,196
3,568
40,195

+70
-991
+119
-52
-49
-22,909

1921 .................
1922 .................
1923 .................
1924.................
1925.................
1926.................
1927 .................
1928.................
1929 .................
1930.................

5,571
4,026
3,853
3,871
3,641
3,795
4,013
3,900
3,862
4,058

5,062
3,289
3,140
2,908
2,924
2,930
2,857
2,961
3,127
3,320

+509
+736
+713
,+963
+717
+865
+ 1,155
+939
+734
+738

1931 .................
1932 .................
1933.................
1934.................
1935.................
1936.................
1937.................
1938.................
1939 .................
1940.................

3,116
1,924
1,997
3,015
3,706
3,997
4,956
5,588
4,979
6,361

3,577
4,659
4,598
6,645
6,497
8,422
7,733
6,765
8,841
9,456

-462
-2,735
-2,602
-3,630
-2,791
-4,425
-2,777
-1,177
-3,862
-3,095

1941 .................
1942.................
1943 .................
1944.................
1945.................
1946 .................
1947 .................
1948.................
1949 .................
1950.................

8,621
14,350
23,649
44,276
45,216
39,327
38,394
41,774
39,437
39,485

13,634
35,114
78,533
91,280
92,690
55,183
34,532
29,773
38,834
42,597

-5,013
-20,764
-54,884
-47,004
-47,474
-15,856
+3,862
+ 12,001
+603
-3,112

1951 .................
1952 .................
1953.................
1954.................
1955.................
1956.................
1957 .................

51,646
66,204
69,574
69,719
65,469
74,547
79,990

45,546
67,721
76,107
70,890
68,509
70,460
76,741

+6,100
-1,517
-6,533
-1,170
-3,041
+4,087
+3,249

BUd~et

Budget
receipts

Budget
outlays

surp us
or
deficit (-)

1958 .................
1959 .................
1960.................
1961 .................
1962 .................
1963 .................
1964 .................
1965.................
1966.................
1967 .................
1968.................

79,636
79,249
92,492
94,389
99,676
106,560
112,662
116,833
130,856
149,552
153,671

82,575
92,104
92,223
97,795
106,813
111,311
118,584
118,430
134,652
158,254
178,833

-2,939
-12,855
+269
-3,406
-7,137
-4,751
-5,922
-1,596
-3,796
-8,702
-25,161

1969 .................
1970.................
1971. ................
1972 .................
1973 .................
1974.................
1975 .................
1976.................
TQ .....................
1977 .................
1978.................

187,784
193,743
188,392
208,649
232,225
264,932
280,997
300,005
81,773
357,762
401,997

184,548
196,588
211,425
232,021
247,074
269,620
326,185
366,439
94,729
402,725
450,836

+3,236
-2,845
-23,033
-23,373
-14,849
-4,688
-45,188
-66,434
-12,956
-44,963
-48,839

1979 est. .........
1980 est. .........
1981 est. .........
1982 est. .........

455,989
502,553
576,757
652,629

493,368
53.1,566
577,973
614,870

-37,379
-29,013
-1,216
37,758

Totals, including outlays of off-budget Federal entities
Outl~S

Fiscal year

of 0 budget
Federal
entities

Total
outlays

Total
surplus
or
deficit (-)

1973. ................
1974.................
1975.................
1976 .................
TQ .....................
1977 .................
1978 .................

60
1,447
8,054
7,285
1,785
8,684
10,327

247,134
271,067
334,239
373,724
96,514
411,409
461,163

-14,908
-6,135
-53,242
-73,719
-14,741
-53,647
-59.166

1979 est. .........
1980 est. .........
1981 est. .........
1982 est. .........

11,990
11,956
11,501
11,096

505,357
543,523
589,474
615,966

-49,368
-40,969
-12,717
26,662

Data for 1789-1939 are for the administrative budget: 1940-1980 are for the unified budget.
In calendar year 1976, the Federal fiscal year was converted from a July I-June 30 basis to an Oct. I-Sept. 30 basis. The TQ refers to the
transition quarter from July 1 to Sept. 30, 1976. See footnotes to Table 1 for changes in budget coverage.

GLOSSARY 1
AUTHORIZATION-Basic substantive legislation enacted by Congress that sets up
or continues the legal operation of a Federal program or agency. Such legislation is nor~ally a prerequisite for subsequent appropriations, but does not
usually provide budget authority (see below).
BUDGET AMENDMENT-A formal request 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 will result in immediate or future outlays. It may be classified by the
period of availability (I-year, multiple-year, no-year), by the timing of congressional action (current 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 appropriation process that permits Federal agencies to incur obligations and to make
payments.
Borrowing authority-statutory authority not necessarily provided through the
appropriations process, that permits Federal agencies to incur obligations and
to 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.
BUDGET RECEIPTS-Money, net of refunds, collected from the public by the
Federal Government through the exercise of its governmental or sovereign
powers, as well as gifts, contributions, and 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 loan repayments) and payments between Government accounts. (See offsetting receipts.)
BUDGET SURPLUS OR DEFICIT (- )-The difference between budget receipts and
outlays.
CONCURRENT RESOLUTION ON THE BUDGET-A resolution passed by both
Houses of Congress, but not requiring the signature of the President, setting
forth targets or binding congressional budget totals for the Federal Government.
CONTINUING RESOLUTION-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.
CONTROLLABILITY-In the President's budget this refers to the ability of the
President to control budget authority or outlays during a fiscal year without
changing existing substantive law. The concept "relatively uncontrollable under
current law" includes outlays for open-ended programs and fixed costs, such as
These definitions are consistent with those contained in the booklet, "Terms Used in the Budgetary Process",
published by the General Accounting Office in July 1977.
1

interest on the public and social security and veterans benefits, and outlays to
liquidate (pay for) prior-year obligations.
CURRENT SERVICES ESTIMATES-Estimated budget authority and outlays for
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 Act of 1974 requires
that the President transmit current services estimates to the Congress. The
current services estimates for 1980 are published in Special Analysis A of the
1980 budget.
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: the general fund, 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 collections, such as those generated by and used to finance a
continuing cycle of business-type operations.
FISCAL YEAR-The yearly accounting period for the Federal Government, which
begins on October 1 and ends on the following September 30. The fiscal year is
designated by the calendar year in which it ends; e.g., fiscal year 1980 is the
fiscal year endi~g September 30, 1980. (Prior to fiscal year 1977 the fiscal year
began on July 1 and ended on the following June 30.)
GOVERNMENT-SPONSORED ENTERPRISES-Enterprises with completely private ownership, such as Federal land banks and Federal home loans banks,
established and chartered by the Federal Government to perform specialized
functions. These enterprises are not included in the budget totals, but financial
information on their operations is published i~ a separate part of the appendix
to the President's budget.
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).
NATIONAL NEEDS-The end purposes being served by budget authority, outlays,
loan guarantees, and tax expenditures grouped by function. To achieve our
national needs, the Federal Government undertakes major missions that are
supported by basic programs:
Major missions-The purposes being served by the basic programs authorized to
carry out national needs. For purposes of the budget, major missions are synonymous with subfunctions.
Basic programs-A set of activities directed toward a common purpose or goal,
undertaken in order to meet major missions.
OBLIGATIONS-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 some future period.
OFF-BUDGET FEDERAL ENTITIES-Organizational entities, federally owned in
whole or in part, whose transactions belong in the budget under current budget
accounting concepts but which have been excluded from the budget totals under
provisions of law. While these transactions are not included in the budget
totals, information on these entities is presented in various places in the budget
documents.

OFFSETTING RECEIPTS-Collections deposited in receipt accounts that are offset
against budget authority and outlays rather than being counted as budget
receipts. These collections are derived from other Government accounts or from
Government activities that are of a business-type or market-oriented nature.
Offsetting receipts are classified as (1) intragovernmental transactions or (2)
proprietary receipts from the public.
OUTLAYS-Values of 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.
SUPPLEMENTAL APPROPRIATION-An appropriation enacted as an addition to
a regular annual appropriation act. Supplemental appropriation acts 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-Losses of .~ revenue attributable to provisions of the
Federal income tax laws 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 affecting individual or corporate income tax liabilities.
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 interest-bearing Government securities and earn interest for
the trust fund.
ZERO-BASE BUDGETING (ZBB)-A process that emphasizes management's responsibility for planning, budgeting and evaluation. ZBB provides for analysis of
alternative methods of operation and various levels of effort. It places new
programs on an equal footing with existing programs by requiring ranking of
program priorities and thereby provides a systematic basis for allocating resources.

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Full text of Budget in Brief : Fiscal Year 1980

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