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97th Congress, 1st Session

House Document No. 97-1

BUDGET
OF THE
UNITED STATES
GOVERNMENT
FISCAL YEAR

1982
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET



THE BUDGET DOCUMENTS
Data and analyses relating to the budget for 1982 are published
in four documents:
Budget of the United States Government, 1982 contains the
Budget Message of the President and presents an overview of the
President's budget proposals. It includes explanations of spending
programs in terms of national needs, agency missions, and basic
programs, and an analysis of estimated receipts, including a discussion of the President's tax program. This document also contains a
description of the budget system and various summary tables on
the budget as a whole.
United States Budget in Brief, 1982 is designed for use by the
general public. It provides a more concise, less technical overview
of the 1982 budget than the above volume. Summary and historical
tables on the Federal budget and debt are also provided, together
with graphic displays.
Budget of the United States Government, 1982—Appendix contains detailed information on the various appropriations and funds
that comprise the budget. The Appendix contains more detailed
information than any of the other budget documents. It includes
for each agency: the proposed text of appropriation language,
budget schedules for each account, new legislative proposals, explanations of the work to be performed and the funds needed, proposed general provisions applicable to the appropriations of entire
agencies or groups of agencies, and schedules of permanent positions. Supplemental and rescission proposals for the current year
are presented separately. It also includes the President's recommendations for executive, legislative, and judicial salaries, as well
as information on certain activities whose outlays are not part of
the budget totals.
Special Analyses, Budget of the United States Government, 1982
contains analyses that are designed to highlight specified program
areas or provide other significant presentations of Federal budget
data. This document includes information about: alternative views
of the budget, i.e., current services and national income accounts;
economic and financial analyses of the budget covering Government finances and operations as a whole; and Government-wide
program and financial information for Federal civil rights and
research and development programs.
Instructions for purchasing copies of any of these documents are
on the last two pages of this volume.
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.
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402




TABLE OF CONTENTS
Page

PART 1. THE BUDGET MESSAGE OF THE PRESIDENT
PART 2. ECONOMIC ASSUMPTIONS AND THE BUDGET OUTLOOK
Economic assumptions
The short-range budget outlook
Proposed legislation to reduce Federal spending
Budget authority
Federal civilian employment and pay
Federal debt
Control of Federal credit
The 5-year budget outlook
PART 3. LONGER RANGE TRENDS AND ISSUES
Budget controllability
The roles of Government
Federal credit programs
Sensitivity of the budget to economic assumptions
PART 4. BUDGET RECEIPTS
Summary
Enacted legislation and administrative action
Receipts proposals
Effect of proposals on receipts
Changes in budget receipts
Receipts by source
PART 5. MEETING NATIONAL NEEDS: THE FEDERAL PROGRAM BY
FUNCTION
Introduction
National defense
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
Income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Interest
Allowances
Undistributed offsetting receipts




III

Ml
1
2
5
9
14
15
15
16
20
35
37
45
49
57
63
64
65
73
80
82
83
87
88
93
108
122
132
148
161
169
183
194
204
231
247
269
279
286
293
299
302
304

IV

CONTENTS
Page

PART 6. PERSPECTIVES ON THE BUDGET
Relationship of budget authority to outlays
Alternative budget proposals
Fiscal activities outside the Federal budget
Budget funds and the Federal debt
Comparison of relatively uncontrollable outlays and of receipts
Allocation of windfall profit tax receipts
PART 7. THE BUDGET SYSTEM AND CONCEPTS
The budget process
Coverage of the budget totals
Budget authority and related transactions
Collections
Other transactions
Basis for budget figures
PART 8. THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
Explanatory note
Legislative branch
The judiciary
Executive Office of the President
Funds appropriated to the President
Department of Agriculture
Department of Commerce
Department of Defense—Military
Department of Defense—Civil
Department of Education
Department of Energy
Department of Health and Human Services
Department of Housing and Urban Development
Department of the Interior
Department of Justice
Department of Labor
Department of State
Department of Transportation
Department of the Treasury
Environmental Protection Agency
National Aeronautics and Space Administration
Veterans Administration
Other independent agencies
Allowances
Budget totals
Off-budget Federal entities
PART 9. SUMMARY TABLES
Explanatory note relating to the summary tables
Table 1. Budget summary
Table 2. Budget receipts, outlays, and budget authority
Table 3. Budget authority and outlays by agency
Table 4. Budget authority and outlays available through current action by
Congress
Table 5. Relation of budget authority to outlays
Table 6. Obligations incurred, net
Table 7. Balances of budget authority
Table 8. Summary of full-time permanent civilian employment in the executive branch
Table 9. Budget financing and outstanding debt




307
308
312
320
333
339
347
349
350
355
357
361
363
364
367
368
369
378
381
385
392
405
413
423
427
432
437
452
457
468
471
476
480
488
495
497
498
502
540
541
544
549
550
551
552
553
554
555
556
557
558
559

CONTENTS
Page

Table 10. Budget receipts by source
Table 11. Offsetting receipts by type
Table 12. Budget authority by function and agency
Table 13. Outlays by function and agency
Table 14. Legislative proposals for major new and expanded programs in
the 1982 budget, projection of costs
Table 15. New direct loan obligations by agency
Table 16. New loan guarantee commitments by agency
Table 17. Controllability of budget outlays, 1972-82
Table 18. Budget receipts by source, 1972-82
Table 19. Budget outlays by function, 1972-82
Table 20. Federal transactions in the national income accounts, 1971-82
Table 21. Federal finances and the gross national product, 1964-84
Table 22. Composition of budget outlays in current and constant (fiscal year
1972) prices: 1959-84
Table 23. Budget receipts and outlays, 1789-1984
INDEX




560
563
566
578
591
594
595
596
598
600
610
611
612
613
615

PART 1

THE BUDGET MESSAGE
OF THE
PRESIDENT




Ml

Individual
Income Taxes
45«




Social
Insurance
Receipts

29«

Excise
Taxes

9*

National
Defense
25«
Net Interest

mm

Direct Benefit ^
Payments
for Individuals
48C

^^

BUDGET MESSAGE OF THE PRESIDENT
To the Congress of the United States:
My administration has faced a wide range of challenges at home
and abroad, challenges stemming from our strengths, not our weaknesses: our strengths as a world leader, as a developed industrial
nation, and as a heterogeneous democracy with high goals and
great ambitions. Meeting these challenges satisfactorily requires
that we establish priorities, recognizing the limits to even our
Nation's enormous resources. We cannot do all that we wish at the
same time. But we must provide for our security, establish the basis
for a strong economy, protect the disadvantaged, build human and
physical capital for the future, and safeguard this Nation's magnificent natural environment.
This budget provides for meeting these needs, while continuing a
4-year policy of prudence and restraint. While our budget deficits
have been higher than I would have liked, their size has been
determined for the most part by economic conditions. Even so, the
trend has been downward. In 1976, the budget deficit equalled 4.0%
of gross national product. This was reduced to 2.3% in the budget
year that ended 3 months ago. The 1982 budget deficit is estimated
to equal only 0.9% of gross national product.
The rate of growth in budget outlays has been held to a minimum. In spite of significant increases in indexed programs, outlays
for nondefense programs—after adjusting for inflation—decrease
slightly.
The 1982 budget calls for outlays of $739 billion, an increase of
1.0% when adjusted for inflation. Nondefense spending is projected
to decline by 0.2% in real terms. The tax reductions I proposed as
part of the economic revitalization program have been retained,
THE BUDGET TOTALS
(In billions of dollars)
1980
actual

Outlays
Receipts
Surplus or deficit ( - )
Budget authority
Credit budget




1981
estimate

1982
estimate

1984
estimate

1983
estimate

579.6
520.0

662.7
607.5

739.3
711.8

817.3
809.2

890.3
922.3

-59.6

-55.2

-27.5

-8.0

32.0

658.8
131.2

726.5
165.4

809.8
152.6

892.0

962.7

M3

M4

THE BUDGET FOR FISCAL YEAR 1982

but some have been delayed or phased in over a longer period in
recognition of the continued high inflation rate. The budget deficit—which is now projected at $55.2 billion in 1981—is estimated to
decline to $27.5 billion in 1982.
In planning this budget, I have considered four major issues:
• What is the economic policy that will ensure prosperity for all
while minimizing inflation?
• How much of our Nation's wealth should be used by the
Federal Government?
• What are desirable spending proposals and strategies for defense, human resources, and investment?
• How can the management of Government be improved?

THE ECONOMY
During the last decade we withstood a series of economic shocks
unprecedented in peacetime. The most dramatic of these were the
explosive increases of OPEC oil prices. But we have also faced
world commodity shortages, natural disasters, agricultural shortages, and major challenges to world peace and security. Our ability
to deal with these shocks has been impaired by slower productivity
growth and persistent, underlying inflationary forces built up over
the past 15 years.
Nevertheless, the economy has proved remarkably resilient. Real
output has grown at an average annual rate of 3% since I took
office, and employment has grown by 2V2%. Nearly 8 million productive private sector jobs have been added to the economy. However, unacceptably high inflation remains our most difficult economic problem. This inflation requires that we hold down the
growth of the budget to the maximum extent, while still meeting
the demands of national security and human compassion. I have
done so, as I did in my earlier budgets.
While budget restraint is essential to any appropriate economic
policy, high inflation cannot be attributed solely to Government
spending. The growth in budget outlays has been more the result of
economic factors than the cause of them. For fiscal year 1981 alone,
budget outlays must be increased by $9 billion over last year's
estimate as a result of higher interest rates. Yet this increase results
not only from inflation but from the monetary policies undertaken to
combat it. Nearly $18 billion for 1981 reflects higher defense costs
and higher automatic inflation adjustments than were anticipated a
year ago.




THE BUDGET MESSAGE OF THE PRESIDENT

M5

We are now in the early stages of economic recovery following a
short recession. Typically, post-recessionary periods have been
marked by vigorous economic growth abetted by stimulative policies such as large tax cuts or spending programs. I am not recommending such actions, because persistent inflationary pressures
dictate a restrained fiscal policy. However, I continue to recommend specific tax reductions that contribute directly to increased
productivity and long-term growth.

THE SIZE AND ROLE OF GOVERNMENT
We allocate about 23% of our Nation's output through the Federal budget. (Including all levels of government, the total government
share of our gross national product is about one-third.) We must
come close to matching Federal outlays with tax receipts if we are
to avoid excessive and inflationary Federal borrowing. This means
either controlling our appetite for spending or accepting the
burden of higher taxes.
The growth of budget outlays is puzzling to many Americans, but it
arises from valid social and national security concerns. Other developed countries face similar pressures. We face a threat to our
security, as events in Afghanistan, the Middle East, and Eastern
Europe make clear. We have a steadily aging population; as a
result, the biggest single increase in the Federal budget is the
rising cost of retirement programs, particularly social security. We
must meet other important domestic needs: to assist the disadvantaged; to provide the capital needed by our cities and our transportation systems; to protect our environment; and to revitalize
American industry.
I have been concerned with the proper role of the Federal Government in designing and providing such assistance. The Federal
Government must not usurp functions that are best left to the
private sector or to State and local governments. My administration has sought to make the proper assignments of responsibility,
to resolve problems in the most efficient manner.
We have also recognized the need to simplify the system of
Federal grants to State and local governments. Once again, I am
proposing several grant consolidations in the 1982 budget, including a new proposal that would consolidate several highway programs. Previous consolidation proposals of my administration have
been in the areas of youth training and employment, environment,
energy conservation, airport development, and rehabilitation services. These consolidations are essential to improving our intergovernmental system. However, the Congress has so far agreed to
consolidate only rehabilitation services grants. Therefore, I am proposing again the consolidations recommended earlier.




M6

THE BUDGET FOR FISCAL YEAR 1982

MAJOR BUDGET PRIORITIES
Spending growth can be constrained; not easily, not quickly, but
it is possible. My budget priorities have been established, once
again, to achieve this goal in a responsible manner.
Three years ago, in my 1979 budget message, I outlined the
following principles:
• The Nation's armed forces must always stand sufficiently
strong to deter aggression and to assure our security.
• An effective national energy plan is essential to reduce our
increasingly critical dependence upon diminishing supplies of
oil and gas, to encourage conservation of scarce energy resources, to stimulate conversion to more abundant fuels, and
to reduce our large trade deficit.
• The essential human needs of our citizens must be given high
priority.
• The Federal Government must lead the way in investment in
the Nation's technological future.
• The Federal Government has an obligation to nurture and
protect our environment—the common resource, birthright,
and sustenance of the American people.
My 1982 budget is again based on these principles.
Tax policy and economic revitalizatioru—I continue to believe

that large inflationary individual income tax cuts are neither appropriate nor possible today, however popular they might appear
in the short run. My economic revitalization program stresses tax
reductions on a timetable that we can afford, and that will fight
inflation by encouraging capital formation and increasing industrial productivity. This program stresses:
• simplification and liberalization of depreciation allowances;
• modification of the investment tax credit to encourage investment by temporarily depressed firms and by growing new
firms;
• an income tax credit to offset increases in social security
taxes;
• a liberalized earned income credit to also offset social security
taxes and to encourage low-income earners to work;
• a working-spouse deduction to make more equitable the way
working husbands and wives are taxed; and
• more favorable tax treatment for Americans in certain areas
overseas to help American exports and strengthen the dollar.
Defense.—Maintaining a strong defense has been a primary objective of this administration. In order to meet the security needs
of the Nation, real spending for defense increased in 1979 and 1980
by more than the 3% target I set at the NATO ministerial meeting




THE BUDGET MESSAGE OF THE PRESIDENT

M7

in 1977. This real growth rate in defense spending has been maintained despite the adverse effects of higher than anticipated inflation, and restrained budgets.
To meet critical remaining needs, this budget includes a $6.3
billion supplemental request for 1981, largely for military pay increases and combat readiness. Together with congressional add-ons
to my earlier 1981 request, this supplemental will increase defense
programs almost 8% in real terms over 1980. For 1982 and beyond,
the budget charts a course of sustained and balanced improvements in defense programs that will require real annual increases
in funding of about 5% per year.
The budget request reflects a careful balance between the need
to meet all critical defense needs, while maintaining fiscal restraint. There will be advocates for higher defense levels, but after
careful review I do not believe that higher spending would add
significantly to our national security. My budget already provides
for the three major defense requirements:
• Personnel recruitment and retention.—Our armed forces can
be no better than the quality of the people who serve in them.
Accordingly, I recently approved the largest pay and benefits
increase in history—a $4.5 billion compensation package that
provides for an average compensation increase of 16%. This
increase in base pay, plus better housing allowances, expanded enlistment and reenlistment bonuses, and special pay enhancements for submariners and other specialists, will help
attract and retain highly qualified men and women.
• Improving combat readiness.—Increased compensation will be
a key factor in overcoming key personnel shortages, which
are the major source of readiness problems. In addition, there
have been shortages in critical spare parts and, in a few cases,
inadequate funds for training. The funds recommended by
this budget should alleviate these problems.
• Modernizing our forces.—I also propose major investments to
enhance substantially the capabilities of our forces. Strategic
forces are being upgraded through continued procurement of
Trident submarines and missiles, procurement of cruise missiles, modification of the B-52 bomber, and development of
the MX missile. Army equipment, including tanks, armored
vehicles, helicopters, and air defense and other missile systems, is being modernized. Fighter and attack planes are
being added to Navy and Marine forces, and a continuing
major shipbuilding program will add over 80 ships to our
growing fleet between 1982 and 1986. The rapid deployment of
our forces is being improved through the acquisition of more
cargo ships and modification of airlift aircraft.




M8

THE BUDGET FOR FISCAL YEAR 1982

Foreign aid.—Foreign assistance remains crucial in achieving our
country's international political and economic goals. From the start
of my administration, I have stressed the need for substantial
increases in assistance to friendly nations, many of whom are
drastically harmed by constantly increasing oil prices and other
external economic and security pressures. At the same time, I have
insisted upon improved management of both our security and development assistance programs.
In the first 2 years of this administration, the Congress reduced
my foreign aid requests but permitted some program growth. For
the past 2 years, however, the Congress has failed to pass regular
foreign aid appropriations. Assistance programs in 1981 are being
funded under a continuing resolution that provides amounts slightly above the 1979 levels in nominal terms, and substantially below
them in real terms.
I believe in the need for higher levels of aid to achieve foreign
policy objectives, promote economic growth, and help needy people
abroad. Foreign aid is not politically popular and represents an
easy target for budget reduction. But it is not a wise one. For 1982,
therefore, I am requesting a foreign assistance program level that
is higher by 14% in real terms than the amount currently available for 1981. This request would reverse the recent real decline in
aid and demonstrate that the United States retains its commitment
to a world of politically stable and economically secure nations.
The bilateral development aid budget includes a U.S. response to
the 1980 Venice Summit agreement that the major industrial countries should increase bilateral aid for food production, energy production and conservation, and family planning in the developing
countries. Such an effort to increase the availability of resources on
which the industrial countries depend will serve U.S. national
security, and will stimulate additional actions by the private sector
in the recipient countries. This U.S. effort is planned in the expectation that the other Summit countries will also increase aid in
these sectors, in response to the Venice Summit agreement. We
hope this initiative will lead to agreement on arrangements for
increased consultation and cooperation among the major industrial
countries providing increased bilateral aid to these three vital sectors.
Energy.—My administration, working with the Congress, has established fundamental new policies that will profoundly change the
way the Nation produces and uses energy. They have already led to
more domestic exploration and to substantial energy conservation.
This energy program represents a major long-range national commitment to meeting one of our most pressing problems. It includes:




THE BUDGET MESSAGE OF THE PRESIDENT

M9

• Deregulation and decontrol of oil prices to be completed by
October of this year.
• Establishment of the Synthetic Fuels Corporation, which will
share with the private sector the risk in producing oil and
natural gas substitutes that directly reduce U.S. oil imports.
• Support for energy research and development in technologies,
such as solar and fusion energy, that the private sector would
not finance.
• Development of the strategic petroleum reserve to reduce the
impact of disruptions in world oil supplies.
• Energy conservation in public and nonprofit enterprises.
• Research on the environmental effects of energy production
and use to assure that adverse effects on environmental quality are minimized.
Continuation of a sound energy policy is essential to the Nation's
well-being in the coming decades. Such a policy must include the
pricing of energy at its true cost, mechanisms to stimulate conservation, incentives for the continued development of our own domestic sources of energy, encouragement for longer-run renewable
forms of energy, and equity for all our citizens as we adjust to this
new reality.
Basic science and space technology.—Basic research is essential

to the long-term vitality of the Nation's economy. Because the
benefits of such investments cannot be fully realized by individual
companies, the Federal Government plays a key role in supporting
such research.
My budgets have reversed a long period of decline in Federal
support for basic research. The 1982 budget continues that policy
by providing for 4% real growth in support for the conduct of basic
research across all Federal agencies. The budget also provides for
greater efforts to foster cooperation among government, business,
and universities in research.
In addition, we have recognized the growing importance of improving scientific technology in the Nation's universities as critical
to the advancement of science and to the training of scientific and
engineering manpower.
My administration's comprehensive space policy encourages the
practical, effective use of information obtained from orbiting satellites and the coordinated use of the Space Shuttle, now nearing
completion. Successful resolution of development problems is expected to lead to the first manned orbital flight of the Shuttle in
1981.
With these increases, Federal support for basic research will
have increased by almost 58% over 1978.




M10

THE BUDGET FOR FISCAL YEAR 1982

Social programs.—This budget supports my deep commitment to
programs that help our citizens develop their full potential, and to
programs assisting the poor, the unemployed, the elderly, and the
sick.
The most extensive such programs are social security and medicare. Parts of this system are expected to experience short-run
financing problems because higher than expected unemployment
has decreased payroll taxes below previous forecasts, and high
inflation has increased benefit payments. Therefore, the administration continues to urge the passage of legislation that would
permit the three major social security trust funds to borrow from
each other. In addition, it is essential that the Congress and the
American people give early consideration to medium-term financing concerns.
The reports of the Commission on Pension Policy, which I established 2 years ago, and the National Commission on Social Security
should stimulate constructive debate on these issues. These Commissions will complete their final reports during the coming months.
My administration has consistently maintained a strong commitment to remedying youth unemployment and the problems it
causes. This budget includes an increase of $1.2 billion in 1982 and
an additional increase of $0.8 billion in 1983 for the youth initiative I proposed last year. This initiative emphasizes the mastery of
basic arithmetic and literacy skills, as well as the link between the
classroom and the workplace.
The Job Corps would be continued at this year's level, serving
twice as many youth as when my administration took office. In
addition, my budget provides 240,000 public service jobs for lowincome, long-term unemployed persons in 1982. This program is
designed for the hard-core structurally unemployed, and includes
substantial training in order to place men and women in permanent jobs. At the same time, the budget continues the countercyclical public service employment program through 1982 at the 100,000
level set by the Congress for 1981. The budget also provides a slight
increase for the administration's private sector jobs initiative and
essentially maintains the 1980 level of summer youth employment.
I am again proposing to augment medicaid with a child health
assurance program effective by the end of 1982. This proposal,
which the House of Representatives passed last year, would extend
medicaid coverage to an additional 2 million children and pregnant
women.
I am also proposing a number of changes in existing programs.
For example, I am again proposing that retirement benefits for
government employees be adjusted for inflation once, rather than
twice, a year. This change would make these adjustments comparable to those for social security and most private sector automatic




THE BUDGET MESSAGE OF THE PRESIDENT

Mil

adjustment practices. The Congress approved a similar administration initiative last year for the food stamp program. This proposal
would save $1.1 billion in 1982.
Benefits that are adjusted by statute fot inflation will comprise
nearly one-third of total Federal spending in 1981. During the last
year, my administration has been assessing whether these adjustments are fair and equitable. We have concluded that the Consumer Price Index has several deficiencies as a measure of the true
cost of living, particularly because of the manner in which it
represents housing costs. I am therefore proposing, in this budget,
that future benefits be based on an alternative, more representative index. The alternative index is already calculated and published by the Bureau of Labor Statistics. This proposal is designed
to improve the technique of indexing these programs, not to reduce
benefits. Therefore, no cost savings are assumed in the budget.
The budget also includes legislation to make unemployment
benefits more nearly uniform among the States and to coordinate
benefits more precisely with unemployment rates. Although this
proposal would save about $2 billion in 1982 under the unemployment rates being projected for this budget, a slightly higher rate of
unemployment would trigger extended benefits nationally. In such
a case, unemployment benefits would be very close to those under
current law. Even with the projected change, under current economic projections $1.5 billion would be paid in 1982 for extended
benefits in States where the program is triggered.
I remain committed to a national health plan that would assure
basic and catastrophic medical coverage for all Americans, as well
as for prenatal and infant care. An estimated 22 million Americans
lack any private or public health insurance coverage. Another 60
million people lack adequate basic coverage or protection against
catastrophic medical expenses. Given the fact that adequate cost
containment does not exist and the need for overall budgetary
constraints, the budget does not include specific amounts for this
plan. However, it is important that our Nation attempt to meet
these needs and that the incentives in our health care system be
restructured. A clear demonstration of success in restraining medical care costs is an essential prerequisite to the enactment of a
national health plan.
My proposals to reform our welfare system should also be enacted as soon as possible. Such a program is essential to ensuring
that no American goes hungry or lacks a reasonable income, and to
provide needed fiscal relief to States, counties, and cities.

3^0-000 0 - 81 - 2 : QL 3




M12

THE BUDGET FOR FISCAL YEAR 1982

IMPROVING GOVERNMENT MANAGEMENT
This budget reinforces my commitment to use resources not only
wisely, but efficiently. During my administration we have:
• installed new Offices of Inspectors General in 15 major agencies to combat waste, fraud, and abuse;
• carried out a major Government-wide reform of the civil service system;
• reorganized important areas of the Federal Government, particularly those concerned with education and energy;
• reduced permanent Federal civilian employment by 45,000;
• achieved budgetary savings directly through improved cash
management; and
• reduced paperwork and established a paperwork budget.
Such efforts to streamline the way the Government conducts its
business are rarely dramatic. Improved efficiency is not the product of a simple sweeping reform but, rather, of diligent, persistent
attention to many aspects of Federal program management.
One important aspect of improved management has been in the
budget process itself. Zero-base budgeting is now an integral part of
the decisionmaking system, providing a more systematic basis for
making decisions. We have also instituted a 3-year budget planning
horizon so that the longer range consequences of short-term budget
decisions are fully considered and understood.
In 1978 I made a major commitment to establish a system of
controlling Federal credit since, in the past, the very large Federal
loan guarantee programs had largely escaped the discipline of the
budget process. This system is now in place.
I am gratified that the Congress has supported these efforts to
improve budget control. Appropriations bills now include limits on
many credit programs. The congressional budget resolutions place
significantly greater emphasis on longer range budget trends and
set overall credit targets.
While the credit control system provides a means of assessing
and limiting Federal credit programs, I believe Federal credit programs have become unduly complex and pose an increasing threat
to the effective and efficient operation of private capital markets.
In particular, the Federal Financing Bank has become a major and
rapidly growing source of off-budget funds for direct loans to a wide
range of borrowers.
Therefore, I am recommending that a panel of outstanding financial and budget experts should be established to examine these
issues. Such a panel should consider the treatment of credit activities in the budget, the adequacy of program administration, uniform rules and procedures for Federal credit programs, the role of




THE BUDGET MESSAGE OF THE PRESIDENT

M13

the Federal Financing Bank, and the relationship of tax-exempt
financing to overall credit and tax policies.

CONCLUSION
My budget recommendations reflect the major changes that have
taken place in our country over recent decades. In 1950, social
security and railroad retirement benefits accounted for less than
3% of budget outlays. Last year they accounted for more than onefifth of the total. Mandatory outlays for entitlement programs, the
levels of which are fixed by law, for interest on the public debt, and
for payments under binding contracts account for three-fourths of
total budget outlays. Because so much of the budget is committed
under current law before either the President or the Congress
begins the annual budget formulation process, controlling budget
growth has been difficult, and the results uneven. It has been
difficult because benefit payments and other legal obligations have
too often been spared from annual budget scrutiny. The results
have been uneven because budget restraint has fallen disproportionately on programs subject to the annual appropriations process.
My administration and the Congress began to redress this imbalance in the 1981 budget. The Congress passed, and I signed into
law, a reconciliation bill that for the first time was used as a
mechanism for changing a variety of entitlement and tax programs. I do not propose that we break faith with the American
people by arbitrarily or unfairly reducing entitlement programs.
However, these programs developed independently, and they
should be made less duplicative, more consistent, and more equitable. The size of these programs, and our need for budget restraint,
requires that we address these problems. I urge the Congress to build
upon last year's experience and review all aspects of the budget
with equal care.
The allocation of one-fifth of our Nation's resources through the
Federal budget is a complex, difficult, and contentious process.
Restraint on any program, small or large, is usually subject to
heated debate. At a time when there is broad consensus that the
size of the Federal budget is too large, we can no longer—as individuals or groups—make special pleas for exceptions to budget
discipline. Too often we have taken the attitude that individual
benefits or particular programs or specific tax measures are not
large enough to require restraint. Too often we have taken the
attitude that there must be alternative sources for reductions in
programs that benefit our particular group. This attitude is in part
responsible for the rapid budget growth we have experienced—and
can no longer afford.




M14

THE BUDGET FOR FISCAL YEAR 1982

Given our Nation's needs and our economic constraints, my recommendations meet the fundamental demands of our society: a
strong defense, adequate protection for the poor and the disadvantaged, support for our free enterprise economy, and investment in
the Nation's future.
JIMMY CARTER.
JANUARY 15,




1981.

PART 2

ECONOMIC ASSUMPTIONS AND
THE BUDGET OUTLOOK




ECONOMIC ASSUMPTIONS AND THE BUDGET
OUTLOOK
This part of the budget discusses the budget outlook and the
economic assumptions that underlie it. The first section presents
economic assumptions for calendar years 1980 through 1986. The
second section discusses several aspects of the short-range budget
outlook. The final section examines the budget's multiyear planning base for fiscal years 1982-84 and the projections for 1985 and
1986.
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. Budget receipts vary with individual and corporate incomes, which respond
to both real economic growth and inflation. Variations in receipts,
as well as in some benefit payments, such as unemployment compensation, normally serve as "automatic stabilizers" for the economy by restraining growth during boom periods and cushioning
economic downturns. Other activities of Government that are not
reflected in the budget totals, such as loan guarantees, off-budget
outlays, and regulations also affect the economy, although their
effect is generally less direct and less easily measured.
Conversely, most receipts, and outlays for many Federal programs, are directly linked to developments in the economy. For
example, most retirement and other social insurance benefit payments are now tied by law to price indexes. Medicare and medicaid
outlays are affected directly by the price of medical services. Interest on the debt is linked to market interest rates and the size of the
budget surplus or deficit, both of which in turn are influenced by
economic conditions. Loan asset sales, which reduce budget outlays,
are also affected by interest rates. Outlays for certain benefits,
such as unemployment compensation and food stamps, vary with
the rate of unemployment and income levels and are thereby
linked to the state of the economy.
Because of the complex interrelationships between the budget
and the economy, budget estimates depend to a very significant
extent upon economic assumptions. Thus, budget estimates can
change substantially if economic conditions differ greatly from



3

OUTLOOK

those assumed. In 1980, for example, actual Federal spending was
$48 billion higher than the original budget estimate in January
1979, with over half the increase directly attributable to economic
conditions different from those originally assumed.
The economic assumptions used for developing the budget estimates are presented in the following tables to assist in understanding the budget estimates and projections and the administration's
fiscal strategy. These economic assumptions are on a calendar year
basis, as is customary for economic statistics, whereas the budget
estimates are for fiscal years.
SHORT-RANGE ECONOMIC FORECAST
(Calendar years; dollar amounts in billions)
Item

Major economic indicators:
Gross national product, percent change, fourth quarter
over fourth quarter:
Current dollars
Constant (1972) dollars
GNP deflator (percent change, fourth quarter over fourth
quarter)
Consumer Price Index (percent change, fourth quarter over
fourth quarter) 2
Unemployment rate (percent, fourth quarter)
Annual economic assumptions:
Gross national product:
Current dollars.Amount
Percent change, year over year
Constant (1972) dollars:
Amount
Percent change, year over year
Incomes:
Personal income
Wages and salaries
Corporate profits
Price level:
GNP deflator:
Level (1972=100), annual average
Percent change, year over year
Consumer Price Index: 2
Level (1967 = 100), annual average
Percent change, year over year
Unemployment rates:
Total, annual average 3
Insured, annual average
Federal pay raise, October (percent): 4
Civilian
Military
Interest rate, 91-day Treasury bills (percent) 5
1
Actual
2

Actual
1979

Forecast
1980»

1981

1982

9.9
1.7

9.6
-.3

12.3
1.7

12.6
3.5

8.1

10.0

10.4

8.8

12.8
5.9

12.8
7.5

12.6
7.7

9.6
7.4

2,414
12.0

2,627
8.8

2,928
11.4

3,312
13.1

1,483
3.2

1,481
-.1

1,493
.9

1,545
3.5

1,944
1,236
255

2,160
1,344
241

2,420
1,486
233

2,700
1,656
269

162.8
8.5

177.4
9.0

196.0
10.5

214.3
9.3

217.7
11.4

247.1
13.5

278.1
12.5

306.8
10.3

5.8
3.0

7.2
3.9

7.8
4.4

7.5
4.1

7.0
7.0
10.0

9.1
11.7
11.5

5.5
9.1
13.5

9.0
9.0
11.0

data for the 1980 unemployment rate, Federal pay raise, and 91-day Treasury bill rate.
CPI for urban wage earners and clerical workers. Two versions of the CPI are now published. The index shown here is that currently used,
as 3
required by law, in calculating automatic cost-of-living increases for indexed Federal programs.
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.
4
General schedule pay raises become effective in October—the first month of the fiscal year. Thus, the October 1981 pay raise will set new
pay5 scales that will be in effect during fiscal year 1982.
Average rate on new issues within period. These projections assume, by convention, that interest rates decline with the rate of inflation. They
do not represent a forecast of interest rates.




THE BUDGET FOR FISCAL YEAR 1982

During the early months of calendar year 1980, the inflationary
outlook worsened significantly and the economy headed into a
recession. During the second quarter, economic activity declined at
a record rate. This decline, though sharp, proved to be brief as
economic activity began to pick up in the summer. Inflation, while
it has abated somewhat from the temporarily high level of the first
quarter, remains unacceptably high.
The short-range economic assumptions for calendar years 1980
(for which only three-quarters of actual data were available when
the forecast was made), 1981, and 1982 are forecasts of probable
economic conditions consistent with the administration's budget
proposals.
As the table indicates, it now appears that the economy has
embarked on what is likely to be a relatively slow recovery, with
real growth of IV2 to 2% during calendar year 1981 and 3 to 4% in
1982. Consistent with this pattern of growth, the unemployment
rate is projected to remain at about its current level during the
forecast period. The overall inflation rate, as measured by the GNP
deflator, is expected to be about 10 ¥2% in 1981, slightly above the
1980 rate. A decline in this measure of inflation, to just under 9%, is
projected in 1982. The consumer price index, which is more sensitive
to food prices, mortgage interest rates, and oil prices, is forecast to
increase by 12V2% during 1981 and 9V2% during 1982. These figures
compare with an increase in the consumer price index of almost 13%
during 1980.
The forecasts for 1981 and 1982 are subject to substantial margins of error. For periods further in the future, economic projections are subject to even greater uncertainty. Hence, in contrast to
the short-range economic forecast, the longer range assumptions for
the period 1983 to 1986 are not forecasts of probable economic

conditions. Instead, they are projections that assume steady progress in reducing unemployment and inflation.




OUTLOOK

LONG-RANGE ECONOMIC ASSUMPTIONS
(Calendar years; dollar amounts in billions)
Assumptions
1983

Major economic indicators:
Gross national product (percent change, fourth quarter
over fourth quarter)
Current dollars
Constant (1972) dollars
GNP deflator (percent change, fourth quarter over
fourth quarter)
Consumer Price Index (percent change, fourth quarter
over fourth quarter) x
Unemployment rate (percent, fourth quarter)
Annual economic assumptions:
Gross national product:
Current dollars:
Amount
Percent change, year over year
Constant (1972) dollars:
Amount
Percent change, year over year
Incomes:
Personal income
Wages and salaries
Corporate profits
Price level:
GNP deflator:
Level (1972=100), annual average
Percent change, year over year
Consumer Price Index:1
Level (1967 = 100), annual average
Percent change, year over year
Unemployment rates:
Total, annual average...
Insured, annual average2
Federal pay raise, October (percent) 3
Interest rate, 91-day Treasury bills (percent) 4

1984

1985

1986

12.2
3.7

11.5
3.7

10.7
3.7

9.9
3.7

8.2

7.5

6.7

6.0

8.2
7.0

7.5
6.6

6.7
6.2

6.0
5.9

3,718
12.3

4,156
11.8

4,611
11.0

5,081
10.2

1,600
3.5

1,659
3.7

1,720
3.7

1,784
3.7

3,021
1,850
311

3,360
2,051
355

3,709
2,257
404

4,067
2,466
455

232.4
8.5

250.5
7.8

268.0
7.0

284.8
6.3

333.6
8.7

359.5
7.7

384.6
7.0

408.6
6.3

7.1
3.8
8.5
9.4

6.7
3.5
8.0
8.5

6.3
3.2
7.5
7.7

6.0
3.0
7.0
6.8

1
CPI for urban wage earners and clerical workers. Two versions of the CPI are now published. The index shown here is that currently used,
as 2
required by law, in calculating automatic cost-of-living increases for indexed Federal programs.
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
General schedule pay raises become effective in October—the first month of the fiscal year. Thus, the October 1983 pay raise will set new
pay4 scales that will be in effect during fiscal year 1984. These rates apply to both civilian and military pay.
Average rate on new issues within period. These projections assume, by convention, that interest rates decline with the rate of inflation. They
do not represent a forecast of interest rates.

The Short-Range Budget Outlook

Overview.—Under the President's proposals, total outlays are
projected to rise by $76.6 billion between 1981 and 1982. Virtually
all of this increase stems from three sources: the relatively uncontrollable programs in the budget, such as interest on the debt and
benefit payments for individuals, and essential increases in spending for energy and defense.
Benefit payments under retirement, disability, health care, and
similar programs rise because of automatic cost-of-living adjust-




THE BUDGET FOR FISCAL YEAR 1982

ments and other built in price increases and because of the normal
increase in the number of eligible beneficiaries. Interest on the
public debt increases because of the effect of high interest rates
and because of increases in debt. In total, outlays for relatively
uncontrollable nondefense programs increase by $55.2 billion from
1981 to 1982. *
Expenditures to improve the combat readiness of our military
force are proposed to continue to increase in real terms. This
includes essential defense modernization—primarily to strengthen
NATO-related and strategic capabilities and to increase our flexibility to meet crises in other areas. National defense outlays increase by $23.3 billion from 1981 to 1982.
Necessary increases are provided for programs that will protect
this Nation against supply disruptions in imported oil and reduce
our long-term reliance on such oil through increased domestic
energy production and conservation. These outlays increase by $3.2
billion from 1981 to 1982.
The remainder of the budget shows selective increases for critical
areas, such as for the administration's youth initiative and for the
outlay effects of the economic revitalization program, principally
refundable tax credits to encourage investment.

Payments
Individuals and
Grants

82
Estimate

1

Long-term issues related to relatively uncontrollable programs are discussed in Part 3.




OUTLOOK

Overall, total outlays adjusted for inflation increase by about 1%
in 1982. All of this increase is due to growth in defense spending,
which rises by about 4%% in real terms. Nondefense spending is
virtually unchanged from 1981 to 1982.
The budget deficit is projected to be cut in half in 1982, from
$55.2 billion to $27.5 billion. As a percent of GNP, the 1982 budget
deficit is only 0.9%, as compared to 4.0% in 1976 and 2.3% in 1980.

Current services estimates.—The major policy changes in the
budget can be highlighted by comparing the administration's recommendations with current services estimates. Current services
estimates are projections of the costs of existing programs under
current law. They include outlay changes that result from increased numbers of beneficiaries entitled to receive payments,
higher benefit levels due to increases in the cost of living, and
added outlays necessary to maintain program levels in the face of
rising costs. They do not include increases or decreases in program
levels due to proposed policy changes.




THE BUDGET FOR FISCAL YEAR 1982
EFFECTS OF BUDGET PROPOSALS
(In billions of dollars)
1980
actual
Receipts:
Current services
Proposed reductions ( - ) .
Proposed increases
Budget receipts.
Outlays:
Current services
Proposed reductions ( - ) .
1 increases
Budget outlaysSurplus or deficit (—):
Current services
Budget surplus or deficit ( - ) .

Estimates
1981

1982

520.0

605.0
-3.1
5.6

706.5
-18.3
23.6

520.0

607.5

711.8

579.6

660.5
-1.4
3.7

736.2
-15.9
19.1

579.6

662.7

739.3

-59.6

-55.4

-29.7

-59.6

-55.2

-27.5

Current services estimates are thus a basis for identifying the
effects of all the policy changes recommended in the budget. Policy
changes include both proposed legislation and changes in appropriations. Special Analysis A, which accompanies this budget, compares in detail the 1981 and 1982 budget estimates and the current
services estimates.
The budget recommendations would result in 1982 outlays of
$739.3 billion, $3.1 billion above the current services level. The two
areas where major increases over current services occur are DefenseMilitary program increases, which are $10.0 billion over current
services levels in 1982, and the refundable credits from the economic revitalization program, which are $4.2 billion above current services levels. The major reductions from current services levels
include: —$4.8 billion for pay reform and restraint and —$2.2
billion for unemployment compensation proposals. The following
table identifies major program increases and reductions, relative to
current services levels, in the 1981 program. Major legislative reduction proposals are discussed in a separate section below.
Receipts under the tax proposals in this budget are expected to
be $711.8 billion in 1982, $5.3 billion higher than the current
services level. The major reductions from current services estimates result from tax reductions associated with the administration's proposed economic revitalization program. These reductions
are more than offset by increases resulting from the proposed
increase in motor fuels and highway use taxes, the withholding of
taxes on interest and dividends, and other revenue raising proposals. Additional detail on these proposals is provided in Part 4.




OUTLOOK
DIFFERENCES BETWEEN ADMINISTRATION 1982 BUDGET REQUEST AND CURRENT SERVICES LEVELS
(In billions of dollars)
Outlays

authority

Current services estimates for 1982
Decreases:
Defense, pay raise allowance
Defense, retired pay proposals
Defense, stockpile sales proposal
Export-Import Bank
Employment and training assistance
Payment to the Postal Service
Rail assistance
Federal impact aid to education
Loan guarantees to students and parents
Medicare and medicaid proposals
Civil service retirement indexation proposal
Unemployment compensation proposals
Housing assistance
Food and nutrition assistance
Public assistance program reform
Civilian agencies, pay raise allowance
Other
Subtotal decreases
Increases:
Defense—Military, program increases
Atomic energy defense activities
Foreign economic and financial assistance
Science and space programs
Federal Crop Insurance Corporation
Highway programs
Rural development business assistance proposals
Student financial assistance
Youth education and training proposal
...
Economic revitalization—refundable tax credit proposals
Allowance for contingencies
Other
Subtotal, increases
President's request for 1982

806.7

736.2

-3.4
-0.5
-0.2
-0.9
-0.2
-0.4
-0.4
-0.5
-0.8
-0.1
-0.7
-2.0
-5.4
-0.6
-0.5
-2.4
-3.3

-3.5
-0.5
-0.2
-0.1
-0.1
-0.4
-0.4
-0.4
-0.6
-0.5
-0.7
-2.2

-22.3

-15.9

11.8
0.9
1.1
0.4
0.5
0.6
0.6
0.1
1.2
4.2
2.0
2.0

10.0

25.4
809.8

19.1
739.3

0.1
-0.5
-0.5
-2.3
-2.9

0.8
0.3
0.3
0.1
0.1
*
0.4
0.1
4.2
1.0
1.7

•$50 million or less.

Proposed Legislation to Reduce Federal Spending

The budget restraint required to counter the current severe inflation has made it essential to propose a number of reductions in
Federal programs. Zero-base budgeting is well suited to this task.
With this process, it has been possible to compare programs and to
judge where the largest savings could be achieved with the least
sacrifice in service to the public.
This budget includes a number of legislative proposals that
would reduce Federal spending. Savings would be achieved through
several proposals relating to health programs, modification of entitlement programs to relate benefits more closely to need or to
earned rights, increased administrative efficiencies, and further




10

THE BUDGET FOR FISCAL YEAR 1982

reduction of waste, fraud, and abuse. In addition, this budget contains proposals to reform Federal compensation practices and procedures, place the railroad retirement system on a solid financial
footing, and sell excess materials in the national stockpile of strategic materials. Together, the legislative proposals reduce estimated
Federal spending by $9.4 billion in 1982, $8.9 billion in 1983, and
$9.6 billion in 1984.
Savings under legislative proposals are not the only savings proposed in this budget. Some are planned under existing administrative authority or take the form of lower appropriation requests.
The largest legislative savings result from proposed reductions in
three areas: unemployment benefit programs, Federal employee
compensation, and certain programs whose benefits are linked to
inflation.
Unemployment benefit programs would be revised in two ways.
First, the insured unemployment rate that is used for triggering
extended benefits (an additional 13 weeks of eligibility in most
States) would be revised to exclude extended benefit claimants
from the calculation. Under current law, the payment of extended
benefits in a state can be delayed in a period of rising unemployment. Moreover, a State that is not paying extended benefits may
have an unemployment situation that is identical to that of a State
in which extended benefits are being paid. In addition, during
economic recovery extended benefits continue to be paid when
overall unemployment is less than when the extra payments started. The proposal would eliminate these anomalies. It would also
have the effect of raising the unemployment rate required to trigger extended benefits nationally. Although this proposal would
save about $2 billion in 1982 under the unemployment rates being
projected for this budget, a slightly higher rate of unemployment
would trigger extended benefits. In such a case, unemployment
benefits would be very close to those under current law. Second,
legislation is recommended to complete a change made by the
Omnibus Reconciliation Act of 1980 and make unemployment compensation coverage of federally funded public service employment
workers optional rather than mandatory and to prohibit the use of
Federal public service employment funds to pay such benefits.
These two proposals reduce estimated 1982 outlays by $2.2 billion.
The administration continues to support comprehensive legislation to reform Federal compensation systems and procedures. The
proposal would broaden the principle of comparability and relate
Federal compensation more closely to compensation in the nonFederal sector. Comparability as currently defined would require
an October 1981 pay increase estimated at 13.5%. Under the proposed changes the comparability increases would be an estimated
9.1% for military employees and 8.6% for civilian employees. This




OUTLOOK

11

proposal reduces estimated 1982 outlays by $3.5 billion. As part of
an overall effort to restrain inflation, the budget estimates reflect a
further reduction in the civilian employee pay raise, to 5.5%. The
outlay effect of this further reduction, $1.3 billion in 1982, is not
shown in the accompanying table because these savings can be
accomplished by administrative action.
The administration proposes a shift to annual cost-of-living increases for all Federal programs that are currently indexed more
than once a year. Federal employee retirement programs are currently indexed twice a year, in March and September. Under the
administration's proposal, the September increase would be eliminated, beginning in 1981. This proposal reduces estimated 1982
outlays by $1.1 billion, of which $0.5 billion is for military retired
pay and $0.7 billion is for civilian retirement programs.
Child nutrition programs will receive only one automatic benefit
increase in 1981 as a result of congressional action last year, but in
1982 and subsequent years current law provides for two increases,
in January and July. The administration is seeking a permanent
change to eliminate the January increase beginning in 1982. Dairy
price supports are also currently indexed twice a year, in April and
October. The administration proposes eliminating the April increase, effective this year. A change is also proposed in the way
food stamp benefits are adjusted for inflation. As a result of legislation enacted last year, food stamp allotments are now adjusted
annually. However, the scheduled January 1982 increase would be
based on actual price increases over a 12 month period plus projected increases for an additional 3 months. The administration proposes to retain the current annual adjustment based on actual
price changes over 12 months. The 1982 outlay savings associated
with these changes in the indexing of Department of Agriculture
programs is $0.6 billion in 1982.
In addition to these major reforms and proposals, a number of
other legislative proposals would reduce spending. In the agriculture area, two additional legislative changes are proposed. One
would increase the interest rate on water and sewer loans from 5%
to the interest rate on municipal bonds for comparable communities. The second proposal would impose user charges in lieu of
direct appropriation for grading and standardization services for
cotton, tobacco, and naval stores, and for warehouse examination.
These two reforms would save $25 million in 1982 and $35 million
by 1984.
There are several legislative proposals in the health area. The
largest savings proposal would make the Federal Government a
more efficient purchaser of medicare services by eliminating the
bonus that hospitals currently receive for providing routine nursing services to medicare beneficiaries. Savings from the proposed




12

THE BUDGET FOR FISCAL YEAR 1982

repeal of low priority benefit expansions that were included in the
Omnibus Reconciliation Act of 1980 would also be sizable. These
two proposals account for over three-fourths of the total outlay
savings of $0.7 billion in 1982 that would result from the healthrelated legislative proposals.
In the income security area, several changes are sought in addition to those already discussed. For food stamps, liberalizations of
deductions for determining eligibility and benefits, which are currently scheduled to occur in 1982, would be eliminated. The child
nutrition programs would be better targeted to the most needy. Aid
to families with dependent children (AFDC) would be reformed to
simplify program administration, promote greater accuracy in determining benefits, reduce waste, and tighten eligibility, and the
child support enforcement program would be improved. Reforms in
the industry pension component of railroad retirement benefits are
sought to assure the long-term solvency of this retirement system.
Simplifications and technical changes are proposed to improve the
equity of old age survivors and disability insurance benefits. Those
proposals reducing outlays include: rounding benefits to the nearer
ten cents; and changing the benefit computation rules for those
receiving both social security and workers' compensation. Together,
these income security proposals would reduce 1982 outlays by $1.0
billion.
Three proposals in veterans programs would reduce 1982 spending by $79 million. These proposals would end payments for general flight training and correspondence courses under the GI bill
program; terminate certain dental benefits for veterans; and eliminate travel reimbursements for veterans being treated for nonservice connected disabilities.
Existing law entitles Federal employees to receive both civil
service pay and military pay while on active duty for training with
the Guard or Reserve in a military leave status. The budget proposes eliminating such dual compensation by limiting Federal employees to the higher of their active duty or civilian pay for the
period.
The following table summarizes the legislative cost-savings proposals included in the budget. Additional detail is given in Part 5.
Many of the proposals relate to health and income security programs. Since most spending in these programs is for entitlements,
reductions can be made only through the enactment of legislation.
In contrast, reductions in most other Federal programs may be
accomplished by reducing appropriations.




13

OUTLOOK
OUTLAY SAVINGS FROM LEGISLATIVE PROPOSALS
(In millions of dollars)
1983

1984

-2,088

-405

-424

-122

-225

-210

-2,210

-630

-634

-85
-12

-477
-655

-364
-615

-331
-679

-138

-102
-86
-419

-87
-86
-647

-74
-86
-497

-235

-1,739

-1,799

-1,667

-2,275
-1,219

-2,950
-1,386

-3,267
-1,529

-3,494

-4,336

-4,796

-2

-10

1981
Unemployment benefit programs.Change unemployment insurance extended benefit trigger
rate calculation
Eliminate mandatory unemployment benefit coverage for
public service employment workers
Subtotal, unemployment
Changes in indexing formulas:
Shift to annual indexing of Federal personnel retirement:
Military retired pay
Civilian retired pay
Permanently shift to annual indexing of child nutrition
programs
Shift to annual indexing for dairy price supports
Keep food stamps indexed to actual, not projected, costs
Subtotal indexing
Federal compensation reform:
Department of Defense
Civilian agencies
Subtotal, Federal compensation reform
Other agriculture programs:
Increase water and sewer loan interest rate
Impose user fees for services provided by the Agricultural
Marketing Service to grade and classify tobacco and
cotton

-25

-25

-25

-25

-27

-35

-35

-250

-285

-350

-55
-25

-228
-100

-254
25

-286

-24
-23

-24
-47

24
-78

-15
-18

-24
-18

-38
-18

-5
-20

-5
-19

-5
-20

-683

-701

-819

-63
-327

-68
-358

-74
-382

-531

-543

-557

-36

-71

104

-23

-26

-57

-980

-1,066

-1,174

Subtotal, other agriculture programs
Health programs:
Eliminate bonus to hospitals for provision of routine nursing
services to medicare beneficiaries
Repeal low priority medicare/medicaid expansions that were
recently enacted
Expedite recovery of disallowed State medicaid claims
Establish financial penalties to deter abuse of medicare and
medicaid programs
Adopt competitive bidding for medicare contractors
Adopt competitive bid purchasing for selected medicare and
medicaid equipment and services
Impact on medicaid of welfare program changes
Repeal increment in bonuses for years of obligated service by
PHS Commissioned Corps physicians
Other health care cost control proposals
Subtotal, health programs
Other income security programs:
Retain current food stamp deductions
Target child nutrition subsidies to the most needy
Reform and simplify the aid to families with dependent
children (AFDC) program and improve the child support
enforcement program
Reform the railroad retirement program to help restore the
solvency of the railroad industry pension fund
Social security simplifications and technical reforms
Subtotal, other income security programs
340-000 0 - 81 - 3 : QL 3




1982

-115

14

THE BUDGET FOR FISCAL YEAR 1982
OUTLAY SAVINGS FROM LEGISLATIVE PROPOSALS—Continued
(In millions of dollars)
1981

Veterans benefits and services:
Eliminate Gl bill benefits for correspondence courses and
general flight training
Eliminate certain dental benefits
Limit reimbursement for beneficiary travel for certain nonservice disabled veterans

1982

1983

1984

-32
-32

-28
-30

-24
-28

-15

-15

-15

-79

-73

-67

-15
-210

-30
-210

-30
-217

-30
-430

-575

-9,450

-8,879

-9,652

-310
-138

-2,992
-111

-4,058

-115
-12

-683
-4,366
-79
-1,219

-3,561
-111
-2
-701
-3,045
-73
-1,386

Subtotal, veterans programs..
Defense: Eliminate dual leave pay
General Services Administration: Increase stockpile sales
Total, cost savings proposals
MEMORANDUM

Outlay savings by function:
National defense
Agriculture
Community and Regional Development.
Health
Income security
Veterans benefits and services
Allowances

-111
-10
-819
-3,058
-67
-1,529

Budget Authority

All budget outlays depend on the legal authority to spend money
provided by the Congress. Such "budget authority"—usually in the
form of appropriations—results in outlays, some of which occur
during the fiscal year for which the budget authority is granted
and the rest of which occur later. For 1982 the President is requesting new budget authority of $809.8 billion, which is $3.1 billion
above the current services level of $806.7 billion.
In 1982, outlays are estimated at 91% of budget authority for
that year. This percentage is in line with historical experience.
BUDGET AUTHORITY
(In billions of dollars)
Estimate

1980
actual

Available through current action by the Congress
Available without current action by the Congress
Deductions for offsetting receipts
Total, budget authority

1981

411.7
325.2
-78.2

449.9
371.8
-95.2

491.2
427.4
-109.0

658.8

726.5

809.8

658.8

722.9

806.7

1982

MEMORANDUM

Budget authority, current services basis




OUTLOOK

15

Federal Civilian Employment and Pay
The 1982 budget meets the President's objective of holding Federal civilian employment to the minimum necessary for the efficient
and effective operation of the Government. Full-time permanent
employment in the executive branch (excluding the Postal Service)
is estimated to be 1,879,500 by the end of 1982, which is a small
increase from 1981 but remains below the level that existed when
the administration took office.
As noted earlier, the administration has proposed comprehensive
legislation to reform and improve Federal pay-setting systems and
procedures. The legislative proposal would broaden the principle of
comparability to (1) take into account both pay and benefits instead
of only pay; and (2) include data from State and local governments
as well as data from private industry. The Federal wage system for
the blue collar work force would be changed, and a number of
other modifications would be made to improve comparability with
non-Federal wage rates. These reforms would improve the comparability system.
As part of an overall effort to hold down inflationary trends, the
budget estimates assume an October 1981 pay increase of 5.5%,
about 3 percentage points below the estimate consistent with compensation comparability under the reform proposals.
Federal Debt
During 1982, Federal debt held by the public is estimated to
increase from $787 billion to $832 billion, a rise of $45 billion. The
corresponding growth during 1981 is expected to be $72 billion.
About three-fifths of the 1981 debt increase is due to the anticipated budget deficit and two-fifths is due to the outlays of the offbudget Federal entities (discussed in Part 6 of this document).
Other factors, such as changes in cash balances held by the Treasury, also affect borrowing. Gross Federal debt, which also includes
debt held in Federal Government accounts (primarily trust funds),
is projected to rise by $78 billion in 1981 and $65 billion in 1982.
Part 6 provides a more detailed discussion of Federal debt.
FEDERAL DEBT
(In billions of dollars)
1980
actual

Debt outstanding, end of year:
Gross Federal debt
Debt held by the public




914.3
715.1

1981
estimate

992.4
787.1

1982
estimate

1,057.7
832.1

16

THE BUDGET FOR FISCAL YEAR 1982

Control of Federal credit
The administration made a major commitment in 1978 to establish and maintain a regular, systematic review of Federal credit
activity. The credit control system and credit budget was announced in the 1980 budget and was carried out in the 1981 budget.
The new system is an important step in restraining the growth of
Federal credit activity.
In the past, Federal credit programs were only partially controlled through the normal budget process. Budget authority and
outlays for some direct loans of the Federal Government were
included in the budget, and limitations of various kinds were
placed on some guarantee programs. However, there is increasing
concern about control over Federal guarantees of private loans,
which do not generally result in budget outlays except in cases of
default. Guarantees can often substitute for on-budget direct lending or other outlays in order to escape budget controls. In fact,
many agencies convert their federally guaranteed loans to offbudget direct loans by financing them through the Federal Financing Bank (FFB), the activities of which are excluded from the
budget by law. The FFB, a financial intermediary for the efficient
financing of Federal credit activities, is discussed in more detail in
Part 6.
The credit budget works in tandem with the conventional budget
system, and includes both on- and off-budget accounts. It measures
total new Federal credit activity in terms of new obligations for
direct loans and new commitments for loan guarantees. The table
below shows the totals of the credit budget.
THE CREDIT BUDGET TOTALS
(In billions of dollars)
1980
actual

1981
estimate

1982
estimate

New direct loan obligations:
On-budget
Off-budget

37.8
23.6

42.1
32.2

34.1
26.1

Total new direct loan obligations
New loan guarantee commitments *

61.4
69.8

74.2
91.1

60.2
92.4

131.2

165.4

152.6

Total

... .

' To avoid double counting, excludes commitments for guarantees of loans previously guaranteed and for guarantees by one Government account
of direct loans made by another Government account.

The credit control system is the mechanism for controlling the
size of the credit budget, and it operates through the appropriations process. Wherever appropriate, the administration is requesting that annual appropriations bills include limitations on
credit programs. The limitations, which were developed as part of




17

OUTLOOK

the normal budget review process, are placed on new obligations
for direct loans and new commitments for loan guarantees.
The credit budget totals rise sharply between 1980 and 1981 but
decrease in 1982. For direct loans, the increase between 1980 and
1981 is due primarily to a rise in Federal Financing Bank lending.
Between 1981 and 1982 new direct loan obligations are expected to
decrease by $14.1 billion. Decreases occur primarily in the Farmers
Home Administration and the disaster loan program in the Small
Business Administration. Total loan guarantee commitments are
estimated to increase substantially between 1980 and 1981 resulting
from large increases in education and housing programs. Guarantees
remain relatively stable between 1981 and 1982.
FEDERAL CREDIT LIMITATIONS
(In billions of dollars)
actual

1981

1982
estimate

New direct loan obligations
Limitations on obligations

61.4

74.3
25.3

60.2
23.6

New loan guarantee commitments..
Limitations on commitments

69.8

91.1
42,9

92.4
73.8

131.2

165.4
68.2
41.2

152.6
97.4
67.5

Credit budget total
Total limitations
Percent of credit budget total limited.

For 1982, the administration is recommending appropriation bill
limitations on $23.6 billion of new direct loan obligations, about
45% of all the new obligations and it is recommending appropriation bill limitations on $73.8 billion in new loan guarantee commitments, about 80% of all new commitments. Of the total credit
budget, 67.5% is recommended for limitation in 1982.
Exemptions from the credit control system.—A number of programs are included in the credit budget but are not subject to specific
proposed appropriations limitations in this year's budget. In
such instances, estimates of expected activity are made, displayed
in the Budget Appendix, and included in the credit budget totals,
but appropriations bill limitations are not requested. There are two
general reasons why the administration requests that programs be
exempted from credit control:
• Emergency assistance programs and some insurance programs, such as those of the Federal Deposit Insurance Corporation, may use loans as one means of carrying out their
responsibilities. Specific annual limitations could hamper
their ability to respond quickly and adequately to emergencies.




18

THE BUDGET FOR FISCAL YEAR 1982

• Entitlement programs, under which any qualified recipient
has a legal right to loans or loan guarantees, are essentially
uncontrollable through the appropriations process. Although
they are included in the credit budget, such programs are best
controlled through changes in the basic authorization laws
that establish legal entitlements. The credit entitlements are
analogous to direct expenditure entitlements, such as social
security.
One of the important goals of the credit control system is to
encourage more careful consideration of the impact of total Federal
credit activity on the economy as a whole. The credit budget does
this by monitoring new transactions. For analytical purposes, the
Federal Government's large portfolio of loans outstanding is also
important. This portfolio has been growing because new credit
assistance transactions have exceeded repayments of previous
loans. As shown in the following table, the total size of Federal
credit outstanding is large.
DIRECT LOANS AND LOAN GUARANTEES OUTSTANDING END OF YEAR
(In billions of dollars)
1980
actual
Direct loans outstanding:
On-budget
Off-budget
Loan guarantees outstanding1
Total Federal credit outstanding
1

1981

1982
estimate

88.1
72.3
222.2

91.5
95.5
263.5

97.5
114.0
302.4

382.6

450.6

513.9

To avoid double counting, excludes loans previously guaranteed and guaranteed loans held as direct loans by Government accounts.

On-budget direct loans outstanding are expected to rise by 10V2%
between 1980 and 1982. Off-budget direct loans outstanding increased by $41.7 billion between 1980 and 1982 due primarily to
increases in the holdings of the FFB. Loan guarantees outstanding
increase sharply from 1980—by $41.4 billion in 1981 and $38.8 billion
in 1982—and are estimated to reach $302.4 billion, continuing the
rise shown in the chart below.




19

OUTLOOK

Loa n Guara ntees Outstandi ng
% Billions

:600

600H I Held by Federal Financing Bank
Held by Government-Sponsored
Enterprises

1972 73 74 75 78

77 78

79 80

81 82

Fiscal Y*ar$

Esttmat*

Net direct loan outlays are equal to the change in direct loans
outstanding, and net loan guarantees are equal to the change in
loan guarantees outstanding. Net loan outlays and net loan guarantees measure new credit advanced by the Federal Government
less repayments on existing loans or guarantees. They are conceptually analogous to budget outlays. As the table below shows, total
net loan outlays increase in 1981 but are estimated to decrease in
1982. This is due in part to fluctuations in repayments and the
changes in the credit budget totals discussed above.
NET DIRECT LOAN OUTLAYS AND NET LOAN GUARANTEES
(In billions of dollars)
1980
actual

1981
estimate

1982
estimate

Net loan outlays:
On-budget
Off-budget
Net loan guarantees1

8.8
14.7
25.1

3.4
23.2
41.4

6.0
18.5
38.8

Total

48.6

68.0

63.3

1

To avoid double counting, excludes loans previously guaranteed and guaranteed loans made as direct loans by Government accounts.




20

THE BUDGET FOR FISCAL YEAR 1982

Debt collection.—The Government has more than $175 billion in
accounts and loans receivable outstanding, of which over $25 billion is delinquent or in default. The amount of overdue debts owed
the Government prompted OMB to establish a Debt Collection
Project in August 1979, under the sponsorship of the President's
Management Improvement Council.
An extensive review of credit management and debt collection
practices in the major agencies was conducted. The review activities included: (1) analyzing the Government's receivables in terms
of age, delinquency rates, write-offs, and expected losses; (2) evaluating the effectiveness of each agency in the management of receivables; and (3) identifying solutions to both agency and Governmentwide problems.
OMB and the agencies are working together to find improved
ways to prevent delinquencies and to recover overdue debt owed to
the Government.
The 5-Year Budget Outlook

Control of budget growth is very difficult in the short run. In
1982, about three-fourths of budget outlays are relatively uncontrollable under existing law, a concept explained later in this section and discussed in greater depth in Part 3. The remaining onefourth includes many very high priority items. About 64% of relatively controllable outlays, for example, are for national defense
and at least another 10% of these outlays are for employees in
Veterans hospitals and other essential nondefense activities. In
short, a large portion of expenditures for 1982 flows from decisions
made in previous years or is associated with high priority programs.
Limits to budget growth, therefore, can best be discussed and
acted upon in a longer-range context. Effective limits on future
outlays require proposals now to restrain growth, even though
substantial savings may not be realized for many years.
This section discusses the 5-year budget outlook. Outlay estimates for the first 2 years beyond the budget year (1983 and 1984)
have received explicit policy review. Projections for 1985 and 1986
are extrapolations of the 1982-84 multi-year planning estimates.
Part 5 of the budget shows estimates of outlays and budget
authority by function for the 3-year planning period, 1982-84.
Basic assumptions.—The receipts projections presented in this
section are consistent with the foregoing economic assumptions,
and with continuation of current tax laws as modified by the
proposals in this budget. The budget authority and outlay estimates indicate the degree to which resources would be committed




OUTLOOK

21

by program levels recommended for 1981 and 1982, planned for
1983 and 1984 and continued at planned levels in 1985 and 1986.
These estimates are not precise forecasts of future budget authority
or outlays. Nor are they intended as detailed recommendations of
future budget levels. They are, however, consistent with the objective of restraining growth in Federal spending and holding Federal
outlays as a percentage of gross national product (GNP) to the
lowest level consistent with national needs.
These planning base estimates, and the projections to 1986, allow
for future cost-of-living adjustments to most benefit programs (a
major exception being aid to families with dependent children, the
benefits for which are set by States), anticipated changes in numbers of eligible beneficiaries, Federal pay raises, and other built-in
cost changes (such as interest) consistent with the economic assumptions outlined above. They allow for real growth of outlays in
certain areas, such as defense, basic research, and payments for
individuals, and a net real decline in all other areas combined.
The budget outlook.—The following table summarizes the budget
outlook from 1980 to 1986 based on the proposals in this budget.
Receipts are projected to increase by an average of 13.7% per year
from 1982 to 1986, rising from $711.8 billion to $1,188.5 billion.
Over the same period, outlays are projected to rise by an average of
9.2% a year, from $739.3 billion to $1,050.3 billion. Under these
assumptions, the budget is projected to move into surplus in 1984.
It should be emphasized that the projections do not imply that
budget surpluses of this magnitude will in fact occur or that resources will in fact be available for additional spending or for debt
reduction. It is unrealistic to assume that Federal receipts will be
permitted in the future to rise continually as a percentage of GNP,
with an attendant rise in individual tax burdens. Income tax reductions were enacted in the 1960's and 1970's partially to offset such
increases. Future tax reductions will be required to lower tax burdens and as incentives to business investment and innovation that
would help raise productivity and reduce inflation.




22

THE BUDGET FOR FISCAL YEAR 1982
THEEIUDGET OUTLOOK 1980-86
(Dollars in billions)
Estimate

Projection

1980
actual

1981

1982

1983

1984

579.6
520.0

662.7
607.5

739.3
711.8

817.3
809.2

890.3 967.9 1,050.3
922.3 1,052.6 1,188.5

-59.6

-55.2

-27.5

-8.0

32.0

84.7

138.2

22.6
20.3

23.3
21.4

23.0
22.1

22.6
22.4

22.0
22.8

21.5
23.4

21.2
24.0

ADDENDUM
Receipt reductions necessary to reduce burdens to the 1982 level (22.1% of GNP)..

-9.4

-26.9

-57.2

-89.9

Budget surplus or deficit ( - ) with
burdens at the 1982 level

-17.4

27.5

48.3

Budget outlays
Budget receipts
Budget surplus or deficit (—)
As a percent of GNP:
Budget outlays
Budget receipts

5.1

1985

1986

Holding future burdens to levels consistent with recent experience will require stringent control of budget outlays if the budget
is to be kept near balance in these years. The timing and structure
of future reductions, however, cannot be projected in detail far in
advance of events; they depend critically on economic developments, especially on progress in reducing inflation, and on the
appropriate level of aggregate public sector saving.
The table also shows the budget estimates as a percent of GNP.
Budget outlays are estimated to reach a peak of 23.3% of GNP in
1981 and decline to 21.2% by 1986. Under existing tax law, modified by the proposed changes in this budget, receipts would reach
peak proportions of GNP each year, rising to 24.0% by 1986. (The
previous peak was 21.9% in 1944.)
Because such increases are undesirable and unlikely, it may be
more realistic to assume that receipts will remain at their 1982
share of GNP—22.1%. This implies substantial cuts in later years.
It also means that, without substantial reductions in outlays, there
could be larger deficits or smaller surpluses through 1986, even
with the relatively favorable economic assumptions used for these
projections. These projections highlight the need for budget restraint now and in the long run.
They also raise the issue of whether the current role of the
Federal Government is appropriate for the 1980's. Given pressures
on resources, a fundamental review is required of the appropriate
Federal activities and roles both with respect to the private sector
and other levels of government. This issue deserves serious consideration and is discussed in Part 3.




23

OUTLOOK

Receipts.—The estimates of receipts shown in this section are
extrapolations (based on the assumed economic trends) of the receipts that would result under existing tax law and the tax proposals in this budget. Projected increases in receipts from 1982 to 1986
are attributable largely to rising nominal incomes, due to both
inflation and real growth, and to increases in social security taxes
scheduled under current law. The table shows projected receipts by
source and the effect on receipts of administration tax proposals.
BUDGET RECEIPTS BY SOURCE
(In billions of dollars)
Projection

Estimate

1980
actual

Total

1982

1983

1984

1985

1986

244.1
64.6
160.7
24.3
26.3

284.0
66.0
184.8
44.4
28.3

331.7
64.6
214.7
69.6
31.2

384.6
77.6
239.5
73.4
34.1

451.2
91.0
264.2
77.1
38.9

525.6
106.5
298.8
81.1
40.5

607.6
123.8
331.0
83.6
42.5

520.0

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

1981

607.5

711.8

809.2

922.3 1,052.6

1,188.5

-.5
-.8
3.8
*

-2.8
-8.6
.5
16.1
.1

-12.9
-13.2
.5
17.8
.1

-18.9
-16.1
.5
19.5
.1

-22.4
-18.9
.6
21.6
.1

-25.4
-21.1
.6
23.9
.1

2.5

5.3

-7.9

15.0

19.0

21.9

MEMORANDUM:

Effect of receipts proposals In comparison to current services:1
Individual income taxes
Corporation income taxes
Social insurance taxes
Excise taxes ..
Other
Total

* $50 million or less.
'These estimates do not reflect the renewal of the highway trust fund taxes, which are scheduled to expire September 30, 1984; renewal is
assumed in the current services receipts estimates.

Individual income taxes are projected to rise from $331.7 billion
in 1982 to $607.6 billion in 1986, an increase of 16.3% per year.
Corporation income taxes rise by 17.6% per year over the same
period, from $64.6 billion to $123.8 billion. The provisions of the
proposed economic revitalization program reduce income taxes by
amounts rising from $18.3 billion in 1982 to $56.2 billion by 1986.
These reductions are partially offset by the proposed withholding
of taxes on interest and dividend income and other proposals,
which add $6.9 billion to income taxes in 1982 and $9.7 billion by
1986. For a more detailed discussion of the economic revitalization
program and other tax proposals, see Part 4 of this Budget.
Social insurance taxes and contributions, which increased from
only 2.5% of GNP in 1958 to 5.9% two decades later, are projected
to increase to 6.7% of GNP by 1986. As shown in the accompanying




24

THE BUDGET FOR FISCAL YEAR 1982

table, the social security tax rate, which increased from 12.26% to
13.3% of the taxable earnings base on January 1, 1981, is scheduled
under current law to increase in three steps to 14.3% by 1986. The
taxable earnings base is scheduled to increase annually, rising
from its current level of $29,700 to a projected $45,900 by 1986.
SOCIAL SECURITY TAX RATE AND TAXABLE EARNINGS BASE
(Calendar years)
1980

Tax rate (FICA, percent)
Taxable earnings base (dollars) 1

1981

1982

1983

1984

1985

1986

12.26
25,900

13.3
29,700

13.4
32,100

13.4
35,400

13.4
38,700

14.1
42,300

14.3
45,900

1
The taxable earnings base figures for 1982-86 are estimates based on an automatic adjustment mechanism. The figures for earlier years are
scheduled under current law.

Excise taxes are projected to rise from $69.6 billion in 1982 to
$83.6 billion in 1986. These estimates include the proposed increases in the motor fuels and other highway use taxes; excise tax
receipts from these increases are projected to rise from $3.5 billion
in 1981 and $14.6 billion in 1982 to $21.6 billion in 1986. Excise tax
receipts from the windfall profit tax, which was enacted in 1980,
are estimated at $22.2 billion in 1981, $34.7 billion in 1982, and
$40.0 billion by 1986. The 1985 and 1986 estimates include $3.9
billion and $4.0 billion, respectively, from the proposed extension of
the highway trust fund taxes that expire under existing law on
September 30, 1984.
Estate and gift taxes, customs duties, and miscellaneous receipts
are projected to be $42.5 billion in 1986, an increase of $11.3 billion
from 1982.
Budget authority and outlays.—The estimates and projections of
budget authority and outlays shown in this section are extrapolations (based on the assumed economic trends) of program costs
reflecting current administration policy—including the 1982 budget
proposals and the multiyear budget plans for 1983 and 1984. They
are estimates of future resources and of the degree to which those
resources are already committed by current policy.
Total budget outlays are projected to increase at an average
annual rate of 9.2% from $739.3 billion in 1982 to $1,050.3 billion
in 1986. As a percentage of GNP, outlays fall from 23.3% in 1981 to
21.2% in 1986.
Historical trends in budget outlays.—The budget seeks to focus
attention on longer term planning, and from this perspective it is
important to keep in mind the underlying historical trends. The
chart disaggregates budget outlays as a percentage of GNP by four
major categories at 6-year intervals for the period 1964 to 1982. It
reveals several underlying trends:




25

OUTLOOK

Budget Outlays as a Percent of GNP
Percent

li

Other
Net Interest
Human Resources
National Defense 22.3

23
0

20-

H

23.0

E\^
"!?!?"!

-20

i 1.6 III

Hi! 1.3!!!!

1964
Fiscal Years

1970

1976
Estimate

Budget outlays for national defense are now about 5*/2% of
GNP. Under present plans, that share will increase. It is
substantially below the share reached in the early 1960's, but
is slightly higher than that in the late 1970's.
Human resources programs2 have expanded steadily. In 1964,
prior to the establishment of medicare, medicaid, and many
other social programs initiated in the latter 1960's, human
resources outlays were 5.5% of GNP. By 1982 they are estimated to be 12.1%. Much of this growth is due to social
security and medicare, which grew rapidly from 2.6% of GNP
in 1964 to an estimated 6.4% in 1982.
Between 1976 and 1980 debt held by the public increased at a
somewhat slower rate than that of GNP. However, interest
rates have increased so greatly that net interest outlays rose
from 1.6% of GNP in 1976 to 2.0% in 1980 and are projected
to be 2.3% of GNP by 1982.
All other budget outlays have fluctuated relative to GNP,
with the 1982 estimate slightly below the 1970 and 1976
levels.
2
Human resources programs consist of those in the following functions: education, training, employment, and
social services; health; income security; and veterans benefits and services.




26

THE BUDGET FOR FISCAL YEAR 1982

In sum, the 0.9 percentage point increase in social security and
medicare outlays relative to GNP from 1976 to 1982, the 0.7 percentage point increase for net interest, and the 0.3 percentage
point increase for defense far more than offset a combined 1.2
percentage point decline in all of the other categories put together.
Outlay projections.—Budget outlays are projected to increase by
$311 billion between 1982 and 1986, an average annual increase of
9.2% per year. This is 1.8% per year faster than inflation. National
defense and payments for individuals—including those that go
through States and localities—account for $275 billion of this increase. The major planned initiative included in the projections is
for growth in national defense, which accounts for $115 billion or
more than one-third of the total 1982-86 outlay increase. Payments
for individuals increase $160 billion from 1982-86, more than onehalf of the total increase. These increases result primarily from
demographic changes (e.g., increases in the number of persons 65
or over) and inflation, rather than the creation of new programs or
liberalization of existing ones.
The table projects the composition of budget outlays as a percent
of the total through 1986. National defense and payments for individuals increase as a percent of the budget for 1982-86, while all
other areas combined decline. National defense outlays are projected to increase from 24.9% in 1982 to 28.5% in 1986, and payments
for individuals increase slightly from 47.8% to 48.9%. All other
areas put together decline from 27.2% in 1982 to 22.5% in 1986.
PERCENTAGE COMPOSITION OF BUDGET OUTLAYS
Description

Actual

Projection

Estimate

1970

1975

1980

1982

1983

1984

1985

1986

NATIONAL DEFENSE:
Direct Federal payments for individuals
Other

1.4
38.5

1.9
24.3

2.1
21.4

2.1
22.8

2.2
23.5

2.3
24.4

2.3
25.4

2.3
26.2

Subtotal, national defense

40.0

26.2

23.4

24.9

25.7

26.7

27.7

28.5

27.5

40.8

40.9

42.0

42.3

42.5

42.9

42.8

4.6
7.6
7.3
13.0

5.3
9.9
7.1
10.6

5.9
9.9
9.1
10.9

5.8
7.7
10.1
9.4

5.9
7.6
9.1
9.4

5.9
7.4
8.2
9.3

6.0
7.0
7.4
9.1

6.1
6.7
6.8
9.0

60.0

73.8

76.6

75.1

74.3

73.3

72.3

71.5

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

NON-DEFENSE:

Direct Federal payments for individuals
Payments for individuals through States
and localities
All other grants to States and localities....
Net interest
Other
Subtotal, nondefense
Total budget outlays




OUTLOOK

27

Part 3 of the budget has several essays analyzing the issues that
are influencing both the changes in the composition of outlays as
well as their growth.
Projections of budget authority and outlays are shown by function and by agency at the end of this part of the budget.
Needs for the Future.—In previous budgets, projections of budget
plans have included specific amounts for two high priority needs, a
national health plan and welfare reform. Current and outyear
projections in this budget do not include such amounts because
such specific plans do not appear appropriate for an administration
that is leaving office.
This administration continues to believe that a national health
plan and welfare reform are essential and that work should continue on their development. They should be put into effect when
adequate cost containment exists and when budgetary conditions
permit. A national health plan is needed because many Americans
are not served well by the existing health care system. About 22
million people do not have health insurance coverage of any kind.
Nearly three times that number lack adequate protection from the
cost of catastrophic illness. More prenatal and infant care services
are needed. Effective measures must be devised and implemented
to restrain the rising burden of health care costs. This administration remains committed to a national health plan that will meet
these needs.
The administration's welfare reform proposals have been before
the last Congress, which did not complete action on them. Those
and related proposals would (1) establish a national basic minimum
level of assistance to families, (2) extend eligibility for cash assistance to two-parent families in all States, (3) alleviate part of the
onerous fiscal burden on States and localities for public assistance
and medicaid costs, and (4) provide work incentives and training
opportunities, including public service jobs, for the principal earner
in families receiving public assistance when a private sector job
cannot be found.
Such a program is needed to insure a reasonable income and to
encourage productive work for all Americans. This administration
remains committed to those goals.
Finally, no account of future budget needs would be complete
without recognition of the need to resolve the problem of social
security financing. The administration has proposed that the major
social security funds be permitted to borrow from each other. The
estimates contained in the budget assume that enactment of that
legislation will overcome any shortfalls in the budget planning
period 1982-84.




28

THE BUDGET FOR FISCAL YEAR 1982

However, additional action will have to be taken to insure uninterrupted payments beyond the planning period. Because the anticipated financing problems in the mid-1980's are expected to be of
relatively short duration, this administration believes that they
should be overcome by providing more funds, not by cutting back
basic benefits.
High employment budget—The high-employment budget is an
analytical concept that estimates the budget aggregates that would
result if the economy were continuously operating at a high level
of employment. The unemployment rate at high employment is
estimated to be 5.1% currently and to decline to 4.8% by the end of
1986. These rates are comparable to a rate of about 4.0% in 1955,
adjusted for changes in the composition of the labor force.
High-employment outlays exclude that portion of outlays for unemployment insurance benefits and certain other programs that
occurs because the economy is not continuously operating at high
employment. They thus eliminate the fluctuations in actual outlays
for these programs due to year-to-year changes in the unemployment rate and in the degree of utilization of capital and other
resources. High-employment receipts are similarly computed on the
basis of the estimated yield of the existing (or proposed) Federal
tax system if the economy were continuously at high employment.
This eliminates year-to-year fluctuations in actual receipts due to
deviations in real gross national product from its long-term trend.
The difference between the adjusted receipts and outlay estimates
is the high-employment budget margin. Changes in this margin
from one year to the next are a rough measure of the combined
effects of (1) discretionary fiscal policy actions and (2) the automatic increase in tax rates caused by inflation and real growth moving
taxpayers into higher tax brackets (sometimes called "fiscal drag").
HIGH-EMPLOYMENT RECEIPTS AND OUTLAYS
(In billions of dollars)
Estimates
1980

High-employment receipts
High-employment outlays
High-employment budget margin

546 .
572.
-26

1982

1981

Projections
1984

1983

1985

1986

660
647

774
726

873
805

986
878

1,115
957

1,248
1,041

13

48

68

108

158

207

High-employment outlays are estimated at $726 billion in 1982 and
rise to $1,041 billion in 1986. High-employment receipts are projected
to increase from $774 billion in 1982 to $1,248 billion in 1986. The
high-employment margin increases from $48 billion in 1982 to $207
billion in 1986.




OUTLOOK

29

Relative controllability.—Efforts at budget control have resulted
in a classification system that distinguishes between outlays that
are the most difficult to limit in the short run, called relatively
uncontrollable outlays, and those relatively controllable outlays
that are in principle easier to limit. In practice, however, relatively
controllable outlays often include high priority items. For example,
more than 60% of relatively controllable 1982 outlays are for national defense and at least another 10% of these outlays are for the
Federal civilian workforce in Veterans hospitals, the FBI, the Internal Revenue Service, the Customs Service, the Immigration
and Naturalization Service, the Coast Guard, and other essential
activities.
Outlays in any one year are considered to be relatively uncontrollable when the program level for that year is determined by
existing statute or by contract or other obligations. Relatively uncontrollable outlays are grouped into two major categories: outlays
for open-ended programs and fixed costs, which are generally mandated by law; and payments from prior-year contracts and obligations, which are required because of previous actions. The table
shows the relative controllability of budget outlays for 1982-86.
Last year the Congress enacted the Omnibus Reconciliation Act
of 1980 as a result of a reconciliation directive in the first budget
resolution for 1981. The resolution directed several committees to
recommend changes to reduce spending or increase receipts. These
recommendations were in the Act and included several changes
that result in lower outlays for relatively uncontrollable programs.
The reconciliation procedure may prove an effective tool in controlling the growth of the budget. These issues are discussed more fully
in Part 3.

340-000 0 - 81 - U : QL 3




30

THE BUDGET FOR FISCAL YEAR 1982
CONTROLLABILITY OF BUDGET OUTLAYS
(In billions of dollars)
Projections

Estimates
1982
Relatively uncontrollable under present law: x
Open-ended programs and fixed costs:
Social security and railroad retirement....
Medical care

Other payments for individuals
Net interest
General revenue sharing
Other open-ended programs and fixed
costs
Subtotal, open-ended programs
and fixed costs, current law
Proposed changes in open-ended programs
and fixed costs:
Annual indexation of Federal retirement
Nutrition programs
Assistance payments (AFDC)
Unemployment compensation
Refundable tax credits
Veterans compensation
Medicare and medicaid
Other
Subtotal, proposed changes

1984

1983

1986

1985

165.4
65.3
124.4
75.2
4.6

187.2
74.4
132.6
76.0
4.6

208.0
84.7
139.5
74.2
4.6

228.8
96.1
149.1
73.8
4.6

249.5
108.5
157.3
74.3
4.6

12.7

12.2

12.8

13.3

13.6

447.6

487.0

523.8

565.5

607.8

-1.1
-.9
-.5
-2.2
4.2
1.0
-.5
-.7

-1.0
-1.2
-.6
6.4
2.0
-.2
-1.1

-1.0
-1.0
-.6
-.6
7.2
3.0
.1
-1.0

-1.1
-.9
-.6
.3
8.0
4.0
.2
-2.1

-1.1
-.8
-.6
2

-.9

3.8

6.1

7.2

8.9

8.7
4.9
.2
-2.3

Outlays from prior-year contracts and obligations 1
Relatively controllable outlays
Undistributed employer share, employee retirement

118.81
180.7/

333.4

367.6

402.7

441.3

-6.8

-7.0

-7.2

-7.5

-7.7

Total budget outlays

739.3

817.3

890.3

967.9

1,050.3

1
Outlays from prior-year contracts and obligations are relatively uncontrollable in the budget year. In the longer run, most of them can be
controlled (e.g., by not entering into contracts); therefore, they are not projected beyond the budget year. Historical data for this category, and
estimates for 1981 and 1982, are shown separately in table 17, Part 9.




31

OUTLOOK
BUDGET AUTHORITY BY FUNCTION
(In billions of dollars)
Projections

Estimates
1982

National defense
Military personnel
Retired pay
Operation and maintenance
Procurement
Other 1
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
Education
Training, employment and other labor
Social services
Health
Medicare
Medicaid
Other
Income security
Social security
Other general retirement
Federal employee retirement
Unemployment compensation
Housing assistance
Food and nutrition assistance
Other income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Interest
Allowances:
Civilian agency pay raises
Contingencies and other
Undistributed offsetting receipts:
Employer share, employee retirement
Interest received by trust funds
Rents and royalties on the Outer Continental Shelf

1983

1985

1984

1986

200.3
38.4
15.6
61.5
49.1
35.8
19.6
8.1
12.1
13.6
5.6
10.7
25.5
9.2

228.6
38.9
18.4
67.8
58.8
44.7
18.4
8.8
12.7
15.3
5.6
12.3
27.2
9.3

258.0
39.5
20.4
74.4
70.0
53.6
20.1
8.4
10.8
16.2
4.9
13.4
28.3
9.4

289.7
40.1
22.4
81.5
82.6
63.1
21.3
8.0
11.5
16.4
5.3
14.1
29.4
9.7

324.1
40.7
24.3
89.0
96.9
73.1
22.4
7.7
15.7
16.4
5.6
15.1
30.5
10.0

36.3
17.2
12.0
7.2
86.1
56.9
18.9
10.3
279.6
150.4
7.4
30.3
24.0
31.4
18.0
18.0
25.0
4.8
5.4
6.9
89.9

38.0
17.5
13.0
7.6
96.1
63.5
21.8
10.8
310.4
166.4
7.7
32.7
24.0
37.7
19.7
22.2
27.0
4.9
5.6
7.4
91.7

39.7
18.3
13.5
7.9
107.5
71.3
25.0
11.2
332.4
182.7
8.1
34.9
22.9
40.9
21.3
21.6
29.2
5.1
5.5
7.6
89.0

41.3
19.1
14.0
8.2
121.7
81.6
28.5
11.6
362.8
208.3
8.8
36.9
22.9
40.2
22.6
23.1
30.7
5.3
5.6
7.8
87.5

42.7
19.7
14.6
8.4
139.0
94.6
32.4
12.0
389.8
231.3
9.2
38.7
21.4
41.3
23.9
24.0
31.7
5.5
5.6
8.0
88.2

1.0
2.0

3.8
3.0

6.3
4.0

8.8
4.0

11.4
4.0

-6.8
-15.2

-7.0
-17.2

-7.2
-16.1

-7.5
-16.1

-7.7
-16.5

-9.9

-9.9

-9.9

-9.9

-9.9

892.0

962.7

1,047.2

1,139.1

Total budget authority
MEMORANDUM
Budget authority, off-budget Federal entities...

31.1

30.2

34.5!

34.5

36.4

Budget authority, including off-budget Federal entities

840.9

922.1

997.2

1,081.7

1,175.5

1

Includes allowances for civilian and military pay raises for Department of Defense.




32

THE BUDGET FOR FISCAL YEAR 1982
BUDGET OUTLAYS BY FUNCTION
(In billions of dollars)
Projections

Estimates
1982

National defense
Military personnel
Retired pay
Operation and maintenance
Procurement
Other 1
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
Education
Training and employment and other labor..
Social services
Health
Medicare
Medicaid
Other
Income security
Social security
Other general retirement
Federal employee retirement
Unemployment compensation
Housing assistance
Food and nutrition assistance
Other income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistance
Interest
Allowances:
Civilian agency pay raises
Contingencies and other
Undistributed offsetting receipts:
Employer share, employee retirement
Interest received by trust funds
Rents and royalties on the Outer Continental Shelf
Total budget outlays
MEMORANDUM
Outlays, off-budget Federal entities
Outlays, including off-budget Federal entities..
1

1983

1985

1986

184.4
38.3
15.6
59.7
40.1
30.8
12.2
7.6
12.0
14.0
4.8
8.1
21.5
9.1

210.4
38.9
18.4
66.3
47.3
39.6
12.9
8.3
12.4
15.0
4.5
7.9
24.9
8.9

237.8
39.4
20.4
72.8
56.1
49.1
13.6
8.3
11.1
15.5
4.8
9.2
26.6
9.2

267.8
40.0
22.3
79.5
67.8
58.1
14.5
8.0
10.9
15.4
5.2
9.8
27.7
9.5

299.5
40.6
24.2
86.8
80.0
67.8
15.3
7.8
13.0
15.3
5.5
10.5
29.1
9.6

34.5
15.8
11.7
7.1
74.6
46.6
18.2
9.8
255.0
159.6
7.7
19.9
21.9
8.5
17.5
20.0
24.5
4.9
5.2
6.9
89.9

36.5
16.7
12.3
7.5
84.5
53.1
21.1
10.3
284.0
180.9
8.1
22.5
20.9
10.0
19.2
22.3
26.2
4.9
5.2
7.5
91.7

38.6
17.6
13.3
7.8
95.4
60.6
24.3
10.6
309.1
201.3
8.5
25.2
20.0
11.8
20.7
21.6
28.0
5.1
5.4
7.6
89.1

40.3
18.4
13.8
8.1
107.1
68.7
27.7
10.8
337.5
221.6
9.0
27.8
20.1
13.7
22.0
23.2
30.3
5.2
5.3
7.8
87.5

41.7
19.1
14.3
8.3
119.9
77.4
31.4
11.1
364.8
242.0
9.4
30.3
20.4
15.4
23.2
24.0
31.2
5.4
5.2
8.0
88.2

.9
1.0

3.7
2.0

6.2
3.0

8.7
3.0

11.3
3.0

-6.8
-15.2

-7.0
-17.2

-7.2
-16.1

-7.5
-16.1

-7.7
-16.5

-9.9

-9.9

-9.9

-9.9

-9.9

739.3

817.3

890.3

967.9

1,050.3

18.3

15.3

14.7

15.3

16.9

757.6

832.6

905.0

983.2

1,067.2

Includes allowances for civilian and military pay raises for Department of Defense.




1984

33

OUTLOOK
BUDGET AUTHORITY BY AGENCY
(In billions of dollars)

1982

Legislative and judicial branches
Funds appropriated to the President
Agriculture
Commerce
Defense—Military1
Defense—Civil
Education1
Energy
Health and Human Services
Housing and Urban Development
Interior
Justice
Labor
State
Transportation
Treasury
Environmental Protection Agency
National Aeronautics and Space Administration
Office of Personnel Management
Veterans Administration
Other agencies
Allowances
Undistributed offsetting receipts
Total budget authority

Projections

Estimates

Department or other unit

1983

1984

1985

1986

2.2
10.9
30.1
3.1
195.7
3.4
17.0
14.6
258.4
38.2
4.5
2.6
37.0
3.0
24.0
104.7
5.3

2.4
9.7
31.4
3.4
223.3
4.4
17.4
15.8
288.2
45.5
5.0
2.6
37.1
2.9
25.6
108.7
5.8

2.2
10.3
32.8
3.6
252.4
4.5
18.3
14.3
315.5
48.9
5.4
2.7
36.6
3.1
26.6
106.8
6.3

2.3
10.6
34.8
3.7
283.6
4.5
19.0
15.5
357.0
48.1
5.7
2.8
37.3
3.3
27.5
106.0
6.5

2.4
10.9
36.4
3.9
317.6
4.5
19.7
20.3
398.2
49.5
5.7
2.9
36.4
3.4
28.7
107.4
6.5

6.7
30.5
24.9
21.9
3.0
-31.9

7.3
33.1
26.9
22.0
7.6
-34.1

6.8
35.3
29.2
23.2
11.1
-33.2

6.2
37.3
30.7
24.6
13.6
-33.5

5.8
39.2
31.6
25.9
16.2
-34.1

809.8

892.0

962.7

1,047.2

1,139.1

1
Does not reflect shift of about $0.5 billion per year from Department of Defense—Military to Department of Education starting in 1983,
when current law transfers the responsibility for dependent schools to the Department of Education.




34

THE BUDGET FOR FISCAL YEAR 1982
BUDGET OUTLAYS BY AGENCY
(In billions of dollars)

1982

Legislative and judicial branches
Funds appropriated to the President
Agriculture
Commerce
Defense—Military 1
Defense—Civil
Education1
Energy
Health and Human Services
Housing and Urban Development
Interior
Justice
Labor
State
Transportation
Treasury
Environmental Protection Agency
National Aeronautics and Space Administration
Office of Personnel Management
Veterans Administration
Other agencies
Allowances
Undistributed offsetting receipts
Total budget outlays

Projections

Estimates

Department or other unit

1983

1984

1986

1985

2.2
6.3
28.0
3.2
180.0
3.4
15.7
14.1
258.2
15.5
4.1
2.7
34.5
2.6
20.0
104.3
5.8

2.2
6.8
29.7
3.4
205.3
3.9
16.6
15.2
291.3
15.5
4.5
2.6
33.9
2.7
23.2
108.3
6.1

2.2
7.4
31.9
3.5
232.3
4.1
17.6
14.5
322.1
18.0
5.1
2.7
33.4
2.9
25.0
106.5
6.2

2.3
7.9
33.8
3.5
261.8
4.1
18.4
14.8
356.0
19.9
5.2
2.8
34.3
3.0
26.0
105.5
6.2

2.3
8.2
35.3
3.7
293.3
4.4
19.1
17.3
390.0
21.8
5.3
2.9
35.2
3.2
27.4
107.0
5.9

6.4
20.2

7.0
22.9

6.8
25.6

6.4
28.2

6.0
30.7

24.4
17.6
1.9
-31.9

26.2
18.1
5.9
-34.1

28.0
17.9
9.9
-33.2

30.2
18.6
12.5
-33.5

31.2
19.3
15.1
-34.1

739.3

817.3

890.3

967.9

1,050.3

1
Does not reflect shift of about $0.5 billion per year from Department of Defense—Military to Department of Education starting in 1983,
when current law transfers the responsibility for dependent schools to the Department of Education.




PART 3

LONGER RANGE TRENDS
AND ISSUES




35

LONGER RANGE TRENDS AND ISSUES
With Federal, State, and local spending having grown from onequarter to one-third of gross national product (GNP) in the last 25
years, fundamental questions about the role of government in our
society need to be raised. Despite substantial efforts by the administration and the Congress to restrain the growth of Federal spending in the last several years, it has not been possible to bring the
Federal budget into balance. While budget deficits as a percentage
of GNP have been reduced, the relative size of the budget has not
been decreased. The reasons for this are not accurately described
by simplistic criticisms of big government or by accusations of
wholesale waste, fraud, or abuse. Rather, there are strong pressures in our society that increase the tendency of Federal activity
to grow.
The momentum of the budget is the product of all past Presidential and congressional budgetary decisions. These decisions are
modified each year to reflect changes that the President believes to
be necessary to meet the Nation's future needs. His proposals are,
in turn, modified by the Congress. Each year, therefore, the budget
summarizes the results of thousands of past and current decisions
about all aspects of Federal activity.
These decisions both allocate resources to meet specific needs
and help to determine the relative role of the private and public
sectors in our society. Such decisions, however, are influenced by
forces that usually have developed over time and that rarely fade
quickly. For example, the long-term health of the economy, our
Nation's changing role in the world, and the slowly shifting age
distribution of the population are all factors that strongly affect
the composition of the budget. Multi-year budgeting and analyses
of demographic and other factors have been used by the administration to improve our understanding of basic factors that influence the budget in important ways. The sections that follow discuss
some of the issues that form the context within which budget
decisions must be made.
The section on budget controllability is concerned with the effects that indexing, the growth of non-cash benefits, and demographic change have had on programs that make payments to
individuals; the section on roles of government discusses the appropriate size and scope of government activity within the Federal
system; the section on Federal credit programs discusses the
growth and effects of those programs; and the final section dis36



LONGER RANGE TRENDS AND ISSUES

37

cusses the sensitivity of the budget to economic conditions. They
are intended to promote wider understanding of the obstacles that
must be overcome to achieve better control over Federal spending.
Budget Controllability
Federal budget planners face a serious dilemma: despite increasing concerns about the growth of Federal spending, the Federal
budget has, particularly in the short run, become more difficult to
control. This is so even though there have been notable successes
in both executive and legislative branch efforts to improve the
budget process. The purpose of this section is to discuss some of the
factors that have made controllability of spending so serious a
problem.
Budget controllability is a relative concept. Technically, outlays
are relatively uncontrollable when they are determined by existing
statute or by contract or other obligations. Over time, however, all
Federal spending must be considered controllable, since all Federal
spending is authorized in law, and the President and the Congress
may change the laws. But spending programs that are beyond the
immediate discretionary control of the President and the Congress
have increased from slightly less than 60% of total budget outlays
in 1967 to more than 75% in the 1982 estimates.
There are two major categories of uncontrollable spending: outlays from prior-year contracts and obligations, and open-ended programs and fixed costs under which payments are made according
to fixed provisions of law.
Outlays from prior-year contracts and obligations arise because
some Federal spending, such as that for construction and hardware
procurement, takes place over time. Outlays from prior-year contracts and obligations have been about 16%-17% of budget outlays
in recent years.
Open-ended programs and fixed costs that make payments according to fixed provisions of law include benefit programs, grants,
and subsidies for which eligibility is automatic or fixed by law;
interest payments; and farm price supports. These programs have
been about 58%-59% of total budget outlays in recent years.
The largest subcategory of open-ended uncontrollable spending is
that of payments for individuals. These grew from $42 billion in
the 1967 budget to an estimated $355 billion in the 1982 budget, an
average rate of growth of more than 14% per year. These payments increased from about 27% of the total budget in 1967 to an
estimated 48% of the total in 1982, and will have doubled as a
percentage of the gross national product (GNP), from 5.5% to
11.0%. The programs included in this category include social security, railroad retirement, Federal employees retirement, unemploy-




38

THE BUDGET FOR FISCAL YEAR 1982

ment compensation, medicare and medicaid, housing assistance,
food stamps, public assistance, and supplemental security income.
Social security, the largest of these programs, increased from
1.2% of GNP in 1955 to 5.9% in 1980, and is estimated to reach
6.4% of GNP in 1985. Programs that provide assistance to individuals and families based on an assessment of need grew from 0.6%
of GNP in 1955 to 1.9% in 1980, but are estimated to decline to
1.7% in 1985.
Although growth in the programs from which spending is relatively uncontrollable may have been desirable during the last three
decades, we have reached a point where uncontrollable spending
threatens the effectiveness of the budget as an instrument of discretionary national economic policy. It is extremely difficult to
balance the budget, for example, when more than three quarters of
all spending is determined by factors that are normally beyond the
control of the President and the Congress in any given year. The
factors that have led to the growth of the major component, uncontrollable payments for individuals, are discussed below.
OUTLAYS AS A PERCENTAGE OF GNP AT FIVE YEAR INTERVALS

National defense
Nondefense payments for
individuals
Allother
Total budget

1985

1980

1975

1970

1965

I960

1955
10.4

9.0

7.2

8.1

5.8

5.3

6.0

3.7

4.7

4.9

6.5

10.2

10.6

10.5

3.9

4.7

5.9

5.7

6.1

6.7

5.1

17.9

18.5

17.9

20.3

22.0

22.6

21.5

Program evolution.—National concern for the poor, the sick, and
the elderly resulted in the development of programs to address
their problems. Social security, aid to families with dependent children, medicare and medicaid, food stamps, and other programs are
designed to provide beneficiaries with cash or in-kind benefits from
the Federal Government. These programs may be based on formulas intended to represent an assessment of need or they may be
non-needs-tested.
Social security is a good example of growth in payments for
individuals. In 1955, social security consisted of a single program—
old age and survivors insurance (OASI). Total social security outlays were equal to 1.2% of GNP. By 1960, OASI had grown to 2.1%
of GNP and disability insurance (DI), which had begun in 1958, was
equal to 0.1% of GNP. The two programs combined were equal to
2.6% of GNP in 1965 and 3.1% of GNP in 1970. By 1970, OASI and
DI had been joined by a third program—medicare—which was
equal to an additional 0.7% of GNP that year.




LONGER RANGE TRENDS AND ISSUES

39

Social security thus grew from a single program equal to 1.2% of
GNP in 1955 to three programs that were equal to 3.8% of GNP 15
years later. Although no new social security programs have been
added since 1970, liberalizations of benefits, rising medical costs,
and a growing retired population have increased social security
and medicare outlays to 5.3% of GNP in 1975 and 5.9% in 1980.
With no significant changes to existing social security programs,
they are projected to increase to 6.4% of GNP in 1985. Social
security has grown from about 6% of total budget outlays in 1955
to a projected 30% of total budget outlays in 1985.
The problems of controlling the growth in programs that make
payments to individuals are manifold. Because these programs
grew up separately, they provide a largely uncoordinated set of
benefits. There is no standard definition of an adequate income, no
commonly accepted indices of need, no accepted method for converting noncash benefits (such as housing assistance) into cash
income, and no consistent way of insuring that the interactions
among benefit programs provide adequate financial incentives for
people to seek employment. It is, therefore, difficult to establish
common criteria for program eligibility or to assess precisely how
the combination of Federal programs helps people in need, with
the result that it is difficult to determine whether Federal programs are doing too much or too little. Moreover, since these
programs tend to be politically popular, it is very difficult to reduce
existing benefits.
In the past several years, the administration has made a number
of proposals to reduce spending by eliminating or reducing the rate
of growth in programs that make payments for individuals. Savings
were proposed through initiatives to reduce the rate of growth of
medical care costs, reduce duplication in some benefit programs,
and eliminate waste, fraud, and abuse. Most of those proposals
were rejected by the Congress.
Last year, for the first time, the Congress used a process known
as reconciliation to reduce spending of some relatively uncontrollable programs. Reconciliation, which is part of the congressional
budget process, directs congressional committees that authorize
spending and the collection of taxes to recommend changes that
reduce spending or increase receipts by amounts specified in the
congressional budget resolutions.
The reconciliation process thus enables the entire Congress to
vote on instructions to individual committees that have jurisdictions over spending and taxation legislation. Because reconciliation
is part of the congressional budget process, it can cause programs
that would ordinarily escape such annual scrutiny to be evaluated
along with other Federal programs. The Omnibus Reconciliation
Act of 1980 made changes in a number of laws that resulted in




40

THE BUDGET FOR FISCAL YEAR 1982

both increased receipts and reduced outlays in 1981. This unprecedented action demonstrates that the Congress can act to restrain
the growth of uncontrollable spending when it is necessary for
fiscal restraint.
Indexing.—Before 1962, benefit levels in Federal programs were
not adjusted for inflation in any systematic manner. Many of the
benefit liberalizations that were adopted for social security in the
1960's and early 1970's were made in response to perceptions that
social security benefits were inadequate. The Congress increased
benefits on an ad hoc basis, often providing increases that went
beyond the increase in the cost of living as measured by the Consumer Price Index (CPI).
In 1962, legislation was enacted to link civil service retirement
benefits to the CPI so benefits would increase automatically. The
following year, legislation indexed military retirement benefits to
the CPI. Black lung compensation for coal miners was indexed in
1969. In 1970, outlays for these indexed programs were 3% of total
budget outlays.
Indexing expanded significantly when food stamps, social security, supplemental security income, railroad retirement, and various nutrition programs were indexed between 1971 and 1975. By
1975, outlays for indexed programs were 25% of total budget outlays. After the indexing of veterans pensions in 1979, the only
major Federal cash transfer programs that are not automatically
indexed are veterans' compensation, unemployment compensation,
and aid to families with dependent children (AFDC). Fully indexed
programs today account for around 30% of all Federal budget
outlays.
Recent large automatic inflation adjustments to benefit levels in
indexed programs, both actual and projected, have attracted attention to the rapid growth and importance of indexed programs in
the budget. Indexing is not the only important source of growth in
these programs. Demographic changes increasing the number of
beneficiaries and legislation increasing program coverage have also
been important sources of program growth. In addition, some programs that are not indexed, such as medicare and medicaid, have
added to the growth of uncontrollable spending. While not tied to a
specific index, they are implicitly indexed since they pay claims for
services without regard to inflation. Since prices of health care
services have increased more rapidly than prices in general, outlays for these programs have increased faster than the overall
inflation rate.
Given the rapid growth in indexed spending and the high rate of
inflation in the past several years, there is a concern that these
trends will continue and that indexed programs will consume even




LONGER RANGE TRENDS AND ISSUES

41

larger portions of the budget. This concern is heightened by the
realization that other major elements of the budget are also difficult to control or are projected to grow rapidly. Some nonindexed
outlays, such as those for interest and most Federal housing expenditures, are fixed by contract and not susceptible to direct
control by either the Congress or the President, and defense and
basic research programs are projected to grow at 3% to 6% above
the rate of inflation annually as a matter of deliberate policy

ControBaWJHy of Budget Outlays

Fiscal Years

The indexing of major portions of the budget creates significant
problems for budgetary and economic policy. For example, relatively uncontrollable programs that are indexed have an advantage
over relatively controllable programs in the competition for budgetary funds, since many of them continue without requiring specific
annual appropriations action by the President or the Congress. As
a result, greater budgetary pressure is placed upon discretionary
programs. This has important implications for programs that require investments over time; these can be postponed in the short
run, but the costs of doing so may be significant in the long run.
An additional problem is that indexing creates substantial problems for economic stabilization policy; inflation tends to produce
large increases in indexed outlays at the very time that fiscal
restraint is most important.




42

THE BUDGET FOR FISCAL YEAR 1982

In re-examining indexing in light of its growing budgetary significance and of conflicts between indexing and other policy goals,
several levels of issues need to be distinguished. Indexing is one
solution to the problem of protecting real program benefits against
inflation, but there is a more fundamental policy question as to
whether current indexing methods provide the most fair and effective method for protecting real benefit levels against inflation.
The index currently used in most Federal entitlement programs
is the CPI, which has a number of shortcomings as a measure of
the cost of living. The CPI measures housing costs in a way that
tends to overstate the actual rise in the cost of shelter and the
importance of housing in total living costs. Its treatment of mortgage interest rates also makes housing costs, and the entire index,
very volatile, with the effect of increasing the volatility of budget
outlays. The administration is recommending that legislation be
enacted to substitute an alternative index for adjusting Federal
benefits now tied to the CPI that uses actual market data on rental
transactions to approximate the cost of shelter in owner-occupied
houses.
Besides the issue of what index should be used to adjust benefits,
there is an issue of how frequently benefits should be adjusted.
Programs accounting for more than three-quarters of indexed outlays, including social security, are adjusted once a year, while other
programs, including Federal civilian and military retirement, are
adjusted twice a year. The administration is recommending annual
cost-of-living adjustments for all programs in this budget.
Modification of current indexing practice need not imply a
return to the system of ad hoc adjustments. One alternative to full
indexing that should be given the fullest possible consideration—
regardless of what index is used—would be a combination of indexing and discretionary control. This could provide full protection of
real benefits under ordinary circumstances, but would enable the
President to propose an alternative adjustment in some instances.
The Congress would have the option of restoring the full adjustment, but the choice between the full protection of real benefit
levels and other budgetary and economic goals would then be made
explicitly rather than by default.
In-kind benefits.—When the Government provides a service to
beneficiaries or pays the provider of the service instead of providing a cash income transfer to the beneficiary, the benefit is known
as an in-kind benefit. Two decades ago, there were few benefits-inkind; most arose from veterans medical care connected with service-related ailments. Medical care for the elderly (medicare) and for
the poor (medicaid) are today more than eight times as costly to
the Federal Government as are veterans medical care programs.




LONGER RANGE TRENDS AND ISSUES

43

Twenty years ago, in-kind benefit outlays for housing assistance
and food and nutrition assistance combined made up less than 2%
of all payments to individuals; in 1980 they made up nearly 7% of
that total. Ten years ago, Federal interest subsidies for student
loans amounted to about $2 million; in 1980 they were $1,408
million. Taken together, in-kind benefits increased from 1.4% of
total budget outlays in 1960 to about 7% in 1970 and to nearly 14%
in 1980.
The increased use of in-kind benefits causes several major
budgetary problems:
• In-kind benefits are much more difficult to administer than
cash benefits. Establishing and policing appropriate eligibility
standards and monitoring levels of service are major administrative burdens. In 1980, social security paid $77.31 in cash
benefits for every dollar of administrative expenses. In contrast, medicare provided only $30.95 worth of benefits for
each dollar of administrative expense, and medicaid provided
only $18.26.
• In-kind benefits are not measured in income statistics. Because it is difficult to develop standards that would allow the
calculation of cash equivalents for in-kind benefits, they are
not counted as income. In-kind benefits have grown from 4%
of needs-tested (i.e., exclusively for the poor) payments for
individuals in 1960 to over 58% in 1980. Since they are not
included in calculations of income, it is difficult to gauge the
effectiveness of Federal programs in alleviating poverty, to
maintain meaningful eligibility criteria, and to develop coordinated approaches to aiding individuals. In-kind benefits
directed toward the poor have increased substantially, and
there has been no corresponding decrease in programs that
provide cash payments. The cost of these programs has increased without any adequate measure of their benefits.
• The combination of indexed cash benefits and in-kind benefits
may over-compensate for inflation. When the Government
pays a disproportionate share of some rapidly rising living
cost (notably medical care, food, and housing) through in-kind
benefits, a substantial part of the recipient's increased living
costs is already provided for by the Government. If, in addition, the recipient receives cash benefits that are indexed
according to a price index that includes measures for medical
care, food, and housing, the recipient's cash payments can be
over-adjusted for inflation.
Demographic factors.—In addition to the liberalization of existing
programs and the initiation of new ones, shifts in the age distribution of the population have had an important effect on the growth




44

THE BUDGET FOR FISCAL YEAR 1982

of payments for individuals. Between 1935, when social security
was authorized, and 1955, there were relatively few individuals
who had been covered by social security during their entire work
history. This tended to reduce total social security spending. Between 1955 and 1978, however, the number of social security beneficiaries as a percentage of the total U.S. population more than
tripled from 4.8% to 15.8%, and those covered by social security
were entitled to higher benefits because they were covered for
longer periods at higher wages. This has been referred to as a
"maturation" of social security; the program now has been in
existence long enough that most of the elderly population is receiving benefits. Among the reasons for this growth in beneficiaries
and benefits for social security and similar programs are:
• The population aged 62 and over has been rising steeply
relative to the working age population.
• An increasing proportion of the 62 and over population is
eligible to retire as insured workers under social security and
similar programs. Insured workers receive higher retirement
benefit levels than do their surviving spouses who were not
insured workers, so the increase in the number of women
retiring as insured workers rather than as surviving spouses
raises the total benefits.
• An increasing proportion of eligible workers over age 62 is
actually retired. There has been a significant increase in
early retirement (including disability retirements), thereby
placing people on the retirement rolls sooner and removing
them from the tax base at earlier stages.
• The life expectancy of the elderly is continuing to increase.
• Real average cash benefit awards (i.e., benefit levels at time
of retirement in constant dollars) have increased significantly
over time as a result of longer work histories and more liberal
benefits.
As a result of these factors the ratio of the active labor force to
retirees has fallen substantially compared to what it was 20 or
even 10 years ago. The ratio of social security covered workers to
beneficiaries dropped from 5.1 in 1960 to 3.7 in 1978. For disability
insurance, the ratio dropped from 106 to 22 covered workers per
beneficiary. Both the military and civil service retirement systems
have far less favorable ratios than social security. They are now
approaching a ratio of lVfe active duty members to each retired
beneficiary.
There is nothing that the Federal Government can do about the
age distribution of the population. It might be possible, however, to
reduce the pressure on Federal spending caused by demographic
factors. The burden of financing Federal retirement programs
could be eased by gradually extending the minimum retirement




LONGER RANGE TRENDS AND ISSUES

45

age, which would simultaneously expand the tax base and reduce
program costs. A number of alternative retirement policy options
are being considered by the President's Commission on Pension
Policy, which is to submit its final report in February.
Many factors have increased the uncontrollable spending in the
Federal budget. Some pose new analytical challenges, such as constructing accurate price indices and determining the cash value of
in-kind benefits, while others are a test of the Nation's political
will to change the eligibility requirements and formulas for benefit
programs, even when the changes are both justifiable and equitable
as a means of reducing Federal spending. The problems posed by
uncontrollable Federal spending will continue until these fundamental issues are resolved.
The Roles of Government

Consistent with his promise to streamline government, the President, during his administration, has directed concerted efforts to
define the appropriate allocation of functions among Federal,
State, local governments, and the private sector. This issue of the
proper roles of government has become more pressing because
political concerns and economic scarcity today demand the most
efficient allocation and use of governmental resources. The growth
of the Federal Government in size, complexity, and power, as well
as the perceived uncontrollability of the system, have brought cries
to "rediscover the principles of federalism" and "redefine the principles of government" by State and local officials, business leaders,
public interest groups, and individuals.
The debate over the roles of government centers around the
influence of the Federal Government in domestic affairs. Of course,
there is no doubt that today's patterns of intergovernmental and
public-private relations are astonishingly different from those that
existed when our Founding Fathers formulated the doctrine of
federalism. Indeed, they differ significantly from even those patterns that prevailed just several decades ago.
After more than 150 years of moderate increase, Federal revenues and expenditures accelerated rapidly in the 1930's. Federal
spending as a percentage of gross national product (GNP) increased
from 9.8% in 1939 to 22.6% in 1980. Concurrent with this rapid
growth in revenues and expenditures, there has been a marked
shift in their character. This shift is most obvious in the enormous
increase in Federal aid to and demands on State and local governments, and in the Federal Government undertaking burdens that
previously had been exclusively the responsibilities of State and
local governments or of the private sector.
For example, between 1950 and 1980, the Federal grant system
shifted aid into new and expanded areas. In the 1950's, 80% of
340-000 0 - 81 - 5 : QL 3




46

THE BUDGET FOR FISCAL YEAR 1982

Federal grants were for transportation and income security programs. Only in the latter category did expenditures exceed $1 billion.
By 1975, the Federal Government was spending more than $1 billion
annually in each of a dozen areas that included categorical grants
and general purpose fiscal assistance.
With this expansion came a proliferation of programs in each
area. Between 1962 and 1967, the number of categorical grant
programs increasd from 160 to 379. In 1965 alone, 109 such programs were enacted. Major new and expanded programs included
medicaid and housing planning grants. The Federal role in education was significantly expanded through enactment of the Elementary and Secondary Education Act in 1965, in health care with the
Social Security Amendments of 1965, and in law enforcement with
the Omnibus Crime Control and Safe Street Act of 1968. Prior to
this legislation, all these areas were considered primarily State and
local responsibilities. In all, Federal aid to State and local governments rose from $2 billion in 1950 to $25 billion in 1970. By 1980 it
had grown to $91.5 billion.
As Federal expenditures expanded, the relationship between the
Federal Government and State and local governments changed
markedly. In the 1950's, most grant-in-aid programs were designed
to help State and local governments achieve their objectives. Federal administrative requirements were fairly unrestrictive and Federal
agencies saw their role as one of technical assistance rather than
control. Policymaking for the established functions remained with
State and local governments. By the 1960's, however, Federal
grants-in-aid were used increasingly to encourage State and local
action on behalf of expressly stated national purposes. The State
and local matching share of jointly funded programs decreased
from 50% to 20% or less for most programs, but commensurate
with the increase in the Federal financial share there was an
increase in Federal regulations and supervision. Moreover, the conditions and mandates attached to Federal aid multiplied, particularly in such areas as civil rights, the environment, and health and
safety in the workplace. State and local governments often considered jointly funded programs to be Federal because control and
direction remained with the Federal Government.
It should be noted, however, that even though the Federal Government has expanded into a broad range of activities, primary
administrative and financial responsibility frequently has remained with State and local entities or with the private sector. For
example, the Advisory Commission on Intergovernmental Relations
conducted a comparison of private, Federal, State, and local
expenditures in several broad functional areas: education, health,
social welfare, transportation, housing and urban renewal, and




LONGER RANGE TRENDS AND ISSUES

47

income maintenance. It found that only in three areas—health,
income maintenance, and housing and urban renewal—did the
Federal Government play the predominant financial role, with
Federal expenditures exceeding those of State and local government.
Other activities, such as education, continue to be dominated by
the State-local sector. Also in education, although Federal expenditures are growing, they are still less than private expenditures.
Health and medical care expenditures are still predominantly private, although Federal expenditures have been growing and are now
much larger than those of State and local governments. Federal
expenditures for highways, airports and natural resources programs
are comparatively small, still about 20-30% of State-local expenditures for these functions. However, as a practical matter, the Federal
Government has taken over policy leadership in virtually every
field in which it offers aid, despite the fact that its funding is not
predominant.
The confusing and ill-defined nature of intergovernmental roles,
and the shift in responsibilities toward national government and
away from State and local governments, has resulted in a complex
array of problems including:
—excessive cost as a result of duplication of effort and lack of
coordination;
—divided and uncertain responsibility and lack of adequate control and responsiveness through the political process; and
—increased tension among the levels of government as State and
local officials attempt to carry out a wide variety of programs
often directed toward the same objective, but each mandating
different approaches and requirements.
It is apparent from the foregoing review of the growth of the
Federal Government that the evolution of the modern intergovernmental system and the allocation of roles and responsibilities
among Federal, State, and local government has not resulted from
an adherence to any guiding philosophical framework or consistent
doctrine. Rather, the modern system is the outcome of a series of
political debates and compromises over the years. It represents the
cumulative results of the ideological and philosophical preferences
of past and present Presidents and Members of Congress. Special
interest groups and the committee system within the Congress
have further contributed to the current chaotic system. Well-organized special interest lobbies have pushed strongly for narrow categorical programs and, because the committee system in Congress is
primarily specialized and decentralized, the issue of the effects
that legislative proposals have on the intergovernmental system as a
whole has rarely been considered.
In our democratic society it is appropriate that the President
propose and the Congress enact laws and programs based on their




48

THE BUDGET FOR FISCAL YEAR 1982

respective views of the appropriate level of Federal involvement in
particular activities. However, history suggests that in the legislative process, attention generally focuses narrowly on the specific
programs and issues under consideration with little attention given
to the overall emerging pattern of Federal, State, local, and private
sector relations. In part, this is because there is no institutional
mechanism or process that routinely examines proposed or enacted
legislation to determine whether a new or continuing activity represents an appropriate Federal function.
The absence of any consensus on what the appropriate role of
the Federal Government should be, and the lack of any institutional mechanism to enforce a review of the Federal role, has complicated efforts to restrain the growth of Federal spending. However,
the administration has taken a number of steps to make governmental activities more efficient and to ameliorate the concerns of
State, local, and private sector critics of the current Federal role.
First, as noted above, the issue of the appropriate Federal role has
received careful attention in legislative and budget reviews over
the past few years. These reviews have helped clarify the limits of
appropriate Federal activities. Zero-base budgeting has facilitated
an examination of whether specific government activities were appropriate and whether alternative ways of carrying out the required activities would be more efficient.
In response to the concern that Federal aid programs have excessively detailed qualification requirements, overlapping and confusing layers of administration, and insufficient breadth to help solve
the problems of State and local governments, the administration
devoted substantial attention to grant consolidation and simplification. For example, the 1982 budget will recommend major transportation grant consolidations. These include consolidating numerous
highway programs for interstate, primary, rural, and urban roads,
and bridge and safety programs. Added to the consolidation proposals made in the fiscal 1980 and 1981 budgets for youth education,
training, and employment; environment; energy conservation;
health care; airport development; rehabilitation services; and alcohol, drug abuse, and mental health programs, these proposed consolidations represent another important step to ameliorate some of
the fundamental grievances against the present Federal grants-inaid system.
In addition, the administration has worked diligently to reduce
the many burdens that government regulations impose on the private sector. Most recently, the administration was successful in
securing enactment of several significant deregulation bills, including airline, banking, trucking, and railroad deregulation. In 1978,
President Carter issued an Executive Order instructing agencies to
consider less burdensome regulations to meet legislative require-




LONGER RANGE TRENDS AND ISSUES

49

ments and to conduct periodic reviews of existing rules in order to
eliminate obsolescence or overlap. The administration has also created the Regulatory Analysis Review Group to evaluate and comment on the quality and quantity of regulatory analysis performed
by agencies. A recent example of the effort to consider less burdensome alternatives is the decision by the Department of Health and
Human Services to adopt a less costly alternative to its originallyproposed requirement for providing information with prescription
drugs. The savings from this modification alone are estimated to be
$80 million.
Similarly, the administration has worked to simplify intergovernmental grant management requirements, and accomplishments so
far have been substantial. They include:
—Clarification, simplification, and reissuance of guidance on administrative requirements and cost principles.
—The establishment of new audit principles and the development of a standard audit guide to replace the almost 100
guides previously in use. (Under the new procedures substantially greater use is made of audits conducted by or for State
and local governments.)
—Continued reform of government regulations and reduction in
paperwork requirements.
These actions can provide a solid base for further progress. In
particular, they can establish a momentum for Federal grant-in-aid
simplification that continues for years. However, the momentum
will fade when confronted by forces aggressively pursuing their
more narrow and specific self interest unless individual constituencies supporting the "good government" reforms can be forged into
a strong and durable coalition. Continued success can be assured
only by a strong commitment to a continuing focus on the roles
issues raised by nearly all legislative proposals, by open discussion
of the thoughtful recommendations advanced by State and local
government groups, and ultimately, by the exercise of balanced
and good judgment by both the Congress and the President. In
addition, the cooperative working relationship between the President, the Congress, and State and local officials and their representatives must continue and grow stronger. With the help of
officials at all levels of government, a tighter, leaner and more
accountable government can be achieved. The steps taken represent an excellent start. We must build on this progress.
Federal Credit Programs

In 1967 the President's Commission on Budget Concepts established basic ground rules for the presentation of Federal credit
programs in the budget. But over the next decade there was a
dramatic increase in the use of Federal credit, and a decline in its




50

THE BUDGET FOR FISCAL YEAR 1982

clear and meaningful presentation. This budget continues the administration's efforts to develop a credit control policy, and institute more discipline in the analysis and use of Federal credit.
Accounting and budget techniques for Federal credit are often
technical and complex. Forms of credit can often substitute for
each other—loan guarantees, for example, can be used as replacements for direct loans and vice versa, especially since the establishment of the Federal Financing Bank (FFB). Sales of loan assets
often have helped to mask the total volume of new credit. In some
cases, the likelihood of default has been so great that the credit
extended is akin to an outright grant. The lending programs of the
Rural Electrification Administration have been excluded from the
budget by law. Sales in the financial markets of certificates of
beneficial ownership financed by loan repayments of the Farmers
Home Administration have been, by law, treated as offsets to
budget outlays, while in fact they are a form of borrowing like
Treasury securities.
The Federal Financing Bank, created in 1974, routinely makes
direct loans if Federal agencies guarantee them. Yet its loans avoid
the regular budget and appropriations process and are excluded
from the budget totals. Government-sponsored enterprises have
been chartered by the Federal Government. These large credit
institutions are privately owned, supposedly independent, and excluded from the budget. Yet some of them at least seem to have the
attributes of public, rather than private, institutions.
These and other inconsistent and confusing practices led to a
situation where many Federal credit programs were largely excluded from normal budget scrutiny and discipline.
In the 1980 budget, the administration introduced the first comprehensive effort to restrain the growth of federally assisted credit.
The new credit control system has three essential features:
• The points of control are annual limitations on new obligations (for direct loans) and new commitments (for guarantees).
These points of control have the advantage that the budgeted
amounts are unaffected by loan repayments, asset sales, or
various systems of accounting.
• The controls are set through specific annual limitations in
appropriations acts, thus subjecting credit programs to the
same review process as the budget.
• The system encompasses credit programs whether presently
included in the budget totals or not. Thus, no privileged
status is obtained by measures that exclude a credit program
from the regular budget. A loan guarantee is subject to the
same review process as a direct loan.
It is too early to pass judgment on the ultimate success of the
credit control system. However, it does provide a disciplined framework that permits the Congress and future administrations to im-




LONGER RANGE TRENDS AND ISSUES

51

prove their understanding of credit programs and to determine
appropriate levels of credit activity. The credit budget also makes
Federal credit programs visible to the public and allows better
general understanding of the way this type of Federal resource is
used.
To strengthen the credit control system further and to allow
consideration of possible modifications, the President, in his budget
message, is recommending the establishment of a Blue Ribbon
Commission of financial and budget experts. This section discusses
further the issues that led to this recommendation.
History of credit programs.—Most of the loan and loan guarantee
programs now operated by the Federal Government had their origins in efforts to revive the economy during the depression of the
1930's. The Reconstruction Finance Corporation (RFC), charged in
1932 with reviving economic activity, was the forerunner of what
are now the Commodity Credit Corporation, the Federal National
Mortgage Association, the Export-Import Bank, and the Small
Business Administration.
The Nation's single largest credit program today, the Federal
Housing Administration's home mortgage insurance program,
began in 1934 with the purpose of stimulating housing construction. In the late 1930's, additional credit assistance was provided to
financial institutions, businesses, and agriculture. During World
War II, most new Federal lending programs supported defense
production. After the war and into the 1960's, the provision of
housing credit dominated all other Federal credit activities. In
recent years, business and agriculture have reemerged as two of
the more important recipients of Federal credit assistance, and
loan programs have been established in numerous additional areas.
However, housing continues to be relatively dominant in Federal
credit activity.
Size and scope of Federal credit activity.—Federal credit programs are influential in allocating capital in domestic credit markets. Of $348 billion advanced in U.S. credit markets in 1980, $56.7
billion, or 16.3%, was advanced under Federal auspices. This means
that close to one-sixth of the total amount of capital available in
1980 was allocated to a particular use, such as housing or education, with Federal credit assistance. In addition, the activities of
the privately owned Government-sponsored enterprises are related
to Federal credit programs. (See Part 6 of this document for a
discussion of this relationship.) If the activities of these institutions
are taken into account, 23.2%, or almost a fourth of credit advanced,
was allocated under Federal auspices.
During the 1970's, an average of 14% of all credit was advanced
through Federal credit programs. From one year to the next, the




52

THE BUDGET FOR FISCAL YEAR 1982

proportion of all U.S. credit that is Government controlled fluctuates from 10 to 18% of the market, though there has been no
marked trend in recent years toward a proportionally greater role
for Federal credit.
Although the share of Federal credit in relationship to total
credit has been relatively stable, there has been rapid growth in all
credit—both private and public. New net direct Federal loans and
loan guarantees totalled $11 billion in 1970; in 1980 they reached
$56.7 billion. This is a rise of about 400%, without adjusting for
inflation, compared with an increase in unified budget outlays over
the same period of 300%. Although no means of accurately adjusting credit for inflation exists, it is clear that the increase in credit
extended has substantially exceeded the rate of inflation. This
occurs because new extensions of credit have exceeded repayments
of previous loans. The 1982 estimates for Federal credit outstanding in the credit budget are $513.9 billion.
The chart below shows how the range of economic activities
supported by federally guaranteed loans has widened. In 1950, the
home mortgage guarantee programs of the Federal Housing Administration and the Veterans Administration accounted for 90%
of the total volume of guaranteed and insured loan activity. Now,
loan guarantees have expanded into such new areas such as
energy, education, and economic development.

Relative Shares of New




Department
of
•~ Education

'"/• *•*".' ,- - '' >:'/:''°-

'^"''-'^^'tU

"/''I'-;

'-' ''•'''"}. --•

LONGER RANGE TRENDS AND ISSUES

53

Economic effects.—Analysis of the economic effects of Federal
credit is limited because the complex interactions within credit
markets and their intricate linkages to other sectors of the economy are extremely difficult to analyze. Generally, two major concerns have been associated with the economic effects of Federal
credit.
First, it has been suggested that Federal credit activity can
"crowd out7' private credit activity, and thereby transfer command
over resources from the private to the public sector. The degree to
which this occurs depends upon the level of economic activity,
conditions in the credit markets, and the actions of the Federal
Reserve Board. During recessions, credit assistance programs may
encourage the use of idle resources and an expansion in the level of
economic activity and entail minimal adverse effects. On the other
hand, when little excess capacity exists in the economy, credit
extended under Federal auspices may serve to raise interest rates
and add to inflationary pressures. In these respects, the effects of
credit activity are analogous to those of Federal expenditures.
Second, it is often difficult to determine the net effect of Federal
lending and loan guarantees; that is, whether Federal credit augments or substitutes for private lending. It is often unclear whether the beneficiaries of credit programs would have been able to
secure the funds privately, without Government support. For example, Government-guaranteed mortgage credit might be used to finance at a lower cost a house that someone would have purchased
anyway.
These concerns reinforce the importance of providing greater
oversight over Federal credit programs, and the credit budget has
provided a sound mechanism for exercising that oversight.
Credit budget—Before the new credit control system was created,
Federal credit activity was controlled in some cases through limitations on budget authority and on annual activity in the normal
budget process. However, loan guarantees, which do not generally
affect budget outlays except in cases of default and can be substituted for on-budget lending or other outlays to escape budget controls, were subjected to less control.
By limiting new loan guarantee commitments and new direct
loan obligations, the credit budget controls gross lending. This is
the point in the budget process where there is little possibility of
disguising the true volume of credit an agency plans to extend. In
the past, loan repayments and loan asset sales have caused the




54

THE BUDGET FOR FISCAL YEAR 1982

total amount of Federal credit assistance to be disguised. The new
system controls credit activity at the origin and requests appropriations bill limits for most programs. The activity levels for the
credit control system for 1982 are discussed in Part 2 and Part 5 of
the Budget.
Congressional action.—The initial congressional response to the
credit control system has been positive. The Congress incorporated
the system and accompanying limitations requests into the regular
budget and appropriations process. In the second budget resolution,
the Congress set targets for new direct loan obligations, new primary loan guarantee commitments, and new secondary loan guarantee commitments.
Management of Federal credit programs.—The non-credit pro-

grams of the Federal Government are largely administered on a
decentralized basis, with each agency taking responsibility for the
efficient conduct of its responsibilities. For credit programs there
has been a concern as to whether they should be managed centrally or by the departments concerned with the policy goals involved.
Under the RFC, the Federal Loan Administration oversaw the
management of the various credit programs. When the RFC was
disbanded in 1954, however, its functions were dispersed among
several departments. For the next 20 years, each department controlled its own management practices, such as criteria for loans,
loan terms and debt collection methods.
The Federal Financing Bank, created in 1974, consolidated the
financing of credit programs. It did not, nor was it intended to,
take over the management of agency credit programs. The administration has initiated other efforts to improve program management. During the past year, a special Debt Collection Project has
reviewed the collection practices of most of the major Federal
institutions responsible for collection of debts owed to the Federal
Government. For the most part, these are lending agencies, although such significant exceptions as the Internal Revenue Service
were included. The Project found that agencies were often under
considerably greater pressure to extend credit than to collect
it. It appeared that agencies often devote insufficient resources
to the recovery of debt owed the Federal Government, and that
program controls and records are often inadequate.
Remaining problems.—Despite the progress that has been made
in improving credit budgeting, a number of serious problems
remain. For example, some of the costs of credit programs, such as
implicit interest subsidies, are not accurately reflected in the Federal budget.




LONGER RANGE TRENDS AND ISSUES

55

Most Federal credit assistance directly or indirectly provides
credit to recipients at or near the Federal borrowing rate. For most
borrowers, this represents a substantial subsidy. However, this type
of subsidy is never explicitly dealt with in the budgetary process.
In contrast, if the Federal Government were to make payments to
a private lender to induce it to lend at comparably low rates, the
expenditure would be explicitly recognized and closely examined.
Some have argued that the effect of a large portion of Federal
credit assistance is to provide a subsidy with little control or
review rather than to provide credit to those lacking access to it at
a reasonable cost. Explicit subsidies result from programs lending
at interest rates below the Treasury's cost of funds. These are also
not adequately reflected in the budget. It is estimated in Special
Analysis F that $20.2 billion in interest subsidies assistance will be
provided by Federal credit programs in 1982.
Another problem arises when Federal credit assistance is provided in cases where there is little prospect for repayment. One
example is railroad assistance loans, which provided assistance to
Amtrak, the bankrupt Milwaukee, Delaware and Hudson, and
Rock Island Railroads. Although it may not be clear ahead of time
the degree to which repayment prospects are as dim as they later
appear, Federal assistance would be more appropriately budgeted
as grants in cases where repayment prospects are clearly low or
nil.
The appropriate role of the Federal Financing Bank (FFB) in
financing Federal credit programs has raised some difficult questions. Although direct loans on-budget have remained fairly stable
in the last decade, off-budget direct loans financed by the FFB have
grown substantially. The FFB, an off-budget Federal entity within
the Treasury Department, began operations in 1974 as a financial
intermediary for efficient financing of Federal agency obligations.
The FFB performs three functions. First, it lends to Federal agencies that in the past borrowed from the public. Second, it buys
direct loan assets from agencies that in the past had sold these
financial assets to the public. Loan asset sales shift title of the loan
(or a certificate representing a group of flows) from the agency to
the FFB. For an on-budget agency, this shift reduces the recorded
budget outlays by the amount of the sale, but raises the off-budget
outlays of the FFB by an equal amount. Third, the FFB purchases
guaranteed loans. Rather than purchasing the guaranteed loan
from private lenders, the FFB makes the guaranteed loan directly,
effectively converting these guaranteed loans into direct loans offbudget.
The lack of a mechanism to integrate fully credit assistance with
other resource allocation decisions creates perverse incentives. For
many credit programs, the only costs included in the budget totals




56

THE BUDGET FOR FISCAL YEAR 1982

at the time assistance is extended are minor administrative expenditures. The costs to the Government associated with interest
subsidies, defaults, and administration may be hidden or not recognized for many years. Even with the credit control system in place,
Federal credit assistance may appear preferable to other forms of
Federal assistance, since it largely escapes the review associated
with activities that contribute to the current budget deficit.
It has been well over a decade since a thorough review of Federal
credit assistance was last conducted by a Presidential commission,
and even longer since guidelines for the conduct of Federal credit
assistance were adopted. During that period, the volume of direct
and federally guaranteed loans has grown tremendously. There
have been major changes in financial institutions, in financial
markets, and in financial instruments. Programs such as assistance
for the development of synthetic fuels, nuclear fuel and satellite
finance, and aid to Lockheed, to New York City, and to Chrysler
have been enacted. During this period, the Federal Financing Bank
was created. The Federal National Mortgage Association was established as a private corporation. The creation and enormous growth
of the Government National Mortgage Association's pass-through
mortgage pool instruments may have revolutionized housing finance. In short, the present Federal credit environment was barely
conceivable when the last major guidelines were established.
As a consequence, those guidelines should be reviewed and revised as appropriate during the coming year and periodically thereafter to address many of the problems discussed above. These problems include the growth of Federal credit assistance, the threat to
budgetary control from the growth of off-budget programs (which
avoid the regular budget process) the provision of hidden or implicit subsidies to borrowers under Federal credit programs, the use of
Federal credit assistance to provide assistance more akin to direct
grants or subsidies, and problems in the management of Federal
loans and guarantee programs, especially regarding the collection
of debt.
However, the periodic review of Federal credit assistance by
itself cannot provide the proper longer-term perspective to address
the problems raised by the fundamental changes that have occurred. In his budget message, the President has proposed that a
special commission be formed to examine the state of Federal
credit policy. It would conduct a thorough review of the present
institutional structure and consider basic changes to the system. It
would be concerned with the major changes that have occurred in
our financial system, and would address the problem of prior Federal credit programs with a necessary flexibility to adapt further to
changing financial conditions.




LONGER RANGE TRENDS AND ISSUES

The deliberations and recommendations of such a commission, in
concert with the recently established Federal credit control system,
should result in a more effective and rational approach to Federal
credit.
Sensitivity of the Budget to Economic Assumptions
In recent years the sensitivity of the budget to economic conditions has become increasingly apparent. For example, actual Federal spending in 1980 was $48 billion higher than the original budget
estimate in January 1979, with over half the increase directly
attributable to economic conditions different from those originally
assumed. Similarly, estimated 1981 outlays have been revised
upward by $47 billion since only a year ago and the deficit has
been revised upward by $39 billion, with assumptions about economic conditions again accounting for a large part of the increases.
The sensitivity of the budget aggregates to economic conditions
seriously complicates budget planning. Recently, for example, the
sharp rise in interest rates that has accompanied high inflation,
stronger economic conditions, and the Federal Reserve System's
restrained monetary policy has added substantially to interest
costs. Estimated outlays for net interest are $12 billion higher than
estimated only six months ago when the administration prepared
its Mid-Session Review of the 1981 Budget. The faster-than-anticipated rise in consumer prices experienced in the last half of calendar year 1980 and the rise expected in the early months of 1981
will also add substantially to spending for indexed programs such
as social security in 1981 and beyond. The administration's earlier
budget projections have had to be modified substantially to reflect
these and other developments. Similarly, the congressional budget
targets established in the second budget resolution last fall, which
were based on an earlier assessment of the economic outlook, are
likely to be amended in the spring to reflect these economic developments.
Summary estimates.—An understanding of changes in budget estimates requires an understanding of the general magnitudes of
the sensitivity of the budget to the economy. This section gives
such estimates.
Inflation.—Inflation has a direct impact on both Federal tax
collections and Federal spending. Tax collections increase automatically as inflation swells various tax bases—corporate profits,
personal incomes, payrolls, and sales. The increase in total receipts
is generally proportionally larger than the growth in incomes because of the progressive individual income tax. At the same time,
Federal spending in a variety of areas—such as social security,




58

THE BUDGET FOR FISCAL YEAR 1982

interest, Federal pay and medicare—likewise increases as a result
of inflation. Outlay increases may also occur in other areas, such
as defense, as a result of congressional or executive action to maintain real program or benefit levels.
The automatic increases in response to inflation differ in timing
and magnitude between receipts and outlays. Tax collections begin
to rise almost immediately when inflation occurs, in large part due
to our system of withholding and estimated payments. For outlays,
however, longer lags generally exist. Statutory cost-of-living benefit
increases occur at fixed intervals and are not paid until several
months after the price increases that triggered them. Similarly,
higher interest rates that may accompany higher inflation are only
reflected in new debt issues and do not affect existing debt until it
must be refinanced.
The table below shows, for 1981 and 1982, the automatic effect of
a one percentage point rise in the inflation rate on outlays and
receipts in 1981 and 1982. The increases in outlays are for indexed
programs, for interest costs, and for medicare and medicaid, which
respond automatically to price changes. If inflation is one percentage
point higher than projected, beginning in January 1981, the outlays
in 1982 would be roughly $6 billion higher and receipts would be $11
billion higher, thus reducing the deficit by $5 billion. Since automatic increases in receipts exceed automatic increases in outlays, the
automatic budget response to inflation acts to restrain the economy.
To the extent that discretionary programs are also adjusted for
inflation, however, the outlay increase would be higher and the
reduction in the deficit would accordingly be smaller. In program
areas where spending targets are set in real terms, such as for
defense and for basic research, such discretionary actions could be
expected.
Two important caveats should be noted. First, these estimates
assume that real growth, productivity, and unemployment are unchanged. If the higher inflation reduces real growth, as might be
expected under unchanged policies, the outlay increase would be
higher and the receipt increase would be less. Second, these estimates reflect an increase in domestic prices that is accompanied by a
corresponding increase in domestic incomes. To the extent that the
higher inflation is due to import price increases (such as oil imports
from OPEC), for which there are no corresponding increases in
domestic incomes, the increase in receipts would be less than is
shown.




59

LONGER RANGE TRENDS AND ISSUES
SENSITIVITY OF THE BUDGET TO ECONOMIC ASSUMPTIONS
(Fiscal years; in billions of dollars)
1981
Outlays

Effect of one percentage point higher
annual rate of inflation beginning:l
January 1981
January 1982
Effect of one percentage point lower
annual rate of real growth beginning:
January 1981
January 1982

1982

Receipts

2

1

Deficit

3

-3

Outlays

Receipts

Deficit

-1

6
2

11
3

-5

4

6
1

-13
-3

19
4

1
Includes the effect of higher inflation on indexed programs, interest outlays, and medicare/medicaid; excludes effects on discretionary
programs.
Note.—If the rate of inflation were lower by one percentage point, the changes in outlays and receipts would be of the opposite sign but of
similar magnitude to the figures shown above. If the rate of real growth were one percentage point higher rather than lower, the outlay effect would be of
opposite sign but smaller in magnitude. This is because the increase in unemployment from the. levels forecast in this budget does not only raise spending for
regular unemployment benefits and other programs but also is sufficient to trigger an additional 13 weeks of extended unemployment benefits for the entire
Nation. In contrast, a reduction in unemployment from currently projected levels would not affect the national trigger.

Real GNP growth.—Differences from the anticipated levels of
real GNP can also substantially affect the budget. Lower real GNP
growth would reduce personal and corporate incomes and therefore
lower receipts. Since lower real GNP growth is usually accompanied by higher unemployment, outlays for unemployment-sensitive
programs would be increased. A one percentage point lower real
growth rate beginning in January 1981 would raise outlays in fiscal
year 1982 by $6 billion, reduce receipts by $13 billion, and increase
the deficit by $19 billion. This rise in outlays is unusually large for a
slowdown in real growth of this magnitude. This is because the
estimated increase in unemployment from the levels forecast in this
budget does not only raise spending for regular unemployment
benefits and other programs but also is sufficient to trigger an
additional 13 weeks of extended unemployment benefits for the
entire Nation.
The acute sensitivity of the budget to the economy means that
when the economy is volatile the budget will be volatile also. The
budget should thus be understood as an uncertain "best estimate"
based in part on the most likely economic forecast. The accuracy of
the budget estimates cannot be improved without acknowledging
the inevitable underlying uncertainty of all economic projections.
Outlay sensitivity: additional detail—The above discussion describes generally how outlays and receipts respond to changes in
economic conditions. The discussion below gives more detail on the
responsiveness of outlays.




60

THE BUDGET FOR FISCAL YEAR 1982

Prices.—Because of the program-by-program variation in the
timing and frequency of automatic cost-of-living increases, the
outlay effect of increases in the Consumer Price Index (CPI) on
indexed programs will differ depending upon their timing. The
most important projected CPI increases for fiscal year 1982 outlays
are those for the year between the first quarter of calendar year
1980 and the first quarter of calendar year 1981. The rise in the CPI
during this period will determine the July 1981 cost-of-living increases for social security, supplemental security income, railroad
retirement, and veterans pensions. Subsequent CPI increases will
not increase outlays for these programs until July 1982, 3 months
before the end of that fiscal year. Certain other indexed programs,
such as Federal employee retirement programs, are sensitive to
price changes later in the year.
Each percentage point increase in the CPI by the first quarter of
calendar year 1981 increases fiscal year 1982 outlays for indexed
programs by $1.9 billion. The fiscal year 1982 outlay effect resulting from CPI increases subsequent to the first quarter of calendar
year 1981 would be substantially smaller.
These estimated outlay effects for higher prices are conservative
because they do not include additional spending for other pricesensitive programs such as medicare and medicaid. Nor do they
include increases that may result from congressional or executive
action to maintain real program or benefit levels for discretionary
programs.
Interest rates.—Additional outlays resulting from higher interest
rates are reflected only for new borrowing and do not affect existing debt until it is refinanced. Thus, the outlay effect of an interest
rate change increases over time as more and more securities are
issued at the higher rates. A one percentage point increase in rates
by January 1, 1981, would increase fiscal year 1982 outlays for
interest on the public debt by $4.2 billion. A one percentage increase by October 1, 1981—the beginning of the fiscal year—would
increase outlays by $2.6 billion.
Changed economic conditions also affect the deficit and therefore
the amount the Treasury needs to borrow. Based on the interest
rate assumptions used in this budget, a $10 billion increase in the
1982 deficit would increase 1982 interest outlays by roughly $550
million. The 1983 (full-year) outlay effect of this larger 1982 deficit
would be about double this magnitude, or $1.1 billion.




61

LONGER RANGE TRENDS AND ISSUES
SENSITIVITY OF 1982 BUDGET OUTLAYS TO ECONOMIC ASSUMPTIONS
(In thousands of dollars)
1982 Outlays

Prices (effect on indexed programs only)
One percent increase in CPI level by:
First quarter, CY 1981
Third quarter, CY 1981
First quarter, CY 1982
Interest Rates
One percentage point increase in interest rates by:
January 1,1981
July 1,1981
October 1,1981
January 1,1982
July 1 , 1 9 8 2
Unemployment Rate
One percentage point increase in average rate for FY 1982:
Unemployment benefits
Other
Civilian and Military October 1981 Pay Raises
One percentage point increase

1.9
0.7
0.4

4.2
3.3
2.6
1.6
0.3

7.5
1.5
0.7

Note.—For changes in economic assumptions in the opposite direction, outlay decreases would generally be of similar magnitude with the
opposite sign. For unemployment benefits, however, a one percentage point decline in the unemployment rate from levels forecast in this budget
would reduce outlays by an estimated $5.5 billion.

Unemployment—Higher unemployment leads directly to higher
unemployment benefits with almost no lag. It also results in higher
outlays for certain other programs, such as social security, food
stamps, and public assistance, which have more beneficiaries as
unemployment rises. The outlay increases for the latter programs
generally occur with some lag. A one percentage point rise in the
unemployment rate would add an estimated $9 billion to 1982
outlays with about four-fifths of the increase being for unemployment benefits. A one percentage point decline in the unemployment rate would reduce spending by only about $5.5 billion because, as noted earlier, a decline in unemployment from currently
projected levels would not affect the national trigger for extended
benefits. To the extent that the unemployment increase is attributed to increased imports—as in the case of increased unemployment
in the auto industry in 1981—increased unemployment benefits
under the trade adjustment assistance program would add to the
above figures. In 1981, for example, estimated outlays for this
program are $2.7 billion, which is $1.1 billion higher than in 1980
and $2.5 billion higher than in 1979.
Federal pay raises.—Each additional percentage point increase in
Federal pay adds about $0.7 billion to outlays, with about twothirds going for military and civilian pay in the Department of
Defense and one-third for civilian agencies.

340-000 0 - 81 - 6 : QL 3







PART 4

BUDGET RECEIPTS
63

BUDGET RECEIPTS
This section of the budget discusses budget receipts for 1980 to
1984 and the President's proposed tax program.1 The economic
assumptions on which the receipts estimates are based are presented in Part 2 together with estimates of receipts for 1985-86 and
estimates of what receipts would be under conditions of high employment. Part 6 contains an analysis of the difference between
actual receipts for 1980 and the budget estimates for 1980 made 2
years ago. Part 7 explains the conceptual basis for classifying certain amounts collected by the Federal Government as budget receipts and other amounts as offsetting collections.
SUMMARY
Total budget receipts in 1982 are estimated to be $711.8 billion,
an increase of $104.3 billion from the $607.5 billion estimated for
1981. Receipts in 1983 and 1984 are estimated to be $809.2 billion
and $922.3 billion, respectively. These estimates include the effects
of:
• increases in the social security tax rate and taxable earnings
base scheduled under current law;
• the proposed economic revitalization program, as modified in
this budget;
• the proposed motor fuels tax; and
• other receipts measures that are included in the President's
budget proposals.
The estimates of receipts for 1983 and 1984 are based on current
tax law as modified by the proposals in this budget. They do not
include provision for reductions beyond those proposed as part of
the economic revitalization program. The higher burdens associated with these longer-range estimates are undesirable and should be
reduced through further periodic reductions; however, the timing,
size and structure of reductions in these years should be decided
later in accordance with the state of the economy, especially progress in reducing inflation. Because the reduction in inflation is a
critical goal, cuts in these years should be designed in ways that
directly moderate wage and price increases. The amount of reductions that would be required to hold the ratio of receipts to GNP at
the 1982 level, and the effect of such an adjustment on the current
estimates, are shown in the addendum to the following table.
'Detailed estimates of budget receipts by source are shown in tables 10 and 18 of Part 9.

64




65

BUDGET RECEIPTS
BUDGET RECEIPTS BY SOURCE
(In billions of dollars)
1980
actual

Source
Individual income taxes
. .
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Custoitis duties
Miscellaneous receipts

. .. .

Total, budget receipts

1981
estimate

1982
estimate

1983
estimate

1984
estimate

244.1
64.6
160.7
24.3
6.4
7.2
12.7

284.0
66.0
184.8
44.4
6.9
7.4
13.9

331.7
64.6
214.7
69.6
7.7
7.8
15.7

384.6
77.6
239.5
73.4
8.6
8.2
17.3

451.2
91.0
264.2
77.1
9.6
8.7
20.6

520.0

607.5

711.8

809.2

922.3

520.0

607.5

711.8

-9.4
799.8

-26.9
895.4

ADDENDUM
Reductions required to hold burdens to the 1982
level (22.1% of GNP)
Receipts with burdens at the 1982 level

Composition of budget receipts.—The Federal tax system relies
predominantly on income and payroll taxes. In 1982:
• Income taxes paid by individuals and corporations are estimated at $331.7 billion and $64.6 billion, respectively. These
sources combined account for 56% of estimated budget receipts.
• Social insurance taxes and contributions—composed largely of
payroll taxes levied on wages and salaries, most of which are
paid in equal amounts by employers and employees—will
yield an estimated $214.7 billion, 30% of the total.
• Excise taxes imposed on selected products, services, and activities are expected to provide $69.6 billion, 10% of the total.
• Estate and gift taxes, customs duties, and miscellaneous receipts are estimated at $31.2 billion, the remaining 4% of the
total.
Under the tax policy assumptions presented in this budget, the
income tax share of total receipts is projected to rise to 59% by
1984, 3 percentage points more than projected for 1982. Social
insurance taxes and contributions are projected to fall as a share of
total receipts from 30% in 1982 to 29% in 1984. The projected
share of all other receipts declines by 2 percentage points between
1982 and 1984.
ENACTED LEGISLATION AND ADMINISTRATIVE ACTION
Three major tax laws were passed last year that affect receipts
in 1981 and subsequent years: the Crude Oil Windfall Profit Tax
Act of 1980, the Omnibus Reconciliation Act of 1980, and the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980. In addition, the administration published regula-




66

THE BUDGET FOR FISCAL YEAR 1982

tions that accelerate employer payments to the Treasury of withheld income and payroll taxes.
THE CRUDE OIL WINDFALL PROFIT TAX ACT OF 1980

Under this Act (Public Law 96-223), which was enacted on April
2, 1980, a windfall profit tax is levied on domestic producers of
crude oil and several income tax credits are provided to encourage
the production and conservation of energy. The Act also provides a
partial exclusion of interest and dividend income from income tax,
retains the basis under existing law for determining the gain or loss
on the sale of inherited property, and changes the tax treatment of
the gains realized on the sale or transfer of certain inventories.
Windfall profit tax.—This tax is a temporary excise tax levied on
domestic producers of crude oil. There are three tiers of taxable oil:
the first generally includes oil that has been subject to price controls; the second consists of stripper oil; and the third consists of
newly discovered, incremental tertiary, and heavy oil. The tax base
is equal to the amount a producer receives for domestically produced crude oil in excess of his base price and any State* excise
taxes attributed to the excess. Each tier has a different base price,
which is adjusted quarterly for inflation. For most producers the
tax rates are 70%, 60%, ai^d 30%, for the first, second, and third
tiers, respectively. For independent producers the rates are lower for
tiers one and two. Exemptions from the tax are provided for State
and local governments, Indian tribes, certain charitable organizations, and oil produced in certain areas of Alaska.
The gross windfall profit tax is estimated to increase excise tax
receipts by $22.2 billion in 1981, $34.7 billion in 1982, $36.8 billion
in 1983, and $38.6 billion in 1984. Since excise taxes are deductible
when calculating income taxes, the net increase in receipts—taking
into account the reduction in individual and corporation income
taxes—is $13.5 billion in 1981, $20.9 billion in 1982, $21.0 billion in
1983, and $22.1 billion in 1984.
The windfall profit tax is scheduled to phase out during the 33
months after aggregate net receipts exceed $227.3 billion. However,
in no event is the phase-out to begin before December 1987 or after
December 1990.
Energy tax credits.—A number of income tax credits and incentives to stimulate the production and conservation of energy are
included in the Act. These are estimated to reduce receipts by $0.2
billion in 1981, $0.3 billion in 1982, $0.7 billion in 1983, and $1.1
billion in 1984. The major credits are described briefly below:
• Residential tax credit for renewable energy source equipment.—

The tax credit for the cost of installing solar, wind, or geother-




BUDGET RECEIPTS

67

mal energy equipment in a principal residence is increased to
40% of the first $10,000 of total expenditures, effective January
1,1980. Under prior law the credit was equal to 30% of the first
$2,000 and 20% of the next $8,000 in qualifying expenditures,
for a maximum total credit of $2,200.
• Business tax credit for solar and wind energy property.—The
investment tax credit for equipment that uses solar or wind
power to generate or save energy for a structure is increased
from 10% to 15% effective January 1, 1980. The credit also is
extended to equipment that uses solar power for industrial,
agricultural and commercial applications.
• Tax credit for small-scale hydroelectric facilities.—An 11%
business energy credit is provided for investments in equipment and structures used in the production of hydroelectric
power made between January 1, 1980 and December 31, 1985.
• Tax credit for biomass property.—The 10% credit provided for
expenditures for equipment that primarily use organic substances other than oil, natural gas, or coal (waste, sewage,
wood, crops) as a fuel or to produce a synthetic fuel is extended
through December 31, 1985. The credit has been scheduled to
expire December 31, 1982.
Repeal of carryover of basis provisions.—In general, the gain or
loss on the sale or exchange of property is measured by the difference between the cost (basis) and the selling price. Before 1977 the
basis of inherited property was the value on the date of the decedent's death (or 6 months later). The Tax Reform Act of 1976
changed the basis for property inherited after December 31, 1976.
For assets purchased after December 31, 1976, the basis of property
was to be "carried over" from the decedent. Assets acquired before
this date were subject to a transition rule. The Revenue Act of 1978
postponed the effective date of the carryover provision for 3 years.
Current tax law (Public Law 96-223) repeals the 1976 provision;
therefore, the basis of inherited property generally will be its market
value at the date of the decedent's death. This provision is estimated
to reduce receipts by a small amount in 1982, $0.1 billion in 1983, and
$0.2 billion in 1984.
Partial exclusion of interest and dividend income.—Under prior
law, a single taxpayer was allowed to exclude up to $100 in annual
dividend income from tax. For a married couple filing a joint
return the exclusion was $200, provided each spouse had at least
$100 in dividends. This Act increases the exclusion to $200 for a
single taxpayer and $400 for a married couple filing a joint return
and extends the exclusion to most interest income. This provision,




68

THE BUDGET FOR FISCAL YEAR 1982

which only applies to interest and dividend income received after
December 31, 1980 and before January 1, 1983, is estimated to
reduce receipts by $0.3 billion in 1981, $2.3 billion in 1982, and $1.7
billion in 1983.
OMNIBUS RECONCILIATION ACT OF 1980

This Act (Public Law 96-499) provides for spending reductions
and revenue increases pursuant to section 3 of the First Concurrent Resolution on the Budget for fiscal year 1981. The revenue
provisions of this Act, which are described below, are estimated to
increase receipts by $3.4 billion in 1981, $3.2 billion in 1982, $5.1
billion in 1983 and $8.3 billion in 1984.
Restrictions on tax-exempt mortgage subsidy bonds.—State and
local governments use the proceeds from some tax-exempt borrowings to provide mortgage funds for private housing. The tax exemption of interest on State and local securities makes it possible to
lend these funds at interest rates well below the rates for private
mortgages. This Act imposes a number of restrictions on the use of
mortgage subsidy bonds, the most important of which are:
• A ceiling in each State on the annual volume of mortgage
subsidy bonds for single family housing equal to 9% of the
average of all mortgages originated in the State during the
preceding three years or $200 million, whichever is greater.
• A total ban on mortgage subsidy bonds for single family housing effective January 1, 1984.
• A restriction on the use of tax-exempt bonds for multi-family
rental housing to projects that include a substantial number
of units for low and moderate income individuals. These restrictions apply to bonds issued after April 25, 1979, with
exceptions allowed for bonds in process as of that date.
Corporation payments of estimated tax.—Corporations are generally required to pay 80% of their income tax liability in estimated
payments during the taxable year. For corporations that keep accounts on a calendar year basis, the estimated payments are due
on the fifteenth of April, June, September and December. The
remainder of the liability is due in two equal installments after the
close of the year, payable on March 15 and June 15. The required
level of estimated tax payments has several exceptions, including
one that allows corporations to make estimated payments on the
basis of the previous year's tax liability. Under this exception, a
corporation with a loss in the preceding year need not pay any
estimated tax. This Act requires corporations with taxable income
exceeding $1 million in any of the three preceding taxable years to




BUDGET RECEIPTS

69

make estimated payments equal to at least 60% of their current
year's liability.
Taxation of foreign investment in U.S. real estate.—A tax is imposed on all capital gains realized by foreign investors in U.S. real
estate effective June 19, 1980. In the past, most non-resident foreign investors in U.S. real estate could avoid capital gains taxation
on their investments.
Windfall profit tax royalty credit (or refund).—Royalty owners
are provided a credit (or refund) of up to $1,000 against the windfall profit tax imposed on royalty oil removed during calendar year
1980.
Inclusion in wages of payroll taxes paid by employers.—Under
prior law, an employer's payment of an employee's social security
taxes or State unemployment compensation taxes was excluded
from wages when determining an employee's liability for social
security and Federal unemployment taxes and the employee's
social security benefits. Under this Act, such employer payments
generally are defined as wages for these purposes effective January
1, 1981.
Extension of telephone excise tax.—This Act delays for one year
the scheduled reduction and expiration of the excise tax on telephone and teletypewriter services. Under the new law, the tax rate
will be 2% in calendar year 1981, 1% in calendar year 1982, and
will expire December 31, 1982.
Increased duties on imported alcohol—To encourage domestic
alcohol production for use in gasohol, the duty on imported ethyl
alcohol used in or as a fuel is increased by 10 cents per gallon in
1981, 20 cents in 1982, and 40 cents in 1983. This increase in effect
denies such imported alcohol the benefits of the exemption from
the 4 cents per gallon Federal excise tax on gasoline allowed for
gasohol.
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND
LIABILITY ACT OF 1980

This Act (Public Law 96-510) establishes a fund to assure adequate and timely cleanup of hazardous substances spills and uncontrolled hazardous waste dumps that significantly threaten public
health and the environment. The fund will be financed primarily
by excise taxes paid by industry. This Act is estimated to increase
receipts by $0.1 billion in 1981, $0.3 billion in 1982 and 1983, and
$0.4 billion in 1984.




70

THE BUDGET FOR FISCAL YEAR 1982
EMPLOYER DEPOSITS OF TAXES (CASH MANAGEMENT)

The times at which withheld income and payroll taxes and the
employer's share of payroll taxes must be remitted to the Treasury
depend on the amount of such taxes held by the employer. The
larger the employer and hence the accumulated taxes, the sooner
they must be paid. Last year the administration published regulations to accelerate the deposits by large employers and to reduce
the frequency of deposits by employers with quarterly withheld
taxes of $13,000 or less. These changes are estimated to increase
receipts by $2.5 billion in 1981, $2.0 billion in 1982, $0.7 billion in
1983, and $0.7 billion in 1984.




EFFECT OF MAJOR TAX LEGISLATION AND ADMINISTRATIVE ACTION1
(In billions of dollars)
Calendar year liabilities

Crude Oil Windfall Profit Tax Act of 1980:
Windfall profit tax:
Individual income taxes

Corporation income taxes
Excise taxes
Subtotal, windfall profit tax
Energy tax credits:
Individual income taxes
Corporation income taxes
Excise taxes
Subtotal, energy tax credits

1982

1983

1984

1.0
-3.7
10.7

-2.5
-10.1
29.1

-3.1
-12.3
35.6

-3.2
-12.9
37.4

-3.4
-13.6
39.3

-0.4
-1.7
6.0

-1.6
-7.1
22.2

-2.7
11.0
34.7

-3.1
12.6
36.8

6.0

16.5

20.2

21.2

22.3

3.9

13.5

20.9

21.0

22.1

-0.1

-0.1
-0.2

-0.2
-0.2

-0.2
-0.8

-0.4
-0.8
-0.1

—*

-0.1
-0.2

-0.1
-0.2

-0.2
-0.5

-0.3
-0.8

-0.2

-0.3

-0.4

-1.0

-1.4

—

-0.2

-0.3

-0.7

-1.1

—*

-0.1
-22

-0.2

-0.2

—*
-23

0.1
-17

-0.2

-03

0.2

0.2

0.1

0.2

0.2

13.0

18.4

18.8

21.0

Repeal of carryover basis (individual income taxes)
Interest and dividend exclusion (individual income taxes)
Inventory accounting changes (corporation income taxes)
Total, Crude Oil Windfall Profit Tax Act of 1980

Omnibus Reconciliation Act of 1980:
Individual income taxes:
Tax-exempt mortgage bonds
Other
Subtotal, individual income taxes
Corporation income taxes:
Tax-exempt mortgage bonds
Payment of estimated tax




Fiscal year receipt s

1981

1980

-21

5.9

1980

1981

1982

0.2
3.9

1983

1984

L

-3.3
-13.3
38.6

14.1

17.7

20.3

20.9

0.3

1.2

2.5

4.3

0.1
-0.2

0.6

1.7

3.2

0.3

1.2

2.5

4.3

-0.1

0.6

1.7

3.2

0.4

1.3

2.8

4.9

0.2
2.8

0.8
0.8

2.1
0.7

3.8
0.7

-0.2
-0.2

td

I

EFFECT OF MAJOR TAX LEGISLATION AND ADMINISTRATIVE ACTION1—Continued
(In billions of dollars)
Calendar year liabilities
1980

1982

1981

*

Fiscal year receipts
1984

1983

1980

1981

1982
H
e

1984

1983

0.1

0.1

0.1

0.1

0.1

0.1

0.1

Subtotal, corporation income taxes

0.4

1.4

2.9

5.0

3.0

1.7

2.8

4.6

Social insurance taxes and contributions
Excise taxes
Other

0.1
0.5
*

0.3
0.6
*

0.4

0.6
*

0.3
0.6
*

0.3
0.2
*

0.5

*

0.1
0.3
*

1.4

3.5

5.8

9.8

3.4

3.2

5.1

8.3

0.2

0.3

0.3

0.4

0.1

0.3

0.3

0.4

1.6
0.8

1.3
0.6

0.5
0.2

0.5
0.2

2.5

2.0

0.7

0.7

Other

Total, Omnibus Reconciliation Act of 1980

0.1

Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (excise taxes)
Acceleration of employer deposits of withheld income and FICA
taxes:
Individual income taxes
Social insurance taxes and contributions

Total

1

CO

00

-1.2
-3.8
10.7
5.7

-4.4
-9.8
0.1
29.9
*

-4.4
-10.9
0.3
36.5
*

-1.1
-10.5
0.4
37.7
*

0.3
-9.2
0.6
39.6
*

-0.4
-1.7

15.7

21.5

26.4

31.2

3.9

6.0

to

-0.4
-4.2
0.9
22.7
*

-3.2
-9.4
0.9
35.6
*

-3.0
-10.0
0.6
37.3
*

-9.3
0.7
39.0

19.0

23.9

24.9

30.5

*$50 million or less.
1
These estimates are based on the direct effect only of legislative changes at a given level of economic activity. Induced effects are taken into account for forecasting incomes, however, and in this way affect the receipts estimates by major
source and in total.




W

2

Total, Acceleration of employer deposits
ADDENDUM
Effect of major legislation and administrative action on receipts by
source:
Individual income taxes
. ..
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Other

*

BUDGET RECEIPTS

73

RECEIPTS PROPOSALS
Economic revitalization program.—On August 28, 1980, President

Carter announced his economic revitalization program. Through a
series of tax and spending initiatives, this program is designed to
increase employment and restore growth without increasing inflation. In light of recent strength in the economy and persistent
inflationary pressures, some of the tax measures included in this
program are to be delayed and phased in over a longer period than
announced in August. The tax program is designed to increase
productivity, lower unemployment, and reduce inflation. These tax
proposals, which are described below, are estimated to reduce receipts by $3.1 billion in 1981, $18.3 billion in 1982, $32.0 billion in
1983 and $42.1 billion in 1984.
Several of the provisions of this program are refundable to taxpayers with no tax liability. Since payments in excess of liability
are treated as outlays, these tax provisions are estimated to increase outlays by $0.2 billion in 1981, $4.2 billion in 1982, $6.4
billion in 1983 and $7.2 billion in 1984.
Constant rate depreciation.—Under present law depreciation is
computed either under the asset depreciation range system (ADR)
or according to facts and circumstances established by each taxpayer. A new system of depreciation allowances is proposed to encourage business to expand investment, modernize capacity, and provide new jobs. This program provides for a constant annual rate of
depreciation (CRD) for each asset class, reduces the number of
asset classes, simplifies depreciation procedures, and increases allowable depreciation rates by approximately 40%. It also makes
the full 10% investment tax credit available for all eligible machinery and equipment lasting more than 1 year. The CRD system,
which is proposed to be fully effective and required for all assets
placed in service after December 31, 1980, is estimated to reduce
receipts by $2.9 billion in 1981 and $9.0 billion in 1982.
Refundable investment tax credit.—The 10% investment tax
credit that is permitted under current law is of limited value to
firms that have little or no earnings, yet make substantial investments. To provide investment incentives for such firms equivalent
to those provided for other firms, and to assist new firms and those
experiencing structural adjustment problems, the President has
proposed a refundable investment tax credit. Under the administration's proposal, up to 30% of the earned but unused credit for
investments placed in service after December 31, 1980, would be
refundable. The portion of the credit not made refundable would be
available for carryback or carryforward as under present law. This
proposal is estimated to reduce receipts by $66 million in 1981 and




74

THE BUDGET FOR FISCAL YEAR 1982

$4 million in 1982. Most of the budget effect of this proposal is
reflected in outlays, which are increased by an estimated $0.2
billion in 1981 and $2.3 billion in 1982.
Tax credit for social security taxes paid.—An income tax credit
equal to 8% of social security taxes paid is proposed. The credit
would be nonrefundable to individuals, but refundable to State and
local governments, nonprofit organizations and businesses.* This
provision, proposed to become effective January 1, 1982, is estimated to reduce receipts by $8.5 billion in 1982 and to increase outlays
due to the refundability of the credit by $1.9 billion in that year.
Expanded earned income tax credit—Under present law, lowincome taxpayers with dependent children are eligible for the
earned income tax credit, which is 10% of the first $5,000 of
earnings and phases out at the rate of 12.5% for earned income
above $6,000. Under this proposal the credit is increased to 12% of
the first $5,000 of earnings and phases out at the rate of 15% for
earned income above $7,000. This increase in the earned income
tax credit, proposed to become effective January 1, 1982, is estimated to reduce receipts by $8 million in 1982. Although the credit is
refundable, outlays will not be affected until 1983.
Working spouse deduction.—Under present law married couples
with two earners often pay higher taxes than if they were single.
As a result, two-earner families are subject to a work disincentive—or marriage disincentive—created by the tax law. To reduce
this "marriage penalty/' a tax deduction equal to 5% of the first
$30,000 of earnings of the spouse with the lower earnings, with a
maximum deduction of $1,500, is proposed for calendar year 1982.
This deduction would increase to 10% in 1983 and subsequent
years, with a maximum deduction of $3,000. This provision is estimated to reduce receipts in 1982 by $0.4 billion.
Exclusion for Americans working abroad.—Americans working
abroad in certain areas would be exempt from tax on the first
$25,000 of foreign earned income plus 60% of the next $60,000, for
a maximum exemption of $61,000. The exemption would be allowed
for areas where the State Department authorizes a hardship allowance of 10% or more for U.S. Government employees. The special
deductions under present law would continue for Americans working abroad in other areas of the world. More generous and less
complex tax treatment for Americans working in foreign countries
is designed to assist the competitiveness of American exports. This
1
Low-income individuals with dependent children would be eligible for the proposed expanded earned income
tax credit, which would be refundable.




BUDGET RECEIPTS

75

proposal is estimated to reduce receipts by $0.1 billion in 1981 and
$0.3 billion in each of the next three years.
Motor fuels and highway use taxes.—The administration's proposal would replace the current 4 cents per gallon excise tax on
gasoline and diesel fuels with a 14 cents per gallon tax effective
June 1, 1981. The tax rate would be adjusted quarterly thereafter
in accordance with changes in producers' prices. This proposal is
estimated to increase receipts by $3.5 billion in 1981 and $13.1
billion in 1982. Since motor fuel tax receipts now go to the Highway Trust Fund, receipts equivalent to 4 cents a gallon would
continue to be transferred to this Fund. Effective October 1, 1981,
it is proposed that this transfer increase to the equivalent of about
6 cents per gallon.
The administration proposes to increase certain other excise
taxes that support the Highway Trust Fund. These increases are
estimated to add $1.4 billion to receipts in 1982.
The additional revenues to the trust fund from the motor fuels
and other excise tax increases are designed to provide the receipts
necessary to support the administration's proposed Federal highway program. These changes would retain the current relative tax
burden imposed on the users of the Nation's highway system.
Withholding of taxes on interest and dividend income.—No tax is
currently withheld on payments of interest and dividends to domestic taxpayers, although taxes are withheld from wages. To remedy
this inequity, the administration proposes withholding on dividend
and interest payments at a rate of 15%. Individuals who reasonably believe they would owe no tax and tax exempt organizations
would not be subject to withholding if they file exemption certificates. For this reason, and because the lowest tax rate bracket is
14%, few individuals would be deprived of the use of over-withheld
funds. This change, which is proposed to become effective January
1, 1982, is estimated to add $3.9 billion to receipts in 1982, $2.8
billion in 1983, and $3.1 billion in 1984. These revenue increases
result in large part from an expected increase in compliance,
except in the first year, when much of the increase reflects the
acceleration of payments.
Other receipts proposals.—The budget estimates reflect a number
of other proposed actions to improve resource allocation and the
overall efficiency and equity of the tax structure.
Foreign tax credit on oil and gas extraction.—Under present law,
foreign income taxes may be offset dollar for dollar against U.S.
income taxes. In general, foreign income taxes may be used to
offset U.S. income taxes only on foreign source income. The admin-




76

THE BUDGET FOR FISCAL YEAR 1982

istration's proposal would assure that foreign taxes on income from
oil and gas extraction in a particular country be used to offset U.S.
taxes on only that income, rather than U.S. taxes on any foreign
source income. This change, proposed to be effective for income
earned beginning January 1, 1979, is estimated to increase receipts
by $1.4 billion in 1981 and $0.5 billion in 1982.
Tax distinction between employees and independent contractors.—
Under current law, a worker classified as an "independent contractor' ' rather than as an "employee" receives favorable withholding
and employment tax treatment:
• An employer is required to withhold income and social security taxes on wages paid to an employee, but not on payments
made to an independent contractor. Thus, tax compliance by
independent contractors is extremely poor.
• The combined employer-employee social security tax rate
(13.3% in 1981) is higher than the self-employed rate paid by
independent contractors (9.3% in 1981).
There is no clear method to distinguish between employees and
independent contractors under present law. As a result, this distinction has become a frequent source of controversy between taxpayers and the Internal Revenue Service and has resulted in substantial revenue losses to the Treasury each year. To prevent tax
evasion by independent contractors, the administration recommends that effective January 1, 1982, 10% be withheld from compensation for services paid to certain independent contractors. Enactment of this proposal is expected to increase receipts by $0.7
billion in 1982.
Railroad retirement taxes.—The budget estimates reflect a proposal to increase railroad retirement payroll taxes to alleviate
funding problems of the Railroad Retirement trust fund. The largest part of the increase in receipts results from the elimination of
the taxable earnings maximum (currently $2,000 per month) on the
employer portion of the tax. This increase in payroll taxes is proposed to become effective October 1, 1981, and is estimated to add
$0.3 billion to receipts in each of the years 1982 through 1984.
Unemployment insurance coverage of CETA public service employees.—-The Omnibus Reconciliation Act of 1980 phased out Federal
reimbursement to States for unemployment benefits paid to former
public service employees funded under the Comprehensive Employment and Training Act. The administration proposes to complete
this action by making unemployment compensation coverage of
these workers optional rather than mandatory and by prohibiting
the use of Federal public service employment funds to pay such




BUDGET RECEIPTS

benefits. This proposal is estimated to reduce State deposits to the
unemployment insurance trust fund by $57 million in 1982.
Airport and airway trust fund taxes.—The airport and airway
trust fund expired on September 30, 1980. The administration's
proposal would reinstate the freight waybill and passenger ticket
taxes, and certain other taxes, at their former rates. It would also
change the 7 cents per gallon tax on aviation fuel to an ad valorem
tax of 10% and would impose a 6% tax on new aircraft and
avionics. These taxes, proposed to become effective July 1, 1981, are
estimated to increase receipts by $0.2 billion in 1981 and $1.4 billion
in 1982.
Employer social security tax on tips.— Under current law, employers pay social security taxes on a limited part of the cash tips
received by their employees, whereas employees are required to
pay social security taxes on all cash tips. The administration's
proposal would require employer social security tax payments on
all tips now subject to employee social security taxes, effective
January 1, 1982. Enactment of the proposal would increase receipts
by a small amount beginning in 1982.
Withholding tax on interest paid to foreigners.—Current law requires a withholding tax of 30% on interest (and other periodic
payments, such as dividends, rents, royalties, etc.) paid to foreign
corporations and nonresident foreign persons. However, because of
numerous statutory and treaty exemptions, collections are very
small. The administration recommends eliminating withholding on
all portfolio interest paid to nonresident foreigners. This is expected
to encourage foreign investment in the United States, help the
balance of payments and the value of the dollar, and spur domestic
capital formation. This proposal is expected to reduce receipts by
relatively small amounts.
Increase in passport and visa fees.—The administration recommends an increase in passport fees from $14 to $30 effective October 1, 1981. An increase in visa fees from $25 to $100, effective
April 1, 1981, is also proposed. While the increase in passport fees
requires legislation, the change in visa fees can be accomplished by
administrative action. Together, these proposals are estimated to
increase receipts by a relatively small amount in 1981 and $0.1
billion in 1982-84.
Restrictions on tax-exempt bonds for private purposes.—The use
of tax-exempt bonds to finance private projects has grown rapidly
in recent years. Tax-exempt financing adversely affects the efficient allocation of scarce capital resources and the control of the
Federal budget. The administration supports a proposal to restrict
340-000 0 - 8 1 - 7




: QL 3

78

THE BUDGET FOR FISCAL YEAR 1982

the use of tax-exempt financing for certain private purpose activities. The following changes are proposed:
• Eliminate the exemption allowing tax-exempt bonds to finance student loans.
• Eliminate the exemption allowing non-governmental taxexempt organizations the use of tax-exempt financing. The
largest use of such financing is for hospital construction.
• Restrict the use of the "small-issue" exemption to small industrial businesses or to targeted areas, and require a State
or local government matching payment to the issuer and a
report to the Treasury on the volume of bonds issued.
These proposed changes are estimated to increase receipts by
$0.1 billion in 1981 and $0.5 billion in 1982.
Tax status of the U.S. Territories.—The U.S. Internal Revenue
Code is in effect in the Virgin Islands, Guam, American Samoa,
and the Northern Marianas but the Code is administered by the
territories. These territorial tax systems contain major ambiguities,
inconsistencies, and inequities, and have generally suffered from a
decline in the level of compliance and enforcement. The administration recommends that the IRS administer the Code in the four
territories but that the revenues be returned to the territories
through quarterly payments. The repeal of the tax exemption for
income earned by U.S. citizens in Johnston, Midway, and other
nonself-governing U.S. territories is also being proposed. The repeal
of this exemption is expected to increase receipts by $1 million
annually.
Taxation of commodity straddles and futures contracts.—Many
taxpayers currently are engaged in financial schemes to defer taxation on income already earned and to convert short-term capital
gains and ordinary income (taxable at a maximum 70% rate) into
long-term capital gains (taxable at a maximum 28% rate). Many of
these schemes involve commodity futures contracts held in balanced positions; that is, each contract to buy is matched with a
contract to sell (the commodity straddle). Related schemes involve
the direct purchase of commodities with borrowed dollars ("cash
and carry transactions") and the use of Treasury bill futures,
which, as capital assets, are accorded different tax treatment than
are Treasury bills, which are treated as assets producing ordinary
income.
The administration's proposal would disallow losses incurred in
commodity straddles and spread transactions where the taxpayer
remains in a balanced position. Rules with respect to futures contracts in financial markets are also proposed. Together, these
changes are estimated to increase receipts by $0.1 billion in 1981
and $1.3 billion in 1982.




BUDGET RECEIPTS

79

Charitable contributions of tangible personal property.—Under

current law a taxpayer can deduct charitable contributions subject
to certain restrictions. A taxpayer making a contribution of tangible personal property held for more than one year may claim the
fair market value of the property, instead of being limited to
deducting its cost. However, charitable deductions in any given
taxable year may not exceed 30% of the taxpayer's adjusted gross
income. The unused portion of the deduction may be carried over
to the 5 succeeding taxable years.
To prevent taxpayers from claiming excessive valuation for contributions of tangible personal property, the administration recommends that the deduction be limited to the taxpayer's adjusted
basis (that is, cost plus improvements) in the property on the date
of the contribution. No change would be made in the case of
intangible property such as stocks and bonds. This proposal is
estimated to increase receipts by a small amount in 1981 and by
$0.2 billion in 1982.
Extension of "at risk" to the investment tax credit.—Individuals,
electing small business corporations, and certain other closely held
corporations are limited in the amount of losses they may take
from business activities to their amounts "at risk" in the activity
at the close of the taxable year. In general, a taxpayer's amount
"at risk" in an activity is the aggregate of the amount contributed
to the activity by the taxpayer and loans to the activity for which
the taxpayer is. personally liable. Losses that are disallowed because of the "at risk" limitation may be carried over to future
years. However, a taxpayer is able to claim investment tax credits
for property for which losses are disallowed by this limit.
The administration recommends that only amounts "at risk" be
included in the basis of property for purposes of computing the
investment tax credit; amounts not "at risk" will be excluded from
the basis. This would reduce the investment tax credit available to
a taxpayer who has used nonrecourse loans (loans for which the
taxpayer is not personally liable) to finance property that would
otherwise qualify for the credit. This proposal is estimated to increase receipts by a small amount in 1981 and $0.1 billion in 1982.
Audit of partnerships.—Partnerships are not subject to Federal
income taxation. Although the items of income, gain, loss, deduction and credit are computed at the partnership level, they are
included on the tax returns of each of the member partners, where
they are combined with the income and other items from any other
sources. The partners are liable for any Federal income tax shown
on their own returns. Partnerships are required only to file an
annual information return, which sets forth the items of income,
deduction, and credit and includes the names, addresses, and dis-




80

THE BUDGET FOR FISCAL YEAR 1982

tributive shares of the partners, as well as any other required
information.
Since the partnership is not a taxable entity, there is no administrative mechanism for making adjustments at the partnership
level. The Internal Revenue Service must audit each partner separately with respect to that partner's share of partnership items,
even though each such audit may involve the same substantive
partnership determinations. A settlement arrived at by one partner
with the IRS is not binding on any other partner or on the agent
who deals with another partner. Similarly, a judicial determination
of a partnership issue may be conclusive only as to those partners
who are parties to the proceeding.
The administration recommends that all partnerships be treated
as entities for purposes of audit, including administrative settlement and judicial review. The revenue impact of this proposal is
negligible.
Electronic fund transfer for alcohol and tobacco taxes.—The ad-

ministration has proposed regulations to require alcohol and tobacco
products taxpayers to transmit excise tax payments by use of
electronic fund transfer. This is estimated to increase receipts by
$0.2 billion in 1981 and $0.1 billion in 1982.
EFFECT OF PROPOSALS ON RECEIPTS
The summary table shows the effect of the President's proposals
on receipts. These are estimates of the direct effects of the proposals on gross receipts, based on levels of corporate and individual
income that reflect enactment of the proposals. The total of these
effects on receipts are $2.5 billion in 1981, $5.3 billion in 1982,
-$7.9 billion in 1983, and -$15.0 billion in 1984.




81

BUDGET RECEIPTS
EFFECT OF ADMINISTRATIVE ACTION AND PROPOSED LEGISLATION1
(In billions of dollars)
1982

1981
Economic revitalization program.Constant rate depreciation
Refundable investment tax credit
Social security tax credit
Earned income tax credit
Marriage penalty relief
Exclusion for Americans working abroad.
Other
Subtotal, economic revitalization program.
Motor fuels and highway use taxes
Withholding on interest and dividends
Foreign tax credit
Independent contractors
Railroad retirement taxes
Airport and airway trust fund
Commodity straddles
Tax exempt bonds
Other

-2.9
-.1

3.5

'7.4

2.5

Total
ADDENDUM
Effect of proposals on receipts by source:
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions..
Excise taxes
Other

-.5
-.8

3.8
2.5

Total..

-9.0

*

-8.5
*

— .1
*
-3.1

1984

1983

—4
!

-18.3
14.6
3.9
.5
.7
.3
1.4
1.3
.5
.4
5.3

-18.4

-14.2
.2
-13.1
-.2
-4.4
-.3
-32.0

16.1
2.8
.6
.7
.3
1.6
.8
1.0
.2
-7.9

.3
-14.5
-.1
-9.1
-.3
-42.1
17.7
3.1
.6
.9
.3
1.8
1.0
1.6
.2
-15.0

-2.8
-8.6
.5
16.1
.1

-12.9
-13.2
.5
17.8
.1

-18.9
-16.1
.5
19.5
.1

5.3

-7.9

2.3
1.9

2.9
2.9
.6

3.3
3.3
.5

4.2

6.4

7.2

-15.0

2

Effect of proposals on outlays:
Refundable investment tax credit.
Social security tax credit
Earned income tax credit
Total..

*1 5 0 million or less.
These estimates are based on the direct effect only of legislative changes at a given level of economic activity. Induced effects are taken into
account for forecasting incomes, however, and in this way affect the receipts estimates by major source and in total.
2
These estimates reflect payments in excess of tax liabilities, which are recorded as outlays in the budget.

The estimated indirect, or "feedback," effects on receipts resulting from induced changes in income are not included in the above
estimates because they are already included in gross receipts.
These indirect effects are shown in the following table. This table
compares total receipts without the administration's proposals with
total receipts under those proposals. The estimates shown for receipts without the administration's proposals are based on levels of
economic activity that would prevail if no policy changes were
made. These amounts are $605.9 billion in 1981, $708.8 billion in
1982, $817.1 billion in 1983 and $932.4* billion in 1984. The direct
effect of administrative actions and proposed legislation is the
same as shown in the previous table. The indirect effect on receipts
is the change in receipts due only to the effects of the administra-




82

THE BUDGET FOR FISCAL YEAR 1982

tion's proposals on income levels. The net change in receipts combines the direct and indirect effects of the proposals and is equal to
the difference between total receipts under the administration's
proposals and total receipts without those proposals. These net
changes are $1.6 billion in 1981, $3.0 billion in 1982, -$7.9 billion in
1983 and -$10.1 billion in 1984.
DIRECT AND INDIRECT EFFECTS OF ADMINISTRATIVE ACTION AND PROPOSED LEGISLATION ON
RECEIPTS
(In billions of dollars)

1981

Receipts without administrative action and proposed legislation...
Direct effect on receipts of administrative action and proposed legislation
Indirect effect on receipts from induced changes in income
Net effect on receipts
Receipts under existing and proposed legislation

1982

1983

1984

605.9

708.8

817.1

932.4

2.5
-0.9
1.6
607.5

5.3
-2.3
3.0
711.8

-7.9
*
-7.9
809.2

-15.0
4.9
-10.1
922.3

*$50 million or less.

CHANGES IN BUDGET RECEIPTS
Budget receipts are estimated to rise by $87.5 billion in 1981 and
$104.3 billion in 1982. The year-to-year changes can be divided
between changes due to growth in the tax base and changes due to
revisions in the tax structure. Under the tax rates and structure in
effect on January 1, 1979, receipts would have risen by $58.7 billion
in 1981 and $85.7 billion in 1982. Thus, the combined effect of
administrative actions and enacted and proposed tax law changes,
which is shown in the accompanying table, increases the growth in
receipts by $28.8 billion in 1981, $18.5 billion in 1982, and $8.1 billion
in 1984. The corresponding decrease for 1983 is $4.4 billion.
1981

Growth in receipts (in billions of dollars):
Under existing law and administrative actions and proposed
legislation
Under tax rates and structure in effect Jan. 1, 1979
Difference




87.5
58.7
28.8

1982

104.3
85.7
18.5

1983

97.4
101.8
-4.4

1984

113.1
104.9
8.1

83

BUDGET RECEIPTS
CHANGES IN BUDGET RECEIPTS
(In billions of dollars)
1980
Receipts under tax rates and structure in
effect January 1, 1979 *
Administrative actions:

Acceleration of State and local deposits of social
security taxes effective July 1,1980
Acceleration of employer deposits of withheld
income and FICA taxes effective January 1,
1981
Waiver of import duties and fees on crude oil
and petroleum products
Other
Enacted legislative changes:
Crude Oil Windfall Profit Tax Act of 1980
Omnibus Reconciliation Act of 1980
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
Social security taxable earnings base increases: 2 4
$22,900 to $25,900 effective Jan. 1, 1980
$25,900 to $29,700 effective Jan. 1,1981
$29,700 to $32,100 effective Jan. 1, 1982
$32 100 to $35 400 effective Jan 1 1983
$35 400 to $38 700 effective Jan 1, 1984.
Social security tax rate increases:4
12.26% to 13.3% effective Jan. 1,1981
13 3% to 13 4% effective Jan 1 1982
Other
Total, receipts under existing legislation
Proposed changes:
Economic revitalization program

1981

1984

1983

514.5

573.2

658.9

760.7

2.0

0.4

0.3

0.3

0.3

2.5

2.0

0.7

0.7

-0.7
-0.1

-0.4
-0.2

-0.4
-0.2

-0.4
-0.2

-0.5
-0.2

3.9

13.0
3.4

18.4
3.2

18.8
5.1

21.0
8.3

0.1

0.3

0.3

0.4

4.4
1.5

5.7
5.1
1.0

7.2
6.6
3.2
1.5

8.7
8.4
4.2
4.7
1.4

9.3

16.3
1.5
-4.5

17.9
1.7
-5.5

1.3

865.7

-0.8

-2.1

14.7
1.0
-3.4

520.0

605.0

706,5

817.1

937.3

-3.1
3.5

2.1

-18.3
14.6
3.9
5.2

-32.0
16.1
2.8
5.2

42.1
17.7
3.1
6.3

607.5

711.8

809.2

922.3

Motor fuels and highway use taxes
Withholding on interest and dividends
Other
Total, receipts under existing and proposed legislation 3

1982

520.0

1
These
2

figures assume a social security taxable earnings base of $22,900.
If the taxable earnings base were not changed to reflect increased earnings, the effective social security tax rate on earnings would fall. The
amounts included in legislative changes that can be attributed to keeping taxes and average earnings in the same relationship that existed in
1979 are: $0.8 billion in 1980, $3.9 billion in 1981, $8.5 billion in 1982, $14.7 billion in 1983, and $23.0 billion in 1984.
3
These estimates include both the direct and indirect effects of administrative action and legislative changes.
4
Technical note: When the tax rate and the taxable earnings base increase at the same time, dividing up the total effect on receipts is
arbitrary to some small extent because of an interaction effect. The increase in receipts due to this interaction effect is attributed to the rate and
base changes in proportion to the increases in receipts than would occur if the rate and base were each changed separately.

RECEIPTS BY SOURCE
Individual income taxes.—Individual income tax receipts are estimated at $284.0 billion in 1981 and $331.7 billion in 1982. These
estimates reflect the proposed economic revitalization program,
which is estimated to reduce individual income taxes in 1981 and
1982 by $0.7 billion and $8.6 billion, respectively. The proposed




84

THE BUDGET FOR FISCAL YEAR 1982

withholding of taxes on interest and dividend income increases
individual income taxes by an estimated $3.9 billion in 1982.
Individual income taxes in 1983 and 1984 are projected at $384.6
billion and $451.2 billion, respectively. These figures reflect a rise
in the average tax rate on personal income as inflation and real
growth push taxpayers into higher tax brackets. These rising tax
burdens should be offset by judicious tax cuts in future years.
However, the timing, size, and structure of any future legislated
tax reductions should depend on the future performance of the
economy, especially progress in reducing inflation.

Budget Receipts,
teutons

Excise and Other
Social Insurance Taxes
and Contributions

Corporation Income
Taxes
Individual Income Taxes

1972 73 74 78 76
Fiscal Y#ars

77 M
.

79 80 81 82 83 84
,/'

Estimate

Corporation income taxes.—Corporation income tax receipts are
estimated at $66.0 billion in 1981 and $64.6 billion in 1982. These
estimates reflect the deductibility of the windfall profit tax, which
is estimated to reduce corporation income tax receipts in 1981 and
1982 by $7.1 billion and $11.0 billion, respectively. The proposed economic revitalization program, primarily the constant rate
depreciation provision and the 8% tax credit for social security
taxes paid, reduces estimated corporation income tax receipts by
$2.4 billion in 1981 and $9.7 billion in 1982. Other proposed
changes add $1.5 billion to receipts in 1981 and $1.1 billion in 1982.
Corporation income tax receipts in 1983 and 1984 are estimated
at $77.6 billion and $91.0 billion, respectively. These estimates re


BUDGET RECEIPTS

85

fleet reductions of $14.7 billion in 1983 and $18.0 billion in 1984 due
to the proposed economic revitalization program. Other proposed
changes, primarily the limitation on the foreign tax credit for oil
and gas extractions, are estimated to increase corporation income
taxes by $1.4 billion in 1983 and $1.9 billion in 1984.
Social insurance taxes and contributions.—This category includes
social security and railroad retirement taxes, unemployment insurance taxes and deposits, Federal employee retirement contributions, and premium payments for supplementary medical insurance.
Receipts from this source are expected to be $184.8 billion in
1981 and $214.7 billion in 1982. These figures reflect the scheduled
increase in the combined employer-employee social security tax
rate from 12.26% to 13.3% on January 1, 1981 and to 13.4% on
January 1, 1982, and annual increases in the social security taxable
earnings base from $25,900 in 1980 to $29,700 in 1981 and to
$32,100 in 1982. These estimates also reflect $0.8 billion in 1981 and
$0.6 billion in 1982 from an administrative action to accelerate
deposits of withheld FICA taxes effective January 1, 1981.
The estimates for 1983 and 1984 are $239.5 billion and $264.2
billion, respectively. These estimates reflect annual increases in
the taxable earnings base to $38,700 in 1984.
Excise taxes.—Excise taxes are levied on a variety of products,
services, and activities. Receipts from these taxes are estimated at
$44.4 billion in 1981 and $69.6 billion in 1982. These estimates
include the windfall profit tax, which is estimated at $22.2 billion
in 1981 and $34.7 billion in 1982. An additional $30 million in 1981
and $58 million in 1982 is attributable to enactment of the Inland
Waterways Revenue Act of 1978, which levied a tax on liquid fuel
used in vessels engaged in commercial waterway transportation,
effective October 1, 1980. The proposed increase in the motor fuels
tax and other highway use taxes raises receipts in 1981 and 1982
by an additional $3.5 billion and $14.6 billion, respectively. These
estimates also reflect proposed legislation to restore in a modified
form the airport and airway taxes that expired September 30, 1980.
The estimates for 1983 and 1984 are $73.4 billion and $77.1
billion, respectively. These estimates include $36.8 billion from the
windfall profit tax in 1983 and $38.6 billion in 1984. The proposed
increase in the motor fuels tax and other highway use taxes adds
an additional $16.1 billion to receipts in 1983 and $17.7 billion in
1984.
Other receipts.—Estate and gift taxes, customs duties, and miscellaneous receipts (the largest of which are deposits of earnings by
the Federal Reserve System) are estimated to total $28.3 billion in




86

THE BUDGET FOR FISCAL YEAR 1982

1981, $31.2 billion in 1982, $34.1 billion in 1983, and $38.9 billion in
1984.
Proprietary receipts.—In addition to budget receipts, the Government receives significant proprietary income from the public. This
income is derived from various market-oriented activities and takes
the form of interest, rents, royalties, and the sale of Government
property, products, and services. Because this income arises from
business-type transactions rather than from taxation, it is treated
as an offset to related outlays and budget authority rather than as
budget receipts. Proprietary receipts from the public are shown in
table 11 of Part 9.




PART 5

MEETING NATIONAL NEEDS:
THE FEDERAL
PROGRAM BY FUNCTION




87

INTRODUCTION
National needs and the functional classification.—This section of

the budget discusses budget authority, outlays, and related measures of Federal spending, focusing on the end purposes served by
the spending. The presentation is in terms of two closely related
analytical structures: the national needs structure and the functional structure.1
The functional structure is divided into 17 broad areas (functions) that provide a coherent and comprehensive basis for analyzing the budget. It has two additional categories—allowances and
undistributed offsetting receipts—that are not functions but are
required in order to cover the entire budget. In the functional
structure, budget authority and outlays are classified according to
the primary purpose of the activity; to the extent feasible this
classification is made without regard to agency or organizational
distinctions. The process of classifying each activity in the function
that defines its most important purpose—even though many activities serve more than one purpose—permits adding the functional
totals of budget authority and outlays to obtain the budget totals.
The national needs structure uses the same broad categories as
the functional structure except that there are no national needs
categories for interest, allowances, and undistributed offsetting receipts. In the national needs presentation, programs or activities
are counted more than once in those cases where the activities
make a significant contribution to more than one national need.
For example, budget outlays for medical care for military personnel and dependents are primarily designed to strengthen our nation's defense capability. Hence, they are counted in the national
defense function and are not counted in the health function. However, this spending does have a major impact on our nation's
health care for a significant segment of the population, so the
spending is included in the national needs presentation for health
as well as in that for national defense.
Structure of the Part 5 sections.—For each major function (except
the interest function), there is a common structure to the presentation. Each section starts with a statement of national needs. Each
section has a table that shows budget authority and another that
shows outlays for that function for a 5-year span (1980 through
1
See the sections entitled "Functional classification" and "National needs presentation" in Part 7 of this
volume for additional background information.




INTRODUCTION

89

1984). These tables display each subfunction and provide programmatic detail below the subfunction level. In many cases, additional
tables are presented showing related programs in other functions
that support these national needs. Off-budget activity for each
function is shown as addendum entries.
Credit budget—As part of the new credit control system that
began last year, there is a credit table for direct loans and for loan
guarantees in each national needs section. These tables show, by
major program, new loans; loan repayments, sales and adjustments; and net loan outlays. In order to make these tables comprehensive, off-budget lending is also included. For loan guarantees
the tables show new loan guarantees and net loan guarantees (i.e.,
net change in loan guarantees outstanding). Because of the way
loan programs are financed, there is frequently double-counting of
new loans (but not net loan outlays). All loans by the Federal
Financing Bank are guaranteed by other Federal agencies, so all
FFB loans are also included under agency loan guarantees.2 A
more thorough discussion of the credit control system, and nonduplicative totals for Federal credit can be found in Special Analysis F (Federal credit programs) in the Special Analyses volume
issued in conjunction with this budget.
Allowances.—Two categories of activities are treated differently
in the estimated years from the treatment in the actual years.
• Future increases in Federal pay are not distributed by budget
account, program, or agency. They are reflected in two
allowances for pay increases—one for the Department of Defense and one for the rest of the Government. Hence, the
functional total for national defense includes the pay allowance for the Department of Defense, military functions; the
nondefense total includes the nondefense pay allowance, but
the latter allowance is not distributed among the nondefense
functions.
• The budget contains an allowance for contingencies to cover
unanticipated requirements. The allowance does not represent
a specific budget request and the Congress is not asked to
provide an appropriation for this purpose. Therefore, no
actual outlays are made from the contingency allowance; any
contingencies for which appropriations are made later are
financed and fully reported in the appropriate function, so the
contingency allowance for all past periods is always zero.

2
For example, an agency may make a new direct loan, guarantee it, and sell it to the FFB. In such a case, the
same loan shows up twice as new direct loans—once by the originating agency and once by the FFB when it
purchases the loan—and the agency guarantee of the loan is included under loan guarantees.




90

THE BUDGET FOR FISCAL YEAR 1982

Changes in the functional structure.—Two major modifications
have been made in the functional classification for the 1982 budget.
In conformity with law, the administration consulted with the
relevant committees of the Congress prior to making these
changes. The changes are as follows:
First, in recent budgets the income security function included a
subfunction that covered a wide range of spending programs, such
as food stamps, housing assistance, and supplemental security
income. This subfunction was not only diverse, but was larger than
13 of the major functions. Therefore, it has been divided into three
new subfunctions—housing assistance, food and nutrition assistance, and other income security. This change did not affect the
other subfunctions within the function or the coverage of the major
function.
Second, all lending by the Federal Financing Bank is now shown
in the subfunction of the parent account being serviced by the FFB;
the FFB subfunction used in previous budgets has been abolished.
The FFB is a central financing institution maintained by the Department of the Treasury to service Federal agencies and programs. It is, by far, the largest off-budget entity in terms of budget
authority and outlays. It performs three services:
(1) It lends to agencies (such as the Tennessee Valley Authority)
that are authorized to borrow from the public. (Such interagency
borrowing is not counted as FFB outlays; the use of the money by
the borrowing agency is counted as outlays by that agency.)
(2) It purchases title to loan assets from agencies that have made
the loans. (When agencies sell loan assets to the FFB, they guarantee to repurchase the loans in the event of default by the borrower.
When these sales occur, the FFB records loan outlays off-budget
and the selling agency records an offset to its outlays.)
(3) It makes or purchases new loans that are guaranteed by
Federal agencies. All such loans are recorded as off-budget outlays
of the FFB. They are contingent liabilities (loan guarantees) of the
guaranteeing agencies.
The latter two categories result in loan outlays by the FFB; these
loans are recorded as off-budget outlays in the subfunction of the
account being serviced by the FFB. In carrying out these lending
operations, the FFB has other transactions—mainly interest payments and collections. These transactions net out to a relatively
small portion of the total FFB outlays and are now recorded in the
central fiscal operations subfunction.
The published historical data have been revised to make them
comparable to the current usage.
Relationship to other budget tables.—The budget includes a

number of tables that supplement the tables shown in Part 5,




INTRODUCTION

91

including (1) outlays over a longer period of past years; (2) estimates and projections further into the future; (3) budget authority
and outlays by agency rather than by function; and (4) more detailed data than those reflected in the Part 5 tables.
• Budget outlays by function and subfunction for the years 1972
through 1982 are shown in Table 19 in Part 9 of this document. (Earlier data can be obtained upon request from the
Office of Management and Budget.)
• Estimates and projections of budget authority and outlays by
agency, major function, and major program for the years 1982
to 1986 are published in Part 2 of this document.
• Summary budget authority and outlay data by agency for the
years 1980 to 1982 are contained in Table 3 of Part 9. Detailed
data are published in Part 8 (The Federal Program by Agency
and Account).
• Part 8 contains a detailed set of budget authority and outlay
figures for all budget and off-budget transactions. Each item
in that listing has a 3-digit code indicating the function and
subfunction in which it is classified.
The Full Employment and Balanced Growth Act—Section 4(a) of
the Full Employment and Balanced Growth Act of 1978 provides
that the President's budget shall incorporate the programs and
policies that the President deems necessary to achieve the goals
specified in the Act. These goals are discussed in the President's
Economic Report Programs and policies to help achieve these
goals, as well as a broad range of other goals mentioned in the Act,
are discussed throughout this section.
As the national needs sections that follow demonstrate, the goals
listed in the Act were among those weighed in the process of
developing the President's budget recommendations.
Tax expenditures.—Tax expenditures are features of the tax law
that provide special benefits or incentives. They are revenue losses
under the individual and corporate income tax laws that are attributed to special exclusions, exemptions, or deductions from gross
income, or to special credits, preferential rates of tax, or deferrals
of tax liabilities. They are one of several means by which the
Federal Government can carry out policy objectives. In most cases,
tax expenditures can be viewed as alternatives to other instruments of Government policy such as outlays, loan guarantees, regulations, and other tax law provisions. The functional classification
of several tax expenditures was changed this year in order to
reflect more accurately the national needs they meet.
The most important tax expenditures are discussed in the national needs sections that follow so that they may be compared with
the outlays and loan guarantees that serve the same broad pur-




92

THE BUDGET FOR FISCAL YEAR 1982

poses. Tax expenditures are discussed further in Part 6 and in
Special Analysis G, "Tax Expenditures." The latter includes a listing by function and an analysis of all tax expenditures, along with
a discussion of their definition and measurement. It also provides
information about this year's changes in tax expenditure functional classifications.
Other Federal fiscal activities.—The Federal Government allocates resources by means other than those reflected in budget
outlays, tax expenditures, and loan guarantees. Outlays of the offbudget Federal entities, which are federally owned and controlled
but excluded from the budget under provisions of laws, are similar
in nature to budget outlays. The regulation of economic activity
also has a major impact on the economy in many sectors. Finally,
provisions of the tax law affect the allocation of resources among
private uses and the distribution of income among individuals in
many important ways not covered by tax expenditures, which include only special provisions of income taxes. Federal taxes other
than income taxes have economic effects, as do tax rates, personal
exemptions, and other features of the income tax structure that
are not treated as tax expenditures.
The national needs sections that follow include information on
off-budget Federal entities and discuss major issues regarding economic regulation. Off-budget Federal entities and privately owned,
Government-sponsored enterprises are discussed in Part 6 of the
Budget.




NATIONAL DEFENSE

93

NATIONAL DEFENSE
National Needs Statement:
• Protect America's people, its institutions, and its lands
from foreign aggression.
• Improve the current overall military balance between
the United States and its allies, and the Soviet Union
and its allies.
• Deter a nuclear attack on the United States, or its forces,
or on other nations whose security is important to us,
and assure that should deterrence fail, the U.S. can inflict devastating damage in retaliation.
• Maintain, with our allies, sufficient military power to
counter aggression against U.S. interests anywhere in
the world.
• Seek equitable and verifiable international agreements
to limit and reduce all armaments, to prevent proliferation of nuclear weapons technology, to restrict arms
trade, to settle disputes by peaceful means, and to
strengthen international stability.
To meet these national needs, the 1982 budget proposes $200.3
billion in budget authority for national defense. Outlays are estimated at $184.4 billion in 1982, increasing to $210.4 billion in 1983,
and $237.8 billion by 1984.
The predominant spending for national defense occurs in the
Department of Defense. The largest discretionary increase proposed
in the budget is the $22.4 billion increase in outlays for the Department of Defense. An average annual outlay increase of over 5% in
real terms for 1981 and 1982 continues the administration's policy
to provide substantial real increases in our Nation's defenses.
Department of Defense.—The basic national security objectives of
the United States are to provide for its physical security as a free
Nation, to maintain its fundamental institutions and values, and to
advance and protect U.S. interests in the world. To achieve these
objectives the United States must be able to deter attacks on itself
and on its allies and friends; to prevent others from imposing their
political will on it by military means; to influence international
affairs from a position of recognized strength; and, when necessary
to fight, to do so successfully. The United States seeks to deter
armed conflict, to establish and maintain international stability, to

340-000 0 - 81 - 8 : QL 3




94

THE BUDGET FOR FISCAL YEAR 1982

promote international security through arms control and other
international agreements, and to prevent the proliferation of nuclear weapons.
The Nation's security does not depend solely on the strength of
our military forces; it is also affected by the strength of hostile
forces that may confront them. U.S. forces are adequate to protect
us against today's threats, but Soviet military capability continues
to grow. Our forces must be capable and ready if they are to
contain Soviet aggression and continue to assure our security in
the future. This will require a sustained commitment over a period
of years. The United States and its NATO (North Atlantic Treaty
Organization) allies have made that commitment, each seeking to
increase its defense spending by 3% or more per year in real
terms. If we are to maintain a credible capability to oppose the
Soviets and their Warsaw Pact allies in the future, such increases
will continue to be required. Every effort must be made by the
United States and its allies to maintain that commitment, even in
the face of economic difficulties.
The United States has exceeded its real growth commitment in
1979-1980 and in 1980-1981. The 1982 budget continues this trend.
It reflects a real increase in total obligational authority (TOA) of
more than 5%. From 1982 through 1986, real growth of 5% per
year is projected. This represents a major—but clearly necessary—
commitment to strengthening our defenses.
NATIONAL NEED: DEFENSE, MILITARY
(Functional code 051; in billions of dollars)
Budget authority
Major missions and programs

Strategic forces x
General purpose forces
Intelligence and communications
Airlift and sealift
Guard and reserve
Research and development2
Central supply and maintenance
Training, medical, and other general personnel activities
Administration and associated activities
Support of other nations
Total, budget authority
Prior-year funds and other financial adjustments
Total obligational authority
1
2

1980
actual

1981 1982 1983 1984
estimate estimate estimate estimate

11.1
52.2
9.1
2.1
7.9
11.9
16.0
29.2
2.5
.6

12.6
65.4
10.9
2.8

142.6

170.3

171.2

9.4

13.8
16.6
34.6
3.3
.9

18.9
85.1
15.5
4.0
11.2
18.2
21.2
44.1
4.1
.9

22.8
95.4
16.8
5.3
12.8
21.0
24.1
48.8
4.5
.9

195.7

223.3

252.4

196.4

224.0

253.1

15.0
73.5
13.0
3.5
10.3
17.3
18.8
39.2
4.0
1.0

-.4

142.2

Excludes $0.7 billion in 1980, $1.5 billion in 1981, and $2.4 billion in 1982 for MX missile, included under research and development.
Excludes research and development in other program areas on systems approved for production.




NATIONAL DEFENSE

95

The increased level of defense resources proposed for 1982 would
help preserve strategic deterrence, improve the combat effectiveness and readiness of our NATO forces, and increase our ability to
deter or respond to conflict worldwide through the rapid deployment of forces. The capability of the Rapid Deployment Force has
been enhanced in the past year by prepositioning 7 combat equipment and supply ships to the Indian Ocean, by improving readiness
of designated units, by joint exercises, and by successful base rights
negotiations in the Persian Gulf region. The budget includes funds
for other Rapid Deployment Force improvements such as acquisition of a new cargo aircraft, acquisition and conversion of more
cargo ships, and procurement of additional spare parts and other
support equipment.
The budget includes measures that would improve the readiness
and abilities of our conventional forces. These include increased
pay and benefit levels to attract and retain high quality personnel;
increased training; and additional spare parts for aircraft and
other equipment. A high level of deployment and other exercises is
scheduled to keep our units fully prepared to move rapidly to
potential trouble spots.
It is essential that we continue to build and maintain our conventional and strategic forces to the levels required to assure our
future security. The increase proposed for 1982 would:
• upgrade our strategic forces so that initiation of nuclear war
continues to be clearly disadvantageous for the Soviet Union;
• improve, in cooperation with our NATO allies, the ability of
our forces to mobilize quickly and fight effectively in defense
of Europe in order to make initiation of a conventional war
there clearly disadvantageous for the Soviet Union and its
Warsaw Pact allies;
• enhance our ability to deter, and when necessary, respond to,
crises outside Europe, especially in such critical and potentially unstable areas as Northeast Asia, the Middle East, and the
Persian Gulf;
• continue to modernize our naval forces to assure freedom of
the seas, to maintain maritime and naval lines of communication, and to improve our ability to conduct military operations
wherever we are challenged; and
• maintain our ability to monitor foreign military developments
and activities and to verify arms control agreements, with a
high degree of reliability.




96

THE BUDGET FOR FISCAL YEAR 1982

The principal objective of strategic forces is to act as an effective
deterrent to both nuclear and conventional warfare. The 1982 program for strategic forces supports all operational weapons systems
and provides budget authority of $2.8 billion for the new intercontinental ballistic missile program, the MX, which is now in full-scale
development. The MX is scheduled to become operational in 1986.
The 1982 program provides for continued procurement of the Trident missile and submarine. Funds are also provided for the longrange air-launched cruise missile (ALCM), as well as for improvements to our existing bomber fleet.
As part of our 1977 commitment to the long-term NATO defense
program that was reaffirmed in 1979, the budget supports programs to improve the ability of our conventional forces to deter or
respond to military threats in Western Europe and elsewhere.
These include the continuation of cooperative NATO programs for
the joint purchase and operation of a fleet of airborne warning and
control (AWACS) aircraft; joint production of the new F-16 fighter
aircraft; and the development of a standard 120 mm. gun for use
on new tanks of various NATO countries. The budget also provides
funds for storing additional U.S. Army equipment in Europe to
shorten the time required to build up forces there. The budget
requests funds to upgrade artillery, anti-tank weapons, combat
medical support, and the combat capability of land forces in
Europe. Continued modifications to the C-5A cargo aircraft, acquisition of ships for cargo transport and prepositioned storage of
combat equipment, and the development of a new wide-body transport aircraft will improve our ability to deploy forces rapidly anywhere in the world.
Strategic forces.—The most serious threat to our security is a
nuclear war. The probability of such a war has been kept very low
by the deterrent effect of our triad (bombers and land- and submarine-based missiles) of strategic nuclear forces. These forces must
be able to retaliate with devastating effect, even after suffering a
first strike. They must also be capable of varying degrees of response appropriate to different levels of attack and flexible enough
to defeat whatever objectives the Soviets might have in initiating
nuclear war. This should assure that Soviet leaders are discouraged
from initiating a nuclear attack against the United States, and are
unable to gain any advantage in a conventional conflict by threatening a nuclear attack.




NATIONAL DEFENSE

97

The budget continues modernization of each component of the
strategic triad. The strength and reliability of our land-based intercontinental ballistic missile force will be substantially increased by
the larger, more accurate, and less vulnerable MX. These missiles
and their mobile launchers are to be housed in shelters linked by
special road circuits to be constructed in the western part of the
United States. This basing system minimizes vulnerability to
attack and meets arms control objectives.
The budget also supports programs to deploy cruise missiles on
modernized B-52 bombers as well as continued procurement of
Trident submarines and of Trident I missiles for the new Trident
submarines and the replacement of older types of missiles in Poseidon submarines.
Important improvements to reduce the vulnerability and increase the endurance of strategic command, control, and warning
systems are also underway. These radar and satellite systems
ensure reliable warning of an attack and help direct appropriate
retaliation.
Our intermediate-range nuclear weapons, based in Europe, act as
a deterrent against potential Soviet military aggression, either nuclear or conventional. To assure continued deterrence, the Soviet
deployment of new SS-20 nuclear missiles and Backfire bombers
against Western Europe must be offset by stronger NATO forces.
In cooperation with our NATO allies, we are beginning to modernize NATO's intermediate-range nuclear forces through deployment
of ground-launched cruise missiles and new Pershing II ballistic
missiles.
General purpose forces.—The largest funding in the defense function is for conventional military forces, which help deter or counter
non-nuclear military aggression. The budget proposes 1982 budget
authority of $73.5 billion for general purpose forces, a 12% increase
over 1981. Active general purpose forces include 16 army divisions,
3 marine divisions, 3 marine air wings, 26 wings of air force tactical aircraft, and 309 general purpose naval warships, including 13
aircraft carriers and 12 carrier air wings.
A number of important initiatives for modernizing existing
forces and improving their readiness for combat are proposed.
These initiatives would strengthen the ability of our general purpose forces to maintain the balance of conventional military power,
particularly in Western Europe, and to deter aggression elsewhere
in the world.




98

THE BUDGET FOR FISCAL YEAR 1982

SUMMARY OF ACTIVE MILITARY PERSONNEL AND FORCES
(Year end—i.e., as of September 30)
actual

Military personnel (in thousands):
End strength:
Army
Navy
Marine Corps
Air Force
Total, Department of Defense..
Average strength:
Army
Navy
Marine Corps
Air Force
Total, Department of Defense..
Strategic forces:
Intercontinental ballistic missiles:
Minuteman
Titan II
Polaris-Poseidon-Trident
Strategic bomber squadrons
General purpose forces:
Land forces:
Army divisions
Marine Corps divisions
Tactical air forces:
Air Force wings
Navy attack wings
Marine Corps wings
Naval Forces:
Attack and multipurpose carriers..
Nuclear attack submarines
Other warships
Amphibious assault ships
Airlift and sealift forces:
C-5A airlift squadrons
Other airlift squadrons
Sealift fleet
1
2

1981
estimate

1982
estimate

777 775 786
527 538 550
189 188 188
558 565 570
2,050 2,065 2,094
766 771 774
525 531 542
184 187 187
558 562 569
2,033 2,052 2,072

1,000 1,000 1,000
54
54
54
576 544 568
28
28
28
16
3

16
3

16
3

26
12
3

26
12
3

26
12
3

13
74
183
63

12
*83
194
59

4
13
52

4
13
59

13
92
204
60

X

2

4
13
57

Includes ex-Polaris ships operating as attack submarines.
Excludes 2 SL-7 logistics ships undergoing modification.

Army forces are designed primarily to meet the largest of all
general purpose force challenges—a land conflict between NATO
and the Warsaw Pact countries—while retaining the flexibility to
meet threats to U.S. interests elsewhere. Improvements proposed in
1982 include:




NATIONAL DEFENSE

99

• modernization of armored fighting vehicles, helicopters, air
defense systems, and other equipment;
• prepositioning of additional equipment in Europe to facilitate
rapid U.S. reinforcement of NATO in an emergency;
• greater readiness of combat units in the United States and
overseas;
• better living and working conditions for our soldiers; and
• improved ability of our forces to withstand nuclear, biological
and chemical warfare.
The XM-1 main battle tank provides a major increase in the
Army's ability to survive and maneuver under conditions of
modern land warfare. A new type of armor enables it to withstand
direct hits and continue fighting. A more powerful engine and an
improved track system enable it to move faster over rougher terrain than other tanks. The budget provides for continued procurement of the XM-1 in 1982. The Army's new Infantry Fighting
Vehicle, also included in the 1982 program, will provide infantry
forces with the speed, protection, and firepower needed to fight
alongside the XM-1 tank. Initial production of the Advanced
Attack Helicopter armed with the Hellfire missile will begin in
1982. This helicopter can engage heavily armored vehicles in
combat at longer ranges than could previous attack helicopters.
The Patriot air defense missile system will provide more effective
protection of vital targets, such as depots, bridges, and airbases,
and more freedom of movement for combat support forces. The
Patriot system is able to counter mass air attacks at longer ranges
and higher altitudes than previous systems.
The ability of combat and support forces to respond effectively
depends on the condition of equipment and the ability of welltrained combat units to act with confidence, skill, and coordination.
To maintain our military forces in a high state of readiness, the
budget provides for increases for unit training and for operation of
a national training center for ground forces. Inventories of spare
parts are being increased and maintenance backlogs are to be
reduced to bolster the combat readiness and endurance of our forces.
Air force tactical fighter forces have the mission of gaining superiority in the air, providing close support to ground forces, attacking enemy forces behind the lines, and limiting enemy air attacks
on allied forces and facilities.
The budget begins procurement of the Maverick missile with
advanced guidance for attacking tanks, and provides for continued
procurement of the following tactical aircraft and equipment:




100

THE BUDGET FOR FISCAL YEAR 1982

• F-15 fighter aircraft for maintaining air superiority;
• F-16 multimission aircraft for maintaining air superiority and
attacking ground targets;
• improved versions of the Sidewinder and Sparrow air-to-air
missiles for Air Force and Navy fighter aircraft; and
• EF-111A aircraft with electronic equipment for jamming
enemy air defense radars.
For the Air Force, the budget supports continued expansion
toward a full 26 tactical fighter wings, including the deployment of
A-10 and F-16 aircraft to Korea, F-16's to NATO, and A-10 and F-15
aircraft to Alaska. Improvements to Air Force readiness are to be
made through increased procurement of spare parts as well as
reduction of maintenance backlogs. Flying hours are to be increased over the 1981 level as a result of additional aircraft enters
ing the inventory and initiatives to increase pilot readiness. A high
level of deployments and other exercises is scheduled to keep our
units fully prepared to move rapidly to potential trouble spots.
Special emphasis is being placed on the readiness of rapid deployment forces.
Naval general purpose forces serve our national security needs in
several ways. The presence of U.S. warships and aircraft in an area
provides a visible symbol of support to our allies and a deterrent to
military aggression both in peacetime and during crises. Should
deterrence fail, our naval forces will protect vital sea lanes and
deny their use to the enemy. Our naval forces can also attack land
targets and support amphibious assaults by the U.S. Marine Corps.
Commissioning of 28 new ships and the retirement of 12 older
vessels will increase the total fleet size from 549 ships in 1981 to
565 in 1982. Significant among these increases will be the strengthening of surface warship forces by the delivery of 1 aircraft carrier,
2 destroyers, 9 frigates, and 5 hydrofoil patrol craft. Delivery of 6
Los Angeles class submarines and conversion of 3 Polaris submarines to attack submarines will add 9 to the nuclear attack submarine force.
Maintenance of our naval superiority requires that we continually modernize our naval weapons systems. Toward that goal, the $48
billion 5-year shipbuilding plan calls for acquiring 85 ships between
1982 and 1986, including 6 ballistic missile (Trident) submarines.
The budget supports procurement of the following new general
purpose force ships in 1982:
• 2 large warships (cruisers) equipped with the AEGIS system,
which helps protect the fleet from aircraft and missile attack;
• 1 small warship (frigate) to protect the fleet and military
convoys;




NATIONAL DEFENSE

101

• 1 nuclear powered attack submarine and 4 surveillance ships
to counter enemy submarine threats;
• 1 mine countermeasures ship as the start of a new program to
improve the fleet's ability to operate in the presence of enemy
mine threats; and
• 2 salvage ships for recovering damaged ships or aircraft.
The budget request also includes funds to design new ships of
moderate cost that can be bought in quantity to maintain U.S.
naval superiority. These include a new attack submarine and a
new anti-submarine frigate for use by the naval reserve.
Naval aviation forces include 15 tactical air wings (12 Navy and
3 Marine Corps), 24 land-based patrol squadrons, and various support aircraft. To maintain and modernize these forces the budget
provides funding for additional F/A-18 fighter and attack aircraft
for the tactical airwings and initial production of the SH-60B antisubmarine helicopter.
Airlift and sealift forces.—These forces must be able to move
military personnel and equipment rapidly to trouble spots worldwide and then sustain their activities with resupply.
Existing transport aircraft are being modified and additional war
reserve spare parts are being procured. The budget provides for
replacement of the wings on C-5A aircraft to extend its service life
beyond the year 2000. Fuselages on the C-141 aircraft are being
lengthened to enable it to carry more cargo, and in-flight refueling
capabilities are being added to extend its range. The development
and eventual procurement of the C-X, a new wide-body, long-range,
cargo aircraft, will allow a more rapid military response. The Civil
Reserve Air Fleet conversion program will increase the number of
civilian aircraft capable of carrying military cargo in an emergency.
During 1980, 7 supply ships loaded with equipment and supplies
for prepositioning were deployed to Diego Garcia, an island in the
Indian Ocean. The budget provides for increased sealift capacity
through the acquisition and modification of SL-7 logistics ships and
acquisition of additional supply ships for prepositioning of equipment and supplies.
Guard and reserve forces.—Guard and reserve forces need to be
fully trained and equipped and, in an emergency, be able to mobilize and deploy rapidly as an integral part of the active forces.
Units scheduled for early deployment in the event of mobilization
receive the highest priority for training and equipment.




102

THE BUDGET FOR FISCAL YEAR 1982

The budget proposes substantial increases in unit strength for
the Army National Guard, Army Reserve and Marine Corps Reserve, as well as an increased emphasis on programs for individuals
who have already received their military training. Various incentive programs are provided to improve recruitment and retention.
These programs would increase strength and improve personnel
quality. More intensive and effective unit training is provided to
improve readiness and increase participation of guard and reserve
personnel in service-wide training exercises. To enhance overall
unit readiness and training, full-time military support is increased
for Army Reserve components.
Increased funding is requested for logistical support, equipment
maintenance, and base operations. Modernization of Air National
Guard and Air Force Reserve forces will continue with the outfitting of units with more modern F-4 fighters and new A-10 attack
aircraft.
Research and development—Defense research and development
is directed toward the development of new and more capable weapons systems to meet changing military requirements, as well as
toward maintaining our current lead in most areas of military
technology. The budget requests a $3.5 billion increase over the
1981 budget authority level to improve our technology and continue to modernize our strategic and conventional forces. Principal
research and development initiatives, some of which have been
noted above, include:
• Technology.—Substantial real growth is proposed for basic
research and for continued research into such promising technologies as high-energy lasers, and very-high-speed integrated
circuits.
• Strategic systems.—Major emphasis is placed on continued
full-scale development of the new MX land-based intercontinental ballistic missile system, as well as increased effort on
the new Trident II submarine-launched ballistic missile.
• Tactical systems.—Air Force intiatives include a new longrange transport aircraft and improved guided missiles and
precision-guided munitions for fighter aircraft. The Navy
budget request emphasizes development of a light-weight antisubmarine torpedo and continues development of the AV-8B,
a vertical or short takeoff and landing (V/STOL) attack aircraft for the Marines. The Army is beginning development of
a light-weight tank, as well as continuing development on
new air defense missiles and armored vehicles.




NATIONAL DEFENSE

103

• Other defense research and development.—Programs under
development that should benefit both the military and civilian communities include an upper stage for use with the
space shuttle and NAVSTAR satellites to provide accurate
worldwide navigational assistance.
Active duty military personnel.—Since 1973, our armed forces
have been manned exclusively by volunteers. In 1980 the military
services again achieved their personnel objectives, reaching 99.9%
of the congressionally authorized strength levels. The military services will continue to be confronted with manpower challenges in
1982 and beyond as increased personnel levels are needed to support deployments of additional weapons systems. To retain greater
numbers of experienced personnel in the armed services, over $4.5
billion in pay and reimbursement increases for 1981 were enacted.
These initiatives receive continued support in this budget as do
increased efforts to improve the quality of recruits entering the
services. The budget includes a pay raise of 9.1% for military
personnel, effective in October 1981.
Military retirement reform.—The administration continues to
support legislation to reform the military retirement system. This
legislation would correct inefficiencies and inequities in the retirement program that were highlighted in the April 1978 Report of
the President's Commission on Military Compensation.
The key feature of the proposed retirement reform, drawn from
the Commission's plan, would provide new career incentives by
giving active duty personnel special cash payments after 10 years
of service. These payments would be charged against their future
pension rights. Members completing 20 years of service would still
be entitled to immediate pensions although benefits would be reduced from current levels until age 60. Personnel leaving active
duty after completing 10, but before completing 20 years of service
would be entitled to deferred pensions beginning at age 60. Annuities would be calculated on high 2 years' average basic pay, rather
than final basic pay, and would be offset by benefits available
under the social security system.
Although more costly in the near term, these proposals would
eventually result in substantial cost reductions after a transition
period that would protect the interests of members of the current
active-duty force. At the same time, this legislation would provide
major improvements over the current system in achieving more
management flexibility, fairness, and cost effectiveness.




104

THE BUDGET FOR FISCAL YEAR 1982

The administration proposes two modifications to current indexing procedures in the military retirement and other income support programs. Currently, retired military personnel receive cost-ofliving adjustments semi-annually. It is proposed that the frequency
of such automatic benefit increases be limited to once a year for all
Federal retirement and income security programs. For military
retired pay, outlay savings are estimated at $477 million in 1982. In
addition, for retired pay and other programs currently linked to
the Consumer Price Index (CPI), the administration is proposing
that, beginning in 1982, benefit increases be based on an alternative—"rental equivalency"—measure of the CPI. This proposal is
discussed more fully in the income security section.
Financing military retirement costs on an accrual basis,—The
administration also supports legislation to change the way the
budget accounts for military retired pay. The budget now reflects
only the benefits paid to military personnel who have already
retired. Under the proposal, the defense budget would reflect the
cost of retirement benefits being earned by military personnel on
active or reserve duty at the time they are being earned. This
change would improve personnel management by focusing attention on those retirement costs that can be controlled. Because the
proposal involves complex changes in many parts of the budget, the
changes will not be reflected in the budget schedules until the
legislation is enacted.
Tax expenditures.—The exclusion from taxable income of housing
and meals for military personnel, provided either in-cash or inkind, results in a tax expenditure estimated to total $1.7 billion in
1982. In addition, disability pensions received by current military
retirees are largely excluded from taxable income, resulting in a
tax expenditure estimated at $200 million for 1982.
National defense summary.—The accompanying table shows
budget authority and outlays by appropriation categories for the 3
major national defense missions: military functions of the Department of Defense, atomic energy defense activities and the defenserelated activities of other agencies.
Atomic energy defense activities.—The Department of Energy
is responsible for research, development, testing and production of
nuclear weapons and special nuclear materials, storage of nuclear
wastes from defense programs, and design of reactors for navy
vessels. The accompanying table shows the distribution of funding
levels for these programs. Budget authority of $4.7 billion is requested for 1982 compared to $3.7 billion for 1981.




105

NATIONAL DEFENSE
NATIONAL DEFENSE
(Functional code 050; in millions of dollars)
1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

31,014

36,709

38,363

38,938

39,522

11,965

Major missions and programs

13,917
-85
54,074
44,951
16,054
3,327
2,014
-657

BUDGET AUTHORITY
Department of Defense—Military:
Military personnel
Retired military personnel:
Existing law
Proposed legislation
Operation and maintenance
Procurement
Research, development, test and evaluation....
Military construction
Family housing
Revolving funds and other
Allowance for civilian and military pay raises..
Other legislation
Subtotal, Department of Defense—Military

46,365
35,283
13,561
2,293
1,526
615
1

Atomic energy defense activities..
Defense-related activities:
Existing law
Proposed legislation
Subtotal, defense, related activitiesDeductions for offsetting receipts
Total, budget authority

142,621

16,077 18,093 20,046
-477
297
346
61,492 67,762 74,438
49,065 58,843 70,015
19,841 21,763 23,747
5,554
6,726
8,019
2,156
2,375
2,595
-402
-381
-354
3,771
8,569 13,656
220
310
336
170,305 195,660 223,295 252,366

2,991

3,658

4,704

5,230

5,569

156

119
-210

186
-210

292
-217

462
-430

156
-4

-91
-3

-24
-3

75

32
-3

145,764

173,869

200,337

30,842

36,711

38,291

11,920
44,770
29,021
13,127
2,450
1,680
-969

13,880
-85
52,117
35,422
15,441
2,526
1,861
-273

132,840

157,600

2,878

3,587

4,478

4,998

5,457

142

114
-210
-96
-3

134
-210
-76
-3

308
-217

441
-430
11
-3

228,596 257,965

OUTLAYS
Department of Defense—Military:
Military personnel
Retired military personnelExisting law
Proposed legislation
Operation and maintenance
Procurement
Research, development, test and evaluation....
Military construction
Family housing
Revolving funds and other
Allowance for civilian and military pay raises..
Other legislation
Subtotal, Department of Defense—Military*
Atomic energy defense activities...
Defense-related activities:
Existing law
Proposed legislation
Subtotal, defense related activities..
Deductions for offsetting receipts

Total, outlays..

142
-4

38,865

39,448

16,049 18,061 20,011
-477
297
346
59,659 66,334 72,784
40,120 47,251 56,109
18,485 20,858 22,879
3,880
2,919
5,660
2,257
1,959
2,512
- 9 3 2 -1,301 -1,354
3,707
8,488 13,569
310
220
336
180,000 205,300 232,300

91
-3

135,856 161,088 184,399 210,387 237,766

1
Current law requires that, beginning in 1983, the overseas schools operated by the Department of Defense be transferred to the Department
of Education. This change—about $0.5 billion per year—is not reflected in this table but will be made in the 1983 budget.




106

THE BUDGET FOR FISCAL YEAR 1982
ATOMIC ENERGY DEFENSE ACTIVITIES
(Functional code 053; in millions of dollars)
1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

1,847
784
278
82

2,320
948
303
87

3,049
1,187
346
122

3,331
1,343
416
140

3,580
1,417
423
149

2,991

Major missions and programs

3,658

4,704

5,230

5,569

1,814
745
241
78

2,218
975
312
82

2,815
1,214
328
121

3,195
1,260
402
141

3,513
1,385
415
144

2,878

3,587

4,478

4,998

5,457

BUDGET AUTHORITY
Weapons research, development, test, and production
Weapons materials production and waste management
Naval reactor develoDment
Other research programs
Total, budget authority
OUTLAYS
Weapons research, development, test, and production
Weapons materials production and waste management
Naval reactor development
Other research programs
Total outlays

. .

The nuclear weapons program involves the design, research, development, testing and production of nuclear warheads for the
nuclear weapons stockpile, including quality control and periodic
inspection of the finished devices. Funding levels proposed for 1981
and 1982 provide for increased missile warhead production for
current and new weapons systems.
Nuclear materials production entails the production of special
nuclear materials for use in nuclear warheads. The budget provides
for increased production of special nuclear materials corresponding
with increased missile warhead production.
The defense nuclear waste management program currently provides interim storage for all defense nuclear wastes. The program
also supports research to develop permanent storage and isolation
of these wastes. Funding proposed for 1982 continues the transfer
of old defense wastes to new interim storage tanks, provides increased support for interim storage operations, and supports continued research and development on waste storage and disposal.
The naval reactor development program includes the research
and development, design, procurement, and testing of prototype
reactors for current and future naval vessels.
Other Department of Energy defense research and development
programs involve work in inertial confinement fusion; improved
physical security at Department of Energy nuclear facilities; and
arms control and verification technology.




NATIONAL

107

DEFENSE

CREDIT PROGRAMS—NATIONAL DEFENSE
(In millions of dollars)
1980
actual

Direct loans:
New loans . . .
Repayments, sales and adjustments ( - )
Net loan outlays.
Loan guarantees:
New loans
Net loan guarantees

1981
estimate

-10

-10

11

-10

10

11

30
5

30

1982
estimate

Defense-related activities.—Activities of the civilian departments
and agencies that support national defense include emergency
management, maintenance of strategic stockpiles, and the Selective
Service System. In 1982, offsetting receipts are expected to exceed
other outlays by $76 million.
Estimated outlays for the emergency planning, preparedness,
and mobilization functions of the Federal Emergency Management
Agency of $169 million in 1982 would support planning for limited
relocation during crises and would aid State and local planning to
deal with possible future nuclear power plant emergencies.
To meet our needs for critical raw materials that might be
unavailable during wartime, the General Services Administration
stockpiles strategic and critical materials. Sales and purchases are
proposed in 1982 to adjust the inventory of the stockpile to current
requirements. Outlays for purchases are estimated to be $108 million in 1982. Receipts from sales are estimated at $477 million in
1982.
The Selective Service System is responsible for maintaining
standby capability to meet defense personnel requirements during
an emergency national mobilization. The budget includes outlays of
$24 million in 1982 to improve the Selective Service System's mobilization capability, including a national registration program, and
to provide increased data processing and other support.




108

THE BUDGET FOR FISCAL YEAR 1982

INTERNATIONAL AFFAIRS
National Needs Statement:
• Promote a stable international environment that will
reduce conflicts, encourage worldwide economic progress,
and bring greater respect for human rights.
• Support the security and the economic and political stability of allies and friendly governments.
• Support the long-term development of poor countries,
with particular emphasis on reducing widespread poverty.
• Assist our domestic economy by strengthening international economic institutions and promoting trade.
• Advance American foreign policy through diplomacy and
improved communication between the United States and
other nations.
The well-being of the United States and its people depends, in no
small measure, upon events beyond our borders. The United States
must therefore maintain a leadership role in the world.
International affairs programs do not constitute the whole of this
country's international role. That role depends upon the strength
of our economy, our free institutions, and the moral values and
actions of our people. Moreover, the governmental actions required
to meet most of our national needs in international affairs are
diplomatic and policy initiatives that require relatively few budget
resources.
This budget allows the United States to continue its long-term
leadership in world affairs. For 1982, the budget requests $19.6
billion in budget authority and $12.2 billion in outlays for international affairs, compared to 1981 estimates of $25.2 billion in budget
authority and $11.3 billion in outlays. The decline in budget authority is largely the result of an increase in the United States'
quota in the International Monetary Fund, which added $5.5 billion to 1981 budget authority.
The largest budget items in international affairs are foreign
assistance programs. The budget includes $9.2 billion in budget
authority and $7.0 billion in outlays for economic assistance, and
$0.6 billion in budget authority and outlays for military assistance
in 1982. A total of $2.7 billion in budget authority and $2.4 billion
in outlays are requested for the conduct of foreign affairs and for
foreign information and exchange activities. International financial
programs are estimated at $7.1 billion in budget authority and $2.1
billion in outlays.




109

INTERNATIONAL AFFAIRS
NATIONAL NEED: CONDUCTING INTERNATIONAL RELATIONS
(Functional code 150; in millions of dollars)
Major missions and programs

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

BUDGET AUTHORITY
Foreign aid:
Foreign economic and financial assistance:
International Development Cooperation Agency.
Multilateral development banks
Public Law 480 food aid

Peace Corps
Economic support fund/peacekeeping operations
Refugee assistance
Offsetting receipts and other

1,856
2,308
886
100

1,974
1,584
1,305
109

2,726
2,414
1,263
122

3,034
1,515
1,273
130

3,387
2,057
1,435
142

1,972
483
-296

2,153
491
-310

2,450
611
-364

2,405
529
-376

2,370
509
397

Subtotal, foreign economic and financial
assistance

7,310

7,306

9,222

8,510

9,503

Foreign military sales credit
Relocation of facilities (Israel)
Offsetting receipts and other

110
25
645
236
-333

110
28
500

34
36
850

29
36
850

27
36
850

276

-286

-286

-287

Subtotal, military assistance

682

363

633

628

626

7,992

7,669

9,855

9,138

10,129

821
486
36

989
517
38

1,281
724
43

1,290
698
45

1,425
755
47

1,343

1,553

2,048

2,033

2,227

518

577

687

670

727

1,842
3,997

7,021
2,889
5 516
88
-79

4,594
2,376

4,648
2,049

5,315
1,842

239
-80

-82

-84

5,761

15,435

7,129

6,615

7,073

-96

-81

79

-79

80

15,519

25,153

19,639

18,377

20,077

Military assistance:
Grant military assistance
Foreign military training

Total, foreign aid
Conduct of foreign affairs:

Administration of foreign affairs
International organizations and conferences
Other
Subtotal, conduct of foreign affairs
Foreign information and exchange activities
International financial programs-.
Export-Import Bank
Foreign military sales trust fund (net)
International monetary programs .
International commodity agreements
Other
Subtotal, international financial programs
Deductions for offsetting receipts
Total, budget authority

77

Foreign economic and financial assistance.—The missions of foreign economic and financial assistance are to promote economic
development in Third World countries, to provide humanitarian
aid to needy people abroad, and to support the foreign policy interests of the United States.
Continued large increases in world petroleum prices have placed
heavy burdens on most developing countries over the past year,
increasing their present and future needs for financial assistance
from the United States and other developed nations. However,
340-000 O - 81 - 9 : QL 3




110

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: CONDUCTING INTERNATIONAL RELATIONS—Continued
(Functional code 150; in millions of dollars)
Major missions and programs

1982
estimate

1981
estimate

1980
actual

1983
estimate

1984
estimate

OUTLAYS
Foreign aid:
Foreign economic and financial assistance:
International Development Cooperation Agency.
Multilateral development banks
Public Law 480 food aid
Peace Corps
Economic support fund/peacekeeping operations
Refugee assistance
Offsetting receipts and other
Subtotal, foreign economic and financial
assistance
Military assistance:
Grant military assistance
Foreign military training

Foreign military sales credit
Relocation of facilities (Israel)
Offsetting receipts and other
Subtotal, military assistance
Total, foreign aid
Conduct of foreign affairs:
Administration of foreign affairs
International organizations and conferences
Other
Subtotal, conduct of foreign affairs
Foreign information and exchange activities..
International financial programs:
Export-Import Bank
Foreign military sales trust fund (net)
International monetary programs
International commodity agreements
Other
Subtotal, international financial programs
Deductions for offsetting receipts
Total, outlays

1,609
784
1,073
101

1,828
988
1,471
107

1,898
1,219
1,263
121

2,267
1,314
1,273
128

2,645
1,405
1,435
139

1,904
446
-311

2,104
486
-319

2,314
585
-363

2,359
543
-380

2,419
513
399

5,607

6,664

7,038

7,504

8,157

219
26
644
341
-335

151
26
595
360
-278

148
34
660
68
-288

90
34
805

72
34
940

-288

-287

894

854

622

640

758

6,501

7,518

7,660

8,144

8,915

842
492
33

916
539
39

1,122
668
42

1,248
685
43

1,366
742
41

1,367

1,494

1,831

1,976

2,149

534

588

610

687

747

1,836
1,137
12

2,350

2,657

2,702

2,366

-559

5
-562

30
556

534

529

2,427

1,793

2,131

2,168

1,837

96

81

-79

-79

-80

10,733

11,314

12,152

12,897

13,568

ADDENDUM
Off-budget Federal entity:
Federal Financing Bank:
Overseas Private Investment Corporation:
Outlays
Foreign military sales credit:
Budget authority
Outlays




-4

-5

2,380
1,932

2,600
2,010

-5
3,000
2,220

-6

2,800
1,800

2,689
1,439

111

INTERNATIONAL AFFAIRS

funding for most of this mission, except for Public Law 480 food
aid, has remained at or near the level of two years ago. These
programs operated throughout 1980 under a continuing resolution
due to congressional inaction on the foreign aid appropriation. The
programs in this mission are now operating under another continuing resolution that expires June 5, 1981.
The 1982 proposal of $9.2 billion in budget authority and $7.0
billion in outlays provides a substantial increase over the 1981
levels available under the continuing resolution. Though a modest
response to the growing needs of developing countries, the requested increase in bilateral assistance provides the basis for the United
States to urge other donors and recipients to join in meeting these
needs, particularly needs related to food production, energy production and conservation, and family planning. Also, the proposed
subscription to the general capital increase of the World Bank
supports vital efforts of the international community to help developing countries deal with increasingly severe financial strains.
International Development Cooperation Agency (IDCA).—Substantially increased funding in 1982 is requested to provide strong U.S.
support for development in the poorest developing countries. The
effectiveness of economic assistance programs has increased under
the coordination of the International Development Cooperation
Agency. The Director of IDCA is directly responsible for the poliINTERNATIONAL DEVELOPMENT COOPERATION AGENCY
(In millions of dollars)
1983
estimate

1984
estimate

304
1,408
262

351
369
2,035 2,310
257
248
85
90
7

399
2,611
277
90
9

1,974

2,726 3,034

3,387

303
1,307

334
1,340
254
-72
40
2

389
1,983
268
-82

1981
estimate

Budget Authority
IDCA/AID, operating expenses
Agency for International Development
International organizations and programs
International Fund for Agricultural Development
Trade and development program
Total, budget authority..
Outlays
IDCA/AID, operating expenses
Agency for International Development
International organizations and programs
Overseas Private Investment Corporation
International Fund for Agricultural Development..
Trade and development program
Total, outlays..




259
-66
25
1,828

1982
estimate

361

1,667
253
-78
60
6
2,267

2,645

112

THE BUDGET FOR FISCAL YEAR 1982

cies and budgets of the Agency for International Development
(AID), the Overseas Private Investment Corporation, voluntary contributions to international organizations and programs, the trade
and development program, and U.S. contributions to the International Fund for Agricultural Development, which is a multilateral
lending institution. In addition, the Director shares responsibility
with the Secretary of the Treasury for developmental aspects of
U.S. participation in the multilateral development banks, and with
the Secretary of Agriculture and other officials for the Public Law
480 food aid program.
The bilateral AID program promotes economic growth in developing countries while stressing the distribution of the benefits of
this development to the poorest people. The 1982 budget authority
request of $2.0 billion will finance larger programs in food production, family planning, health, energy, and scientific cooperation
than the $1.4 billion level estimated for 1981. Outlays are projected
to rise from $1,307 million in 1981 to $1,340 million in 1982.
AID programs consist of innovative projects addressing basic
human needs, which complement and serve as models for largerscale undertakings financed by multilateral development banks
and by recipient country governments. Allocations of AID funds
are made on the basis of countries' need, past and present economic policies and performance, and human rights practices.
The United States makes voluntary contributions to 14 international organizations and programs that carry out important developmental, humanitarian, and scientific activities. This voluntary
funding is concentrated in those areas where bilateral assistance or
domestic research cannot fully or appropriately meet the needs of
this mission. Of the requested budget authority of $248 million in
1982, the largest planned contribution is $145 million for the
United Nations development program, the primary multilateral
source of technical assistance for developing countries. Also included in the 1982 request is a $45 million contribution to the United
Nations Children's Fund (UNICEF), and smaller contributions to
the Organization of American States, the International Atomic
Energy Agency, and several other developmental and scientific
programs.
The Overseas Private Investment Corporation (OPIC) provides po-

litical risk insurance and financial assistance to support the participation of private American business in the development of
Third World countries. In accordance with its legislative mandate,
OPIC gives preferential consideration to investment in the poorest
countries, particularly by smaller U.S. businesses, and cooperatives. It




INTERNATIONAL AFFAIRS

113

also encourages projects involving energy and minerals production.
OPIC is a self-sustaining agency and does not require appropriated
funds. In 1982, receipts (largely interest and insurance premiums)
are expected to exceed outlays by $72 million.
The International Fund for Agricultural Development (IFAD) finances development projects in Third World countries that improve the productivity and well-being of small farmers. IFAD is
unique in its sole concentration on the small farmer and in the
level of participation by members of the Organization of Petroleum
Exporting Countries (OPEC). OPEC pledged to provide 43% of the
initial funding of IFAD. Because the fund is expected to exhaust its
authority to make financial commitments during calendar year
1981, the United States has agreed to help replenish the fund's
resources. While negotiations have not been concluded, the United
States expects to contribute $265 million over 3 years as its share
of a $1.3 billion increase to finance the 1982-84 lending program.
Budget authority of $85 million is requested for 1982 for the first of
three installments of the replenishment.
The trade and development program was made a separate entity
within IDCA in 1980 to increase attention to issues of trade with
developing countries. The program assists in the economic development of certain developing countries, principally those not participating in regular AID programs, by promoting sales of U.S. technological goods .and services. Budget authority of $7 million is proposed for 1982.
Multilateral development banks.—Financing of capital projects
and related technical assistance is provided by the multilateral
development banks. The World Bank group and the Inter-American, Asian, and African Development Banks lent $16 billion during
their last completed fiscal years. United States support for these
institutions is based on the quality of bank operations and on the
premise that U.S. participation can encourage a greater sharing of
the cost both by other wealthy countries and, to a lesser extent, by
advanced developing countries.
Because of the long repayment periods for the banks' loans,
funds for new lending must be provided periodically by new infusions of capital. The total size and donor country shares of these
capital replenishments are negotiated among member countries.
Replenishment agreements normally provide for annual installments over 3- to 5-year periods.
The contributions are of two types:
• Paid-in capital, a direct contribution requiring budget authority and resulting in budget outlays; and




114

THE BUDGET FOR FISCAL YEAR 1982

• Callable capital, by means of which members guarantee repayment of the banks' borrowing on world capital markets to
finance their nonconcessional lending.
Because the banks have nearly perfect records of repayment by
their borrowers and have also accumulated large reserves against
losses, it is highly unlikely that funds will be called upon to make
good on guarantees. Because of this and because of large past
appropriations for callable capital, no budget authority is now
sought for callable capital. Instead, a limitation is set in appropriations acts on the amount of callable capital to be provided for a
given replenishment.
The 1982 proposal of $2.4 billion in budget authority for paid-in
capital and the associated $9.5 billion in program limitations on
callable capital is in three parts:
• Planned annual installments for ongoing replenishments, authorized in prior years for most of the banks, totalling $1.5
billion in budget authority, along with $690 million in callable
capital.
• A one-time subscription to the general capital increase of the
World Bank of $658 million to be paid in, plus $8.1 billion in
callable capital. (This represents a 22% U.S. share of a total
capital increase of $40 billion designed to meet the growing
capital needs of developing nations through the mid-1980's.
Paid-in capital will be drawn down by the Bank over 7 years
and the outlays in 1982 will be only $66 million).
• Overdue installment payments to ongoing replenishments totaling $279 million, and $692 million in callable capital.
Public Law 480 food aid.—This program meets needs abroad for
economic development, humanitarian and emergency feeding, and
urgent disaster relief. Third World requirements for food import
financing have not diminished, and rising prices have increased
costs. Price increases have also reduced the quantity of food aid
that can be shipped in 1981 and 1982 from the amounts originally
planned. The budget request of $1.3 billion in budget authority
would shift aid toward the neediest recipient countries, and toward
countries of key importance to the United States. A significant
portion of direct food donations would be devoted to meeting refugee relief needs. Starting in 1981, the Food Security Reserve Act
authorizes up to 4 million metric tons of grain to be set aside for
food aid during periods of serious shortage, 300,000 metric tons of
which may be used to meet urgent humanitarian needs in a country that suffers a major disaster.
Peace Corps.—The Peace Corps will continue to help meet the
skilled manpower needs of developing countries, to support social
and economic development, and to promote mutual understanding




INTERNATIONAL AFFAIRS

115

between the peoples of the United States and of the Third World.
Budget authority of $122 million is proposed for 1982, $14 million
above the 1981 level. This would provide a small increase in volunteers, improved selection and training, and increased readjustment
allowances to help volunteers during their transition back into
American society after their service.
Economic support fund and peacekeeping operations.—The Eco-

nomic Support Fund provides economic assistance to promote political and economic stability. This aid is provided in a variety of
forms, including general budget and balance-of-payments support,
and development project financing. Peacekeeping operations include the costs of the Sinai Support Mission and payment of a
share of the costs of U.N. forces on Cyprus. Total budget authority
proposed for the economic support fund and peacekeeping operations
is $2.2 billion in 1981 and $2.4 billion in 1982.
In recent years most of these funds have been committed to
Egypt and Israel in support of U.S. efforts toward a peaceful
Middle East political settlement. This budget would continue that
support in 1982. Economic support fund financing is also being
provided to assist our NATO ally, Turkey, in a time of economic
difficulties.
Recent events have demonstrated the need for a rapid U.S. response to security-related requirements that cannot be anticipated.
Situations have arisen in Africa, the Middle East, and Latin America where relatively small but critical U.S. funding was delayed
and the beneficial foreign policy impact thereby diminished because of delay in the legislative process. To provide for a timely
U.S. response in such situations, the 1982 budget includes $100
million that is not allocated to any specific country program. These
funds are requested to be appropriated to the President and would
be held in reserve to meet unanticipated requirements.
Refugee assistance.—The number and needs of refugees continue
to rise because of war, famine, and social and political disorder in
many areas of the world. Major refugee movements into countries
of first asylum—that is, nearby countries that provide temporary
refuge prior to repatriation or resettlement—are expected to continue in Africa and Southwest Asia, and from Indochina and Eastern Europe. The need to care for these refugees abroad and provide
for the transportation and resettlement of some of them in the
United States will continue in 1982. The budget proposes $611
million in budget authority for 1982 to allow the United States to
continue to play a leading and responsible role in the international
efforts to meet these needs. All United States assistance will be
provided through the United Nations, the International Committee




116

THE BUDGET FOR FISCAL YEAR 1982

of the Red Cross, other international organizations, and numerous
American voluntary agencies.
The United Nations High Commissioner for Refugees has large
care and maintenance responsibilities in Southeast Asia and
Africa, especially in Somalia, Pakistan, Thailand, and Kampuchea.
The United States provides substantial support to the UN Relief
and Works Agency to aid in the care of Palestinian refugees, and
will urge other nations to increase contributions for that important
activity. The number of refugees to be admitted to the United
States in 1982 will not be determined until next summer. This
budget proposes $297 million for the transportation to and initial
resettlement in the United States of 144,000 Indochinese and 43,000
other refugees, most of whom are expected to come from the Soviet
Union and Eastern Europe.
Military assistance.—International security assistance programs
are an essential instrument for achieving our foreign policy objectives. They consist of military assistance, security-related economic assistance (economic support fund), and peacekeeping operations. Through these programs the United States assists allies
and other friendly nations in maintaining their defense forces, and
promotes economic stability in areas where the United States has
special security interests. They enable the United States to promote peace in the Middle East, demonstrate timely support of
countries in Southeast and Southwest Asia, strengthen the NATO
southern flank, help maintain a stable balance of forces on the
Korean Peninsula, and assist Latin American and African nations
in resisting threats to their independence and democratic institutions. Military and security-related economic assistance are also
provided in connection with access to military bases and facilities
overseas. Security assistance programs are under the policy direction of the Secretary of State and are administered by the Department of Defense and the Agency for International Development.
Grant military assistance.—The emphasis of military assistance
programs continues to shift from grants to credit assistance for
military exports. No new grant military assistance programs are
being requested in this budget. Outlays will continue to occur for
several years from prior-year programs and for administrative
costs.
Foreign military training.—This program trains members of foreign military establishments and acquaints them with the social,
economic, and political institutions of the United States. Grants
have been planned for 71 countries in 1982.




INTERNATIONAL AFFAIRS

117

Foreign military sales credit.—The estimate for 1982 includes
$3.8 billion in new commitments for loans to 41 countries, roughly
$700 million above the 1981 level. Proposed loans of $2,931 million
would be made off-budget by the Federal Financing Bank and
under guarantees of the Department of Defense. In addition, $850
million would be in the form of direct loans, of which $500 million
would be for Israel. Since Israel's loan repayments would be forgiven, this loan is in fact a grant. The remaining $350 million is to be
provided at concessional interest rates, which enable recipient
countries to meet essential defense needs while reducing their longterm debt burden. Budget outlays from the foreign military sales
credit program result only from direct loans and from payments of
claims for late payments on prior-year guarantees.
Conduct of foreign affairs.—The Foreign Service Act of 1980 is
the first comprehensive revision of the enabling legislation for the
Foreign Service since 1946. The budget carries out the major personnel policies contained in the new Foreign Service Act. Funding
is requested for the revised pay structure designed to link Foreign
Service grades and salaries more appropriately to grade and salary
levels of positions with comparable responsibility in the civil service. This budget also proposes several new allowances that take
into account the hardships and recognize the risks of service in an
increasing number of posts abroad. Financing for a new program of
professional training and development is requested in 1982. In
addition to improving junior officer training, the program would
provide mandatory, intensive training in management and foreign
affairs specialty skills to all officers entering the mid-level grades.
More officers and support staff are requested in 1982 to improve
the reporting and analysis of political and economic events and
trends from selected areas of the world. The 1982 request builds
upon a similar request for additional reporting officers in 1981,
both of which are designed to strengthen this critical element of
foreign policy formulation and conduct. Increases in consular workload abroad require further staff increases in 1982.
The acquisition, development, and construction of only the most
urgently needed office buildings and staff housing abroad is proposed. The proposed 1982 projects, including the large office building and staff housing in Riyadh, Saudi Arabia, would improve
living and working conditions and increase security in many countries where adequate facilities are not available otherwise.
International organizations and conferences.—Through membership in the United Nations and other international organizations,
the United States participates in solving many multinational political, economic, social, and peacekeeping problems. Operating costs
of these organizations are assessed annually and are in addition to




118

THE BUDGET FOR FISCAL YEAR 1982

the voluntary contributions to international organizations and programs discussed above. The United States share of the budgets of
these organizations, including United Nations peacekeeping activities, is estimated to require $716 million in budget authority for
1982. The 1982 estimate includes $74 million of shortfalls from
prior-year assessments that the United States is bound to pay
under international treaties and conventions. For most organizations, the administration supports only those budget increases
needed to maintain the prior year's level of operations during the
1982-83 period, and encourages organizations to meet new and
expanded needs from reductions in lower priority activities. The
United States overall effort to promote international peace and
security accords high priority to the United Nations peacekeeping
activities in the Middle East and elsewhere.
Foreign information and exchange activities.—To promote understanding and build long-term relationships between the American
people and people of other nations, the International Communication Agency (ICA) conducts academic and leader exchanges, produces and disseminates media materials, holds seminars, and operates libraries and cultural centers in 126 countries. The agency's
Voice of America provides accurate news reports, portrays American society, and explains official U.S. policies in radio broadcasts in
40 languages. ICA also advises the President and other foreign
policy leaders on the impact of foreign policy issues on foreign
public opinion.
This budget proposes $590 million to maintain most ICA activities at their current levels. The request includes an $8 million
increase for academic exchanges and $79 million for added radio
transmitters to improve the quality of Voice of America reception
in Asia and Africa.
The Board for International Broadcasting provides grants to
Radio Free Europe/Radio Liberty, Inc., which broadcasts in 21
languages to Eastern Europe and the Soviet Union. Budget authority of $94 million would maintain 1982 operations at the current
level.
International financial programs.—International financial programs advance U.S. interests by improving the functioning of the
international financial system, facilitating U.S. participation in
world trade, and stabilizing world commodity markets. The international financial system has been strengthened substantially in
recent years through the economic stabilization programs of the
International Monetary Fund and increased cooperation among
central banks of various countries. The programs of the U.S.
Export-Import Bank and the foreign military sales trust fund facilitate U.S. commercial exports and military sales. In addition, U.S.




119

INTERNATIONAL AFFAIRS

participation in international commodity agreements should help
moderate price fluctuations in raw materials.
The Export-Import Bank provides direct loans, loan guarantees,
and insurance to facilitate the export of U.S. goods and services.
These programs support exports by:
• assuming commercial and political risks that exporters or
private financial institutions are unwilling or unable to undertake;
• overcoming limitations in private sector U.S. export financing;
• assisting U.S. exporters to meet foreign officially supported
export credit competition; and
• providing guidance in export financing.
Since the Bank concentrates on areas where private financing is
not available and on meeting foreign competition, its programs are
generally intended to supplement private credit markets. Terms
and conditions on the use of its funds are more favorable than
those available in the private sector in order to match the special
terms that foreign governments provide to subsidize their exporters.
EXPORT-IMPORT BANK AUTHORIZATIONS
(In millions of dollars)
1980
actual

1981
estimate

1982
estimate

Direct loan commitments, net
Loan guarantee commitments...

4,365
7,914

5,900
8,560

5,000
9,420

Total commitments..

12,279

14,460

14,420

1,836

2,350

2,657

Total outlays (net):

While the 1982 budget would continue support for long-term
export financing on a large scale (nearly six times the level
achieved in 1977), the budget would require the Bank to take a
more selective approach toward meeting foreign credit competition.
Also, the 1982 budget would end the medium-term discount loan
program.
The administration has long recognized the growing problem of
international export credit competition and has actively sought an
improved international export credit agreement, both to avoid the
potential for "credit wars" and to reduce the high subsidy in these
programs. While some progress has been achieved, continued
strong efforts will be necessary to obtain a satisfactory agreement.
Foreign military sales trust fund.—U.S. law requires that certain
types of military equipment and services may be sold only by the
Federal Government. This trust fund does not finance U.S. Govern-




120

THE BUDGET FOR FISCAL YEAR 1982

ment programs but rather is a financial mechanism for carrying
out this policy. Foreign governments make payments to the fund
for their purchases, and the fund is drawn down when deliveries
are made. The fund is expected to be roughly in balance in 1982
and beyond.
Through contributions to international commodity agreements
the United States helps to finance buffer stocks that are intended
to reduce price swings in certain raw materials and encourage
production. For the International Natural Rubber Agreement, $88
million is available in 1981. The 1982 request includes $165 million
for the Sixth International Tin Agreement and $74 million for the
Common Fund for Commodities, both subject to ratification by the
Congress. The Exchange Stabilization Fund's interest income on
holdings of U.S. securities is estimated to result in negative outlays
of $0.5 billion in both 1981 and 1982.
Tax expenditures.—A tax expenditure results from the deferral
of taxes on one-half of the profits derived from the incremental
sales of domestic international sales corporations (DISCs). The
DISC provision, estimated to cost $1.8 billion in 1982, was established to provide an incentive for domestic firms to increase their
exports and to offset partially the perceived export advantages of
other countries' tax systems.
Americans living and working abroad may deduct living expenses in excess of the cost of living in the United States, with an
extra $5,000 of deductions available for hardship areas. Tax expenditures for these benefits, estimated to be $665 million in 1982,
are intended to correct for the perceived inequity resulting from
high living costs abroad. This provision also encourages firms to
maintain U.S. nationals abroad and deepens our involvement in
international economic activities. The administration proposes
exempting Americans working in certain hardship areas abroad
from tax on the first $25,000 in income plus 60% of the next
$60,000 for a maximum exemption of $61,000. This would result in
a further tax expenditure of $320 million in 1982.
Except for certain tax-haven provisions, the income of foreign
corporations controlled by U.S. shareholders is exempt from U.S.
taxation until that income is distributed to shareholders. This deferral of taxes results in an estimated tax expenditure of $520
million for 1982.




121

INTERNATIONAL AFFAIRS
CREDIT PROGRAMS—INTERNATIONAL AFFAIRS
(In millions of dollars)

Security assistance:
Direct loans:
New loans
Repayments, sales and adjustments ( - )

186
145

366
323

916
-181

878
-195

735

682

3,949
-1,605

4,316
-1,788

2,344

2,528

5,640
1,249

6,203
1,105

11
-131

11
-115

1
-110

-120

Net loan outlays

28

5,127
1,323

Other international assistance: Direct loans:
New loans
Repayments, sales and adjustments ( - )

64

1,906

Loan guarantees:
New loans
Net loan guarantees

363
-335

3,288
-1,382

Net loan outlays

369
-306

651

Export-Import Bank:
Direct loans-.
New loans
Repayments, sales and adjustments ( - )

3,000
2,180

846
-195

Net loan outlays

2,600
1,960

80
42

Public Law 480 food aid: Direct loans:
New loans
Repayments, sales and adjustments ( - )

871

112

Loan guarantees:
New loans
Net loan guarantees

863

374
-262

Net loan outlays

1,655
784

2,380
1,880

Economic development credit:
Direct loans:
New loans
Repayments, sales and adjustments ( —)

1,595
-732

886

Loan guarantees:
New loans
Net loan guarantees

Net loan outlays

1982
estimate

1,617
731

Net loan outlays

Off-budget Federal entity—Federal Financing Bank:
Direct loans:
Overseas Private Investment Corporation:
New loans
Repayments, sales and adjustments ( - )

1981
estimate

1980
actual

Program

-104

-109

-4

-5

-5

1

-4

5

5

Foreign military sales credit:

New loans
Repayments, sales and adjustments ( - )

Net loan outlays

2,380
-448

2,600
-590

3,000
-780

1,932

2,010

2,220

1
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
above in this table. See the Introduction to Part 5 for further explanation.




122

THE BUDGET FOR FISCAL YEAR 1982

GENERAL SCIENCE, SPACE, AND TECHNOLOGY
National Needs Statement:
• Expand scientific knowledge through support of basic
research in all fields of science.
• Encourage technological advancement and innovation
through collaborative research among universities, industry, and government.
• Develop a greater understanding of the Earth, the solar
system, and the universe through space exploration.
• Develop and demonstrate practical, economic, and productive applications of space technology.
Advances in science and technology, built on a strong foundation
of basic research, are essential to the security of our Nation; to the
health, welfare, and safety of our citizens; and to the long-term
growth and vitality of our economy.
All sectors of society and the economy benefit from basic research. Many institutions outside the Federal Government invest
in such research, including major corporations, universities, and
private foundations. But as a whole, these institutions do not conduct enough basic research to meet the Nation's needs. Thus, for
many years, the Federal Government has accepted responsibility
not only for the support of basic research related to specific goals,
such as improved agricultural productivity, but also for the support
of basic research that is in the broad interest of the Nation. This is
exemplified by the creation and growth of the National Science
Foundation, which seeks to assure the advancement of science
across all disciplines. The Federal Government now funds some
70% of the basic research conducted in the United States.
For similar reasons, the Federal Government has, over the past
20 years, made substantial investments in space programs under
the auspices of the National Aeronautics and Space Administration
(NASA). These programs, including the development of the Space
Shuttle, also serve the Nation as a whole. They have provided new
means of acquiring knowledge about the Earth, the planetary
system, and the universe. They also provide new technologies for
the improvement of national security, human welfare, and industrial growth.




123

GENERAL SCIENCE, SPACE, AND TECHNOLOGY
NATIONAL NEED: INCREASING BASIC SCIENTIFIC KNOWLEDGE AND USE OF SPACE
(Functional code 250; in millions of dollars)
Major missions and programs

BUDGET AUTHORITY
General science and basic research:
National Science Foundation programs
Department of Energy general science programs

1981
estimate

1982
estimate

1983
estimate

1984
estimate

991
470

1,083
504

1,359
607

1,471
653

1,584
708

1,461

1,588

1,966

2,124

2,292

2,820
1,425
439

3,143
1,416
451

3,802
1,782
558

3,751
2,136
762

3,121
2,279
752

4,684

5,010

6,142

6,649

6,152

1980
actual

^mithcnnijin cripntifir infnrrrotinn PYPhanop JirtiwitipQ

Subtotal, general science and basic research
Space research and technology:
Space flight
Space science, applications, and technology
Supporting space activities
Subtotal, space research and technology
Deductions for offsetting receipts
Total, budget authority
OUTLAYS
General science and basic research:
National Science Foundation programs
Department of Energy general science programs

-3

-4

—4

-4

-4

6,141

6,593

8,104

8,769

8,439

912
469

1,007
510

1,190
597

1,324
651

1,442
708

1,381

1,518

1,787

1,975

2,149

2,594
1,346
405

2,984
1,330
431

3,679
1,635
494

3,663
1,979
734

3,230
2,215
755

_3

-4

4

-4

-4

5,722

6,258

7,590

8,347

8,345

107
107

102
102

144
144

^mithQflnifln ^ripntifir infnrmjjtinn pyrhsnop JirtiwitiPQ

Subtotal, general science and basic research
Space research and technology:
Space flight
Space science, applications, and technology
Supporting space activities
Subtotal, space research and technology
Deductions for offsetting receipts
Total, outlays
ADDENDUM
Off-budget Federal entity:
Federal Financing Bank:
Supporting space activities:
Budget authority
Outlays
*$500 thousand or less.

General science and basic research.—When the administration
took office 4 years ago, it made a commitment to continue to
strengthen the national investment in basic research, recognizing
the importance of such research to economic growth in an era of
increasing international competition and rising resource costs.
Federal support for basic research has been an important aspect
of this commitment and funding for such research increased 38%
from 1978 to 1981 or about 6% in real terms. Special programs to
enhance the contribution of science and technology to the long-




124

THE BUDGET FOR FISCAL YEAR 1982

term health of the economy were also proposed 2 years ago as part
of the President's special message on industrial innovation and last
year as part of the President's proposed program for economic
revitalization. Of particular significance in these proposals were
new measures to spur cooperation between Government and industry and between universities and industry as a means to increase
the return on Federal investments in basic research and to encourage private support.
These initiatives extend beyond the traditional role of Federal
support to scientists in universities and national laboratories. They
will help link more closely the established centers of excellence in
scientific research and the industrial sector, and help assure that
new knowledge and improved understanding of basic physical phenomena will enable industry, over time, to make better use of the
Nation's scientific resources in developing new technologies.

Federal ObligationsforBasic Research
$ Billions

$ Billions

7-

7

6-

-6
All Other

5-

Department of
Defense
Department of
Energy
National Aeronautics
and Space
Administration
National Science
Foundation

-5
4
3
-2

National Institutes
of Health

Fiscal Year$1980
Actual

1982

This budget provides for 4% real growth in obligations for the
conduct of basic research across all Federal agencies, from $5.1
billion in 1981 to $5.9 billion in 1982. Even during a period of fiscal
restraint, growth in support for basic research is an essential investment in the future of the Nation. Funding is increased in real
terms not only for basic research undertaken in individual Government, university, and industrial laboratories, but also for administration initiatives to foster greater cooperation among Government,



125

GENERAL SCIENCE, SPACE, AND TECHNOLOGY

business, and universities in research. In addition, special efforts
are proposed in two areas that would improve the productivity of
U.S. research efforts: research equipment for universities, and engineering manpower.
Federal support for basic research is provided by a large number
of departments and agencies, but chiefly by the Departments of
Health and Human Services, Energy, Defense, Agriculture, and
Interior, and by NASA and the National Science Foundation. The
programs included in this function are those of NASA (except its
aeronautics activities, which are included in the transportation
function), the National Science Foundation, and the high energy
physics and nuclear science programs supported by the Department
of Energy. Obligations for basic research programs in this function
are expected to be $2,065 million in 1982, an increase of $309 million,
or 18%, over 1981. These programs collectively account for about
35% of total Federal obligations for the conduct of basic research.
Total Federal funding for basic research across all functions is shown
in the following table.
FEDERAL OBLIGATIONS FOR THE CONDUCT OF BASIC RESEARCH
(In millions of dollars)
AGENCY

actual

1981
estimate

1982
estimate

Programs in the general science, space, and technology function (by agency):
National Science Foundation
Energy
National Aeronautics and Space Administration..
Subtotal

812
322
482

923
364
469

1,057
423
585

1,616

1,756

2,065

Programs in other functions (by agency):
Health and Human Services
Defense
Agriculture
Energy
Interior
National Aeronautics and Space Administration..
Smithsonian
Commerce
Education
Veterans Administration
Transportation
Environmental Protection Agency
Other agencies

1,758 1,887 2,053
605
704
539
322
367
275
227
287
201
85
99
79
86
96
77
44
53
40
33
41
29
24
18
18
14
16
18
12
17
15
13
16
25

Subtotal-

3,065

3,366

3,797

Total

4,682

5,121

5,861

Further information on Federal support of basic research and
other research and development is published in Special Analysis K,
"Research and Development," in the Special Analyses volume accompanying the budget.
340-000 0 - 8 1 - 1 0




: QL 3

126

THE BUDGET FOR FISCAL YEAR 1982

National Science Foundation programs.—The primary mission of
the National Science Foundation (NSF) is support of basic research,
which accounts for about 78% of its budget in 1982. The Foundation also funds selected programs in applied research and science
education at all levels. Outlays for the NSF are estimated to increase from $1.0 billion in 1981 to $1.2 billion in 1982. Budget
authority is proposed to increase from $1.1 billion in 1981 to $1.4
billion in 1982.
Particular emphasis in 1982 is placed on:
• significant growth in funding for engineering research, because of the particular importance of such research to growth
in industrial productivity;
• increased support for basic research in the mathematical and
physical sciences, because these disciplines have not shared as
fully in previous increases for Federal basic research support
as their importance would warrant; and
• initiation of a project to construct a new radio telescope capable of providing fundamental information about intense
energy sources in outer space not now observable from Earth.
The following additional measures are proposed to augment the
efforts of the administration to support long-term economic revitalization through science:
• A program to upgrade scientific equipment and instrumentation in universities that will supply the modern tools that
researchers need to conduct high quality basic research in the
sciences and engineering. This program will also help to
assure that engineering and computer science students are
trained adequately with the latest technologies as they prepare to enter industry or academic work. Funding for this
program is proposed at $100 million in budget authority for
1982.
• Expansion of the small business innovation research program
that assists small, high-technology firms engaged in "proof-ofconcept" research. These Federal funds provide the seed
money for developing innovative research concepts to the
stage at which they can attract private venture capital for
commercial development. This program will increase from $8
million in 1981 to $15 million in 1982.
• Strengthening of the industry-university cooperative research
program to encourage industry and university scientists to
collaborate on research problems of mutual interest. This program will increase from $14 million in 1981 to $27 million in
1982.
Department of Energy general science programs.—An increase in
outlays from $510 million in 1981 to $597 million in 1982 is esti-




GENERAL SCIENCE, SPACE, AND TECHNOLOGY

127

mated for research supported by the Department of Energy in high
energy physics, nuclear physics, life sciences, and nuclear medicine.
The goal of the high energy and nuclear physics programs is to
achieve a comprehensive understanding of the fundamental constituents of matter and energy, the basic forces that govern their
interactions, and their role in determining the basic properties and
dynamics of nuclear particles.
In high energy physics, large atomic particle accelerators are
being used to develop more knowledge based on recent major theoretical and experimental discoveries. Considerable progress is now
being made in understanding the fundamental constituents of
matter called "quarks," the study of nuclear forces, and the properties of nuclear matter under extreme conditions. Funds are proposed in 1982 to continue these investigations and to use existing
accelerators more efficiently.
Increased operating funds are proposed for nuclear physics research in 1982, which would permit greater use of the experimental facilities and increase the emphasis on nuclear theory.
Tax expenditures.—In addition to direct Federal funding for basic
research, the Federal tax code encourages private sector research
and development, including basic research, by allowing expenditures for such purposes to be deducted as a current expense. The
resulting tax expenditures are estimated to be $2.3 billion in 1982.
Space research and technology.—In 1978, two Presidential directives stated overall administration policies to guide U.S. space activities. The basic principles set forth in these directives were that
the United States should pursue space activities to increase scientific knowledge, develop useful commercial and government applications of space technology, and maintain U.S. leadership in space.
It was recognized, however, that the funding demands of the Space
Shuttle and the necessity for fiscal restraint would inhibit, in the
near term, our ability to pursue major new engineering challenges
in the development of space technology.
The 1982 budget continues a strong and balanced effort in space
applications, science, and technology through the programs of the
National Aeronautics and Space Administration (NASA). A key
element is the completion of the Space Shuttle and the commencement of Space Shuttle operations.
The budget also provides for initiating the Venus orbiting imaging radar mission (VOIR) to explore the planet Venus in 1986;
maintaining the continuity of land resources data obtained through
the Landsat series of spacecraft; and expanding basic research and
technology to strengthen the technical foundation supporting space
missions.




128

THE BUDGET FOR FISCAL YEAR 1982

Space flight—The space flight programs of NASA sustain and
improve our ability to supply space transportation services to government, industry, universities and foreign users. Space flight includes development, production, and operation of the Space Shuttle; procurement and operation of the European-developed Spacelab
for research in near-Earth orbit; development and procurement of
the space vehicles needed to carry satellites into high Earth orbit
and to launch interplanetary missions; and related activities and
procurement of support equipment necessary for a national space
flight system. The budget estimates outlays of $3.7 billion for these
programs in 1982 compared to $2.9 billion in 1981.
The Space Shuttle is essential to exploit space effectively and
maintain U.S. leadership in space throughout this century. It will
be the world's first manned space transportation system capable of
being reused routinely, and will allow retrieval, repair and service
of satellites in space. Because it is reusable, it can greatly reduce
the costs of space missions. The Shuttle will be useful to a variety
of domestic and foreign users, who have already made significant
investments based upon its availability in the early 1980's. It will
also be important in meeting national security needs. The funding
proposed to complete the development and testing of the Space
Shuttle and to prepare for regular operations is necessary to meet
civilian and national security commitments in a timely manner at
the lowest total cost to the Nation.
To meet existing and projected needs for space transportation,
the budget includes funding that will permit the expansion of the
proposed Shuttle fleet from four to five vehicles, if necessary.
While the Shuttle is expected to replace most expendable launch
vehicles when it is operating at full capacity, the budget continues
efforts to assure the availability of expendable vehicles until the
Shuttle is able to replace them.
The Space Shuttle is now approaching the critical final phase of
development, with the first flight scheduled for early 1981 and
regular operations planned to begin in late 1982 or early 1983. This
budget provides the funds needed to make possible a fully operational Shuttle system in the early 1980's. Outlays of $2.5 billion
are estimated for the Space Shuttle program in 1982 compared to
outlays of $2.3 billion in 1981.
In related space flight projects, the budget proposes that procurement of the first U.S. Spacelab be continued, with initial flight
planned for mid-1983, and that development and procurement of an
upper stage for use with the Shuttle for high-Earth orbit and for
interplanetary missions also be continued.
Funds are also included for continued development of the solar
electric propulsion system, which will provide a low thrust, long




GENERAL SCIENCE, SPACE, AND TECHNOLOGY

129

duration propulsion capability for potential future deep space missions.
Space science, applications and technology.—Programs in this category include space science activities to study the solar system and
the universe; the development, launch and demonstration of satellite systems for agricultural, geological, weather, and communications uses; and longer-range basic space research and technology
programs.
Space science outlays are estimated at $817 million, an increase
of 25% over 1981. The program consists of space-based observations
of the environment around the Earth, the sun, the planets, the
stars, and other objects in the universe. These observations cannot
be made from the ground because of the obscuring effects of the
atmosphere. As part of such scientific investigations, the administration proposes to initiate development of the Venus orbiting
imaging radar (VOIR) mission in 1982, to continue the planetary
exploration program. This project is planned for launch by the
Shuttle in 1986. VOIR will use an advanced microwave radar instrument to look through the heavy clouds around Venus and
photograph and map the surface features of the planet. Venus is
the sister planet of the Earth and scientists believe that understanding Venus will contribute to understanding the Earth's evolution, atmosphere, climate, and cloud behavior.
Ongoing major flight projects started since 1978 for which continued funding is proposed in 1982 include the solar polar mission and
the gamma ray observatory. The solar polar mission, to be
launched in 1985, will orbit the sun and will, for the first time,
study solar activity and radiation near the sun's polar regions.
Better understanding of solar radiation should improve knowledge
about how the sun affects the Earth's atmosphere and climate. The
gamma ray observatory, to be launched in 1986, will yield knowledge about objects in deep space by studying them in the gamma
ray spectral region. The budget request also provides for the continued development of other spacecraft, such as the space telescope
and the Galileo mission to Jupiter, both to be launched in 1985.
Estimated outlays for space applications are $559 million in 1982,
an increase of 25% over 1981. The administration is proposing to
initiate studies and instrument design activities for a possible
future upper atmospheric research satellite program (UARS) to
study the interaction between radiation and the chemistry of the
upper atmosphere.
The budget requests continued funding for ongoing programs
such as the investigation of advanced technologies that use new
radio-frequencies for advanced satellite communications, the national oceanic satellite system (NOSS)—funded jointly by NASA




130

THE BUDGET FOR FISCAL YEAR 1982

and the Departments of Commerce and Defense—and the global
agriculture production forecasting program using the Landsat
series of satellites. Development of Landsat-D, the fourth in the
series of land remote sensing satellites, is continuing, with launch
scheduled for 1982. Landsat-D will substantially improve the quality of remotely sensed Earth-resources data for a variety of applications.
The administration's plan for remote sensing of land resources
for civilian purposes includes a commitment to maintain continuity
of Earth-resources remote-sensing capability through the 1980's
and to accomplish research needed to maintain technological leadership in remote land sensing. To carry out this plan, funds are
requested for the National Oceanic and Atmospheric Administration (NOAA), in the natural resources and environment function,
for ground system enhancements to improve user service and for
an operational satellite system based on the Landsat-D series of
satellites. The NASA budget includes funding for development of
advanced solid state sensors that could be part of a more advanced
Earth-resources remote-sensing system for the 1990's.
For basic space research and technology programs, outlays are
estimated at $259 million in 1982, an increase of 13% over 1981,
providing increased support for research in materials, structures,
electronics, propulsion, and the relationships between aerodynamics and thermodynamics. This increased support will strengthen
the technical foundation for ongoing projects and provide a sound
basis for the definition of new space capabilities and missions.
Supporting space activities.—The administration estimates outlays of $494 million in 1982,* an increase of 15% over 1981, for
satellite and space flight tracking and data support for the entire
NASA space program. This includes funding for consolidation and
upgrading of the ground based satellite tracking systems to improve their capabilities and reduce operating costs.
Credit programs.—Long-term lease commitments to finance the
construction and acquisition of tracking and data relay satellites
for NASA were made in 1976. No additional commitments for new
systems are expected under this program. Use of the existing commitments results in loan guarantees and off-budget outlays by the
Federal Financing Bank. Lease payments by NASA are expected to
commence in 1983, when the system becomes operational.




131

GENERAL SCIENCE, SPACE, AND TECHNOLOGY

CREDIT PROGRAMS—GENERAL SCIENCE, SPACE AND TECHNOLOGY
(In millions of dollars)
Program

NASA satellite leases:
Loan guarantees-.
New loans
Net loan guarantees
Off-budget Federal entity—Federal Financing Bank:1
Direct loans:
New loans
Repayments, sales and adjustments (—)
Net loan outlays (off-budget).

1980
actual

1981
estimate

1982
estimate

107
107

102
102

144
144

107

102

14
4

17
0

12
0

14
4

1
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
above in this table. See the Introduction to Part 5 for further explanation.




132

THE BUDGET FOR FISCAL YEAR 1982

ENERGY
National Needs Statement
• Mobilize our resources to protect the Nation's energy
security and independence.
• Promote energy production and conservation through
pricing policies that reflect the real cost of energy.
• Protect the Nation against disruptions in energy supplies.
• Develop renewable sources of energy to sustain long-term
economic growth.
• Increase the safety of nuclear power production and
assure the safe, long-term disposal of nuclear waste,
while limiting the potential for international proliferation of nuclear weapons.
• Protect the environment while achieving the Nation's
energy goals.
The Nation entered the 1970's with fundamental energy problems. Pricing policies for oil and natural gas perpetuated the illusion that energy would remain cheap and discouraged energy production and conservation. There was widespread doubt and misunderstanding about the gravity of the Nation's energy problems.
In the last 4 years, energy policies have been redirected on a new
course toward energy security.
• Natural gas pricing policy. The Natural Gas Policy Act of
1978 resolved a 25-year debate over natural gas price controls,
unified the inter- and intra-state markets, and established the
principle that energy prices must increase to replacement cost
levels in order to encourage production and conservation.
• Crude oil pricing policy. In 1979, the President initiated the
phased decontrol of domestic crude oil prices, allowing them
to rise to world market levels by October 1981. This has
increased crude oil exploration activities and reduced U.S.
consumption of oil.
• The windfall profit tax. The administration proposed, and the
Congress adopted, the crude oil windfall profit tax, which is
designed to produce additional Government revenues of $227
billion between 1980 and 1990.
• Energy conservation policy. The administration's pricing
policy reforms provide incentives to minimize waste and
reward efficient energy use. The administration also initiated
programs to accelerate energy conservation in residences and




ENERGY

133

commercial buildings, in transportation, and in schools and
hospitals.
• International energy policy. Energy sufficiency in the United
States is inextricably linked to the prosperity and energy
policies of other free world nations. With our partners in the
International Energy Agency, we have developed agreements
to encourage joint reductions in oil demand and established
procedures for concerted action in the event of a major disruption in oil supplies.
• The Synthetic Fuels Corporation. The administration proposed, and the Congress approved, the establishment of a new
corporation to assist the private sector in developing crude oil
substitutes that will directly reduce oil imports. The Synthetic
Fuels Corporation will share the substantial technical and
economic risks associated with the development of synthetic
fuels, while leaving management decisions to the private
sector.
These changes illustrate what the Federal Government's role in
energy policies should be.
The budget proposes $12.1 billion in budget authority in 1982 for
the energy programs included in this function, which is a 46%
increase over the $8.3 billion enacted in 1981, and $12.0 billion in
outlays, which is a 37% increase over the $8.7 billion in outlays
estimated for 1981. The programs covered in these estimates include
the energy programs of the Department of Energy, the Synthetic
Fuels Corporation, the Nuclear Regulatory Commission, and the
Tennessee Valley Authority. There are also approximately $7.3
billion in energy tax expenditures, and $2.2 billion in energy loan
guarantees.
A number of the Federal spending programs included elsewhere
in the budget meet national energy needs:
• Department of Health and Human Services programs that
provide special energy allowances and energy crisis assistance
to those families least able to pay the escalating costs of
essential energy needs (included in the income security function).;
• Department of the Interior programs for oil, gas, coal, oil
shale, tar sands and geothermal leasing; coal mining research
and development; surface mining reclamation; and environmental assessments of energy minerals (included in the natural resources and environment function);
• Department of Agriculture programs stimulating gasohol production and energy conservation for rural communities (included in the agriculture function);
• Department of Commerce programs that reduce the adverse
impacts of energy development on coastal communities and




134

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: ENERGY
(Functional code 270; in millions of dollars)
Major missions and programs

BUDGET AUTHORITY
Energy supply:
Promotion of domestic production:
Energy security reserve (payment to the Synthetic Fuels
Corporation)
Department of Energy alternative fuels production
Biomass energy development
Research, development, demonstration, and applications:
Solar
Other renewable resources
Fossil
Nuclear fission.Existing law
Proposed legislation
Other technology
Direct production (net):
Uranium enrichment
Petroleum reserves
Power marketing
Subtotal..
Energy conservation:
Technology development
State and local grants..
Standards, technical assistance and information...
Solar Energy and Energy Conservation Bank
Subtotal
Emergency energy preparedness:
Strategic petroleum reserve
Energy information, policy, and regulation:
Energy information and policy
Regulation:
Federal Energy Regulatory Commission
Economic Regulatory Administration
Nuclear Regulatory Commission
Alaska gas pipeline inspector
Administrative expenses (Department of Energy).
Subtotal
Deductions for offsetting receipts..
Total, budget authority

1980
actual

1983
estimate

1984
estimate

1981

1982

581
521
873

585
615
1,131

583
607
1,572

664
670
1,952

623
756
1,305

1,064

961

1,218

1,330

673

951
300
735

857

910

1,024

127
-950
14,924

1,207
-665
-90

423
-988
2,133

135
101
- 9 8 0 -1,076
2,233 2,187

36,813

4,770

6,147

6,802

6,250

222
442
72

213
453
87
121

229
537
106
127

189
370
76
127

736

874

999

219
516
78
127
940

-2,000

1,486

3,650

3,645

2,517

117

138

168

178

189

68
151
400
8
207

76
255
454
22
272

86
184
501
37
360

159
530
46
343

91
147
550
47
353

951

1,217

1,336

1,345

1,377

-53

-58

-58

-58

-58

36,447

8,289

12,075

12,675

10,848

12,212
5,518
1,270

762

regions, and a similar inland energy program funded through
the Department of Energy and administered by the Department of Agriculture (included in the community and regional
development function);
Department of Labor mine health and safety programs (included in the health function); and
assistance to developing countries and multilateral lending
institutions to promote energy production overseas (included
in the international affairs function).



135

ENERGY
NATIONAL NEED: ENERGY—Continued
(Functional code 270; in millions of dollars)
Major missions and programs
OUTLAYS
Energy supply:
Promotion of domestic production-.
Energy security reserve (payment to the Synthetic Fuels
Corporation)
Department of Energy alternative fuels production
Biomass energy development
Research, development, demonstration, and applications:
Solar
Other renewable resources
Fossil
Nuclear fission:
Existing law
Proposed legislation
Other technology
Direct production (net):
Uranium enrichment
Petroleum reserves
Power marketing
Subtotal..

1980
actual

1981
estimate

1982
estimate

28
200
163

52
225
132

57

52

26

529
542
823

588
615
975

589
664
1,438

650
677
1,627

657
754
1,636

1,144

1,108
200
819

1,237

1,348

719

1,002
-100
717

128
-889
1,552

76
-459
1,922

127
-906
1,786

-107 -134
- 9 7 9 -1,064
1,985
1,895

4,574

5,727

6,234

6,078

6,180

131
372
65

200
441
64
47

215
625
91
136

256
606
97
127

236
485
89
127

568

752

1,067

1,086

937

342

1,173

3,412

4,050

2,703

101

135

167

177

189

67
132
378
5
199

79
212
437
21
261

85
216
484
36
329

161
498
45
312

91
149
528
47
347

882

1,145

1,317

1,281

1,351

-53

-58

-58

-58

-58

6,313

8,739

11,973

12,438

11,113

2,036

6,062

57

52

3,188
3,188

4,774
4,774

5,752
5,752

7,387
7,379

7,571
7,550

2,436
685

3,437
277

4,502
257

5,464
231

6,281
195

1983
estimate

1984
estimate

931

Energy conservation:
Technology development
State and local grants
Standards, technical assistance and information....
Solar Energy and Energy Conservation Bank
Subtotal
Emergency energy preparedness:
Strategic petroleum reserve
Energy information, policy, and regulation:
Energy information and policy
Regulation:
Federal Energy Regulatory Commission
Economic Regulatory Administration
Nuclear Regulatory Commission
Alaska gas pipeline inspector
Administrative expenses (Department of Energy).
Subtotal..
Deductions for offsetting receipts.
Total, outlays.
ADDENDUM
Off-budget Federal entities:
Rural electrification and telephone revolving fund:
Budget authority
Outlays
Synthetic Fuels Corporation:
Budget authority
Federal Financing Bank:
Rural electrification and telephone revolving fund:
Budget authority
Outlays
Tennessee Valley Authority (power program):
Budget authority
Outlays
*$500 thousand or less.




34
-30

136

THE BUDGET FOR FISCAL YEAR 1982

Energy supply.—Supplying energy to meet the Nation's needs
requires tens of billions of dollars of private investment each year.
Government spending for energy supply programs is designed to
complement that investment. Budget authority of $6.1 billion is
proposed for energy supply in 1982, a 29% increase over the 1981
budget. Net outlays, which are reduced by offsetting receipts received from direct production activities, are expected to be $6.2
billion in 1982, a 9% increase over 1981.
In addition to these spending programs, the budget provides
approximately $5 billion in tax expenditures for energy supply.
Federal Government credit programs provide direct loans and loan
guarantees totaling $2.2 billion in 1982 to promote energy supply.
The spending programs that support the energy supply mission fall
into three main categories, as described below.
Promotion of domestic production.—Programs to encourage production and use of domestic energy supplies include the synthetic
fuel programs of the Department of Energy and the Synthetic
Fuels Corporation, the biomass and alcohol fuels programs of the
Departments of Agriculture and Energy, and tax credits.
In 1980, the Congress appropriated $19.0 billion to encourage the
production of oil and natural gas substitutes. This amount was
divided between the Synthetic Fuels Corporation, the interim alternative fuels production programs of the Department of Energy, and
the biomass energy development programs appropriated to the Department of Treasury for allocation to the Departments of Agriculture and Energy. The Corporation, which is the primary vehicle for
the promotion of synthetic fuels in the United States, will enter
into price, purchase and loan guarantee agreements to encourage
the production of synthetic fuels by the private sector. The Corporation will replace the similar, but much smaller, price, purchase
and loan guarantee programs of the Department of Energy, and
any funds not used by those programs will be transferred to the
Corporation.
Although the Synthetic Fuels Corporation itself is outside of the
budget, its system of financing was devised so that all costs of the
Corporation appear within the budget. The funds for carrying out




ENERGY

137

the Corporation's activities come from appropriations to the Secretary of the Treasury in the energy security reserve, and the payments from this account are included in the budget totals.
For the biomass program of the Departments of Agriculture and
Energy, the Congress appropriated $1.3 billion in 1980 for loans and
loan guarantees that encourage the production of alcohol fuels,
biomass energy, and energy from municipal waste. This amount,
along with tax credits, will assure that alcohol fuels production
meets the goals established by the President.
Market acceptance of solar energy will be accelerated by tax
credits, including a 40% residential tax credit enacted this year,
that help consumers and businesses defray the cost of solar equipment. Department of Energy rules stimulate solar energy use by
requiring utilities to purchase electricity at favorable rates from
small power producers using renewable resources such as windmills.
Research, development, demonstration, and applications.—Advances in technology can reduce the cost and risk of looking for oil
and gas, allow cleaner burning of coal, make solar energy more
attractive economically, prove the viability of fusion power and, in
general, provide the Nation with better ways to meet its energy
needs. Many new energy technologies are characterized by such
high risks and long development times that the private sector
alone would be unlikely to undertake enough research and development to meet the Nation's energy needs. This is particularly true
for basic research or work on generic technologies that could have
wide commercial application. It is therefore appropriate for the
Government to support research and technology development.
As technologies develop, they may eventually demonstrate potential for commercial application. At that point, Government support
of technology development should be diminished, and the private
sector should become actively involved in setting R. & D. priorities
and in managing and financing R. & D. activities. The 1982 budget
reflects the belief that cost sharing by the private sector in federally sponsored research is an effective way to promote the development of new technologies. Federal programs that encourage the
development of solar, geothermal, fossil, nuclear fission, and nuclear fusion involve cost sharing where appropriate.
Significant growth is proposed for the Federal solar energy program in 1982, reflecting the administration's belief that solar
energy can, over time, make a valuable contribution to the Nation's energy supply. The solar program includes research and
development on longer-term solar technologies and tax credits and
subsidies that encourage consumer acceptance of commercially
available solar systems. The Department of Energy and other Fed-




138

THE BUDGET FOR FISCAL YEAR 1982

eral agencies also encourage the direct application of solar technologies in their own operations.
Department of Energy outlays for solar energy are expected to be
$589 million in 1982. Efforts continue in the areas of solar heating
and cooling, direct conversion of sunlight into electricity using
photovoltaic devices, and solar thermal systems. Further efforts
will also be undertaken to develop improved processes and raw
materials for energy from biomass, including technologies to utilize
cellulose for alcohol fuel production, and to convert the energy of
the wind and oceans into fuel energy.
Total budget outlays for solar energy, including programs outside
this function, are estimated to exceed $1 billion in 1982, an increase of $45 million over 1981. This increase occurs despite a $64
million reduction in outlays for biomass and alcohol fuels financial
assistance. This reduction reflects the phasing down of outlays from
1980 programs intended to provide initial stimulus to biomass energy
development. In addition, the revenue loss associated with tax
expenditures for solar energy is estimated to be $474 million in 1982,
and the Federal gasoline excise tax exemption for gasohol is expected to be $189 million. Thus, total Federal support for solar
energy is expected to exceed the 1981 level by nearly 20%.
FEDERAL OUTLAYS AND TAX EXPENDITURES FOR SOUR ENERGY DEVELOPMENT
(In millions of dollars)
1981
estimate
Outlays for solar energy:
In the energy function:
Research, development, demonstrations, and applications
Solar Energy and Energy Conservation Bank*
Biomass and alcohol fuels financial assistance
Other solar related

Subtotal
In other functions
Total outlays for solar energy
Tax expenditures for solar energy
Excise tax exemption for gasohol

1982
estimate

588
19
185
64

589
54
121
65

856

829

122

194

978

1,023

310
121

474
189

•Excludes outlays of $28 million in 1981 and $82 million in 1982 for the energy conservation portion of the Bank.

Other renewable resources includes programs of the Department
of Energy in magnetic fusion, geothermal, and hydroelectric energy
from small dams.
The magnetic fusion program has grown rapidly since 1977, reflecting the administration's belief that fusion has the potential of
providing a relatively clean and limitless source of power in the




ENERGY

139

next century. Recent experiments have established that the conditions necessary to initiate and maintain a fusion reaction can be
achieved. The program is directed at determining the best technical and economic means of producing energy through a controlled
thermonuclear reaction. Outlays for the fusion program are estimated to be $563 million in 1982, an increase of $120 million over
1981. The additional funds will complete commitments to existing
construction projects and provide operating funds necessary to establish the engineering feasibility of this technology.
The geothermal program encourages the development of hot underground brines and deep deposits of hot brines mixed with natural gas as useful energy sources. A longer-term goal is to develop
the Nation's large reserves of thermal energy stored in hot underground rock formations. The program also helps identify and
reduce environmental and regulatory barriers to the use of domestic geothermal resources. Outlays of $85 million are estimated for
1982.
For the development of hydroelectric power from small dams, the
primary Federal role of granting permits and licensing is supplemented through Department of Energy programs that finance feasibility studies and support commercial demonstrations on a costshared basis.
The fossil fuels program has been changed in this budget to
emphasize longer-term, high-risk research and development. This
change was made in response to rising energy prices and the
creation of the Synthetic Fuels Corporation.
Outlays for coal research are estimated to be $1.4 billion in 1982,
an increase of almost $400 million over 1981. Most of this increase
will continue support for the buildup of previously committed
major fossil energy demonstration projects in coal liquefaction and
gasification. No new construction starts have been proposed in coal
research. The budget also maintains support for longer-term research activities.
Outlays in the oil and gas R. & D. areas are projected to be $74
million in 1982, a 28% decrease from 1981 estimates. For gas
research, emphasis will continue on enhanced recovery techniques
for natural gas. For petroleum research, reductions have been
made where large financial incentives exist for increased private
investment as oil and gas prices are deregulated.
Nuclear fission programs include a wide range of activities, including R. & D. on breeder reactors, conventional reactors, advanced nuclear systems and associated fuel cycle support programs
such as uranium resource evaluation, advanced isotope separation,
and waste management.
For breeder reactor R. & D., the budget proposes $458 million in
budget authority for 1982, including $400 million for the liquid




140

THE BUDGET FOR FISCAL YEAR 1982

metal breeder reactor program and $58 million for the light water
breeder reactor. No funds are requested for the Clinch River breeder reactor project.
The request for conventional nuclear power reactors continues to
emphasize safety and technological development in the nuclear
industry. Included in the program are $28 million for light water
reactor research and $10 million for research related to the accident at the Three Mile Island nuclear plant. The administration's
commercial nuclear waste management program would continue to
develop a strong technical foundation for commercial waste disposal, leading to an operating, licensed repository.
The other technology programs of the Department of Energy
include research on the environmental effects of energy production
and use, with emphasis on determining the health and ecological
effects of developing technologies such as coal liquefaction and
other synthetic fuels technologies. Additional funding is proposed
for research to determine whether increasing amounts of carbon
dioxide in the atmosphere cause changes in the Earth's climate.
Direct production programs.—The Federal Government directly
produces and sells enriched uranium for nuclear power plants, oil
from Government-owned fields in California and Wyoming, and
electricity from five power marketing administrations and the Tennessee Valley Authority.
In the uranium enrichment program, the Department of Energy
plans to continue operating three gaseous diffusion uranium enrichment plants. Estimated outlays of $1.8 billion in 1982 are for
continuing work to increase enrichment capacity and improve efficiency in existing plants and to continue construction and procurement of machinery for a new centrifuge enrichment plant. These
outlays will be largely offset by receipts from the sale of enriched
uranium estimated to be $1.7 billion.
Crude oil production at Government-owned naval petroleum reserves in California and Wyoming is expected to continue in 1982,
adding about 150,000 barrels per day to domestic energy supplies.
Estimated outlays for this program in 1982 are $294 million, which
are more than offset by receipts from the sale of oil that are
estimated to be over $1.2 billion.
Power marketing activities include power plant construction,
power generation and transmission, rehabilitation of existing facilities, and conservation. These activities include those of the Tennessee Valley Authority (TVA), the power marketing administrations
of the Department of Energy, and the Rural Electrification Administration of the Department of Agriculture. The five power marketing administrations—the Alaska Power Administration, the Bonneville Power Administration, the Southeastern Power Administra-




ENERGY

141

tion, the Southwestern Power Administration, and the Western
Area Power Administration—are responsible primarily for the
marketing and transmission of energy produced by Federal hydroelectric dams. The Tennessee Valley Authority nuclear plant construction program is expected to result in $2.0 billion in outlays in
1982, with revenues from the power marketing administrations
offsetting this amount by $300 million. TVA now operates two
nuclear plants in its system and has five plants under construction.
The Bonneville Pcwer Administration is to begin carrying out
the provisions of the recently-enacted Pacific Northwest Electric
Power Planning and Conservation Act in 1981. The Act is intended
to help the region establish an adequate power supply and a longterm electric energy plan. It places maximum reliance on energy
conservation and renewable energy sources in response to growing
demand for electricity. TVA also encourages energy conservation
through commercial and residential weatherization and ride sharing. The TVA is constructing an atmospheric fluidized bed boiler to
improve coal combustion, and conducts research into economic and
technical improvements in converting biomass to alcohol.
The Rural Electric and Telephone Revolving Fund is administered by the Rural Electrification Administration (REA). New insured loans to rural borrowers during 1982 are estimated to be
$900 million for electric service and $266 million to furnish and
improve telephone service to rural areas.
The REA finances the construction and operation of generating
plants and electric transmission and distribution systems in rural
areas. The REA made new loan guarantees of $2.6 billion in 1980,
and requests an additional $4.4 billion in 1981 and $5.2 billion in
1982. These guaranteed loans are converted to direct loans when
they are purchased by the Federal Financing Bank, the outlays of
which are excluded from the budget totals by law. Under the
Federal credit control program, limitations upon the gross obligations for new REA loans approved and new loan guarantee commitments for 1982 are proposed for inclusion in the appropriation bills
approved by the Congress.

340-000 0 - 81 - 11 : QL 3




142

THE BUDGET FOR FISCAL YEAR 1982

CREDIT PROGRAMS—ENERGY
(In millions of dollars)
Program

1980
actual

1981
estimate

Synthetic fuels promotion:
Loan guarantees:
New loans
Net loan guarantees

6,000
6,000

Biomass energy development:
Direct loans:
New loans
Repayments, sales, and adjustments ( - )

1982
estimate

2,000
2,000

15

Net loan outlays

15

Loan guarantees:
New loans
Net loan guarantees

1,761
1,761

35
35

5

12

16

Net loan outlays

5

12

16

Loan guarantees:
New loans
Net loan guarantees

78
77

226
216

213
212

1,207
-1,038

1.100
-890

1,166
-1,010

169

210

156

3,305
3,305

4,874
4,874

5,852
5,849

3,188

4,774

5.752

3,188

4,774

5,752

2,436

3,437
-3,160

4,502
4,245

685

277

257

Geothermal development and other energy:
Direct loans:
New loans
Repayments, sales, and adjustments ( - )

Off-budget Federal entities:
Rural Electrification Administration:
Direct loans:
New loans
Repayments, sales, and adjustments ( - ) 1
Net loan outlays
2

Loan guarantees:
New loans
Net loan guarantees
Federal Financing Bank: 3
Direct loans:
Rural electrification and telephone revolving funds:
New loans
Repayments, sales, and adjustments ( —)
Net loan outlays
Tennessee Valley Authority (power program):
New loans
Repayments, sales, and adjustments ( —)
Net loan outlays

*$500 thousand or less.
1
Includes sales of direct loans.
2
Includes guarantees of direct loans.
3
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
above in this table. See the introduction to Part 5 for further explanation.




ENERGY

143

Energy conservation.—An effective conservation strategy includes much more than direct Federal spending programs. Oil and
natural gas prices that reflect market realities and accurate public
information are essential to promote conservation in the public and
private sectors. Conservation is also achieved through tax incentives and sound regulatory policies such as efficiency standards for
automobiles, buildings, and appliances. Direct Federal spending
programs for conservation include technology development; State
and local conservation grants; financial and technical assistance to
public agencies, industries, and individuals; and energy efficiency
improvements in Federal buildings.
Outlays for conservation programs in the energy function are
estimated at $1,013 million for 1982, up 38% from $733 million in
1981. Other Federal programs, such as conservation investments in
Federal facilities, public transportation improvements, rehabilitation of public housing, and the purchase of fuel-efficient vehicles
for Federal use also contribute to meeting the Nation's conservation needs; and funds for them are included in other functions. In
1982, tax credits for conservation improvements in the residential,
business, and transportation sectors are estimated at approximately $0.8 billion.
OUTLAYS AND TAX CREDITS FOR ENERGY CONSERVATION
(In millions of dollars)
1981
estimate

Outlays for energy conservation:
In the energy function:
Technology development
State and local grants
Standards, technical assistance and information
Solar Energy and Energy Conservation Bank*
Subtotal, energy function
In other functions:
Conservation investments in Federal facilities
Total, outlays
Tax credits for energy conservation (revenue loss).
Excise tax exemptions relating to buses

1982
estimate

200
441
64
28

215
625
91
82

733

1,013

283

412

1,016

1,425

735
50

800
50

•Excludes outlays of $19 million in 1981 and $54 million in 1982 for the Solar Energy portion of the Bank.

Technology development—Federal programs to accelerate the development of high-risk energy-saving technologies that have significant potential to reduce the Nation's use of energy are conducted
in four program areas. The buildings and community systems program focuses on research to improve the energy efficiency of buildings, consumer products and community services such as recover-




144

THE BUDGET FOR FISCAL YEAR 1982

ing energy from urban waste. The industrial program stresses
energy waste reduction, cogeneration and industrial process efficiency. The transportation program continues support for development of more fuel-efficient automotive engines and electric vehicles. Finally, the multi-sector program supports development of
small-scale energy-saving technologies, exploration of innovative
conservation concepts and research on multiple-use energy conversion. Total outlays for conservation technology in 1982 are estimated to be $215 million, an increase of $15 million over 1981.
State and local grants.—Department of Energy conservation
grants are of two major types. First, weatherization assistance is
provided to low-income persons and to public or nonprofit schools
and hospitals—groups unlikely to make conservation investments
without Federal aid. Proposed budget authority for grants to each
of these groups is $200 million in 1982, up 10% from 1981.
Second, grants also are given to States for conservation programs. Budget authority of $102 million is proposed for an energy
management partnership program to consolidate these grants.
Budget authority of $24 million also is proposed to help States
develop plans for dealing with energy emergencies. Total outlays
for conservation grants are estimated to increase 42%, from $441
million in 1981 to $625 million in 1982.
Standards, technical assistance, and information.—The many Department of Energy programs in this area are directed to improve
energy efficiency in each energy-consuming sector. They involve
developing efficiency standards for new buildings and consumer
products, assisting community self-help projects such as district
heating, and informing consumers and producers about new
energy-saving products, processes, and other conservation measures. The budget also supports a residential and commercial buildings conservation program that provides energy auditor training
and certification, provides demonstrations of innovative conservation
delivery services, and requires large utilities to offer conservation
services to their customers. Outlays for these Department of
Energy programs are estimated at $64 million in 1981, increasing
to $91 million in 1982.
Solar Energy and Energy Conservation Bank.—The recently established Solar Energy and Energy Conservation Bank in the Department of Housing and Urban Development (HUD) is governed by a
board of directors composed of representatives of the Departments of
HUD, Energy, Treasury, Agriculture, and Commerce. Budget authority of $127 million is requested in 1982, a slight increase above
the adjusted 1981 appropriation of $121 million. Of the total 1980
appropriation, 60% is expected to be used for energy conservation
subsidies, and 40% is planned for subsidies for the use of solar
technology. The solar program promotes the use of passive



145

ENERGY

solar design features in newly constructed residences and active
solar systems for new and existing homes and buildings. The
energy conservation subsidies are primarily for low- to moderateincome households.
Conservation investments in Federal facilities.—The administration has placed major emphasis on modifying Federal buildings for
energy conservation. In 1982, $379 million in outlays is estimated
for such investments in the nine agencies that consume 97% of the
energy used in Federal buildings. In addition, $33 million in outlays are estimated to convert major petroleum and natural gasburning facilities to coal. Most of the funds for these purposes are
classified in functions other than the energy function. The accompanying table shows the outlays for both conservation and fuel
conversion investments by major agency.
MAJOR AGENCY OUTLAYS FOR ENERGY MANAGEMENT IN FEDERAL FACILITIES
(In millions of dollars)
1981
estimate

Total, outlays 4
1
Except for the Department of Energy, funds are
2
Off-budget outlays.
3
The listed agencies account for an estimated 97
4

133
22
33
18
18
17
5
12
4
262

206
44
37
21
21
11
19
12
8
379

16
5

25
8

21

Energy conservation retrofits (department or agency):
Defense
Energy 1
General Services Administration
Postal Service2
Veterans Administration
National Aeronautics and Space Administration
Interior
Agriculture
Transportation
Total, outlays 3
Major fuel conversions:
Defense
Energy1

1982
estimate

33

classified in functions other than the energy function.

percent of total energy consumed in Federal buildings.
The listed agencies account for virtually all Federal agency fuel conversions in the years given.

Emergency energy preparedness.—The free world uses about 50
million barrels of oil every day. About 40% of this oil comes from
the Middle East. The United States and other petroleum-consuming countries have taken steps to prepare themselves to deal with
disruptions in world oil markets. The strategic petroleum reserve
and contingency plans, including gasoline rationing, are designed
to deal with this problem.
The Department of Energy recently resumed oil acquisition for
the strategic petroleum reserve (SPR) at an average rate of 100,000
barrels per day. Purchases had ceased in March of 1979. The




146

THE BUDGET FOR FISCAL YEAR 1982

budget assumes that all funds available in 1981 will be used to
maintain a fill rate of 200,000 barrels per day in 1981, resulting in
an end of year total of 171 million barrels in storage. The budget
proposes sufficient new funding in 1982 to fill the reserve to its
estimated capacity of 252 million barrels at the end of 1982, requiring an average fill rate of 230,000 barrels per day.
The budget also provides for expansion of storage facilities to 750
million barrels. Under the current schedule, the expanded storage
will be complete by the late 1980's. The administration believes
that the level of protection afforded by a billion-barrel reserve is
needed. However, no decisions have been made about whether the
final 250 million barrels of storage capacity will be owned by the
United States Government, or whether it should be some form of
privately-owned storage. Additional budget authority of $15 million
is proposed to begin work on regional strategic petroleum storage.
In addition to strategic petroleum reserves, the Department of
Energy is developing contingency plans to deal with supply disruptions. These include standby regulatory conservation measures,
which would be carried out in cooperation with State governments
under the authority of the Emergency Energy Conservation Act,
and the standby gasoline rationing plan approved by the Congress
in 1980. The budget proposes a $72 million supplemental request
for 1981 to allow prompt completion of preparatory work for the
rationing programs. Outlays for these contingency plans are estimated to be $120 million in 1982. Budget estimates for them are
included in the energy conservation and the energy information,
policy, and regulation subfunctions.
Energy information, policy, and regulation.—Programs in this
mission are intended to provide accurate and timely energy statistics, establish sound energy policies, and develop and enforce
energy regulations. Outlays are expected to rise from $1.1 billion in
1981 to $1.3 billion in 1982.
Energy information and policy.—Three offices within the Department of Energy have primary responsibility for energy information
and energy policy. The Energy Information Administration collects
data needed for policy decisions. The Office of Policy and Evaluation is responsible for overall policy development and coordination.
The Office of International Affairs helps formulate and carry out
international energy policy. Outlays for these three offices are
estimated to increase from $135 million in 1981 to $167 million in
1982 in order to improve data collection programs.
Regulation.—Energy regulations assure that national needs are
satisfied safely, efficiently, and equitably. Regulations are appropri-




ENERGY

147

ately phased out when private markets alone become capable of
achieving national objectives more effectively.
The Federal Energy Regulatory Commission, an independent
agency in the Department of Energy, regulates natural gas pricing,
gas and oil pipelines, hydropower, and electric power transmission.
In carrying out its functions, the Commission tries to ensure adequate energy supplies at reasonable prices while allowing sufficient
rates of return on investment to provide incentives for increased
production. Phased decontrol of new natural gas, as provided by the
Natural Gas Policy Act, will continue during 1982. Slight funding
increases are provided in 1982, particularly to reduce the backlog of
unresolved regulatory cases.
The Economic Regulatory Administration in the Department of
Energy administers petroleum price and allocation regulations. It
also promotes reduction in the use of petroleum products by utilities and others, and develops regulatory programs for dealing with
energy emergencies.
The budget proposes reductions in funding for petroleum regulatory activities, which phase down following the decontrol of crude
oil prices upon expiration of the Emergency Petroleum Allocation
Act on September 30, 1981. An increase is provided for the Fuel
Use Act program mandating shifts to fuels other than oil and
natural gas for selected major fuel-burning installations.
The Nuclear Regulatory Commission (NRC) regulates the siting,
construction, and operation of all civilian nuclear reactors; nuclear
fuel storage; and disposal of radioactive waste. It also conducts a
nuclear safeguards program to prevent the loss or diversion of
nuclear materials, and a research program to support the formulation of nuclear licensing standards and regulations.
In 1982, the Commission will place primary emphasis on enforcing the new requirements for safety, operator training, and emergency planning based on lessons learned from the nuclear accident
at Three Mile Island. Those lessons have resulted in increased
research on risk assessment, plant safety, and accidents involving
small losses of coolants. A small prototype data link system will be
initiated to improve the information available to NRC headquarters during nuclear plant incidents.
The Alaska gas pipeline inspector oversees the construction of
the portions of the Alaskan natural gas pipeline that run through
the United States and coordinates actions of Federal agencies regulating the project.




148

THE BUDGET FOR FISCAL YEAR 1982

NATURAL RESOURCES AND ENVIRONMENT
National Needs Statement
• Protect the public health and welfare by ensuring a
clean environment, with special emphasis on abating pollution of the land, air, and water through control of
hazardous wastes, injurious pesticides, and toxic substances.
• Conserve, manage and develop public lands, water,
timber, minerals, and other natural resources.
• Preserve natural areas, national historic sites, and fish
and wildlife.
• Improve our knowledge and understanding of the atmosphere, and of the Earth's structure, environment, and
resources.
Intelligent stewardship of America's natural resources and environment is a prime responsibility of government at all levels. As
energy and economic development proceed throughout the Nation,
the resources held in common—our air, water, and public lands—
must be conserved and enhanced by every generation of Americans.
To protect the environment and to contribute to a sound balance
between development and conservation of our natural resources,
the budget proposes $13.6 billion in budget authority in 1982, an
increase of 7% over the 1981 amount.
The 1982 budget reflects the administration's continuing commitment to improve the control and management of hazardous wastes.
The request includes increased financial assistance to the States
for this purpose as well as increased emphasis on criminal investigations and certification of hazardous waste storage facilities. In
December 1980, the President signed the "superfund" bill, which
authorizes the cleanup of uncontrolled hazardous waste disposal
sites and provides a funding source through taxes on industry to
ensure a quick response to future hazardous substance spills. In
1982, the consolidation of toxic substances control programs now




NATURAL RESOURCES AND ENVIRONMENT

149

planned should produce an improved regulatory decisionmaking
process while reducing administrative costs.
Efforts to improve the management of resources on Federal
lands are emphasized by increasing funds for reforestation, proposing improvements to facilities and public range land programs, and
increasing resources for forest, range and related engineering research.
The budget request also reflects the need to expand energy production on the public lands. Significant increases in budget authority are requested for Outer Continental Shelf oil and gas lease sale
activities, and activities related to development of coal, tar sands
and oil shale on Federal lands.
Modest increases in water resources programs will mean that
construction projects producing high priority benefits such as hydropower, urban water supply, and urban flood control can remain
on schedule, although completion of some lower priority projects
may be moderately delayed.
The budget allows some increases for recreational programs with
emphasis on Federal acquisition of park and recreation areas that
have already been authorized and on the maintenance and operation of the national park and wildlife refuge systems.
Pollution control and abatement—Efforts to control and reduce
air, water, and land pollution are carried out through both direct
Federal programs and through Federal financial and technical assistance to State and local governments. Outlays are estimated to
increase by 4%, from $5.5 billion in 1981 to $5.8 billion in 1982.
Regulatory, enforcement, and research programs.—Estimated out-




150

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: USING AND PRESERVING NATURAL RESOURCES AND IMPROVING THE
ENVIRONMENT
(Functional code 300; in millions of dollars)
Major missions and programs

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

BUDGET AUTHORITY
Pollution control and abatement:
Regulatory, enforcement and research programs
Hazardous substance response fund

1,235

Oil pollution fund
Sewage treatment plant construction grants
Subtotal, pollution control and abatement
Water resources:
Existing law
Proposed legislation

Subtotal, water resources
Conservation and land management:
Management of national forests, cooperative forestry and
forestry research

Management of public lands
..
Mining reclamation and enforcement
Conservation of agricultural lands
Other, including offsetting receipts
Subtotal, conservation and land management
Recreational resources:
Land and water conservation fund
Urban park grants and historic preservation fund
Operation of recreational resources
Subtotal, recreational resources
Other natural resources:
Existing law
Proposed legislation
Subtotal, other natural resources
Deductions for offsetting receipts
Total, budget authority

37
3,400

1,302
72
31
3,305

1,312
249
29
3,700

1,341
373
7
4,000

1,371
427
7
4,400

4,672

4,710

5,290

5,721

6,205

4,157

4,141
7

4,543

5,829
23

6,205
19

4,157

4,148

4,543

5,852

6,224

1,965
440
180
540
-538

1,943
512
175
583
-589

2,034
2,198
2,128
524
551
536
246
285
266
584
613
585
- 9 1 8 -1,049 -1,177

2,586

2,624

2,471

2,466

2,471

539
165
969

409
52
961

520
108
1,045

555
110
1,126

597
113
1,165

1,672

1,423

1,673

1,792

1,875

1,401

1,518

1.659
124

1,820
174

1,914
165

1,401

1,518

1,782

1,994

2,079

1,717 - 2 , 1 8 7 - 2 , 5 1 4

?685

13,572

16,170

-1,439
13,051

12,705

15,310

lays of $1.3 billion are expected for the regulatory, enforcement,
and research programs in this function; this is an increase of 8%
over 1981.




151

NATURAL RESOURCES AND ENVIRONMENT
NATIONAL NEED: USING AND PRESERVING NATURAL RESOURCES AND IMPROVING THE
ENVIRONMENT—Continued
(Functional code 300; in millions of dollars)

Major missions and programs

OUTLAYS
Pollution control and abatement:
Regulatory, enforcement and research programs
Hazardous substance response fund
Oil pollution fund
Sewage treatment plant construction grants
Subtotal, pollution control and abatement
Water resources:
Existing law
Proposed legislation
Subtotal, water resources
Conservation and land management:
Management of national forests, cooperative forestry and
forestry research
Management of public lands
Mining reclamation and enforcement
Conservation of agricultural lands
Other including offsetting receipts
Subtotal, conservation and land management
Recreational resources:
Land and water conservation fund
Urban park grants and historic preservation fund
Operation of recreational resources
Subtotal, recreational resources
Other natural resources:
Existing law
Proposed legislation
Subtotal other natural resources
Deductions for offsetting receipts
Total, outlays

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

23
4,343

1,243
33
36
4,200

1,338
163
29
4,230

1,332
311
7
4,400

1,335
400
7
4,425

5,510

5,512

5,760

6,050

6,167

4,294

4,515
3

4,574
4

5,327
23

5,713
19

4,294

4,518

4,578

5,350

5,732

1,798
456
85
548
-559

1,933
472
158
605
-589

2,253
2,181
2,153
541
522
494
153
144
134
601
608
565
- 9 2 1 -1,056 -1,187

2,328

2,578

2,425

2,398

2,361

595
53
1,059

518
102
1,043

556
94
1,031

544
122
1,055

589
150
1,098

1,707

1,663

1,681

1,720

1,837

1,412

1,556

1,662
120

1,823
169

1,892
167

1,412

1,556

1,782

1,992

2,059

1,143

-1,439 -1,717 -2,187
13,812

14,110

14,039

2,514 - 2 , 6 8 5
14,996

15,470

The 1982 budget includes two initiatives to improve program
coordination and management. Currently, decisions on regulatory
control of toxic substances are made independently for air, water,




152

THE BUDGET FOR FISCAL YEAR 1982

and land. Pollution control programs for different media (air,
water, land) are developed separately, in part because pollutants
and the cost of control vary considerably for each medium. Now,
however, the high priority of controlling toxic waste requires an
integrated approach regardless of where the pollutant is discharged
into the environment. Without coordination, efforts to regulate the
most serious sources of pollution risk being arbitrary and incomplete.
A second proposal transfers responsibility for the negotiation and
management of State/EPA agreements from individual media programs to a central office for planning and management in each
region. This should result in substantial savings and better coordination of State activities.
EPA administers about a dozen categorical grants to assist States
in developing pollution control programs. Budget authority of $236
million, a 6% increase from 1981, is proposed for State assistance,
with the largest increase earmarked for hazardous waste control.
The administration has also proposed legislation that would give
States the flexibility to integrate two or more of EPA's State environmental program grants. States could transfer up to 20% of
certain grants to deal with high priority problems.
Other EPA regulatory programs support the President's energy
initiatives by assisting the Department of Energy in preparing
supplementary environmental impact statements and by certifying
new energy facilities. In 1982, $5 million in budget authority is
requested for energy review and permit-issuance activities.
In carrying out enforcement responsibilities, the administration
believes that proper operation and maintenance of equipment and
facilities using existing treatment technologies will have a greater
effect on reducing pollution than new regulations. For example,
substantial reduction in pollution would be achieved through
proper maintenance and use of unleaded gasolines in automobiles.
Budget authority to provide a 5% personnel increase or 115 additional full-time permanent positions above 1981 levels is requested
to monitor regulation compliance, conduct criminal investigations
and expand the responsibilities of the hazardous waste enforcement
task force.
The 1982 request includes $23 million in budget authority to
support a multi-agency research program on the sources and af-




NATURAL RESOURCES AND ENVIRONMENT

153

fects of acid rain, including control technology development and
establishment of a national acid rain monitoring system.
Hazardous substance response fund.—The administration's proposal to create a hazardous waste cleanup and emergency response
fund of up to $1.6 billion over 5 years was enacted into law in
December 1980. The fund will be financed primarily by taxes paid
by industry. This budget provides a strong start in controlling
hazardous substances by earmarking budget authority of $117 million in 1981 and $249 million in 1982 for this effort. This pays for a
significant increase in Federal personnel each year. The budget is,
however, based on preliminary assessments of the staffing and
budgetary resources required for this program. Should additional
needs be demonstrated, this administration would consider amending the request.
Sewage treatment plant construction grants.—The budget requests budget authority of $3.7 billion for this program in 1982, an
increase of $395 million over the enacted 1981 level. The administration has, in the past, proposed legislative reforms that would
limit the Federal share of this program to reducing the backlog of
authorized construction. The administration continues to believe
that there is an urgent need for program reforms to control longterm costs and to establish eligibility standards for selecting projects with the greatest environmental benefits.
Water resources.—The Army's Corps of Engineers, Interior's
Water and Power Resources Service, and Agriculture's Soil Conservation Service are responsible for the planning, development and
utilization of water resources while preserving the quality of the
environment. Program benefits include flood control, municipal
and industrial water supply, irrigation of agricultural lands, shallow and deep draft navigation, hydroelectric power, recreation,
wildlife preservation, and erosion control.
Budget authority for water resources programs is expected to
increase from $4.1 billion in 1981 to $4.5 billion in 1982.
The 1982 budget request includes $2.8 billion in budget authority
for continuing construction of wat6r resource projects. This is an
increase of $215 million from 1981. Inflation in construction costs,
however, will force selective construction delays.




154

THE BUDGET FOR FISCAL YEAR 1982

As in last year's budget, the administration favors the funding of
a set of new construction starts after the Congress agrees to the
independent review of water projects by the Water Resources
Council.
As a result of the eruption of Mount St. Helens in Washington,
emergency efforts are continuing during 1981 to restore and maintain the Cowlitz River channel, which was initially blocked with
volcanic mud. These efforts will help protect many of the homes
and businesses located along the river from the flooding that would
otherwise occur. Dredging is also continuing to restore the Columbia River navigation channel to Portland.
Budget authority of $1.3 billion is requested for operation and
maintenance of Federal water resources projects in 1982, compared
with $1.1 billion in 1981. Operation and maintenance requirements
grow as new projects are completed and existing projects grow
older.
Funds to plan and design small hydropower installations at existing Water and Power Resources Service dams are requested, contingent on passage of proposed authorizing legislation.
Consistent with the authorizing legislation for the WEB water
supply pipeline in South Dakota, the administration supports a
construction funds request when the Oahe irrigation project is
deauthorized.
Budget authority for the State water management matching
grant program administered by the Water Resources Council is
proposed to increase from $10 million in 1981 to $25 million in
1982. States will be encouraged to use a portion of these program
funds to carry out interstate water resources studies in cooperation
with Federal agencies.
Conservation and land management—Federal civil and defense

agencies administer about 762 million acres or one-third of the
land area of the United States. Use of Federal lands serves a
variety of purposes: recreation, wilderness, wildlife habitats, watersheds, timber production, mineral extraction, and range utilization.
Total outlays for the mission of conservation and land management are estimated to be $2.5 billion in 1982, $153 million below
the 1981 level.
Management of national forests, cooperative forestry, and forestry

research.—The Forest Service administers the national forest
system, conducts a comprehensive program of forest and range
research, and carries on cooperative forestry programs with States
and private landowners. Budget authority in 1982 totals $2.0 billion over the 1981 amount, excluding Forest Service payments to
States (which are included in the general purpose fiscal assistance




NATURAL RESOURCES AND ENVIRONMENT

155

function) and funds for fighting forest fires (which are traditionally
requested later in a supplemental budget request for whatever
amounts are required.)
Timber sales for 1982 are planned at 11.9 billion board feet based
on the estimated maximum amount that can be sold in an economically and environmentally sound manner. Nevertheless, harvests
from the national forests can be increased to meet the expected
recovery in the housing industry because the volume of timber sold
but not yet cut has expanded significantly over the last 2 years and
now, totals 42 billion board feet. Land management planning may,
in the future, identify opportunities for expanding sales—primarily
through departure from the existing policy of "non-declining even
flow" interpretation of sustained yield.
Requested budget authority should allow a 5% real increase for
forest and range research. Included in this amount is a 3% real
increase in basic forest biology and engineering research.
Funds for State and private cooperative forestry programs are
proposed at the 1981 budget level, while a modest increase is
recommended for efforts to improve southern pine regeneration.
The appropriations requested for reforestation programs will
permit 227,000 acres of reforestation and 200,000 acres of timber
stand improvements. The requested level of budget authority, $127
million in 1982 compared to $108 million in 1981, is expected to
meet all reforestation requirements by the end of fiscal year 1985.
In June 1980, the Secretary of Agriculture recommended a range
of future Forest Service programs and budgets pursuant to the
Renewable Resources Planning Act. By enacting Public Law 96514, the Congress adopted a statement of policy and expressed a
general acceptance of the high bound of that range as necessary to
meet the goals of that policy. Financing this program would require an additional $334 million in 1982 appropriations, raising the
Forest Service total to $390 million above 1980 and $478 million
above 1981. Given the total demands on the Federal budget, the
growing volume of sold but uncut timber in the national forests, and
the investment uncertainties in other areas of the plan, the 1982
budget request generally reflects a program level at or near the
lower bound of the Secretary's recommended range.
Offsetting receipts, primarily from the national forest system's
timber sales, are expected to increase from $1.2 billion in 1981 to
$1.7 billion in 1982.
Management of public lands.—The Bureau of Land Management
administers about 340 million acres of public land, including about
167 million acres in Alaska. In addition, it manages about 370
million acres of subsurface mineral rights retained in Federal own-




156

THE BUDGET FOR FISCAL YEAR 1982

ership where the surface is privately owned. It also has jurisdiction
over mineral exploration and development of 1.1 billion acres of
the Outer Continental Shelf.
Seven Outer Continental Shelf oil and gas lease sales are scheduled for fiscal year 1982. Funds for administering these sales and
for conducting environmental studies and other preparatory work
for later sales are included in the budget request at the 1981 level.
Outer Continental Shelf oil and gas receipts (discussed in the section on undistributed offsetting receipts) are expected to increase
from $7.8 billion in 1981 to $9.9 billion in 1982. Revenues produced
by onshore mineral leasing, grazing fees, timber sales, land and
material sales, right-of-way fees and other sources are estimated to
increase to $1.0 billion in 1982 compared to $769 million in 1981.
The first three competitive coal lease sales (other than emergency sales) since the beginning of the coal leasing moratorium in 1971
will be held in 1981. Two major sales are planned for 1982. The
budget includes a supplemental request of $8.7 million for 1981 to
lease four additional oil shale tracts under the prototype program
and to initiate a permanent oil shale leasing program. An additional $1.1 million is requested in the 1982 budget to initiate a tar
sands leasing program, and an increase of $1.3 million is also
recommended to accelerate the review of Federal land withdrawals.
Funds are requested to initiate a dam safety program and to
monitor intensively range improvement investment projects. The
budget also proposes an additional $8.9 million in budget authority
for mineral surveys and $2.6 million for wilderness plans and
studies to accelerate the public lands roadless area review.
Budget authority for the Bureau of Land Management, excluding
firefighting costs, is proposed at $524 million, compared with $467
million in 1981, an increase of $57 million or 12%.
Mining reclamation and enforcement.—Programs within the
Office of Surface Mining Reclamation and Enforcement help prevent environmental degradation of land due to surface mining of
coal and help reclaim land previously damaged by such mining.
Budget authority of $246 million is recommended for 1982, an
increase of $71 million over 1981.
In 1982 a total of $162 million in budget authority is requested
for abandoned mine reclamation fund programs, compared with
$82 million in 1981. The budget includes funding to retain Federal
regulatory programs in cases where States have not achieved fully
approved programs; to monitor State programs; to provide technical assistance to States; and to review plans for mines on Federal
lands. The national abandoned mine lands inventory, scheduled to
be completed in mid-1982, will provide a basis for evaluating the




NATURAL RESOURCES AND ENVIRONMENT

157

costs and benefits of State and Federal reclamation expenditures
and for establishing priorities for potential projects. The budget's
substantial but orderly rate of increase for these programs should
provide funding assistance to the States as they become capable of
using effectively the results of the national inventory.
Conservation of agricultural lands.—Several programs help protect and maintain the Nation's agricultural production capacity
through technical and financial assistance to conservation districts,
State and local governments, and private land owners. Budget
authority requested for these programs in 1982 totals $584 million,
approximately the same as in 1981. The resource conservation and
development program requires $28 million to complete work on
projects begun in earlier years while requested budget authority
for the Great Plains conservation program and the conservation
operations program, is sufficient to maintain programs at, or near,
their 1981 levels.
Other conservation and land management.—The Department of
Commerce's National Oceanic and Atmospheric Administration
(NOAA) is responsible for planning and promoting the rational use
and conservation of our coastal areas. For 1982, the administration
requests $35 million in budget authority to continue Federal assistance to 26 States for implementing coastal zone management
plans. Federal support will be phased down as State and local
efforts become established.
NOAA also manages the coastal energy impact formula grant
program and the marine and estuarine sanctuary programs that
assist States in the development and conservation of our coastal
areas. No funding is requested for coastal energy impact formula
grants in 1982 because States and their localities have the capability to address the projected economic and environmental impacts of
Outer Continental Shelf oil and gas developments in their jurisdictions.
Recreational resources.—The Federal Government, either directly or through its grant programs, acquires and operates national
parks, recreation areas, historic sites, wild and scenic rivers, fish
hatcheries and wildlife refuges. Included in the 1982 budget are
requests for initiating activities under the Alaska National Interest
Lands Conservation Act. Passage of this legislation protects over
104 million acres of Alaskan lands, and is a major environmental
achievement by the administration.
Budget authority for these programs are estimated at $1.7 billion
in 1982, an increase of $250 million over 1981.

340-000 0 - 8 1 - 1 2




: QL 3

158

THE BUDGET FOR FISCAL YEAR 1982

Land and water conservation fund.—This program provides
matching funds to States for planning, acquiring and developing
park and recreation facilities. It also provides funds to Federal
land-managing agencies to purchase lands for recreation and preservation.
Budget authority requested for 1982 is $520 million, an increase
of $141 million over the 1981 appropriation. The 1982 request includes:
• $185 million for matching grants to States, a decrease of $44
million;
• $327 million for Federal acquisition of land for national
parks, wildlife refuges, and recreation areas, an increase of
$185 million; and
• $8 million for administration.
Of the total request for Federal acquisitions, $297 million is
requested to purchase lands in areas specifically designated by law
as either threatened or undergoing rapid price escalation.
Urban park grants and historic preservation fund.—Budget authority of $75 million for urban grants to rehabilitate city parks
and recreation facilities is requested in 1982; this is a $55 million
increase from 1981. The historic preservation fund is maintained in
1982 at the 1981 level of $32 million. An estimated $26 million is
recommended to support State agencies administering historic
preservation programs and an additional $5 million to transfer
properties to the National Trust for Historic Preservation.
Operation of recreational resources.—These programs carry out
activities necessary to the operation and maintenance of the national park and wildlife refuge systems. Also included are grants,
research, and technical assistance in the areas of recreation, and
fish and wildlife.
Budget authority recommended for 1982 is $1.0 billion, an increase of $84 million from 1981.
The Fish and Wildlife Service manages 84 million acres of wildlife refuges, operates 89 fish hatcheries, conducts research on fish
and wildlife, administers programs to protect endangered species;
and provides grants to States for managing fish and wildlife programs.
Budget authority requested for Fish and Wildlife Service programs in 1982 is $463 million, an increase of $42 million over 1981.
Increases in refuge and hatchery operations and maintenance account for $26 million of this increase.
The National Park Service develops, operates, and maintains the
national park system, comprising 327 parks totaling 72 million
acres. An increase from $494 million in 1981 to $564 million in




NATURAL RESOURCES AND ENVIRONMENT

159

1982 is requested for these programs. The increase covers new and
developing park areas, increased operational costs in already established parks, and maintenance and repair of park facilities.
Other natural resources.—These activities are primarily concerned with promoting an understanding of the environment and
the Earth's structure.
The Geological Survey conducts national geologic and mineral
resources surveys, water resources investigations, topographic surveys and mapping, including the identification of geological hazards such as earthquakes. It also supervises Federal mineral leases
and federally financed exploration to assess petroleum resources in
the national petroleum reserve in Alaska.
Budget authority of $573 million in 1982 is recommended for the
Geological Survey activities in this function, compared with $525
million in 1981. An increase in budget authority of $11 million to a
level of $106 million is requested for Outer Continental Shelf oil
and gas activities, including selection of tracts for potential lease
offering, lease regulation, and marine geological research. An increase of $3 million is included for coal investigations to facilitate
the leasing of Federal coal lands. Also included is $4 million for
hydrologic studies of acid rain and toxic waste problems.
The budget includes $6 million under a legislative proposal to
initiate a program establishing a digital cartographic data base.
This program would provide high quality computer-processable cartographic data to private and Federal users, and is expected to
recover its full cost of operation over time.
The Bureau of Mines conducts research and administers programs to develop and conserve the Nation's mineral resources, to
diminish the adverse effects on the environment of mining, and to
protect the health and safety of miners. Budget authority of $151
million is recommended in 1982, compared with $144 million in
1981.
The National Oceanic and Atmospheric Administration (NOAA)
conducts marine and atmospheric-related research and environmental monitoring, produces maps and charts for navigation, manages our marine fisheries, protects marine mammals and endangered species, and operates a national system to monitor and forecast weather conditions. NOAA also has responsibility for operating civilian remote sensing satellites.
An increase in budget authority from $785 million in 1981 to
$994 million or 27% in 1982 is proposed for NOAA. The requested
increases would allow for expanded data in support of fisheries
management, improved weather warning and forecasting, for increased climate-related activities and for continued development of
a national ocean satellite system (discussed in the space and technology function).




160

THE BUDGET FOR FISCAL YEAR 1982

NOAA also plans to accelerate the automation of surface weather observations to reduce personnel and improve data collection,
and to develop new advance weather radar that will significantly
improve severe weather warnings.
New funding of $124 million is included for NOAA to assume
operational responsibility from NASA for the Landsat satellite
system, which provides land resource remote satellite sensing, as
discussed in the space and technology function. This will assure
data continuity through the early 1990's with single satellite coverage. Starting in 1983, fees for Landsat data products will be increased so that at the end of the decade most of the system cost is
recovered from the users. After the Landsat system advances have
been evaluated, the Federal Government will assess its future
needs for land resource remote satellite sensing. At that time, it is
anticipated that a private corporation would develop and operate
the satellite sensing system.
Tax expenditures.—Income realized from logging timber is taxed
at rates applicable to long-term capital gains, rather than as ordinary income. This will result in an estimated 1982 tax expenditure
of $0.7 billion. An investment tax credit and 7-year amortization of
reforestation expenses results in a $10 million tax expenditure.
CREDIT PROGRAMS—NATURAL RESOURCES AND ENVIRONMENT
(In millions of dollars)

Program

Water resources and other:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays

1980
actual

1981
estimate

1982
estimate

30
-5

25
-7

30
-9

25

18

22

Credit programs.—hoans are made to State and local organizations for the construction and rehabilitation of nonfederal irrigation and municipal and industrial water systems. Net loan outlays
are estimated to be $22 million in 1982.




AGRICULTURE

161

AGRICULTURE
National Needs Statement:
• Assure sufficient agricultural production to meet domestic needs and export demands.
• Provide an adequate return to farmers based on the cost
of production.
• Dampen fluctuations in food prices.
• Increase farm production and income through the conduct and application of research.
• Improve health through nutrition and food safety.
• Improve the efficiency and reliability of domestic and
export agricultural marketing systems.
American agricultural commodities provide basic nutrition for
millions of people around the world and a livelihood for American
farmers. The Nation has a strong interest in assuring that food
supplies are sufficient to meet domestic needs, to earn foreign
exchange through commercial exports, and to feed the needy in
poor countries facing shortages while protecting American agricultural producers against the vagaries of weather and depressed
market prices for farm goods.
The United States is the world's largest exporter of farm products. Many countries depend on us for food, and we look to them as
markets for our farm products. Agricultural exports in 1980 were
$40.5 billion while imports totaled $17.3 billion, resulting in a
positive trade balance of $23.2 billion. For 1981, the agricultural
trade balance is forecast to grow to approximately $30 billion.
Since exports are a large part of U.S. agri-business, small
changes in world production and demand can produce rapid increases and decreases in the prices of U.S. farm products. Consequently, mechanisms are needed that stabilize prices but are flexible enough to respond to changing domestic and international
supply and demand.
On the domestic side, acreage set-asides for 1981 crops have not
been established because of strong commodity prices and expanding
export markets. In international trade, an aggressive market promotion program is being carried out in cooperation with private
commodity groups.
On January 4, 1980, the President announced a reduction of
about 17 million metric tons in grain exports to the Soviet Union.
To offset income losses to grain producers, the export control miti-




162

THE BUDGET FOR FISCAL YEAR 1982

gation program has removed or diverted from normal marketing
channels the portion of this grain that could not be sold elsewhere.
In addition, the administration has continued to build export
markets outside of the Soviet Union. One recent example of this is
the U.S.-China Grain Agreement signed October 22, 1980. The People's Republic of China is committed to the annual purchase of a
minimum of 6 million metric tons of wheat and corn over the 4
years beginning January 1, 1981.
As a result, the increase in U.S. exports to other countries in
1980 more than offset the reduction in exports to the Soviet Union.
The total of $40.5 billion value of U.S. exports in 1980 was $8.5
billion, or 27%, over the 1979 record total. For 1981, exports are
projected to increase even further to about $48.5 billion.
Additional administration accomplishments over the past year
include: (1) the recent enactment of the administration-proposed
Food Security Wheat Reserve Act of 1980 that establishes a Government-owned reserve of up to 4 million metric tons of wheat to
provide emergency humanitarian food assistance to developing
countries (discussed in the international affairs section); (2) the new
all-risk crop insurance program that provides expanded disaster
and emergency assistance to farmers while reducing Federal outlays; (3) successful results from the administration's innovative
farmer-held reserve program; and (4) increased emphasis on basic
food and agricultural research.
The 1982 budget further demonstrates the Federal commitment
to a strong agricultural economy in three ways:
• by moderating the swings in the agricultural economy
through price and income stabilization and farmer-held grain
reserves;
• by increasing basic animal and plant research to help the
American farmer continue to be one of the world's most efficient agricultural suppliers; and
• by helping farmers adopt soil conservation and pollution control practices that protect our agricultural land and water
resources. (These programs are discussed in the natural resources and environment section.)
Budget outlays for the agriculture function are estimated to
increase from $1.1 billion in 1981 to $4.8 billion in 1982. The
increase reflects additional costs due mostly to expected loan activities for price support and related activities and to the large sale of
assets in 1981 which does not occur in 1982 for the agricultural
credit insurance fund. Off-budget outlays in the agriculture function, primarily financed by the Federal Financing Bank, are estimated to be $6.1 billion in 1981 and $1.6 billion in 1982.




163

AGRICULTURE
NATIONAL NEED: IMPROVED AGRICULTURE
(Functional code 350; in millions of dollars)
Major missions and programs

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

BUDGET AUTHORITY
Farm income stabilization:
Price support and related programs
Crop insurance
Agricultural credit
Other programs
Unallocated salaries and expenses
Subtotal, farm income stabilization..
Agricultural research and services:
Research programs:
Existing law
Proposed legislation
Extension programs
Marketing programs.Existing law
Proposed legislation
Animal and plant health programs....
Economic intelligence!
Other programs
Unallocated overhead
Offsetting receipts
Subtotal, agricultural research and services..
Deductions for offsetting receipts
Total, budget authority

3,056 3,300 2,296 2,593 1,967
12
230
544
462
352
335
297
795
474
484
43
36
41
48
58
191
210
219
223
227
3,637

4,073

3,894

3,799

3,087

560
"286

635
10
304

692
10
305

725
10
331

760
10
358

76

82

251
145
64
86
-66

282
159
70
100
-70

94
-25
295
178
72
120
-72

95
-26
323
189
73
126
-75

97
-27
306
203
74
130
-76

1,402

1,572

1,670

1,772

1,836

-5

-5

-5

-95

-5

4,945

5,640

5,559 5,566 4,919

Farm income stabilization.—-This is the major Federal involvement in the agricultural sector. Estimates of price support outlays
are highly speculative and subject to the uncertainties of weather
and markets at home and abroad. The projected outlays are estimates, not limits on assistance, and they will vary upward or
downward depending upon the requirements of the agricultural
sector.
Price support and related programs.—Price support and related
programs were created to stabilize, support, and protect farm
income and prices and to help the orderly distribution and maintenance of a balanced and adequate supply of agricultural commodities and their products. The Commodity Credit Corporation (CCC)
provides price support to producers of agricultural commodities
through loans, purchases, payments and other means. CCC outlays
for price support programs under existing law are projected to
increase from -$0.2 billion in 1981 to $2.1 billion in 1982.
This increase reflects a return to a "normal" marketing year,
with loans and sales at their historical levels. Estimates for 1981
reflect a year of low corn crop production as a result of the drought
and accompanying high grain prices. This resulted in a large flow
of grain out of reserves held by farmers and the CCC. The estimat


164

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: IMPROVED AGRICULTURE—Continued
(Functional code 350; in millions of dollars)

OUTLAYS
Farm income stabilization:
Price support and related programs:
Existing law
Proposed legislation
Crop insurance
Agricultural credit
Other programs
Unallocated salaries and expenses
Subtotal, farm income stabilization..
Agricultural research and services:
Research programs:
Existing law
Proposed legislation
Extension programs
Marketing programs:
Existing law
Proposed legislation
Animal and plant health programs....
Economic intelligence
Other programs
Unallocated overhead
Offsetting receipts
Subtotal, agricultural research and services.,
Deductions for offsetting receipts
Total, outlays..

1981
estimate

1982
estimate

1983
estimate

1984
estimate

38
478
36
190

-84
-138
265
-745
43
204

2,151
-86
183
640
48
214

1,615
-86
268
626
58
223

1,855
-86
285
630
67
227

3,459

-454

3,148

2,703

2,978

288

644
2
302

6
303

720
10
326

752
10
351

81

87

251
147
64
86
-66

277
157
69
102
-70

95
-25
296
177
71
119
-72

95
-26
322
188
72
125
-75

97
-27
307
203
73
128
-76

1,398

1,571

1,659

1,757

1,818

-95

-5

-5

-5

-5

4,762

Major missions and programs

1,112

4,803

4,455

4,791

5,257
3,982

7,121
6,096

2,305
1,570

4,326
864

6,097
702

actual

2,717

56
4

ADDENDUM
Off-budget Federal entity:
Federal Financing Bank:
Agricultural credit:
Budget authority
Outlays

ed collections from these loan repayments and CCC inventory sales
more than offset CCC outlays. For 1982, loan estimates are expected to return to 1980 levels while repayments and sales are expected
to decline.
As part of this administration's efforts to contain costs and
reduce Federal outlays, the budget assumes enactment of legislation that would eliminate the April 1, 1980 semi-annual adjustment
in the dairy support price required by existing law. Gross outlays
for the dairy support purchase program were $1.4 billion in 1980
and are estimated to be about $1.5 billion in 1981 and $1.1 billion
in 1982. This proposal would reduce 1981 and 1982 outlays by
approximately $0.1 billion each year.




165

AGRICULTURE

Export credit is provided through the enlarged credit guarantee
program to finance commercial as well as noncommercial sales
that would not occur without Federal credit backing. A proposed
shift in 1981 from federally financed direct loans to loan guarantees would allow private financial institutions to provide shortterm credit to importers of U.S. farm products. Commitments of
$2.0 billion in loan guarantees are proposed for 1982, the same as
in 1981. This represents the highest level of federally backed credit
ever extended for agricultural export commodities.
COMMODITY CREDIT CORPORATION OUTLAYS
(In millions of dollars)
Function and program
Agriculture:
Price support and related programs:
Existing law:
Commodity loans
Commodity purchases
Direct payments
Grain reserve storage payments
Export control mitigation
Short-term and intermediate export credit..
Storage facility loans
Interest expenditures
Other price support operations
Receipts and adjustments
Proposed legislation
Subtotal, price support and related programs..

Other..

1980
actual

1981
estimate

1982
estimate

1983 1984
estimate
estimate

3,866 3,368 4,470 4,852
2,643 1,999 1,373 1,289
418
753
360
254
92
112
19
1
127
336
719
18
150
363
210
150
1,086 1,235 1,334
995
547
629
353
370
-7,515 -8,552 -6,017 -6,143
-138 - 8 6
-86
2,717 -222 2,065 1,529
41
35
47
57

5,423
1,362
58
123
150
1,009
349
-6,619
-86
1,769
67

-181

2,112

1,586

1,836

1,505
-432

1,857
-462

1,741
-478

1,798
-513

1,964
-535

Subtotal, international

1,073

1,395

1,263

1,285

1,429

Total, Commodity Credit Corporation outlays.

3,825

1,266

3,375

2,871

3,265

Subtotal, agriculture..
International affairs:
Public Law 480 food aid:
Gross outlays
Receipts and reimbursements..

2,752

Crop insurance.—The Federal Crop Insurance Corporation offers
insurance against crop losses from natural hazards. In carrying out
the provisions of the Federal Crop Insurance Act of 1980, the new
all-risk crop insurance program would be expanded to 500 new
counties over the next two years and would cover 39 million additional acres. The expanded crop insurance program is planned to
replace CCC disaster payments and emergency loans administered
by the Farmers Home Administration starting in 1982. Outlays
depend primarily on the weather, the number of participants, and
crop prices. Outlays are estimated to be $0.3 billion in 1981 and
$0.2 billion in 1982. (Small business disaster loans, also available




166

THE BUDGET FOR FISCAL YEAR 1982

under limitied circumstances to farmers, are discussed under community and regional development.)
Agricultural credit—New agricultural loan commitments under
the agricultural credit insurance fund totaled $6.4 billion in 1980,
with over 70% of this amount going for disaster and economic
emergency loans. The outlays associated with this lending were
converted to off-budget outlays through the sale of loan assets to
the Federal Financing Bank. Total loan obligations by the agricultural credit insurance fund are estimated to decline from $8.0
billion in 1981 to $5.1 billion in 1982, largely because of the expiration of the economic emergency loan program and tighter disaster
loan requirements. The $3.0 billion amount proposed for farm ownership and farm operating loans in 1982 is $1.2 billion more than
the 1981 level. Approximately 40% of these funds will be earmarked to assist farmers with limited resources. The budget does
not provide for extension of the economic emergency loan program
as the conditions that necessitated it are not expected to recur.
Further, expanded crop insurance and additional funding for farm
ownership and operating loans will meet the needs of family farmers who formerly participated in the emergency loan program.
Outlays are estimated to be $0.6 billion in 1982.
AGRICULTURAL CREDIT INSURANCE FUND—LOAN OBLIGATIONS
(In millions of dollars)

Loan program

Farm ownership
Farm operating ....
Emergency:
Natural disasters
Economic
Soil and water
Other
Total

1980
actual

1981
estimate

1982
estimate

954
875

920
875

1,500
1,500

2,267
2,186
55
25

4,200
1850
53
56

2,000

6,362

7,954

5,107

53
54

Agricultural research and services.—Programs in this mission
seek to improve production and marketing efficiency by developing
better technologies to enhance public and private agricultural activities. They also provide information on worldwide agricultural
markets, and control the spread of animal pests and diseases.
Research.—Research helps to increase agricultural productivity,
and expands knowledge of human nutrition and food safety. Budget
authority of $0.7 billion is requested for agricultural research in
1982, compared to $0.6 billion in 1981.
The funds requested will be used to respond directly to a number
of national concerns: extending animal and plant production and



167

AGRICULTURE

protection; assisting regulatory agencies; expanding the application
of existing earth satellite technologies; managing natural and maninduced environmental changes; and enhancing the agricultural
capacities of developing countries. Research will be carried out in
Federal laboratories and through private, State, and local organizations.
Animal and plant health,—The Federal Government carries out
a number of programs to prevent the introduction and spread of
plant and animal pests and diseases that can cause severe losses in
crop yields or livestock. Budget authority of $0.3 billion is proposed
for these services in 1982.
CREDIT PROGRAMS—AGRICULTURE
(In millions of dollars)
Program
Price support and related commodity loans:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays

1980
actual

1981
estimate

1982
estimate

4,947
-5,705

3,596
-6,103

4,620
-4,598

-758

-2,506

21

2,036
1,792

2,000
764

7,513
8,682
-7,612 -10,172

5,809
-6,009

Loan guarantees:

New loans
Net loan guarantees
Agricultural and emergency credit programs and other:
Direct loans, on-budget:
New loans
Repayments, sales and adjustments ( - ) x
Net loan outlays
Loan guarantees:2
New loans
Net loan guarantees

673
652j

-100

-1,489

-200

5,415
3,948

7,457
6,026

2,665
1,560

5,257
1,275

7,121
-1,025

2,305
-735

3,982

6,096

1,570

Off-budget Federal entity—Federal Financing Bank: 3
Direct loans: agricultural credit insurance fund:

New loans
Repayments, sales and adjustments ( - )
Net loan outlays
1
Includes
2
Includes
3

sales of direct loans.
guarantees of sales of direct loans.
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
above in this table. See the introduction to Part 5 for further explanation.

Credit programs.—Net credit outlays for price support and related commodity loans are projected to increase by $1.5 billion in
1982. This outlay increase is accounted for by the increase in loan
activity and the substantial decline in receipts from the one-time
1981 grain reserve sale. Agricultural and emergency credit programs include farm real estate, and farm operating and emergency



168

THE BUDGET FOR FISCAL YEAR 1982

loans. The estimated decrease in net credit outlays for these programs is a result of a projected reduction in new lending for emergency
purposes. The credit programs will emphasize assistance to new
farmers and those with limited resources while deemphasizing financial aid to farmers who are credit-worthy enough to borrow in
the private sector.
Tax expenditures.—The objectives of agricultural income support
and rural development are promoted by a range of tax expenditures. The tax code permits farmers to treat certain capital outlays
as current expenses and accords capital gains treatment to certain
types of ordinary income. The 1982 revenue losses from these two
provisions are estimated to be $0.6 billion and $0.5 billion, respectively. Rural electric, telephone, and agricultural marketing cooperatives can deduct noncash patronage dividends, and they receive
preferential tax treatment in a variety of ways. A 1982 tax expenditure of $0.4 billion is expected from these preferences. Payments
received under Federal and State cost sharing conservation programs are excluded from income. The revenue loss from this provision is estimated to be $0.1 billion in 1982.
OUTLAYS FOR FEDERAL PROGRAMS THAT SUPPORT THE AGRICULTURE MISSIONS
(In millions of dollars)

Program Title

Primary
Function
budget

Disaster loans, drought assistance, and emergency conservation
Conservation of agricultural lands
Rural clean water programs
Public Law 480 food aid
Food safety and quality service

450
300
300
150
550

1982
estimate

1980
actual

1981
estimate

2,043
2,328
4,294
1,073
304

3,273 852
2,578 2,425
4,518 4,578
1,471 1,263
310 343

Related programs.—Several programs that fulfill other national
needs complement the programs in agriculture. The most important of these programs is the Public Law 480 food aid program,
which is discussed in the international affairs section.




COMMERCE AND HOUSING CREDIT

169

COMMERCE AND HOUSING CREDIT
National Needs Statement:
• Insure that an adequate supply of mortgage credit is
available nationally.
• Target credit to urban and rural areas and prospective
borrowers not well served by private credit markets.
• Encourage urban revitalization efforts.
• Maintain effective mail service at reasonable rates with
costs borne largely by postal customers.
• Encourage the development of jobs and a productive
economy through assistance to and oversight of business.
Aggregate fiscal and monetary policies significantly affect the
Federal Government's long-term objectives in the commerce and
housing credit area. These policies must continue to be restrictive
in order to counter inflationary pressures.
Total housing starts in calendar year 1980 were about 1.3 million
units, down from 1.7 million in 1979 and 2.0 million in both 1977
and 1978. As overall economic conditions improve in 1981, the
housing sector should return to higher levels of activity. Housing
starts are projected to be at an annual rate of about 1.5 to 1.6
million units by the end of calendar year 1981.
Housing was kept from bearing a larger share of the 1980 decline
in economic activity through a continued emphasis on institutional
improvements in financial markets. These included the 6-month
"money market" certificate, which enables mortgage lenders to
compete more effectively for available funds, and through expanded use of federally sponsored secondary market facilities. In addition, the underlying strength of the demand for housing derived
largely from the post-World War II baby boom has provided and
will continue to provide support for the housing sector.
The performance of the housing market is important to the
continued improvement of housing conditions in the Nation, especially for low-income families. Census data indicate that the
number of households residing in physically substandard housing
units has declined substantially. As of the fall of 1977, 5.0 million
lower-income households resided in units with one or more significant physical deficiencies, compared to 5.8 million in 1974. This
favorable trend in housing conditions is expected to persist because
of the continued strong performance by the private housing
market, the projected growth in family incomes, and growth in the
number of low-income families benefiting from Federal housing
subsidies.




170

THE BUDGET FOR FISCAL YEAR 1982

Investment opportunities that bear high interest rates have not
been uniformly available to all savers, and particularly not to those
with limited assets and those less able to shift to more profitable
investments. The administration continued its commitment to
greater equity in the provision of financial services through support of the Depository Institutions Deregulation and Monetary Control Act of 1980. This law provides for an orderly phasing out of
regulatory restrictions on the earnings of deposits at banks and
savings institutions.
A major objective of this administration is to avoid disproportionate reductions in housing credit as a result of necessary monetary
restraint. The administration also seeks to ensure that the Federal
Government continues to provide adequate investment incentives
and an economic environment that fosters continued strength in
the housing market.
Other major concerns are to achieve Federal commerce and
housing credit objectives more efficiently, and to target scarce Federal resources more effectively to those groups, regions, or economic sectors with the greatest need.
While Federal expenditure programs in this function contribute
significantly to the achievement of Federal objectives, Federal tax
policies and credit programs make an even greater contribution.
Major administration efforts to avoid curtailment of mortgage
credit and housing market activities include:
• supplemental requests for increases of about $5 billion in the
credit limitation on insurance commitments by the Federal
Housing Administration (FHA) and $19 billion in the limitation on Government National Mortgage Association (GNMA)
mortgage-backed securities for 1981;
• initiation of a demonstration program in which mortgage interest subsidy grants would be substituted for purchases of
$1.7 billion in mortgages on rent-subsidized housing projects
and on some of the middle/moderate income projects in distressed urban areas;
• continued broad use of GNMA mortgage-backed securities to
attract nontraditional investors to mortgage markets; and
• continued use of money market certificates to attract deposits
at savings and loan institutions.
This budget allows efficient and effective use of Federal resources allocated to commerce and housing credit by:
• strengthening the export performance of the United States
and assuring fair international trade practices;
• continuing to target rural housing programs to low-income
families occupying substandard housing;




COMMERCE AND HOUSING CREDIT

171

• restructuring the business loan programs of the Small Business Administration and targeting direct and guaranteed
loans more effectively to minority- and women-owned firms;
• expanding program activities to strengthen the development
of women's business enterprises;
• increasing the level of minority- and women-owned business
participation in Federal procurement; and
• extending the administration's initiative to enhance the rate
of industrial innovation.
Mortgage credit and thrift insurance.—Federal housing policy

continues to focus on the basic goal of providing a decent home in a
suitable living environment for every American family. Federal
housing programs carry out this goal by:
• insuring an adequate supply of mortgage credit;
• increasing the stock of housing through new construction and
rehabilitation programs; and
• providing explicit subsidies primarily for low- and moderateincome households.
Most of the explicitly subsidized programs are discussed in the
income security section.
Mortgage credit programs are aimed at increasing the supply of
credit for housing. Mortgage insurance, guarantees, direct loans,
interest subsidies, and secondary mortgage market activities support the operation of private mortgage credit markets and supplement these markets, particularly in rural and central-city areas.
By making credit available at subsidized interest rates, Federal
credit policies stimulate the demand for, and therefore the production of, housing.
Past periods of fiscal and monetary austerity have led to sharp
outflows of savings from savings and loan institutions to other
financial instruments, resulting in severely depressed rates of housing construction. Recently, the housing sector has been increasingly able to compete effectively for funds during periods of high
interest rates. The Federal contribution to this improved competition stems from the development of 6-month money market certificates as well as 2V2-year saving market certificates and expanded
use of GNMA mortgage-backed securities, which attract nontraditional mortgage investors, and GNMA tandem interest subsidies.




172

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: PROMOTION OF COMMERCE AND HOUSING CREDIT
(Functional code 370; in millions of dollars)
Major missions and programs

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

BUDGET AUTHORITY
Mortgage credit and thrift insurance:
Department of Housing and Urban Development:
Mortgage purchase activities (GNMA)
Mortgage credit (FHA)
Housing for the elderly or handicapped
Department of Agriculture—rural housing programs
National Credit Union Administration

1,869
324
806
2,282
1,200

1,407
344
781
618
197

492
305
774
2,218
310

1,393
279
749
2,141

1,354
259
805
2,578

Subtotal, mortgage credit and thrift insurance

6,481

3,347

4,098

4,562

4,996

1,677

1,343

1,119

869

790

788
67
241
750
2
493

227
881
122
271
272
1
515

3,493
802
136
313
198
1
550

4,704
887
160
319
202
1
565

5,390
945
185
327
171
1
580

2,340

2,290

5,494

6,839

7,600

_*

_*

*

*

6,979

10,711

12,270

13,385

Postal Service
Other advancement and regulation of commerce:
Payments in excess of corporate tax liability (proposed)
Small business assistance
National Consumer Cooperative Bank
Technology utilization
Economic and demographic statistics
Chrysler Corporation loan guarantees
Other
Subtotal, other advancement and regulation of commerce
Deductions for offsetting receipts
Total, budget authority

10,497

*$500 thousand or less.

Mortgage purchase activities.—The Government National Mortgage Association (GNMA) will continue to provide significant support for the mortgage market through its two major activities:
• In 1980, the mortgage-backed security program guaranteed
$23 billion in securities backed by pools of mortgages that
were insured either by the Federal Housing Administration
or guaranteed by the Veterans Administration. In 1981, a
limitation of $72 billion is requested on commitments for
GNMA-guaranteed securities. This will result in approximately $31 billion in actual guarantees.
• The tandem mortgage purchase program and the mortgage
assistance grant program provide subsidies for the origination
of $2 billion in multifamily project mortgages, the same level
that has been supported in the last 4 years.




173

COMMERCE AND HOUSING CREDIT
NATIONAL NEED: PROMOTION OF COMMERCE AND HOUSING CREDIT
(Functional code 370; in millions of dollars)
Major missions and programs

OUTLAYS
Mortgage credit and thrift insurance:
Department of Housing and Urban Development:
Mortgage purchase activities (GNMA)
Mortgage credit (FHA)
Housing for the elderly or handicapped
Department of Agriculture—rural housing programsFederal Deposit Insurance Corporation
Federal Savings and Loan Insurance Corporation
National Credit Union Administration
Subtotal, mortgage credit and thrift insurance..

actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

521 1,013 - 1 0 2
572
1,358
151
61 - 1 1 6 - 2 2 3 - 3 7 5
780
760
750
753
800
1,571
1,903 2,153
1,719 - 7 3 9
- 9 2 2 -1,450 -1,500 -1,550 -1,600
552
415 - 6 5 0 - 6 8 3 - 7 5 1
287
-12
85
198
-16
3,696

-194

1,385

93

734

1,677

1,343

1,119

869

790

950
9
241
794
2
414

227
838
136
264
291
1
549

3,493
881
128
305
210
1
535

4,704
983
152
319
204
1
559

5,390
1,034
178
326
173
1
568

Subtotal, other advancement and regulation of commerce
2,409

2,307

5,554

6,923

7,671

7,782

3,456

8,058

7,884

9,194

-431

219

-70

4,681
1,906

7,341
5,341

4,161
3,421

5,385
2,700

6,436
2,506

149
127

360
327

360
315

360
280

360
255

Postal Service
Other advancement and regulation of commerce:
Payments in excess of corporate tax liability (proposed)..
Small business assistance
National Consumer Cooperative Bank
Technology utilization
Economic and demographic statistics
Chrysler Corporation loan guarantees
Other

Deductions for offsetting receipts..
Total, outlays
ADDENDUM
Off-budget Federal entities:
Postal Service:
Outlays
Federal Financing Bank:
Rural housing insurance fund:
Budget authority
Outlays
Small business assistance:
Budget authority
Outlays

-1,352 -1,531

*$500 thousand or less.

The 1982 budget proposes that $1.7 billion of the total $2 billion
in multifamily mortgages assisted by GNMA be subsidized through
the use of grants to mortgage originators in order to compensate
them for the loss they would otherwise take on mortgages they
write at below-market interest rates. This proposed arrangement
would subsidize $1.5 billion in mortgage commitments for projects
receiving subsidies under the lower income housing assistance (Section 8) program of the Department of Housing and Urban Development (HUD) and $200 million in mortgages on moderate/middle
income multifamily properties.
340-000 O - 81 - 13 : QL 3




174

THE BUDGET FOR FISCAL YEAR 1982

The tandem mortgage purchase mechanism would be retained to
assist $300 million in moderate/middle income mortgages. Under
the tandem mechanism, GNMA makes commitments to purchase
multifamily project mortgages at below-market interest rates.
Upon completion of the project, GNMA purchases these mortgages
at their face value but resells them at a discount sufficient to bring
their yield up to current market interest rates. The loss GNMA
absorbs on this transaction represents the subsidy provided on
these mortgages.
The administration seeks to phase out the use of the tandem
arrangement and substitute a grant approach because the cost of
the tandem mechanism is extremely sensitive to market interest
rates. Unfavorable market conditions may require GNMA to
absorb significant losses and, therefore, incur major budget outlays.
GNMA's net outlays are estimated to be $521 million in 1981 and
$1,013 million in 1982.
Mortgage credit—The Federal Housing Administration (FHA) operates programs for mortgage and loan insurance that provide
assistance for families who can fulfill the obligations of a mortgage
loan but who may not be adequately served by the private market.
Insurance for mortgages with graduated payment schedules, which
require lower initial monthly payments, would continue to be made
to assist first-time homebuyers.
Heavy default rates experienced under some mortgage insurance
programs in the early 1970's resulted in large increases in the FHA
inventory of assigned mortgages, and many properties were acquired by HUD as a result of foreclosure. Better underwriting and
HUD's lower-income housing assistance (Section 8) and troubled
projects operating subsidies programs have begun to decrease the
size of this inventory. Efforts began in 1979 to increase the sale of
multifamily properties now owned by FHA by making available
Section 8 rental assistance (this is classified sis an income security
program). The Section 8 program induces the private market to
rehabilitate properties not currently meeting minimum housing
standards. In addition, HUD intends to increase its sales to achieve
a 35% decline in the HUD inventory of assigned and acquired
properties between the end of 1980 and the end of 1986. Recently
enacted legislation provides protection to homeowners from precipitous foreclosures when sudden, uncontrollable reductions in income
temporarily put them in default. This temporary mortgage assistance payments program will also prevent unnecessary additions to
the assigned inventory due to temporary default problems.
All of these factors are expected to result in a decline in outlays
for FHA mortgage credit activities from $61 million in 1981 to net
receipts of $116 million in 1982. Loans insured under FHA pro-




COMMERCE AND HOUSING CREDIT

175

grams are expected to be $31.0 billion in 1982, an increase of $5.7
billion from 1981. The administration continues to support legislation to simplify and consolidate the currently cumbersome, complex and, in some instances, outmoded statutes governing FHA
insuring and GNMA mortgage credit authorities.
Housing for the elderly or handicapped.—In addition to supporting private market mortgage financing with FHA insurance, HUD
provides direct loans to finance housing for the elderly or handicapped under the "Section 202" program. The 1982 budget provides
for $840 million of new loan commitments and continues to support
housing for the handicapped in the form of a $50 million set-aside
for nonelderly, handicapped households. Outlays for this program
are estimated to be $800 million in 1981 and $780 million in 1982.
Department of Agriculture rural housing programs.—The Farmers Home Administration (FmHA) of the Department of Agriculture provides direct and guaranteed loan housing assistance to lowand moderate-income families in rural communities of less than
20,000 population. In addition, there is a rural rental assistance
program to assist the tenants of FmHA-flnanced housing. A related
program of grants to repair and rehabilitate inadequate singlefamily housing, and grants for farm labor housing and self-help
housing construction by individuals are classified in the income
security function.
For 1982, the budget proposes $4.4 billion in new direct and
guaranteed loans, an increase of about $0.2 billion from the level
enacted in 1981. Budget authority of $0.5 billion for rural housing
assistance payments is requested to cover the entire life of contracts proposed for 1982 under the rural rental assistance and
homeownership assistance programs. The requested funds are directed primarily to the needs of lower-income families occupying
inadequate housing and will provide assistance for about 116,760
rural housing units.
Outlays for FmHA housing programs in this function are estimated to increase from —$739 million in 1981 to $1.6 billion in
1982, primarily as a result of large loan sales to the Federal Financing Bank. The sales by the FmHA provide receipts that offset
FmHA gross outlays (disbursements), however, the FFB purchase
of FmHA loan assets constitutes off-budget outlays of the FFB.
Banking and finance.—A number of programs enhance the
safety and soundness of the banking system and affect its responsiveness to the needs of both savers and borrowers.
The Federal Deposit Insurance Corporation (FDIC) insures the
deposits of all federally and many State chartered commercial and




176

THE BUDGET FOR FISCAL YEAR 1982

savings banks. In 1982, receipts of the FDIC are estimated to
exceed expenses by $1.5 billion.
The Federal Savings and Loan Insurance Corporation (FSLIC)
insures deposits in savings and loan associations. In 1982, receipts
of the FSLIC are estimated to exceed its costs by $0.6 billion.
The National Credit Union Administration regulates credit
unions and insures depositors' accounts. In 1982 the National
Credit Union Administration (NCUA) will continue to assist credit
unions in overcoming the loss of deposits due to high interest rates.
The NCUA aids in establishing community development credit
unions to promote thrift, provide residents in poor communities
access to credit at reasonable rates, and provide other financial
services that are difficult to obtain in impoverished neighborhoods.
The community development credit union program was proposed as
part of the President's urban policy and was authorized by the
Congress in 1979.
The NCUA operates a central liquidity facility that provides
member credit unions with short-term loans for liquidity purposes.
It serves a function similar to the short-term loans for liquidity
provided to member commercial banks and thrift institutions
through the discount window of the Federal Reserve. During 1982,
the central liquidity facility expects to lend $3.7 billion to member
credit unions.
Postal Service.—The Postal Reorganization Act of 1970 established the U.S. Postal Service as an independent part of the executive branch to replace the former Cabinet-level Post Office Department. The Act charges the Postal Service with providing prompt,
reliable, and efficient mail services to patrons at reasonable rates
and fees. Outlays for the general operations of the Postal Service
are excluded from Federal budget totals, except for the Federal
subsidy payment. This payment covers: certain liabilities of the
former Post Office Department; public service payments that provide a direct postal subsidy; and reimbursements for revenue forgone for carrying certain classes of mail at free and reduced rates.
The request for 1982 and future year budget estimates reflect the
administration's policy that postal costs should be paid directly by
mailers, not by the taxpaying public. A payment of $1,119 million
is requested for 1982, $474 million below the amounts available in
1981 under the second continuing resolution. This primarily reflects a $394 million reduction in the public service subsidy from
$644 million to $250 million. The proposed 1982 level is higher than
earlier proposals because the second continuing resolution for 1981
does not provide for the administration-supported phaseout of the
public service subsidy. Moreover, the legislative restrictions included in the Omnibus Reconciliation Act of 1980 hamper the Postal




COMMERCE AND HOUSING CREDIT

177

Service's ability to achieve certain operating economies. The administration continues to support an accelerated phaseout of the
public service subsidy and immediate elimination of any legislative
restrictions on achieving added operational economies.
The budget also includes a limitation on the Postal Service's
authority to borrow from the Treasury. For 1982, the maximum
amount of funds available would be limited to $1 billion annually,
with the stipulations that no more than $500 million could be used
for operating expenses and the repayment period could not exceed
12 months. This limitation is consistent with the administration's
objective of establishing effective credit control procedures.
The off-budget outlays of the Postal Service represent the difference between its gross expenditures and its gross receipts. The
estimates for 1981 and 1982 assume increased revenues resulting
from an increase in postal rates effective in March 1981.
Other advancement and regulation of commerce.—As part of the
economic revitalization program, the administration is proposing to
make 30% of the investment tax credit refundable to businesses
with no tax liability. The administration is also proposing an 8%
tax credit for social security taxes paid by businesses. Together,
these provisions increase outlays by $227 million in 1981 and $3.5
billion in 1982.
Many Federal programs provide technical assistance to and promote the development of new business. Other programs provide
oversight of the economy and of the business community to assure
fair and equitable practices and opportunities.
Small business assistance.—Net outlays for assistance to small
business are estimated to total $0.9 billion in 1982. The budget
request for the Small Business Administration (SBA) includes $4.2
billion of new commitments for guaranteed business loans, a slight
increase over the level of assistance available in 1981. It is anticipated that 11.1% of these business loans will be approved for
minority-owned businesses and 8.5% for women-owned businesses.
To assure that these targets are met, the budget proposes to establish a direct loan contingency reserve that would be used to supplement guaranteed lending if the agency goals cannot otherwise be
achieved.
The administration recommends a major restructuring of SBA's
direct and guaranteed business lending programs. The changes
would enable the agency to place more emphasis on its guaranteed
lending programs, and to target both its direct and guaranteed
loans more selectively to minority- and women-owned firms and to
industries where competition or innovation is inadequate. This recommendation includes consolidating SBA's five business loan programs into one program, increasing the interest rate charged on




178

THE BUDGET FOR FISCAL YEAR 1982

direct loans to a level equal to the rate for guaranteed loans, and
raising loan limits on its guaranteed loans from $500,000 to
$750,000. These changes would reduce the artificial demand for
direct loans created by the currently subsidized interest rates and
should improve substantially SBA's ability to serve small
businesses.
In addition to intensifying efforts to target financial assistance to
minorities and women, the SBA will continue to provide other
types of financial and nonfinancial assistance to these groups.
These include a requested increase in the Minority Enterprise
small business investment company program, maintenance of the
expanded counseling assistance provided in support of the section
8(a) minority business program, and continuation and expansion of
the separately managed women's business enterprise program,
with greater emphasis on integrating management assistance and
support services for women into regular SBA programs.
National Consumer Cooperative Bank,—The National Consumer
Cooperative Bank began operations in 1979. The Bank is authorized to make loans at market interest rates to finance a wide
variety of cooperatively-owned businesses.
An adjunct to the Cooperative Bank, the Office of Self-help Development and Technical Assistance, was also created to provide
technical assistance to all cooperatives, and interest subsidies and
capital advances to cooperatives that are not able to qualify for the
Cooperative Bank loans.
The Cooperative Bank began making loans in 1980 with Federal
funding and will repay the Federal investment as its ownership is
transferred to the member cooperatives that borrow from the
Bank. Eventually, the Cooperative Bank will be owned by its customers, and loans will be financed through debt issues in the
private market.
Technology utilization.—In addition to the initiatives to enhance
the rate of industrial innovation (discussed in the general science,
space, and technology function), the budget proposes that the
Department of Commerce continue and expand the following
activities:
• encourage the flow of technical knowledge from Federal laboratories to the private sector, and from foreign countries to
U.S. industry;
• enhance the National Bureau of Standard's basic research
and development efforts in measurements and standards, including chemical standards, and in programs in automated
manufacturing and metals processing;




COMMERCE AND HOUSING CREDIT

179

• continue the program to establish private sector centers to
cooperate with industry in the development of basic technologies that apply to their manufacturing operations; and
• expand and modernize the patent and trademark systems and
improve the dissemination of patent information.
Economic and demographic statistics.—Budget outlays for the
Bureau of the Census are estimated to decline from $794 million in
1980 to $291 million in 1981 and $210 million in 1982, primarily
due to the completion of the decennial census field operation in
1980. Approximately 40% of the total cost of the 1980 decennial
census supported data collection and various improvements, particularly a major effort to reduce the undercounting of the population, especially among minorities. Processing, tabulation, and publication of decennial data will begin in 1981 and continue through
1982. In addition, a productivity measurement program is proposed
in 1982 to improve the statistical base used in the analysis of
productivity, primarily in the measurement of capital plant and
equipment.
Chrysler Corporation loan guarantee program.—To prevent the
financial collapse of the Chrysler Corporation and consequent unemployment and economic disruption, the administration proposed
and the Congress authorized up to $1.5 billion in federally guaranteed loans in 1980. The program is administered by a board consisting of the Secretary of the Treasury, the Chairman of the Federal
Reserve Board, and the Comptroller General. Substantial contributions or investments in the company by Chrysler employees, suppliers, dealers, banks, and others with an economic stake in the
company's continued existence are required as a condition for Government assistance. Outlays are expected to be $1.0 million in 1982.
Other.—The 1982 budget reflects the planned integration of international tourism development activities currently conducted by
the U.S. Travel Service with the International Trade Administration (ITA) in the Department of Commerce. The ITA would use
resources to carry out the most recent international trade agreements, improve export licensing and compliance activities under
the Export Administration Act of 1979, and develop U.S. trade with
new and existing trading partners, and promote tourist travel to
the United States.
Tax expenditures.—The tax system provides a variety of incentives for investment in equipment, commercial and industrial
structures, and residential housing.
The 10% tax credit for capital equipment generates a tax expenditure estimated at $20.8 billion in 1982. Rapid depreciation




180

THE BUDGET FOR FISCAL YEAR 1982

using asset depreciation ranges and additional first-year depreciation of equipment are estimated to result in a 1982 tax expenditure of $4.3 billion. The administration's proposed change to constant rate depreciation, as part of the economic revitalization program would add $9 billion to depreciation deductions. The depreciation of commercial structures at rates in excess of straightline
rates will produce an estimated 1982 tax expenditure of $0.3 billion, and expensing construction period interest and taxes produces
a tax expenditure estimated to be $0.8 billion in 1982. The credit
for the rehabilitation of industrial structures, enacted in 1978, will
generate an additional tax expenditure of $225 million in 1982.
The cost of financing investment is also reduced by a number of
tax preferences. The dividend and interest exclusion produces a
revenue loss estimated at $3.2 billion in 1982. Exclusion of interest
on State and local industrial development bonds generates an estimated 1982 tax expenditure of $1.6 billion. Preferential treatment
of capital gains produces two types of tax expenditures. Taxation of
capital gains at less than the ordinary rates is estimated to reduce
receipts by $20 billion in 1982, and failure to tax capital gains at
death is estimated to reduce receipts by another $5.4 billion.
Housing investment is encouraged by permitting deductions for
mortgage interest and property taxes on owner-occupied homes.
These deductions will generate estimated 1982 tax expenditures of
$25.3 billion and $10.9 billion, respectively. Homeownership is also
encouraged by the deferral of capital gains taxes on the sale of
homes. This treatment is estimated to reduce 1982 receipts by $1.2
billion. Rental housing investment is also encouraged by allowing
depreciation in excess of straightline rates. The 1982 tax expenditure that results from this practice is estimated at $0.4 billion. The
Revenue Act of 1978 significantly increased tax expenditures for
elderly homeowners. The provision that allows a once-in-a-lifetime
tax exemption on capital gains up to $100,000 on the sale of a
principal residence will reduce tax collections by an estimated $0.6
billion in 1982.
In the past, State and local governments used tax-exempt bonds
to finance only low-income rental housing. In recent years, however, they have made increasing use of tax-exempt bonds to provide
below-market-rate mortgages for single-family homeownership as
well, with a tax expenditure of $1.2 billion in 1982. In the 1981
budget, the administration proposed that this tax-exempt bond financing for single-family housing be eliminated because of the
substantial projected loss of Federal revenues and the adverse
impact on State and local borrowing costs for other social purposes.
Recently the Congress acted to limit, in general, the amount of taxexempt bonds that can be issued for single-family homeownership
to no more than 9% of the annual amount of mortgages originated
in each State in the preceding 3 years. This average annual limita-




181

COMMERCE AND HOUSING CREDIT
CREDIT PROGRAMS—COMMERCE AND HOUSING CREDIT
(In millions of dollars)
Program
Mortgage purchase activity (GNMA):
Direct loans: l
New loans
Repayments, sales and adjustments (—)
Net loan outlays

1980
actual

1981
estimate

1982
estimate

2,002
1,623
2,398
981 - 2 , 1 5 1 - 2 , 6 4 3
1,021

-528

-244

22,996
18,894

31,000
25,633

31,360
24,100

301
236

282
407

248
414

65

-125

-166

23,342
14,399

25,354
15,281

31,029
20,041

790
-8

840
-11

840
-17

782

829

823

2

Loan guarantees:
New loans
Net loan guarantees
Mortgage credit (FHA):
Direct loans:1
New loans
Repayments, sales and adjustments (—)
Net loan outlays
2

Loan guarantees:
New loans
Net loan guarantees
Housing for the elderly or handicapped:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays
Rural housing programs:
Direct loans:1
New loans
Repayments, sales and adjustments ( — )
Net loan outlays

6,630
5,272
6,586
-5,515 -8,335 -5,271
1,072 - 1 , 7 0 5

1

7,433
4,780

4,216
3,166

201
2,225
- 1 1 5 -2,010

3,650
3 450

2

Loan guarantees:
New loans
Net loan guarantees
Central Liquidity Facility:
Direct loans.-l
New loans
Repayments, sales and adjustments (—)
Net loan outlays
National Consumer Cooperative Bank:
Direct loans: 1
New loans
Repayments, sales and adjustments (—)
Net loan outlays
Small Business assistance:
Direct loans:*
New loans
Repayments, sales and adjustments (—)
Net loan outlays




4,770
1,729

85

215

200

5
*

182
-59

-17

5

123

119

753
-399

795
-388

834
-399

354

407

435

136

182

THE BUDGET FOR FISCAL YEAR 1982
CREDIT PROGRAMS—COMMERCE AND HOUSING CREDIT—Continued
(In millions of dollars)
Program

Loan guarantees:2
New loans . .
Net loan guarantees
Chrysler Corporation loans:
Loan guarantees:
New loans
Net loan guarantees

1980
actual

4,227
955

800
800

1981
estimate

1982
estimate

5,170
1,720

5,315
1,699

700
700

Other.
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays
Loan guarantees:
New loans
Net loan guarantees
Off-budget Federal entity—Federal Financing Bank: 3
Direct loans:
Rural housing insurance fund:
New l o a n s . . . .
Repayments, sales and adjustments ( - )
Net loan outlays
Small business assistance:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays

931
-40

1,074
-215

211
-198

891

859

13

153
113

150
110

125
73

7,341
4,681
-2,775 -2,000

4,161
-740

1,906

5,341

3,421

149
-22

360
-33

360
-45

127

327

315

*$500 thousand or less.
1
Includes sales of direct loans.
2
Includes guarantees of sales of direct loans.
3
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
above in this table. See the introduction to Part 5 for further explanation.

tion will apply for the next 3 years, after which tax-exempt financing for single-family homeownership would be prohibited.
There are also tax expenditures for specific types of business.
Financial institutions will receive tax expenditures estimated at
$0.5 billion in 1982 because of the favorable tax treatment accorded
excess bad debt reserves. Small businesses receive a tax preference
because the first $100,000 of corporate income is taxed at less than
46%. In 1982, this provision will generate a tax expenditure of $7.6
billion. The income of credit unions is exempt from tax, producing
a tax expenditure of $0.1 billion.
Finally, permitting the deduction of interest on consumer debt
produces an estimated tax expenditure of $6.0 billion in 1982.




TRANSPORTATION

183

TRANSPORTATION
National Needs Statement:
• Develop and maintain a transportation system to meet
the needs of commerce and the public.
• Help ensure that the system operates safely, reliably,
and efficiently.
• Ensure that transportation policy and programs are consistent with the Nation's economic, energy, environmental, and social goals.
The Nation's transportation system serves the dual purpose of
meeting the personal transportation needs of our citizens and providing an essential component for the smooth working of a healthy
national economy. Meeting national transportation needs is a
shared responsibility of all levels of government and private enterprise. The Federal Government fulfills its responsibility through:
• aid for highway construction, improvement, and safety;
• aid for mass transit construction, equipment purchases, and
operations;
• railroad financial assistance, safety, and research and development;
• aviation safety, and aeronautical research and development;
• airway and airport development; and
• marine safety, environmental protection, and financial assistance.
The transportation proposals in the 1982 budget continue the
policies and initiatives of the current administration. The budget
reflects ongoing efforts to reassess the appropriate Federal role in
transportation programs, to improve the efficiency and effectiveness of Federal subsidies and grant programs, and to assure that
costs are borne equitably. The multi-year proposals concentrate on
long-term capital investment needed to preserve our national
transportation infrastructure and maintain its efficiency in the
future. The 1982 request for budget authority to carry out these
proposals is $25.5 billion, and outlays are estimated at $21.6 billion.
The budget recommendations for the Nation's transportation
needs in 1982 and beyond reflect an emphasis on reassessing the
appropriate Federal role vis-a-vis other levels of government and
the private sector. The 1982 budget assumes passage of highway
reauthorizing legislation that would focus resources on highway
systems of high national priority, such as the Interstate highway
system, and increase the flexibility of States and localities in meeting their varied needs. For mass transit, the administration sup-




184

THE BUDGET FOR FISCAL YEAR 1982

ports an increased Federal role in assisting States and localities in
rebuilding and expanding the Nation's public transportation systems. In addition, the administration supports the sale or transfer
of the Alaska Railroad to the State of Alaska or interested private
concerns by 1983.
Over the past several years the reassessment of the appropriate
role of the Federal Government vis-a-vis the private sector has led
to deregulation of mature transportation industries that can satisfy
consumer demands through market-place competition. Deregulation of the airline industry began in 1978 and is continuing successfully. In addition, the Congress passed the International Air Transportation Competition Act, which has led to expanded air service to
foreign countries, reduced prices, and more opportunities for U.S.
airlines to compete.
During 1980, the President signed into law legislation to deregulate the trucking and railroad industries. The last transportation
industry now planned for deregulation is the intercity bus industry. These efforts will make ground transportation more efficient,
decrease energy consumption, increase competition, and improve
service to consumers. Deregulation will help improve the overall
efficiency and productivity of the national economy.
The 1982 budget reflects the administration's ongoing effort to
increase the efficiency and effectiveness of those subsidy and grant
programs that are appropriately the responsibility of the Federal
Government. The administration recommends several proposals to
direct funds where they are needed most and to assure that benefits exceed costs, including:
• revising the financial terms of Federal assistance to railroads;
• subsidizing only those Amtrak routes that meet ridership criteria specified by law;
• focusing air carrier subsidies on essential air service to small
communities; and
• focusing mass transit operating assistance on those cities that
depend most on public transportation.
The 1982 budget also emphasizes redesigning Federal transportation programs so that costs are shared more equitably. In the trust
fund-financed aviation programs, the administration recommends
certain tax reforms both to strengthen the integrity of the "user
pays" concept and better assure that users' contributions are more in
line with the benefits they receive. In the highway program, the
administration supports continuing the highway trust fund and
maintaining the existing relative tax burden imposed on the users of
the system. In addition, the budget proposes the following costsharing initiatives for Federal rail programs:




185

TRANSPORTATION
NATIONAL NEED: BALANCED TRANSPORTATION SYSTEMS
(Functional code 400; in millions of dollars)
Major missions and programs

BUDGET AUTHORITY
Ground transportation:
Highway improvement and construction
Highway safety
Mass transit
Railroads
Regulation

1982
estimate

1983
estimate

1984
estimate

1980
actual

1981
estimate

7,336
1,841
2,565
2,198
79

7,433 8,791 9,664 9,958
2,101 2,116 2,178 2,238
4,932 5,197 5,733 6,044
4,425 1,904 1,643 1,597
87
86
85
89

Subtotal, ground transportation..

14,019 18,978 18,093 19,305 19,927

Air transportation:
Airways and airports
Aeronautical research and technology..
Air carrier subsidies
Regulation

3,269 3,583 3,843 4,050 4,279
560 528 583 628 640
96 114 114 112 107
31
31
29
30
31

Subtotal, air transportation..
Water transportation:
Marine safety and transportation:
Existing law
Proposed legislation
Ocean shipping
Regulation
Subtotal, water transportation.,
Other transportation
Deductions for offsetting receipts...
Total, budget authority

3,954

4,255

4,571

4,821

5,057

1,681

2,015 2,175 2,312 2,449
-1
- 9 -11 -12
507
939
601
690
760
11
12
13
13
13
3,004 3,210

2,199

2,965

2,779

97

113

122

128

133

-60

-60

-56

-51

-51

20,210 26,251 25,509 27,205 28,275

• sharing the cost of subsidies for Conrail with those who benefit most from its operation—labor, the States and localities,
and shippers; and
• requiring that by 1985 Amtrak ticket revenues cover 50% of
Amtrak operating costs.
For 1982 the budget recommends growth only in transportation
capital programs that address immediate needs of highest priority,
particularly for mass transit and highways. The need for budget
restraint necessitates postponement of some capital investment
projects for air transportation and Coast Guard programs until 1983
and 1984.
Ground transportation.—HYie budget estimates include outlays of
$14.5 billion in 1982 for programs to support operation of the
Nation's network of highways, railroads, and mass transit in a safe,
reliable, and efficient manner.




186

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: BALANCED TRANSPORTATION SYSTEMS—Continued
(Functional code 400; in millions of dollars)
Major missions and programs

OUTLAYS
Ground transportation:
Highway improvement and construction.
Highway safety
Mass transit
Railroads
Regulation

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

8,397 7,667 7,260 8,781 9,531
1,126 1,354 1,576 1,694 1,892
3,307 3,705 3,827 4,532 4,968
2,170 4,301 1,795 2,183 1,955
84
86
89
79
85

Subtotal, ground transportation..

15,079 17,112 14,542 17,276 18,435

Air transportation:
Airways and airports
Aeronautical research and technology..
Air carrier subsidies
Regulation

3,136 3,260 3,470 3,867 4,224
509 542 556 589 618
89 118 114 112 108
28
30
31
31
31

Subtotal, air transportation..
Water transportation:
Marine safety and transportation:
Existing law
Proposed legislation
Ocean shipping

3,762

3,951

4,171

4,599

4,980

1,613 1,928 2,122 2,269 2,396
-1
- 9 -11 -12
611 1,000 654 683 681
12
12
11
12
13

Deductions for offsetting receipts...
Total, outlays.

2,939

2,779

2,954

3,078

112

115

119

124

-60

-60

-56

-51

-51

21,120

Other transportation

2,235

104

Subtotal, water transportation..

24,054

21,551

24,897

26,565

ADDENDUM
Off-budget Federal entities:
U.S. Railway Association:
Budget authority
Outlays
Federal Financing Bank:
Railroads:
Budget authority
Outlays

-258
-258
1,222
161

545
210

10
10
325
318

204
180

131
108

Highway improvement and construction,—The administration
recommends extending the authorizations for the highway program
through 1986. The recommendation is premised on the need to
preserve the Nation's highway system, to focus Federal involvement in the areas of highest national interest, and to increase
State and local discretion to focus scarce resources on areas of
greatest need. These needs would be addressed by proposals designed to:
• reduce the number of separate categorical programs from 44
to 9, thereby providing States and localities the flexibility to




TRANSPORTATION

187

address their particular transportation problems and priorities;
• increase the effectiveness of highway funds by eliminating
requirements imposed on the States by designation of secondary and urban systems;
• bring all segments of the Interstate highway system up to a
minimum standard and curtail further enhancements; and
• expand Federal efforts to preserve the Interstate highway
system through significant increases in funding for resurfacing or rehabilitation of segments already open to traffic.
Decreased energy consumption due to higher fuel costs and more
energy-efficient automobiles is placing severe financial strain on the
highway trust fund. The budget assumes an increase in Federal
motor fuels taxes, of which approximately 2 cents per gallon would
be transferred to the trust fund, and an increase in other highway
user excise taxes. These tax increases would:
• assure that revenues to the highway trust fund are adequate;
• increase the fiscal soundness of the fund;
• support increased authorizations; and
• maintain the existing relative tax burden imposed on automobiles, trucks, and buses for support of the highway trust
fund.
To support the goal of preserving the Nation's highways, particularly the Interstate system, the administration is requesting highway obligations totaling $10.2 billion in 1982, an increase of approximately $1.2 billion above the 1981 level.
Highway safety.—Current statistics indicate that each person
born this year can expect to be involved in an automobile accident
every 10 years, and that one in 60 will be killed and one in 20 will
be seriously injured. The 1982 request of $2.1 billion in budget
authority would fund programs to reduce the number of highway
deaths and injuries. It emphasizes improving the safety design of
small cars, enforcing the national 55 mile per hour speed limit,
beginning programs in all States to address the safety hazards
posed by drunk drivers, increasing the use of seat belts and other
safety equipment, and improving the fuel economy of passenger
cars and light trucks.
For other highway safety programs, the budget assumes the enactment of legislation to maintain bridge rehabilitation and replacement programs. It also assumes the consolidation of several
safety activities into a unified safety program that will provide for
changes in the physical structure of highways required by the
increased number of small cars on the Nation's highways.




188

THE BUDGET FOR FISCAL YEAR 1982

Mass transit—In 1982, $5.2 billion in budget authority is requested for the various mass transit programs of the Federal Government. This is $0.3 billion above the level estimated for 1981, and
reflects a substantial increase in capital improvement assistance
for construction, rehabilitation, and modernization of transit facilities, and the purchase of new equipment. The budget proposes no
increase for mass transit operating assistance in 1982, however,
because the administration believes the formulas for distributing
Federal subsidies must first be reformed.
The budget request for mass transit programs continues the
President's transportation energy initiative proposals first advanced in last year's budget. Increased bus service is the quickest,
most flexible, and most effective way to save energy. The administration remains committed to assisting in a major expansion of the
Nation's transit bus fleet, and to increased Federal support for bus
replacement and rehabilitation and for improvement of bus maintenance and storage facilities. The budget request of $1.1 billion in
budget authority would increase funds available for these purposes
by 23% over the amounts appropriated by the Congress in 1981.
The request also would increase funding for projects that rehabilitate or modernize existing fixed rail facilities and equipment.
The existing subway, light rail, and commuter rail systems in the
large cities of America are a national investment that returns
large dividends in terms of energy saved, pollution avoided, and
mobility. The maintenance of these systems is a high priority, and
the budget requests $940 million in budget authority for these
activities—an increase of 19% above the 1981 level.
The proposed funding levels for new fixed guideway construction
(i.e., new subway systems, extension of existing systems, trolley
lines, and automated people movers) would continue work to complete new systems in Miami, Baltimore, Atlanta, and Buffalo under
pledges made in existing Federal letters of intent. The administration request is $703 million, a 10% increase over the 1981 level.
Funds requested for the entire Interstate transfer grant program
in 1982 total $1.05 billion, and represent a 31% increase over the
enacted 1981 level. A 1981 supplemental appropriation of $250
million is also requested for this program to carry out the economic
revitalization initiative announced last summer. The 1982 budget
request splits the Interstate transfer program into two separatelyfunded accounts—one for highway projects and one for transit
projects. Localities may choose either as substitutes for Interstate
highway segments. The highway substitute projects would be
funded from the highway trust fund.
Railroads.—Enactment of the Staggers Rail Act of 1980 will help
insure an orderly transition to a less tightly regulated environment




TRANSPORTATION

189

for the Nation's railroads. The Act provides railroads with muchneeded flexibility in setting rates in accordance with shifting transportation markets, while protecting shippers against unwarranted
rate increases. Curtailment of collective rate-setting practices of
the railroads should improve their competitive position, permitting
them to regain traffic lost to other modes of transportation. Finally, the Act permits the elimination of some rail services that currently operate at a loss.
The Staggers Rail Act will restrain the 1982 and subsequent
budgets. Railroads should earn more adequate revenues, and therefore increase their investments for rehabilitation and improved
track and equipment. This will mean that Federal support for
marginal and failing railroads can be reduced. Last year the administration requested $520 million for the Federal Railroad Administration's rail rehabilitation programs. In 1982 the request is
$470 million. Eventually, it may be possible to phase these programs out completely.
The Federal Railroad Administration (FRA) plans to direct rail
rehabilitation funds, to the extent possible, to projects entailing
restructuring of rail services, and to improve the financial integrity
of its programs in two ways. First, one of its goals is avoidance of
further investments in those railroads in which the debt and equity
claims held by the Federal Government already exceed those held
by others. A second goal is to accelerate the required payback on
certain of the Government's equity investments to ensure that the
repayment schedule is more consistent with the stream of financial
benefits expected to accrue to the railroads from those investments.
Conrail remains a serious financial problem. Although the Staggers Rail Act is expected to improve ConraiFs financial performance by approximately $100 million annually, there are serious
doubts whether Conrail can ever become self-sustaining in its present form. Continuation of the status quo would cost U.S. taxpayers
at least $900 million, and more likely $1.5 to $2.1 billion, over the
next 5 years. The United States Railway Association, the Department of Transportation, and Conrail are preparing detailed studies
on Conrail's future for presentation to the Congress by April 1,
1981.
The budget proposes a 1981 supplemental of $300 million for
Conrail. No funds are budgeted for 1982 pending completion of the
studies. If and when 1982 funding is proposed, it should be based on
the principle that Conrail's beneficiaries (especially States, localities, and labor) must share with the Federal Government the
burden of sustaining Conrail. Cost sharing should begin in calendar
year 1981. In addition, $50 million is requested in both 1981 and
1982 to assist Conrail to reduce its workforce and thereby reduce
long-term costs. No 1982 funding is requested for labor protection
340-000 0 - 8 1 - 1 4




: QL 3

190

THE BUDGET FOR FISCAL YEAR 1982

payments for those employees furloughed or downgraded subsequent to Conrail's creation. Payments under this entitlement program have exceeded $60 million annually.
The Federal Government has agreed to a court-approved $1.5
billion settlement of a lawsuit with the Penn Central Corporation
over the value of properties transferred to Conrail on April 1, 1976.
Including interest, the total 1981 cost of this settlement is $2.1
billion. Although settlement is being sought, litigation with six
other bankrupt railroads whose properties were also transferred to
Conrail may continue through 1982.
The 1982 budget assumes the sale or transfer of the Alaska
Railroad to the State of Alaska or other appropriate parties by
1983. The benefits from operating the Alaska Railroad are largely
concentrated in that State, making continued Federal funding inappropriate. Moreover, the State has sufficient funds with which to
support and improve the Railroad's operations.
The budget proposes $993 million in subsidies to the National
Railroad Passenger Corporation (Amtrak) for 1982. Of this amount,
$743 million in operating assistance should allow Amtrak to operate essentially the same system in 1982 as it operates in 1981, with
the possible exception that either some routes with poor ridership
may have to be discontinued or other cost saving measures may be
necessary. Amtrak ridership in 1982 is expected to reach 23 million
riders, about a 12% increase over 1980. The Congress has directed
Amtrak to have its passengers pay 50% of Amtrak operating costs
by 1985 as opposed to the 40% they paid in 1980. To meet this goal,
Amtrak fares must continue to rise at a faster rate than Amtrak's
costs between 1982 and 1985. In 1982, Amtrak passenger revenues
are expected to exceed $600 million.
Federal capital subsidies have allowed Amtrak to improve its
passenger cars substantially. By 1982 over half of Amtrak's rail
passenger cars will be less than 10 years old, and the majority of
Amtrak's other, somewhat older cars will have been completely
refurbished. The budget provides $250 million for the purchase of
new equipment and maintenance of Amtrak facilities.
The Northeast Corridor Improvement Project, designed to improve rail service between Washington, D.C. and Boston, is scheduled for completion in 1985. The project received its final authorization in 1980, which increased total funding from $1.7 billion to
$2.5 billion.
Air transportation.—To provide a safe and reliable air transportation system, the Federal Government will spend an estimated
$4.2 billion in 1982 compared to $4.0 billion in 1981. Approximately
$350 million in loan guarantees for aircraft acquisition will be
made in 1982.




TRANSPORTATION

191

Airways and airports.—The primary mission of the Federal Aviation Administration (FAA) is ensuring the safe and efficient movement of air traffic. The 1982 budget requests $3.8 billion in budget
authority to support the FAA.
The administration recognizes the need to improve and expand
FAA's capital plant to meet the aviation demands of the 1980's.
The 1982 budget requests $400 million for FAA facilities and equipment. This large capital investment initiative is intended to be a
multi-year commitment, with cumulative budget authority from
1983 to 1986 totaling $1.95 billion. The budget also requests funds
for advance preparations to replace the enroute centers' computers.
The budget assumes enactment of legislation to extend the airport and airway trust fund through 1985 and to balance better the
sources of trust fund revenue and the beneficiaries of the various
trust fund programs.
Aeronautical research and technology.—NASA's aeronautical research and technology programs are designed to increase the
safety, efficiency, and performance of civilian and military air
transportation, and to maintain U.S. leadership in aeronautical
technology. The budget requests $583 million in budget authority
for these programs, which is $55 million or 10% above the 1981
level. The budget includes $16 million in 1982 for the numerical
aerodynamic simulator, which would improve aircraft design
through computer modeling and provide a unique capability for
modeling complex physical phenomena. In addition, the budget
requests $4 million in 1982 to develop technology to allow the use
of weight-saving composite materials in large aircraft structures
(e.g., wings and fuselages). This effort would involve substantial
cost-sharing by industry and reflects the administration's policy of
industry cost-sharing in aeronautics research and development
projects that are likely to have relatively near-term commercial
applications.
Air carrier subsidies.—In conjunction with airline deregulation,
the existing air carrier subsidy program, which promotes aviation
in general, is being replaced by a new program that supports
essential air services to small communities that otherwise would
lose them. Total funding for air carrier subsidies is projected to be
$114 million in 1982 and to decline thereafter.
Water transportation.—In order to meet the need for a competitive U.S. merchant marine and to maintain a safe, reliable, and
efficient marine transportation system, the budget includes $2.8
billion in both budget authority and outlays for water transportation programs in 1982, about $0.2 billion less than in 1981.




192

THE BUDGET FOR FISCAL YEAR 1982

Marine safety and transportation.—Coast Guard services to the
public include search and rescue of persons in distress; maintenance of navigation aids; icebreaking; prevention and clean up of
marine pollution; enforcement of maritime, customs, and safetyrelated laws; and examination and licensing of vessels, merchant
seamen, and ship's officers. The Coast Guard is increasing its capability to inspect offshore drilling rigs, both to ensure the safety of
drilling personnel and to confirm that industry takes adequate
precautions to minimize oil spills. The budget includes $2.2 billion
in budget authority for these programs in 1982.
The budget request would permit the Coast Guard to continue to
upgrade its aging capital plant and to increase the efficiency of its
operations. Three older cutters are being replaced, and the Coast
Guard aircraft fleet is being modernized by the continuing purchase
of 41 jet surveillance aircraft and 90 new rescue helicopters. The
budget proposes postponing until 1983 major efforts to improve and
modernize several Coast Guard training and shore facilities. It
supports substantial 1981 and 1982 increases in pay and other
benefits for Coast Guard military personnel. These increases should
help reverse decreasing reenlistment rates and thereby increase the
professionalism and operational capability of the Coast Guard. The
budget proposes legislation that would switch the current semiannual cost-of-living adjustment for Federal retirees (including Coast
Guard) to annual adjustments.
In 1982, Coast Guard employment is estimated at 39,900 military
and 6,000 civilian personnel. A major review of Coast Guard roles
and missions for the balance of the century is scheduled for 1981.
Ocean shipping.—Direct subsidies are provided to the U.S. merchant marine and shipbuilding industry to offset higher U.S. costs
that otherwise would encourage American ship operators to build
their vessels in foreign shipyards and operate them under foreign
registry. New ship construction subsidies currently focus on improving the capacity of the U.S. merchant fleet to carry dry-bulk
cargo. Outlays for this program are estimated to be $624 million
for 1982. Indirect support is provided to the maritime industry in
the form of loan guarantees and Government cargo preference
rules. In 1982, an estimated $1.4 billion in ship construction loan
commitments Will be guaranteed by the Federal Government. The
cost to the Federal Government of the cargo preference rules is
estimated to be approximately $136 million in 1982 outlays.




193

TRANSPORTATION

CREDIT PROGRAMS—TRANSPORTATION
(In millions of dollars)
1980
actual

Program

Highways and mass transit:
Direct loans:
New loans
Repayments, sales and adjustments ( —)

1981
estimate

1982
estimate

29
-12

55
-5

64
-5

17

50

59

-1

-1

-2

168
2

108
2

93
2

Net loan outlays

170

110

96

Loan guarantees:
New loans
Net loan guarantees

223
262

309
209

269
317

14
-8

15
-10

15
-11

6

5

4

Loan guarantees:
New loans
Net loan guarantees

752
494

970
630

1,388
1,004

Aircraft loan guarantees:
Loan guarantees:
New loans
Net loan guarantees

247
229

324
284

350
274

19
-22

7
-241

1

-3

234

1

1,222
-1,061

545
-335

325
-7

210

318

Net loan outlays
Net loan guarantees
Aid to railroads:
Direct loans:
New loans
Repayments, sales and adjustments ( - )

Assistance to ocean shipping:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays

*

Off-budget Federal entities:
U.S. Railway Association:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays
1

Federal Financing Bank:
Direct loans (rail programs):
New loans ...
. ...
....
Repayments, sales and adjustments ( - )
Net loan outlays

161

*$500 thousand or less.
1
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
above in this table. See the introduction to Part 5 for further explanation.

Tax expenditures.—In 1982, the deferral of income taxes on shipping companies results in a tax expenditure estimated at $75 million.




194

THE BUDGET FOR FISCAL YEAR 1982

COMMUNITY AND REGIONAL DEVELOPMENT
National Needs Statement
• Promote the development, maintenance, or redevelopment of economically and socially viable neighborhoods
in urban, suburban, and rural areas.
• Develop a partnership among Federal, State, and local
governments and the private sector to assist in the stabilization and revitalization of economically depressed or
declining areas.
• Provide relief to areas that suffer natural disasters.
The administration places strong emphasis on revitalizing economically depressed and declining areas through a partnership
among Federal, State, and local governments, and the private
sector. This partnership is essential to the administration's urban
and rural development policies, since Federal resources alone
cannot revitalize economically depressed or declining areas.
This budget provides the necessary resources to meet community
and regional needs. However, due to an anticipated decline in
disaster assistance from the extraordinarily high 1981 level, budget
authority for community and regional development is estimated to
decrease from $10.2 billion in 1981 to $9.2 billion in 1982. Outlays
also are expected to decrease from $11.1 billion in 1981 to $9.1
billion in 1982. Excluding disaster assistance, budget authority is
estimated to increase from $7.7 billion in 1981 to $8.4 billion in
1982 and outlays from $7.9 billion in 1981 to $8.2 billion in 1982.
Federal programs in this area have been selectively increased in
this budget. Increases are proposed for those programs that advance the Federal partnership with State and local governments
and the private sector, and that direct Federal resources to areas
with the greatest need and potential for improvement. Federal
resources therefore are focused on increasing the capability of
State and local governments to provide those public goods and
services essential to the revitalization of their neighborhoods and
communities and on more effectively supporting private economic
development, and thus increasing the competitiveness of the U.S.
economy and the economic vitality of local areas.
To achieve these objectives, the administration proposes to:
• maintain budget authority for Economic Development Administration (EDA) programs at $625 million in 1982;
• increase budget authority for the community development
block grant program by $265 million;
• maintain the urban development action grant program at its
1981 funding level of $675 million; and
• continue support for neighborhood-oriented programs, by increasing budget authority for the Neighborhood Reinvestment
Corporation from $12 million in 1981 to $15 million in 1982.




195

COMMUNITY AND REGIONAL DEVELOPMENT
NATIONAL NEED: COMMUNITY AND REGIONAL DEVELOPMENT
(Functional code 450; in millions of dollars)
Major missions and programs

BUDGET AUTHORITY
Community development:
Community development block grants
Urban development action grants
Rehabilitation loans
Neighborhood Reinvestment Corporation
Pennsylvania Avenue development
Other programs
Subtotal, community development.
Area and regional development:
Rural development and business assistanceProposed legislation
Economic development assistance
Coastal energy impact assistance
Indian programs
Regional commissions
Other programs
Offsetting receipts
Subtotal, area and regional development..
Disaster relief and insurance:
SBA disaster loans
Federal emergency management activitiesDrought assistance and other
Subtotal, disaster relief and insuranceDeductions for offsetting receipts
Total, budget authority

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

3,752 3,695 3,960 4,110 4,260
675
675
675
675
675
142
130
110
134
138
17
12
12
15
16
37
32
31
45
40
429
367
387
338
419
4,927

4,911

647

803

553
667
-35
1,183 1,134
425
474
173
271
-304 -375

5,202

5,402

5,560

833 791
499
635
799
674
736
24
12
1
1,175 1,250 1,178
406
379
350
186
191
201
-266 -270 -270

2,790

2,826

3,268

3,131

3,114

1,208
1,182
35

1,470
1,038
10

729
10

742
11

742
12

2,426

2,518

739

753

754

-25

-25

-30

-30

10,110 10,230

9,184

9,256

9,398

-32

Community development—A variety of Federal programs, administered by several agencies, support the mission of community development by providing Federal grants, loans, loan guarantees, and
technical assistance to States and localities. Outlays for this mission are estimated to rise from $5.1 billion in 1981 to $5.3 billion in
1982.
Community development block grants.—The Housing and Community Development Act of 1974 consolidated a number of separately funded programs of the Department of Housing and Urban
Development (HUD) into the community development block grant
program. This program substantially improved and simplified the
delivery of Federal community development assistance to local governments. Activities funded under this program include property
acquisition, construction of public facilities, rehabilitation of buildings, provision of social services, planning and management, and




196

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: COMMUNITY AND REGIONAL DEVELOPMENT—Continued
(Functional code 450; in millions of dollars)
Major missions and programs

OUTLAYS
Community development:
Community development block grants
Urban development action grants
Rehabilitation loans
Neighborhood Reinvestment Corporation..
Pennsylvania Avenue development
Other programs
Subtotal, community development..
Area and regional development:
Rural development and business assistance
Proposed legislation
Economic development assistance
Local public works
Coastal energy impact assistance
Indian programs
Regional commissions
Other programs
Offsetting receipts
Subtotal, area and regional development..
Disaster relief and insurance:
SBA disaster loans
Federal emergency management activitiesDrought assistance and other

1980
actual

1981 1982 1983 1984
estimate estimate estimate estimate

3,902 3,938 3,998 3,791 4,004
610
225
365
660
675
135
140
142
165
133
17
12
12
15
16
24
34
31
36
27
576
403
551
531
466
4,878 5,061 5,322 5,100 5,273

629
458
150
416
41
28
991 1,004
423
458
237
164
-304 -375

914
933
37
30
11
682
614
720
60
41
50
39
947 1,046 1,094
364
382
406
222
160
181
-266 -270 -270

3,180

2,935

798

897

2,835

949 2,300
1,070 944
29
23

2,989

3,089

- 9 9 -100 -100
936 923 916
11
12
15

Deductions for offsetting receipts
Total, outlays

2,043

3,273

852

834

827

-32

-25

-25

-30

-30

10,068 11,144

Subtotal, disaster relief and insurance..

9,084

8,892

9,159

126
158

152
171

172
165

148
180

175
194

45
29

270
249

270
232

270
194

250
179

1,443
993

1,608
983

1,064
1,064

1,299
794

1,822
842

ADDENDUM
Off-budget Federal entities:
Rural Telephone Bank:
Budget authority
Outlays
Federal Financing Bank:
Community development:
Budget authority
Outlays
Rural development:
Budget authority
Outlays

economic development, all primarily for the benefit of low- and
moderate-income people. Funds are allocated to large communities
by entitlement formulae, and to small communities through competition on the basis of objective measures of need.
The administration recommends that the budget authority for
the community development block grant program be increased by
$265 million, from $3.7 billion in 1981 to $4.0 billion in 1982.
Outlays also are expected to increase from $3.9 billion in 1981 to
$4.0 billion in 1982.



COMMUNITY AND REGIONAL DEVELOPMENT

197

Urban development actions grants.—Under this HUD program,
initiated by this administration in 1978, distressed cities and urban
counties are eligible for discretionary grants to supplement local
government and private financing for major economic development
and neighborhood revitalization projects. As a major element of the
administration's urban policy, funding was increased from $400
million in 1979 to $675 million in 1980 and 1981. The 1982 budget
continues the administration's strong commitment to this program
by again requesting $675 million in budget authority for action
grants. Outlays are estimated to rise from $365 million in 1981 to
$610 million in 1982.
Rehabilitation loans.—This HUD program offers low-interest
loans to rehabilitate single-family and multi-family residential
structures as well as a small number of commercial structures in
specified areas. New commitments of $182 million are estimated for
1981. The 1982 request of $134 million, plus prior-year repayments,
will increase this level of effort, financing the rehabilitation of
about 12,500 units, with new commitments of about $200 million.
In addition, tax expenditures estimated at $225 million and $35
million in 1982 will be generated from investment credits and 5year amortization of rehabilitation of structures.
The Neighborhood Reinvestment Corporation.—This public corporation, established in 1979, has successfully formed working partnerships among residents, local governments, and financial institutions in promoting neighborhood revitalization. Realizing the
importance and effectiveness of neighborhood organizations in revitalizing distressed areas, the administration is requesting a 1982
funding level of $15 million, $2.5 million above the 1981 level of
$12.5 million.
Pennsylvania Avenue development.—The budget requests $31 million in budget authority in 1982 to accelerate the redevelopment
and revitalization of 21 blocks along the north side of Pennsylvania
Avenue in downtown Washington, D.C. The first major commercial
projects began in 1979 and were completed in 1980; they involved
private investment in excess of $65 million. More projects have
been initiated and are progressing toward completion in a unique
public-private partnership between the Pennsylvania Avenue Development Corporation and private businesses. Outlays for land
acquisition and public development activities are estimated at $34
million in 1982.
Other programs.—Several other programs contribute to community development. Two of the larger ones are the planning assistance and urban homesteading programs administered by HUD.




198

THE BUDGET FOR FISCAL YEAR 1982

Planning assistance grants, established by the Housing Act of 1954
and revised last year in order to tie planning assistance more
closely to project implementation, provide funds to States, local
governments, and areawide organizations for planning and management. Budget authority of $35 million is proposed for this program in 1982.
The urban homesteading program transfers properties to local
governments for use in locally administered programs to revitalize
residential areas. Last year this program was expanded to include
the transfer of properties owned by the Veterans Administration
and the Farmers Home Administration, as well as those owned by
HUD. Under this budget, carryover balances from prior years will
be used to reimburse agencies for the homesteading properties
transferred in 1982.
Area and regional development—Programs in this mission support rural and urban development, American Indian tribal governments, and multi-State regional development through the Appalachian Regional Commission and other regional commissions.
Rural development and business assistance.—The Department of
Agriculture administers a variety of programs for developing rural
areas. The 1982 budget provides for:
• $575 million in direct loan obligations and $100 million in
grants for water and waste disposal systems, contingent upon
enactment of legislation to increase interest rates in this program;
• $260 million in direct loan obligations for community facilities;
• $500 million in loan guarantee commitments for business and
industrial development; and
• $6 million in budget authority for rural development planning
grants.
Rural areas can also receive assistance for sewer, water, and
community facilities from the Environmental Protection Agency's
waste treatment grant program (included in the natural resources
and environment function) and the Housing and Urban Development's community development block grant program. The Department of Agriculture's community facility programs are limited to
communities with a population of less than 20,000, while industrial
development loan guarantees are available in communities of less
than 50,000 population. Outlays for rural programs are estimated
to increase from $897 million in 1981 to $944 million in 1982. In
addition, the Federal Financing Bank, an off-budget Federal entity,
plans to make an estimated $1.6 billion in loans for rural development in 1981 and $1.1 billion in 1982, loans that are guaranteed by
other Federal agencies.




COMMUNITY AND REGIONAL DEVELOPMENT

199

Economic development assistance.—The Department of Commerce's Economic Development Administration (EDA) assists
States, rural and urban communities, and Indian tribes in efforts
to foster economic development and provide permanent employment opportunities in distressed areas. EDA assistance includes
grants for State and local planning, technical assistance to public
and private organizations, and construction of public facilities. It
also includes direct loans and guaranteed loans for public works
and business development.
For these programs and related expenses the budget requests
authority of $674 million in 1982. For loan guarantees, the budget
requests authority of $425 million in 1982.
Coastal energy impact assistance.—This program provides grants
and loans to State and local governments to assist them in planning and financing public facilities and services required as a
result of energy development activities in or near coastal areas,
such as Outer Continental Shelf (OCS) oil and gas developments. In
addition, grants are provided to States to help them participate in
OCS leasing decisions. No budget authority is requested in 1981
because offshore oil and gas development has taken place less
rapidly than anticipated and, as a result, has not created the
significant coastal impact that was originally anticipated. New
funding is included in the multi-year estimates for 1983 and 1984
with primary emphasis on energy-related impacts resulting from
OCS oil and gas development. It is anticipated that significant
impacts will occur in the mid-1980's in Alaska and some other
selected geographical areas. Outlays are estimated to rise from $41
million in 1981 to $50 million in 1982.
Indian programs.—The major objectives of Federal Indian policy
are to meet the trusteeship responsibilities of the U.S. Government,
to increase self-determination for American Indian tribal governments, and to encourage economic development on Indian reservations. To further these objectives, the Indian Self-Determination
and Education Assistance Act of 1975 enables the Bureau of Indian
Affairs (BIA) to enter into contracts so that Indian communities
can administer the Federal programs serving them.
The Federal Government provides grants, training, and technical
assistance to strengthen tribal management and planning abilities.
It also encourages economic development through business development assistance, direct Federal loans, loan guarantees, and interest
subsidies. Federal Indian programs also fund community development activities, such as construction of roads, schools, and irrigation systems. Outlays for the Indian programs whose primary mission is regional development are estimated to be $1,004 million in
1981 and $947 million in 1982. Additional assistance is classified in




200

THE BUDGET FOR FISCAL YEAR 1982

the health, education, natural resources and environment, and general government functions.
Regional commissions.—The Appalachian Regional Commission
and the Commerce Department's Title V Regional Action Planning
Commissions are intended to support rural and urban development
and multi-State planning and coordination for regional development programs.
Activities of the Appalachian Regional Commission (ARC) are
proposed to continue at their 1981 level. Grants for economic and
human development would be increased to maintain the same real
program level in 1982. The States have agreed that an equivalent
of 30% of ARC funds should be applied to the high priority areas of
reducing infant mortality, providing better housing, improving basic
education, and promoting energy development. The Appalachian
highway program, designed to improve the accessibility of Appalachia, would be maintained at the 1981 level.
Federal support for the Title V Regional Commissions is proposed to be eliminated in 1982. Continuation of the Commissions is
not necessary because essentially all of the Commissions' projects
can be funded through economic development programs of other
Federal and State agencies. Further, the Commerce Department's
Economic Development Administration can assist, where necessary,
in planning and coordinating economic development on a multiState basis.
Disaster relief and insurance.—Insurance against losses from
floods, hurricanes, tornadoes, and other natural disasters is primarily the responsibility of private individuals and businesses. Though
State and local governments are responsible for aiding recovery,
Federal insurance and disaster relief programs are available to
supplement these resources when they are insufficient.
SBA disaster loans.—Until recently, both the Small Business
Administration (SBA) and the Farmers Home Administration
(FmHA) in the Department of Agriculture provided disaster loans
to farmers. Amendments to the Consolidated Farm and Rural Development Act (Public Law 96-302), enacted in July 1980, shifted
the major responsibility for agricultural disaster lending to the
FmHA. This Act will reduce the difficulties caused by the previous
overlap in responsibilities. The FmHA is better equipped to handle
agricultural disaster loans than the SBA because of its longstanding experience in dealing with farmers and their problems. However, SBA will continue to provide disaster loan assistance to nonagricultural businesses, homeowners, and to a very limited number
of farmers who do not qualify for an FmHA loan. The FmHA
programs are discussed more fully in the agriculture and the commerce and housing credit functions.




201

COMMUNITY AND REGIONAL DEVELOPMENT
CREDIT PROGRAMS—COMMUNITY AND REGIONAL DEVELOPMENT
(In millions of dollars)

Housing and Urban Development programs:
Direct loans:
New loans
Repayments, sales and adjustments ( - )

Loan guarantees:
New loans
.
Net loan guarantees
Off-budget Federal entities:
Rural Telephone Bank:
Direct loans:
New loans
..
Repayments, sales and adjustments ( - )
Net loan outlays




2,642
1,782

1,690
1,343

113
-97

123
-65

16

58

382
262

382
232

2,887
-567

524
-682

2,320

-158

2
-1

:

-125

773

Loan guarantees:
New loans
Net loan guarantees

-66

1,249
-476

Net loan outlays

1,032
-1,157

48
-87

Small Business Administration disaster loans:
Direct loans.New loans
Repayments, sales and adjustments ( — )

1,621
-1,687

100

Loan guarantees:
New loans
Net loan guarantees

270
166

151
-50

Net loan outlays

280
137

2,125
1,500

Economic Development Assistance:
Direct loans:
New loans
Repayments, sales and adjustments ( - )

126

-14

Loan guarantees:2
New loans
Net loan guarantees

140

1,493
-1,506

Net loan outlays

210
-83

98
-169

Farmers Home Administration programs:
Direct loans: 1
New loans
Repayments, sales and adjustments ( — )

239
-99

163

Loan guarantees:
New loans
Net loan guarantees

Net loan outlays

1982
estimate

383
-220

Net loan outlays

Other programs:
Direct loans:
New loans
Repayments, sales and adjustments ( — )

1981
estimate

1980
actual

Program

-1

44
-16

103
-25

28

78

61

8
5

14
8

51
43

200
-8

185
-14

185
-17

191

*

171

2

81
-20

168

202

THE BUDGET FOR FISCAL YEAR 1982
CREDIT PROGRAMS—COMMUNITY AND REGIONAL DEVELOPMENT—Continued
(In millions of dollars)
Program

Federal Financing Bank: 3
Direct loans:
Community development:
New loans
Repayments, sales and adjustments ( — )
Net loan outlays
Rural development:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays

1980
actual

1981
estimate

1982
estimate

45
-16

270
-21

270
-38

29

249

232

1,443
-450

1,608
-625

1,064

993

983

1,064

*$500 thousand or less.
1
Includes direct loan transactions with the FFB shown below.
2
Includes guarantees of direct loan transactions with the FFB shown below.
3
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
above in this table. See the Introduction to Part 5 for further explanation.

Federal emergency management activities.—The Federal Emergency Management Agency administers the Federal disaster assistance program, a nationwide program operated pursuant to the
Disaster Relief Act of 1974. Supplementary assistance is provided
to individuals, businesses, and State and local governments in the
event of a Presidentially declared emergency or disaster. Funds
may also be made available directly to States or Federal agencies
as reimbursements for expenditures in disaster relief work performed under this authority.
Levels of disaster relief cannot be accurately forecast. Demands
on the fund in 1980 were unusually heavy because of the Mount St.
Helens eruptions and the influx of Cuban and Haitian entrants.
Estimates for 1982 through 1984 anticipate that activity will more
closely approximate pre-1980 levels.




203

COMMUNITY AND REGIONAL DEVELOPMENT

FEDERAL OUTLAYS FOR CIVIL PUBLIC WORKS AND CONSTRUCTION 1
(In millions of dollars)
Function or Program

Federal civil public works: 1
Community and regional development
Water resources projects
Other natural resources and environment
Energy
Transportation
Veterans hospitals
Health
Other functions
Total, Federal civil public works
Grants to State and local governments:
Community and regional development:
Community development block grants
Other
Subtotal, community and regional development
Highways and mass transit
Other transportation
Pollution control and abatement
Other natural resources and environment
Other
Total, grants to State and local governments...
Total, civil public works
1

1980
actual

1981
estimate

1982
estimate

195
2,400
1,040
1,900
413
297
195
353
6,793

266
2,428
1,132
2,992
494
380
168
484
8,345

203
2,548
1,255
3,746
503
551
183
546
9,535

3,902
1,938
5,839

3,938
1,710
5,648

3,998
1,719
5,716

10,981
624
4,343
261
151

11,075
536
4,200
312
161

11,042
549
4,230
298
184

22,200

21,932

22,019

28,992

30,277

31,553

Outlays for the construction and rehabilitation of physical assets, including privately owned assets.

Related programs.—Many programs whose primary purpose is to
fulfill other national needs also promote community and regional
development. For example, Federal outlays for civil public works,
shown in the table above, support community development. Grants
for local health, education, crime prevention, employment and
training, transportation and general revenue sharing also assist
State and local development. Community development is also significantly affected by many other direct Federal activities, such as
housing credit, defense contracting, management of public forests
and parks, and the operation of Federal facilities (such as Veterans
Administration hospitals, naval shipyards, and NASA research
facilities).




204

THE BUDGET FOR FISCAL YEAR 1982

EDUCATION, TRAINING, EMPLOYMENT, AND
SOCIAL SERVICES
National Needs Statement
• Assist State and local governments in providing elementary and secondary education to students of special national concern, particularly the disadvantaged and the
handicapped.
• Assist students and their families in overcoming financial barriers that may limit access to higher education.
• Promote the arts and humanities.
• Promote the development and dissemination of knowledge about education and training techniques.
• Assist the disadvantaged and the disabled to become selfsufficient by providing training or transitional employment opportunities.
• Develop ways to help workers dislocated by permanent
changes in the structure of the economy to prepare for
and find new employment.
• Enhance the quality of working life and the stability of
labor-management relations.
• Provide social services to needy children, youth, families,
the elderly, and other special groups.
Federal education, training, employment, and social services programs encompass a wide variety of activities that share one
common goal: to help our citizens lead independent and productive
lives. Their major objectives are to assist in obtaining education,
job skills, information about employment, and social services.
These programs meet immediate needs, such as job retraining, as
well as future needs, such as youth education and training. The
greater need is currently for programs providing longer-term benefits for participants and for society.
Concern for both present and future generations has guided the
development of this portion of the 1982 budget, some of which
builds upon initiatives begun in prior years. Outlays for programs
in this function are estimated to increase from $22 billion in 1978
to $32 billion in 1981. This trend continues in the 1982 budget,




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 205

which proposes $36.3 billion in budget authority and $34.5 billion
in outlays for education, training, employment, and social services.
The major legislative proposal in this function—the President's
youth initiative—is designed to meet the basic education and training needs of youth, particularly minority youth, who are poorly
prepared for employment. The 1981 budget proposed an increase of
$1.2 billion in 1981 and $800 million more in the second year (1982)
for this initiative. Despite favorable action by the House, the bill
was not enacted by the Congress. Instead, an increase of $50 million for existing youth employment and training programs was
provided, which will serve to begin those aspects of the initiative
that can be undertaken administratively. The budget reproposes
the youth initiative and requests an increase of $1,150 million for
1982 with $800 million more in 1983 in order to reestablish the
total $2 billion increase. The effect of this proposal would be a oneyear delay of the youth initiative.
About half of the Nation's unemployed are under age 25, and
about one-fourth are ages 16 through 19. The problems associated
with high rates of unemployment and extended unemployment are
primarily the problems of disadvantaged and minority youth, who
tend to be concentrated in central cities and impoverished rural
areas. Some of the employment problems of these youth are caused
by discrimination, lack of information about job openings, and
wage rigidities. Equal employment opportunity efforts, special employment service programs, and the targeted jobs tax credit are
aimed at overcoming these obstacles. A substantial portion of the
unemployment problem exists, however, because many youth lack
the basic language and arithmetic skills that employers find essential.
The youth initiative, therefore, emphasizes the mastery of basic
arithmetic and literacy skills needed in the workplace. These are
essential to improving future employability and earnings. The program depends upon close coordination and joint planning among
educators, training and employment officials, and private employers to ensure that locally developed programs provide those services to youth that impart the basic education and work skills
demanded by local employers. The legislation would require the
Departments of Education and Labor to emphasize the use of objective program standards to measure the performance of both program participants and program operators.

340-000 0 - 81 - 15 : QL 3




206

THE BUDGET FOR FISCAL YEAR 1982

Other major budget proposals in this function would:
• limit impact aid payments to those local education districts
that are most seriously burdened by Federal activity in their
districts;
• slow the very rapid growth of the Federal guaranteed student
loan program by altering loan terms;
• test alternative ways of providing training and relocation assistance to workers unemployed due to changing economic
conditions;
• provide a refundable income tax credit for nonprofit organizations, as was proposed in the economic revitalization program
last summer;
• assist Head Start projects to meet rising operating costs and
improve the quality of comprehensive services to low-income
preschool children and their families; and
• increase funding to States for child welfare services to reunite
families or find adoptive homes for children to prevent unnecessary placement of children in foster care homes.
Education

Education is an important prerequisite to the effective functioning of our democratic system of government. In 1982, the Nation
will spend approximately $220 billion on education activities.
Three-fourths of that amount will come from public sources; approximately one-eighth will come from the Federal Government.
The major mission of Federal education programs is tp help
assure appropriate educational opportunities are made available to
the Nation's people. Federal programs provide funds for supplemental educational activities for the educationally disadvantaged
and handicapped, for strengthening State and local educational
systems, and for research and development activities. In addition,
funds are provided to individuals, higher education institutions,
and lending institutions to assist students in meeting the costs of
postsecondary education.




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 207
NATIONAL NEED: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES
(Functional code 500; in millions of dollars)
Major Missions and Programs

BUDGET AUTHORITY
Education:
Elementary, secondary, and vocational education:
Elementary and secondary education:
Existing law
Proposed legislation
Indian education
Impact aid
Education for the handicapped
Vocational and adult education
Other
Subtotal, elementary, secondary, and vocational education
Higher education:
Student financial assistance
Loan guarantees for students and parentsHigher and continuing education
Special institutions
Subtotal, higher education..
Research and general education aids:
Educational research and improvement.
Unallocated salaries and overhead
Cultural activities
Other
Subtotal, research and general education aids..
Subtotal, education
Training, employment, and labor services:
Training and employment:
General training and employment programs..
Public service employment
Youth programs:
Existing law
Proposed legislation
Older workers
Work incentive program
Federal-State employment service
Subtotal, training and employment..
Other labor services
Subtotal, training, employment, and labor services..
Social services:
Tax-credit for non-profit institutions (proposed)
Grants to States for social services:
Existing law
Proposed legislation
,
Services for children, youth, and families
Services for the elderly
Services for other special groups
Rehabilitation services and research for the handicappedCommunity service programs
Domestic volunteer programs
Other social services
Subtotal, social services..



1980
actual

1981 1982 1983 1984
estimate estimate estimate estimate

3,596

3,795

346
825
1,051
927
479

7,225

4,557
900
356
405
642
436
1,102 1,225 1,339
921
904 978
473
528
7,288 8,505 9,142
4,203
900
384
401

4,882
900
426
471
1,437
1,049
566
9,731

3,496 4,169 4,091 2,685 2,401
1,609 2,234 2,346 3,300 3,700
442 397 437 467 498
188 204 248 270 292
5,735

7,003

7,121

6,722

6,891

375
161
661
146

386
248
674
149

389
255
768
157

424
264
785
158

455
272
833
162

1,344

1,456

1,569

1,630

1,723

14,304 15,747 17,195 17,494 18,345

3,004 2,702 3,150 2,929 2,931
3,105 2,894 3,955 4,236 4,578
2,101 2,475 1,516 1,548 1,592
1,125 1,125 1,125
267 277 277 277 277
365 365 385 385 385
781 845 904 981 1,065
9,623

9,558 11,312 11,480 11,954

52 66
7
2
73 73
1
3
10,195 10,184 12,000 12,193 12,687
237

349

389

2,823 2,398 3,132
-41
862 1,040 1,225
652 677 704
533 163 165
574 966 1,011
550 536 542
146 165 186
11
12
13

3,232 3,332
-41 -41
1,319 1,369
723 743
165 165
1,102 1,192
542 542
191 196
13
13

6,150

7,594

5,958

7,173

7,899

208

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES—Continued
(Functional code 500; in millions of dollars)
Major Missions and Programs

1980
actual

1981
estimate

1982
estimate

Deductions for offsetting receipts
Total, budget authority
OUTLAYS
Education:
Elementary, secondary, and vocational education:
Elementary and secondary education:
Existing law
Proposed legislation
Indian education
Impact aid
Education for the handicapped
Vocational and adult education
Other
Subtotal, elementary, secondary, and vocational education
Higher education:
Student financial assistance
Loan guarantees for students and parents..
Higher and continuing education
Special institutions
Subtotal, higher education..
Research and general education aids:
Educational research and improvement..
Unallocated salaries and overhead
Cultural activities

Other
Subtotal, research and general education aids..
Subtotal, education
Training, employment and labor services:
Training and employment:
General training and employment programs..
Public service employment
Youth programs:
Existing law
Proposed legislation
Older workers
Work incentive program
Federal-State employment service
Subtotal, training and employment..
Other labor services
Subtotal, training, employment, and labor servicesSocial services:
Tax-credit for non-profit institutions (proposed)
Grants to States for social services:
Existing law
Proposed legislation




-28

-30

-32

1984
estimate

800

Allowance for youth initiative (proposed)..

1983
estimate

800

-33

-35

30,622 31,859 36,336 38,048 39,696

3,569 3,371

395 294
690 799
822 1,074
863 937
393 466
6,732

6,942

3,942 4,185 4,509
50 900 900
332 368 383
443 425 455
1,088 1,258 1,359
1,092 980 996
419 471 517
7,366

8,588

9,119

3,683 3,743 3,947 2,600 2,472
1,408 2,109 2,350 3,172 3,600
410 452 384 430 457
193 212 246 281 291
5,694

6,516

6,927

6,483

6,820

401
170
632
154

394
234
671
173

387
249
745
157

411
261
781
157

441
270
826
161

1,357

1,473

1,539

1,610

1,698

13,783 14,931 15,832 16,681 17,637

2,932 2,851 2,995 3,004 2,928
3,697 3,088 3,772 4,078 4,408
2,330 2,536 1,782 1,551 1,588
875 1,100 1,125
235 265 277 277 277
395 365 385 385 385
756 831 904 981 1,065
10,345 9,935 10,989 11,375 11,776

51 6 5 6 4 65 76
5
0
6
9
1
10,896 10,540 11,653 12,070 12,492
237

349

389

2,706 2,963 3,116 3,232 3,332
-41 -41 -41

EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 209
NATIONAL NEED: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES—Continued
(Functional code 500; in millions of dollars)
Major Missions and Programs
Services for children, youth, and families
Services for the elderly
Services for other special groups
Rehabilitation services and research for the handicapped..
Community service programs
Domestic volunteer programs
Other social services

Subtotal, social services.,

1980
actual

854
679
709
427
592
133
16
6,116

1981 1982 1983 1984
estimate estimate estimate estimate

930 1,167 1,282 1,328
585 690 706 725
182 147 128 128
960 1,003 1,083 1,174
538 544 542 542
156 183 187 192
18
13
13
13
7,481

7,781

260

760

-33

-35

31,773 34,511 36,458

38,635

1,923
1,923

2,543
2,543

6,332

7,058

Allowance for youth initiative (proposed)..
Deductions for offsetting receipts

-28
30,767

Total, outlays

-30

-32

ADDENDUM
Off-budget Federal entity:
Federal Financing Bank:
Higher education:
Budget authority
Outlays

1,070
1,070

1,095
1,095

2,211
2,211

Increases in Federal spending are requested for 1982 even though
school enrollments are beginning to decline because of a shift in
the age distribution of the population caused by the aging of children born during the post-war baby boom. Total enrollments,
which reached a peak of over 60 million students in 1975, are
expected to decline to 58 million in the fall of 1981. Increases in
Federal expenditures are justified since a significant percentage of
eligible and needy populations are currently not being served. For
example, elementary and secondary education programs for the
disadvantaged serve about 55% of the eligible 11 million students.
For 1982, the administration proposes $17.2 billion in budget
authority for education programs, $1.4 billion more than was provided for 1981. Outlays are estimated at $15.8 billion for 1982 and
$16.7 billion for 1983.




210

THE BUDGET FOR FISCAL YEAR 1982

For 1982 the budget requests:
• $8.5 billion in budget authority for elementary, secondary,
and vocational education programs;
• $7.1 billion in budget authority for Federal assistance to support higher education; and
• $1.6 billion in budget authority for educational research and
related activities.
Elementary, secondary, and vocational education.—Most of the
funds requested in the 1982 budget for elementary, secondary, and
vocational education are to assist States and localities in improving
the education provided to students of special national concern—
those from low-income families, the handicapped, American Indians, and students with limited English language proficiency.
Elementary and secondary education.—The largest share of the
funds for elementary and secondary education is channeled to
States and localities for supplementary services (e.g., special classes
in reading and mathematics) to low-income, low-achieving students
under title I of the Elementary and Secondary Education Act. In
the 1982-83 school year, approximately 14,000 school districts and
325 State agencies will participate in these programs, serving an
estimated 6.3 million students. The 1982 request of $4.2 billion in
budget authority includes $3.8 billion for title I, which is $315
million above the 1981 level.
The Department of Education would play a key role in the youth
initiative, which is assumed in this year's budget to begin in the
1982-83 school year. This initiative includes a grant program to
support services in school districts with high concentrations of poor
and unemployed youth. It would help needy junior and senior high
school students learn the basic academic and employment skills
necessary for them to find jobs. Budget authority of $0.9 billion is
requested for 1982.
Federal funds help train bilingual teachers and assist in the
development of curricula to meet the special educational needs of
children with limited English language proficiency. Budget authority of $209 million, an increase of $19 million over the 1981 level, is
requested for the bilingual education program in 1982 to serve
378,000 such children.




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES

211

Indian education.—Budget authority of $384 million is recommended for 1982 to advance the education of Indians and Alaskan
Natives. Of this amount, $282 million is for the activities of the
Department of the Interior's Bureau of Indian Affairs, which operates 224 schools that serve approximately 44,400 elementary and
secondary students.
In academic achievement, Indian children and adults are substantially below the majority of Americans. To help address this
problem the budget requests $102 million for the Indian education
program in the Department of Education. Grants of $213 per child
would be provided to 1,180 public school districts serving 326,000
Indian students, and more than 9,000 adult Indians would receive
assistance in reading and mathematics.
Impact aid.—This program compensates local school districts for
the loss of property tax revenue that results from tax-exempt Federal land or federally related activities in their districts. Much of
the aid currently goes to districts where Federal activities do not
place a substantial burden on the locality's educational system.
Therefore, the administration proposes to limit this assistance in
1982 to those districts most heavily burdened by Federal activity.
Payments would be made only to those districts in which children
whose parents both live and work on Federal property comprise
20% or more of the district's enrollment. The budget requests 1982
budget authority of $401 million for these payments, and a rescission of $148 million for 1981.
Education for the handicapped.—Most of the funds for programs
included in this section assist State and local educational agencies
in educating handicapped children. In 1980 and 1981 the administration requested and the Congress appropriated a funding level
that would support between 11% and 12% of the excess costs of
educating handicapped children under the principal State grant
program authorized by the Education of All Handicapped Children
Act of 1975. For 1982, most of the request of $1.2 billion is for the
State grant program and would provide the same proportion of the
excess cost of educating handicapped children as was provided in
1981. The 1982 request would provide an increase of $123 million
over the amount available in 1981, and outlays are estimated to
increase from $1.1 billion in 1982 to $1.4 billion in 1984.
Vocational and adult education.—The vocational education program assists youth in bridging the gap between school and work.
Vocational education funds are used by States to teach work and
work-related skills. For 1982 the budget requests $904 million for
this program. Enrollment in vocational education programs for the
1982-83 school year is estimated to be 15.3 million secondary, post-




212

THE BUDGET FOR FISCAL YEAR 1982

secondary, and adult students. The adult education program provides formula grants to States to reduce functional illiteracy
among the Nation's adults. An estimated 2.3 million persons will
be served in the 1982-83 school year by the $125 million requested
for this program in 1982.
Other aid.—Budget authority of $488 million is requested for
1982 for other assistance to education agencies. The request includes $251 million to assist in the desegregation of school districts
and $20 million to support equal educational opportunity for
women.
Higher education.—The budget proposes $7.1 billion in budget
authority and $6.9 billion in outlays to support higher education
activities in 1982. An additional $1.9 billion in off-budget outlays is
estimated for student loans financed by the Federal Financing
Bank.
The Education Amendments of 1980 reauthorized the Higher
Education Act of 1965 for 5 years, made significant changes in
student aid and other programs, authorized several new programs,
and amended various other education laws. The new law partially
reformed the student loan programs, created a new loan guarantee
program for parents, and simplified Federal student aid procedures. In addition, eligibility for Federal student aid was broadened
substantially, Federal assistance limits were significantly increased,
expected family and student contributions to educational costs were
reduced, and reductions in State and private sector levels of student
support were made possible.
Federal student aid helps qualified students enter and complete
schooling beyond the twelfth grade. This aid takes the form of
grants, loans, and loan guarantees, and has expanded from $250
million in budget authority in 1965 to a request of over $6.4 billion in
1982. Growth in these programs has been especially rapid in the last
few years, as indicated by the chart.
In preparing the 1982 budget, the rapid expansion of the student
aid programs made possible by the Education Amendments of 1980
had to be balanced against other educational priorities and the need
to restrain Federal spending. This resulted in proposals to control
further rapid cost increases, especially in the guaranteed student
loan program, which are discussed below.
Student financial assistance.—Student financial assistance includes all of the major student aid programs except the program
that provides loan guarantees for students and parents.




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 213

Student Aid for Higher Education
$ Billions
7

(Budget Authority)

$ Billions
7

-6

6Guaranteed
Student and
Parent Loans

5-

-5

Direct Student
Loans
- Work Study

3-

-Other Grants

-2

o —
-Pell Grants

1-

o

— "I

!:::•:•

1970 72
Fiscal Years

74

76

78

8G

82

Estimate

Pell grants, formerly called basic educational opportunity grants,
provide entitlement grants directly to undergraduate students to
serve as the foundation upon which other financial aid is awarded.
Students qualify for these grants under a national needs analysis
that takes into account the student's and family's ability to contribute to educational costs. The 1982 request of $2.7 billion in budget
authority would allow a maximum award of $1,800 per student, an
increase of $50 above the maximum award level proposed for 1981.
In the 1982-83 school year, an estimated 2.6 million students would
receive Pell grants.
The budget also requests budget authority of $400 million for
supplemental educational grants to support awards to 633,000 students in 3,700 participating institutions. This program provides
funds to institutions for grants to undergraduate students who
demonstrate financial need. Budget authority of $77 million is
recommended for State student incentive grants to provide aid to
307,000 students. In addition, $550 million of budget authority is
recommended for the college work-study program.
Finally, the national direct student loan program provides capital to participating institutions to make low-interest loans to students with demonstrated financial need. Budget authority of $286
million is requested for the Federal capital contributions in 1982.
Loan guarantees for students and parents.—Budget authority of
$2.3 billion is requested to subsidize and guarantee $5.7 billion in




214

THE BUDGET FOR FISCAL YEAR 1982

new loans in 1982 to 3.4 million students and 2.3 million parents
under the guaranteed student loan program. The request is significantly higher than the 1980 level due to the rapid rise in interest
rates, which has escalated the cost of providing interest subsidies
on outstanding student loan guarantees and the increasing volume
of loans.
After the Middle Income Student Assistance Act in 1978 removed
any needs test for loan eligibility, the annual volume of student
loan guarantees rose rapidly—from $1.6 billion in 1978 to $4.8
billion in 1980. The annual volume was expected to reach approximately $10 billion in 1982, even though only about 25% of the
eligible students were expected to take advantage of these highly
subsidized loans.
To reduce the likely higher costs required by these loan volumes,
restore the Federal goal of providing help according to need, and
produce a more equitable distribution of loans, several reforms
that can be achieved through appropriation language are proposed
for the guaranteed student loan program in 1981 and 1982. These
reforms would: (1) limit loans to a student's remaining financial
need after all other financial assistance and expected family contribution have been counted; (2) eliminate the 9% interest subsidy
now provided to students while they are in school; (3) set the
interest rate on loans to be offered to parents at a rate not to
exceed that of 91-day Treasury bills plus 3 ¥2% and remove the
authorized special allowance paid to lenders; and (4) maintain the
ceiling, which was recently increased to $3.5 billion, on authority
for the Student Loan Marketing Association to borrow from the
Federal Financing Bank with an Education Department guarantee.
These proposals would save $78 million in 1981 and $878 million
in 1982. It must be recognized that $1.4 billion in 1981 and $1.8
billion in 1982 are outlays required by previous loan commitments
with their interest subsidies and current special allowance. Total
outlays for this program are estimated to increase from $2.4 billion
in 1982 to $3.6 billion in 1984.
Higher and continuing education.—The mission of most of these
programs is to encourage and assist low income youths, minorities,
and women to enter, continue, or resume postsecondary education.
Funds are provided to institutions to provide special services and
fellowships to encourage these groups to enter certain professional
fields at the graduate level, and to strengthen the institutions'
programs. The budget proposes $437 million in 1982 budget authority for assistance to higher education institutions.
Budget authority of $167 million is proposed for special programs
for the disadvantaged, an increase of $7 million above the 1981
level. These programs identify and help prepare potential college
students at the high school level, and assure that placement, career




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 215

counseling, and other services are provided once they enroll in
college.
The budget proposes budget authority of $152 million for the
program to strengthen developing institutions, $20 million of which
is for a newly authorized program that requires these institutions
to match each Federal dollar they receive. The request represents
an increase of $32 million over the 1981 level. As authorized by the
Education Amendments of 1980, certain graduate medical schools
will now be eligible for these funds.
The administration has been particularly concerned with the
level of support provided for traditionally black colleges. This year,
the President signed an executive order aimed at increasing participation of blacks in Federal programs. As a result, Federal outlays for education programs for black colleges are expected to rise
from $548 million in 1981 to $610 million in 1982.
FEDERAL OUTLAYS FOR BLACK COLLEGES
(In millions of dollars)
1981
estimate

Agency

Largely classified in education, training, employment, and social services:
Education
Health and Human Services
Classified in other functions:
Defense
Veterans Administration
Agriculture
Transportation
Other
Total Federal outlays for black colleges

1982
estimate

475
27

466
31

529
29

9
10
12
5

10
12
13
5
11

11
12
13
6
10

56
4

58
4

60
1

The Education Amendments of 1980 consolidated the graduate
and professional opportunities fellowship, the public service fellowship, and the mining fellowship programs into a single program.
For 1982 a total of $14 million in budget authority, an increase of
$3 million over 1981, is proposed for the program to increase the
number of minorities and women entering occupations in which
they are currently underrepresented. This would provide 850 new
fellowships, with priority to public service-oriented careers, including public administration.
Special institutions.—Gallaudet College, the National Technical
Institute for the Deaf, and Howard University are private institutions that receive direct appropriations from the Federal Government. The budget requests $248 million in budget authority for
these programs in 1982, including $20 million for construction of




216

THE BUDGET FOR FISCAL YEAR 1982

facilities to prepare Gallaudet and the Institute for an influx of
deaf students born during the 1965 rubella epidemic.
CREDIT PROGRAMS—EDUCATION
(In millions of dollars)
1981
estimate

1980
actual

Student aid programs:
Direct loans:
New loans
Repayments, sales and adjustments ( — ) l

1982
estimate

554
-92

639
-120

462

517

519

5,820
4,417

8,280
6,603

7,620
4,826

90
-87

102
-91

74
-93

4

Net loan outlays

619
-102

10

-19

2

Loan guarantees:
New loans
Net loan guarantees
Other education:
Direct loans:
New loans
.
Repayments, sales and adjustments ( - )

. .

Net loan outlays
Loan guarantees:
New loans
Net loan guarantees
Off-budget Federal entity-Federal Financing Bank:
Student aid programs-.
Direct loans:
New loans
Repayments, sales and adjustments (—)
Net loan outlays

-22

-23

-25

1,070

1,095

1,923

1,070

1,095

1,923

3

1

Includes direct loan transactions with the FFB shown below.
Includes guarantees of direct loan transactions with the FFB shown below.
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
in this table. See the introduction to Part 5 for further explanation.
2
3

Research and general education aids.—The budget requests $1.6

billion in budget authority for education research and development, other general education and cultural activities, and program
administration. Budget authority of $274 million is requested to
support libraries and other learning resources in 1982, $9 million
above the 1981 level.
The budget requests budget authority of $175 million for the
National Endowment for the Arts and $169 million for the National Endowment for the Humanities in 1982. The Corporation for
Public Broadcasting, which is provided funds 2 years in advance,
would receive $183 million in 1984.
Tax expenditures.—-The major tax expenditures that aid higher
education are the exclusion of interest on State and local student
loan bonds, the personal income tax exemptions available to par-




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 217

ents of children age 19 and over who are in school, the deduct ibility of charitable contributions to educational institutions, and the
exclusion of scholarships and fellowships from income subject to
tax. The revenue losses associated with these provisions in 1982 are
estimated to be $0.1 billion, $1.1 billion, $1.5 billion, and $0.5
billion, respectively. The administration proposes that issuance of
tax-exempt bonds to finance student loans be discontinued with
reasonable transition rules to avoid unnecessary program disruptions. The Revenue Act of 1978 permits employers to establish
educational assistance plans for the benefit of their employees.
Payments are not included in the employee's income, and employer
deductions are estimated to result in a tax expenditure of $40
million in 1982.
Related programs.—K number of Federal programs are related to
education, although their primary purpose is to meet other national needs. For example, veterans readjustment benefits provide assistance to eligible veterans attending school, and several health
programs of the Federal Government support biomedical education.
The Department of Defense operates schools for the dependents of
military personnel and the service academies. Comprehensive Employment and Training Act (CETA) training activities are frequently conducted through State and local education agencies, and some
CETA public service employment participants are employed in education agencies. CETA also provides special grants to be used by, or
with the cooperation of, education agencies to increase coordination
between education, training, and employment programs. The accompanying table shows major education-related programs that
support other missions.




218

THE BUDGET FOR FISCAL YEAR 1982
FEDERAL OUTLAYS FOR EDUCATION AND RELATED PURPOSES
(In millions of dollars)

Agency

Education 1
Related outlays supporting other major missions:
Elementary and secondary education:
Health and Human Services
Defense
Veterans Administration
Agriculture
Interior
State
Other
Subtotal, elementary and secondary education.
Higher education:
Health and Human Services..
Defense
Veterans Administration

Agriculture
Interior
State
Transportation
Other
Subtotal, higher education..
Other:
Health and Human Services
Defense
Veterans Administration
Housing and Urban Development...
Agriculture
Transportation
Justice
Labor
Other
Subtotal, other-

1980
actual

1981
estimate

1982
estimate

13,783

14,931

15,832

1,790
42
248
4,190
17
11
18

1,837
46
205
4,256
18
13
23

2,278
69
190
4,308
19
14
24

6,316

6,398

6,902

1,922
515
182
12
3
1
1
53

1,933
577
161
12
3
1
1
53

1,957
613
131

2,689

2,741

2,771

197
751
186
23
268
33
29
662
1

209
845
163
21
299
35
28
767
1

216
909
120
21
312
38
34
800
1

2,150

2,368

2,451

3
1
2
64

Total related outlays

11,507

Total Federal outlays for education and related purposes.
1

11,155

12,124

24,938

26,438

27,956

See national needs table at the beginning of this section for more detail.




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 219

Training, Employment, and Other Labor Services
Between 1977 and 1980, employment has increased by 9 million
jobs, a 4-year increase exceeded only by the 4-year periods ending in
1978 and 1979. However, some 8 million people are currently unable
to find work. Programs that carry out the training and employment
mission are designed to increase employment opportunities, mainly
for the disadvantaged, and to increase their long-term employment
and earnings. These programs attempt to develop work skills, provide temporary employment and work experience, and improve the
matching of workers and jobs. Other labor services include the
regulation of employer-employee relations and the publication of
labor statistics. The budget proposes $11.7 billion in outlays for these
activities in 1982.
Training and employment—Funding for training and employment activities has grown steadily over the years, including large
temporary increases in 1977 and 1978 as part of the administration's economic stimulus program.
The 1982 budget continues to emphasize training and employment programs for the disadvantaged and for the long-term unemployed as well as improvements in program management. The
administration has proposed legislation to improve the targeting
and content of programs that address the special problems of
youth. New approaches are being explored to help workers find new
jobs when they lose jobs permanently because of economic circumstances, such as rising imports.
The success of structural employment and training programs can
best be measured by long-term improvements in employment and
earnings. An evaluation that was begun after the enactment of the
Comprehensive Employment and Training Act (CETA) in 1973 is
beginning to produce data comparing the employment and earnings of participants in federally supported training programs before
and after the training, with the employment and earnings of similar people not in the programs. Preliminary results indicate that
participants who entered the programs in 1975 generally increased
their earnings in the year following participation more than nonparticipants. The net average change in income for participants as
compared to nonparticipants varied by type of training and was
most positive for those in on-the-job training. Earnings gains
appear to be maintained in the second year after leaving the
program. Future studies will extend these benefit measurements
and compare benefits with costs for different kinds of training.




220

THE BUDGET FOR FISCAL YEAR 1982

The accompanying tables and charts provide information on
trends in the level of training and employment services, on the
distribution of services by type of service provided, and on the
characteristics of participants in training and employment programs. They include all programs that are classified in the training
and employment services mission as well as programs with similar
objectives classified in other national needs or missions. Outlays for
these other programs are shown in the table at the end of this
section.
DISTRIBUTION OF TRAINING AND EMPLOYMENT SERVICES BY TYPE OF SERVICE
(In percent)
Years of service

Outlays

Service

1980

1981

1982

1980

1982

1981

Public service employment
Work experience
On-the-job training
Institutional training
Vocational rehabilitation
Labor market services, and other

10
35
3

18
28
6

Total

100

100

100

100

100

100

CHARACTERISTICS OF THE UNEMPLOYED, THE POOR, AND TRAINING AND EMPLOYMENT PROGRAM
PARTICIPANTS »
Unemployed workers

Poverty population2

1976

Average number (millions)
Percent:
Age 21 or less
Female
Less than high school education
Low income
Public assistance recipients
Minority
1

1978

1980

1980

1976

1978

1980

7.3

6.0

7.7 17.3 16.9 17.4

3.3

3.9

3.4

71 ?6 ?4
34 40 34
4fi 49 44 6? 6? 63
42 49 40 68 65 n.a.
4
4
? 1 ? 3 4 ?? ion 100 100
n.a. n.a. n.a. n.a. n.a. n.a.
28 31 31
20 24 22

40
47
41
65
23
43

34
5?
46
5
86
35
35

43
53
52
74
37
43

1976

1978

Program
participant5

Unemployed and poor reported on a calendar year basis. All data are for persons age 14 and older.
Data collected in March of year shown here; represents income of prior year. Source: Bureau of the Census data from the Current
Population Survey.
3
Program participant figures exclude summer employment programs for youth.
4
Represents individuals living in poverty areas.
3
Reflects increase in income eligibility limits in many CETA programs to about 20% above the poverty level.
n.a.= Not available.
2




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 221

Service Years tar f raining and Employment Activities
Millions

Public Service
Employment*

Vocational Rehabilitation

1972 73 74 7S 76

77 78 79 80 81 82

Fiscaf Years
*TotaJ Public Service Employment Activities




Estimate

222

THE BUDGET FOR FISCAL YEAR 1982

General training and employment programs.—Most training and
employment programs are operated by State and local governments through grants under CETA. Outlays for general training
and employment programs are expected to be $3.0 billion in 1982,
$144 million more than in 1981. The budget would continue general
purpose training grants (under CETA title II-B and C) at 1981
levels, providing a range of 325,000 to 375,000 years of service in
1982. The services include classroom and on-the-job training, work
experience, and retraining for individuals who can move to jobs
requiring greater skill or who lose their current jobs.
The 1978 amendments to CETA included the administration's
private sector initiative designed to improve the quality and quantity of private sector job placements. The 1982 budget includes
outlays of $314 million to support job development, training, placement, implementation of the targeted jobs tax credit, and other
services, such as on-the-job training, designed jointly with Private
Industry Councils. A 2-year extension of this program enacted in
1980 provides for increased coordination with economic development activities.
The Federal Government also finances training and employment
services outside of the State and local prime sponsor system. These
programs are primarily for migrant and seasonal farmworkers,
whose mobility makes them difficult to serve locally, and for
Indian tribes and groups, because of the special Federal responsibility to them. Other services for groups such as workers displaced by
economic dislocation or increased imports, displaced homemakers,
and older workers are funded separately. Changes in imports or
other economic conditions can result in permanent displacement of
large groups of workers from their jobs. Between 10 and 12 pilot
projects are proposed for 1982 to test several types of training,
services, and incentives that might help such workers find new
jobs.
Public service employment.—Two public service employment
(PSE) programs under CETA have provided temporary, federally
subsidized employment for low-income, unemployed persons in
public or nonprofit agencies, through grants to State and local
governments. Outlays for PSE are estimated to be $3.8 billion in
1982, compared to $3.1 billion in 1981.
The public service employment proposals under CETA title II-D
would provide about 240,000 jobs for low-income, long-term unemployed persons in 1982, the same level reached by the end of 1981.
The program requires substantial investments in training to prepare participants for placement in permanent jobs after PSE. Outlays for this component of PSE are expected to be $2.7 billion in
1982.




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 223

The PSE program in title VI of CETA provides jobs for persons
with up to 40% higher incomes than those in the program under
title II-D and with shorter periods of unemployment. Tighter targeting, required by the 1978 amendments to CETA, has improved
program management. The 1981 funding level set by the Congress
will reduce the number of jobs at the end of the year to a level of
about 100,000. The budget proposes to continue title VI at that
level through 1982. Outlays are estimated to be $1.1 billion in 1982,
$122 million more than in 1981.
Youth programs.—Part of the administration's proposed youth
initiative has been described in the preceding pages under elementary and secondary education. For training and employment, the
1981 budget proposed budget authority of $300 million above the
current services level of the 3 programs to be consolidated. Although the Congress did not enact the proposed legislation, it did
provide $50 million of the requested funding increase. Budget authority for 1982 would be $1,125 million, which is $250 million
above the current services level of the programs that the youth
initiative would replace. Prime sponsors receiving grants under the
new program would work closely with local school systems to provide the combination of training in basic skills and work experience that fits the needs of each individual participant. Youngsters
in schools receiving the new education assistance could be helped
to get jobs, preferably in the private sector. School-age dropouts
could get subsidized jobs only if they participated in a training
program designed to give them basic skills.
Prime sponsors would devote their greatest effort to the older
(18- through 21-year-old) out-of-school disadvantaged youth who
cannot find and keep jobs. Efforts would concentrate on providing
opportunities to learn basic skills, gain work discipline, develop
specific skill training, and obtain private sector employment. Prime
sponsors would work with local employers to develop objective job
performance standards for program participants. Use of these
standards would foster better program management and enable
participants to develop credible training and work records that
would be acceptable to future employers, paving the way for private employment. In addition, the private sector program and the
targeted jobs tax credit discussed below would provide additional
resources aimed at increasing the employment of youth in the
private sector.
The expansion of the Job Corps training program will continue
to build up to 44,000 enrollees in 1981. That level, which is double
the 1977 level, would be maintained in 1982. Under the budget
request, the summer youth employment program in 1982 would




224

THE BUDGET FOR FISCAL YEAR 1982

provide 800,000 to 900,000 part-time jobs, roughly equal to the level
financed in 1980 and 1981. Under the youth initiative the planning
and administration of this program would be closely integrated
with the proposed youth program, easing the application and reporting burdens of prime sponsors. The Young Adult Conservation
Corps, which provides work experience on public lands for youth
from families in all income ranges, would be phased out in 1982 as
part of the effort to concentrate programs on the disadvantaged.
The accompanying chart shows the relative magnitudes of these
youth programs as well as other related youth training and employment programs.
Older workers.—Budget authority of $277 million is requested for
the community service employment program for older Americans.
This would provide about 54,200 job opportunities for low-income
persons aged 55 and over, with estimated outlays of $277 million in
1982, compared to $265 million in 1981 outlays.
Work incentive (WIN) program.—This program helps persons receiving aid to families with dependent children (AFDC) find and
retain jobs by providing training, work experience, subsidized jobs,
intensive employment services, child care, and other services. Private employers are encouraged to hire recipients through the WIN
Youth Training and Employment Programs*
7-6

6
Youth Initiative

5

-5

4

Special Labor Dept.
Youth Programs

3

-4
3

Labor
Dept.

2

h-2
Training and
Work Programs

1

Ed.
Dept.

0

1
0

1972 74 76 7&
Rscai Years
* Budget Outlays




gy!

^jp&'x. ^JWP1

EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 225

tax credit. In 1982, an estimated 286,000 WIN participants would
be placed in unsubsidized jobs. WIN outlays for 1982 are estimated
to be $385 million, $20 million above the 1981 level.
Welfare reform employment program.—In 1979 the administration
proposed a set of essential reforms of welfare programs. Under this
proposal, reforms in the level and delivery of cash assistance were
integrated closely with an employment and training strategy, the
new jobs tax credit, and revisions in the earned income tax credit.
The proposal would have ensured that individuals receiving public
assistance had strong incentives to seek and retain permanent
unsubsidized employment and would have provided training and
work for principal earners in eligible families.
The Congress did not accept the proposal. Nevertheless, reform
of the Nation's welfare system remains necessary. No reform can
be successful unless the problem of work for able welfare recipients
is addressed. In order to continue to learn more about how training
and employment strategies affect welfare recipients and local labor
markets, this budget requests $174 million in budget authority
under general training and employment programs for continuation
of large-scale research and demonstration projects begun in late
1979.
Federal-State employment service.—Job-matching services are
provided for job seekers and employers free of charge by State
employment service agencies financed by Federal grants. The 1982
budget maintains employment service operations at the 1981 level.
Almost 4.3 million individuals will be placed in jobs in 1982. To
increase the effectiveness of the labor exchange services, job seekers will be assisted at a number of demonstration sites to find jobs
on their own. This assistance will help approximately 100,000 additional unemployed applicants become employed.
Other labor services.—The Federal Government establishes and
enforces standards affecting the relationship between employers
and employees and between unions and their members. These activities include: enforcement of the minimum wage and related
laws, regulation of welfare and pension plans, supervision of labormanagement relations, a program of grants for labor-management
committees, and regulation of the equal employment practices of
Federal contractors. In addition, labor statistics and other information on employment, unemployment, wages, prices, and productivity are collected and disseminated. Outlays for these activities are
estimated at $664 million in 1982.
Enforcement efforts for job safety and health are included in the
health function, while those relating to job discrimination on the
basis of race, age, or sex are in the administration of justice function.




226

THE BUDGET FOR FISCAL YEAR 1982

Tax expenditures.—The tax code provides incentives for employers to hire disadvantaged individuals and recipients of certain welfare benefits. Tax credits are also provided to encourage individuals
with dependents to work by allowing tax credits for child care
expenses.
The targeted jobs credit was enacted in the Revenue Act of 1978
to replace the general, untargeted employment tax credit that was
in effect in 1977 and 1978. It encourages employers to hire disadvantaged youth ages 18 to 25, Vietnam veterans, recipients of
general assistance or supplementary security income, participants
in cooperative education programs, certain ex-offenders, and handicapped individuals undergoing vocational rehabilitation. The
credit, which empires on January 1, 1982, is estimated to result in a
tax expenditure of $0.2 billion in 1982.
Employment is also encouraged by a credit for 20% of child care
expenses incurred to allow people with dependent children to work.
The maximum credit is $200 for one child and $400 for 2 or more
children. The revenue loss from this credit is estimated to be $1.2
billion in 1982.
Training and employment-related programs.—A number of Feder-

al programs are related to training and employment, although
their primary purpose is to meet other national needs and serve
other missions. The following table shows major training and employment-related programs that support other national needs. The
table does not include programs that are primarily for economic
development.
TRAINING AND EMPLOYMENT OUTLAYS IN OTHER NATIONAL NEEDS
(In millions of dollars)

Natural resources and environment
Community and regional development
Education
Social services
Income security.
. ..
Veterans benefits and services
Administration of justice
Allother
Total




1980

1981

1982

actual

National needs

estimate

estimate

56
25
1,269
653
55
574
133
258

61
26
1,283
1,157
111
500
139
254

63
28
1,490
1,233
96
458
141
255

3,021

3,532

3,764

EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 227

Social Services
The Federal Government provides funds to States and to local
public and private institutions for a variety of social services.
These services are primarily designed to meet the needs of lowincome people, children and youth, the elderly, the disabled, and
other groups with special needs.
Income tax credit to nonprofit organizations.—As part of the
economic revitalization program, the administration proposed an
income tax credit equal to 8% of social security taxes paid, to
become effective January 1, 1982. This credit, which is refundable
to nonprofit organizations, is estimated to increase outlays by $0.2
billion in 1982.
Grants to States for social services.—Title XX of the Social Secu-

rity Act authorizes grants to States for services to individuals and
families in order to promote their independence and self-support,
and to reduce their institutionalization. States have broad discretion in determining the types of services offered and who is eligible
to receive them. Roughly 20% of these expenditures are used for
child day care services. States also provide a broad array of services including foster care and child protective services, homemaker
services, family planning, preparation and delivery of meals, transportation, counseling, and substitute care and day care for adults.
Staff training related to social services is also included.
Funds for social services and related training are allotted to the
States based on population. States are reimbursed for 75% of their
expenditures for most social services. Family planning expenditures are 90% federally funded, and States may claim up to 8% of
their total social service allotments for 100% Federal funding of
child day care.
Budget authority of $3.0 billion, the authorized ceiling under
current law, is requested for Federal payments to States for social
services in 1982. A level of $75 million is requested for State and
local training expenditures under title XX, and $16.1 million for
social service funding for the territories.
Services for children, youth, and families.—These programs are
designed to improve the quality of developmental and day care
services for children, to protect neglected, abused, and homeless
children, and to develop stronger safeguards for the rights of children and their parents. Budget authority of $1.2 billion is requested for these programs in 1982.




228

THE BUDGET FOR FISCAL YEAR 1982

Head Start assists local community groups in providing comprehensive services (including health, education, nutrition, and counseling) for low-income preschool children and their families. Approximately 12% of all children served are handicapped. Head
Start relies heavily on the participation of parents in program
control and policymaking. For 1982, budget authority of $950 million is requested, an increase of 16% over the 1981 level. This
increase would assist local projects in offsetting increased expenses
for salaries and operating costs, and would allow the program to
serve approximately 375,000 children in 1982. This level of funding
would also permit improvements in facilities and reductions in
child-to-staff ratios.
Legislation was proposed by the administration and enacted in
1980 to improve child welfare services. It emphasized strengthening
and reunifying families, and placing children promptly and permanently in adoptive homes when they cannot be reunited with their
families. For 1982, $220 million is requested for these services.
States may transfer funds from foster care maintenance to fund
child welfare services, and may be eligible for additional funding if
they provide certain protections for children and their families,
including semi-annual case reviews of all children in foster care.
The budget requests a supplemental appropriation of $5 million
in 1981 and $10 million in 1982 to fund State efforts to locate
permanent adoptive homes for children for whom such homes are
difficult to find.
Outlays for payments to States for the Federal share of foster
care maintenance and related administrative and training costs are
estimated to be $335 million in 1982. These outlays are included in
the income security function.
Budget authority of $11 million is requested in 1982 to support
projects serving runaway and other homeless youth and their families. In addition, $23 million is requested to support research, demonstration, and service projects related to the prevention and treatment of child abuse and neglect.
The White House Conference for Children and Youth is scheduled for December 1981. A conference examining the needs of
children and youth has been held every 10 years since 1909.
Services for the elderly.—-For 1982, the budget requests budget
authority of $704 million for social services for elderly people.
Grants are made to State and area agencies on aging to assist in
financing a range of services to older Americans, particularly those
with the greatest economic and social need. State agencies analyze
and evaluate the need for services, act as advocates on behalf of




EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 229

the elderly, furnish technical assistance to service providers, and
help to coordinate systems of services for older people. Area agencies fulfill similar roles in local communities. Services delivered
locally include access (e.g., transportation, information, and referral services), legal, and community services in addition to a variety
of in-home services.
Nutrition projects for the elderly finance meals served in a group
setting or delivered to the home-bound elderly. Budget authority of
$383 million is requested for these projects in 1982. The request
would finance 431,000 meals daily and is $33 million above the
1981 level.
In addition, $43 million in budget authority is requested to support research, training, and discretionary projects for the elderly.
The emphasis of these programs is on meeting the long-term care
needs of functionally impaired elderly people.
The White House Conference on Aging is scheduled for December 1981. The conference will examine policy issues of concern to
older Americans and recommend ways to meet their needs.
Services for other special groups.—Budget authority of $61 million is requested to assist States to meet the needs of developmentally disabled persons. This program complements existing medical,
educational, rehabilitative, and social service programs, and tries
to reduce inappropriate institutionalization. It also assists States in
developing and administering advocacy systems for developmentally disabled persons. Funds are also requested to help Native Americans achieve economic and social self-sufficiency.
Rehabilitation services and research for the handicapped.—
Budget authority of $1.0 billion is requested for rehabilitation services and research for the handicapped in 1982, an increase of $45
million over the 1981 appropriation. These resources aid approximately 1.8 million persons who have physical and mental disabilities, and help them to become self-sufficient. Funds to rehabilitate
recipients of supplemental security income and social security
benefits are classified in the income security function. In 1982, an
increased number of experimental programs helping the disabled
live independently is scheduled and should be carefully evaluated.




230

THE BUDGET FOR FISCAL YEAR 1982

Community services program.—The community services program
of the Community Services Administration (CSA) finances a variety
of social services for poor people through grants to about 900 local
community action agencies. Grants are also provided for community economic development and for special service project activities.
Budget authority of $542 million is requested for CSA programs to:
• improve grantee performance by establishing a competitive
grant program for community action agencies and through
financial and program management initiatives;
• conduct demonstration projects in areas such as family counseling, group homes, migrants, and rural housing; and
• help community development corporations to become administratively self-sufficient.
Domestic volunteer programs.—ACTION, the Federal Government's agency for volunteer programs, supports the Volunteers in
Service to America (VISTA), Foster Grandparent, Senior Companion, Retired Senior Volunteer, and other programs that promote
voluntary action. (The Peace Corps, also administered by ACTION,
is classified in the international affairs function.) These programs
meet the needs of the poor and emphasize energy conservation, the
acquisition of skills through volunteer service, and independent
living for the handicapped and elderly.
This budget proposes 5,000 worker years of VISTA volunteer
service in 1982. All three older American volunteer programs are
expected to enroll more volunteers than in 1981. The budget also
continues requests for technical assistance grants and demonstration projects to explore alternative approaches to voluntary action
in the private sector. Outlays for ACTION'S domestic programs are
estimated to increase from $156 million in 1981 to $183 million in
1982.
Tax expenditures.—The provision of social services by a wide
variety of private institutions is encouraged by the tax deductibility of contributions to those institutions. The tax expenditure for
charitable contributions, other than to educational and health institutions, is estimated to be $9.0 billion in 1982.




HEALTH

231

HEALTH
National Needs Statement:
• Improve access to medical and mental health services
and improve State and local health care systems.
• Restrain inflation in health care costs.
• Improve financing of health care services through enactment of a national health plan.
• Acquire knowledge regarding the causes, prevention, and
treatment of diseases.
• Promote health maintenance and consumer and workplace health and safety.
• Support education of students in the health professions,
especially in primary care fields, and placement of
health workers in medically underserved areas.
Federal involvement in promoting the Nation's health began
with the establishment of the Public Health Service in 1798 to
protect the Nation from contagious diseases brought into the country by seamen. The rapid growth in Federal support for the Nation's health care systems began in the mid-1960's when medicare
and medicaid were established. Between 1966 and 1982, Federal
health outlays (including health-related programs classified in
other functions) are projected to rise from $7.4 billion, 13% of
national health expenditures, to an estimated $94.9 billion, almost
30% of national health expenditures. These outlays were 5.5% of
the Federal budget in 1966 and are estimated to be 12.8% in 1982.
The administration has addressed these national health needs
over the last 4 years and continues to do so-in this budget, which
includes estimated outlays of $74.6 billion in 1982 in the health
function. The budget provides major support for the following activities:
• Health services to the poor and underserved and reorganization of these services to deliver care more effectively. Increased

Federal involvement has dramatically improved the health
care system, particularly by increasing access to medical care
for the poor and the elderly. The poor now make more physician visits annually than the nonpoor and measures of their
health status, such as infant mortality rate and life expectan-




232

THE BUDGET FOR FISCAL YEAR 1982

cy, have improved. Despite these accomplishments, improvements in access, planning, and management of health care
are still needed, particularly for the rural poor, the chronically mentally ill, and other underserved populations. This administration continues to endorse the child health assurance
program, which would make an additional 2 million children
and pregnant women eligible for medicaid and expand services to eligible children. Further expansions are also proposed
for community health centers and the National Health Service Corps. In addition, the budget provides for implementation
of the Mental Health Systems Act of 1980 and proposes complementary financing expansions.
• Increased efforts to control inflationary growth in health care
costs. Excessive inflation hinders the ability of people to pay
for health care, strains the national economy, and burdens
Federal, State, and local budgets. Health care expenditures in
the United States grew from 4.5% of gross national product in
1955 to 9.0% in 1979. During the last decade, hospital costs,
the largest component, have grown 2 M times as fast as the
s
Consumer Price Index. Without major changes in the health
system, by 1990 national health expenditures are projected to
reach 11.5% of GNP and the Federal cost of medicare and
medicaid $181 billion. The Congress has rejected a legislative
approach to vitally needed hospital cost containment, first
proposed by the administration in 1977. Thus, this budget
does not repropose such a bill. Instead, it proposes several
steps to reduce the impact of health care cost inflation on the
Federal budget and on the economy.
• Enactment of a national health plan. An estimated 22 million
Americans have no health insurance, medicare, or medicaid
coverage; another 20 million have inadequate basic coverage;
and an additional 40 million lack adequate protection against
catastrophic expenses. Enactment of a national health plan
remains one of the highest priorities in the health area. However, given the need for budgetary restraint and given the
relatively limited prospects for adequate cost containment,
which must be achieved first, the budget does not include
funding for the plan for 1983-1986.
• Expanded research and education efforts throughout the Federal Government to promote health and to prevent illness and




HEALTH

233

disability. The administration has developed national objectives and strategies for prevention of disease and injury. 1
Increased budget authority is requested for health promotion
and disease prevention programs. Health research on the
causes, prevention, and treatment of disease, and efforts to link
research effectively with practical applications, are critical.
Increased funding is requested for the National Institutes of
Health (NIH) to award 5,000 new grants and to expand the
resources available for basic and clinical research. Increases
are also requested for mental health research.
• Education of health professionals. Since 1960, the Federal
Government has spent about $18 billion to help increase the
supply of health professionals by 50%. This effort has been so
successful t h a t there is and will continue to be an adequate,
or excessive, overall supply of professionals in most of the
major health fields. Having achieved this goal, the Federal
Government has reallocated resources to increase manpower
in the primary health care field and to improve services in
neglected or isolated areas of the country.
These and other proposals are discussed in detail in the following
sections on health care services, health research, education and
training of the health care work force, and consumer and occupational health and safety.
Health care services.— The largest amount of Federal spending
for national health needs is devoted to the mission of financing and
providing health care services. Federal outlays for health care
services are estimated to rise from $69.0 billion in 1982 to $78.7
billion in 1983 and $89.5 billion in 1984, despite proposed savings
legislation. Total Federal outlays for health care services, including
activities in other missions of the budget, are estimated to be $81.1
billion in 1982, of which 30% supports services to the poor and over
60% supports services to the aged, including low-income aged.

1
Healthy People: Surgeon General's Report on Health Promotion and Disease Prevention (August 1979) and
Promoting Health, Preventing Disease: Objectives for the Nation (November 1980).




234

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: HEALTH
(Functional code 550; in millions of dollars)

Major missions and programs

BUDGET AUTHORITY
Health care services:
Medicare:
Existing law
Proposed legislation
Medicaid:
Existing law
Proposed legislation
Other health care services:
Existing law.
.
Proposed legislation
Subtotal, health care services
Health research:
National Institutes of Health research
Alcohol, Drug Abuse, and Mental Health Administration research
Other research programs
Subtotal, health research
Education and training of the health care work
force:
National Institutes of Health training
Health Resources Administration and other training
. .
Alcohol, Drug Abuse, and Mental Health Administration training

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

35,855

44,874
3

56,840
31

63,494
-41

71,313
-36

14,543

17,365
-31

18,999
-98

21,494
306

24,352
682

3,902

4,104

4,520
-5

4,912
-5

5,106
5

54,300

66,314

80,287

90,160

101,412

3,211

3,367

3,611

3,736

3,866

233
198

240
188

276
198

290
198

305
198

3,642

3,795

4,086

4,224

4,369

218

227

237

233

233

591

333

183

183

183

114

116

114

114

114

Subtotal, education and training of the
health care work force

923

675

534

530

530

Consumer and occupational health and safety:
Consumer safety
Occupational safety and health

658
337

723
379

754
418

766
418

775
419

995

1,102

1,172

1,184

1,194

-17

-3

-3

-3

-3

59,844

71,884

86,075

96,095

107,501

Subtotal, consumer
health and safety

and occupational

Deductions for offsetting receipts
Total, budget authority




235

HEALTH
NATIONAL NEED: HEALTH—Continued
(Functional code 550; in millions of dollars)

Major missions and programs

OUTLAYS
Health care services:
Medicare:
Existing law
.
Proposed legislation
Medicaid:
Existing law
Proposed legislation
. ..
Other health care services:
Existing law
Proposed legislation

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

35,034

40,065
-84

47,044
-446

53,633
-490

61,176
-613

14,028

16,577
-31

18,312
-98

20,817
306

23,592
682

3,958

4,121

4,183
-5

4,469
-5

4,632

53,019

60,648

68,991

78,730

89,462

.3,029

3,198

3,433

3,527

3,650

255
158

199
165

237
174

249
179

261
183

3,442

3,563

3,844

3,955

4,095

193

212

in

111

225

404

419

322

326

326

122

125

104

104

104

Subtotal, education and training of the
health care work force

719

755

649

652

655

Consumer and occupational health and safety:
Consumer safety
Occupational safety and health

674
327

701
369

752
404

765
418

776
419

1,001

1,070

1,156

1,184

1,194

— 17

3

3

58,165

66,032

74,636

84,517

95,403

39
22

52
47

76
54

86
80

90
85

Subtotal, health care services
Health research:
National Institutes of Health research
Alcohol, Drug Abuse, and Mental Health Administration research
Other research programs
Subtotal, health research
Education and training of the health care work
force:
National Institutes of Health training
Health Resources Administration and other training
Alcohol, Drug Abuse, and Mental Health Administration training

Subtotal, consumer
health and safety

and occupational

Deductions for offsetting receipts
Total, outlays
ADDENDUM
Off-budget Federal entity:
Federal Financing Bank:
Health care services:
Budget authority
Outlays




3

3

236

THE BUDGET FOR FISCAL YEAR 1982
TOTAL FEDERAL HEALTH SERVICE OUTLAYS BY INCOME AND AGE GROUPS
(In millions of dollars)
1980
actual

Poor persons:
Aged (65 and over)
Other adults (19 to 64)
Children and youth (18 and under)
Subtotal, poor
Non-poor persons:
Aged (65 and over)
Other adults (19 to 64)
Children and youth (18 and under)
Subtotal, non-poor
Total, all recipients:
Aged (65 and over)
Other adults (19 to 64)
Children and youth (18 and under)
Total, all recipients
Classified in health (function 550).
Classified in other national needs...

1981
estimate

1982
estimate

7,396
8,978
2,627
19,001

8,395
10,160
3,068
21,623

9,597
11,156
3,371
24,124

30,750
11,745
2,338
44,833

35,104
12,418
2,709
50,232

40,566
13,440
2,992
56,998

38,146
20,723
4,965
63,834

43,499
22,578
5,777
71,854

49,963
24,596
6,363
81,122

53,019
10,815

60,648
11,206

68,991
12,131

Medicare and medicaid.—Medicare and medicaid outlays, which
finance health care services for poor, disabled, and aged Americans, are estimated to be $64.8 billion in 1982, nearly 9% of total
Federal outlays. Estimated medicaid outlays of $18.2 billion in
1982, with an additional $14.0 billion provided by States, are expected to finance care of 24 million poor Americans. Estimated
medicare outlays of $46.6 billion will finance services for 25 million
aged and 3 million disabled Americans. The administration continues to support the child health assurance program (CHAP), the
most important step the Nation can take to improve medical serv-




HEALTH

237

ices for children from low-income families. CHAP is proposed to
begin in the last quarter of 1982 at an estimated 1982 cost of $52
million, increasing to $719 million by 1984 as more eligible children
are served.
The budget also proposes to enhance medicare mental health
benefits by reducing the share of costs paid by the beneficiary to
the same level as other medical services and by raising the total
amount that can be reimbursed. This budget also includes a new
$20 million legislative recommendation to improve services for the
chronically mentally ill who are eligible for medicaid by requiring
States to provide case management services.
Restraining health care costs.—In view of congressional rejection
of hospital cost containment legislation, this budget concentrates
on other approaches, including cooperation with the hospital industry's own voluntary effort to reduce the rate of hospital cost inflation. The industry and the Department of Health and Human
Services (HHS) have independently announced comparable guidelines for calendar year 1980. The HHS guideline would have limited hospital expenditure increases to 13.5%. Unfortunately, expenditures for 1980 appear to have risen about 16.5%. HHS has initiated, and is working to achieve hospital association support for, a
program to monitor hospital expenditures. It is projected in this
budget that these efforts could result in 1982 savings of $830 million compared to current actuarial estimates. The urgency of this
problem is underscored by the fact that, based on current law, HHS
estimates of the Federal costs of medicare and medicaid in 1982 have
increased by $2.0 billion just since planning estimates were issued in
July 1980.
Several administration proposals would improve the cost effectiveness of the medicare and medicaid programs. Implementation
of proposed savings initiatives and repeal of certain low-priority
expansions recently enacted by Congress would save an estimated
$972 million in 1982.
The administration proposes national objectives for the professional standards review organizations (PSRO) program, the
achievement of which would reduce medically unnecessary medicare and medicaid expenditures and save an estimated $204 million
in 1982. The administration supports changes in current regulations to provide incentives for hospitals to improve their management practices.

340-000 0 - 81 - 17 : QL 3




238

THE BUDGET FOR FISCAL YEAR 1982

Actions have been undertaken to restrict Federal expenditures
and subsidies for hospital construction and renovation in areas that
have an excess of hospital beds. In addition, the administration
recommends enactment of legislation to restrict tax-exempt bond
financing of, and medicare and medicaid reimbursement for, construction and renovation in such areas.
The administration continues to encourage State mandatory hospital revenue control activities with demonstration grants and by
allowing States that meet appropriate standards to regulate medicare hospital payments. In 1979, 8 States with mandatory revenue
controls held hospital cost inflation to a weighted average of 11.0%,
compared to 14.9% for other States.
HEALTH CARE COST CONTROL OUTLAYS
(In millions of dollars)
1982
estimate

Programs to control health care costs:
Health p l a n n i n g . . . . .
Health maintenance organizations (HMO)
Professional standards review organizations (PSRO)

1983
estimate

1984
estimate

148
52
171

147
36
171

147
35
171

371

354

353

250
14
24
1
15
100
23
5
18
228

285
17
24
1
24
25
47
1
18
254

350
18
24
1
38

678

696

814

25
204
32
13
20

25
204
63
25
23

25
204
73
30
26

Subtotal, administrative savings

294

340

358

Total, savings proposals

972

1,036

1,172

Total, programs to control health care costs
Savings from legislative proposals:
Elimination of routine medicare nursing bonus
Use of social security wage information for medicaid eligibility
Financial penalty to deter abuse
Medicaid fee schedules for physician services
Competitive bid purchasing of selected medicare and medicaid services
Expedited recovery of disallowed State medicaid claims
Competitive bidding for medicare contractors
Improved recovery of medicaid overpayments to providers
Impact on medicaid of welfare program changes
Repeal of recently enacted low priority benefit expansions
Subtotal, savings from legislative proposals
Administrative savings proposals:
Hospital reimbursement reform
PSRO—Reduced unnecessary hospitalization
Reform of reimbursement to hospital-based physicians
Revised home health agency reimbursement limits
Increased audit activities for hospital services

78
1
18
286

Finally, State and local health planning agencies and health
maintenance organizations (HMO's) receive continued support. Of a
$147 million total for health planning, $13 million would be reserved for discretionary grants to particularly effective State and
local planning agencies.




239

HEALTH

Other health care services,—Budget authority for health care
programs other than medicare and medicaid is proposed to increase
from $4.1 billion in 1981 to $4.5 billion in 1982. These funds support health service initiatives to reform management of the health
care grant system, mental health and primary care services, and
prevention activities.
This budget continues an effort begun in 1981 to provide the
basic framework for an integrated Federal-State-local system for
budgeting and managing health services programs. The current
Federal grant system requires 11 separate State plans and includes
30 distinct grant programs. This fragmentation has contributed to
gaps in service delivery, burdensome application requirements, and
poor coordination of planning and management.
Wherever feasible, HHS will develop performance agreements
with States and localities to assure delivery of primary health
services to the poor. The agreements are also intended to establish
performance standards relating services to health measures such as
immunization and infant mortality rates. Single annual performance agreements would become the basis for awarding all primary
care grants to areas that have voluntarily entered into such agreements.
HEALTH CARE SERVICES
(In millions of dollars)
Budget authority
Program

1980
actual

1981
estimate

1982
estimate

35,855
14,543

44,877
17,334

56,871
18,901

293
92

324
101

339
106

385

425

445

Health care services:
Community health centers
Maternal and child health
Family planning
National Health Service Corps
Public Health Service hospitals
Indian health service
Other health services

320
346
162
74
168
574
206

325
357
162
91
168
662
215

375
357
162
118
172
718
361

Subtotal, health services

1,850

1,980

2,263

243
238
146
313
758
66,314

254
273
147
340
793

Total, budget authority

277
332
167
264
627
54,300

80,287

(Total, outlays)

53,019

60,648

68,991

Medicare
Medicaid
Mental health:
Mental health services
Saint Elizabeths Hospital
Subtotal, mental health

Prevention
Alcohol and drug abuse
Health planning
Management of the Public Health Service
Federal employee health benefits




240

THE BUDGET FOR FISCAL YEAR 1982

Consolidation of the disparate planning requirements would also
improve the coordination of planning and decisionmaking. Planning and grant reforms would be phased in on a voluntary basis
with State and local governments, as has already been initiated in
four States and three large local governments.
In addition to primary care planning and grant reform, the 1982
budget proposes to improve health services for underserved areas
through added funding for the community health centers program
and the National Health Servce Corps (NHSC). Budget authority of
$375 million is proposed for 1982, $50 million above the 1981 level,
to support 872 community health centers serving over 6 million
people. Budget authority for the NHSC services program is proposed to rise from $91 million in 1981 to $118 million in 1982 to
support 3,569 NHSC professionals, an increase of 909 over 1981. By
1990, the NHSC field strength is projected to exceed 11,000. In
addition, this budget requests $180 million in advance appropriations for use in 1983 to eliminate last-minute placement of NHSC
participants; this would allow the NHSC to plan better the delivery
of care to the medically underserved and recruit more effectively
those who wish to serve without a scholarship obligation.
Budget authority of $772 million in 1982, including $718 million
for health services and $54 million for program management, is
requested to provide direct medical services or contract care to
802,000 American Indians and Alaskan Natives. This represents an
increase of $56 million over the 1981 services level.
Since the passage of the original Community Mental Health
Centers (CMHC) Act in 1963, more than $2.5 billion in Federal
funds have been spent to establish 800 CMHCs, which now provide
access to mental health services to over half of the U.S. population
and treat more than 3% million individuals annually.
The Mental Health Systems Act of 1980—a major legislative
accomplishment of this administration—established a Federal-State
partnership to reform the mental health services system and to
allow States to manage the delivery and financing of mental health
care. For State and community mental health programs authorized
under this Act, $339 million in 1982 budget authority is requested,
an increase of $15 million over the 1981 level. The request includes
$38 million to initiate services to the chronically mentally ill, $48




HEALTH

241

million for new mental health programs focused primarily on the
elderly, children, and minorities, and $253 million for CMHCs.
An estimated $1 billion in Federal funds were spent under medicaid in 1980 for care to over 200,000 institutionalized chronically
mentally ill persons. To encourage effective community-based care,
this budget proposes that States be required to develop case management services and plans to coordinate services financed under
medicaid and under the Mental Health Systems Act.
The 1982 budget continues the administration's commitment for
national health promotion and disease prevention. The Surgeon
General's Healthy People report of 1979 has identified the reduction of cigarette smoking and alcohol abuse as 2 of 15 major prevention objectives for 1990. This budget includes $10 million for the
third year of a community-based demonstration grant program
designed to discourage smoking and alcohol abuse among youth.
Budget authority for prevention and treatment demonstration programs related to alcohol abuse is proposed to increase from $73
million in 1981 to $110 million in 1982, with special attention to
prevention of fetal alcohol syndrome and other alcohol-related
health problems, and treatment of alcohol abuse among women
and youth. Starting in 1982, this budget proposes that Federal
grant support for alcohol demonstration projects beyond their sixth
year of operation be phased out over a 3-year period.
Expanded support is provided for both traditional public health
activities and more recent health promotion and disease prevention
initiatives such as high blood pressure control, genetic services,
community water fluoridation, and completion of the campaign to
eliminate measles in this country. This budget requests $37 million
to sustain the successful childhood immunization program begun in
1978, reaching 6.3 million children in 1982. Funding would be
increased for prevention of environmental health hazards to reduce
hazards from toxic chemicals in the environment and to respond to
health emergencies.
Tax expenditures.—Federal tax laws help finance health care by
allowing employees to exclude from their taxable income the insurance premiums paid by their employers. Under current law, the
revenue loss from this tax expenditure is estimated at $16.6 billion
for 1982. There has been considerable discussion, especially in the




242

THE BUDGET FOR FISCAL YEAR 1982

Congress, about the inflationary effects on health care costs of
these tax expenditures. Individuals are permitted to itemize as
deductions certain expenses for health care and premiums paid for
health insurance. In 1982, the revenue loss from these tax deductions is estimated at $4.1 billion. In addition, tax expenditures in
1982 are estimated at $1.9 billion for health-related charitable contributions, and $0.7 billion for the exclusion of interest on State
and local hospital bonds, which the administration proposes to
disallow.
Health research.—The budget proposes to increase budget authority for health research from $3.8 billion in 1981 to $4.1 billion in
1982.
National Institutes of Health research.—Budget authority for
health research at the National Institutes of Health (NIH) is proposed to increase from $3.4 billion in 1981 to $3.6 billion in 1982.
The request provides for support of 5,000 grants for new research
projects and a total of approximately 16,085 research project grants
in 1982. These levels reflect continuation of the administration's
commitment to stable funding for NIH project grants and an
increase in resources for basic and clinical research activities. The
budgets for 1981 and 1982 have restored and maintained a relatively
equitable distribution of funds among the 11 institutes of the NIH.
Additional funds and personnel are made available for the opening
of the Ambulatory Care Research Facility at the Warren G. Magnuson Clinical Center on the NIH campus.
Alcohol, Drug Abuse, and Mental Health Administration research.—Budget authority for research in the Alcohol, Drug Abuse,
and Mental Health Administration (ADAMHA) is proposed to increase from $240 million in 1981 to $276 million in 1982, an increase of nearly 15%. Basic and applied research would be expanded in such areas as the neurosciences, epidemiology, prevention,
special population needs, and assessment of treatments.
Other research programs.—Budget authority of $198 million is
requested for other research such as health services, health care
financing, health statistics, and health care technology.
Federal outlays for health research, including outlays not in this
function, are expected to increase from $4.7 billion in 1981 to $5.2
billion in 1982. The Federal Government provides approximately
two-thirds of the total funds devoted to health research.




243

HEALTH

Education and training of the health care work force.—The Fed-

eral Government provides funding for training in nearly every
health profession through one or more of about 60 separate programs. Projections indicate, however, that there is already an adequate overall supply of medical personnel, and an excessive supply
in many specialties. The number of active physicians is expected to
reach nearly 600,000 by 1990, an increase of 58% between 1975 and
1990.
In recognition of these trends, the budget supports the geographic redistribution of physicians through service commitment scholarships; the reduction of excessive physician specialization through
support of primary care training programs; and the phaseout of
general institutional grants to train health professionals, particularly capitation subsidies. Total budget authority for training
health professionals in this mission is proposed to decline from
$675 million in 1981 to $534 million in 1982.
SUPPLY OF ACTIVE HEALTH PROFESSIONALS
(In thousands)
1950
actual

Physicians
Dentists
Optometrists
Pharmacists
Registered nurses

220
79
15
88
335

I960
actual

n

274
90
16
101
527

1970
actual

323
102
18
114
750

i

1975
actual

377
112
20
122
961

i

1980
estimated

447
126
22
144
1,195

i

—

estimated

598
156
26
185
1,509

Source: Division of Health Profession Analysis, HHS.

Budget authority for NHSC scholarships, as distinguished from
the NHSC services program, is proposed to decrease from $80 million in 1981 to $70 million in 1982. This funding level would support 1,000 new scholarships and an estimated total of 4,488 scholarships in 1982, about 1,750 fewer than in 1981. These reductions are
intended to bring the NHSC projected field strength in line with
projected national needs in the 1990's. Legislation is supported that
would allow scholarships to be offered to medical students in the
third year rather than the first year of medical school, so that they
would have a better basis for making early career commitments
and would serve sooner than first year students. Emphasis would
be placed on attracting students from a broader distribution of
medical schools. Those obliged to serve because of scholarships
would be assigned to areas where physicians are least likely to
locate voluntarily. In certain circumstances, assignments might be
made to Veterans Administration or Department of Defense facilities. Service commitments to underserved areas and understaffed
facilities are also required for all federally supported students in
mental health professions.




244

THE BUDGET FOR FISCAL YEAR 1982

New loan guarantees under the health education assistance loan
program for students seeking financial assistance without a service
commitment are estimated to be $100 million for the 1981-82 academic year. This budget continues support for other training programs, especially to strengthen health professions schools for minorities, expand assistance for disadvantaged students, and enhance the recruitment into and retention of minorities and women
in health professions.
Research training subsidizes the preparation of young people for
careers in research and supports their actual contribution to research while in training. In 1982, $261 million in budget authority
is requested for research trainees, including more than 10,000 trainees supported through NIH and nearly 1,500 trainees supported
through ADAMHA in both 1981 and 1982. This budget would stabilize funding for research training by maintaining support for a
constant level of trainees.
Consumer and occupational health and safety.—Budget authority
of $1.2 billion in 1982 is requested for the mission of protecting
consumers from unsafe and defective products and workers from
occupational hazards.
Consumer safety.—Budget authority for consumer safety activities is proposed to increase from $723 million in 1981 to $754
million in 1982. Funding would support research, dissemination of
information, regulatory measures to protect consumers from unreasonable consumer product risks, and the second phase of construction of a new laboratory for the Food and Drug Administration.
Current activities to assure the safety and efficacy of drugs and
medical devices and the safety of foods would be continued.
Occupational safety and health.—The budget includes $418 million in budget authority to improve occupational safety and health
in 1982, an increase of $39 million over the 1981 level. The Occupational Safety and Health Administration (OSHA) and the Mine
Safety and Health Administration in the Department of Labor
continue to revise and issue new standards to eliminate workplace
hazards causing injury, illness, or death. Increased funding is included in this budget for OSHA to conduct additional and improved
regulatory analyses of proposed standards, to increase grants to
help private organizations train workers and employers to recognize and eliminate hazards, and to expand free, on-site consultations to assist small businesses.




245

HEALTH

In 1982, proposed budget authority for the National Institute for
Occupational Safety and Health is $82 million. Initiatives are proposed to enhance efforts to test and certify protective equipment
and to increase research on workplace hazards that affect male and
female reproductive capacity.
Health-related programs.—The Federal Government supports a
number of health-related programs that are a part of other major
functions. These programs meet other national needs, such as national defense, but are related to the health of the Nation's people.
The following table shows 1982 outlays for health and health-related
programs.
PROPOSED 1982 FEDERAL HEALTH AND HEALTH-RELATED OUTLAYS
(In millions of dollars)
Mission
Agency

Health care
services

Health and Human Services
Veterans
Defense
Agency contributions to employee health funds.
Labor
Agriculture
Energy
Interior
Environmental Protection Agency..
State
National Science Foundation
Transportation
National Aeronautics and Space Administration..
Justice
Housing and Urban Development
Education
Commerce
Other agencies
Total..
Classified in health (550)
Classified in other national needs..
1

Includes offsetting receipts of $3 million not allocated by mission.




67,897
7,120
5,293
2,962
1
1,092

36

41
34
328
5
111

Health
research

Training the
health care
work force

Protecting
consumers
and workers

Total l

119
69

3,911
162
251
12
168
272
70
88
6
79
17
92
2

727
379
387

73,096
7,661
6,034
2,962
400
1,737
974
107
88
102
80
411
107
274
52
437
148
191

51
6
13
0
307
477
702
2

13

51
1
351
15
226
18

84,987

5,186

1,686

3,002

94,861

68,991
15,996

3,844
1,342

649
1,037

1,156
1,846

74,636
20,225

246

THE BUDGET FOR FISCAL YEAR 1982
CREDIT PROGRAMS—HEALTH
(In millions of dollars)
1980
actual

Direct loans: 1
New loans
Repayments, sales and adjustments ( — )
Net loan outlays

1981
estimate

1982
estimate

64
-46

80
-90

102
-103

18

10

-1

71
-167

101
53

176
109

39
-18

52
5

76
-21

22

47

54

2

Loan guarantees:
New loans
Net loan guarantees
Off-budget Federal entity—Federal Financing Bank: 3
Direct loans:
New loans
Repayments ( - )
Net loan outlays
1

Includes direct loan transactions with the FFB shown below.
Includes guarantees of direct loan transactions with the FFB shown below.
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
above in this table. See the Introduction to Part 5 for further explanation.
2
3




247

INCOME SECURITY

INCOME SECURITY
National Needs Statement
• Mitigate the loss of income that individuals and their
families experience as a result of unemployment, retirement, disability, or death of a wage earner.
• Assure a reasonable income and adequate diet for all
poor Americans, especially families with children, the
elderly, and disabled who—even though they may be
working—cannot fully provide for themselves.
• Help the poor meet increasing energy costs.
• Assist the poor in working their way out of poverty,
rather than foster their permanent dependence.
• Eliminate physically inadequate or substandard housing
conditions, especially for low-income individuals and
families.
• Assure that income assistance programs focus on those
most in need.
• Administer these programs efficiently while preserving
the dignity and independence of the beneficiaries.
Income security is the largest and one of the most steadily growing functions in the Federal budget. In 1982 income security outlays are estimated to be $255 billion, more than 34% of total
budget outlays. Rising income security outlays reflect the breadth
of protection available to the aged, poor, disabled, or unemployed.
Over the last 25 years total Federal budget outlays as a percentage
of gross national product (GNP) have grown by 5.3 percentage
points, from 17.7% in 1957 to 23.0% in 1982. The income security
portion almost tripled—growing from 2.7% to 7.9% in 1982. This
growth is dominated by social security, which grew over this period
at a rate more than three times as fast as GNP. Unemployment
compensation outlays, which vary with the unemployment rate,
have fluctuated widely both in absolute amounts and as a percent
of GNP, but in general have not increased. Other income security
outlays have risen at a rate roughly three times as fast as GNP.
INCOME SECURITY OUTLAYS AS A PERCENT OF GROSS NATIONAL PRODUCT
1957
actual
Social security
Unemployment compensation
Allother
Total




1962
actual

1967
actual

1972
actual

1977
actual

1982
estimate

1.5
.4
.7

2.6
.7
.9

2.8
.3
.9

3.5
.6
1.5

4.5
.8
2.1

5.0
.7
2.3

2.7

4.1

4.0

5.7

7.4

7.9

248

THE BUDGET FOR FISCAL YEAR 1982

While outlays in the income security function go mainly to the
elderly, the disabled, the unemployed, and low-income families, the
great bulk of such spending is not needs- or income-tested. In 1982
about 18% of total outlays in this function—equal to about 1.4% of
GNP—will be needs tested, while most of the remainder is for
social insurance payments such as retirement, disability insurance,
and unemployment benefits.
Increases in the cost of income security programs come largely
from statutory automatic cost-of-living increases, from an increase
in the number of people eligible for and receiving benefits, and
from the higher initial benefits received by new beneficiaries of the
social security system. Most of the benefits are automatically available to those who meet the qualification standards established in
law. Therefore, the Government can change outlays for these programs in a major way only through new legislation.
The 1982 budget includes revisions to income security programs
so that they better meet national needs and can be administered as
efficiently and inexpensively as possible.
The States and many cities are severely burdened by public
assistance costs. This administration has been committed to trying
to help alleviate those burdens. It is important that these needs be
addressed in the future.
The administration supports the following initiatives in the
income security area:
• improving the short-term and long-term financing of the
social security system;
• indexing programs for price changes once instead of twice
each year, and basing such changes on an alternative index.
• extending full social security coverage to railroad workers,
their dependents, and survivors;
• restoring the rail industry pension fund to solvency;
• offsetting rising energy costs to low-income families;
• using more lower-cost existing housing for rental housing assistance;
• removing imperfections in the unemployment insurance law
to assure that the number of weeks a person can receive
unemployment benefits is extended only when justified by high
unemployment rates;
• simplifying programs to increase administrative efficiency;
and
• reducing fraud and abuse to promote public confidence and to
ensure that benefits reach intended beneficiaries.
The administration continues to support borrowing among social
security trust funds. This would increase the ability of the system
to withstand fluctuations in the economy and help assure the




INCOME SECURITY

249

timely payment of all social security benefits. Sound financing is a
major concern for the railroad retirement system and will require
increased taxes and a modest restructuring of future benefits.
These steps will correct anomalies in the system and bring it more
in line with social security benefits. The budget reflects proposals
by the administration to meet this problem.
Rising energy costs place particularly large burdens on lowincome families. The administration seeks continuation of lowincome energy assistance for the needy.
Fraud and error in the food stamp program are being reduced by
new fiscal incentives for States to improve administration. Specifically, recently enacted legislation will require States with excessive
error rates in administering food stamp benefits to share in the
cost of such errors. An increase in funding is proposed for the
supplemental food program for women, infants, and children (WIC)
to maintain the same number of participants as in 1981. The
budget assumes enactment, on a permanent basis, of reductions
enacted for 1981 in child nutrition subsidies.
All Federal retirement programs in this function and some
public assistance benefits are related by law to changes in the cost
of living, as measured by the Consumer Price Index (CPI) or some
other specified index. In this way, benefits are protected from
erosion by inflation. The administration proposes two modifications
to current indexing procedures.
First, it is proposed that automatic benefit increases be limited to
once per year for all programs, based on price increases over a 1year period. Currently, Federal employee retirement programs, including military retirement (which is included in the national defense function), are adjusted semi-annually. The child nutrition
program, limited to only one increase in 1981 by legislation enacted
last year, would revert back to semi-annual increases in subsequent
years. Changes enacted last year in the food stamp program provide a limit of one increase per year, but would calculate the
benefit increase for January 1982 on the basis of actual price
increases over a 12-month period plus projected price increases for
an additional 3 months. This budget recommends that automatic
benefit increases be based on a 12-month period of actual price
changes.
Second, for programs currently linked to the CPI the administration is proposing that benefit increases beginning in 1982 be based
on a different index. An administration study of indexed Federal
programs that is also being transmitted to the Congress this month
finds that the current CPI significantly overstates the importance
of housing and measures changes in housing costs in an unsatisfactory manner. The Bureau of Labor Statistics currently publishes an
index, the CPI-X1, that treats housing differently and is a better




250

THE BUDGET FOR FISCAL YEAR 1982

measure of changes in the cost of living. On the basis of the economic
assumptions used in this budget, no outlay effects are projected for
this proposal. An effect on future outlays would depend upon
changes in prices and interest rates that are difficult to forecast.
General retirement and disability insurance.—The greatest portion of income security outlays goes to retirement and disability
insurance programs, which pay benefits to 36.5 million people.
Except for special benefits to disabled coal miners, the beneficiaries
themselves have been taxed during their working years to help
support the programs. On the average, however, benefits are substantially higher, even after allowing for inflation, than the
amounts they paid into the program. This advantage will persist,
although the ratio of benefits to taxes will generally decline in the
future. Outlays for general retirement and disability insurance Are
estimated to increase from $146 billion in 1981 to $167 billion in
1982 because of:
• automatic increases in benefits to keep pace with the cost of
living;
• an increase in the number of aged and disabled persons eligible for benefits; and
• individual earnings histories upon which the benefits are
based.
Social security.— Old age, survivors, and disability insurance
(OASDI) touches the lives of virtually every American through
benefits received or through payroll taxes deducted from earnings
to finance the program. In 1982, more than 95% of people age 65 or
over (20.5 million people), and their dependents (3.7 million) will be
eligible for social security retirement benefits. Over 7 million people
under 65 will receive benefits because they are survivors of deceased
workers, and almost 5 million more because they are disabled
workers or dependents of disabled workers. The $150 billion paid into
the system from payroll taxes and other receipts and the $160 billion
paid out in 1982 make OASDI the largest program in the budget,
amounting to 5% of the gross national product.
A major objective of this administration has been to rebuild the
financial soundness of social security. In 1977 the administration
proposed, and the Congress enacted, legislation to prevent the exhaustion of the disability insurance trust fund and to change the
double-indexed benefit formula that was threatening the long-run
health of the entire program. In 1979 the Congress enacted legislation proposed by the administration to eliminate instances of excessive disability benefits, strengthen work incentives, and improve
the administration of the disability program. The administration
and the Congress also worked together in 1980 to enact a reallocation of scheduled payroll tax revenues from disability insurance to
the old-age and survivors insurance program.




251

INCOME SECURITY
NATIONAL NEED: PROVIDING INCOME SECURITY
(Functional code 600; in millions of dollars)

Major missions and programs

BUDGET AUTHORITY
General retirement and disability insurance:
Social security (OASDI):
Existing law
Proposed legislation
Railroad retirement:
Existing law
Proposed legislation
Special benefits for disabled coal miners
Pension Benefit Guaranty Corporation
Other
Subtotal, general retirement and disability insurance.
Federal employee retirement and disability:
Retirement and disability:
Existing law
Proposed legislation
Federal employees workers' compensation
Subtotal, Federal employee retirement and disability..
Unemployment compensation:
Existing law
Proposed legislation
Subtotal, unemployment compensation..
Housing assistance
Food and nutrition assistance:
Food stamps.Existing law
Proposed legislation
WIC—food supplements
School lunch and other child nutrition programs:
Existing law
Proposed legislation
Subtotal, food and nutrition assistance..
Other income security:
Supplemental security income:
Existing law
Proposed legislation
AFDC and related assistance:
Existing law
Proposed legislation
Earned income tax credit:
Existing law
Proposed legislation
Refugee assistance
Low-income energy assistance:
Existing law
Proposed legislation
Other
Subtotal, other income security..
Total, budget authority




1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

115,997 131048 150,145 166,076 182,254
247
410
313

1,902

5,384
118
1,880

5,741
133
1,858

6,119
127
1,868

14

15

13

18

4,400

4,848

7,848
17

122,262 137,813 157,790 174,134 190,797

24,466 27,952 30,654 33,005 35,187
- 6 9 8 -621 - 6 5 5
415
349
353
26
6
31
1
24,732 28,263 30,308 32,732 34,947
17,703 22,575 25,988 24,621
-1,957 -655

23,438
-503

17,703 22,575

24,031 23,966

22,935

27,813 30,870 31,386 37,652

40,853

9,182 11,084 12,882 14,289 15,278
-487 -719 - 5 7 4
758
927 1,068 1,068 1,068
3,834

4,072

5026
-453

5,552
-470

6,012
-482

13,774

16,083

18,037

19,721

21,303

6,468

7,278

7,983
-45

9,488
-45

8,749
-45

7,709

7,728

6,263
-531

8,587
-543

8,872
-557

1,275

1,203

1,115

617

948

767

1,031
572
636

955
526
530

1,618

1,850

227

543

1,850
598

1,850
653

1,850
693

17,914

19,550

18,000

22,229

21,574

224,198 255,154 279,551 310,434 332,408

252

THE BUDGET FOR FISCAL YEAR 1982

NATIONAL NEED: PROVIDING INCOME SECURITY—Continued
(Functional code 600; in millions of dollars)

Major missions and programs

OUTLAYS
General retirement and disability insurance:
Social security (OASDI):
Existing law
Proposed legislation
Railroad retirement:
Existing law
Proposed legislation
Special benefits for disabled coal miners
Pension Benefit Guaranty Corporation

Other
Subtotal, general retirement and disability insurance
Federal employee retirement and disability:
Retirement and disability:
Existing law
Proposed legislation
Federal employees workers' compensation
Subtotal, Federal employee retirement and disability
Unemployment compensation:
Existing law
Proposed legislation
Subtotal, unemployment compensation
Housing assistance
Food and nutrition assistance:
Food stamps:
Existing law
Proposed legislation
WIC—food supplements
School lunch and other child nutrition programs:
Existing law
Proposed legislation
Subtotal, food and nutrition assistance
Other income security:
Supplemental security income:
Existing law
Proposed legislation
AFDC and related assistance:
Existing law
Proposed legislation
Earned income tax credit:
Existing law
Proposed legislation
Refugee assistance
Low-income energy assistance:
Existing law
Proposed legislation
Other
Subtotal, other income security..
Total, outlays




1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

117,117 138,260 159,648 180,939 201,374
-57
-23
-26
4,737

5,295

1,843 2,013
-27
-37
13
16
123,684 145,547

6,013 6,506 6,918
-186 -221 -254
1,875 1,857 1,864
-29
-25
-30
15
18
13
167,313 189,037 209,838

14,442 17,292 20,185 22,808 25,452
- 1 2 -655 -615 -679
353
349
415
2 3 311
3
14,675 17,591 19,883 22,541 25,188
18,023

26,140

24,088
-2,210

21,521
-630

9,117

10,950

717

904

12,722
-482
994

14,181
-715
994

20,638
-634
18,023 26,140 21,878 20,891 20,004
5,514 6,861 8,465 9,973 11,762
15,164
-571
994

5,614
-456
14,015 15,905 17,481 19,194 20,745
4,181

4,052

4,676
-429

5,179
-445

6,411

7,305

8,017
-45

9,498
-45

8,720
-45

7,308

7,794

8,216
-531

8,587
-543

8,872
-557

1,275

1,203

1,115

"368

881

768

1,031
572
694

955
526
581

1,577

1,896
1,850
597

1,850
674

1,850
692
17,190 19,605 19,987 22,317 21,594
250

528

193,100 231,650 255,006 283,955 309,131

253

INCOME SECURITY
NATIONAL NEED: PROVIDING INCOME SECURITY—Continued
(Functional code 600; in millions of dollars)

Major missions and programs

ADDENDUM
Off-budget Federal entity:
Federal Financing Bank:
Housing assistance:
Budget authority
Outlays

1980
actual

119
119

1981
estimate

1982
estimate

1983
estimate

1984
estimate

1,458
1,457

957
942

-252

-252

Long-range projections indicate that the aggregate payroll taxes
to be collected under current law are sufficient to finance the
aggregate benefits over the next 50 years. However, current trends
in birth and mortality rates, in the participation of single and
married women in the labor force, and in the rate of economic
growth if continued beyond 50 years are likely to produce severe
financial difficulties for the social security program. Several national commissions and study groups have begun to report to the
Congress on ways that the program may be adapted to these
trends.
In the shorter run, for perhaps the next 10 years, the financial
structure of the old-age and survivors insurance program will undergo severe strains. These strains have been increasing during the
last decade, and particularly since the 1977 social security amendments, as a result of both higher than anticipated unemployment
and increases in prices at a faster pace than wage rates. Higher
unemployment has reduced the amount of payroll taxes that was
collected and the more rapid increase in prices relative to wage
rates has resulted in larger increases in benefits than in the revenues that finance them. Together, they drain the reserves of the
program to dangerous levels.
Last year the administration proposed that the three major
social security trust funds be authorized to borrow from each other
when needed to assure the timely payment of benefits. Enactment
of full interfund borrowing would bolster the solvency of the old
age and survivors insurance program over the next 2 to 3 years.
The administration therefore urges the Congress to adopt interfund borrowing at the earliest opportunity. Voluntary efforts to
contain hospital costs are essential in assuring sufficient trust fund
reserves in the short run.
Even then, the trust funds will have in the near term only a very
thin margin of reserves. It is desirable, therefore, to take additional
action to ensure the uninterrupted payment of benefits through

340-000 0 - 81 - 18 : QL 3




254

THE BUDGET FOR FISCAL YEAR 1982

the decade. The principal options depend upon increases in
taxes beyond those increases already scheduled in law, transfers
from the general fund, and/or a restructuring of benefits.
This administration has continually opposed cutting back the
basic social security and disability benefits, and has supported the
indexing of benefits to keep pace fully with inflation. Any changes
to the benefit structure require profound and lengthy policy consideration. The effects of such modifications are far-reaching, accrue
over a long period, and cannot be reversed quickly.
The administration therefore believes that the short-range financial difficulty needs to be resolved primarily by the provision of
additional resources. Various approaches have been suggested to
derive the additional revenues. Among the more serious proposals
are:
(1) Provide authority for social security to borrow from the general
fund. This would recognize explicitly that the U.S. Government will guarantee payment of social security benefits until
permanent financing is arranged.
(2) Finance half of the hospital insurance (medicare) program
with general revenues and reallocate a portion of the currently
scheduled hospital insurance payroll tax to finance the OASDI
programs. Many believe that payroll tax financing should not
be the sole support of the hospital insurance program because
the benefits are not related to prior earnings.
(3) Increase the payroll tax rate. Some recent opinion polls have
indicated that Americans are willing to pay higher payroll
taxes, if needed, to assure the payment of social security benefits. However, a further increase at this time seems undesirable, given the increase in taxes scheduled in law for 1985.
These proposals should be addressed in the context of solving a
temporary problem.
Railroad retirement—The Railroad Retirement Board, a Federal
agency, administers benefits that are generally equivalent to social
security benefits, as well as industry pensions, for retired and
disabled railroad employees, their dependents, and survivors. The
industry pensions include an array of retirement, survivor, and
disability benefits in addition to those provided as generally equivalent to social security. Benefit outlays are estimated to increase
from $5.3 billion in 1981 to $5.8 billion in 1982 as a result of
indexed benefit increases and the higher average benefits received
by new beneficiaries. Higher benefits paid to the one million beneficiaries will more than offset the effect of an anticipated decline of
12,000 beneficiaries between 1981 and 1982.




INCOME SECURITY

255

The Board's latest actuarial projection indicates that the industry pension fund is seriously underfunded. Its cash balances are
being depleted rapidly and are projected to be inadequate to pay
benefits on a timely basis by 1983. The budget reflects three legislative proposals to protect the interests of current and future beneficiaries, and taxpayers.
The first is a legislative proposal to extend full social security
coverage and benefits to railroad workers and their families, thereby assuring that full social insurance protection is available to
them. Currently, railroad workers pay the equivalent of social
security taxes, but dependents are not eligible for certain social
security benefits, such as those payable to divorced spouses, remarried widows, and children of retirees. The proposal would simplify
the complex financial arrangement between social security and
railroad retirement, liberalize benefits for dependents and survivors of railroad workers, and prevent rail workers from losing
social security coverage.
The second legislative proposal would ensure that the interests of
current and future beneficiaries are protected by restoring the rail
industry pension fund to solvency. Revenues would be increased by
2% of railroad industry payroll, chiefly by removing the ceiling on
earnings subject to railroad retirement taxes. The proposal also
would restrain growth in certain benefits. The administration joins
the Congress in inviting railroad labor and management jointly to
propose sound short- and long-term financing of the industry pension fund without added Federal subsidies.
The third legislative proposal concerns the "windfall" subsidy.
The industry component of the railroad retirement system provides
windfall benefits to certain beneficiaries entitled to both social
security and railroad retirement benefits. The general taxpayer has
subsidized these benefits to railroad industry beneficiaries since
1976. The windfall subsidy, estimated in 1974 to require 25 annual
$250 million appropriations, was reestimated upward in 1976 and
again in 1979. The estimated cost of the windfall subsidy doubled
in 5 years, and further sizable increases are expected because the
current Railroad Retirement Board estimates assume no inflation
after 1980. The administration proposes limiting the annual windfall appropriation to $350 million in 1982 and subsequent years.
Legislation is also proposed to simplify benefit computations,
improve service to beneficiaries, and simplify administration.
Special benefits for disabled coal miners.—Benefits are provided
to coal miners disabled from pneumoconiosis (commonly known as
"black lung disease") and to their dependents and survivors. Under
the Black Lung Act, if a former miner suffers from a chronic
disease of the lungs according to specified medical evidence (e.g.,




256

THE BUDGET FOR FISCAL YEAR 1982

X-rays), it is presumed that the miner is totally disabled due to black
lung disease and is entitled to the laws benefits. These benefits,
which are adjusted automatically by law to changes in the GS-2
Federal salary levels, are estimated to be $1.9 billion in 1982.
The Department of Health and Human Services (HHS) administers benefits funded from general revenues that are paid to disabled coal miners and their dependents and survivors who filed for
benefits from 1970 through 1973.
The Department of Labor receives black lung claims filed after
1973 and reviews all claims denied by HHS for possible approval
under new eligibility criteria. Benefits are to be paid by the mine
operator found responsible for the disability. Benefit payments for
eligible miners and survivors where no mine operator can be assigned responsibility, or where mine employment terminated
before 1970, are paid from the black lung disability trust fund. This
trust fund is intended to be financed by an excise tax on coal.
However, benefit payments and expenses exceed the tax revenues,
and the trust fund is expected to be $2.1 billion in debt by the end
of 1982. Benefit payments from the trust fund are estimated at
$775 million in 1981 and $570 million in 1982.
Pension Benefit Guaranty Corporation.—The Pension Benefit
Guaranty Corporation was established by the Employee Retirement
Income Security Act of 1974 to protect the vested benefits of workers in covered pension plans that terminate. Employers with covered plans pay annual premiums to cover the Corporation's costs of
taking over terminated plans and paying retirement benefits when
due. Individual employers who sponsor their own plans and terminate them are liable for unfunded portions of vested retirement
benefits up to 30% of the employers' net worth. A law enacted in
1980 requires different treatment of multi-employer plans. For
these plans, the Corporation now insures plan insolvency rather
than plan termination. Financially troubled multi-employer plans
may reorganize and adjust benefits under regulations of the Corporation, and the Corporation may extend loans to enable the plans
to continue paying benefits. The new law requires that the Corporation's outlays be counted in the government's budget totals. Its
receipts are expected to exceed expenditures by $37 million in 1981
and $29 million in 1982.
Other.—The President's Commission on Pension Policy was established to develop recommendations on efficient and equitable
retirement systems. It is examining several subjects, including the
definition of an adequate standard of living upon retirement and
the ability of the various public and private retirement systems to
meet the needs of the retired population. In addition, data are




INCOME SECURITY

257

being collected on the financial condition of the various systems
and their ability to finance promised benefits; on the cost of these
benefits now and in coming decades; and on the relationship of tax
policy, capital formation and economic growth to pension policy.
The Commission has completed two interim reports. The May 1980
report dealt primarily with issues related to private pension plans.
The November 1980 report examined the financing and benefit
structure of the social security system. The final report of the
Commission is scheduled to be submitted to the President and the
Congress in late February 1981.
Tax expenditures.—A variety of income exclusions, tax deferrals,
and credits assist the aged, retired, and disabled. The exclusion
from income subject to tax of all social security and most railroad
retirement benefits without regard to an individual's income from
other sources results in estimated tax expenditures of $11.3 billion
and $435 million, respectively, in 1982. The exclusion from income
of benefits for the disabled results in an estimated tax expenditure
of $1.0 billion in 1982, and the exclusion of disability pay from
income taxes will result in tax expenditures of $170 million. The
tax expenditures resulting from the extra personal exemption for
those over 64 and the blind, and from tax credits for the elderly
are estimated to reduce 1982 receipts by an estimated $2.5 billion,
$30 million and $120 million respectively.
Tax expenditures also provide incentives for employers to provide their workers with pensions and other benefits such as life,
accident, and disability insurance and supplemental unemployment
compensation. Excluding the cost of these benefits from personal
income results in estimated tax expenditures of $30.2 billion, $2.1
billion, $105 million, and $20 million, respectively, in 1982.
Federal employee retirement and disability.—Outlays for Federal
civilian retirement and non-work-related disability insurance are
estimated to increase from $18 billion in 1981 to $20 billion in 1982.
These Federal programs are estimated to have 1.9 million beneficiaries in 1982. (Military retirement is discussed in the section on
national defense.)
Legislation is supported again to provide for annual cost-of-living
adjustments in Federal annuity payments. Currently, adjustments
are made on a semi-annual basis, a practice associated only with
government employee retirement programs. The change will align
Federal policy with that of the social security system.
Expenditures for disability retirement are expected to decrease
gradually as a result of efforts to develop more specific eligibility
criteria. When the criteria are applied, the number of beneficiaries




258

THE BUDGET FOR FISCAL YEAR 1982

should decrease. Potential savings of $135 million in outlays are
anticipated for 1982.
The Department of Labor, through the Federal Employees' Compensation Act program, provides tax-free cash and medical benefits
to Federal employees or their survivors for job-related injuries,
illnesses, or deaths. Other Federal agencies subsequently reimburse
the Department for payments made on behalf of their employees.
About 49,000 workers with long-term disabilities, or their survivors,
are expected to receive monthly payments in 1981. In 1982, this
number is estimated to decline by 2% to 48,000, due to better
quality control. Over $1 billion in benefits is expected to be paid in
1982. After reimbursements from other agencies, outlays are estimated to increase from $311 million in 1981 to $353 million in
1982.
The Federal Employees' Compensation Act was amended in 1980
to provide for annual cost-of-living adjustments. Previously, cost-ofliving adjustments were made in monthly payments whenever the
CPI increased at least 3% over the index of the last base month
and remained there for 3 consecutive months. In recent years, this
irregular system of CPI adjustments has resulted in increases in
benefits twice and even three times a year. The new law will result
in outlay savings of $33 million in 1981 and $300 million over the
5-year period 1981-85.
Unemployment compensation.—About 97% of wage and salaried
employment in the United States is covered by unemployment
compensation that supports individuals who are temporarily out of
work and are searching for jobs. This income to unemployed workers also helps support aggregate purchasing power during slack
periods in the economy. It is estimated that an average of 4.1
million workers per week will receive unemployment benefits
during 1981 and 3.4 million in 1982. Outlays are estimated to
decrease from $26.1 billion in 1981 to $21.9 billion in 1982 as a
result of a decline in the projected average unemployment rate
from 7.8% in fiscal year 1981 to 7.6% in 1982 and of the proposed
legislation described below.
Under present law, the number of weeks an unemployed worker
can receive unemployment insurance (usually 26) is increased by
50% in any State where the insured unemployment rate is 4% or
more for 13 consecutive weeks and at least 120% of the rate in the
corresponding period in each of the previous 2 years. States may
also provide these extended payments when their insured unemployment rate reaches 5% for 13 weeks regardless of the rates in
prior years. In addition, the extended benefits are paid in all States
when the national insured unemployment rate reaches 4.5% for 13




INCOME SECURITY

259

consecutive weeks. Eligibility for extended benefits ceases whenever the insured unemployment rates fall below these requirements for 13 consecutive weeks.
Currently, those claiming extended benefits are counted in calculating the insured unemployment rates. Several anomalies have
resulted from this method of calculation. First, the payment of
extended benefits in a State that paid such benefits in either of the
2 previous years may be delayed when unemployment rises.
Second, extended benefits may be paid in one State while they are
not paid in a second State with an identical overall unemployment
rate. Third, extended benefits continue to be paid when overall
unemployment is less than it was when the extra payments started. Legislation is recommended to correct these imperfections by
removing claimants of extended benefits from the calculation of
insured unemployment rates. This proposal, in addition to eliminating the anomalies cited above, would effectively raise the unemployment rate required to trigger extended benefits nationally.
Most of the outlay savings from this proposal are related to the
national trigger. Under current law, extended benefits would be paid
nationally for the first three quarters of fiscal year 1982, using the
unemployment rates forecast in the budget. Under the proposal,
these unemployment rates would not activate the national trigger.
Extended benefits would still be paid in individual states that trigger
extended benefits; these payments are estimated to be $1.5 billion in
1982. If the unemployment rate were only one-fourth percentage
point higher for 1982, the national trigger would be activated under
both current and proposed law and the outlay savings from this
proposal would be relatively small. Under present economic projections this proposal would reduce outlays for unemployment compensation by $2.1 billion in 1982.
In order to reduce the deficit, the Omnibus Reconciliation Act of
1980 phased out a special reimbursement to States for unemployment benefits paid to former public service employees funded
under the Comprehensive Employment and Training Act (CETA).
Legislation is recommended to complete this action by making
unemployment compensation coverage of these workers optional
rather than mandatory and by prohibiting the use of Federal
public service employment funds to pay such benefits. This proposal is expected to reduce outlays by $100 million in 1982.
In addition to the regular unemployment insurance programs,
special unemployment benefits are available to certain workers
whose unemployment has been determined to have been caused by
specific circumstances. The most important of these special programs is trade adjustment assistance (TAA), which gives workers
certified as unemployed due, at least in part, to increased imports
weekly benefit payments that are higher and last longer than




260

THE BUDGET FOR FISCAL YEAR 1982

normal unemployment insurance (up to 78 weeks). Outlays for
TAA are estimated at $2.7 billion in 1981 and $1.5 billion in 1982.
Due to certification that layoffs of large numbers of auto workers
were attributed at least in part to imports, the estimated outlays
for this program in 1981 grew from an expected $450 million at the
time of submission of the revised fiscal year 1981 budget in March
1980 to $2.7 billion at present.
Tax expenditures.—Unemployment compensation benefits received by people with an annual income, including unemployment
compensation, of under $20,000 (single persons) or under $25,000
(married couples) are excluded from taxable income. The resulting
tax expenditure is estimated at $4.5 billion in 1982.
Housing assistance.—The Federal Government provides a broad
range of economic assistance to support housing. The emphasis of
the direct expenditure programs administered by the Department
of Housing and Urban Development (HUD) is on rental housing
assistance for low-income families and individuals. Outlays for
these programs are estimated to grow by 24% in 1982 to $6.9
billion. HUD also provides operating subsidies for many subsidized
housing projects; outlays are estimated to grow from $972 million
in 1981 to $1.1 billion in 1982.
The 1982 budget supports two major HUD rental housing programs:
• lower income rental assistance (section 8); and
• public housing.
The basic goal of these programs is to improve housing conditions for low-income individuals and families. Occupants of section
8 and public housing pay rent equal to 15% to 25% of their family
incomes. The Federal Government pays rental subsidies for the
difference between the amounts the occupants pay and market
rents. The Federal subsidy thus covers construction, financing, and
operating costs over periods that range from 15 to 30 years.
This budget assumes the addition of another 260,000 units of
housing under the section 8 and public housing programs in 1982,
which is slightly higher than the estimated 1981 program level. For
1982, half of the additional 260,000 units will be allocated to new
construction and substantial rehabilitation programs; the other
half to existing and moderate rehabilitation programs. Compared
to previous years, this new-to-existing ratio will take greater advantage of existing housing programs. This greater emphasis on
existing housing is due to the lower relative cost of rental subsidies
for existing units and the availability of existing housing to meet
the housing needs of disadvantaged groups such as large, lowincome families.
Currently 1.4 million families are being assisted by the section 8




INCOME SECURITY

261

program, and it is estimated that about 220,000 additional families
will be assisted with budget authority already available through
1981. Under the section 8 program for 1982, the administration
supports the following distribution of housing units:
• 71,600 new units at an average annual Federal cost of $5,924
each over 20-30 years;
• 18,400 substantially rehabilitated units at an average annual
Federal cost of $6,705 each over 20-30 years;
• 28,600 moderately rehabilitated units at an average annual
Federal cost of $4,580 each over 15 years; and
• 101,400 existing units that will each cost an estimated $3,600
per year over the 15-year contract period.
Currently, there are 1.2 million occupied units of public housing,
and another 155,000 units are scheduled for construction under
budget authority already enacted. The administration's proposed
subsidized housing program would provide for 40,000 more units of
public housing for 1982, including 4,000 units for Indians on reservations. These units would be constructed at an estimated average
cost of $63,200 per unit, except for Indian housing, which is estimated to cost $79,000 per unit. The average annual Federal costs
for public housing, which reflect only the construction and financing costs, are estimated to be $4,905 per unit for traditional public
housing and $6,278 for Indian housing over a 30-year period.
Tenants in public housing have low incomes and usually must
pay up to 25% of their incomes for rent. Because rent revenues are
insufficient to cover operating costs at more than 95% of the public
housing projects, the Federal Government also provides operating
subsidies at an estimated level of $1.1 billion in 1982. The Federal
government funds capital improvements to the existing stock of
public housing units through a separate public housing modernization program. Last year a new comprehensive improvement assistance program was proposed by the administration and enacted by
the Congress. This will permit more thorough upgrading of the
existing public housing stock during the next few years. The 1982
budget includes $2 billion in budget authority for this new program, the same level as provided by the Congress for 1981.
The budget also requests $65 million in 1982 budget authority for
the troubled projects operating subsidy program. Enacted in 1979,
this program is intended to maintain the solvency of financially
troubled multi-family projects by providing subsidies for short-term
operating costs and financing repairs. It thereby reduces Federal
Housing Administration insurance claim payments, and helps
defray additional rent burdens for low-income tenants. Projects
receiving such assistance must improve their management to correct the conditions that produced the financial problems. Eligible
State-aided projects that meet these and other Federal requirements also may receive assistance.




262

THE BUDGET FOR FISCAL YEAR 1982

Other major forms of Federal support for the housing sector are
tax expenditures and mortgage credit programs. The housing credit
programs and the tax expenditures for housing in general are
discussed under the commerce and housing credit function.
For 1982, this budget includes outlays of $53 million for housing
programs administered by the Department of Agriculture. These
programs assist low-income households through grants for the
repair of housing and rental assistance. The Department of Agriculture also assists farmers to construct housing for farm laborers
and individuals to build their own homes.
Tax expenditures.—-The HUD-subsidized housing programs are
supported by tax expenditures as well as direct budget outlays. The
most important of these involves the sale of tax-exempt instruments by State and local housing authorities to finance the construction of section 8 and public housing projects.
The administration proposed last year to begin financing new
public housing construction through taxable, rather than taxexempt, debt instruments. The Congress failed to adopt this proposal, however, and the 1982 budget does not include sufficient budget
authority to permit public housing to be financed with taxable
bonds. The Federal Government still needs to develop a viable
taxable financing mechanism for future public housing units to
help overcome financing problems created by currently volatile
bond market conditions.
Food and nutrition assistance.—Several food and nutrition programs assist needy families and individuals. The main programs
are food stamps; women, infants and children (WIC); and school
lunches.
Food stamps.—Food stamps help needy Americans buy food for
an adequate diet. Recipients receive monthly allotments of stamps
based on their income and household size. The allotments and
income eligibility criteria are adjusted annually to reflect price
changes. Most food stamp recipients are well below the national
poverty level.
This budget assumes food stamps will increase the food purchasing power of 21.5 million people each month during 1982, with
outlays estimated at $12.2 billion. Food stamp benefits are entirely
federally financed, while the States and the Federal Government
share equally the administrative cost.
The Food Stamp Act of 1977 eliminated the requirement that
recipients pay a portion of the monthly allotment value. This
change allowed people who could not afford a cash investment each
month to receive the Federal benefit. Rural and elderly recipients
seem to have benefited most from this change.




INCOME SECURITY

263

Changes enacted in the Food Stamp Act Amendments of 1979
and 1980 have improved program administration by reducing
waste, fraud, and abuse. Among the changes are provisions that
require applicants to report their social security numbers; require
recipients to repay costs of fraudulently received stamps before
eligibility recertification; permit States to use more thorough verification procedures and income information matching efforts; and
restrict food stamp participation by students. States may now receive larger Federal payments for administrative costs if they
maintain low error rates in issuing benefits. States are also liable
for a portion of benefits issued erroneously if they do not reduce
high error rates.
The administration recommends legislation to extend authorization of the food stamp program through 1985. Annual authorization ceilings would not be specified, allowing instead annual appropriation levels based on current economic conditions. To restrain
costs the legislation would also retain the present method for annually indexing food stamp allotments, the current medical deductions for elderly households, and the existing dependent care or
excess shelter deduction for all food stamp households.
Women, infants, and children (WIC).—This special supplemental
food program finances high protein food for low-income women,
infants, and children who may be malnourished.
Since the mid-1970s, when the program began as a pilot project,
outlays have expanded dramatically from $14 million in 1974 to an
estimated $994 million in 1982. About 2.2 million women who are
pregnant, who have just given birth, or who are nursing their
child; infants; and children under 5 are expected to receive supplemental food each month in 1982.
WIC food packages have highly nutritious foods such as milk,
cheese, eggs, fruit juices, and formula. These foods help to prevent
health problems for poorly nourished low-income women and their
children. Several studies have indicated that improved nutrition
resulting from the program increases infant birth weights and
reduces anemia. This helps to minimize later expenditures that
may be required for the medical and special education needs of this
group.
School lunch and other nutrition programs.—Federally subsidized
meal programs are available for students in schools, summer
camps, child care centers, and similar institutions. This budget
assumes that more than 26 million youngsters will receive subsidized meals in 1982, with estimated outlays of $3.9 billion.
Recent legislative changes limited meal and special milk subsidies in 1981 and allowed for annual rather than semi-annual price
adjustments. The budget reflects proposals to make these changes




264

THE BUDGET FOR FISCAL YEAR 1982

permanent. The administration will implement management improvements beginning in 1981—the assessment, improvement, and
monitoring system (AIMS)—which should help ensure that Federal
subsidies are claimed and accounted for properly.
Commodity and cash subsidies also are available for nutrition
programs for the elderly. These subsidies are estimated to cost $89
million in 1982 to support partially the cost of 179 million meals
served to older Americans at home or at common meal sites. Commodities are also distributed on Indian reservations and in the
Trust Territory of the Pacific Islands to improve the diets of needy
Indian and Micronesian families. These distributions are estimated
to cost $48 million in 1982.
Other income security.—This mission includes programs that
grant primarily cash to people in need. Groups eligible for such aid
include families with dependent children, the aged, the blind, the
disabled, and other low-income people.
Supplemental security income.—The supplemental security
income (SSI) program, which is administered and financed by the
Federal Government, gives cash assistance to needy aged, blind, or
disabled individuals. The basic Federal grant is supplemented by
State payments in some States.
The number of recipients was 4.2 million in 1980 and is expected
to remain at that level through 1982. Federal outlays in 1982 are
estimated to reach $8.0 billion, compared to the 1981 level of $7.3
billion. The increased outlays result from automatic cost-of-living
increases in benefit payments.
High error rates experienced in the program's initial years have
been markedly reduced. Much of this reduction is due to concentrating staff resources on error-prone cases and extensively crosschecking the records of other benefit programs. The Department of
Health and Human Services (HHS) intends to reduce further the
number of errors without sacrificing equity or incurring substantial administrative costs.
Legislation is recommended to end Federal hold-harmless payments, which are special subsidies to three States. The initial programmatic basis for these subsidies has long since eroded since the
initial Federal SSI benefit has doubled as a result of annual cost-ofliving increases.
AFDC and related programs.—The program of aid to families
with dependent children (AFDC) helps finance State and local programs of cash assistance to the needy. Federal outlays are estimated at $7.7 billion in 1982, compared with $7.8 billion in 1981 and
$7.3 billion in 1980. States and localities provide almost an equal
amount from their own resources. Errors and abuses are being




INCOME SECURITY

265

combatted through closer cooperation between the States and HHS.
Management improvement efforts, such as welfare management
and training institutes, are focusing on welfare administration in
selected States. Child support payments also are being collected
from parents who are legally liable. This activity results in a
decrease in State and local AFDC expenditures.
Legislation is recommended for the AFDC program to standardize allowable work expenses, include stepparents' income in calculating eligibility and benefits, establish a minimum amount ($10)
that could be issued to a recipient, and require periodic reporting
and retrospective accounting of beneficiary income to determine
benefits. Enactment of these proposals would simplify administration, promote accuracy in determining benefits, and further reduce
waste and other costs. Legislation is also recommended for the
child support enforcement program that would require States and
localities to charge fees to defray the cost of non-AFDC cases,
mandate the enforcement and collection of support from spouses in
AFDC cases, and deduct from the State's share of collections part
of the amount needed to make incentive payments to cooperating
jurisdictions (the remainder would be taken from the Federal share
of collections, which now finances the full amount of incentive
payments). These proposals would reduce Federal, State, and local
costs, make the Federal share of collections more nearly comparable to the Federal share of AFDC costs, and at the same time
maintain a net return to the States.
Earned income tax credit—Since 1975, the Federal Government
has provided a tax credit for low-income workers that reduces the
amount of income tax they are liable to pay. Where the credit
amounts to more than the income taxes owed, the worker receives
a check for the difference. Beginning in 1979, provision was made
for the credit to be received in advance through additions to wages.
As part of the President's economic revitalization program, an
expansion of the earned income credit from 10% to 12% is proposed, effective January 1, 1982. There would be no outlay effect
from this proposal until 1983. In 1982, total outlays for these payments are estimated to be $1.1 billion. The total cost of this program, including revenue losses and outlays, is estimated at $2.0
billion in 1982.
Refugee assistance.—In recent years, the number of refugees to
this country has increased dramatically. From 1975 to 1982, over
600,000 Indochinese and 170,000 Soviet and other refugees will
have been resettled in the United States. The flow of Indochinese
refugees to the United States in 1981 is expected to continue at the
1980 rate of 14,000 per month. For 1982, 12,000 resettlements per
month are planned. The resettlement of about 43,000 Soviet and




266

THE BUDGET FOR FISCAL YEAR 1982

other refugees is anticipated in 1982. The budget assumes that the
program of special assistance to States on behalf of Cuban refugees
who arrived in the United States before 1978 will continue to be
phased down.
The Refugee Act, which was proposed by the administration and
enacted in March 1980 by the Congress, authorizes activities to
speed the assimilation of refugees into American society and to
relieve State and local fiscal burdens. States and localities are
reimbursed by the Department of Health and Human Services for
certain cash and medical assistance, social services, and English
language and employment training given to refugees during their
first 3 years in the United States. Beginning in 1982, the budget
supports changes so that refugee assistance is more nearly comparable to aid for needy Americans.
Outlays for the refugee assistance programs described above are
estimated to be $579 million in 1981 and $659 million in 1982. The
Federal share of costs for refugees participating in regular assistance programs such as AFDC, medicaid, and food stamps is included in the budget requests for each of those programs. Estimated
outlays for such costs are $350 million in 1981 and $400 million in
1982.
Since April 1980, over 135,000 Cubans and about 40,000 Haitians
have arrived in the United States. Although they are not refugees,
they have been allowed to stay and are eligible for AFDC, medicaid, food stamps, and other assistance. For 1981, $190 million has
been appropriated for welfare and social services. For 1982, $88
million is requested to continue funding for anticipated domestic
assistance costs.
The Cuban-Haitian Task Force in HHS is responsible for reception and processing of these entrants. This role includes Federal
activities at initial resettlement centers, grants to voluntary agencies, and transportation to local sponsors. For 1981, $167 million
has been appropriated for these costs. For 1982, $27 million is
requested for general operating expenses.
Low-income energy assistance.—To moderate the impact of rising
energy costs on low-income families, funding of $1.85 billion in
budget authority is requested for low-income energy assistance in
1982. The program is administered by HHS primarily as grants to
States for aid to their needy citizens. This aid can be in the form of
direct cash assistance to needy households, direct payments to fuel
vendors on behalf of the needy, and payments to public housing
building operators. Of the total 1981 funding, $87.5 million is being
transferred to the Community Services Administration to operate
the energy crisis assistance program, which aids low-income families with energy-related emergencies.




267

INCOME SECURITY

Credit programs.—Most of the credit programs in this function
are loan guarantees for public housing operation and construction.
They are estimated to be $17.1 billion in 1982. Some of these
become direct loan off-budget outlays when purchased by the Federal Financing Bank.
CREDIT PROGRAMS—INCOME SECURITY
(In millions of dollars)
1980
actual

Program
Pension Benefit Guaranty Corporation:
Direct loans:
New loans
Repayments, sales, and adjustments ( — )

3

2

3

1,319
-1,281

302
-302

303
-302

38

*

*

14,214
1,440

16,095
1,799

17,137
2,285

-4

_1

1

-4

Public housing operation and construction:
Direct loans: 1
New loans
Repayments, sales, and adjustments ( — )
Net loan outlays
Loan guarantees:2
New loans guaranteed
Net loan guaranteed
Assistance to refugees:
Direct loans:
New loans
Repayments, sales, and adjustments ( - )
Net loan outlays

Net loan outlays

1982
estimate

2

1

1

Net loan outlays

Off-budget Federal entity—Federal Financing Bank:
Public housing:
Direct loans:
New loans
Repayments( )

1981
estimate

3

-1

119
119

957
-15

1,457

942

1,458

*$500 thousand or less.
1
Includes direct loan transactions with the FFB shown below.
2
Includes guarantees of direct loan transactions with the FFB shown below.
3
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlays with transactions shown
above in this table. See the introduction to Part 5 for further explanation.

Related programs.—A number of other programs are related to
income security but have as their primary purpose meeting other
national needs and servicing other major missions. The following
table lists these income security-related programs that support
other missions.




268

THE BUDGET FOR FISCAL YEAR 1982
FEDERAL OUTLAYS FOR INCOME SECURITY-RELATED BENEFITS SUPPORTING OTHER MAJOR
MISSIONS
(In millions of dollars)
Benefit outlays
Department, agency, and program

Department of Education:
Student assistance
Student loans

1980
actual

1981
estimate

1982
estimate

3,297
1,233

3,407
1,849

3,686
2,015

Total, Department of Education

4,530

5,256

5,701

Department of Health and Human Services:
Medicare
Medicaid
Indian health
Health care services
Public Health Service officers retirement

33,937
13,805
549
1,311
72

38,853
15,096
599
1,293
77

45,638
17,030
642
1,385
92

49,674

55,918

64,787

7,434
3,585
2,417
5,981
183

8,492
3,840
2,071
6,306
198

9,595
4,085
1,699
6,936
204

19,600

20,907

22,519

11,920

13,795

15,572

207

246

279

85,931

96,122

108,858

Total, Department of Health and Human Services
Veterans Administration:
Service-connected compensation
Veterans pensions
Readjustment benefits
Medical care
Other
Total, Veterans Administration
Department of Defense—Military:
Military retirement
Department of Transportation:
Coast Guard retirement
Total outlays




VETERANS BENEFITS AND SERVICES

269

VETERANS BENEFITS AND SERVICES
National Needs Statement:
• Meet the Nation's obligation to compensate veterans disabled while in military service for their loss of earning
power.
• Provide medical care to veterans for disabilities incurred
while in military service; and, within available resources,
to needy veterans.
• Compensate the families of veterans who are killed in
service or who die from service-related disabilities for the
reduction in the family's earning power.
• Help veterans of wartime and draft service return to
civilian life on a social and economic basis comparable to
their peers who did not perform military duty.
• Provide psychological readjustment services and expanded training opportunities to Vietnam-era veterans with
special needs.
• Provide financial assistance to needy veterans and their
survivors.
The benefits and services provided to veterans recognize the
special needs of veterans and their dependents and survivors that
result from the sacrifices that veterans have made in military
service to this country. Benefits compensate for loss of earnings
resulting from service-related disabilities, provide medical care for
physical and psychological disabilities suffered in military service,
and assist in preparing returning veterans for civilian life. In addition, veterans benefits provide financial assistance to needy veterans of wartime service and their survivors.
This administration has sponsored and implemented a number of
improvements in veterans programs. Three of these improvements
are particularly significant:
• Special assistance to Vietnam veterans. The special needs of
Vietnam veterans have been emphasized in all Veterans Administration (VA) programs. Legislation enacted in 1980
(Public Law 96-466) provided for the first major improvement
and modernization of the vocational rehabilitation program in
nearly 40 years, emphasizing training and support to make
independent living and employment possible for disabled veterans. The VA has established 91 psychological counseling
and readjustment centers to seek out and give help to Vietnam veterans. In addition, contracts with community halfway
houses and programs for treatment of drug and alcohol de340-000 0 - 81 - 19 : QL 3




270

THE BUDGET FOR FISCAL YEAR 1982

pendent patients have been enhanced to provide assistance to
Vietnam veterans.
• Improvements in medical care. The number of veterans served
in medical facilities of the Veterans Administration has increased and the quality of care has been improved. These
improvements have been achieved in part by reducing the
duration of hospitalization and by increasing reliance on outpatient treatment. Under this budget the number of longterm care beds are increased to assist the VA in meeting its
share of the demand expected to result from the aging of the
World War II veteran population.
• Reform of the pension program. This reform, enacted in 1978,
sharpened the focus of financial aid on truly needy veterans,
while eliminating inequities in the previous program that had
allowed veterans in widely differing financial situations to
receive identical pensions. The pension reform legislation also
introduced automatic annual cost-of-living increases in benefits.
This budget reflects the following legislative proposals for improving veterans benefits and services in 1982:
• a 12.3% cost-of-living increase in compensation benefits for
veterans with service-related disabilities; and
• a 2-year extension of the period of eligibility for certain readjustment benefits for needy and educationally disadvantaged
Vietnam-era veterans.
The budget provides health care for the growing number of
elderly veterans. During the 1980s the number of veterans over age
65 is expected to more than double as virtually all of the 12 million
veterans of World War II pass this milestone. In anticipation of
this change in the age structure of the veteran population, VA's
medical care and research activities are devoting more attention to
the problems of aging veterans by increasing the availability of
long-term and geriatric care and devoting more research to the
illnesses and disabilities of the aged.
This budget continues to provide increases in construction funds
to maintain, renovate, modernize, and systematically replace aging
VA medical structures in order to prevent deterioration of the
physical facilities housing VA medical services.
At the same time, several cost-saving proposals requiring legislation are in the budget. These legislative proposals, which are described in more detail below, would help offset part of the costs of
the proposed improvements in veterans programs.
Outlays for veterans benefits and services are estimated to rise
from $22.6 billion in 1981 to $24.5 billion in 1982. Outlays for
veterans income security programs, primarily compensation and
pensions, are expected to increase by $1.4 billion (10%) between




VETERANS BENEFITS AND SERVICES

271

1981 and 1982, largely as a result of cost-of-living increases, even
though the number of pension recipients continues to decline. Despite legislation (Public Law 96-466) increasing GI bill benefits by
10% in two stages, fully effective January 1, 1981, outlays for
readjustment benefits are expected to decrease by $367 million
(19%) from 1981 to 1982 because fewer veterans will be eligible.
Outlays for the basic programs of hospital and medical care for
veterans are proposed to increase by $802 million in 1982. Veterans
housing programs are expected to produce negative outlays of $53
million in 1982 due to the sale of housing assets.
Income security for veterans.—In addition to Federal income security programs for the general population, such as social security,
unemployment insurance, housing and energy assistance programs,
food stamps, and medicare and medicaid, several VA programs
help certain veterans and their survivors maintain their income
when the veteran is disabled, aged, or deceased. Outlays for this
mission are estimated to increase from $13.1 billion in 1981 to $14.5
billion in 1982.
Service-connected compensation. —Monthly compensation payments are provided to veterans whose disabilities resulted from
military service. The amount of the benefit depends on the degree
to which average earnings of individuals with a particular disability are reduced. In addition, payments are made to survivors of
veterans who die from service-connected injuries. Legislation effective in October 1980 increased compensation benefits by 14.3% for
veterans rated 50% disabled or higher, and 13% for those rated
10% to 40% disabled.
The administration supports a 12.3% cost-of-living increase in
compensation benefits, effective in October 1981. The estimates for
subsequent years assume annual cost-of-living increases, based on
the projected Consumer Price Index. As discussed in the income
security function, the administration proposes the use of an alternative CPI that treats housing on a "rental equivalency" basis for
future cost-of-living increases. No outlay effects are projected for
this change. An estimated 2.6 million veterans and their survivors
are expected to receive compensation benefits in each of the years
1981 through 1984. Outlays for this mission are estimated to increase from $8.5 billion in 1981 to $9.6 billion in 1982.




272

THE BUDGET FOR FISCAL YEAR 1982

NATIONAL NEED: PROVIDING VETERANS BENEFITS AND SERVICES
(Functional code 700; in millions of dollars)
Major missions and programs

BUDGET AUTHORITY
Income security for veterans:
Compensation and pensions:
Service-connected compensation:
Existing law
Proposed legislation
Non-service-connected pensions
Burial and other benefits
Insurance programs.National service life insurance trust fund....
U.S. Government life insurance trust fund.,
All other insurance programs
Insurance program receipts
Subtotal, income security for veterans.
Veterans education, training, and rehabilitation:
Existing law
,
Proposed legislation
Subtotal, veterans education, training, and rehabilitation..
Hospital and medical care for veterans:
Medical care and hospital services:
Existing law
Proposed legislation
Construction
Medical administration, research, and other
Subtotal, hospital and medical care for veterams..
Other veterans benefits and services:
Undistributed VA overhead and other:
Existing law
Proposed legislation
Non-VA support programs
Subtotal, other veterans benefits and services.
Deductions for offsetting receipts
Total, budget authority




actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

7,353 8,584 8,658 8,704 8,775
1,039 2,125 3,118
3,608 3,860 4,106 4,389 4,663
215
186
199
204
210
1,044 1,135 1,162 1,174 1,179
34
27
38
32
29
5
6
8
8
8
-464 -474 -478 -470 - 4 6 1
11,770 13,344 14,731 16,170 17,524
2,374 2,041 1,658 1,320 1,059
31
39
2,374 2,041 1,689 1,359 1,051

5,832 6,365 7,005 7,532 7,965
-47 - 4 5 - 4 3
402
549
673
980 1,763
248
196
175
220
237
6,409 7,110 7,851 8,704 9,933

64
2

668
....„„.

3
4
68
5

72
0

678
1
38
77
1

689
1
39
79
2

695
*
39
734

-2 -3 -3 -3 - 3
21,208 23,194 24,984 26,959 29,239

273

VETERANS BENEFITS AND SERVICES
NATIONAL NEED: PROVIDING VETERANS BENEFITS AND SERVICES—Continued
(Functional code 700; in millions of dollars)
1980
actual

OUTLAYS
Income security for veterans:
Compensation and pensions:
Service-connected compensation:
Existing law

Proposed legislation
Non-service-connected pensions
Burial and other benefits
Insurance programs:
National service life insurance trust fund
U S Government life insurance trust fund
All other insurance programs

Insurance program receipts
Subtotal, income security for veterans

1981
estimate

1982
estimate

1983
estimate

1984
estimate

7,434

Major missions and programs

8,492

3,585
183

3,840
198

8,643
952
4,085
204

8,691
2,034
4,366
209

8,758
3,035
4,640
?14

928
77
-55
-464

1,036
67
-55
-474

1,062
62
-54
-478

1,084
58
-52
-470

1,103
54
-50
-461

11,688 13,103 14,477 15,920 17,294

Veterans education, training, and rehabilitation:
Existing law

2,342

1,956

1,588

1,269
-28

1,038
-72

2,342

1,956

1,589

1,241

966

5,981

6,306

309
225

384
245

6,983
-47
558
242

7,511
-45
680
254

7,959
-43
872
256

6,515

6,935

7,737

8,400

9,044

Veterans housing:
Loan guaranty revolving fund
Direct loan revolving fund
Other (HUD participation sales trust fund)

28
-67
16

-42
-119
55

25
-72
-6

30
-71
-4

48
-70
-4

Subtotal, veterans housing

-23

-106

-53

-45

-26

683
1
38

692
*

Proposed legislation
Subtotal, veterans education, training, and rehabilitation
Hospital and medical care for veterans:
Medical care and hospital services:
Existing law
ProDosed legislation

Construction
Medical administration, research, and other
Subtotal, hospital and medical care for veterans

Other veterans benefits and services:
Undistributed VA overhead and other:
Existing law
Proposed legislation
Non-VA support programs

. . . .

Subtotal, other veterans benefits and services
Deductions for offsetting receipts
Total, outlays
*$500 thousand or less.




633

671

32

35

677
1
37

665

706

715

723

731

-2

-3

-3

-3

-3

39

21,183 22,591 24,462 26,236 28,008

274

THE BUDGET FOR FISCAL YEAR 1982

Non-service-connected pensions.—Pensions are provided to needy

wartime-service veterans who are age 65 or older or who have
become disabled subsequent to their military service. Survivors of
wartime-service veterans also may qualify for pension benefits
based on financial need. The Veterans and Survivors Pension Improvement Act of 1978 sharpened the focus of veterans pension
benefits upon needy, non-service disabled veterans. The Act liberalized benefits for the neediest veterans and survivors, while correcting many of the inequities in the previous program. The reform
legislation did away with most earnings exclusions that had allowed veterans in widely differing financial situations to draw
identical pensions, and provided that pension benefits be reduced
dollar-for-dollar with increases in earnings. In addition, the reform
legislation provided for automatic cost-of-living increases each July
starting in 1979. In all, 1.9 million needy veterans and their survivors are expected to receive $4.1 billion in 1982.
Burial and other benefits.—Families of deceased veterans who
are buried in private cemeteries may receive allowances to apply
toward the purchase of burial plots. Families of deceased veterans
also receive burial benefits to assist in defraying funeral expenses.
Outlays for burial and other allowances are estimated to increase
from $198 million in 1981 to $204 million in 1982.
Insurance programs.—The budget assumes that insurance programs for veterans and their survivors will provide an estimated
$30 billion of coverage on 4.4 million policies in 1982. The servicemen's group life insurance program for military personnel is projected to provide an estimated $63 billion of coverage on 3.2 million
policies in 1982. Low-interest policy loans against life insurance
reserves have risen dramatically as the economy has experienced
record high interest rates. Loans in fiscal year 1982 are expected to
be slightly less than those estimated for 1981, amounting to $298
million.
Veterans education, training, and rehabilitation.—The GI bill pro-

vides education benefits ranging from college courses to vocational
and on-the-job training. These benefits help eligible veterans make
the transition from military to civilian life by helping them obtain
the education they might have received had they not entered military service. Active duty servicemen and widows and children of
veterans who have died or been totally disabled in military service
also are eligible for these benefits. This budget reflects the 10%




VETERANS BENEFITS AND SERVICES

275

increase enacted last year in GI bill education benefits, fully effective January 1, 1981, to help Vietnam-era veterans and eligible
dependents and survivors continue to pursue their educational
goals in spite of increased costs. In addition, the administration
continues to support the extension of the period of eligibility from
10 to 12 years for certain Vietnam-era veterans who have less than
a high school diploma or who require on-the-job training to find
employment.
Benefits paid to veterans under the vocational rehabilitation program were increased by 17%, effective October 1, 1980. In addition,
legislation was enacted in 1980 to improve and modernize vocational rehabilitation services offered to disabled veterans. These improvements are intended to make this program more responsive to
the needs of Vietnam veterans by placing emphasis on the provision of training and support to make employment and independent
living possible for disabled veterans.
Individuals who enter military service after 1976 are eligible for
the post-Vietnam-era education program, which allows them to set
aside $25 to $100 (a change from the $50 to $75 permitted under
prior law) from their monthly pay to finance future education.
These amounts are matched by the government on a two-for-one
basis and returned to these individuals in education payments after
they are discharged. Current authority for this program expires on
December 31, 1981. The administration recommends a one-year
extension of the current VA authority while the Department of
Defense tests and evaluates the effects of various supplements to
post-Vietnam educational benefits on the recruitment and retention of servicemen in certain difficult-to-recruit areas.
More than 65% of all Vietnam-era veterans have utilized GI bill
benefits. The number of GI bill trainees will continue to drop in
the future as the number of eligible veterans becomes smaller. In
1982, nearly 645,000 GI bill trainees are expected to participate in
the program, compared with 847,000 in 1981. Thus, outlays for this
mission are estimated to decline from $2.0 billion in 1981 to $1.6
billion in 1982, $1.2 billion in 1983, and $1.0 billion in 1984.
The administration continues to support legislation to end payments for general flight training and correspondence courses, activities that do not meet the criterion of promoting the readjustment
of veterans to civilian life. Enactment of this proposal would
reduce outlays by $32 million in 1982.
Hospital and medical care for veterans.—The Veterans Adminis-

tration provides hospital and medical care to veterans by operating
a nationwide medical care system. In 1982 it is expected to accommodate over 18 million outpatient medical and dental visits, and
treat more than 1.3 million patients in 172 hospitals, 229 outpa-




276

THE BUDGET FOR FISCAL YEAR 1982

tient clinics, 100 nursing homes, and 16 domiciliary facilities. Outlays for medical programs are estimated to be $6.9 billion in 1981
and $7.7 billion in 1982.
Medical care and hospital services.—In 1982 the VA plans to
continue to reorder its program of health care services to provide
the most appropriate types of care and to accommodate the anticipated influx of World War II veterans. Almost all of this group of
about 12 million veterans (40% of all veterans) will reach age 65
during the decade beginning in 1980. This milestone is especially
significant because veterans reaching age 65 become eligible for a
wide variety of medical benefits without regard for financial status,
and the VA anticipates a rapid increase in the number of veterans
seeking long-term and geriatric care. Under this budget, the VA's
medical care system continues to place the needs of service-disabled
veterans before all other demands for medical care, and many
efforts to improve the quality of medical care are continued. It is
assumed that increases in the cost of VA health care will be
moderated through greater efficiency. Under the budget proposals,
the research programs of the VA medical system would grow from
$140 million to $155 million between 1981 and 1982, and training of
health care professionals would continue, primarily through the
affiliation of 137 VA hospitals with medical schools.
The Veterans Administration Health Care Amendments of 1980
(Public Law 96-330) provided various changes to the VA medical
personnel system, including very substantial increases in special
pay given to VA physicians and dentists. The increments in these
bonuses will cost $79 million in 1982. Other provisions allowed the
VA flexibility to adjust pay and set working hours and conditions
for nurses. This legislation authorized an expansion of VA health
facilities used as centers for geriatric research, education, and clinical activities. The law also gave the VA the authority to verify the
oath of inability to pay that certain non-service-disabled veterans
are required to sign prior to admission for medical treatment. This
provision should help assure that the highest priority for VA medical services goes to the service-disabled and the most needy.
The administration continues to recommend legislation to terminate outpatient dental benefits for certain non-service related
dental problems, which would save an estimated $32 million in
1982 and decreasing amounts in later years. The budget also reflects a legislative proposal to eliminate travel reimbursements for
veterans being treated for non-service-connected disabilities.
Construction of hospital and extended care facilities.—Budget authority of $673 million is requested for VA medical construction in
1982, a record funding level. This is an increase of 23% over the
1981 level of $549 million. The 1982 request, like the 1981 level,




277

VETERANS BENEFITS AND SERVICES

recognizes the critical need for renovation and modification of
many of the aging facilities in which medical services are provided. This includes funding for new nursing homes, new outpatient facilities, and design funds for a replacement hospital in Albuquerque, New Mexico. Budget authority of $18 million is requested
in 1982 for grants to States for construction of extended care facilities, permitting the establishment or repair of State veterans
homes for the care of aging veterans.
Veterans housing.—VA mortgage loan guarantee and direct loan
programs are expected to assist 355,400 veterans obtain mortgage
loans totaling $21.1 billion in 1982. Sales of housing assets (VA
mortgages), estimated at $248 million, will offset much of the cost
of these programs.
CREDIT PROGRAMS—VETERANS BENEFITS AND SERVICES
(In millions of dollars)
Program
Income security programs:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays
Education programs:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays
Housing programs:
Direct loans:*
New loans
Repayments, sales and adjustments (—)
Net loan outlays
Loan guarantees:

1980
actual

1982
estimate

1981
estimate

257
-139

301
-150

298
-154

118

151

144

8
-7

10
-8

1

2

10
-10
*

366
-395

411
-453

436
-476

-29

-42

-40

6,701
4,177

10,496
7,819

11,234
8,335

2

New loans
Net loan guarantees
*$500 thousand or less.
1
Includes sales of direct loans.
2
Includes guarantees of sales of direct loans.

Other veterans benefits and services.—The Veterans Administration administers a national cemetery system for burial of eligible
veterans, servicemen, and their survivors. Under administration
policy, one large active national cemetery has been designated as
the regional cemetery in each of the 10 Federal regions. New
regional cemeteries are under construction in 4 of the 10 regions (I,
II, III, and IX) and existing cemeteries have been designated in 4




278

THE BUDGET FOR FISCAL YEAR 1982

other regions (VI, VII, VIII, and X). In 1982, construction will begin
on the National Cemetery at Fort Gillem, Georgia (Region IV) and
on the National Cemetery at Fort Custer, Michigan (Region V).
The budget provides $5 million in 1982 budget authority for matching grants to States for the construction of State veterans cemeteries. Other expenditures include the cost of non-medical program
administration, both in VA headquarters and in field units.
Outlays for these programs are estimated to be $706 million in
1981 and $715 million in 1982.
Tax expenditures.—Veterans compensation and pension benefits
are excluded from taxable income. The revenue losses from these
exclusions in 1982 are estimated to be $1.6 billion and $95 million,
respectively. GI bill benefits also are excluded from taxable income,
which results in an estimated 1982 tax expenditure of $160 million.
Related programs.—In addition to the assistance provided specifically for veterans by the VA, many veterans receive assistance
from other income security, health, housing, education, training,
employment, and social service programs supported by the Federal
Government and available to the general population. Some of these
programs have components specifically intended to assist veterans.
Legislation passed in 1980 created the position of Assistant Secretary for Veterans Affairs in the Department of Labor and upgraded the status of the 2,000 State employment service staff designated by the legislation to assist disabled veterans to find jobs. The
Department of Labor also ensures that qualified veterans participate fully in the training and related services available under the
Comprehensive Employment and Training Act. Firms holding Government contracts are required to list their job vacancies with the
State employment service and are required to take affirmative
action to employ Vietnam-era and handicapped veterans.




ADMINISTRATION OF JUSTICE

279

ADMINISTRATION OF JUSTICE
National Needs Statement
• Represent the interest of the public in civil litigation and
in other legal matters.
• Maintain public order and enforce Federal statutes.
• Provide people accused of Federal crimes with fair and
prompt trials.
• Operate secure but humane detention and correctional
facilities for persons charged with or convicted of violating Federal law.
• Assist in the improvement of State and local criminal
justice systems.
Our body of laws and legal institutions bind our society together
and lend order and predictability to our lives. The equitable administration of justice is the foundation for a functioning democracy
and is one of the most basic operations of government. The Federal
Government will spend an estimated $4.9 billion in outlays to meet
these needs in 1982, while State and local governments will spend
close to $26 billion.
In an era of reduced Federal resources, the principle theme in
this budget for the administration of justice is to decrease the
Federal role where State and local governments can better assume
responsibility. Several criteria have been used to determine appropriate Federal activities in areas that would otherwise be under
State or local jurisdiction. A Federal role may be justified in activities that:
• lack the local resources and capability to be handled independently, such as apprehension of individuals involved in
organized crime;
• leverage greater resources through cooperative efforts or the
development of local capability, such as the Drug Enforcement Administration's coordinated State and local task forces,
which assist in prosecuting drug offenders; and
• rank high as an administration of justice priority, but would
not be conducted without Federal assistance, such as juvenile
justice and delinquency prevention programs, and legal services assistance.




280

THE BUDGET FOR FISCAL YEAR 1982

A second theme in this budget is to continue emphasis of Federal
investigation and prosecution of white collar crime, organized
crime, and major drug offenders.
A third theme is to protect the Government against unwarranted
civil suits and to improve Federal debt collection—over $135 million is outstanding on cases settled favorably for the Federal
Government.
Federal law enforcement activities.—Over half of the resources
and 60% of Federal administration of justice personnel are associated with law enforcement activities. While no overall increases in
personnel are proposed, Federal law enforcement outlays in 1982
are estimated to grow to $2.5 billion, or 5% above 1981 levels, in
order to maintain current activities.
General investigation (FBI),—The Federal Bureau of Investigation (FBI) enforces a broad range of Federal criminal statutes, and
cooperates with State and local authorities both to support FBI
missions and to assist States and localities in performing their
activities through training, information dissemination, and other
assistance. Federal law enforcement funds are primarily for investigating those cases that are purely Federal or are too complex for
State and local authorities to handle effectively.
This budget request emphasizes productivity through greater use
of innovative investigative methods and available technology, and
especially through automated data processing. Historically, the FBI
has supported its investigative and administrative operations with
labor-intensive, manually operated information and management
systems. These systems, while appropriate in the past, can no
longer provide the accurate, dependable, and efficient support required. The requested increase in automated data processing would
improve both the investigation of crime and the management of
the FBI. Outlays for the FBI proposed in this budget will increase
by an estimated $64 million, from $679 million in 1981 to an
estimated $743 million in 1982.
Narcotics violation investigation (DEA).—In the proposed budget
the Drug Enforcement Administration (DEA) would continue its
efforts to disrupt organized trafficking in the most dangerous
drugs. In particular, DEA proposes to strengthen its enforcement
capability through additional staffing, and through intelligence in-




281

ADMINISTRATION OF JUSTICE
NATIONAL NEED: ADMINISTRATION OF JUSTICE
(Functional code 750; in millions of dollars)
Major missions and programs

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

614
201
143
800

682
224
152
872

744
236
160
895

760
241
164
917

805
248
167
944

179

185

193

222

28
7

30
2

187
1
359

BUDGET AUTHORITY
Federal law enforcement activities:
General investigation (FBI)
Narcotics violation investigation (DEA)
Alcohol, tobacco, and firearms investigation (ATF).,
Border enforcement activities (Customs and INS)...
Protection and other activities (Secret Service):
Existing law
Proposed legislation
Other enforcement
Subtotal, Federal law enforcement activities..
Federal litigative and judicial activities:
Civil and criminal prosecution and representation:
Existing law
Proposed legislation
Federal judicial activities
Representation of indigents in civil cases
Subtotal, Federal iitigative and judicial activities..
Federal correctional activities
Criminal justice assistance
Deductions for offsetting receipts
Total, budget authority

372

388

2,214 2,435 2,582 2,647

2,775

674
321

554
-13
753
347

569
-13
740
364

586
-14
765
382

1,370

1,496

1,641

1,659

1,720

320
498
-11

355
183
-12

379
235
-12

382
228
-12

393
245
-12

4,391

4,458

4,825

4,905

5,121

609
204
146
816

679
221
151
862

743
232
158
866

760
237
160
904

804
244
164
931

179

181

189

218

22
8

31
2

186
1
350

365

381

2,237 2,415 2,536 2,615

2,742

49
5

51
0

610
300

OUTLAYS
Federal law enforcement activities:
General investigation (FBI)
Narcotics violation investigation (DEA)
Alcohol, tobacco, and firearms investigation (ATF)..
Border enforcement activities (Customs and INS)...
Protection and other activities (Secret Service):
Existing law
Proposed legislation
Other enforcement
Subtotal, Federal law enforcement activities..
Federal litigative and judicial activities:
Civil and criminal prosecution and representation:
Existing law
Proposed legislation
Federal judicial activities
Representation of indigents in civil cases

685
328

540
-12
746
347

543
-13
732
364 1

559
-13
758
382

1,347

1,515

1,620

1,626

1,685

Federal correctional activities
Criminal justice assistance
Deductions for offsetting receipts..

342
656
-11

367
501
-12

392
378
359 i 252
-12 -12

399
274
-12

Total, outlays

4,570

4,786

4,882

4,874

5,088

Subtotal, Federal litigative and judicial activities..




42
5

53
0

575
320

282

THE BUDGET FOR FISCAL YEAR 1982

vestigations to deal with Southwest Asian heroin traffic in Northeastern cities, and cocaine and marijuana traffic entering Florida.
Use of conspiracy, racketeering, and currency control laws have
been effective in identifying drug traffic offenders. Leads resulting
from violation of tax laws can also help to arrest these offenders.
DEA expects to improve its investigation of illegal drug traffic by
coordinating its efforts with the Internal Revenue Service, which
enforces the tax laws. Outlays for DEA are expected to increase by
$11 million to $232 million in 1982.
Border enforcement activities (INS).—While the budget for the
Immigration and Naturalization Service (INS) does not provide for
all of the positions authorized in 1981, the budget does recommend
that the total agency workyears be maintained at the current level.
The administration believes that initiatives should not be proposed
until final policy recommendations of the Select Commission on
Immigration and Refugee Policy and the management proposals of
the President's Management Improvement Council are made. The
budget proposes to fund the operation of a temporary holding
center in Miami for illegal aliens. Outlays for INS are estimated to
increase by $9 million to $382 million in 1982.
Federal litigative and judicial activities.—The Department of Justice litigates all of the Federal Government's criminal cases and
most of its civil cases. Although the Department's concentration on
complex crimes, such as organized and white collar crime, has
caused the number of criminal cases to drop in each of the past few
years, from 43,300 in 1975 to 28,900 in 1980, the civil caseload has
increased from 31,800 to 63,600 in the last 6 years.
In this area, the administration supports:
• a stronger concentration on the prosecution of organized
crime, fraud, public corruption, and illegal drug traffic cases;
• an increased emphasis on protecting the Treasury in civil
litigation, including additional staff to collect debts owed to
the United States;
• an improved management of the executive branch court preparation process, including better case management and computerization of evidence;
• a shifting of responsibilities for the U.S. Marshals Service as
a result of a recent change in the Federal Rules of Civil
Procedure allowing parties other than deputy U.S. marshals
to serve private legal papers; and
• a transfer of responsibility of legal and court support services
for the Superior Court of the District of Columbia from the
Federal Government to the District of Columbia.




ADMINISTRATION OF JUSTICE

283

Civil and criminal prosecution and representation.—Outlays for
civil and criminal prosecution and representation are estimated to
rise from $503 million in 1981 to $528 million in 1982.
The Bankruptcy Reform Act of 1978 established an independent
system of bankruptcy courts and a pilot program designating U.S.
trustees as overseers of bankruptcy administration in 18 judicial
districts. The 1982 budget continues the trustee pilot program in
the executive branch, creates the analogous position of trustee
coordinator in the judicial branch for the remaining judicial districts, and requests additional trustee coordinators for the remaining locations having bankruptcy judges. These changes, plus an
unusually high filing rate for bankruptcy under the new Act, require
an increase of $18 million in outlays in 1982—a 27% increase over
1981 levels.
Federal judicial activities.—Budget estimates from the judiciary
are included in the budget without modification by the administrative branch. The Supreme Court and the Administrative Office of
the U.S. Courts have estimated outlays of $662 million in 1982 for
all judicial branch activities except bankruptcy courts, a $43 million increase over the 1981 level.
Representation of indigents in civil cases.—The Legal Services
Corporation funds grantees to provide free civil legal assistance to
the poor. Corporation outlays have grown from $71 million in 1975
to an estimated $328 million in 1981. In 1982, the administration
proposes to increase outlays to $347 million, primarily to finance
increased costs of maintaining existing services. The administration believes that encouraging efforts of private attorneys to help
the poor as part of their professional responsibilities is the best
way to further expand legal services. The Corporation should take
the lead in fostering and coordinating these efforts.
Federal correctional activities.—The Federal Government is responsible for the care and custody of prisoners convicted of violating Federal laws as well as individuals charged with crimes and
detained for trial or sentencing.
In general, the Federal Government uses local jails to house
Federal detainees awaiting trial, sentencing, or transfer to another
institution. In some areas, however, either because of the volume of
Federal detainees or the absence of local facilities willing or able to
house Federal prisoners, it becomes necessary for the Federal Government to use existing Federal prison space or to build and operate its own jails. There are four federally owned detention centers
in Chicago, New York City, San Diego, and Florence, Arizona. In




284

THE BUDGET FOR FISCAL YEAR 1982

1982, a new Federal jail housing 200 inmates, which replaces the
antiquated Florence facility, is scheduled to open in Tucson, Arizona. More medical staff is also proposed to work toward the goal of
24-hour medical coverage at Federal prison facilities.
Even though the Federal prison population in 1982 is expected to
be about 24,000 offenders, the same as in 1980 and 1981, higher
operating costs are estimated to increase outlays for correctional
activities from $367 million in 1981 to $378 million in 1982.
Criminal justice assistance.—Because limited Federal resources
require a reduced role in areas primarily of State and local responsibility, the President requested and Congress approved elimination
of funding for most of the Law Enforcement Assistance Administration's (LEAA) grant programs in 1981. The few outstanding
LEAA grants are expected to end in 1982. At the same time,
budget authority for the Office of Juvenile Justice and Delinquency
Prevention, established as a separate office in 1980, would increase
budget authority from $100 million in 1981 to $135 million in 1982
to maintain its current operating level and to continue several
programs previously funded through LEAA. In the past, approximately 20% of LEAA's grant funds were used for juvenile justice
and delinquency prevention programs. The increased funding requested for the Office of Juvenile Justice and Delinquency Prevention allows the Federal Government to continue programs for juvenile offenders, including programs for the violent offender and
alternative education projects.
The National Institute of Justice and the Bureau of Justice
Statistics are independent bureaus that conduct research and
gather and disseminate statistics on criminal and civil matters. In
order to apply the results of criminal justice research to community needs, the National Institute of Justice proposes to initiate a
series of demonstration projects totaling $10 million in 1982.
The National Institute of Corrections (NIC) provides technical
assistance and small grants to States, localities, and non-profit
organizations for applied research and development, such as studies of the fiscal impact of new sentencing legislation in various
states. Additional resources are requested for training of State and
local prison and jail staff and for clearinghouse activities by NIC.
Outlays for these criminal justice assistance programs are estimated to decrease from $501 million in 1981 to $359 million in 1982
as a result of the elimination of LEAA grants.




285

ADMINISTRATION OF JUSTICE
CREDIT PROGRAMS—ADMINISTRATION OF JUSTICE
(In millions of dollars)
Program

Law enforcement assistance:
Direct loans.New loans
Repayments, sales and adjustments ( - )
Net loan outlays

1980
actual

1981
estimate

1982
estmate

3
-163
-161

Related programs.—A number of agencies classified in other
functions support the administration of justice. Over 100 agencies
and regulatory commissions perform some type of law enforcement
activity. About 30 Federal agencies, including the Departments of
Agriculture and Labor, the Environmental Protection Agency, and
most independent regulatory commissions, have some litigation authority independent of the Department of Justice.

340-000 0 - 81 - 20 : QL 3




286

THE BUDGET FOR FISCAL YEAR 1982

GENERAL GOVERNMENT
National Needs Statement
• Provide a legislative system that is responsive to the
Nation's people.
• Provide national executive leadership and set overall
management policy for Federal agencies.
• Ensure accountability in the use of public resources.
• Formulate tax and fiscal policies.
• Conduct the financial operations of the Federal Government efficiently and effectively.
• Provide central services, such as property and personnel
management, for all Federal agencies.
The central management and policy responsibilities of the Federal Government are included in the general government function.
This function involves those basic central services and the managerial oversight activities that are essential to any large organization.
These include the leadership and policy formulation by the President and his executive staff, and the setting of overall policy
through statutes by the Congress. Central services include tax collection, fiscal operations, personnel management, and property control and records management. The goal of the President, his staff,
the Congress, and other personnel represented in this function is to
address the needs of the Nation and improve the management and
efficiency of Federal finances, property, and personnel. To address
national needs in the general government area, the Federal Government will spend an estimated $5.2 billion in 1982. The budget
includes proposals to:
• implement the Crude Oil Windfall Profit Tax Act of 1980;
• enhance efforts to collect unpaid tax accounts;
• increase the amount of new construction of Federal buildings;
• improve productivity in the Federal Government; and
• continue the implementation of the administration's territorial policy that emphasizes greater self-sufficiency for the territories.
Legislative functions.-—By law, budget estimates for the legislative branch are included in the President's budget without change.
The legislative branch proposes $1.2 billion in budget authority and
outlays in 1982 for the operation of the Congress, the General
Accounting Office, the Library of Congress, and other programs.




287

GENERAL GOVERNMENT
NATIONAL NEED: GENERAL GOVERNMENT
(Functional code 800; in millions of dollars)
Major missions and programs

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

1,106

1,114

1,208

1,219

1,239

BUDGET AUTHORITY
Legislative functions
Executive direction and management
Central fiscal operations:
Collection of taxes
Federal Financing Bank

Other fiscal operations
Subtotal, central fiscal operations

102

114

113

113

124

2,288
-253
448

2,503
-116
433

2,649
-128
477

2,685
-161
508

2,748
-189
533

2,484

2,820

2,998

3,032

3,092

154
85
167

586
91
185

121
170
98
199

175
102
204

180
105
208

406

862

588

481

493

145

166

168

174

179

210

173

183

191

465
438
-531

144
305
-27

199
1
15
378
-37

16
403
141

17
303
47

583

596

555

744

558

General property and records management:
Real property

Personal property
Records management
Other
Subtotal, general property and records management
Central personnel management
Other general government:

Territories:
Existing law
ProDOsed legislation

Indian affairs
Treasury claims
Other
Subtotal, other general government
Deductions for offsetting receipts
Total, budget authority

??4 - 2 6 7
4,602

5,405

-193
5,439

133 - 1 3 5
5,630

5,550

*$500 or less.

Executive direction and management—Outlays for the White
House, other components of the Executive Office of the President,
and related activities are estimated to be $113 million in 1982.
Central fiscal operations.—The mission of central fiscal operations is to collect taxes and carry out certain other financial
operations of the Federal Government. Outlays are estimated to
increase by $0.2 billion to $3.0 billion in 1982.




288

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: GENERAL GOVERNMENT—Continued
(Functional code 800; in millions of dollars)
1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

1,032

Major missions and programs

1,174

1,173

1,183

1,195

OUTLAYS
Legislative functions

97

113

113

114

117

2,335
-253
440

2,493
-116
443

2,634
-128
473

2,674
-161
496

2,741
-189
521

2,522

2,820

2,979

3,009

3,073

-47
161
84
167

28
255
89
181

28
154
97
209

-133
175
100
202

-209
180
104
205

364

554

487

345

280

154

168

165

174

179

126

198

188

153
305
-48

202
1
13
378
-72

179

475
438
-480

Executive direction and management

16
403
-45

17
303
185

559

608

522

553

693

Central fiscal operations:

Collection of taxes
Federal Financing Bank
Other fiscal operations
Subtotal, central fiscal operations
General property and records management:
Real property

Personal property
Records management
Other
Subtotal, general property and records management
Central personnel management
Other general government:

Territories:
Existing law
Proposed legislation
Indian affairs
Treasury claims
Other
Subtotal, other general government

Total, outlays

-224

-267

-193

-133

-135

4,505

Deductions for offsetting receipts

5,170

5,246

5,245

5,401

42
40

110
109

6
-1

4
-4

21
12

9
9
148

*

*

-6

-23

-19

*
-18

ADDENDUM
Off-budget Federal entity:

Federal Financing Bank:
Federal buildings fund:
Budget authority
Outlays
Territories:
Budget authority
Outlays
Other Outlays

*

*$500 thousand or less.

Collection of taxes.—Most of the funds supporting this mission
are for the Internal Revenue Service (IRS). This budget includes a
substantial increase in staff to process tax returns and collect
revenues under the Crude Oil Windfall Profit Tax Act and to
enhance efforts to collect unpaid tax accounts. It also includes
resources for the first phase of a major conversion of the computers
used for processing tax returns in each of the IRS service centers.




GENERAL GOVERNMENT

289

IRS plans to continue efforts to improve compliance and to
assure that all taxpayers pay their share of the tax burden. These
programs include:
• increased emphasis on collection of unpaid tax accounts;
• matching information documents, such as W-2 forms and interest and dividend statements, and Series E and EE bonds
with individual income tax returns, and resolving discrepancies between these documents and tax returns; and
• developing a model to improve the detection of people who do
not file returns.
In addition, this budget contains resources to implement collection of taxes in the Northern Mariana Islands.
Federal Financing Bank—The Federal Financing Bank (FFB) is
an off-budget Federal entity under the supervision of the Treasury
Department. It was created in 1974 to reduce the costs of Federal
agency borrowing, to coordinate the financing of certain types of
Federal credit assistance, and to promote a more orderly market
for Federal debt securities, thereby lowering the cost of financing
to the Government. The FFB neither initiates nor reviews Federal
credit programs; it is solely a financing vehicle.
At the end of 1980, FFB holdings were $62.0 billion, with about
35% of the portfolio in guaranteed loans to non-Federal borrowers.
These holdings are expected to rise to $85.1 billion by the end of
1981 and $103.3 billion by the end of 1982. The off-budget outlays of
the FFB for purchasing loan assets and for financing loans that are
guaranteed by other Federal agencies are shown as addendum
items to the outlay tables throughout this part of the budget document. The FFB transfers of surplus monies to the general fund,
which are offsetting receipts to central fiscal operations, are estimated to be $128 million in 1982.
Further discussion of the complex transactions of the Federal
Financing Bank is in the introduction to Part 5 and in Part 6 of
the Budget, in Special Analysis E, "Borrowing, Debt, and Investment", and in Special Analysis F, "Federal Credit Programs."
These sources also summarize the distribution of FFB activity according to the agencies that it assists.
Other fiscal operations.—Central fiscal operations include the
manufacturing of coins and currency by the Bureau of the Mint
and the Bureau of Engraving and Printing. The Mint plans to
increase its production capacity by 6.5 billion coins through a 5year program to expand and improve existing facilities. This will
help meet the demand for coins, which has doubled in the last 10
years.




290

THE BUDGET FOR FISCAL YEAR 1982

General property and records management—The General Services Administration (GSA) manages Federal real property, acts as a
central procurement agent, and is the custodian of the Federal
Government's historical records.
Real property.—The budget proposes a sizable increase in new
construction of Federal buildings. New obligational authority for
construction is proposed to increase from $16 million in 1981 to
$196 million in 1982. The largest project is the new headquarters
building for the Nuclear Regulatory Commission in Silver Spring,
Maryland. Other large projects include a courthouse in Birmingham, Alabama, and border stations in California, Arizona, and
Maine.
The amount of leased office space is expected to increase in 1981
by almost 4%. In 1982, the amount of leased space is expected to
decrease slightly from 1981 levels in accord with the lower number
of Federal employees.
Personal property.—The budget proposes to more than double the
funds for GSA to purchase new vehicles in 1981. These funds are to
replace all vehicles in the motor pools that are over 5 years of age.
This will contribute to the goals of energy conservation and cleaner
air by replacing older vehicles with cleaner, more fuel-efficient
vehicles. It will also assist the automobile industry during a particularly difficult period of high unemployment.
Central personnel management—Central personnel management
functions are carried out by the Office of Personnel Management,
the Federal Labor Relations Authority, and the Merit Systems
Protection Board. The administration supports a major effort to
continue activities promoting organizational and individual employee effectiveness in the Federal Government, including productivity improvement, delegation of more authority and responsibility
to agency officials, and development of a better performance evaluation system.
The administration also supports improvement of Federal compensation procedures, benefit claims processing, and legislation to modify the Federal pay system and the cost-of-living adjustment in
annuity payments. These proposals are discussed further in the
allowances and income security sections.
The Federal Labor Relations Authority and the Merit Systems
Protection Board continue their efforts to develop adjudicatory procedures for resolving labor disputes and employee appeals in a
simple, expeditious, and fair manner.
Other general government—Other activities in the general government function include payments of claims and judgments




GENERAL GOVERNMENT

291

against the Federal Government, and funding for the territories,
Indian affairs, and various commissions. Outlays are expected to
decrease from $608 million in 1981 to $522 million in 1982.
Territories.—In February 1980 the administration affirmed its
policy regarding the U.S. territories of Guam, American Samoa,
the Virgin Islands, and the Northern Marianas. This policy includes continued support of basic governmental operations for
those territories still requiring such assistance, capital infrastructure improvements with Federal/territorial cost-sharing, economic
development assistance, incentives to eliminate territorial deficits,
and increased oversight and technical assistance. Budget authority
of $106 million, $27 million over the 1981 level, is requested in 1982
to continue these activities.
Budget authority of $94 million is requested for the Trust Territory of the Pacific Islands, including $21 million to assist the three
Micronesian governments to construct new capitals. The U.S. seeks
to terminate this trusteeship in 1981, and recently initialed a compact of free association with the governments of Palau, the Federated States of Micronesia, and the Marshall Islands. The $66 million in budget authority requested for Trust Territory operations in
1982 is therefore submitted on a contingency basis, in the event
that termination of the trusteeship is delayed.
These programs are funded by the Office of Territorial and International Affairs in the Department of the Interior. The territories
and the Trust Territory also receive grants and payments from other
Federal agencies.
Indian affairs.—Budget authority of $144 million is included in
1981 for Indian affairs, most of which are final payments to settle
land claims in Alaska and Maine. No similar funding involving
Indian land claims is projected for 1982. Budget authority for the
Navajo-Hopi Relocation Commission is proposed to increase from
$1 million in 1980 to $3 million in 1981 and $15 million in 1982.
The increase in 1982 is to continue the relocation process and cover
actual moving expenses and the cost of replacement housing for an
estimated 175 families. It also includes funds to implement the
Commission's new authorities, which include a new land selection
process and a discretionary fund. Additional assistance to Indian
tribes is classified in the health; natural resources and environment; community and regional development; and education, training, employment and social services functions.




292

THE BUDGET FOR FISCAL YEAR 1982
CREDIT PROGRAMS—GENERAL GOVERNMENT
(In millions of dollars)
Program

Loans to U.S. territories and other:
Direct loans-.
New loans
Repayments, sales and adjustments ( - )
Net loan outlays
Loan guarantees:
New loans
Net loan guarantees
Off-budget Federal entity—Federal Financing Bank: 1
Direct loans.New loans
Repayments, sales and adjustments ( - )
Net loan outlays

1980
actual

1981
estimate

2
-21

1982
estimate

2
-1

-18

-19

-18

9
9

*

31
30

51
-3

110
-2

6
-8

48

-108

-1

*$500 thousand or less.
1
The FFB is a mechanism to finance direct loans sold or guaranteed by other Federal agencies. It therefore overlaps with transactions shown
above in this table. See the introduction to Part 5 for further explanation.




GENERAL PURPOSE FISCAL ASSISTANCE

293

GENERAL PURPOSE FISCAL ASSISTANCE
National Needs Statement
• Strengthen the Federal system by providing financial
assistance to local governments.
• Strengthen the capacities of State and local governments
to finance essential public services and cushion the fiscal
impact of adverse economic conditions.
• Assist States and localities by sharing receipts generated
by Federal land management activities.
General purpose fiscal assistance is financial aid that now goes
principally to units of local government, without major restrictions
or matching requirements. Recipients may use such aid to offset
increasing costs, maintain service levels that would otherwise have
been reduced, increase services, retire debt, or lower taxes. Its
purpose is to reduce inequalities in the ability of the various jurisdictions to provide public services from the fiscal resources available to them.
This function includes a decrease of $2.3 billion from 1980 to
1982 for the general revenue sharing program. This $2.3 billion
decline is a major decline in the budget, and is a decrease of
approximately one-fourth of the entire function.
General revenue sharing (GRS).—Outlays for the general revenue
sharing program are estimated to decline from $6.8 billion in 1980
to $4.6 billion in 1982, due to the elimination of the $2.3 billion
annual payments to States. Reauthorizing legislation for this program was passed by the Congress in 1980 for fiscal years 1981-83.
The program, which originally included allocations to State governments, was first passed in 1972 as a means of:
• raising funds from the relatively more productive and more
equitable Federal tax system;
• redistributing funds to reduce disparities in State and local
fiscal capacities; and
• reducing red tape and increasing State and local control over
the expenditure of Federal aid.
Since the inception of general revenue sharing in 1972, intergovernmental fiscal conditions have changed, and so have perceptions
of the appropriate Federal role, vis-a-vis State and local governments, in providing such fiscal assistance. The revenue-generating
ability of State and local tax systems, in the aggregate, has grown
more rapidly than that of the Federal Government. In addition,
State and local tax systems have become less regressive.




294

THE BUDGET FOR FISCAL YEAR 1982
NATIONAL NEED: FISCAL ASSISTANCE TO STATE AND LOCAL GOVERNMENTS
(Functional code 850; in millions of dollars)
Major missions and programs

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

BUDGET AUTHORITY
General revenue sharing:
General revenue sharing payments
Administration

6,855
6

4,570
7

4,570
7

4,570
7

4,570
8

6,861

4,577

4,577

4,577

4,578

439

465

495
581

812
580

897
504

1
280

1
223

1
275

1
310

1
340

488
593
5

572
365
5

583
370
5

780
384
2

895
396
2

Subtotal, other general purpose fiscal assistance

1,805

1,631

2,310

2,869

3,035

Total, budget authority

8,667

6,208

6,887

7,446

7,612

6,829
6

5,156
7

4,559
7

4,581
7

4,576
7

6,835

5,163 j

4,566

4,589

4,583

Subtotal, general revenue sharing
Other general purpose fiscal assistance:
Tax credit payments to State and local governments (proposed)

Payments and loans to the District of Columbia....
New York City loan guarantees (administrative
expenses)
Payments to States from Forest Service receipts..
Payments to States and counties from Federal
land management activities
Payments to territories and Puerto Rico
Other

OUTLAYS
General revenue sharing:
General revenue sharing payments
Administration
Subtotal, general revenue sharing
Other general purpose fiscal assistance:
Tax credit payments to State and local governments (proposed)
Payments and loans to the District of Columbia....
New York City loan guarantees (administrative
expenses)
Payments to States from Forest Service receipts..

425

468

495
606

812
586

897
504

1
280

1
223

1
275

1
310

1
340

Payments to States and counties from Federal
land management activities
Payments to territories and Puerto Rico
Other
,

483
555
5

577
415
7

582
370
5

780
384
2

895
396
2

Subtotal, other general purpose fiscal assistance

1,749

1,691

2,336

2,875

3,035

Total outlavs

8,584

6,854

6,902

7,463

7,618

Despite these improvements, general purpose fiscal assistance
remains necessary to provide aid to local jurisdictions less able to
meet their service obligations. Disparities in the revenue-raising
capacities among localities are still substantial enough to warrant
continued Federal efforts to redistribute resources.
General revenue sharing now provides for funds to approximately 39,000 local jurisdictions below the State level. Up through 1980,




GENERAL PURPOSE FISCAL ASSISTANCE

295

State governments received annual revenue sharing payments of
$2.3 billion. These payments to States were eliminated in 1981. The
budget does not request funds for their resumption in 1982, since
States continue to enjoy relatively robust fiscal health.
General revenue sharing has minimal Federal controls. Those
that exist are designed primarily to assure nondiscrimination and
public participation in spending decisions. In addition, governments
that receive $25,000 or more in any one year must have a full audit
of their financial accounts every 3 years.
Revenue sharing allocations among States are based on total
population, urban population, personal and per capita income, Federal and State income tax collections, and general tax effort.
Within the States the allocations to local governments are based
primarily on population, per capita income, and tax effort. The
formula results in some targeting to governments with fiscal problems.
Other general purpose fiscal assistance.—Several other programs

also provide funds with minimal restrictions to States and localities. Total outlays are estimated to be $1.7 billion in 1981 and $2.3
billion in 1982.
Tax credit payments to State and local governments.—As part of
the economic revitalization program, the administration proposed
an 8% tax credit for social security taxes paid, effective in January
1982. This credit would be refundable to State and local governments. Payments, which are reflected in budget outlays, are estimated at $495 million in 1982, $812 million in 1983, and $897
million in 1984.
Payments and loans to the District of Columbia.—The District of
Columbia's operating budget is financed in part by annual payments from the Federal Government in recognition of the costs to
the local government of the Federal establishment. The administration requests $581 million in budget authority for the Federal
payment in 1982. Included in the request is $52 million in 1982 to
pay Federal contributions to the retirement funds for the District's
police officers, firefighters, teachers, and judges under pension
reform legislation enacted in 1979.
The 1982 request for the Federal payment was determined by use
of a formula proposed by the District of Columbia and modified by
the administration. The administration supports enactment of such
a payment formula in order to make the determination of the size
of the Federal payments more equitable and more predictable.
The District of Columbia Self-Government and Governmental
Reorganization Act of 1973 (the "Home Rule Act") authorized the
city to issue short-term notes on its own behalf. Accordingly, inter-




296

THE BUDGET FOR FISCAL YEAR 1982

est-free cash advances from the U.S. Treasury to the District will
no longer be made after 1981. The 1982 estimates anticipate that
the city will exercise its authority to borrow in the private market
for short term, cash management purposes. For long-term funding
purposes, the 1982 budget requests budget authority of $194 million
for Federal loans to fund capital improvements in the District. It is
expected that the District will make significant progress in developing the capability to finance long-term borrowing in the private
market.
Outlays for the Federal payment to the District of Columbia are
estimated to rise from $468 million in 1981 to $606 million in 1982.
New York City loan guarantees.—Under the New York City Loan
Guarantee Act of 1978, the Secretary of the Treasury is authorized
to guarantee up to $1,650 million of New York City obligations
through June 30, 1982. During 1982, an estimated $756 million in
standby guarantees could be made available.
These guarantees are contingent upon a number of conditions,
including the required holding of obligations by City or State employee pension funds, balancing the City's budget by the fiscal year
ending June 30, 1982, and the City's payment of an annual guarantee fee of 0.5% to the Treasury. The loan guarantees are not
included in the budget totals because they are not expected to
result in Federal outlays, but the related administrative costs are
reflected.
Other payments.—Some jurisdictions receive payments from the
Federal Government based on a percentage of receipts generated
from the sale of timber, mineral leases, grazing permits, and other
activities on Federal property.
The Forest Service in the Department of Agriculture will return
an estimated $223 million in 1981 and $275 million in 1982 to State
and local jurisdictions.
Payments to States and counties from Federal land management
activities are estimated to be $577 million in 1981 and $582 million
in 1982. For 1982, no funds have been requested for the payment in
lieu of taxes program, a small part of Federal land management
activities. Outlays for the payment in lieu of taxes program were
$103 million in 1980. The need for this program is questionable
since any economic burden associated with the presence of Federal
lands is alleviated, and in many cases offset entirely by the receipt
sharing programs.
In addition, Federal taxes and other revenues generated or collected in Guam, the Virgin Islands, and Puerto Rico by various
Federal agencies are returned to these territories for their fiscal
support.




297

GENERAL PURPOSE FISCAL ASSISTANCE

Tax expenditures.—Major tax expenditures also provide fiscal
assistance to States and localities. Interest income from most State
and local government securities is not subject to Federal income
tax. This exclusion allows these governments to borrow at lower
interest rates. The cost of this tax expenditure for general purpose
State and local debt alone, apart from special purpose obligations,
is estimated at $6.5 billion in 1982. In addition, the deductibility of
State and local non-business taxes, other than owner occupied
homes, from gross income allows individuals who itemize deductions to offset some of their State and local taxes through reduced
Federal taxes. This revenue loss is estimated to be $23.1 billion in
1982.
Corporations may also take a tax credit for income earned from
doing business in United States possessions. This tax expenditure
will produce an estimated revenue loss in 1982 of $1.1 billion.
CREDIT PROGRAMS—GENERAL PURPOSE FISCAL ASSISTANCE
(In millions of dollars)
Program

Guarantees of New York City loans:
Loan guarantees:
New loans
Net loan guarantees
Loans to the District of Columbia:
Direct loans:
New loans
Repayments, sales and adjustments ( - )
Net loan outlays
Loan guarantees:
New loans
Net loan guarantees

1980
actual

1981
estimate

1982
estimate

300
277

300
211

756
662

130
-84

173
-66

220
-28

46

108

191

-20

Related programs.—In addition to general purpose fiscal assistance, the Federal Government supports States and localities
through a large variety of other Federal grant-in-aid programs.
These programs, which range from relatively narrow categorical
programs to block grant programs, are designed to meet other
national needs and to serve other major missions. Therefore, they
are not included as general purpose fiscal assistance, although they
do provide, when taken together, a far larger source of State and
local revenues. Total grants-in-aid directly paid to States and localities are estimated to rise from $95.3 billion in 1981 to $99.8 billion in
1982.




298

THE BUDGET FOR FISCAL YEAR 1982
FEDERAL GRANT-IN-AID OUTLAYS BY FUNCTION
(In millions of dollars)
Function

National defense
Energy
Natural resources and environment
Agriculture
Commerce and housing credit
Transportation.......
Community and regional development
Education, training, employment, and social services
Health
Income security
Veterans benefits and services
Administration of justice
General government
General purpose fiscal assistancex
Total grant outlays
1

actual

1982
estimate

93
499
5,362
569
3
13,087
6,486
21,862
15,758
18,495
90
530
160
8,478

51
618
5,298
761
4
12,886
6,215
21,697
18,607
21,771
80
420
210
6,726

66
826
5,294
594
4
12,794
6,434
23,454
20,170
22,937
65
263
236
6,690

91,472

95,343

99,829

These numbers differ slightly from total outlays for this function, because they exclude administrative expenses.




1981
estimate

299

INTEREST

INTEREST
Interest is the cost of borrowing or the income from lending
money. The interest function includes both interest paid and interest received by the Federal Government. In 1981 and 1982 interest
outlays are estimated to grow substantially, rising by $15.9 billion
and $9.5 billion, respectively. By 1982, outlays for the interest
function are estimated to be $89.9 billion.
INTEREST
(Functional code 900; in millions of dollars)
Programs

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

74,781

94,100

106,500

110,600

109,900

BUDGET AUTHORITY
Interest on the public debt*
Other interest:
Interest on refunds of tax collections
Interest on loans to the Federal Financing Bank
Other
Subtotal other interest
Total, budget authority

502
-5,915
-4,860

600
708
610
480
- 8 , 8 9 9 - 1 2 , 0 7 3 -14,454 -16,185
5,028 - 5 , 1 4 5
-5,509 -5,081

-10,273 -13,700 -16,554 -18,872 -20,850
64,508

80,400

89,946

91,728

89,050

74,781

94,100

106,500

110,600

109,900

OUTLAYS
Interest on the public debt 1
Other interest:
Interest on refunds of tax collections
Interest on loans to the Federal Financing Bank
Other
Subtotal other interest
Total, outlays
1

502
-5,915
-4,865

600
708
610
480
- 8 , 8 9 9 -12,073 -14,454 -16,185
-5,504 -5,081 -5,032 -5,140

-10,278 -13,695 -16,554 -18,876 -20,845
64,504

80,405

89,946

91,724

89,055

Includes interest paid on the public debt held by Government investment accounts.

Interest on the public debt— This subfunction includes all interest paid on the public debt. The public debt consists of Treasury
securities sold to the public and to trust, revolving, and deposit
funds within the Federal Government. In 1980, for the first time in
several years, an appreciable amount of public debt securities, $2.1
billion, was sold to deposit funds.
Estimates of interest on the public debt are highly sensitive to
assumptions about interest rates. For purposes of developing
budget estimates, interest rates are assumed—by convention—to
fall as inflation declines. Under this convention, which is not
meant to be a forecast, it is assumed that the 91-day bill rate will
decline gradually from about 14y2%, the prevailing rate when the
estimates were made, to an average of 13Vz% in calendar year 1981
and 11% in calendar year 1982.
Interest on the public debt is estimated to grow substantially in
1981. Much of this rise is due to an increase in average interest




300

THE BUDGET FOR FISCAL YEAR 1982

rates on Treasury securities resulting from the sharp rise in
market interest rates in the spring and then again in the late fall
of last year. Interest is estimated to grow at a slower rate in 1982
and 1983 due to assumed declines in interest rates and lower
Treasury borrowing requirements.
Other interest—This subfunction includes interest payments on
tax refunds and, as an offset, interest collections from Federal
agencies and the public. The largest item is collections from the offbudget Federal Financing Bank (FFB). In recent years, this offbudget Federal entity has become the major source of funds for
many Government programs. The FFB borrows directly from the
Treasury and uses these funds to purchase debt and financial
assets guaranteed by various Government programs. It then pays
interest to the Treasury on this borrowing. A more detailed discussion of the FFB and its operations is contained in Part 6 of this
document. Part 6 also discusses borrowing by the Federal Government. Additional information on borrowing is contained in Special
Analysis E, "Borrowing, Debt, and Investment," in the Special
Analyses volume of the budget.
Net interest—A substantial portion of interest outlays is paid to
Federal trust funds on securities held by these funds. Since this
payment of interest is not made to the public, but rather consists of
offsetting transactions within the budget itself, these amounts are
deducted from both budget authority and outlays before arriving at
the budget totals. As shown in the following table, net interest
outlays—the interest function minus the interest received by trust
funds—are projected to be $74.8 billion in 1982.
In addition, Federal Reserve Banks hold Government securities
as part of their monetary function. The Federal Reserve Banks
return most of the interest they receive on these securities back to
the Treasury as miscellaneous budget receipts. This deposit of earnings is projected to be $14.7 billion in 1982. Deducting these receipts from net interest results in a net impact on the budget of
$60.1 billion in 1982. The net impact of interest is the amount of
interest that must be paid from receipts or additional borrowing to
meet Federal financing requirements.
Tax expenditures.—A tax expenditure arises from the optional
deferral of interest income on U.S. savings bonds. Interest is normally taxed each year as it is credited, but the holder of savings
bonds may defer paying tax until the bond is redeemed. The revenue loss from this tax expenditure is estimated to be $335 million
in 1982.




301

INTEREST
NET INTEREST
(In millions of dollars)
1980
actual

Net interest outlays

52,459

Deposit of earnings by the Federal Reserve System

1
2

2

l

40,692




: QL 3

66,970

74,781

11,767 -13,069 -14,710

Shown as budget receipts.
Net amount of interest to be paid from receipts, borrowing, or other means of financing.

340-000 0 - 8 1 - 2 1

1982
estimate

1983
estimate

1984
estimate

91,724
64,504
80,405
89,946
89,055
-12,045 -13,435 -15,165 -17,185 - 1 6 , 1 3 4

Outlays for the interest function
Interest received by trust funds

Net impact

1981
estimate

53,901

60,071

74,539

72,921

16,314 - 1 9 , 5 4 1
58,225

53,380

302

THE BUDGET FOR FISCAL YEAR 1982

ALLOWANCES
Allowances are included in the 1982 budget to cover increases in
compensation for Federal civilian agency employees and unforeseen requirements that may arise. Pay allowances for the Department of Defense are included in the national defense function.
ALLOWANCES
(Functional code 920; in millions of dollars)
Program

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

BUDGET AUTHORITY
Civilian agency pay raise
Contingencies for relatively uncontrollable programs...
Contingencies for other requirements
Total, budget authority

958

3,765

6,252

2,000

3,000

4,000

2,958

6,765

10,252

920

3,652

6,153

1,000

2,000

3,000

1,920

5,652

9,153

OUTLAYS
Civilian agency pay raises
Contingencies for relatively uncontrollable programsContingencies for other requirements
Total, outlays

Comprehensive legislation to reform and improve Federal paysetting procedures was submitted to the last Congress. The administration urges that the new Congress give early consideration to
these reforms. The legislative proposal would broaden the principle of
comparability and make certain structural changes to bring Federal compensation rates and practices more closely into line with
those of the private and non-Federal governmental sectors. Both
pay and benefits—rather than just pay—would be used to determine comparability. Compensation scales would be based on State
and local government pay and benefits as well as those for private
industry. The Federal wage system for the blue collar workforce
would be changed, and a number of other modifications would be
made to improve comparability with non-Federal rates.
Comparability as currently defined would require an October
1981 pay increase estimated at 13.5%. Under the proposed changes,
the comparability increases would be an estimated 9.1% for military employees and 8.6% for civilian employees. As part of an
overall effort to restrain inflation, the budget estimates reflect a
further reduction in the civilian employee pay raise to 5.5%. A
final decision on the level of the October 1981 pay increase is
generally made in the late summer after Presidential review of the
recommendations of the President's Compensation Agent, the Federal Employees Compensation Council, and the Advisory Commit-




ALLOWANCES

303

tee on Federal Compensation, and after a review of economic conditions at that time.
The President received and considered recommendations from
the quadrennial Commission on Executive, Legislative, and Judicial Salaries for salary increases of about 40% for top-level Government officials. He has, as part of the overall effort to restrain
inflation, cut back the increases proposed by the Commission. Part
VII of the 1982 Budget Appendix includes the President's recommendation to the Congress for increases of 16.8% in such salaries
now, and a 5.5% increase in October 1981. The quadrennial review
statute requires the Congress to consider and act on the President's
recommendation within 60 calendar days of receiving them. The
recommendations of the President are further addressed in a separate Message to the Congress.
The contingency allowance for relatively uncontrollable programs is assumed to be zero since outlays higher or lower than the
budget estimates are assumed to be equally probable. The contingency allowance for other requirements does not represent a compilation of a specific list of future needs, but is a rough estimate
taking into account past experience in financing unanticipated
requirements.




304

THE BUDGET FOR FISCAL YEAR 1982

UNDISTRIBUTED OFFSETTING RECEIPTS
Offsetting receipts are generally deducted from outlays and
budget authority at the function, subfunction, or agency level. In
three instances, however, such payments are deducted from the
budget totals as undistributed offsetting receipts. Payments for
rents and royalties on the Outer Continental Shelf are extremely
large, and their inclusion in a particular function would distort the
display of Federal program costs. Deductions for interest received
by trust funds and for the payments that each agency makes as its
share of employee retirement costs are included as undistributed
offsetting receipts to eliminate double counting of budget authority
and outlays in order to reflect properly the transactions of the
Government with the public. Details of offsetting receipts are
shown in table 11 in Part 9 of this Budget.
UNDISTRIBUTED OFFSETTING RECEIPTS
(Functional code 950; in millions of dollars)
Offsetting Receipts
BUDGET AUTHORITY AND OUTLAYS
Employer share, employee retirement
Interest received by trust funds:

Existing law
Proposed legislation
Subtotal, interest received by trust funds
Rents and royalties on the Outer Continental Shelf
Total

1980
actual

1981
estimate

-5,787

-6,561

1982
estimate

6,798

1983
estimate

1984
estimate

-6,980

-7,171

- 1 2 , 0 4 5 -13,429 -14,714 - 1 5 , 6 9 0 - 1 4 , 8 8 0
-6
- 4 5 1 -1,495 -1,254
12,045 -13,435 -15,165 -17,185 - 1 6 , 1 3 4
-4,101

-7,800

-9,900

-9,900

-9,900

- 2 1 , 9 3 3 -27,796 - 3 1 , 8 6 3 - 3 4 , 0 6 6 - 3 3 , 2 0 5

Employer share, employee retirement—The payments by Federal
agencies to various employee retirement funds are counted as outlays of the agencies and as receipts of the respective retirement
funds. Nearly 75% of these payments are to the civil service retirement fund. Most of the remainder is paid to the social security
trust funds.
Interest received by trust funds.—By law, most trust fund balances are invested in interest-bearing Federal securities. The interest outlays are included in interest on the public debt. The receipts
collected by various trust funds are shown as undistributed offsetting receipts. Nearly half of these inteiest collections is received by
the civil service retirement and disability fund, and almost onethird is received by social security and medicare. Several proposals
in the budget reduce estimated trust fund outlays. These outlay
reductions increase trust fund balances and thereby increase trust
fund investments in Treasury securities. The higher interest earn-




UNDISTRIBUTED OFFSETTING RECEIPTS

305

ings on these investments are included in the estimates of interest
received by trust funds.
Rents and royalties from the Outer Continental Shelf (OCS).—

These estimates include cash bonuses received from the new leasing of OCS lands that have the promise of containing oil and gas.
Annual rents on existing leases, payments based on a percentage
share of profits, and royalties based on a percentage of the value of
production are also included. OCS collections from lands immediately adjoining State lands or from disputed lands are recorded in
deposit funds rather than as offsetting receipts. Such funds are
now usually invested in public debt securities. On September 30,
1980, such deposit funds held $2.1 billion of debt securities.
The current estimates assume that seven OCS sales will be conducted in 1981 and seven sales in 1982. Eight sales are currently
scheduled for 1983. No final decision will be made on any of these
sales until environmental studies and other requirements under
the National Environmental Policy Act have been completed.







PART 6

PERSPECTIVES ON
THE BUDGET
307

PERSPECTIVES ON THE BUDGET
This part of the budget explains several topics that help place
the budget in perspective:
• the relationship of budget authority to outlays;
• alternative budget proposals that would balance the budget in
1982;
• fiscal activities outside the Federal budget:
—outlays of off-budget Federal entities,
—Government-sponsored enterprises, and
—tax expenditures;
• Federal debt and the relationship of budget funds to changes
in Federal debt;
• the difference between the initial budget estimate of outlays
and the actual outlays of relatively uncontrollable programs
for 1980;
• the difference between the initial budget estimate of receipts
and the actual receipts for 1980; and
• the allocation of windfall profit tax receipts.
RELATIONSHIP OF BUDGET AUTHORITY TO OUTLAYS
The Congress must provide budget authority, generally in the
form of appropriations, before Federal agencies can obligate the
Government to make outlays. For 1982, $809.8 billion of new
budget authority is proposed for those Federal agencies included in
the budget. In addition, $31.1 billion of new budget authority is
proposed for those Federal entities that are excluded from the
budget.1
Of the total new budget authority proposed for budget agencies
in 1982, $491.4 billion will require congressional action. New
budget authority of $427.4 billion will be available through permanent authorizations under existing law. This consists mainly of
trust fund receipts, which in most trust fund programs are automatically appropriated under existing law, and interest on the
public debt, for which budget authority is automatically provided
under a permanent appropriation enacted in 1847. Offsetting the
gross new budget authority is $109.0 billion of deductions for offsetting receipts, which comprise transactions within the Government
and proprietary income from the public. Almost all of the budget
1

B.udget authority is discussed further in Part 7 of this volume.

308




309

PERSPECTIVES ON THE BUDGET

authority for off-budget Federal entities will be available under
existing law.
BUDGET AUTHORITY
(In billions of dollars)
1981
estimate

1980
actual

Description
Available through current action by the
Congress:
Enacted and pending appropriations
Proposed in this budget:*
Appropriations
Supplemental requests
Rescission DroDosals
To be requested separately:
Upon enactment of proposed legislation

411.7

1983
estimate

1982
estimate

1984
estimate

433.2
480.2
0.2

523.3

559.6

0.5

4.5

9.8

12.2

-0.1

3.0
3.5

7.6
9.2

11.1
14.3

17.5
-1.3

Allowances:
Civilian agencies2
Department of Defense—Military 3 ....
Subtotal, available through current action by the Congress

411.7

449.9

491.4

549.7

597.2

Available without current action by the
Congress
(permanent
authorizations): 4
Trust funds (existing law)
Interest on the public debt
Other

228.6
74.9
21.7

258.5
94.1
19.2

298.6
106.5
22.3

327.2
110.6
20.5

354.9
109.9
21.7

325.2

371.8

427.4

458.2

486.5

-78.2

-95.2

-109.0

-116.0

-121.0

658.8

726.5

809.8

892.0

962.7

*

7.5

7.7

Subtotal, available without
action by the Congress

current

Deductions for offsetting receipts
Total, budget authority
ADDENDUM
Budget authority for off-budget Federal
entities:
Available through current action by the
Congress
Available without current action by the
Congress

22.3

32.8

31.1

22.7

26.9

Total, off-budget Federal entities..:

22.4

32.8

31.1

30.2

34.5

681.1

759.3

840.9

922.1

997.2

Total, budget authority including offbudget Federal entities

*

*$50 million or less.
1
Amounts for 1983 and 1984 are tentative planning targets.
2
Includes allowances for civilian agency pay raises and contingencies.
3
Includes allowances for civilian and military pay raises for Department of Defense.
4
Allowances for relatively uncontrollable programs with permanent authorizations are estimated at zero.




310

THE BUDGET FOR FISCAL YEAR 1982

Not all of the new budget authority for 1982 will be obligated or
spent in that year.2
• Budget authority for most trust funds comes from the authority of these funds to spend their receipts from special taxes
and contributions and from Federal fund payments. Any balances arising from these receipts remain available to these
trust funds indefinitely in order to finance benefits and other
purposes specified by law.
• Under longstanding budget policy, budget authority for most
major construction and procurement projects covers the
entire cost estimated when the projects are initiated, even
though costs will be incurred and outlays made over a period
extending beyond the fiscal year for which the budget authority is enacted. In the past, an exception to this policy has been
made for water resource programs. The administration policy
continues to be that funds for new water resource projects
should cover the entire costs of the projects. No new water
resource projects are proposed in this budget, but the administration would favor the submission of some fully funded new
projects after the independent review of projects by the
Water Resources Council has been authorized by Congress.
• Government enterprises are occasionally given budget authority for general capital purposes that will be used over a period
of years.
• Budget authority for the subsidized housing programs is equal
to the Government's estimated maximum contractual obligation to pay subsidies under contracts, which may extend over
periods of up to 40 years.
• Budget authority for long-term contracts covers the estimated
maximum obligation of the Government. For example, budget
authority for many direct loan programs provides financing
for a number of years; budget authority for many insurance
and loan guarantee programs consists of amounts to be used
only in the event of defaults or other claims made upon the
programs.
As a result of these factors, a substantial amount of budget
authority carries over from one year to the next. Most of this is
earmarked for specific uses and is not available for new programs;
a small part may never be obligated or spent, because it is primarily for contingencies that do not occur or reserves that do not have
to be used.
2
This subject is discussed more fully in a separate report, "Balances of Budget Authority," which is published
by the Office of Management and Budget shortly after the budget is transmitted.




PERSPECTIVES ON THE BUDGET

311

As shown in the chart on the next page, $127.1 billion of the
outlays in 1982, 17% of the total, will be made from budget authority enacted in previous years. At the same time, $197.6 billion of
the new budget authority proposed for 1982, which is 24% of the
total amount proposed, will not lead to outlays until future years.
Thus, the total budget authority for a particular year is not useful
for the analysis of annual outlays, since it combines various types
of budget authority that have different short-term and long-term
implications for budget obligations and outlays. The relationship
between budget authority, obligations, and outlays is discussed further in Part 7 of the Budget and displayed in table 5 of Part 9.

Relation of Budget Authority to OutIays-1982 Budget
$ Billions

New Authority
Recommended
for 1982

To be spent in 1982

612.2

Outlays
in 1982

739.3

809.8

f

Unspent Authority
Enacted in
Prior Years
807.9

To be spent in
Future Years

675.9

Unspent Authority
for Outlays in
Future Years
872.5

Once budget authority is provided, the Congressional Budget and
Impoundment Control Act requires that any available amounts
withheld from use (without specific congressional authorization)
must be reported to the Congress in rescission or deferral messages. The Congress may require these funds to be released by
overturning the deferral of budget authority or by not taking
action on the proposed rescission.




312

THE BUDGET FOR FISCAL YEAR 1982

ALTERNATIVE BUDGET PROPOSALS
In April 1979, the Congress enacted a new temporary limit on
the Federal debt (Public Law 96-5). Included in the act was a
provision that "If a budget which is transmitted by the President
to the Congress . . . would, if adopted, result in a deficit in 1981 or
in 1982, the President shall also transmit alternate budget proposals which, if adopted, would not result in a deficit." This section
outlines the alternative budget proposals for 1982, describes the
difference between the budget and alternative budget proposals,
and explains why the budget proposals of the President are clearly
preferable to these alternatives.
This discussion emphasizes, as it must, tax and spending proposals alternative to those in the 1982 budget. No alternative budget
policy, however, can be considered independently of economic conditions because the major fiscal policy changes likely to be implied
by an alternative budget may have profound effects on the economy.
This budget is the fourth to be prepared using the zero-base
budget review process. This process has allowed the administration
to establish priorities that make the best use of the taxpayers'
dollars. Reduction and cost saving proposals have been recommended where possible and emphasis has been placed on increasing the
efficiency of existing programs.
Balancing the 1981 budget—The deficit estimated for the 1981
budget is $55.2 billion. Because the fiscal year is well along, the
economic and programmatic effect of reductions in spending and
increases in taxes necessary to eliminate a deficit of the magnitude
required to produce a balanced budget would be so severe that they
should not be considered.
The large tax increases or outlay reductions required to eliminate the $55.2 billion 1981 deficit would themselves reduce economic activity significantly. This would reduce budget receipts and
increase spending. Therefore, spending reductions and tax increases totaling on the order of $75 billion would be required to
achieve balance in 1981.
If tax and spending actions totaling $75 billion were taken and in
place by March 31, one-half of the fiscal year would be gone before
they took effect. Therefore, tax increases or program reductions
would need to be twice as large as would be required if they were
spread over an entire fiscal year. The full-year outlay effect of the
actions required to achieve a reduction of $75 billion in one-half a
year would therefore be on the order of $150 billion. Further,
obligations would already have been incurred for most of the discretionary spending expected in the remainder of the year. A re-




PERSPECTIVES ON THE BUDGET

313

duction of the magnitude required would be larger than what is
needed to achieve a balanced budget in 1982 and later years. Such
a change could be accomplished in one-half year only by:
—increasing Federal tax burdens by almost 25% for the last half
of the fiscal year; or
—reducing outlays by either halting virtually all discretionary
Government activity, including the activities of the Defense
Department and patrol of the borders, or else quickly overturning legislation that mandates payments for social security,
health benefits, unemployment benefits, farm price supports,
etc.; or
—combining such tax increases and outlay reductions in
amounts so large as to cause drastic, lasting damage to our
economy and our society.
Finally, it is very unlikely that such tax increases and spending
cuts could be achieved by March 31. The President does not have
authority to reduce spending or raise taxes. Under law, each action
must be approved by the Congress, which requires time to consider
whether to agree. Even assuming that Congress would agree, it is
also likely that court actions would be initiated to challenge some
of the proposals and that stays of action would be ordered in some
cases.
Balancing the 1982 budget—Balancing the budget in 1982 would
not have such drastic consequences as attempting to do so in 1981,
but it would be both difficult and undesirable for a number of
reasons. Either increased taxes or reduced Federal spending or
some combination of the two, beyond the restrained levels proposed
in this budget, would be required. Such approaches would have
adverse secondary effects on the economy and therefore on other
Federal programs. They would reduce real economic growth and
employment, thereby reducing tax receipts and raising unemployment-sensitive spending. Consequently, tax increases or spending
cuts in excess of the $27.5 billion estimated deficit would be needed.
For purposes of this discussion, it has been estimated that $40
billion in tax increases and spending decreases would be required
to produce a balanced budget in 1982.
The undesirable effects of actions to increase taxes or to reduce
spending still further in 1982 can be explained best by discussing
specific alternatives. A number of alternative ways to achieve a
balanced budget are possible. Specific proposals are presented
here that involve tax increases of $69.7 billion and spending reductions of $37.0 billion.
Tax choices.—Tax increases could be used solely or in combination with outlay reductions to balance the 1982 budget. In the short
run, such increases would be likely to weaken or reverse the




314

THE BUDGET FOR FISCAL YEAR 1982

modest recovery that is now expected for the next two years.
Unemployment would be increased with little beneficial effect on
inflation. This administration has had the long-term goal of reducing tax burdens, not increasing them. A tax increase, therefore,
moves in exactly the opposite direction from that proposed by this
administration and desired by the American people. Some of the
specific options that could be considered if taxes were to be increased are discussed below.
Income taxes could be increased by dropping the administration's
economic revitalization program. This would increase income tax
receipts in 1982 by $18.3 billion in comparison with the estimates
in this budget. The longrun benefits that would result from the
economic revitalization program—particularly increases in business investment and in employment—would be lost by removing
this program. In addition, an income tax surcharge could be levied
on individual and corporation income taxes. A 10% income tax
surcharge effective January 1, 1982, would increase 1982 receipts
by $27.1 billion.
Another possible source of tax receipts would be an increase in
payroll taxes. A one percentage point increase in the social security
payroll tax rate effective Janaury 1, 1982, would increase 1982
receipts by $9.9 billion. It would be particularly inappropriate to
raise payroll taxes beyond those increases already scheduled under
current law. Such increases would have all the disadvantages of
increases in income taxes and moreover would raise business costs
and thereby increase inflation and reduce employment.
Excise tax rates could also be increased. The administration is
already proposing an increase in the gasoline tax of ten cents per
gallon in June 1981. A further ten cent increase in this tax effective at the same time would raise 1982 receipts by an additional
$10.8 billion. Alcohol and tobacco tax rates, which have not been
increased since 1951, could also be increased. A doubling of these
tax rates would raise 1982 receipts by $3.6 billion. Obviously, there
is any number of possible tax increase combinations that could be
proposed. However, the administration believes that longrun tax
policy must move in the opposite direction. Taxes should be reduced in a prudent manner, as the budget permits.




315

PERSPECTIVES ON THE BUDGET
ALTERNATIVE BUDGET: TAX INCREASES
(In billions of dollars)
1982

1981
Increases in income taxes:
Drop economic revitalization program: l
Individual income taxes
Corporation income taxes

1984

1983

0.7
2.4

24.1
18.0

18.3

32.1

42.1

23.5
3.6

37.5
7.6

44.2
8.9

27.1

45.1

53.1

9.9

15.3

17.0

10.8

10.2

9.7

3.6

Subtotal
Increases in payroll taxes:
Increase social security tax rate by one percentage point,
effective Jan. 1,1982
Increase excise taxes:
Raise gasoline excise tax by an additional 10 cents per
gallon effective June 1,1981
Double the excise tax rate on alcohol and tobacco products,
effective Jan. 1,1982

17.4
14.7

3.1

Subtotal
10 percent income tax surcharge, effective Jan. 1, 1982:
Individual income taxes
Corporation income taxes

8.6
9.7

5.7

5.9

3.2

1
This option also reduces outlays for the refundable credits in this program. These outlay reductions are incorporated in the list of outlay
reductions that follow.

Spending choices.—If achievement of a balanced 1982 budget irrespective of economic circumstances and national priorities were
the administration's sole aim, it would be better to balance tax
increases with program reductions that would lower spending. Obviously, such changes might be made in a variety of ways. In
particular, there could be a choice between relatively few major
reductions or widespread, relatively small cuts.
The following are a few of the larger changes that could be
considered. If all of them were chosen, they would result in 1982
outlay reductions of $28.7 billion.
ALTERNATIVE BUDGET: OUTLAY REDUCTIONS IN MAJOR PROGRAMS
(In billions of dollars)
1981
Defense

This represents the effect on defense outlays if no real
growth were planned in obligational authority through
1984. Such a reduction would prevent the United States
from achieving its fundamental national security objectives. We would be unable to (1) maintain our strategic
forces as an effective deterrent to both nuclear and
conventional warfare, ( 2 ) meet our NATO commitments
that increase defense efforts to prevent eventual Soviet
military superiority, and ( 3 ) develop the overall force
structure necessary to assure our national security now
and in the future. The readiness capability that we now
seek would be jeopardized.




1982

1983

1984

-4.0

-12.0

-23.0

316

THE BUDGET FOR FISCAL YEAR 1982
ALTERNATIVE BUDGET: OUTLAY REDUCTIONS IN MAJOR PROGRAMS—Continued
(In billions of dollars)
1981




1983

1984

-2.3
(-1-0)
(-1.3)

-3.1
(-1.4)
(-1.7)

-2.0

-3.0

-1.8

-1.8

-1.8

-1.0

-1.4

-2.7
(-1.2)
(-1.5)

-1.0

Health care cost controls
Revise medicare cost-sharing
Reduce medicaid matching for long-term care services
These proposals would require beneficiaries to pay a greater
percentage of their health care costs and would reduce the
Federal Government's share for funding medicaid long-term
services. Medicare cost-sharing is not being proposed
because the elderly already pay a much greater proportion
of their income for health care than do other age groups.
Also, the proposal to reduce the Federal matching for
medicaid would most likely cause States to reduce necessary services to beneficiaries since some States, like the
Federal Government, already face heavy fiscal burdens.
Social security benefit reforms
These changes, reducing some social security benefits, would
affect retired and disabled workers and their survivors and
dependents, who rely on these benefits. In addition,
Congress has been unwilling to consider most social
security benefit reforms.
Low Income Energy Assistance
This reduction, eliminating low income energy assistance,
results in a loss of income support to vulnerable poor and
elderly individuals who currently receive benefits to mitigate high energy costs. In spite of recent inflation the
1982 request includes no increase over the 1981 level.
Trade Adjustment Assistance benefits
Under this option, the amount of Trade Adjustment Assistance benefits would be reduced to the amount of regular
unemployment compensation, payable only to those unemployed after exhausting regular (and extended) unemployment compensation. It would be inappropriate to reduce
their benefits while unemployment from firms affected by
imports is high, before the scheduled expiration of the
program at the end of 1982, and before information on
methods to improve the adjustment process has been
obtained from projects just getting underway.
Social security, veterans compensation and pensions, civil
service and military retirement, public assistance and
other programs indexed to the Consumer Price Index.
Under this option, inflation-related increases in retirement,
veterans, and disability benefits would be limited to threequarters of the adjustment that would otherwise be made
through calendar year 1982. Such a change would be
precipitous and inequitable and therefore unacceptable to
this administration.
General revenue sharing
General revenue sharing grants could be terminated. Since
the inception of revenue sharing in 1972, the fiscal
condition of recipient governments, in the aggregate, has
improved. Despite these improvements, however, generalpurpose fiscal assistance is needed to redistribute aid to
jurisdictions less able to meet their service obligations.
Significant disparities in fiscal capacity among localities
remain and are substantial enough to warrant continued
Federal assistance beyond 1981.

1982

-0.7

-0.4

-7.5

-13.1

-14.7

-4.6

-4.6

-4.6

317

PERSPECTIVES ON THE BUDGET
ALTERNATIVE BUDGET: OUTLAY REDUCTIONS IN MAJOR PROGRAMS—Continued
(In billions of dollars)
1981

1982

-2.3
(-1.0)
(-1.3)

Federal pay increases..
Defense
Civilian agencies and programs
This alternative would deny Federal pay increases that are
scheduled for October 1981; the estimates for 1983 and
1984 assume that this reduction would not be made up in
later years. To hold down costs, the 1982 budget already
proposes savings of $1.2 billion by limiting the increase for
civilian pay to 5.5%, rather than the 8.6% that would be
permitted under the administration's pay reform plans.
Further reductions would inordinately concentrate fiscal
restraint on public servants. In the long run such a policy
would make Government less effective.
Economic Revitalization Program

-0.2

-4.2

1983

-2.3
-1.0)
-1.3)

-6.4

1984

-2.3
(-1.0)
(-1.3)

-7.2

These refundable tax credits are an integral part of the
President's economic revitalization program. To help
reduce labor costs and further encourage employment, a
tax credit is proposed to help offset the increase in Social
Security taxes. In order to help industry obtain capital for
investment in new plants and equipment, it is proposed
that 30% of the earned but unused investment tax credit
be made refundable. A liberalization of the earned income
tax credit is also proposed in order to offset the Social
Security tax increase for low income taxpayers with
dependent children.

As an alternative to making reductions exclusively in major
programs, some of the reductions listed above could be combined
with a number of detailed reductions throughout the budget. The
following is one such list but it should be noted that, by itself, it
yields only one-fifth of the reduction required to balance the 1982
budget.
ALTERNATIVE BUDGET: SMALLER OUTLAY REDUCTIONS THROUGHOUT THE BUDGET
(In millions of dollars)

International Affairs:
Reduce Economic Support Fund aid to eleven countries in
1982
Reduce AID bilateral assistance
Reduce Public Law 480 food aid
Defer Department of State construction starts and program
augmentation
Reduce refugee admissions to the U.S. and resettlement and
relief programs abroad
Defer ICA construction and reduce academic exchange
Cut program support for Board for International Broadcasting.
Reduce Export-Import Bank direct loans
Energy and Space:
Cancel Solvent Refined Coal (SRC-I) demonstration plant
340-000 0 - 81 - 22 : QL 3




-1 0 4

1984

-40
-112
-100

-10
-181
-100

-29

-11

-9

-46
-9
-9
-25

-4

1983

-240
-24
-100

1981

-26
-27
-10
-108

-19
-15
-10
^173

-320

-460

-521

1982

318

THE BUDGET FOR FISCAL YEAR 1982

ALTERNATIVE BUDGET: SMALLER OUTLAY REDUCTIONS THROUGHOUT THE BUDGET—Continued
(In millions of dollars)
1981

Strategic Petroleum Reserve:
Limit oil acquisition to an annual average of 100,000
barrels per day
Delay initiation of facilities construction for Phase III from
1982 to 1983
Reduce breeder reactor research and development
Terminate contingency planning for gasoline rationing
Cancel Galileo mission to Jupiter
Cancel space telescope
Cancel Venus orbiting imaging radar mission
Cancel Solar Electric Propulsion (SEPS) project
Deny funding for fifth Orbiter option protection
Reduce 1982 space applications enhancements
Reduce longer term space technology below 1980 level
Agriculture:
Reduce Forest Service activities
Reduce annual project completion rate for the small watershed program
Natural Resources:
Eliminate non-critical EPA program
Land and Water Conservation Fund: Reduce Federal land
acquisition
Reduce Bureau of Indian Affairs construction and road
construction activities
Reduce water project construction to minimum continuity
levels
Drop commitment to land remote satellite sensing data
(LANDSAT) continuity
Commerce and Housing:
Terminate National Consumer Cooperative Bank after 1981
Eliminate 50% of Postal Service revenue foregone subsidy in
1981 and subsequent years
Community and Regional Development:
Maintain 1981 Community Development Block Grant level
Reduce Department of Commerce economic development
assistance programs to 1980 level
Terminate the rehabilitation loan fund
Transportation:
Reduce urban transportation programs to 1981 enacted level..,
Federal-aid highways: Fund Interstate, primary, and bridge
programs and return other program responsibility to the
States
Education, Training, Employment, and Social Services:
Reduce State grants for vocational education
Reduce school libraries and instructional resources
Freeze Public Service Employment (Title Il-D) at current
leveis
Phase out Public Service Employment (Title VI) in 1982
Fund Summer Youth Employment at the minimum level
Eliminate Youth Education and Training initiative
Eliminate Job Corps capital improvement program
Eliminate Positive Adjustment Assistance pilot projects
Reduce Title XX social services
Reduce discretionary social services
Health:
Eliminate Public Health Service hospital system and benefits...
Withdraw Child Health Assurance Program (CHAP) proposal...




1982

1983

1984

-1,606

-1,793

-383

-85
-100
-78
-140
-103
-25
-11
-16
-23
_g

-109
-100
-42
-107
-90
-83
-79

-59
-100
-42
-78
-79
-83
-99

-63
-17

-84
-17

-68

-199

-196

-19

-43

-46

-14

-8

-3

-120

-180

-200

-64

-85

-120

-234

-131

142

-113

-136

-126

-129

-127

-127

-400

-381

-383

-4

-75

-160

-19

-69
-110

-94
-190

-102
-188

-25

-155

-295

-265

-285

-1,200

-1,600

-10
-50

-55
-55

-100

-100
-64

-163

-479
-548
-439
-130
-62
-31
-115
-32

-518
-1,167
-439
-1,310
-48
-19
-215
-32

-560
-1,280
-439
-1,910
-48

-100
-70

-150
-425

-150
-815

-478
-100
-56

-315
-32

319

PERSPECTIVES ON THE BUDGET

ALTERNATIVE BUDGET: SMALLER OUTLAY REDUCTIONS THROUGHOUT THE BUDGET—Continued
(In millions of dollars)

Eliminate miscellaneous health services expansions
Tighten Section 223 medicare cost reimbursement limits
Income Security:
Lower Indochinese refugee flow into the U.S
Reduce Women, Infant and Children (WIC) caseload below
1981
Reduce child nutrition training and equipment
Increase HUD subsidized housing tenant rent burdens from
25% to 30% of income
Rescind 1981 homeownership assistance (sec. 235) funds
Deny 1981 supplemental for public housing operating subsidies
Veterans benefits and services.Close four VA medical facilities and deny increases for specialized medical services

1984

-150
-120

-150
-140

-50

-25

130
-8

-50

1983

-50

-50

1982

-50
-100

1981

130
-8

-130
-8

-885
-70

-1,013
-70

-1,152
-70

-102

-105

-50
-104

Every effort has been made in the 1982 budget and in previous
budgets by this administration to eliminate unnecessary spending.
A number of savings proposals this administration has made have
not been enacted by the Congress. In the 1981 budget, for example,
the President proposed legislative actions that would have reduced
1981 outlays by $5.6 billion, including $0.8 billion for hospital cost
containment. In March of 1980, further reductions of $3.3 billion
were proposed for a total of $8.9 billion. Of the total amount of
savings proposed, the Congress passed legislation last session that
reduced 1981 outlays by $2.8 billion or a little less than one-third of
those proposed by the President. Much of the savings that were
achieved came about through the enactment of the Omnibus Reconciliation Act of 1980. This landmark legislation resulted from a
congressional initiative requiring committees to cut spending and
raise revenues by amounts specified in the concurrent budget resolution.
In this budget, additional savings involving outmoded and other
low priority programs have been proposed. As is noted in Part 2,
substantial operating efficiencies and cost reductions have been
achieved and more are proposed. Substantial additional reductions
cannot be achieved without further program reductions that would
unavoidably cause important national needs to go unmet. For these
reasons, the administration does not recommend that the reductions listed above be made. The administration does recommend
that Congress pursue, before it does anything else, the reductions
already proposed.
Consideration of these alternative budget proposals is useful
nonetheless because it illustrates the nature of the task that the
President faces each year in reviewing the budget. Indeed, this
budget reflects a large number of difficult choices that have been
made in order to arrive at the restrained 1982 budget.



320

THE BUDGET FOR FISCAL YEAR 1982

These alternatives are not unlike those the President faces every
year. Most of the budget is composed of spending for national
security and for programs that must be carried out under current
law. To achieve significant reductions, the President must make a
series of difficult choices. Should he propose budget cuts in entitlement programs that would reduce services and benefits for millions
of people, or should he risk endangering the national security, or
both? It is not likely that the Congress or the public would accept
large reductions in either of these areas. Yet massive cuts in the
remainder of the budget, which comprises less than 25% of the
total, would reduce public programs to a level unacceptable to most
people.
The effort to restrain Government spending must be continuous
and progress must occur incrementally over a period of time. Restraint cannot be accomplished by rhetorical statements or by general directions to eliminate waste, fraud, and abuse. It requires
hard and unending efforts to determine the effectiveness of programs and to eliminate or change those that do not meet their
objectives. Such changes must be accompanied by the difficult task
of coping with the expectations and hopes of program beneficiaries
and advocates.
FISCAL ACTIVITIES OUTSIDE THE FEDERAL BUDGET

The budget does not include a number of fiscal activities of the
Federal Government that result in spending similar to budget outlays. One major exclusion, the outlays of off-budget Federal entities,3 is discussed in some detail below. This is followed by a
discussion of the Government-sponsored enterprises, which are outside the budget because of their private ownership.4 Taxation and
tax expenditures, which also have significant effects on the economy, are discussed subsequently. The regulation of economic activity
can also have economic effects similar to budget spending by requiring the private sector to make expenditures for specified purposes such as safety, pollution control, and accessibility for the
handicapped. While important, many of these effects cannot be
quantified satisfactorily at the current time and therefore cannot
be clearly related to the budget.
Loan guarantees, which also allocate economic resources toward
particular uses, provide credit to borrowers at more favorable
terms than would otherwise be available in the private market.
One year ago, the administration established a budget-type control
system on much of the Government's direct loan and loan guarantee activity. The Congress has supported this effort. The credit
3
Financial statements for these entities are published in the Appendix, Budget of the United States Government, Fiscal Year 1982. See Part IV, "Off-Budget Federal Entities."
4
For financial statements, see the Appendix, Part VI, "Government-Sponsored Enterprises."




PERSPECTIVES ON THE BUDGET

321

control system and the estimated amounts of lending, including
loan guarantees, are discussed in Parts 2, 3, and 5 of this Budget
Outlays of off-budget Federal entities.—Off-budget Federal entities are federally owned and controlled, but their transactions have
been excluded from the budget totals under provisions of law.5
Therefore, their fiscal activities are not reflected in either budget
outlays or the budget surplus or deficit, appropriation requests for
their programs are not included in the totals of budget authority
for the budget, and their outlays are not subject to the ceilings set
by the congressional budget resolutions. As shown in the table on
page 335, the outlays of the off-budget Federal entities are added
to the budget deficit to derive the total Government deficit that has
to be financed by borrowing from the public or by other means.
When off-budget outlays are financed by Treasury borrowing, the
additional debt is subject to the statutory debt limit; when financed
by the entities' own borrowing, it is not. In either case the additional debt is part of the gross Federal debt.
Since the 1969 budget, the Federal Government has used the
unified budget concept as the foundation for its budgetary analysis
and presentations. This concept measures cash payments to and
from the public. The first departure from the unified budget concept occurred in August 1971, when the Export-Import Bank was
excluded by statute from the budget. Further departures followed.
The Postal Service fund, the Rural Telephone Bank, the lending
transactions that became the Rural Electrification and Telephone
revolving fund, and the Housing for the Elderly or Handicapped
fund were removed from the budget. The Federal Financing Bank,
the U.S. Railway Association, and the Pension Benefit Guaranty
Corporation were established off-budget. The Exchange Stabilization Fund had always been outside the unified budget, although
until four years ago it was classified as a deposit fund instead of an
off-budget Federal entity.6
In the past 5 years the trend toward increasing the number of
off-budget Federal entities has been reversed. The Export-Import
Bank was returned to the budget by statute on October 1, 1976, and
the Housing for the Elderly or Handicapped fund was returned to
the budget by statute a year later. In 1978 Congress enacted legislation proposed by the administration to include in the budget the
administrative expenses previously paid by the Exchange Stabilization Fund. The interest collections of the fund were put on-budget
by administrative action at the same time, and a year later the
5
The Board of Governors of the Federal Reserve System (but not the Federal Reserve banks, which are
privately owned) is a Federal organization. It is excluded from the budget and from this discussion.
6
The Exchange Stabilization Fund conducts a cycle of operations similar to revolving funds. Consequently, its
classification as a deposit fund was contrary to the normal definition of a deposit fund: an account that records
amounts held by the Government as an agent for others or amounts held in suspense temporarily before being
refunded or paid into some other fund.




322

THE BUDGET FOR FISCAL YEAR 1982

actual profits and losses realized from foreign exchange transactions were put on-budget.7 This year, in accordance with legislation
enacted in 1980, the Pension Benefit Guaranty Corporation is being
included in the budget. To the extent feasible the budget outlays
and deficits of previous years have been revised to include these
four entities so that the series measuring budget transactions over
time would be as consistent as possible. Legislation has also
brought most of the transactions of the U.S. Railway Association
into the budget. Almost all of the Association's current activity is
for assistance to Conrail, and since the start of this program in
1976 the purchase of Conrail securities has been included in the
budget by law.
Despite the exclusion of the off-budget entities from the budget,
some of the outlays related to their operations are nonetheless
included in the budget totals. The budget totals include the payment made to the Postal Service fund and the administrative expenses of the Rural Electrification lending programs and the U.S.
Railway Association. Moreover, while the budget authority and
outlays of off-budget Federal entities are excluded from the budget
totals, some of their activities are subject to Presidential and congressional review. For example, limits on the amount of new lending for the rural electrification program financed by the Rural
Electrification and Telephone revolving fund are set annually by
law; and the outstanding debt and annual borrowing of the Postal
Service are limited by statute.
As part of the Government's program to reduce U.S. dependence
on imported oil, the Synthetic Fuels Corporation was created outside of the budget in 1980 as a means of helping private industry
finance the development of oil substitutes. Although the Corporation is itself off-budget, its funding is included in the budget totals.
The system of financing was devised so that all costs of the Corporation appear within the budget. The funds for carrying out the
Corporation's activities come from appropriations to the Secretary
of the Treasury. The Treasury makes payments to the Corporation,
and the Treasury outlays for this purpose are included in the
budget totals. These budget outlays count as income to the Corporation and, consequently, as an offset to the Corporation's offbudget outlays. Since the Corporation acquires funds only as
needed, its net off-budget outlays are approximately zero.8
Conrail was created by the Federal Government in 1976 to own
and operate the facilities of several railroad companies in the
northeast and midwest. The Government has provided financial
7
Because it is not practicable to forecast transactions in gold, foreign currency, and foreign investments, the
budget continues the prior practice of not estimating profits and losses from foreign exchange transactions for
the current and future years.
8
Any receipts of the Corporation are also offsets to its outlays and thus reduce its need to borrow from the
Treasury.




PERSPECTIVES ON THE BUDGET

323

assistance to Conrail by purchasing debentures and series A preferred stock. As the result of a recent settlement with the Penn
Central Railroad for the compensation it is to receive for Conrail's
acquisition of its railroad properties, the Government is paying
Penn Central $2.1 billion and is receiving all of the Penn Central's
holdings of common stock and series B preferred stock in Conrail.
These holdings comprise about 80% of the total amount of both of
these types of Conrail stock. The Government's financial assistance
to Conrail and its payment to Penn Central have been included in
the budget totals. However, Conrail is not currently included in the
budget nor is it classified with the off-budget Federal entities.
Even though the exclusion of off-budget Federal entities from the
budget results from provisions of law, the Congress has expressed
concern about this practice. In 1976, the House Budget Committee
held hearings on those provisions of law that exclude any outlays
of Federal entities from the budget and then adopted a report
recommending that the budget include the outlays of all off-budget
Federal entities except the Federal Financing Bank. At that time
the Committee deferred judgment about the Federal Financing
Bank.9 The House Budget Committee subsequently supported legislation to include the Federal Financing Bank in the budget and
renewed its recommendation to include the other off-budget entities.10 The first and second congressional concurrent resolutions on
the budget for 1980 recommended that a way be found within the
congressional budget process to relate accurately the outlays of offbudget Federal entities to the budget. The first and second budget
resolutions for 1981 recommended aggregate limitations on obligations for new direct loans made by the off-budget Federal entities
as well as by the budget agencies.
Except for the Postal Service, the outlays of the off-budget Federal entities are incurred for carrying out loan programs. These
programs have the same characteristics as the direct loan programs in the budget. The outlays of the off-budget loan programs
are approximately equal to the difference between the new loans
disbursed and the repayments of principal. For example, during
1982, the new loans disbursed by the off-budget programs are estimated to be $26.2 billion and repayments $7.7 billion, for an increase in loans outstanding of $18.5 billion. This is about the same
as the estimated outlays of these programs, which are $18.3 billion.
The difference is due to such factors as administrative expenses
and interest paid and received.
9
House of Representatives, Committee on the Budget, Off-Budget Activities of the Federal Government, Report
No. 94-1740 (1976); and First Concurrent Resolution on the Budget—Fiscal Year 1978, Report No. 95-189 (1977),
pp. 11-12 and 135.
10
House of Representatives, Committee on the Budget, First Concurrent Resolution on the Budget—Fiscal
Year 1979, Report No. 95-1055 (1978), p. 23.




324

THE BUDGET FOR FISCAL YEAR 1982

Like direct loans in the budget, the loans of the off-budget entities are designed to allocate economic resources toward particular
uses. Part 5 of the Budget, "Meeting National Needs: the Federal
Program by Function," shows the outlays of the off-budget Federal
entities by function and discusses some of their more significant
activities.
OUTLAYS OF OFF-BUDGET FEDERAL ENTITIES
(In billions of dollars)
Off-budget Federal entity

Federal Financing Bank
Rural Electrification and Telephone revolving
fund
Rural Telephone Bank
Postal Service fund
U.S. Railway Association
Synthetic Fuels Corporation
Total

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

23.1

18.2

16.5

16.1

.2
-.4

.2
.2
-.3

.2
-.1
*

.2
-1.4
*

.2
-1.5
*

14.2

23.2

18.3

15.3

14.7

14.5
*

*$50 million or less.

As the table above shows, the Federal Financing Bank (FFB)
accounts for most of the off-budget outlays. Among the other offbudget Federal entities, only the Postal Service fund in some years
has comparatively large outlays. The outlays of the Postal Service
fund are calculated with an offset for the payment it receives that
is included in the budget. This payment, which is estimated to be
$1.1 billion in 1982, is mostly for public service costs and for
revenue forgone from carrying certain mail at free or reduced
rates.
The FFB's outlays do not come from programs that the FFB
operates itself. Instead, the FFB assists other programs within the
Government by purchasing their debt securities or purchasing obligations that they have guaranteed. The operation of these programs remains both legally and administratively with the agencies
that borrow from the FFB or provide the guarantees. The outlays
of the FFB include its purchase of guaranteed obligations but not
its purchase of Federal agency debt securities. An agency's outlays
increase when it spends the proceeds of borrowing from the FFB,
so FFB outlays must exclude this borrowing transaction in order to
prevent double counting.
The FFB buys two types of guaranteed obligations, newly originated guaranteed loans and guaranteed loan assets. When the FFB
buys newly originated guaranteed loans, the process is that FFB
makes the original loan, upon agency request, with the loan being
guaranteed by the requesting agency. Thus, the newly originated
guaranteed loans are converted into direct Federal loans outside
the budget.




325

PERSPECTIVES ON THE BUDGET

Loan assets are loans that an agency has made in the past and
are still due. According to law, the category of loan assets also
includes certificates of beneficial ownership issued by the Farmers
Home Administration and the Rural Electrification and Telephone
revolving fund. These certificates are securities backed by loans
that the agency continues to hold and service.11
The sales of loan assets are treated as offsets to the outlays of
the agency that sells them, so if the selling agency is in the budget
its loan asset sales reduce the amount by which the direct loans of
Federal agencies add to budget outlays. When the FFB buys loan
assets, it in effect converts direct loans that have already been
made by another agency into off-budget direct loans of the FFB.
DISTRIBUTION OF FEDERAL FINANCING BANK OUTLAYS
(In millions of dollars)
Description

Outlays from direct loans, by agency or
program:
Farmers Home Administration: certificates
of beneficial ownership
Rural Electrification and Telephone revolving fund:
Certificates of beneficial ownership
New originations
Foreign military sales credit
Student Loan Marketing Association
Housing and Urban Development:
Community development
Low rent public housing
Transportation: Railroad programs
National Aeronautics and Space Administration
Small business investment companies
Tennessee Valley Authority: Seven States
Energy Corporation
Other
Subtotal, outlays from direct loans
Interest, transfer of surplus, and administrative expenses
Total, FFB outlays

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

6,881

12,420

6,056

4,358

4,050

689
2,498
1,932
1,070

516
4,258
2,010
1,095

624
5,129
2,220
1,923

715
6,664
1,800
2,211

715
6,835
1,439
2,543

34
119
161

249
1,457
210

232
942
318

194
-252
180

179
-252
108

107
142

102
342

144
330

31
295

-89
270

685
47

111
135

257
33

231
56

195
76

14,365

23,072

18,206

16,483

16,071

148

-6

-23

-19

-18

14,513

23,065

18,183

16,464

16,053

11
The President's Commission on Budget Concepts recommended that the sale of such securities (also known
as participation certificates) be treated as borrowing, since as a means of financing outlays there is no difference
between an agency selling securities labeled "certificates of beneficial ownership," the same agency selling
securities labeled "debt," and the Treasury selling securities labeled "debt." See Report of the President's
Commission on Budget Concepts (Washington: U.S. Government Printing Office, 1967), pp. 8, 47-48, and 54-55.




326

THE BUDGET FOR FISCAL YEAR 1982

In order to present the implications of the FFB's transactions for
different programs, the budget distributes the FFB outlays that are
made on behalf of a guaranteeing agency to that agency itself. The
preceding table summarizes this distribution, showing the outlays that
arise from the FFB purchasing newly originated guaranteed loans
(i.e., by making direct loans) and by purchasing loan assets. FFB
outlays distributed to an agency or program equal gross FFB loans
(of either type) less repayments. The remainder of FFB outlays
consists of administrative expenses, the transfer of surplus to the
general fund, and interest paid on borrowings from Treasury, offset
by interest received on its own holdings of loans and debt. The
distribution of FFB outlays by function is shown as an addendum
to the tables throughout Part 5, and a complete listing is given in
Part 8 in the section that covers off-budget entities.
As shown in this table, FFB assists a wide variety of programs.
The largest part of FFB's outlays over the period as a whole is
attributable to its purchases of certificates of beneficial ownership
from the Farmers Home Administration. Since the Farmers Home
Administration is on-budget, these transactions decrease total
budget outlays as well as the outlays of the Farmers Home Administration. The purchase of certificates of beneficial ownership from
the off-budget Rural Electrification and Telephone revolving fund
explains the small size of this fund's outlays in the previous table
on the outlays of off-budget entities. These transactions offset this
fund's outlays and augment the outlays of the FFB by an equal
amount.
The table on the next page compares the outlays of the offbudget Federal entities with budget outlays.12 The outlays of the
entities that are now off-budget were negligible in 1973 but grew
rapidly afterwards, particularly due to the creation and subsequent
rapid expansion of the Federal Financing Bank. The outlays of the
off-budget Federal entities equalled 2.5% of budget outlays in 1980
and are estimated to equal 3.5% in 1981 and 2.5% in 1982.
Government-sponsored

enterprises. —Several

Government-spon-

sored enterprises have been established and chartered by the Federal Government to perform specialized credit functions. The earlier enterprises were all created with partial or full Government
ownership and with direct Government control, but, in time, they
were converted to private ownership and some new enterprises
were created as privately owned institutions. The rule governing
the budget treatment of these enterprises was established in 1967
in accordance with a recommendation by the President's Commis12
The historical data for budget outlays include Federal entities that are now off-budget for any period when
they were in the budget, and include Government-sponsored enterprises for periods when they had any
Government ownership. The outlays of former off-budget entities are included in the budget totals for all years
to the extent practicable.




327

PERSPECTIVES ON THE BUDGET

sion on Budget Concepts. The Commission recommended that the
budget exclude those Government-sponsored enterprises that are
entirely privately owned. Since the enterprises carry out federally
designed programs and receive benefits from their close association
with the Government, the Commission recommended that financial
statements of their operations be included in the budget documents.13
COMPARISON OF OUTLAYS FOR THE BUDGET, OFF-BUDGET FEDERAL ENTITIES, AND GOVERNMENTSPONSORED ENTERPRISES
(In billions of dollars)
Outlays
Federal Governmentl

Fiscal year

Off-budget
Federal entities

Total

Government
sponsored
enterprises2

1960
1961
1962
1963
1964

92.2
97.8
106.8
111.3
118.6

92.2
97.8
106.8
111.3
118.6

.4
-.3
1.1
.5
1.8

1965
1966
1967
1968
1969

118.4
134.7
158.3
178.8
184.5

118.4
134.7
158.3
178.8
184.5

1.2
1.9
-2.9
1.7
4.3

1970
1971
1972
1973
1974

196.6
211.4
232.0
247.1
269.6

0.1
1.4

196.6
211.4
232.0
247.1
271.1

9.6
*
4.4
11.4
14.5

1975
1976
TQ
1977
1978
1979

326.2
366.4
94.7
402.7
450.8
493.6

8.1
7.3
1.8
8.7
10.4
12.5

334.2
373.7
96.5
411.4
461.2
506.1

7.0
4.6
2.3
10.2
25.6
27.1

1980

579.6
662.7
739.3
817.3
890.3

14.2
23.2
18.3
15.3
14.7

593.9
685.9
757.6
832.6
905.0

26.4
23.6
34.1

1981 estimate.
1982 estimate.
1983 estimate,
1984 estimate.

*$50 million or less.
1
The 1972-80 data have been revised to include the Export-Import Bank, the Housing for the Elderly or Handicapped fund, and the Pension
Benefit Guaranty Corporation in the budget instead of with the off-budget Federal entities. The administrative expenses and interest collections of
the Exchange Stabilization Fund are included in the budget beginning in 1976, and the actual profits and losses realized from foreign exchange
transactions are included beginning in 1979. Comparable data are not available for earlier years.
2
To prevent double counting, outlays of Government-sponsored enterprises exclude loans to other Government-sponsored enterprises and loans to
or from Federal agencies and off-budget Federal entities.
3
Not available.

13

Report of the President's Commission on Budget Concepts, pp. 29-30.




328

THE BUDGET FOR FISCAL YEAR 1982

The Federal Land Banks and Federal Home Loan Banks had
both become entirely privately owned a number of years before the
unified budget was adopted and therefore have always been excluded. The Federal National Mortgage Association, the Banks for
Cooperatives, and the Federal Intermediate Credit Banks became
wholly privately owned by repaying their Federal equity capital
late in calendar year 1968 and were accordingly removed from the
budget for all later periods. The Federal Home Loan Mortgage
Corporation and the Student Loan Marketing Association were
subsequently established with full private ownership.
The Government-sponsored enterprises were all created to carry
out loan programs, either lending their funds directly for specifically authorized purposes, or buying loans originated by the private
groups that they were established to assist. Their loans primarily
support housing, but also support agriculture and higher education.
As shown in the preceding table, the outlays of the privately owned
Government-sponsored enterprises have grown considerably—from
relatively small amounts in the early 1960's to an average of $18.4
billion (equal to 4.0% of budget outlays) during 1976-80.
THe operations of the Government-sponsored enterprises are not
subject to the Federal budget review process, and the economic
assumptions on which their estimates are based are not necessarily
the same as the administration's economic forecast shown in Part
2. In 1982 these enterprises estimate that they will spend $34.1
billion, an amount equal to 4.6% of budget outlays in that year.
The following table shows the total amounts of Government-sponsored loans outstanding and net loans (i.e., the change in loans
outstanding) during 1980-82, in billions of dollars:14
actual

Loans outstanding, end of year.,
Net loans

1981 estimate

1982 estimate

151.0
24.1

171.4
20.3

199.6
28.3

Taxation and tax expenditures.—Taxation affects the economy
not only by providing the Government with receipts but also by
changing the allocation of resources among private uses and the
distribution of income and wealth among individuals. These effects
are caused by the structural characteristics of each different tax—
for example, by the rate schedules, exemptions, deductions, and
exclusions of the individual income tax—and by the magnitude of
each tax. The effects of taxation on resource allocation and income
distribution are analogous to the effects of outlays.
14
In order to prevent double counting in adding Government-sponsored loans to Federal direct loans and loan
guarantees, excludes loans from one Government-sponsored enterprise to another, loans from the Federal
Government, and guaranteed loans acquired.




PERSPECTIVES ON THE BUDGET

329

Some features of the tax structure are called "tax expenditures"
and receive special attention in the budget. Tax expenditures are
defined as revenue losses under the individual and corporation
income taxes that are attributable to a special exclusion, exemption, or deduction from gross income or to a special credit, preferential tax rate, or deferral of tax liability.
Tax expenditures are so designated because they are one means
by which the Federal Government pursues its objectives, and because in many respects they can be regarded as an alternative
means of achieving the same objectives as direct expenditures.
They can also be regarded as alternative means of achieving the
same objectives as other instruments of Government policy, such as
off-budget outlays, loan guarantees, regulations, and provisions of
the tax law other than those that give rise to tax expenditures.
There are numerous examples of the similarity in objectives between tax expenditures and direct outlays. For instance, direct
expenditures and tax expenditures both reduce the cost of ship
acquisition by shipping companies; CETA payment of the extra cost
of on-the-job training and the jobs tax credit both lower the employer's cost of hiring targeted groups in the labor force; and direct
interest subsidies and the use of tax exempt bonds both lower the
mortgage interest cost for eligible borrowers. Similarly, State and
local governments benefit both from direct grants and from the
ability to borrow funds at tax-exempt rates; individuals benefit
both from direct medicare payments and from the income tax
deductibility of medical expenses; and individuals also benefit both
from social security payments and from the tax exemption of these
payments.
Tax expenditures ordinarily result from permanent legislation
and therefore are not submitted to the Congress each year and do
not routinely receive a formal and systematic annual review. Some
tax expenditures and many other provisions of tax law were, nonetheless, reviewed by the administration and the Congress during
the 2 years of work that led to the Revenue Act of 1978. The
Congress may also review tax law generally as the result of a
reconciliation directive in a concurrent budget resolution that calls
on various committees to increase receipts or decrease outlays by
specified amounts. This procedure was used for the first time in the
Omnibus Reconciliation Act of 1980, which changed tax expenditures and other provisions of tax law as well as outlays. In addition, the Treasury Department and the Office of Management and
Budget reviewed a number of major tax expenditure provisions in
connection with the preparation of this budget.




330

THE BUDGET FOR FISCAL YEAR 1982

The Congressional Budget Act requires that the estimated levels
of tax expenditures be presented each year in the budget that the
President transmits to the Congress and in the reports of the
Senate and House Budget Committees to their respective Houses
on the proposed congressional budget resolutions. This is intended
to encourage regular examination of tax expenditures by the administration, the Congress, and the public. The provisions of the
income tax law other than those that result in tax expenditures,
although they can also affect the allocation of resources and the
distribution of income, do not receive either an annual, systematic
review or the kind of budget presentation mandated for tax expenditures; nor do taxes other than the individual and corporation
income taxes receive such a review. However, tax expenditures,
other provisions of the income tax, and other tax laws are generally all reviewed whenever fiscal policy decisions are considered regarding the overall level of tax receipts.
The classification of certain provisions of law as resulting in tax
expenditures requires some standard against which the law can be
compared. Deviations of the law from this standard—sometimes
called the "normal tax structure"—are deemed to cause tax expenditures. The "normal tax structure" used for the individual
income tax includes those provisions that exist under current law
for graduated rate schedules, personal exemptions, and standard
deductions. Thus, under current definition, these characteristics of
the tax structure do not generate tax expenditures.
The normal tax structure is not defined in the tax code. The
concept that is used has evolved from various congressional and
public reviews of the tax system focusing on the definitions of the
income tax base and on the rates applied to that base. A different
standard might exclude personal exemptions and standard deductions and thus classify these provisions as resulting in tax expenditures. A different standard might integrate the individual and
corporation income taxes; however, the analysis in this budget
regards the separate taxation of individuals and corporations as
part of the normal tax structure. The provisions of tax law that are
not defined as resulting in tax expenditures deserve as much scrutiny as the provisions that are, since they also have resource allocation and income distribution effects.
Tax expenditures are presented at two places in the budget. Part
5, "Meeting National Needs: the Federal Program by Function,"
discusses the most important tax expenditures in each functional
category, together with outlays and loan guarantees, in order to
describe more fully the effects of governmental policy toward meeting each national need. Special Analysis G, "Tax Expenditures,"




PERSPECTIVES ON THE BUDGET

331

discusses the concept of tax expenditures and presents a complete
list of tax expenditure estimates for individuals and corporations in
1980-82.1516
The figures shown for tax expenditures are necessarily estimates
for past years as well as future ones, since they compare actual tax
receipts with what tax receipts would have been if the tax law had
been different. The method of estimation is to assume that only the
tax provision in question is removed and that taxpayer behavior
and all other characteristics of the tax system remain the same. If
removing a particular provision would increase taxable income, as
in most cases, the tax expenditure is estimated as the increase in
taxable income multiplied by the appropriate tax rate.
The size of a particular tax expenditure depends not only on the
tax provision in question but also on the interaction of this provision with the rest of the tax structure. The income tax changes
enacted in 1978, as an example, automatically decreased many tax
expenditures below what they otherwise would have been, since
they reduced the tax rate schedules and raised standard deductions
and personal exemptions. The reduction in the tax rate schedules
decreased the amount of receipts that would be gained by repealing
deductions and exclusions, because lower tax rates would be applied to the increase in taxable income; the higher standard deductions decreased the number of taxpayers itemizing deductions,
thereby lowering tax expenditures for deductions, particularly
those taken disproportionately by low-income taxpayers; and the
higher standard deductions and personal exemptions decreased the
taxable income and marginal tax rates of individual taxpayers,
thereby reducing the receipts that would be gained by repealing
deductions and exclusions.
The interaction among tax provisions means that special calculations are generally needed to add tax expenditures together. For
example, if more than one exclusion from individual income were
ended, the gain in receipts would generally be greater than the
sum of the separate tax expenditures, because some taxpayers
would move into higher tax rate brackets. If more than one personal deduction were ended, the gain in receipts would generally be
smaller than the sum of the separate tax expenditures, because
some taxpayers would switch to the standard deduction. According
to a special calculation made by Treasury, if all itemized deductions resulting in tax expenditures were eliminated, the gain in

15
See Special Analyses, Budget of the United States Government, Fiscal Year 1982. The presentation in the
special analysis meets the requirement in the Congressional Budget Act that tax expenditures be set forth in
the budget.
16
The role of certain tax expenditures as a form of credit assistance is discussed in Special Analysis F,
"Federal Credit Programs."




332

THE BUDGET FOR FISCAL YEAR 1982

receipts in 1982 would be $62.3 billion. In comparison, the sum of
the separate tax expenditures is $81.8 billion. Consequently, except
for a few special calculations, adding together separate tax expenditures would be misleading, and they are not generally added together in this budget. Where tax expenditures for both individuals
and corporations result from the same provision, however, such as
the investment tax credit, the interaction is negligible and the two
estimates may meaningfully be added.
Even aside from these interaction effects, budget receipts would
not necessarily be raised by the total amount of a group of tax
expenditures if all the tax expenditure provisions were removed
together. Tax expenditures and other provisions of tax law have
frequently been changed together or viewed as substitutes for one
another. Furthermore, a direct outlay may be substituted for a tax
expenditure. Thus, an aggregation of tax expenditures that did
take interaction into account would simply indicate the total resources available for some combination of cutting tax rates, increasing outlays, and reducing the deficit. If a group of tax expenditure provisions were removed, the overall effects on budget receipts and on resource allocation and income distribution would
therefore depend on the particular decisions made as to which
changes in tax rates and outlays—out of a limitless number of
alternatives—were used to compensate for their removal.
As discussed in Part 4, "Budget Receipts/' the principal tax
change enacted in 1980 was the windfall profit tax. Since this is an
excise tax, it does not give rise to tax expenditures. As part of the
same energy program, however, several tax expenditures were enacted in order to stimulate the production and conservation of
energy. They included an increase in the income tax credit for the
cost of installing solar energy equipment in a person's home; an
extension of the business tax credit for solar energy property so
that it also applies to equipment that generates process heat for
industrial, agricultural, and commercial purposes; and a new tax
credit for small-scale hydroelectric facilities. The conservation of
energy would also be encouraged by an increase in the excise tax
on gasoline and diesel fuel, which is proposed in this budget but is
not a tax expenditure.
Among the other tax measures enacted in 1980 was a restriction
on State and local governments issuing tax-exempt bonds to finance mortgages for private housing. Tax-exempt bonds for single
family housing are limited in amount until 1984 and are banned
beginning in that year, and their use for multi-family rental housing is confined to projects with a sufficient proportion of low and
moderate income renters. This reduces the tax expenditures arising




PERSPECTIVES ON THE BUDGET

333

from the exemption of interest on State and local securities. The
administration proposes to restrict still further the use of taxexempt financing for private purposes: to limit the issuance of
small-issue industrial development bonds, to disallow tax-exempt
financing by tax-exempt organizations, and to disallow tax exemption for bonds that finance student loans. These proposed reductions in tax expenditures, like the restriction on tax-exempt bonds
for mortgage financing, would make the allocation of scarce capital
resources more efficient. They are consistent with the administration's actions to control Federal credit programs generally.
As part of its economic revitalization program the administration
has proposed a series of tax expenditures to reduce taxes on income
from capital and other sources in ways that would increase productivity, lower unemployment, and reduce inflation. The largest proposed tax expenditure provision is constant rate depreciation,
which would increase depreciation rates by about 40%. Other tax
expenditure proposals under this program include an increase in
the investment tax credit for assets with short lives; making a
portion of the investment tax credit currently available to firms
that have no current profits; and an expansion of the earned
income tax credit to offset the rise in social security taxes paid by
low income individuals who have dependent children.

BUDGET FUNDS AND THE FEDERAL DEBT
The budget consists of two major groups of funds: Federal funds
and trust funds.17
The Federal funds are derived mainly from taxes and borrowing
and are used for the general purposes of the Government. Most of
these funds are not restricted by law to any specific Government
program. The trust funds, on the other hand, collect certain taxes
and other receipts for specified purposes, such as paying social
security and unemployment insurance benefits.

17
Data for Federal funds and trust funds are presented in Special Analysis C, "Funds in the Budget," in
Special Analyses, Budget of the United States Government, Fiscal Year 1982.

340-000 0 - 81 - 23 : QL 3




334

THE BUDGET FOR FISCAL YEAR 1982
BUDGET TOTALS BY FUND GROUP
(In billions of dollars)
1980
actual

Budget receipts:
Federal funds
Trust funds
Interfund transactions
Total, budget receipts
Budget outlays:
Federal funds
Trust funds...
Interfund transactions
Total, budget outlays
Budget surplus or deficit ( — ) :
Federal funds
Trust funds

1981
estimate

1982
estimate

1983
estimate

1984
estimate

350.8
213.9
-44.7

415.2
242.5
-50.3

484.1
286.1
-58.4

556.2
314.5
-61.5

644.7
340.3
-62.8

520.0

607.5

711.8

809.2

922.3

419.2
205.1
-44.7

474.9
238.1
-50.3

530.8
266.9
-58.4

578.7
300.0
-61.5

620.7
332.3
-62.8

579.6

662.7

739.3

817.3

890.3

-68.4
8.8

-59.7
4.5

-46.7
19.2

-22.5
14.4

24.0
8.0

-59.6

-55.2

-27.5

-8.0

32.0

-14.2

-23.2

-18.3

-15.3

-14.7

73.8

78.4

45.8

23.4

17.3

Total, budget surplus or deficit

(-)
Addendum:
Deficit ( - ) , off-budget Federal entitiesl..
Total, surplus or deficit (—) including off-budget Federal entities

1
All off-budget Federal entities are revolving funds, in which income is offset against expenditure to derive net outlays. Hence, no adjustments
are made to receipts when on and off-budget totals are consolidated. The off-budget outlays would be classified as Federal funds outlays if they
were included in the budget.

The budget includes the receipts and outlays of both the Federal
funds and the trust funds and, as shown in the table above, deducts
the various transactions that occur between them. The budget
totals for receipts and outlays therefore generally display the net
transactions of the Federal Government with the public. The
budget does not, however, include the transactions of the Federal
Financing Bank and the other off-budget Federal entities, which
have been excluded from the budget under provisions of law. Were
they to be included in the budget, all of their transactions would be
classified in the Federal funds group.




335

PERSPECTIVES ON THE BUDGET
BUDGET FINANCING AND CHANGE IN DEBT OUTSTANDING '
(In billions of dollars)
Description

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

Budget surplus or deficit (—)
Deficit ( - ) of off-budget Federal entities

-59.6

55.2

-27.5

-8.0

32.0

-14.2

-23.2

-18.3

-15.3

-14.7

Total, surplus or deficit ( — )

-73.8

-78.4

-45.8

-23.4

17.3

.6

5.1

-.5
2.5
.7

.2
.6
.4

.2
.6

1.1

1.1

3.3

6.4

.8

1.1

1.1

-70.5

72.0

-45.0

-22.3

18.4

Means of financing other than borrowing
from the public:
Decrease or increase ( —) in cash and
other monetary assets
Increase or decrease ( - ) in liabilities
for:
Checks outstanding, etc
Deposit fund balances
Seigniorage on coins
Total, means of financing other
than borrowing from the public
Total, requirements for borrowing
from the public
Change in debt held by the public
Change in Federal agency investments in
Federal debt:
Federal funds
Trust funds 2
Off-budget Federal entities 3

70.5

72.0

45.0

22.3

-18.4

-.9
8.7
2.2

.5
5.2
.4

1.5
18.6
.2

14.4

8.0

Total, change in Federal agency investments in Federal debt

10.1

6.1

20.3

14.4

8.0

80.6

78.1

65.3

36.8

-10.3

Change in gross Federal debt

*$50 million or less.
Several amounts have been assumed to be zero in 1983 and 1984 because they are usually small and cannot be estimated accurately.
Estimates for 1983 and 1984 are equal to the total trust fund surplus.
Includes deposit funds.

1
2
3

Thus, as shown in the above table, the combined deficit or surplus of the budget and the off-budget entities is the principal
determinant of the change in the Federal debt held by the public.18
The budget and off-budget deficits, together with the other factors
noted in this table, are estimated to increase the Federal debt held
by the public from $715.1 billion at the end of 1980 to $832.1 billion
at the end of 1982—a $117.0 billion increase over the 2 years.
Debt beyond the budget year is projected on the basis of the eco-

18
Table 9 in Part 9 of this Budget contains more detail on budget financing through 1982 and shows the levels
of debt from 1979 to 1982. Federal debt is discussed further in Special Analysis E, "Borrowing, Debt, and
Investment," in Special Analyses, Budget of the United States Government, Fiscal Year 1982.




336

THE BUDGET FOR FISCAL YEAR 1982

nomic assumptions and the tentative long-range planning base that
are explained in Part 2 of this volume. Debt held by the public is
projected to rise in 1983 but to fall in 1984 because of a large
budget surplus.
Gross Federal debt is the sum of the debt held by the public and
the debt held by the Government itself, which includes such investments as the Treasury debt held by the social security and other
trust funds. At the end of 1982 gross Federal debt is estimated to
be $1,057.7 billion, of which debt held by the Government is $225.6
billion. Thus, gross Federal debt is much larger than the Federal
debt held by the public.
Gross Federal debt is estimated to rise by $65.3 billion during
1982. As indicated in the lower section of the preceding table, $20.3
billion of this increment will be held by trust funds and other
Federal agencies, reflecting mainly the investment of trust fund
surpluses in Treasury debt. The Federal funds deficit and the deficit of off-budget Federal entities are the principal determinants of
the change in gross Federal debt.
The gross Federal debt consists almost entirely of securities
issued by the Treasury Department. However, a few Government
agencies are authorized to issue their own debt instruments to the
public or to other Government agencies and funds. These securities
are part of the gross Federal debt. At the end of 1980 the public
held $6.6 billion of agency debt. This debt is expected to fall by
small amounts each year as existing agency debt matures and most
new agency borrowing is from the Federal Financing Bank (FFB).
The FFB finances its purchases of agency debt by borrowing from
Treasury, which in turn borrows from the public. To prevent
double counting, FFB's holdings of agency debt are not included in
gross Federal debt.
As shown in the following chart, the debt held by the public was
equal to more than 40% of GNP in the early 1960's, and gross
Federal debt was equal to more than 50%. Both proportions declined steadily through 1974. The recessions of 1974-75 and 1980
both induced large deficits, however, and interrupted this downward trend. Federal debt held by the public rose from a postwar
low of 25% of GNP in 1974 to 30% in 1977, then declined for two
years, but rose again to 28% in 1980. It is estimated to decline to
26% in 1982 and to still lower proportions in the following two
years.
Almost all Treasury debt issues are covered by a statutory debt
limit, though most borrowing by Federal agencies other than the
Treasury is excluded from this limit. The ceiling on the debt sub-




337

PERSPECTIVES ON THE BUDGET

Federal Debt as a Percent of GNP
Percent

60Gross Federal Debt
Federal Debt Held by Public

Hii Government Accounts ii!;lill;!!i::iin*

FEDERAL FUNDS FINANCING AND CHANGE IN DEBT SUBJECT TO LIMIT
(In billions of dollars)
Description
Federal funds surplus or deficit (—)
Deficit ( - ) of off-budget Federal entities

Total, amount to be financed
Means of financing other than borrowing:
Decrease or increase ( - ) in cash and other monetary assets
Increase or decrease ( - ) in liabilities for:
Checks outstanding etc

Deposit fund balances
Seigniorage on coins
Total, means of financing other than borrowing
Decrease or increase ( - ) in Federal funds and off-budget entity
investments in Federal debt
Increase or decrease ( - ) in Federal funds and off-budget entity debt
not subject to limit
Total, requirements for borrowing subject to debt limit
Change in debt subject to limit

1980
actual

1981
estimate

1982
estimate

-68.4
-14.2

-59.7
-23.2

-46.7
-18.3

82.6

-82.9

-65.0

.6

5.1

-.4
2.5
.7

-.5
.6
.4

.6
.2
.6

3.4

5.7

1.4

-1.3

-.9

-1.7

-.6

-.5

-1.1

-81.1

-78.5

-66.4

81.1

78.5

66.4

ject to limit is $935.1 billion through September 30, 1981. However,
to permit the Federal Government to meet its obligations, the
ceiling will have to be raised early this year.




338

THE BUDGET FOR FISCAL YEAR 1982

Debt subject to the general statutory limit, like gross Federal
debt, includes debt held internally within the Government, such as
the Treasury issues held by the social security trust funds. Debt
subject to the statutory limit is therefore much larger than the
debt held by the public and is nearly as large as gross Federal debt.
It is a little less than gross Federal debt primarily because most
agency debt is excluded from the general statutory limitation.
Since trust fund surpluses for the most part have been invested
in debt securities, rather than being held as cash assets, the Federal funds deficit and the deficit of off-budget Federal entities must
be financed primarily by selling Federal debt; and this debt is
almost entirely subject to the statutory limit. As shown in the
preceding table, the Federal funds deficit plus the off-budget deficit
was $82.6 billion in 1980, and the increase in debt subject to statutory limit was $81.1 billion. Thus, these deficits approximately
accounted for the increase in the debt subject to limit.
A large part of the Federal funds deficit—and, therefore, a large
part of the growth in debt subject to limit—is attributable to transactions between Federal funds and trust funds. These transactions
consist primarily of Federal funds payments to trust funds. These
payments include interest paid on Treasury debt securities held by
trust funds; payments to the civil service retirement fund; and
other payments, which are primarily to social insurance trust
funds, such as the Federal Government's contribution for supplementary medical insurance. The trust fund payments to Federal
funds are relatively small.
BUDGET SURPLUS OR DEFICIT ( - ) BY FUND GROUP l
(In billions of dollars)
Description

Federal funds:
Transactions with the public2
Transactions with trust funds
Total
Trust funds:
Transactions with the public 2
Transactions with Federal funds
Total
Budget total:
Federal funds
Trust funds
Total

1980
actual

1981
estimate

1982
estimate

1983
estimate

1984
estimate

-31.3
-37.1

-14.4
45.2

5.4
52.1

32.1
-54.6

79.0
-55.0

-68.4

59.7

46.7

-22.5

24.0

-28.3
37.1

-40.8
45.2

-32.9
52.1

-40.1
54.6

-47.0
55.0

8.8

4.5

19.2

14.4

8.0

-68.4
8.8

-59.7
4.5

46.7
19.2

-22.5
14.4

24.0
8.0

-59.6

-55.2

-27.5

-8.0

32.0

1
For purposes of this analysis, payments from Federal funds to the general revenue sharing trust fund are treated as transactions with the
public instead of transactions with a trust fund; and the corresponding payments from the general revenue sharing trust fund to the public are
accordingly omitted. This is because the general revenue sharing trust fund has no independent source of funding, and serves only as a channel
through which a Federal funds payment is made to the public.
2
Includes some incidental transactions with off-budget Federal entities.




PERSPECTIVES ON THE BUDGET

339

The cumulative Federal funds deficit from 1971 through 1980
was $466.1 billion, of which $227.9 billion was attributable to transactions with trust funds and the remaining $238.3 billion was
attributable to transactions with the public. The Federal funds
group can have a deficit at the same time as there are surpluses in
the budget and in the transactions of the Federal funds group with
the public. This occurred in 1969. The net transactions of the
Federal funds with the public and with the trust funds are shown
in the preceding table in comparison with the budget surplus or
deficit.
COMPARISON OF RELATIVELY UNCONTROLLABLE
OUTLAYS AND OF RECEIPTS

The Congressional Budget Act requires that the budget contain
two comparisons between the initial budget estimates and the
actual amounts for the last completed fiscal year: a comparison of
the differences in relatively uncontrollable outlays by major program, and a comparison of the differences in receipts by major
source. These comparisons are made in the following two sections
for the 1980 budget, which was submitted in January 1979 for the
fiscal year beginning on October 1, 1979.
Comparison of relatively uncontrollable outlays.—Outlays in any

one year are considered to be relatively uncontrollable when the
program level is determined by existing statutes or by contracts or
other obligations. Outlays for these programs generally depend on
factors that are beyond administrative control under existing law
at the start of the fiscal year. For example, the definition of beneficiaries eligible for programs like medicaid and social security is
established by law, and usually can be altered only by a change in
the law. Prior-year contracts and obligations are also legally
binding.
For a number of reasons, the amounts estimated in the budget
for relatively uncontrollable outlays may differ from the actual
outlays that are subsequently realized. For example, legislation
may change benefit rates or coverage; the actual number of beneficiaries may differ from the number estimated; and economic conditions (such as interest rates) may differ from what was assumed in
making the estimates.
Relatively uncontrollable outlays are grouped into two major
categories: open-ended programs and fixed costs, for which outlays
are generally mandated by law; and payments from prior-year
contracts and obligations, for which outlays are required because of
previous action, such as entering into contracts. In accordance with
the definition, budget estimates of uncontrollable outlays do not
include the effect of proposed legislation. In cases where legislation




340

THE BUDGET FOR FISCAL YEAR 1982

was enacted that significantly affected relatively uncontrollable
outlays in 1980, it is identified in the discussion below.
The following table shows the differences between actual outlays
for relatively uncontrollable programs for 1980 and the amounts
estimated in the 1980 budget. The list of programs in this table is
the same as table 17 (Controllability of Budget Outlays) in Part 9 of
this year's Budget.
RELATIVELY UNCONTROLLABLE OUTLAYS FOR 1980
(In billions of dollars)
Relatively uncontrollable under present law

January 1979
estimate
(existing l a w ) l

Change

Actual

Open-ended programs and fixed costs:
Payments for individuals:
Social security and railroad retirement
Federal employees retirement and insurance1
(Military retired pay)
(Other)*
Unemployment assistance
Medical care
Assistance to students 12
Housing assistance
Food and nutrition assistance* 2
Public assistance and related programsx
All other relatively uncontrollable payments for
individuals1

120.3
33.0
(11.4)
(21.5)
12.4
46.2
3.3
5.1
10.3
19.0
2.5

0.5

3.1

Subtotal, payments for individuals

252.0

15.6

267.6

46.2
6.9
2.8
10.0

6.3
*
0.1
3.0

52.5
6.8
2.9
13.1

Total, open-ended programs and fixed
costs

317.9

24.9

342.9

Outlays from prior-year contracts and obligations.National defense
Civilian programs

37.1
50.7

-0.6
9.3

36.5
60.0

Total, outlays from prior-year contracts
and obligations

87.8

8.7

96.5

405.7

33.6

439.4

Net interest
General revenue sharing
Farm price supports (CCC)
Other open-ended programs and fixed costs x

Total, relatively uncontrollable outlays

1.5
1.8
(0.5)
(1.3)
5.6
2.8
0.6
0.2
2.9
-0.4

121.8
34.7
(11.9)
(22.8)
18.0
49.0
3.9
5.4
13.2
18.6

*$50 million or less.
1
Adjusted for redefinition of classifications in the 1981 budget.
2
This category now contains programs that were previously classified as relatively controllable.

In the aggregate, actual outlays for relatively uncontrollable programs in 1980 were $439.4 billion, which is $33.6 billion higher
than estimated in January 1979. Outlays for open-ended programs
and fixed costs were $24.9 billion higher, and outlays from prior-year
contracts and obligations were $8.7 billion higher.
Open-ended programs and fixed costs consist mainly of benefit
programs, grants, and subsidies for which eligibility is automatic or




PERSPECTIVES ON THE BUDGET

341

fixed by law; interest payments; farm price supports; and payments
for the legislative and judicial branches, which the President
must—by law—include in the budget as submitted and without
change.
Payments for individuals is a grouping of Federal budget outlays
that are essentially income transfers rather than payments for
direct Federal operations. Total payments for individuals were 78%
of all open-ended programs and fixed costs in 1980. Actual outlays
for this grouping were $15.6 billion higher than estimated. This
was caused by differences between actual and assumed economic
conditions and the number of beneficiaries, and by congressional
action on legislation.
Outlays for social security retirement and disability and for railroad retirement, the biggest category of payments for individuals,
were $1.5 billion higher than estimated. The original estimates
assumed automatic benefit increases, based on inflation as measured by consumer price index, of 9.1% in July of 1979 and 7.1% in
July of 1980. The actual increases were 9.9% and 14.3%, respectively. A substantially lower caseload for disability insurance than was
originally estimated partially offset the effect of these higher benefit increases.
Actual outlays for Federal employee retirement and disability
insurance programs were $1.8 billion above the budget estimate.
These programs consist of military retired pay, civilian employee
retirement and disability (largely civil and foreign service), and
veterans service-connected compensation. Except for veterans service-connected compensation, these benefits are indexed to the consumer price index. Outlays for the indexed programs exceeded the
budget estimates by $1.0 billion, largely because of higher than
anticipated cost-of-living increases. The original estimates assumed
automatic increases of 3.9% in September 1979 and 3.3% in March
1980, while the actual increases were 6.9% and 6.0%, respectively.
Increases to adjust veterans service-connected compensation benefits for the effects of inflation are considered relatively controllable
because they require congressional action. Actual spending for this
program was $0.7 billion above the original estimate because the
Congress enacted a 9.9% cost-of-living increase in these benefits.
Outlays for unemployment compensation programs were $5.6 billion higher than estimated mainly due to higher than anticipated
unemployment. The unemployment rate for fiscal year 1980 was
6.8%, compared to the budget forecast of 6.2%. In addition, outlays
for Trade Adjustment Assistance, which originally had been estimated at $0.3 billion, exceeded $1.6 billion, mainly due to unemployment in the automobile industry.
Outlays for medical care were $2.8 billion higher than estimated,
largely as a result of the higher price increases in the health sector




342

THE BUDGET FOR FISCAL YEAR 1982

that accompanied the higher inflation in general. The use of medical care services was also higher than anticipated. Medicaid outlays were $1.6 billion higher than originally estimated, and medicare outlays were $1.2 billion higher.
Assistance to students previously included primarily GI bill benefits. However, the Education Department's student loan insurance
fund has been reclassified as a relatively uncontrollable payment
for individuals, and the data have been adjusted to reflect this
change. Outlays for assistance to students were $0.6 billion higher
than originally estimated, largely due to the effect of higher interest rates than expected on the interest subsidy for student loan
insurance.
Outlays for food and nutrition assistance were $2.9 billion higher
than estimated. The food stamp program accounted for $2.2 billion
of this difference. The 1977 Food Stamp Act, which eliminated the
food stamp purchase requirement, increased participation to higher
levels than anticipated, and the average monthly bonus per beneficiary was higher than expected due to higher than expected food
price increases and relatively higher participation by poorer families. In addition, higher unemployment than forecast caused more
people to participate in the food stamp program. Two food programs that were previously classified as relatively controllable
have been reclassified as relatively uncontrollable payments for
individuals. These are the food donations program and the section
32 funds for strengthening markets, income, and supply. Outlays
for these two programs were $0.2 billion above the original estimates.
Higher than expected food prices and participation in the child
nutrition and special milk programs account for most of the remaining difference between the original estimate and actual outlays for food and nutrition assistance.
Public assistance and related programs include public assistance,
supplemental security income, outlays for earned income tax credits, and veterans non-service-connected pensions. Outlays were $0.4
billion below the initial estimate largely due to an overestimate in veterans non-service-connected pensions because fewer
beneficiaries than expected chose to participate in the improved
pension program that became effective in 1979.
Uncontrollable outlays for all other payments for individuals
were $0.5 billion higher than estimated, largely because more
people than expected applied for and received black lung benefits.
The single largest difference between estimated and actual outlays for open-ended programs and fixed costs was for net interest,
where outlays were $6.3 billion higher than originally estimated.
Interest on the public debt was $9.1 billion higher than assumed
largely because interest rates and the deficit were higher than
anticipated. The budget estimate assumed a 7.9% interest rate on




PERSPECTIVES ON THE BUDGET

343

91-day Treasury bills for fiscal year 1980 while the actual 91-day
rate averaged 11.1%. Interest received by trust funds, which is
offset against interest costs to reflect transactions with the public,
was $506 million higher than the budget estimate due to higher
than anticipated interest rates and despite lower trust fund balances.
Outlays for general revenue sharing virtually matched the original estimate, since the amounts are specified by law.
Other open-ended programs and fixed costs were $3.0 billion
above the original budget estimates. Outlays for the Federal Savings and Loan Insurance Corporation were $1.1 billion higher than
estimated due to increased aid to support savings and loan institutions for losses caused by prolonged high interest rates, low-yielding portfolios, and problems arising from speculation. Outlays for
the foreign military sales trust fund were $1.1 billion above the
original budget estimate. The 1980 budget assumed that trust fund
receipts would exactly offset outlays. However, the change in foreign government balances, which constitutes trust fund receipts,
was $1.1 billion lower than outlays. The remaining $0.8 billion
difference between estimated and actual outlays in this category is
due to higher than estimated outlays for several other programs,
the largest of which are disaster relief ($0.3 billion), the Federal
Deposit Insurance Corporation ($0.3 billion), and grants to States
for social services ($0.2 billion).
Outlays for prior-year contracts and obligations for civilian and
national defense programs were $8.7 billion higher than estimated.
Outlays for civilian programs were $9.3 billion higher than estimated, which contrasts sharply with previous years. During 1970-79,
outlays for prior-year contracts and obligations for civilian programs
were lower than estimated in every year except two, and in those
years the underestimates were only $1.3 billion (in 1976) and $0.1
billion (in 1978). The largest differences are for programs administered by the Departments of Energy, Transportation, Agriculture,
Housing and Urban Development, the Export-Import Bank, and the
Environmental Protection Agency. These programs account for $8.5
billion of the $9.3 billion difference between actual and estimated
outlays for prior-year contracts and obligations of civilian programs.
Programs administered by the Department of Energy account for
$2.0 billion of this difference. Of this amount, $1.6 billion was
for fossil energy research and development, the strategic petroleum
reserve, energy supply, research, and development plant and capital equipment, and energy conservation.
Outlays for prior-year contracts and obligations of Department of
Transportation programs were $1.5 billion higher than estimated.
Nearly $1.0 billion of this difference was due to the urban mass
transportation fund, and $0.4 billion was an underesti-




344

THE BUDGET FOR FISCAL YEAR 1982

mate of outlays for Federal-aid highways. Department of Agriculture outlays were $1.3 billion higher than originally estimated due
to the rural housing insurance fund. Department of Housing and
Urban Development outlays were $1.3 billion higher than estimated, largely because of the emergency mortgage purchase program.
The $1.3 billion underestimate for the Export-Import Bank is largely the result of a shift in the Bank's loan program from slow to faster
spending projects. Programs administered by the Environmental
Protection Agency were $1.0 billion above the original budget estimates, of which $0.9 billion is attributable to the sewage treatment
construction grants program.
The remaining $0.9 billion underestimate of outlays for civilian
prior-year contracts and obligations is the result of small differences divided primarily among four other Federal agencies.
National defense outlays for prior-year contracts and obligations
were $0.6 billion below the original budget estimate. Department of
Defense military programs account for $0.4 billion of this overestimate, and Department of Energy outlays for atomic energy defense were $0.2 billion lower than estimated.
Comparison of actual and estimated receipts.—As shown in the
following table, receipts for 1980 were $520.0 billion, which is $17.5
billion greater than the January 1979 estimate of $502.6 billion.
Differences in tax law from the legislation proposed in the budget
increased receipts by $4.5 billion. Higher than anticipated incomes
and changes in collection patterns and effective tax rates account
for the remaining increase of $13.0 billion.
COMPARISON OF FISCAL YEAR 1980 RECEIPTS
(In billions of dollars)
January
1979
estimate

Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts
Total

Change
from 1979
estimate

Actual

227.3
71.0
161.5
18.5
6.0
8.4
9.9

16.7
-6.4
-0.7
5.9
0.4
-1.3
2.9

244.1
64.6
160.7
24.3
6.4
7.2
12.7

502.6

17.5

520.0

The effect of the differences in tax law consists of a wide variety
of comparatively small amounts, some of them due to proposals not
enacted and others due to changes in law not proposed in the 1980
budget. The largest effect from a budget proposal not enacted was
from real wage insurance. This was proposed to ensure compliance
with the voluntary wage standards set out by President Carter in




345

PERSPECTIVES ON THE BUDGET

his comprehensive anti-inflation program announced on October
24, 1978. The receipt gain from not enacting this proposal was
estimated to be $2.3 billion. A number of proposals to improve
resource allocation and the overall equity and efficiency of the tax
structure were not enacted with a resulting loss in estimated 1980
receipts of $0.3 billion. The proposals included restrictions on the
use of tax-exempt funds for mortgage financing; an increase in
railroad retirement payroll taxes; and a fee on crude oil to pay
damages and clean-up costs of oil pollution. Together, failure to
enact the proposals in the 1980 budget resulted in a net increase in
estimated receipts of $2.0 billion.
The most important difference in tax law not proposed in the
1980 budget was the Crude Oil Windfall Profit Tax Act of 1980
(Public Law 96-223), which was proposed by the administration
subsequently and was enacted on April 2, 1980. This act levied a
windfall profit tax on domestic producers of crude oil, contained
several income tax credits to stimulate the conservation and production of energy, and repealed the carry-over basis provisions for
inherited property that had been provided in the Tax Reform Act
of 1976. This act also provided a partial exclusion of interest and
dividend income from tax and changed the tax treatment of the
gains realized on the sale or transfer of certain inventories. The
provisions of this act resulted in a net increase in 1980 receipts of
$3.9 billion.
Other enacted legislation, primarily a negotiated tariff reduction
and the Depository Institutions Deregulation and Monetary Control Act of 1980, reduced 1980 receipts by $0.7 billion. A waiver of
import duties and fees on crude oil and petroleum products, which
was accomplished by administrative action, reduced 1980 receipts
by an additional $0.7 billion.
COMPARISON OF ACTUAL 1980 RECEIPTS WITH THE JANUARY 1979 ESTIMATES
(In billions of dollars)
January
1979
estimate
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts
Total
*$50 million or less.




227.3
71.0
161.5
18.5
6.0
8.4
9.9
502.6

Inaction on
legislative
proposals
2.3
*

Enacted
legislation and
administrative
actions

-0.4
-1.7

-0.5
-0.6

244.1
64.6
160.7
24.3
6.4
7.2
12.7

2.5

13.0

520.0

5.7

2.0

Actual

14.8
-4.6
-0.5
0.1
0.4
-0.8
3.6

-0.2

-0.1

Technical
adjustments
and revised
incomes

346

THE BUDGET FOR FISCAL YEAR 1982

Individual income taxes were $244.1 billion in 1980, $16.7 billion
greater than the original budget estimate of $227.3 billion. Inaction
on the proposed real wage insurance increased individual income
tax receipts by $2.3 billion. This was only partially offset by enactment of the Crude Oil Windfall Profit Tax Act of 1980, which
reduced individual income taxes by $0.4 billion. This reduction was
in large part due to the deducibility of the windfall profit tax for
income tax purposes. Higher than anticipated personal incomes
and a technical underestimate of collections increased receipts by an
additional $14.8 billion.
Corporation income taxes were $6.4 billion below the January
1979 estimate. The deductibility of the windfall profit tax for
income tax purposes reduced corporation income taxes by $1.7
billion. Different effective tax rates, collection patterns, and economic conditions than assumed in January 1979 account for the
remaining decline of $4.6 billion.
Social insurance taxes and contributions (which are composed of
employment taxes and contributions, unemployment insurance receipts, and contributions for other insurance and retirement) were
$0.7 billion less than the January 1979 estimate. Lower employment taxes and contributions, reflecting inaction on the proposed
increase in railroad retirement payroll taxes and a technical overestimate of collections, reduced social insurance taxes and contributions by $0.4 billion. A decline in unemployment insurance receipts, primarily due to an overestimate of State taxes deposited in
the Treasury to finance unemployment benefits, reduced social
insurance taxes and contributions by an additional $0.5 billion.
These reductions were partially offset by an increase in contributions for other insurance and retirement of $0.2 billion.
The $5.9 billion increase in excise tax receipts is primarily due to
enactment of the windfall profit tax, which increased 1980 excise
tax collections by $6.0 billion. Other excise taxes were $0.1 billion
below the original estimate.
Estate and gift taxes were $0.4 billion above the January 1979
estimate and customs duties were $1.3 billion lower. A negotiated
tariff reduction, a decline in sugar import duties, and the waiver of
import duties and fees on crude oil and petroleum products account
for $0.5 billion of the decline in customs duties receipts. The remaining decline of $0.8 billion is due to an overestimate of imports
of foreign goods.
Miscellaneous receipts in 1980 were $2.9 billion above the original estimate of $9.9 billion. An increase in deposits of earnings by
the Federal Reserve System, primarily reflecting higher interest
rates than anticipated in January 1979, added $3.2 billion to miscellaneous receipts. The waiver of import duties and fees on crude
oil and petroleum products and inaction on the proposed oil pollu-




347

PERSPECTIVES ON THE BUDGET

tion liability fund reduced miscellaneous receipts by $0.5 billion
and $0.1 billion, respectively.
ALLOCATION OF WINDFALL PROFIT TAX RECEIPTS

Section 102 of the Crude Oil Windfall Profit Tax Act of 1980
requires that each year the President propose the allocation of net
receipts from the tax in his budget.
This act establishes in the Treasury a Windfall Profit Tax Account "for accounting purposes only." After the Secretary of the
Treasury has determined the amount of net receipts from the tax,
they are to be allocated to the Windfall Profit Tax Account. Since
the Conference Report accompanying the act stated explicitly that
the net receipts from the tax "shall not be earmarked or invested
separately from general revenues . . .", the allocations referred to
in section 102 cannot be interpreted as earmarking funds for specific purposes.
The method for these allocations is prescribed by three formulas
in subsections b(l), b(2), and b(3) of section 102. The allocations for
1982 are compared in the following table with the amounts included in this budget for the functional categories referred to in the
formula.
ALLOCATION OF WINDFALL PROFIT TAX, NET RECEIPTS, 1982
(In millions of dollars)
Section 102 Formula »

Total net receipts2
Allocation:
Low-income assistance
Energy and transportation programs
Income tax reductions
Total

1982 Budget

19,897
5,004
2,931
11,962
19,897

19,897
3
4

19,987
26,515
46,502

1
Includes $354 million in net receipts above the level assumed in the Conference Report on the Act. In accordance with the formulas, these
additional net receipts are distributed to low-income assistance ($118 million) and income tax reductions ($236 million).
2
This amount is revenues excluding those attributable to an economic interest in oil held by the United States, as defined by the Crude Oil Windfall Profit
Tax Act.
3
This amount is the total outlays for the other income security subfunction (609).
4
This amount is the total outlays for all energy and transportation programs in the energy function (270) and the ground transportation subfunction
(401).




PART 7

THE BUDGET SYSTEM
AND CONCEPTS

349

340-000 0 - 81 - 24 : QL 3




THE BUDGET SYSTEM AND CONCEPTS
The budget system of the U.S. Government provides the framework within which decisions on resource allocation and program
management are made in relation to the requirements of the
Nation, availability of Federal resources, effective financial control,
and accountability for use of the resources.
THE BUDGET PROCESS

The budget process has four main phases: (1) executive formulation and transmittal; (2) Congressional action; (3) budget execution
and control; and (4) review and audit. Each of these phases is
interrelated with the others.
Executive formulation and transmittal.—The budget sets forth
the President's financial plan and indicates his priorities for the
Federal Government. The President's transmittal of his budget to
the Congress early in each calendar year is the climax of many
months of planning and analysis throughout the executive branch.
In a year in which a new President takes office, as in this year, the
outgoing President submits a budget. Usually, the new President
proposes changes to that budget.
Formulation of the 1982 budget began in the spring of 1980,
although general goals were set earlier. The budget is formulated
in the context of a 3-year budget planning and tracking system.
The budget planning horizon covers the 2 years following the
budget year and integrates long-range planning into the executive
budget cycle. This multi-year budget planning system requires that
broad fiscal goals and agency spending targets be established
beyond the budget year.
During the period when a budget is being formulated in the
executive branch, there is a continual exchange of information,
proposals, evaluations, and policy decisions among the President,
the Office of Management and Budget (OMB) and other Executive
office units, and the various Government agencies. Decisionmaking
in the budget process is facilitated by the use of zero-base budgeting, a management process that provides for in-depth evaluation of
all proposed and existing programs and activities in conjunction
with planning and budgeting.
In the spring, agency programs are evaluated, policy issues are
identified, and budgetary projections are made, giving attention
both to important modifications and innovations in programs and
350




THE BUDGET SYSTEM AND CONCEPTS

351

to alternative long-range program plans. These budgetary projections, including projections of estimated receipts prepared by the
Department of the Treasury, are then presented to the President
for his consideration, and the major issues are discussed. At about
the same time, the President receives projections of the economic
outlook that are prepared jointly by the Council of Economic Advisers, OMB and the Departments of Commerce, Labor, and the
Treasury.
Following a review of these projections, the President establishes
general budget and fiscal policy guidelines for both the fiscal year
that will begin about 15 months later and for the 2 years beyond.
General policy directions and planning ceilings are then given to
the agencies to govern the preparation of their budget requests.
Throughout the fall and early winter the executive branch is
involved in the development of the President's budget. The primary
phase of the budget process involves the formulation and preparation of the President's budget for transmittal to the Congress.
Budget determinations are developed after detailed reviews of
agency zero-base budget requests and the Government-wide OMB
ranking of zero-base decision packages falling at the margin of
approved agency totals. These determinations are then discussed
with the agencies and revised as a result of later Presidential
decisions. Fiscal policy issues—relating to total budget outlays and
receipts—are reexamined. Consistent with the multi-year budget
planning system, the effects of budget decisions on budget authority and outlays in the years that follow are also considered and are
explicitly taken into account. Thus, the budget formulation process
involves the simultaneous consideration of the resource needs of
individual programs, and the total outlays and receipts that are
appropriate in relation to current and prospective economic conditions. The budget reflects the results of both of these
considerations.
Current services estimates are also prepared to provide the Congress with a basis for the review of the President's budget. These
estimates are projections of budget authority and outlays required
to continue Federal programs and activities in the upcoming fiscal
year without policy changes from the fiscal year in progress at the
time the estimates are transmitted. The Congressional Budget Act
of 1974 requires that these estimates be transmitted to provide the
Congress with information on projected costs of current programs.
For the first two years after the requirement became effective, they
were transmitted in November. However, it was generally agreed
that the estimates transmitted at that time did not provide a
suitable basis for review, since the underlying assumptions
changed before the budget was transmitted. As a result, the comparability of the current services and the budget estimates was less-




352

THE BUDGET FOR FISCAL YEAR 1982

ened significantly. Consequently, the current services estimates
are now transmitted with the President's budget.
Congressional action.—The Congress can act to approve, modify,
or disapprove the President's budget proposals. It can change funding levels, eliminate proposals, or add programs not requested by
the President. It may also act upon legislation determining taxes
and other means of increasing or decreasing receipts.
In making appropriations, the Congress does not normally vote
on the level of outlays directly, but rather on budget authority. The
Congress first enacts legislation that authorizes an agency to carry
out a particular program and, in some cases, includes limits on the
amount that can be appropriated for the program. Many programs
are authorized for a specified number of years or indefinitely; other
programs, such as most nuclear energy, space exploration, defense
procurement, foreign affairs, and some construction programs, require annual authorizing legislation.
Provision of budget authority is usually a separate, subsequent
action. Generally, budget authority becomes available each year
only as voted by the Congress in appropriation acts. However, in a
number of cases the Congress has voted permanent budget authority, under which ifunds become available annually without further
Congressional action. Many trust fund appropriations are permanent, as are a number of Federal fund appropriations, such as the
appropriation to pay interest on the public debt.
Congressional review of the budget begins when the President
transmits his budget estimates to the Congress within 15 days after
the start of each new session in January, as required by law.
Under the procedures established by the Congressional Budget Act
of 1974, the Congress considers budget totals before completing
action on individual appropriations. The act requires that each
standing committee of the Congress submit reports on budget estimates to the House and Senate Budget Committees by March 15;
and that the Congressional Budget Office submit a fiscal policy
report to the two budget committees by April 1. The Congress then
adopts the first concurrent budget resolution to guide the Congress
in its subsequent consideration of appropriations and revenue
measures. The first budget resolution, which is supposed to be
adopted by May 15, sets targets for total receipts and for budget
authority and outlays, in total and by functional category.
Congressional consideration of requests for appropriations and
for changes in revenue laws occurs first in the House of Representatives. The Appropriations Committee, through its subcommittees, studies the proposals for appropriations and examines in
detail each agency's performance. The Ways and Means Committee




THE BUDGET SYSTEM AND CONCEPTS

353

reviews proposed revenue measures. Each committee then recommends the action to be taken by the House of Representatives.
When the appropriation and tax bills are approved by the House,
they are forwarded to the Senate, where a similar review process is
followed. In case of disagreement between the two Houses of the
Congress, a conference committee (consisting of Members of both
bodies) meets to resolve the differences. The report of the conference committee is returned to both Houses for approval. When the
measure is agreed to, first in the House and then in the Senate, it
is ready to be transmitted to the President in the form of an
enrolled bill, for his approval or veto.
After action has been completed on all or most money bills, the
Congress adopts a second concurrent resolution containing a
budget ceiling on total budget authority and outlays, and a floor for
budget receipts. This resolution, which is supposed to be adopted by
September 15, may retain or revise the levels set earlier in the
year. Either the first or second budget resolution can direct various
committees to recommend reductions in budget authority and outlays or increases in budget receipts. Changes recommended by
committees pursuant to the budget resolution are to be reported in
a reconciliation bill.
After the Congress completes action on the second resolution, it
may not consider any spending or revenue legislation that would
breach the totals specified in this resolution. The Congress may,
however, adopt a new budget resolution changing the levels set by
the second resolution.
If action on appropriations is not completed by the beginning of
the fiscal year, the Congress enacts a "continuing resolution" to
provide authority for the affected agencies to continue operations,
usually until their regular appropriations are enacted.
Budget execution and control—Once approved, the President's
budget, as modified by the Congress, becomes the financial plan for
the operations of each agency during the fiscal year. Under the
law, most budget authority and other budgetary resources are
made available to the agencies of the executive branch through an
apportionment system. The Director of OMB apportions (distributes) appropriations and other budgetary resources to each agency
by time periods (usually calendar quarters) or by activities. Obligations may not be incurred in excess of the amount apportioned.
The objective of the apportionment system is to ensure the effective and orderly use of available resources and to preclude the need
for additional or supplemental appropriations.
Nonetheless, changes in laws or other factors may indicate the
need for additional appropriations during the year, and supplemental requests may have to be sent to the Congress. On the other




354

THE BUDGET FOR FISCAL YEAR 1982

hand, reserves may be established under the Antideficiency Act to
provide for contingencies or to effect savings made possible by
changes in requirements or greater efficiency of operations.
Amounts may also be withheld from obligation for policy or other
reasons, but all amounts withheld must be reported for Congressional review pursuant to the Impoundment Control Act of 1974.
Whenever the President determines that all or part of any
budget authority provided by the Congress will not be required to
carry out the full objectives or scope of a program for which it was
provided, or that such budget authority should be rescinded for
fiscal policy or other reasons, a special message is transmitted by
the President to the Congress requesting a rescission of the budget
authority. The budget authority proposed for rescission by the
President must be made available for obligation unless both the
House and the Senate pass a rescission bill within 45 days of
continuous session.
Whenever the President determines that the use of budget authority provided by the Congress should be deferred (that is, temporarily withheld from obligation), the President transmits a special
message to the Congress on such deferrals. Either House may, at
any time, pass a resolution disapproving this deferral of budget
authority, thus requiring that the funds be made available for
obligation. When no Congressional action is taken, deferrals may
remain in effect until, but not beyond, the end of the fiscal year. If
the funds remain available beyond the end of a fiscal year and
continued deferral of their use is desired by the President, he must
transmit a new special message to the Congress.
Review and audit—This is the final phase in the budget process.
The individual agencies are responsible for assuring—through their
own review and control systems—that the obligations they incur
and the resulting outlays follow the provisions of the authorizing
legislation and appropriations, as well as other laws and regulations relating to the obligation and expenditure of funds. Agencies
are assisted in this responsibility by their audit staffs. In the case
of 15 major departments and agencies, audit activities are directed
by statutory Inspectors General, appointed by the President. OMB
reviews program and financial reports and keeps abreast of agency
programs and the effort to attain program objectives.
In addition, the General Accounting Office (GAO), as an agent of
the Congress, regularly audits, examines, and evaluates Government programs. Its findings and recommendations are made to the
Congress, to OMB, and to the agencies concerned. The GAO also
monitors the executive branch's reporting of special messages on
proposed rescissions and deferrals. The GAO reports any items not
reported by the executive branch and any differences that it may




THE BUDGET SYSTEM AND CONCEPTS

355

have with the classification (as a rescission or deferral) of withholdings included in special messages transmitted by the President.
The GAO may bring civil action to obtain compliance should the
President fail to report withholdings of budget authority in accordance with the Impoundment Control Act of 1974.
COVERAGE OF THE BUDGET TOTALS
Agencies and programs.—The budget totals cover agencies and
programs (including Government corporations) no matter how
funded, except for the following off-budget Federal entities: *
Rural electrification and telephone revolving fund
Rural Telephone Bank
Board of Governors of the Federal Reserve System
Postal Service fund
United States Railway Association2
Federal Financing Bank
Synthetic Fuels Corporation 3
The off-budget Federal entities listed above are discussed in Part
6 of the Budget. Schedules and financial statements are presented
in Part IV of the Budget Appendix. Except for the Federal Reserve
Board, these data are also presented in selected tables throughout
the budget documents. The budget totals do not include transactions of privately owned, Government-sponsored enterprises, such
as the Federal land banks and Federal home loan banks. However,
privately owned Government-sponsored enterprises are discussed in
Part 6 of the Budget, and financial statements are presented in
Part VI of the Budget Appendix.
Functional classification.4—The functional classification arrays
budgetary data according to the major purpose served by the unit
being classified. In accordance with the Congressional Budget Act
of 1974, the Congress must pass resolutions establishing budget
targets by these functional categories.
The following criteria are used in establishing and in assigning
activities to functional categories:
• A function must have a common end or ultimate purpose
addressed to an important national need. (The emphasis is on
what the Federal Government seeks to accomplish rather
'In accordance with Public Law 96-364, the Pension Benefit Guaranty Corporation, which was formerly offbudget, has been placed on budget and will be presented as a separate bureau in the Department of Labor.
2
Amounts made available for investments in Conrail securities, which comprise almost all of the Association's
activity after 1977, are included in the budget totals.
3
Budget authority and outlays for the Corporation will not be included in the budget totals. However, cash
requirements of the Corporation will be met by borrowing from the Secretary of the Treasury. Such borrowing
will be financed by appropriations to the Secretary, and thus be reflected as budget authority and outlays within
the budget totals.
4
A discussion of this subject is also found in Part 5 of this volume.




356

THE BUDGET FOR FISCAL YEAR 1982

than the means of accomplishment, what is purchased, or the
clientele or geographic area served.)
• A function must be of continuing national importance and the
amounts attributable must be significant.
• Each basic unit of classification (generally the appropriation
or fund account) is classified into the single best or predominant purpose and assigned to only one function. However,
when an account is large and serves more than one major
purpose, it may be subdivided into two or more subfunctions.
• Activities and programs are normally classified by common
purpose (or function) regardless of which agencies conduct the
activities.
National needs presentation.—Section 601 of the Congressional
Budget Act of 1974 requires that the budget for each fiscal year
shall contain a presentation of budget authority, proposed budget
authority, outlays, proposed outlays, and descriptive information in
terms of—
(1) a detailed structure of national needs which shall be used
to reference all agency missions and programs;
(2) agency missions; and
(3) basic programs.
The functional presentation of the budget is used to meet the
national needs requirement. While national needs and agency missions were not specified, as such, in earlier budgets, the thrust of
the budget functional classification has always been to summarize
what the Government is doing, or expects to do, in terms of the
ultimate purpose that the Government programs are designed to
serve. To meet the requirement of law for a national needs presentation, the budget functional classification was refined to focus
more sharply on the end purposes and accomplishments, and further refinements in the classification are made a£ circumstances
warrant. Each major function is described in the context of national needs being served, and subfunctions are described in the context of major missions devoted to serving national needs.
In the national needs presentation, Federal programs are discussed in terms of national needs and the functional classification.
In this context, a single program may be identified as serving
several national needs even though classified in a single function.
For example, medicare, primarily a health program, is Identified as
meeting the national need for improved health care. However, it
also provides a form of income security by paying for medical bills
and, hence, can also be identified as meeting the national need for
income security. A discussion of Federal programs based solely on
the functional classification system would have been limited to




THE BUDGET SYSTEM AND CONCEPTS

357

discussion of each program, classified by major purposes served, in
only one category.
The national needs presentation can be found in Part 5 ("Meeting National Needs: the Federal Program by Function").
Types of funds.— Agency activities are financed through Federal
funds and through trust funds, both of which are included in the
budget.
Federal funds are of several types. The general fund is credited
with receipts not earmarked by law for a specific purpose and with
the proceeds of general borrowing. It is charged with payments
from appropriations. Special funds contain Federal receipts earmarked for specific purposes, other than for carrying out a cycle of
operations. Public enterprise (revolving) funds finance a cycle of
business-type operations in which outlays generate collections, primarily from the public. Intragovernmental funds, including revolving, management, and consolidated working funds, finance operations within and between Government agencies and are credited
with collections from other Government accounts. Intragovernmental revolving funds, are credited with collections earmarked by law
to carry out a cycle of business-type operations within and between
Government agencies.
Trust funds are established to account for the receipt and expenditure of monies by the Government for carrying out specific
purposes and programs in accordance with the terms of a statute
or trust agreement. These monies are not available for the general
purposes of the Government. Within the category of trust funds
there is a special subcategory of trust revolving funds that are
credited with trust-type collections earmarked by law to carry out
a cycle of business-type operations.
Current expense and capital investment—The budget includes
spending for both current operating expenses and capital investment, such as the purchase of lands, structures, and equipment. It
also includes capital investment in the form of lending and the
purchase of investments. These categories of outlays are discussed
in Special Analysis D.
BUDGET AUTHORITY AND RELATED TRANSACTIONS

Budget authority.—Government agencies—whether or not they
are included in the budget totals—are permitted to enter into
obligations requiring either immediate or future payment of money
only when they have been granted authority to do so by law. This
authority is usually provided as budget authority. In addition, collections specifically authorized to be credited to appropriation and




358

THE BUDGET FOR FISCAL YEAR 1982

fund accounts, while not scored as budget authority, are also available for obligation.
Budget authority permits obligations to be incurred. The
amounts of budget authority requested are determined by the
nature of the programs or projects being financed.
For activities such as operations and maintenance, entitlement
programs, and continuing research programs, for which the cost
depends upon the program level planned for a fiscal year, the
amount of budget authority requested covers the obligations expected to be incurred during the year.
For most projects that are separate and distinct units, particularly direct Federal major procurement and construction projects,
"full funding" is requested. That is, funds are requested in sufficient amounts to complete the entire project at the time it is
initiated, regardless of the expected time of completion.
Budget authority usually takes the form of appropriations, which
permit obligations to be incurred and payments to be made. Some
budget authority is in the form of contract authority, which permits
obligations in advance of appropriations, but requires a subsequent
appropriation or the collection of receipts to "liquidate" (pay) these
obligations. There is also authority to borrow; such budget authority permits obligations to be incurred and these obligations to be
liquidated using funds that are borrowed, generally from the Treasury.
Since 1976, it has not been in order for either House of the
Congress to consider any bill, with certain exceptions, that provides
new borrowing or contract authority unless that bill also provides
that such new spending authority will be effective only to the
extent or in such amounts as are provided in appropriations acts.
Most appropriations for current operations are made available
for obligation only during a specified fiscal year (annual appropriations). Some are for a specified longer period (multiple-year appropriations). Others, including most of those for construction, some
for research, and many trust fund appropriations, are made available for obligation lentil the amount appropriated has been expended or until the objectives have been attained (no-year appropriations).
Budget authority can be made available by the Congress for
obligation and disbursement during a fiscal year from a succeeding
year's appropriation (advance funding). For many education programs, Congress provides forward funding—-budget authority made
available for obligations in one fiscal year for the financing of
ongoing grant programs during the succeeding fiscal year. When
advantageous to the Federal Government, an appropriation is provided by the Congress for use in a fiscal year, or more, beyond the




THE BUDGET SYSTEM AND CONCEPTS

359

fiscal year for which the appropriation act is passed (advance appropria tions).
When budget authority is made available by the Congress for a
specific period of time, any part that is not used for obligations
during that period expires and cannot be used later. Congressional
actions serve to continue the availability of unobligated amounts
that have expired or would otherwise expire. These actions, known
as reappropriations, cause the amounts involved to be counted as
new budget authority in the year in which the availability is
extended, i.e., the fiscal year for which the appropriation action is
taken.
A rescission is a legislative action that cancels new budget authority or available balances of budget authority previously made
available, prior to the time the authority would otherwise have
expired. Rescissions are offset against new budget authority in
arriving at the total of budget authority for each year. A deferral is
an executive branch action or inaction—including the establishment of reserves under the Antideficiency Act—that effectively
delays the obligation or expenditure of funds within the year that
the action is taken.
Most authority to obligate funds is enacted by the Congress in or
immediately preceding the fiscal year in which it becomes available (current authority). Most current authority is granted year by
year. Some budget authority in Federal funds and most budget
authority in trust funds becomes available from time to time as the
result of previously enacted legislation and does not require current action by the Congress (permanent authority). Such authority
is "current" in the year in which the legislation is enacted and
"permanent" in succeeding years.
The amount of budget authority is usually stated specifically in
the legislation that makes it available (definite authority). In some
cases the legislation permits the amount to be determined by subsequent circumstances (indefinite authority). Examples of the latter
type are authority to borrow that is limited to a specified amount
of borrowing that may be outstanding at any time, the appropriation for interest on the public debt, and the trust fund appropriation equal to receipts under the Federal Insurance Contributions
Act (social security). Indefinite budget authority is recorded in the
amount of receipts collected or estimated to be collected each year
in the case of trust funds, and in the amount needed to finance
obligations incurred or estimated to be incurred in the case of
contract authority and authority to borrow.
Obligations incurred.—Following the enactment of budget authority and when required apportionment action is complete, obligations are incurred by Government agencies. Such obligations




360

THE BUDGET FOR FISCAL YEAR 1982

include the current liabilities for salaries and wages, certain contractual services, and interest; contracts for the purchase of supplies and equipment, construction and the acquisition of land; contracts to make loans; and other contractual arrangements requiring the payment of money.
Outlays.—Obligations generally are liquidated by the issuance of
checks or the disbursement of cash; such payments are called
outlays. In lieu of issuing checks, obligations may also be liquidated
(and outlays recorded) by the maturing of interest coupons in the
case of some bonds, or by the issuance of bonds, debentures, or
notes (or increases in the redemption value of bonds or debentures
outstanding). Outlays during a fiscal year may be for payment of
obligations incurred in prior years or in the same year. Such
outlays, therefore, flow in part from unexpended balances of prior
year budget authority and in part from budget authority provided
for the year in which the money is spent.5 Payments for tax credits
in excess of tax liabilities are treated as outlays rather than as an
adjustment to budget receipts. Total budget outlays are stated net
of offsetting collections (see collections below), and exclude outlays
of off-budget Federal entities.
Balances of authority.—Not all budget authority enacted for a
fiscal year is obligated and paid out in the same year. The obligated balance is that portion of the budget authority that has been
obligated but not yet liquidated (paid). For example, in the case of
salaries and wages, 1 to 3 weeks elapse between the time of obligation and the time of payment. In the case of major procurement
and construction, several years may elapse. Obligated balances of
budget authority are carried forward until the obligations are subsequently paid. In addition, in multiple-year or no-year accounts,
budget authority that is still available for obligation (unobligated
balances) may be carried forward for obligation in the following
year.6
Therefore, a change in the amount of budget authority for a
given year does not necessarily result in a similar change in either
the obligations incurred or the budget outlays of that same year. A
change in budget authority in any one year may have an effect on
obligations for 2 or more years, and may affect budget outlays for
an even longer period.
Allocations between agencies.—In some cases, an agency may
share in the administration of a program for which appropriations
are made to another agency or to the President. This is made
5
This process is depicted on the chart, "Relation of Budget Authority to Outlays—1982 Budget," in Part 6 of
this volume.
6
Additional information on balances of budget authority is provided in a separate report. "Balances of Budget
Authority," which is prepared by OMB shortly after the budget is transmitted.




THE BUDGET SYSTEM AND CONCEPTS

361

possible by the establishment of allocations from the "parent" account; that is the account to which the appropriation was made.
Obligations incurred through such allocations are included with
the parent account in the Budget (without separate identification)
and in the Budget Appendix (where the total obligations of each
participating agency are identified separately under the parent
account).
Limits on Federal credit programs.—Generally, separate limitations on the amount of direct loans and on loan guarantees are
proposed for enactment in the appropriations language related to
the budget accounts that support such programs. The limitations
apply to the amount of obligations to be incurred for direct loans
and the amount of commitments made for loan guarantees during
the year. A commitment for a loan guarantee is made when the
Government enters into a guarantee agreement to become effective
at such time as the lender meets stipulated pre-conditions. The
disbursement of a direct loan (an outlay) or the actual guarantee of
a loan (a contingent liability) may occur in a fiscal year subsequent
to the obligation or commitment, respectively. The limitations on
direct loans apply to the principal amount of the loan involved. In
the case of loan guarantees, only the amount of the Government's
contingent liability, which may be less than the full amount of the
loan, is subject to the limitation.
COLLECTIONS

In general.—Amounts collected during the year are classified
into two major categories:
• Budget receipts, which are compared with total outlays in
calculating the budget surplus or deficit.
• Offsetting collections, which are deducted from disbursements
in calculating total outlays. Corresponding offsets are made in
arriving at total budget authority and net obligations incurred.
Budget receipts.—These are collections from the public that
result from the exercise of the Government's sovereign or governmental powers and from contributions paid by voluntary participants in certain Federal social insurance programs. These collections, also called governmental receipts, consist primarily of tax
receipts and social insurance premiums, but also include receipts
from court fines, certain licenses, and deposits of earnings by the
Federal Reserve System. Gifts and contributions (as distinguished
from payments for services or cost-sharing deposits by State and
local governments) are also counted as budget receipts.




362

THE BUDGET FOR FISCAL YEAR 1982

Offsetting collections.—These are collections from other Government accounts or from transactions with the public that are of a
business-type or market-oriented nature. They are classified into
two major categories: offsetting collections credited to appropriation
or fund accounts and offsetting receipts (that is, amounts deposited
in receipt accounts). In general, the distinction between these two
major categories is that, normally, collections credited to appropriation or fund accounts can be used without further appropriation
action by the Congress, whereas funds in receipt accounts cannot
be used without being appropriated.
Offsetting collections credited to appropriation or fund accounts
occur in two circumstances:
• Reimbursements,—When authorized by law, amounts collected
in advance or after materials or services are furnished (for
example, advances received from the public to pay expenses of
providing information under the Freedom of Information Act)
are treated as reimbursements to appropriations. These collections are netted against obligations in determining outlays
from such appropriations.
• Revolving funds.—In the three types of revolving funds—
public enterprise, intragovernmental, and trust revolving—
collections are netted against spending, and outlays are reported as the net amount.
Offsetting receipts generally are deducted from budget authority
and outlays by function or subfunction, and by agency. Offsetting
receipts are subdivided into two categories, as follows:
• Proprietary receipts from the public.—These are collections
from the public—deposited in receipt accounts of the general
fund, special funds, or trust funds—that arise out of the business-type or market-oriented activities of the Government (for
example, loan repayments, interest, sale of property and products, charges for nonregulatory services, and rents and royalties). Such collections are not counted as budget receipts, and,
with one exception, are offset against total budget authority
and outlays by agency and by function. The exception consists
of receipts from rents and royalties from Outer Continental
Shelf lands that are deducted from total budget authority and
outlays for the Government as a whole rather than from any
single agency or function.
• Intragovernmental transactions.—These are payments into receipt accounts from Federal appropriation or fund accounts.
They are treated as offsets to budget authority and outlays,
rather than as budget receipts. Intragovernmental transactions may either be intrabudgetary (where the payment and
receipt both occur within the budgetary universe) or result
from receipts from off-budget Federal entities in those cases




THE BUDGET SYSTEM AND CONCEPTS

363

where the payment is made by a Federal entity whose budget
authority and outlays are excluded from the budget totals.
Normally, intragovernmental transactions are deducted from
both the outlays and the budget authority for the agency
receiving the payment. However, in two cases intragovernmental transactions are not deducted from the figures of any
agency or function. Instead, intragovernmental transactions
that involve agencies' payments (including payments by offbudget Federal entities) as employers into employee retirement trust funds and the payment of interest to nonrevolving
trust funds appear as special deduct lines in computing total
budget authority and outlays for the Government.
Intrabudgetary transactions are subdivided into three categories: (1) interfund transactions, where the payment is from
one fund group (either Federal funds or trust funds) to a
receipt account in the other fund group; (2) Federal intrafund
transactions, in those cases where the payment and receipt
both occur within the Federal fund group; and (3) trust intrafund transactions, in those cases where the payment and
receipt both occur within the trust fund group.
OTHER TRANSACTIONS

Borrowing and repayments.—Borrowing and debt repayments are
not treated as receipts or outlays. If they were, the budget could be
balanced simply by borrowing. This rule applies both to borrowing
in the form of public debt securities and to specialized forms of
borrowing—such as the sale of agency securities, and the sale of
certificates representing participation in a pool of loans. However,
some transactions of that nature, that otherwise would be treated
as borrowing, are required by law to be treated as a sale of assets.
This results in collections being credited to an appropriation or
fund account with a corresponding reduction in outlays and in the
requirement for new budget authority.
Exercise of the monetary power.—Seigniorage is the profit from
coining money. It is the difference between the value of coins as
money and their cost, including the cost of manufacturing. Seigniorage on coins arises from the exercise of the Government's
monetary powers and differs from receipts coming from the public,
since there is no corresponding payment by another party. Therefore, seigniorage is excluded from receipts and treated as a means
of financing a budget deficit, or as a supplementary amount to be
applied to reduce debt or to increase the cash in the Treasury in
the years of a budget surplus. The increment (profit) resulting from
the revaluation of gold as a monetary asset is treated like seigniorage. Prior to the 1980 budget, the profit from the sale of gold was




364

THE BUDGET FOR FISCAL YEAR 1982

treated as a proprietary receipt. However since the value of gold is
determined by its value as a monetary asset rather than as a
commodity, the budget now treats all of the profits on gold sales as
a means of financing rather than as an offsetting collection. This
change was made retroactively in the historical budget data.
Liabilities in deposit fund accounts.—Certain accounts outside
the budget, known as deposit funds, are established to record
amounts held in suspense temporarily, or held by the Government
as agent for others (for example, savings accounts for military
personnel, State and local income taxes withheld from Federal
employees' salaries, and payroll deductions for the purchase of
savings bonds by civilian employees of the Government). Such
transactions affect Treasury's cash balances even though they are
not a part of the budget. Increases in the accounts from year to
year serve as a means of financing.
Exchange of cash.—The Government's deposits with the International Monetary Fund (IMF) are considered to be similar to cash
assets. Therefore, the movement of money between the IMF and
the Department of the Treasury is not in itself considered a receipt
or an outlay, borrowing or lending. In a similar manner, the holdings of foreign currency by the Exchange Stabilization Fund (ESF)
are considered to be cash assets. Changes in these holdings are
outlays only to the extent there is a realized loss, and offsetting
collections only to the extent there is a realized profit on the
exchange.
BASIS FOR BUDGET FIGURES
In general.—Outlays are stated in terms of checks issued, including cash paid in lieu of checks, net of offsetting collections received.
The accrual basis is generally used for interest on the public debt
held by private investors; however, interest on the public debt held
by trust and other Government accounts is stated on a cash basis.
When debt securities are issued at a discount (or at a premium),
the difference between the sales price and the redemption value is
treated as interest and is accrued evenly over time in the account
that issued the securities.
Data for 1980.—The 1980 column of this budget generally presents the actual transactions and balances as recorded in agency
accounts and as summarized in the central financial reports prepared by the Department of the Treasury.
Data for 1981.—Most of the regular appropriation acts for 1981
have been enacted. (The State, Justice, and Commerce, the Judiciary, and related agencies and the Legislative Branch appropriation




THE BUDGET SYSTEM AND CONCEPTS

365

bills were enacted by reference in the second 1981 continuing resolution.) However, funding for activities covered by the Foreign
Assistance; Labor, Health and Human Services, and Education,
and related agencies; and Treasury, Postal Service and General
Government appropriation bills was provided in a continuing resolution, which is effective through June 5, 1981. A number of ongoing activities, for which funding was not included in appropriation bills because of a lack of authorizing legislation, and various
entitlement programs were also provided funding by the same 1981
continuing resolution. Supplemental appropriations are proposed in
the 1982 Budget for various pay raises, principally those of October
1980 and for additional amounts requested to meet previously unforeseen program costs.
Where the word "enacted" is used with reference to 1981, as in
tables 1 and 5 of Part 9 of the Budget, the amount represents
budget authority already voted by the Congress. In the case of
indefinite appropriations, the enacted sums include the amounts
likely to be required. Where the word "estimate" is used, the
amounts include enacted budget authority and requested supplementals.
Data for 1982.—This budget is complete as to the estimates for
1982. Part I of the Budget Appendix generally includes the proposed appropriation language for the various items identified in
the budget. However, in some instances, estimates are included in
the budget schedules without appropriation language for 1981 and
1982. For these, proposed legislation may be required or the estimated amounts will be requested later when the requirements are
known. In certain tables of the budget, these items for later transmittal and the related outlays are separately identified. Estimates
of the total requirements for 1981 and 1982 include both the
amounts formally requested and the amounts planned for later
transmittal.
Data for 1983 and 1984.—To place emphasis on longer term
objectives and plans consistent with the multi-year budget planning system, this budget presents 1983 and 1984 estimates. The
data for 1983 and 1984 often reflect specific Presidential policy
determinations and are shown in a number of budget tables.
Allowances.— Lump-sum allowances are included in the tables to
cover possible additional changes, such as civilian pay increases
and contingencies. The allowance for civilian agency pay raises
includes an estimate of the additional amounts that will be required for pay raises anticipated in October 1981 for employees of
civilian agencies of the Government. A separate allowance for pay
raises is shown for the military and civilian employees of the
340-000 0 - 81 - 25 : QL 3




366

THE BUDGET FOR FISCAL YEAR 1982

Department of Defense and is included in its figures. These increases could not be reflected in the various program appropriation
requests since the applicable detailed amounts have not yet been
determined.
The allowance for contingencies is shown separately as required
by the Congressional Budget Act. The estimates for relatively uncontrollable programs are zero because the probability of net decreases or net increases for such programs is believed to be equal.
The allowances for other requirements contains estimates for potential requirements related to existing programs and for the possible enactment of legislation not specifically provided for in the
budget. In a similar manner, allowances are shown for the Department of Defense. A separate allowance in the education, training,
employment, and social services function is provided beginning in
1983, for the President's youth initiative.
Budget authority and outlays included in the allowance section
are never appropriated as undistributed allowances. These
allowances merely indicate the estimated budget authority and
outlays that may be requested.




PART 8

THE FEDERAL PROGRAM
BY AGENCY AND ACCOUNT




367

EXPLANATORY NOTE
This tabulation contains information on budget authority (BA) and outlays (O) for each appropriation and fund
account. The budget authority in this tabulation takes account of certain transfers between appropriations. All
budget authority items are definite appropriations except
where otherwise indicated. Also, budget authority and
outlay data for off-budget Federal entities are presented at
the end of this table. Within the Federal Financing Bank
(FFB) presentation, there is a distribution of its budget
authority and outlays to the accounts in the various agencies that are provided credit services by the FFB.
Functional code numbers are shown for each account as
a cross reference to tables 12 and 13, where the figures are
summarized by functional classification. Types of funds in
the budget and the deduct entries at the end of each
chapter of this tabulation are explained in Part 7.
Congressional action in the appropriation process occasionally takes the form of a limitation on the use of a trust
fund or other fund, or of an appropriation to liquidate
contract authority. Amounts for such items, which do not
affect budget authority, are included here in parentheses
and identified in the stub column, but are not included in
the totals.
368




THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

369

BUDGET ACCOUNTS LISTING (in thousands of dollars)
1980
actual

Account and functional code

1982
estimate

1981
estimate

Legislative Branch
Senate
Federal funds
General and Special Funds:

Compensation and mileage of the Vice President and
Senators
801
Appropriation, current
Outlays
Expense allowances of the Vice President, President
Pro Tempore, Majority and Minority Leaders and
Majority and Minority Whips
801
Appropriation, current
Outlays
Salaries, officers and employees
801
Appropriation, current

BA
0

6,827
6,781

6,827
6,827

7,984
7,984

BA
0

45
38

45
45

45
45

BA

132,459

135,733

Outlays
0
Office of the Legislative Counsel of the Senate 801
Appropriation, current
BA

120,935

132,459
D
5,543
138,002

1,134

935

135,733

0

350

350

550

390

550

801

Outlays
Senate policy committees
Appropriation, current

841

BA

Outlays
Office of Senate Legal Counsel
Appropriation, current

935
^80
1,015

801

Outlays
Automobiles and maintenance
Appropriation, current
Outlays
Inquiries and investigations
Appropriation, current
Outlays
Folding documents
Appropriation, current
Outlays
Miscellaneous items
Appropriation, current
Outlays
Postage stamps
Appropriation, current
Outlays
Stationery (revolving fund)
Appropriation, current
Outlays
Congressional use of foreign currency, Senate
Appropriation, current
Outlays

0
BA

1,562

1,562

1,693

0

1,366

1,693

1,693

BA
0

65
67

65
65

75
75

BA

33,600

45,805

0

29,254

33,600
1,627
35,227

BA

117

117

128

0

86

128

128

BA
0

38,195
24,271

30,776
30,776

35,189
35,189

BA
0

7
7

7
7

9
9

BA
0

40
100

40
40

40
40

BA
0

400
323

801
801

See footnotes at end of table.




D

801

45,805

801
801
801
801

Public Enterprise Funds:

Senate restaurant fund (revolving fund)
Outlays

1,134

801
0

-42

370

THE BUDGET FOR FISCAL YEAR 1982

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1982
estimate

1981
estimate

Legislative Branch—Con.
Senate—Con.
Recording studio (revolving fund)
Outlays
Senate barber shops (revolving fund)
Outlays

801
-131
801
-6

Total Federal funds Senate

BA
0

214,602
183,890

Payments to widows and heirs of deceased members
of Congress
801
Appropriation, current
BA
Outlays
0
Compensation of Members
801
Appropriation, current
BA

61
61

214,215
214,215

228,385
228,385

29,254
M1O
26,328
M10

29,382

House of Representatives
Federal funds
General and Special Funds:

Outlays..
Mileage of Members
Appropriation, current
Outlays
House leadership offices
Appropriation, current

29,213

0

28,828

BA
0

210
183

BA

2,365

2,415

2,564

0

1,968

2,321

2,308

BA

31,563

36,560

0

30,903

32,952
2,193
31,850

BA

26,628

27,000
2,225
27,849

29,225

3,086

2,856
^377

3,685

0

2,873

2,740
^377

3,326

BA
0

277
105

245
220

218
196

BA

43
9

50
1

55
2

0

49
5

40
7

43
7

BA

2,086

2,390

0

1,622

2,097
D
105
1,992

29,382

801
801

Outlays
Salaries, officers and employees
Appropriation, current

801

Outlays
Committee employees
Appropriation, current

210
189

801

D

32,904

D

Outlays
0
Committee on Appropriations (Studies and Investigations)
801
Appropriation, current
BA
Outlays..
Committee on the Budget (Studies)
Appropriation, current
Outlays
Office of the Law Revision Counsel
Appropriation, current
Outlays
Office of the Legislative Counsel
Appropriation, current
Outlays
e footnotes at end of table.




26,579

26,303

801
801

801
2,151

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

371

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Legislative Branch—Con.
House of Representatives—Con.

Members' clerk hire
Appropriation, current
Outlays
Allowances and expenses
Appropriation, current

801
BA

126,808

0

126,808
11,540
136,152

125,406

138,813

72,672
^3,150
c
2,155
67,555
^3,150

82,023

D

124,932

801
BA

66,461

0

65,003

0

-6

-6

-6

BA

39,877

45,761

Outlays
0
Congressional use of foreign currency, House of Representatives
801
Appropriation, current
BA
Outlays
0

39,338

41,500
D
732
38,132

Outlays
Stationery (revolving fund)
Outlays
Special and select committees
Appropriation, current

73,821

801
801
41,185

800
1,113

1,113
1,113

1,113
1,113

151

151

151

-11

-11

-11

-7

-7

-7

Public Enterprise Funds:

House of Representatives restaurant fund (revolving
fund)
801
Outlays
0
Recording studio (revolving fund)
801
Outlays
0
Beauty shop (revolving fund)
801
Outlays
0
House barber shops (revolving fund)
801
Outlays
0
Office of the attending physician (revolving fund)
801
Outlays
0
Total Federal funds House of Representatives

1

1

1

-1

BA
0

329,928
324,569

BA

2,749

0

2,453

-1

362,346
340,486

372,469
338,410

Joint Items

Federal funds
General and Special Funds:

Joint Economic Committee
Appropriation, current
Outlays
Joint Committee on Printing
Appropriation, current
Outlays
Statements of appropriations, Senate
Appropriation, current
Outlays
See footnotes at end of table.




801
2,150
^100
2,250

2,250

760
58
818

922

2,250

801
BA

864

0

677

D

922

801
BA
0

6

6
6

6
%

372

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Legislative Branch—Con.
Joint Items—Con.

Joint Committee on Taxation
Appropriation, current
Outlays
Office of the Attending Physician
Appropriation, current

801
BA

2,519

2,632
D

2,844

0

2,319

2,496

2,560

801
BA

Outlays
Official mail costs
Appropriation, current

459

0

603

412

504
M3
454
M3

BA
0

810
805

834
751

925
832

BA
0

1,263
1,305

915
302

302

BA

220

236

267

0

Outlays
General expenses, Capitol police
Appropriation, current
Outlays
Capitol Police Board
Appropriation, current
Outlays
Education of pages
Appropriation, current

165

221

240

544

801
801
801

801
BA

79,471

0

Outlays
Capitol Guide Service
Appropriation, current

m

64,354

36,633
37,600
51,750
^37,600
A

81,095
81,095

801
BA

655

Outlays
0
Statements of appropriations, House of Representatives
801
Appropriation, current
BA
Outlays
O

594

Total Federal funds Joint Items

6

664
°67
731

734

13
7

13
7

734

BA
0

89,022
73,084

83,321
97,399

89,659
89,492

BA

12,386

14,298

0

12,101

12,138
M65
12,178

Congressional Budget Office
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

801

Outlays

14,000

Architect of the Capitol
Federal funds
General and Special Funds:

Office of the Architect of the Capitol: Salaries
Appropriation, current
Outlays
See footnotes at end of table.




801
BA

2,836

0

2,792

3,171
C
32
^184
3,414

3,964
3,958

373

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1982
estimate

1981
estimate

Legislative Branch—Con.
Architect of the Capitol—Con.
Contingent expenses
Appropriation, current
Outlays
Capitol buildings
Appropriation, current

801
BA
0

210
105

210
548

210
210

BA

7,394

9,971

0

7,010

7,276
C
285
"97
8,400

BA

2,270

2,147
c
130

4,927

Outlays
0
West central front of the Capitol
801
Outlays
0
Master plan for future development of the Capitol
grounds and related areas
801
Outlays
0
Acquisition of property as an addition to the Capitol
grounds
801
Appropriation, current
BA
Outlays
0
Senate office buildings
801
Appropriation, current
BA

2,615

2,342

3,798

103

151

17

86

Outlays
Capitol grounds
Appropriation, current

801

Outlays
Construction of an extension to the New Senate Office
Building
801
Appropriation, current
Outlays
Extension of additional Senate Office Building site
801
Outlays
Acquisition of property as a site for parking facilities
for the United States Senate
801
Outlays
Senate garage
801
Appropriation, current
Outlays
House office buildings
Appropriation, current




A

11,500
* 11,500
11,433

0

11,786

11,433
c
610
13,974

BA
0

52,583
18,228

51,927

0
0

1
206

0

198

114
C
5
129

21,741

15,140

5

BA

19,507

1

99
99

801
BA

Outlays
0
Acquisition of property, construction, and equipment,
additional House Office Building
801
Outlays
0
Installation of solar collectors in House office buildings
801
Outlays
O
See footnotes at end of table.

9,513

801

18,484
20,352
0

33

16,560
c
910
20,259
79
1.467

20,292
19,497

374

THE BUDGET FOR FISCAL YEAR 1982

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1981
estimate

actual

1982
estimate

Legislative Branch—Con.
Architect of the Capitol—Con.
Capitol Power Plant
Appropriation, current

801
BA
0

Outlays..
Expansion of facilities, Capitol Power Plant
801
Outlays
Modifications and enlargement, Capitol Power
Plant
801
Outlays
Memorial to Hale Boggs
801
Appropriation, current
Outlays
Alterations and improvements, buildings and grounds,
to provide facilities for the physically handicapped
801
Outlays
Structural and mechanical care, Library buildings and
grounds
801
Appropriation, current

14,181
13,326

0

81

147

0

2,098

4,884

16,577
^ 2,600
C
175
17,092
^ 2,600

BA
0

0
BA

7
7

81
5

26
8

21,550
...
1,920
...

80
0

3,408

4,933
C
257
5,535

7,054

4,950

BA
0

114,007
89,496

79,219
150,347

104,576
109,006

B
A

103,812

115,443

0

102,364

101,574
C
383
* 6,112
113,410
9,069
1,043
10,512

10,623

28,083
1,958
29,464

32,288

Outlays
0
Library of Congress James Madison Memorial Building
801
Outlays
O
Total Federal funds Architect of the Capitol

4,410

22,888

22,718
10,780

Library of Congress
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current..
Outlays
Copyright Office: Salaries and expenses
Appropriation, current

503

BA

9,632

Outlays
0
National Commission on New Technological Uses of
Copyrighted Works: Salaries and expenses
376
Outlays
O
Congressional Research Service: Salaries and expenses
801
Appropriation, current
BA

9,600

Outlays
See footnotes at end of table.




114,763

376

0

D

10,598

7
27,890
28,810

D

32,063

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

375

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Legislative Branch—Con.
Library of Congress—Con.
Books for the blind and physically handicapped: Salaries and expenses
503
Appropriation, current
BA
Outlays
0
Collection and distribution of library materials (special
foreign currency program)
503
Appropriation, current
BA
Outlays
Furniture and furnishings
Appropriation, current
Outlays
Payments to copyright owners
Appropriation, permanent, indefinite
Outlays
Oliver Wendell Holmes devise fund
Appropriation, permanent, indefinite
Outlays

0

34,500
31,436
3,563

32,672
C
17
D
250
43,842

33,243
33,060

3,492

3,760
»26
3,923

4,474
4,518

870
14,579

1,686
7,507

1,540
2,917

503
BA
0
376
BA
0

18,461
-1,653

18,000
48,957

18,000
17,260

BA
0

30
25

3
20

2
20

503

Intragovernmental Funds:

Consolidated working fund
Outlays
Trust funds
Gift and trust fund accounts
Appropriation, permanent, indefinite
Outlays

503
0

-2,140

1,863

503
BA
0

6,845
6,220

5,669
6,226

5,487
5,667

Total Federal funds Library of Congress

BA
0

198,758
186,520

204,636
259,498

215,613
215,199

Total Trust funds Library of Congress

BA
0

6,845
6,220

5,669
6,226

5,487
5,667

BA
BA

18,941

16,250
898

0

21,338

17,415

BA
BA

79,078

82,400
988

0

77,635

81,760

Government Printing Office
Federal funds
Genera! and Special Funds:

Printing and binding
Appropriation, current
Contract authority, permanent
Liquidation of contract authority, current
Outlays
Congressional printing and binding
Appropriation, current
Contract authority, permanent
Liquidation of contract authority, current
Outlays
See footnotes at end of table.




801
18,482
898
(898)
19,075

801
90,230
988
(988)
88,600

376

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Legislative Branch—Con.
Government Printing Office—Con.

Office of Superintendent of Documents: Salaries and
expenses
806
Appropriation, current
BA
Outlays

0

23,219
24,285

23,400
2,562
D
405
23,467
^ 1,867
A

. Acquisition of site and general plans and designs of
buildings
806
Appropriation, current
BA
Outlays
0
Project planning
806
Outlays
0

4,600

29,279
27,721
*695
22,300
22,300

41

Intragovernmental Funds:

Government Printing Office revolving fund
Outlays

806
0

Total Federal funds Government Printing Office... BA
0

-7,511
121,238
115,747

2,109

3,402

126,903
131,259

162,177
161,793

210,000
12,902
221,275

244,878

10,427
A 221
"446
10,691
M95

12,404

General Accounting Office
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

801
BA
0

Outlays

204,300
201,192

D

243,090

United States Tax Court
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752
BA
0

Outlays
Construction
Outlays

9,751
9,632

0

2

752

Trust funds
Tax Court judges survivors annuity fund
602
Appropriation, permanent, indefinite
BA
Outlays
0
Total Federal funds United States Tax Court
BA
0
Total Trust funds United States Tax Court
See footnotes at end of table.




12,360
A
26

BA
0

4

124
69
9,751
9,634

130
77
11,094
10,890

134
77
12,404
12,386

124
69

130
77

134
77

377

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Legislative Branch—Con.
Other Legislative Branch Agencies
Federal funds
General and Special Funds:

Commission on Security and Cooperation in Europe:
Salaries and expenses
801
Appropriation, current
BA
Outlays
0
Botanic Garden: Salaries and expenses
801
Appropriation, current
BA

264
378

450
468

468
538

1,464

1,588

2,311

c92

Outlays
Copyright Royalty Tribunal: Salaries and expenses

0

1,583

1,660

2,099

447
22

500

438
22

45
9

376
Appropriation, current

BA

41
7

A

Outlays..

0

46
8

A

Cost-Accounting Standards Board: Salaries and expenses
801
Appropriation, current
BA
Outlays
0
Railroad Accounting Principles Board: Salaries and
expenses
801
Appropriation, current
BA

1,300
1,189

26
4
1,000
^ 860

Outlays....

0
^825

Temporary Commission on Financial Oversight of the
District of Columbia: Salaries and expenses
801
Appropriation, current
BA
Outlays
0
Office of Technology Assessment: Salaries and expenses
801
Appropriation, current
BA

924
^35

7,000
11,622

447

50
0

11,199

10,780

13,100

D

Outlays..
Trust funds
Office of Technology Assessment: Contributions and
donations
801
Appropriation, permanent, indefinite
BA
Outlays
0
Total Federal funds Other Legislative Branch
Agencies
BA
0
Total Trust funds Other Legislative Branch Agencies
BA
0
See footnotes at end of table.




Z70
11,055
^320

12,415
^50

-3

5
4

5
5

21,698
26,389

14,984
15,481

17,379
17,056

_3

5
4

5
5

11,131

378

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

1981
estimate

1982
estimate

1,315,690
1,222,622

1,332,223
1,453,028

1,461,838
1,428,817

n

— JcU

— jc 1

— JZ1

f

-845

-80S

-802

—417

—648

—671

Account and functional code

Legislative Branch—Con.
Summary

Federal funds:
(As shown in detail above)

BA
0

Deductions for offsetting receipts:
Intrafund transactions

803 BA
902

Proprietary receipts from the public

503 BA
Q
801 RA
J*
902 BA
0

Total Federal funds

-5,706

-5,596

-5,597

^

BA

Trust funds:
(As shown in detail above)

1,308,388

1,324,855

1,454,447

0

1,215,320

1,445,660

1,421,426

6,966
6,289

5,804
6,307

5,626
5,749

BA
0

Deductions for offsetting receipts:
Proprietary receipts from the public

503 BA
902

_ ^

_ ^

_3JQQ

-142

-155

3,342
2,665

1,962
2,465

1,771
1,894

BA

1,311,730

1,326,817

1,456,218

0

Total Legislative Branch

-124

BA
0

Total Trust funds

jj A

1,217,985

1,448,125

1,423,320

10,363

11,140

11,208

The Judiciary
Supreme Court of the United States

Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752
BA

D

Outlays
Care of the building and grounds
Appropriation, current

0

9,418

BA

2,182

714

11,584

11,008

752
1,526

1,654

A 42
c

Outlays

0

1,810

60
2,724

A 42

See footnotes at end of table.




1,646

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

379

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

The Judiciary—Con.
Supreme Court of the United States—Con.
Acquisition of property as an addition to the grounds
of the Supreme Court building
752
Appropriation, current
BA
Outlays
0
Total Federal funds Supreme Court of the United
States
BA
0

A
A

12,545
11,228

645
600

14,127
14,950

A

45

12,862
12,699

Court of Customs and Patent Appeals
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752
BA
0

1,640

BA

4,941

0

4,690

BA

5,469

0

Outlays

1,810

1,839
102
1,925

5,172

D

1,990
1,989

United States Court of International Trade
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752

Outlays

5,036
*264
5,273

5,360

5,526
z>297
5,794

5,990

54,500
4,870

60,160

63,645

60,126

214,181
19,032

244,890

5,357

Court of Claims
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752

Outlays

5,973

Courts of Appeals, District Courts, and
other Judicial Services
Federal funds
General and Special Funds:

Salaries of judges
Appropriation, current
Reappropriation
Outlays
Salaries of supporting personnel
Appropriation, current
Reappropriation
Outlays
Defender services
Appropriation, current
Outlays
Fees of jurors and commissioners
Appropriation, current
Outlays
See footnotes at end of table.




752
BA

51,100

BA
0

1,000
45,768

D

752
BA

200,700

BA
0

3,000
196,971

231,910

243,594

BA
0

26,000
23,357

24,000
24,328

27,320
27,514

BA
0

43,000
36,471

36,000
42,063

46,950
46,595

D

752
752

380

THE BUDGET FOR FISCAL YEAR 1982

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

The Judiciary—Con.
Courts of Appeals, District Courts, and
other Judicial Services—Con.
Expenses of Operation and Maintenance of the
Courts
752
BA
Appropriation, current
0
Outlays
Salaries and expenses of magistrates
752
BA
Appropriation, current
Outlays
Bankruptcy courts, salaries and expenses
Appropriation, current

37,800
40,482

41,827
42,527

52,330
50,762

22,800

23,851
°764
24,059

30,170

85,070

3,750

0

21,724

BA

56,512

29,714

752
0

54,342

62,794
3,516
66,472

BA
0

3,500
2,239

3,645
3,552

BA
BA
0

99,862
5,000
93,544

120,000

1,635

2,695

138

55

900
3,222

1,281

182

624

72
4

551,174
520,075

608,980
620,474

685,920
680,333

15,750

16,275

20,490

14,509

16,346

19,404

17,270
16,346

20,490
19,404

D

Outlays
Services for drug dependent offenders
Appropriation, current
Outlays
Space and facilities
Appropriation, current
Reappropriation
Outlays
Furniture and furnishings
Outlays
Speedy trial planning
Outlays
Pretrial services agencies, The Judiciary
Appropriation, current
Outlays
Special rail reorganization court
Outlays

83,823

752
3,714

752

135,280
133,749

752
752
752
BA
0
752

Total Federal funds Courts of Appeals, District
Courts, and other Judicial Services
BA
0
Administrative Office of the United States
Courts
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current..

752
B
A

Outlays
Intragovernmental Funds:

Consolidated working fund
Outlays

752
0

Total Federal funds Administrative Office of the
United States Courts
BA
0
See footnotes at end of table.




- 2 2 7 ..
.
15,750
14,282

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

381

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

The Judiciary—Con.
Federal Judicial Center

Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

752
BA
0

8,113

0

Outlays

8,617

9,000
D
241
9,003

123

135

8,618
1,354

9,653
1,656

7,994
8,203

Bicentennial Expenses, The Judiciary
Federal funds
General and Special Funds:

Bicentennial activities
Outlays

806

Judiciary Trust Funds
Trust funds
Judicial survivors' annuities fund
Appropriation, permanent, indefinite
Outlays.....

602
BA
0

Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

BA
0
750 BA
902

Total Federal funds

\

BA
0

Trust funds:
(As shown in detail above)

BA
0

Total The Judiciary

BA
0

600,306
565,323

662,682
673,900

_^^

_£m

-76

597,774
562,791
8,618
1,354
606,392
564,145

-77

660,421
671,639
9,653
1,656

10,400
1,950

740,606
733,958
_2m
-80

738,333
731,685
10,400
1,950

670,074
673,295

748,733
733,635

250
300

200
200

Executive Office of the President

Compensation of the President
Federal funds
General and Special Funds:

Compensation of the President
Appropriation, current
Outlays
See footnotes at end of table.
340-000 0 - 8 1 - 2 6 : QL 3




802
BA
0

250
200

382

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Executive Office of the President—Con.
The White House Office
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802
BA
0

Outlays

18,941
18,767

20,373
D
905
21,036

22,346
22,246

Executive Residence at the White House
Federal funds
General and Special Funds:

Operating expenses
Appropriation, current

802
BA

3,083

3,156
^50
c

Outlays

0

2,694

3,731

120
D
98

3,705
^_50

3,741

Official Residence of the Vice President
Federal funds
General and Special Funds:

Operating expenses
Appropriation, current
Outlays

802
BA
0

233
127

168
266

185
190

BA

1,462

1,640

0

1,457

1,531
D
60
1,543

BA

2,102

2,313

0

2,145

2,171
D
34
2,296

Special Assistance to the President
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays

1,591

Council of Economic Advisers
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays

2,306

Council on Environmental Quality and Office
of Environmental Quality
Federal funds
General and Special Funds:

Council on Environmental Quality and Office of Environmental Quality
802
Appropriation, current
BA
Outlays
See footnotes at end of table.




0

3,126
2,982

3,250
D
95
3,345

3,668
3,668

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

383

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Executive Office of the President—Con.
Council on Environmental Quality and Office
of Environmental Quality—Con.
Intragovernmental Funds:

Consolidated working fund
Outlays

802
0

Total Federal funds Council on Environmental
Quality and Office of Environmental Quality BA
0

2,720

-1,957

3,126
5,702

3,345
1,388

3,668
3,668

BA

9,447

9,447

0

9,065

9,447

BA

2,711

2,973

0

2,618

2,927
D
89
2,907

BA

3,645

3,668

3,973

0

3,527

3,839

3,980

BA

8,062

13,350

0

5,589

12,000
^200
11,834

Council on Wage and Price Stability
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays

* 2,978
4,448

Domestic Policy Staff
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays

2,923

National Security Council
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays
Office of Administration
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

802

Outlays

12,950

Office of Management and Budget
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays
See footnotes at end of table.




802
BA

33,431

0

32,907

32,606
1,463
34,248

D

37,335
37,335

384

THE BUDGET FOR FISCAL YEAR 1982

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1982
estimate

1981
estimate

Executive Office of the President—Con.
Office of Management and Budget—Con.
Office of Federal Procurement Policy: Salaries and
expenses
802
Appropriation, current

3,000

0

Outlays

BA

2,788

2,223

2,500
^128
3,266

36,431
35,130

36,697
37,514

40,123
40,123

2,788

Summary
Federal funds:
(As shown in detail above)

B
A
0

Deductions for offsetting receipts:
Proprietary receipts from the public

802 BA
0

-168

BA
0

36,263
34,962

36,697
37,514

40,123
40,123

B
A

2,625
2,637

2,658
D
76
2,700

3,253

0

BA

8,384

9,100

10,000

0

5,685

9,173

9,712

-18

Total Office of Management and Budget

173

229

104

21
1

27
7

100,502
95,554

109,652
108,275

Office of Science and Technology Policy
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current

802

Outlays..

2,804

Office of the United States Trade
Representative
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current

802

Outlays
Special Action Office for Drug Abuse
Prevention
Federal funds
General and Special Funds:
Salaries and expenses
Outlays
Special fund for drug abuse
Outlays

554
554

Total Federal funds Special Action Office for
Drug Abuse Prevention

0

Summary
Federal funds:
(As shown in detail above)
See footnotes at end of table.




BA
0

110,733
110,882

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

385

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Executive Office of the President—Con.
Summary—Con.

Deductions for offsetting receipts:
Proprietary receipts from the public

802 BA
0

Total Executive Office of the President

BA
0

1CO

~m

100,334
95,386

109,652
108,275

110,733
110,882

339,300
324,960

340,250
321,000

Funds Appropriated to the President
Appalachian Regional Development Programs
Federal funds
General and Special Funds:

Appalachian regional development programs
Appropriation, current
Outlays

452
BA
0

356,500
340,296

Public Enterprise Funds:

Appalachian housing fund
Outlays

452
0

Total Federal funds Appalachian Regional Development Programs
BA
0

235

1,712

356,500
340,531

339,300
326,672

340,250
321,000

BA
0

1,063,600
573,760

366,449
640,000

400,000
604,357

BA
0

1,063,600
573,760

366,449
640,000

400,000
604,357

Disaster Relief
Federal funds
General and Special Funds:

Disaster relief
Appropriation, current
Outlays

453

Summary

Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

450 BA
Q

902

Total Disaster Relief

onn
— oUU

»

-22

-22

366,127
639,678

399,678
604,035

BA
0

1,063,600
573,760

Ofln
— OUU

Unanticipated Needs
Federal funds
General and Special Funds:

Unanticipated needs
Appropriation, current
Outlays
See footnotes at end of table.




802
BA
0

1,000
825

1,000
1,000

1,000
1,000

386

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Funds Appropriated to the President—Con.

Expenses of Management Improvement
Federal funds
General and Special Funds:

Expenses of management improvement
Outlays

802
2
1

25
6

Foreign Assistance
International Security Assistance

Federal funds
General and Special Funds:

Military assistance
Appropriation, current

152
BA

110,000

0

218,689

BA

25,000

Outlays
Foreign military sales credit
Appropriation, current

0

26,359

BA

645,000

Outlays
Assistance for relocation of facilities in Israel
Contract authority, permanent, indefinite
Outlays
Economic support fund
Appropriation, current, indefinite

0

* 110,200
151,400

"33,500
148,000

* 28,400
25,500

"35,695
33,700

643,640

"500,000
595,000

"850,000
660,000

BA
0

235,556
340,781

360,000

67,919

BA

1,942,100

2,104,500

BA
0

1,872,457

23,950
2,070,000

BA

30,000

25,000

0

Outlays
International military education and training
Appropriation, current

31,434

34,000

"19,000
32,000

-1,799

-1,681

-1,671

11,650,895
(7,654,283)
8,791,158

12,501,000
(9,612,000)
9,612,000

13,090,000
(10,714,000)
10,714,000

2,987,656
3,131,561

2,792,050
3,234,219

3,369,695
3,222,448

-305,504

-263,000

-273,000

152

152

152
151

"2,431,500
Reappropriation
Outlays
Peacekeeping operations
Appropriation, current, indefinite

151

Outlays..

2,282,500

Public Enterprise Funds:

Liquidation of foreign military sales fund
Outlays

152

Trust funds
Advances, foreign military sales
155
Contract authority, permanent, indefinite
BA
Liquidation of contract authority, permanent
Outlays
0
Summary

Federal funds:
(As shown in detail above)
Deductions for offsetting receipts-.
Proprietary receipts from the public
See footnotes at end of table.




BA
0
152 BA
0

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

387

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Funds Appropriated to the President—Con.
Foreign Assistance—Con.
International Security Assistance—Con.
on?

DA

°

Deductions for offsetting receipts.Proprietary receipts from the public

2,622,255
2,766,160

2,469,050
2,911,219

3,036,695
2,889,448

BA
0

Trust funds:
(As shown in detail above)

-60,000

BA
0

Total Federal funds

-59,897

-60,000

11,650,895
8,791,158

12,501,000
9,612,000

13,090,000
10,714,000

155 BA

Total Trust funds

BA
0

3,996,612
1,136,875

2,889,000

2,376,000

Total International Security Assistance

BA
0

6,618,867
3,903,035

5,358,050
2,911,219

5,412,695
2,889,448

Contribution to the International bank for reconstruction and development
151
Appropriation, current
BA

162,997

32,789

16,310

63,279

53,489
* 658,306
140,281

1,072,000

20,000

International Development Assistance
Multilateral Assistance

Federal funds
General and Special Funds:

Outlays
0
Contribution to the International development association
151
Appropriation, current
BA

B

Outlays
Contribution to the International finance corporation
151
Appropriation, current
Outlays
Contribution to the Inter-American development
bank
151
Appropriation, current
Outlays
Contribution to the Asian development bank
151
Appropriation, current
Outlays
Contribution to the African development fund 151
Appropriation, current
Outlays
See footnotes at end of table.




0

472;022

* 1,080,000
1,080,000
552,800
B
18,800

623,576
80,000

B

BA
0

19,000
22,298

11,148

14,448
14,448

BA
0

763,720
225,381

251,547
245,490

359,207
242,822

BA
0

264,992
48,418

139,612
69,831

172,677
86,585

BA
0

25,000

41,667
9,000

58,333
12,900

388

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Funds Appropriated to the President—Con.
Foreign Assistance—Con.
International Development Assistance—Con.

Contribution to the African development bank
Appropriation, current

151
BA

Outlays..

17,987

B

0

Payment to the International Fund for Agricultural
Development
151
Appropriation, current
BA
Outlays
0
International organizations and programs
151
Appropriation, current
BA

* 17,987

B

17,987

* 17,987

25,000

* 85,000
40,000

260,000
K

0

263,501

262,380
259,354

* 247,650
253,682

BA
0

2,567,709
1,047,930

1,845,982
1,272,689

2,747,097
1,512,281

B
A

1,124,801

1,184,888

0

976,017

1,078,760

BA

75,000

90,500

Outlays
0
Payment to the Foreign Service retirement and disability fund
153
Appropriation, current
BA

46,185

46,682

Outlays..
Total Federal funds Multilateral Assistance
Bilateral Assistance

Federal funds
General and Special Funds:

Functional development assistance program
Appropriation, current
Outlays
Sahel development program
Appropriation, current

151

151

26,696

25,676
2,176
25,676
^2,176

* 1,821,200
1,152,920
K

149,400
65,526
32,552

A

Outlays..

0

26,696

B
A

25,000

20,000

0

19,189

20,254

BA

79,050

87,250

Outlays
0
Operating expenses of the International Development
Cooperation Agency
151
Appropriation, current
BA

62,560

104,444

American schools and hospitals abroad
Appropriation, current
Outlays
International disaster assistance
Appropriation, current

32,552

151

151

271,587

* 7,500
17,652
* 27,000
64,365

280,000
* 350,887
A

Outlays
footnotes at end of table.




261,224

13,325
D
10,408
289,792
A
13.325

333,746

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

389

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Funds Appropriated to the President—Con.
Foreign Assistance—Con.
International Development Assistance—Con.

Trade and development program
Appropriation, current
Outlays
Miscellaneous appropriations
Outlays

151

K

BA
0

7,000
2,410

151
0

8,029

13,674

0

27,111

8,613

14,377

Public Enterprise Funds:

Development loans-revolving fund
Outlays
Housing and other credit guaranty programs
Outlays
Overseas Private Investment Corporation
Outlays
African Development Foundation
Appropriation, current
Outlays

151
151
0

4,715

1,873

812

151
0

-81,972

-66,411

-71,596

151
BA
0

2,000
625

5,000
2,297

Intragovernmental Funds:

Advance acquisition of property-revolving fund
151
Outlays
0
Office of the Inspector General of Foreign Assistance
151
Outlays
0
Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
Total Federal funds Bilateral Assistance

-197
139

151
BA
0
BA
0

20,732
22,895
1,602,134
1,349,557

25,000
25,000
1,716,223
1,545,386

30,000
30,000
2,400,539
1,609,297

BA
0

20,732
22,895

25,000
25,000

30,000
30,000

BA
0

4,169,843
2,397,487

3,562,205
2,818,075

5,147,636
3,121,578

150 BA

-m

Total Trust funds Bilateral Assistance
Summary

Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

Q

— 501

0CM

—364

oco

—363

151

Trust funds:
(As shown in detail above)
See footnotes at end of table.




-302,995

-334,998

-385,332

902

Total Federal funds

QA
A

j*
BA
0

-304,383
3,561,964
1,789,608

-362,392
2,864,451
2,120,321

-391,993
4,369,948
2,343,890

BA
0

20,732
22,895

25,000
25,000

30,000
30,000

390

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Funds Appropriated to the President—Con.
Foreign Assistance—Con.
International Development Assistance—Con.

Deductions for offsetting receipts:
Proprietary receipts from the public

151 BA

Total Trust funds

0

Total International Development Assistance

BA
0

_2QJ32

_25m

2,163
3,561,964
1,791,771

2,864,451
2,120,321

4,369,948
2,343,890

Contingencies

Federal funds
General and Special Funds:

President's foreign assistance contingency fund
151
Outlays

0

80

1,369

Total Federal funds Foreign Assistance

BA
0

6,184,219
4,555,848

5,333,501
5,032,909

7,406,643
5,233,338

Total Trust funds Foreign Assistance

BA
0

3,996,612
1,139,038

2,889,000

2,376,000

BA
0

12,582
6,222

15,964
5,255

18,500
23,056

Inter-American Foundation
Federal funds
Public Enterprise Funds:

Inter-American Foundation
151
Appropriation, current
Outlays
Trust funds
Gifts and contributions, Inter-American Foundation
151
Appropriation, permanent, indefinite
Outlays

BA
0

40
40

20
20

Peace Corps
Federal funds
General and Special Funds:

Operating expenses
Appropriation, current

151
BA

Outlays
Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
Summary
Federal funds:
(As shown in detail above)
See footnotes at end of table.




0

99,924
100,895

105,000
A
961
D
2,393
105,370
^932

121,900
120,808
^29

151
BA
0
BA
0

1
-248
99,924
100,895

462
538
108,354
106,302

210
210
121,900
120,837

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

391

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Funds Appropriated to the President—Con.
Peace Corps—Con.
Deductions for offsetting receipts-.
Proprietary receipts from the public

150 BA

_ „ ,

_ ™

_ ™

-'

~4

~4

99,868
100,839

108,300
106,248

121,846
120,783

902 BA

0
Total Federal funds

BA
0

Trust funds:
(As shown in detail above)

BA
0

Deductions for offsetting receipts:
Proprietary receipts from the public

1
-248

151 BA

017
—27/

n

Total Trust funds

BA
0

Total Peace Corps

BA
0

462
538

1
-248
99,869
100,591

245
321

210
210
inn
—lUU

110
110

108,545
106,569

121,956
120,893

* 88,000
«5,000

* 238,850
«30,040

International Commodity Agreements
Federal funds
General and Special Funds:

Contributions to international buffer stocks
Appropriation, current
Outlays

155
BA
0

International Monetary Programs
Federal funds
General and Special Funds:

United States quota, IMF
Appropriation, current, indefinite
Outlays

155
BA
0

12,454

5,515,521

0

51,343

95,058

15,041

0

51,343

95,058

15,041

742,680
794,023

95,058

15,041

Petroleum Reserves
Federal funds
General and Special Funds:

Petroleum reserves.(Energy supply)
(Outlays)

271
Summary

Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
Total Petroleum Reserves
See footnotes at end of table.




271 BA
BA
0

392

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Funds Appropriated to the President—Con.
Public Works Acceleration
Federal funds
General and Special Funds:

Public works acceleration
Outlays

452
0

Summary
Federal funds:
(As shown in detail above)

1

BA
0

Deductions for offsetting receipts:
Proprietary receipts from the public

150 BA

8,691,105
6,615,180

12,788,843
7,233,215

9,637,831
7,459,357

_553

_...

_..„

151

QA

-302,995

-334,998

-385,332

152

Q

A

-305,504

-263,000

-273,000

271

JA

450

f

902

-300
A

-300

-422,418

-452,019

BA

Trust funds:
(As shown in detail above)

-364,284
8,460,449

11,767,713

8,526,767

0

Total Federal funds

j*

742,680

6,384,524

6,212,085

6,348,293

11,671,628
8,813,805

12,526,502
9,637,578

13,120,230
10,744,230

BA
0

Deductions for offsetting receipts:
Proprietary receipts from the public

151 BA
155

Total Trust funds

_ ^

Q A -7,654,283
BA

Total Funds Appropriated to the President

3,996,613

0

1,138,790

BA

0

_ ^

; /

-9,612,000
2,889,285

361

_ ^
-10,714,000
2,376,130

130

12,457,062

14,656,998

10,902,897

7,523,314

6,212,446

6,348,423

4,674

4,504

5,408

5,338

"416
4,822

5,300

Department of Agriculture
Office of the Secretary
Federal funds
General and Special Funds:

Office of the Secretary
Appropriation, current

Outlays
See footnotes at end of table.




352
BA

0

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

393

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Agriculture—Con.
Departmental Administration
Federal funds
General and Special Funds:

Departmental administration
Appropriation, current

352
BA
0

20,206

0

-259

0

Outlays

20,250

12,925
C
18
D
1,294
13,978

20,442

2,842
14,237
13,978

20,442
20,008

8,843
°303
8,987

11,012

38,052
1,472
G
692
39,550

43,535

11,609
D
910
12,260

13,748

416,367
c
1,796
14,386

456,881

423,377

454,274

20,008

Intragovernmental Funds:

Working capital fund
Outlays
Miscellaneous consolidated working funds
Outlays

352
352

Total Federal funds Departmental Administration. BA
0

20,250
22,789

Office of Governmental and Public Affairs
Federal funds
General and Special Funds:

Office of Governmental and Public Affairs
Appropriation, current

352
BA

Outlays

0

10,803

Office of the Inspector General
Federal funds
General and Special Funds:

Office of the Inspector General
Appropriation, current

352
BA
0

34,241

BA

11,493

0

Outlays

35,941

11,811

D

42,843

Office of the General Counsel
Federal funds
General and Special Funds:

Office of the General Counsel
Appropriation, current

352

Outlays

13,509

Science and Education Administration
Federal funds
General and Special Funds:

Agricultural research
Appropriation, current

352
BA

370,970

D

Reappropriation
Outlays
See footnotes at end of table.




BA
0

2,000
358,794

394

THE BUDGET FOR FISCAL YEAR 1982

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1981
estimate

actual

1982
estimate

Department of Agriculture—Con.
Science and Education Administration—Con.
Cooperative research
Appropriation, current

352
BA
0

Extension activities
Appropriation, current
Outlays
Technical information systems
Appropriation, current
Outlays
Buildings and facilities
Appropriation, current
Outlays
Library facilities
Outlays

174,245

BA

285,523

0

288,023

352

200,897

232,476

J

Outlays..

186,031

10,000
201,255
J
2,000

y

303,633
°407
302,158

305,110

9,381

10,000
226,889
J
6,000

303,247

352
BA

7,917

0

7,528

8,541
D
389
8,028

BA
0

10,997

18,230

1,900
5,941

8,768

352
352
0

2 .
.

0

14 .
.

Intragovernmental Funds:

Consolidated working fund
Outlays
Trust funds
Miscellaneous contributed funds
Appropriation, permanent, indefinite
Outlays

352

352
BA
0

994
1,785

1,017
1,250

1,017
1,250

Total Federal funds Science and Education Administration
BA
0

852,441
839,603

956,602
955,048

1,015,748
1,005,119

Total Trust funds Science and Education Administration
BA
0

994
1,785

1,017
1,250

1,017
1,250

89,431

90,403

105,893

0

91,241

*> 4,767
94,650

105,345

BA
0

94
-148

45
62

45
45

Economics and Statistics Service
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current..

352

Outlays..
Trust funds
Miscellaneous contributed funds
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.




c4

352

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

395

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Agriculture—Con.
Agricultural Cooperative Service
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

352
BA

4,500
D

4,800

m

Outlays

0
Trust funds
Miscellaneous contributed funds
352
Appropriation, permanent, indefinite
BA
Outlays
0
World Food and Agricultural Outlook and
Situation Board
Federal funds

4,693

45
66

4,784

45
42

General and Special Funds:

World food and agricultural outlook and situation
board
352
Appropriation, current
BA
Outlays

0

1,045

1,731
D
94
1,783

1,215

1,568
1,596

Foreign Agricultural Service
Federal funds
General and Special Funds:

Foreign Agricultural Service
Appropriation, current

352
BA

Outlays
0
Salaries and expenses (special foreign currency program)
352
Outlays
0
Total Federal funds Foreign Agricultural Service.. BA
0

54,610
54,808
324

60,535
1,157
60,361

D

500

70,428
69,971
457

54,610
55,132

61,692
60,861

70,428
70,428

2,490

3,500

7,404

Office of International Cooperation and
Development
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

352
BA

z>72

Outlays
0
Scientific activities overseas (special foreign currency
program)
352
Appropriation, current
BA

2,543

3,568

7,408

4,550

5,000

5,754

z> 4

Outlays

0

5,686

0

-2,089

Intragovernmental Funds:

Consolidated working fund
Outlays
See footnotes at end of table.




151

5,694

5,759

396

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Agriculture—Con.
Office of International Cooperation and
Development—Con.

Trust funds
Miscellaneous contributed funds
352
Appropriation, permanent, indefinite
BA
Outlays
0
Total Federal funds Office of International Cooperation and Development
BA
0
Total Trust funds Office of International Cooperation and Development
BA
0

4,769
2,345

3,364
6,134

5,259
5,259

7,040
6,140

8,576
9,262

13,158
13,167

4,769
2,345

3,364
6,134

5,259
5,259

Foreign Assistance Programs
Federal funds
General and Special Funds:

Expenses, Public Law 480, foreign assistance programs, Agriculture
151
Appropriation, current
BA
Outlays

886,336

1,228,930
^76,115
1,394,523
* 76,115

1,263,100

0

1,073,429

Increase ( —) or decrease in amount owed by the
Public Law 480 account to the Commodity
Credit Corportation
351
Outlays
0

-187,093

-165,593

BA
0

886,336
886,336

1,305,045
1,305,045

1,263,100
1,263,100

BA

191,490

218,575

0

189,790

195,671
14,306
204,194

Total Federal funds Foreign Assistance Programs

1,263,100

Agricultural Stabilization and Conservation
Service
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays
Rural clean water program
Appropriation, current
Outlays
Agricultural conservation program
Appropriation, current
Outlays
Water Bank program
Appropriation, current
Outlays
Cropland adjustment program
Outlays
Emergency conservation program
Appropriation, current
Outlays
See footnotes at end of table.




351
D

213,522

304
BA
0

50,000

20,000
10,000

20,000
12,000

BA
0

190,000
184,815

190,000
201,000

190,000
174,000

10,000
10,500

10,000
10,500

10,000
28,000

10,000
15,000

302
302
BA
0

10,000
8,102

351
0

-14

453
BA
0

35,000
22,197

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

397

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Agriculture—Con.
Agricultural Stabilization and Conservation
Service—Con.
Dairy and beekeeper indemnity programs
Appropriation, current

351
BA

3,290

1,700

0

3,271

1,719

*200

Outlays
Forestry incentives program
Appropriation, current

200

302
BA

15,000

12,500

15,000

0

Outlays

18,948

16,000

15,625

494,780

454,177

463,775

427,109

471,413

440,847

29,558

136,462

Total Federal funds Agricultural Stabilization and
Conservation Service
BA

0
Federal Crop Insurance Corporation
Federal funds
General and Special Funds:

Administrative and operating expenses
Appropriation, current

351
BA

Outlays

0

12,000

<* 49,181
D
1,570
31,128
A
49,181

12,069

136,462

Public Enterprise Funds:

Federal Crop Insurance Corporation fund
Appropriation, current

351
BA

Outlays

0

Limitation on administrative and operating expenses

A

407,456

150,000
184,840

46,350

12,000

230,309

543,918

38,433

265,149

182,812

3,056,189

3,299,887

2,295,856

2,717,154

-83,680

26,364
(17,512)

Total Federal funds Federal Crop Insurance Corporation
BA

0
Commodity Credit Corporation
Support and Related Activities

Federal funds
Public Enterprise Funds:

Price support and related programs: Reimbursement
for net realized losses
351
Appropriation, current
BA

Outlays

0

'-138,000
Limitation on administrative expenses and direct
loans

J

2,150,936
-86,000

(50,700)

(52,750)

(58,000)

39,421
34,520

34,520
40,781

40,781
47,314

Special Activities

Federal funds
General and Special Funds:

National Wool Act (special fund)
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.
340-000 0 - 8 1 - 2 7




: QL 3

351
BA
0

398

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Agriculture—Con.
Commodity Credit Corporation—Con.
Intragovernmental Funds:

Increase or decrease ( - ) in amount owed to the
Corporation by the Public Law 480 account
351
Outlays
0

187,093

165,593

BA
0

39,421
221,613

34,520
206,374

40,781
47,314

Total Federal funds Commodity Credit Corporation
BA
0

3,095,610
2,938,767

3,334,407
-15,306

2,336,637
2,112,250

27,719
* 1,484
28,904

30,152

32,377
18,945

1,550
11,550

36,752
26,543

61,580
47,849

31,702
41,699

BA

290,000

200,000

0

325,162

319,073

10,000
12,280

5,000
11,623

8,580

5,000
6,404

6,000
5,346
287,034

Total Federal funds Special Activities

Rural Electrification Administration

Federal funds
General and Special Funds:
Salaries and expenses

271

Appropriation, current

BA

26,752

Outlays

0

26,543

BA
BA
0

10,000

30,149

Public Enterprise Funds:

Rural communication development fund
Appropriation, permanent, indefinite
Authority to borrow, permanent, indefinite
Outlays

452

Total Federal funds Rural Electrification Administration
BA
0
Farmers Home Administration

Federal funds
General and Special Funds:

Rural water and waste disposal grants
Appropriation, current

452

Outlays
Rural development grants
Appropriation, current
Outlays
Rural development planning grants
Appropriation, current
Outlays
Salaries and expenses
Appropriation, current
Outlays
Rural community fire protection grants
Appropriation, current
Outlays
See footnotes at end of table.




452
BA
0

J

100,000
268,069
'11,000

452
BA
0

6,000
5,171

452
BA

235,574

0

235,391

245,137
C
21
* 13,106
256,648

3,500
3,498

3,500
3,565

286,035

452
BA
0

1,751

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

399

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Agriculture—Con.
Farmers Home Administration—Con.

Rural housing for domestic farm labor
Appropriation, current
Outlays
Mutual and self-help housing
Appropriation, current
Outlays
Rural housing supervisory assistance grants
Appropriation, current
Outlays
Very low income housing repair grants
Appropriation, current
Outlays

604
BA
0

25,000
12,766

25,000
14,043

25,000
20,576

BA
0

- 5,000
5,554

6,245

5,000
7,422

1,500
1,800

2,000
2,000

604
371
BA
0

1,500
828

604
BA
0

24,000
23,564

25,000
24,924

25,000
25,000

Public Enterprise Funds:

Self-help housing land development fund
Appropriation, current
Outlays
Rural housing insurance fund
Appropriation, current
Indefinite
Authority to borrow, permanent, indefinite

371
BA
0

1,000
-166

1,157

4,000
905

371
BA
BA
BA

653,967
152,000
1,405,608

1,717,035

-740,807

1,568,152

BA
BA

272,809
62,275

297,032

464,083
330,434

0

478,186

-744,519

639,616

91,874

143,282

204,040
' 535,152

216,388

280,439

351,296

3,297,730

1,735,103

4,199,318

3,036,980

-560,728

3,195,748

293,001

318,699

21,187
319,204

313,317

351

Outlays
Rural development insurance fund
Appropriation, current
Authority to borrow, current, indefinite
Authority to borrow, permanent, indefinite

504,318
111,000

0

Outlays
Agricultural credit insurance fund
Appropriation, current
Authority to borrow, permanent, indefinite

320,209
31,283
1,928,706

452
BA
BA
BA

Outlays

0

Total Federal funds Farmers Home Administration
BA

0

155,207

Soil Conservation Service
Federal funds
General and Special Funds:

Conservation operations
Appropriation, current

302
BA

Outlays
River basin surveys and investigations
Appropriation, current
Outlays
Watershed planning
Appropriation, current

Outlays
See footnotes at end of table.




0

274,670

281,284

D

301
BA

16,441

16,165

17,366

17,442
1,085
18,439

0
BA

11,000

10,000

8,690

11,396

813
11,406

8,781

D

16,363

301

0

D

400

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Agriculture—Con.
Soil Conservation Service—Con.

Watershed and flood prevention operations
Appropriation, current

301
BA
0

Outlays
Great plains conservation program
Appropriation, current

220,595

192,524
D
1,361
227,794

172,380

20,000
*664
23,935

22,288

34,046
1,433
34,016

28,132

302

Outlays
Resource conservation and development
Appropriation, current

185,099

302

BA
0

32,000

0

Trust funds
Miscellaneous contributed funds-.
(Water resources)
(Appropriation, permanent, indefinite)
(Outlays)
(Conservation and land management)
(Appropriation, permanent, indefinite)
(Outlays)

23,981

BA

Outlays

18,689

30,565

D

193,546

21,817

29,518

301
BA
0

1,143
1,050

978
1,007

800
832

BA
0

107
104

100
103

100
104

Total Miscellaneous contributed funds

BA
0

1,250
1,154

1,078
1,110

900
936

Total Federal funds Soil Conservation Service

BA
0

Total Trust funds Soil Conservation Service

BA
0

302

537,899
585,187
1,250
1,154

593,556
634,794
1,078
1,110

566,354
583,342
900
936

Animal and Plant Health Inspection Service
Federal funds
General and Special Funds:

Animal and Plant Health Inspection Service
Appropriation, current
Outlays
Animal quarantine station
Outlays

352
BA

249,098

0

248,033

0

Total Trust funds Animal and Plant Health Inspection Service
BA
0




292,323

2,660
2,232

2,798
2,798

279,081
274,548

292,323
293,406

2,660
2,232

2,798
2,798

293,406

352

Trust funds
Miscellaneous trust funds
352
Appropriation, permanent, indefinite
BA
Outlays
0
Total Federal funds Animal and Plant Health
Inspection Service
BA
0

See footnotes at end of table.

266,241
* 12,840
274,548

115

1,904
2,369
249,098
248,148
1,904
2,369

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

401

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Agriculture—Con.
Federal Grain Inspection Service
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

352
BA
0
0

Outlays

23,971
23,087

24,457
1,507
25,964

31,141

2,463

3,787

1,000

D

31,141

Public Enterprise Funds:

Inspection and weighing services
Outlays

352

Total Federal funds Federal Grain Inspection
Service
BA

23,971

25,964

31,141

0

25,550

29,751

32,141

BA

47,893

49,109
2,762

54,837

Agricultural Marketing Service
Federal funds
General and Special Funds:

Marketing services
Appropriation, current

352

Appropriation, permanent
Outlays
Payments to States and possessions
Appropriation, current
Outlays
Perishable Agricultural Commodities Act fund
Appropriation, permanent, indefinite
Outlays
Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
Milk market orders assessment fund
Outlays

BA
0

50,254

D

51,721

'-24,627
5,670
60,357
'-24,570

352
BA
0

1,600
2,417

1,600
2,575

BA
0

2,366
2,313

2,400
2,644

BA
0

247
278

352
2,538
2,644

352
263
263

263
263

351
0

Total Federal funds Agricultural Marketing Service
BA

0
Total Trust funds Agricultural Marketing Service.

BA

-1,225
51,859

55,871

38,418

54,984

56,940

38,431

247

263

263

0

-947

263

263

BA

1,662

3,015

0

1,670

2,000
D
134
2,134

Office of Transportation
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays
See footnotes at end of table.




352
3,015

402

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Agriculture—Con.
Food Safety and Quality Service
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

554
BA

341,257

303,688

293,318
20,360
310,419

BA
0

311,163
460,987

383,012
370,950

463,346
365,400

BA
0

56,305
56,575

61,190
61,190

62,147
62,147

Total Federal funds Food Safety and Quality
Service
BA
0

602,463
764,675

696,690
681,369

804,603
708,153

Total Trust funds Food Safety and Quality Service
BA
0

56,305
56,575

61,190
61,190

62,147
62,147

BA

81,470

97,156

0

83,942

84,000
* 4,714
86,973
9,729,276
1,355,791
'-717

12,882,350

Outlays
Funds for strengthening markets, income, and supply
(section 32)
605
Appropriation, permanent, indefinite
Outlays
Trust funds
Expenses and refunds, inspection and grading of farm
products
352
Appropriation, permanent, indefinite
Outlays

291,300

0

D

342,753

Food and Nutrition Service
Federal funds
General and Special Funds:

Food program administration
Appropriation, current

605

Outlays
Food stamp program
Appropriation, current

605
BA

Outlays
See footnotes at end of table.




J

9,117,136

9,653,600
B
1,295,935

-486,800
12,662,344
B
59,856
J
-481,900

156,800
159,293

118,800
114,600

124,800
117,300

BA

1,348,615

1,474,123

BA
0

1,831,086
3,377,056

1,879,653
3,355,800

2,434,390
-67,400
L
-385,400
1,763,948
3,959,400
J
-63,700
L
-365,000

BA

757,950

927,040

0

716,732

903,630

0
605
605

Appropriation, permanent
Outlays
Special supplemental food programs (WIC)
Appropriation, current

B

BA
0

Outlays
Special milk program
Appropriation, current
Outlays
Child nutrition programs
Appropriation, current

9,181,599

95,213

J

605
1,037,600
K
30,500
994,060

403

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1982
estimate

1981
estimate

actual

Department of Agriculture—Con.
Food and Nutrition Service—Con.
Food donations program
Appropriation, current

605
BA

128,660

0

101,284

124,830

143,700
139,400

13,463,854
13,555,443

15,701,340
15,535,368

17,574,844
17,116,973

BA

1,139,873

1,113,019

1,074,930
4
100,000
D
57,056
13,442
1,099,199
<* 88,500

1,204,254

BA
0

Outlays

106,334

B
A

428,794

378,586
62,542
D
13,491
429,838
A
47,142

505,693

Total Federal funds Food and Nutrition Service.... BA
0

K

Forest Service
Federal funds
General and Special Funds:

Forest management, protection and utilization
Appropriation, current
Reappropriation
Outlays
Construction and land acquisition
Appropriation, current

302

,
302

Outlays..
Youth Conservation Corps
302
Appropriation, current
Outlays
Forest roads and trails
302
Outlays
Other general appropriations
302
Outlays
Acquisition of lands for national forests, special
acts
302
Appropriation, current
Outlays
Acquisition of lands to complete land exchanges
302
Appropriation, current, indefinite
Outlays
Rangeland improvements
302
Appropriation, current, indefinite
Outlays
Construction and operation of recreation facilities
303
Appropriation, current, indefinite
Outlays
Timber salvage sales
' 302
Appropriation, permanent, indefinite
Outlays
Forest Service permanent appropriations
302
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.




1,205,476
A
11,500

A

266,836
BA
0

54,797
55,550

9 559

0

101,184

20 589

0

3

592,647
M5,400

280 .

BA
0

325
12

754
754

754
754

BA
0

284
88

446
446

327
327

BA
0

5,633
5,620

6,800
6,800

6,500
6,500

BA
0

4,675
911

BA
0

14,530
11,687

11,200
10,685

1,880

BA
0

173,850
164,466

127,326
123,309

213,273
213,327

25 .
.

404

THE BUDGET FOR FISCAL YEAR 1982

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code

1981
estimate

actual

1982
estimate

Department of Agriculture—Con.
Forest Service—Con.
Forest Service permanent appropriations
Appropriation, permanent, indefinite
Outlays

852
BA
0

280,295
280,295

223,115
223,115

275,400
275,400

-45

-3,669

-442

2,719

146,561
80,130

96,400
96,579

3,844

1,067
2,069,688
2,059,291
96,400
97,646

2,206,201
2,323,211
103,603
105,456

Intragovemmental Funds:

Working capital fund
Outlays
Consolidated working fund
Outlays
Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
Highland scenic highway
Outlays

302
302

302
BA
0
401

103,603
105,456

Total Federal funds Forest Service

BA
0

Total Trust funds Forest Service..

BA
0

2,103,056
1,999,184
146,561
83,974

BA
0

25,933,995
25,656,519

27,754,563
21,993,511

31,661,089
29,628,030

-137,781

-150,000

-161,700

-406,948

-399,688

-582,570

-396,095

-544,963

-841,730

-94,536

-4,885

-4,885

-27

-38

-38

-4

-3

-3

-1,125

-911

-911

-65

-78

-81

Summary
Federal funds:

(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
Proprietary receipts from the public

Total Federal funds..
Trust funds:
(As shown in detail above)..
Deductions for offsetting receipts-.
Proprietary receipts from the public
See footnotes at end of table.




302 BA
0
270 BA
0
300 BA
0
302 BA
0
350 BA
0
450 BA
0
550 BA
0
605 BA
0
902 BA
0

-2

BA
0

24,897,412
24,619,936

26,653,997
20,892,945

30,069,171
28,036,112

BA
0

212,124
147,107

166,062
169,953

176,077
178,196

302 BA
0

-146,561

-96,400

-103,603

405

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

-69,662

-72,474

Department of Agriculture—Con.
Summary—Con.
352

1
-65,016

3,891

2,119

BA
0

Total Department of Agriculture

-65,562

BA
0

Total Trust funds

*A

24,897,413
24,554,920

26,653,997
20,896,836

30,069,171
28,038,231

34,853

36,690

Department of Commerce
General Administration
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

376
BA

40,380

D

Outlays
White House conference on balanced national
and economic development
Outlays
Special foreign currency program
Outlays
Participation in United States expositions
Appropriation, current
Outlays

0

36,662

growth
376

1,296
41,537

0

36,640

1

376
0

670

259

20£00
151

10,904

200

376
BA
0

•

5,843

Intragovernmental Funds:

Working capital fund
Outlays
Consolidated working fund
Outlays

376
0

-743

0

175

376

Trust funds
Miscellaneous trust funds
376
Appropriation, permanent
BA
Outlays
0
Total Federal funds General Administration
BA
0

200
200

200
200

36,153
52,701

36,690
42,683

BA
0

Total Trust funds General Administration

286
296
61,180
36,915
286
296

200
200

200
200

BA

53,690

63,880

0

55,585

54,600
2,750
56,472

Bureau of the Census
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays
See footnotes at end of table.




376
D

63,238

406

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Commerce—Con.
Bureau of the Census—Con.

Periodic censuses and programs
Appropriation, current

376
BA
0

Outlays

666,038
711,186

146,450
^24,200
D
8,850
176,246
A
24,200

98,232
111,260

Intragovernmental Funds:

Consolidated working fund
376
Outlays
0
Trust funds
Special studies, services, and projects
376
Appropriation, permanent
BA
Outlays
0
Total Federal funds Bureau of the Census
BA
0
Total Trust funds Bureau of the Census

BA
0

114

7,932
6,061
719,728
766,885

9,075
9,075
236,850
256,918

7,600
7,600
162,112
174,498

9,075
9,075

7,600
7,600

24,587
1,000
25,166

28,063

7,932
6,061

Economic and Statistical Analysis

Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

376
BA
0

Outlays

22,035
19,585

D

27,622

Intragovernmental Funds:

Consolidated working fund
376
Outlays
Trust funds
Special studies, services, and projects
376
Appropriation, permanent
Outlays
Total Federal funds Economic and Statistical
Analysis

0

BA
0
BA
0

Total Trust funds Economic and Statistical Analysis
BA
0

1,278

133
176
22,035
20,863

300
300
25,587
25,166

133
176

300
300

300
300
28,063
27,622
300
300

Economic Development Assistance
Economic Development Administration

Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays
See footnotes at end of table.




452
BA

40,825

0

37,579

39,700
3,000
42,700

D

49,250
49,250

407

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1982
estimate

1981
Account and functional code

actual

Department of Commerce—Con.
Economic Development Assistance—Con.
Economic Development Administration—Con.
Economic development assistance programs
Appropriation, current
Outlays
Local public works program
Outlays
Drought assistance program
Outlays
Financial and technical assistance
Outlays
Job opportunities program
Outlays

452

BA
0
0

512,525
545,806
415,508

624,650
508,713
150,000

0

91
9

1,000

0

28
9

20
0

0

4,623

5,022

1,985

0

45,324

-93,140

-51,140

BA
0

553,350
1,050,129

667,350
614,495

673,900
676,550

BA
0

62,820
65,448

43,838
52,944

14,527

BA
0

46,599
44,241

32,853
33,803

18,420

BA
0

616,170
1,115,577

711,188
667,439

673,900
691,077

BA
0

46,599
44,241

32,853
33,803

18,420

B
A

93,362

105,682

116,958
* 15,344

452

624,650
616,045
60,410

453
376
504

Public Enterprise Funds:
Economic development revolving fund
Outlays...

452

Total Federal funds Economic Development Administration
Regional Development Program
Federal funds
General and Special Funds:
Regional development programs
Appropriation, current
Outlays

452

Trust funds

452

Regional development commissions
Appropriation, permanent, indefinite
Outlays

Total Federal funds Economic Development Assistance

Total Trust funds Economic Development Assistance

Promotion of Industry and Commerce
International Trade Administration
General and Special Funds:
Operations and administration
Appropriation, current

376
D

0

Outlays

79,781

4,500
107,700

132,302

BA
0

9,583
6,183

9,945
9,945

13,810
13,810

Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.




376

THE BUDGET FOR FISCAL YEAR 1982

408

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Commerce—Con.
Promotion of Industry and Commerce—Con.
Minority Business Development Agency

Federal funds
General and Special Funds:

Minority business development
Appropriation, current

376
BA

59,600

65,405

55,574

Outlays..

58,950

57,893

61,980

7,995
9,074

8,000
10,482

United States Travel Service

Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current
Outlays

376
BA
0

Intragovernmental Funds:

Consolidated working fund
Outlays

376
0

81 ..

Total Federal funds United States Travel Service. BA
0

7,995
9,155

Total Federal funds Promotion of Industry and
Commerce
BA
0

160,307
144,510

178,232
176,075

197,707
194,282

Total Trust funds Promotion of Industry and
Commerce
BA
0

9,583
6,183

9,945
9,945

13,810
13,810

725,517

773,367

846,565
K
8,019

8,000
10,482 ..

Science and Technology
National Oceanic and Atmospheric
Administration

Federal funds
General and Special Funds:

Operations, research, and facilities
Appropriation, current

306
B
A

A

4,677
2,036
19,956
£
808
" -30,493
c

D

Indefinite
Outlays.....

BA
0

993
701,143

1,000
770,464
A
4,677
H
-17,288

•"123,800
1,000
864,726
H

-13,205
120,000

J

Construction
Outlays
See footnotes at end of table.




36
0
7,827

37,496

27,512

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

409

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Commerce—Con.
Science and Technology—Con.
National Oceanic and Atmospheric
Administration—Con.

Coastal zone management
Appropriation, current

302
BA

70,120

51,585
D

Outlays
0
Promote and develop fishery products and research
pertaining to American fisheries
376
Appropriation, permanent, indefinite
BA
Outlays
0
Fishing vessel and gear damage compensation
fund
376
Appropriation, current, indefinite
BA
Outlays
0
Fishermen's contingency fund
376
Appropriation, current
BA
Outlays
0
Foreign fishing observer fund
376
Appropriation, current
BA
Outlays

44,010

200
63,023

43,389

21,679
15,167

19,985
16,985

20,000
20,000

3,250
3,250

3,500
3,500

3,178
3,818
600
37

500
500

376

1,000

350

0
BA
0

900
900
K

A

*280
Fishermen's guaranty fund
Appropriation, current
Outlays

43,182
* 2,235

680
*70

A

375

1,900'
100
* 1,900

100

Public Enterprise Funds:

Fisheries loan fund
Outlays
Coastal energy impact fund
Appropriation, current
Outlays
Federal ship financing fund, fishing vessels
Outlays

376
0

- 253

-100

452
BA
0

-35,400
28,352

41,172

620
49,620

376
0

-570

600

600

0

11,535

- 3

BA
0

13,076
12,971

14,300
14,300

14,300
14,300

Total Federal funds National Oceanic and Atmospheric Administration
BA
0

786,687
811,441

849,121
923,056

1,050,821
1,117,892

Total Trust funds National Oceanic and Atmospheric Administration
BA
0

13,076
12,971

14,300
14,300

14,300
14,300

Intragovernmental Funds:

Consolidated working fund
Outlays
Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays

See footnotes at end of table.




306

306

410

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Commerce—Con.
Science and Technology—Con.
Patent and Trademark Office

Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current

376
BA

Outlays

0

104,833

112,550

121,411

102,702

60
D
4,090
112,061

120,491

93,597

106,224

c

Science and Technical Research

Federal funds
General and Special Funds:
Scientific and technical research and services
Appropriation, current

376
BA

C

Outlays

0

93,892

372
* 2,478
105,708

130,656

K

11,488

136,336

Intragovernmental Funds:

Working capital fund
Appropriation, current
Outlays
Consolidated working fund
Outlays
Trust funds
Information products and services
Appropriation, current
Appropriation, permanent, indefinite
Outlays

376
BA
0

4,652
8,323

6,173
4,050

0

1,157

3,258

-27
20,402
19,801

22,000
22,000

7,928
6,850

376

376
BA
BA
0

Total Federal funds Science and Technical Research

BA

0
Total Trust funds Science and Technical Research

24,000
24,000

98,249

115,247

150,072

103,372

113,016

143,186

BA

20,375

22,000

24,000

0

19,801

22,000

24,000

BA

17,644

17,400

17,817

0

15,405

16,848

17,566

National Telecommunications and
Information Administration

Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current

Outlays

See footnotes at end of table.




376

411

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Commerce—Con.
Science and Technology—Con.
National Telecommunications and
Information Administration—Con.

Public telecommunications facilities, planning and construction
503
Appropriation, current
BA

20,283

OutlaysTotal Federal funds National Telecommunications
and Information Administration
BA
0

25,705
"-4,000
21,845
"-400

24,012
"-2,000

39,105
38,293
1,120,173
1,186,426
36,300
36,300

39,367
39,578
1,361,671
1,421,147
38,300
38,300

23,705

21,550

Total Federal funds Science and Technology

BA
0

Total Trust funds Science and Technology

BA
0

41,349
35,688
1,031,118
1,053,203
33,451
32,772

BA

101,000

135,000

0

265,080

274,000

* 107,000
206,000

314,469
(300,515)
341,368

353,012
(333,196)
334,854

414,899
(417,148)
417,148

BA

16,300

16,300

0

22,819

17,000

BA

66,841

65,550

Ocean Shipping
Maritime Administration

Federal funds
General and Special Funds:

Ship construction
Appropriation, current
Outlays
Operating-differential subsidies
Contract authority, permanent, indefinite
Liquidation of contract authority, current
Outlays
Research and development
Appropriation, current

403

403
BA
0
403

K

17,210
17,210

K

Outlays
Operations and training
Appropriation, current

77,063

403
C

65,560

77,172

-39,163

-44,000

-52,000

-557

Outlays

431
D
1,119
56,867

-600

-650

-3,944

9,707

Public Enterprise Funds:

Federal ship financing fund
Outlays
Vessel operations revolving fund
Outlays
War risk insurance revolving fund
Outlays

403
403
72
3
403

Intragovernmental Funds:

Consolidated working fund
Outlays
See footnotes at end of table.




403

412

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Commerce—Con.
Ocean Shipping—Con.
Msrititnc AdtninistrBtion—^on.

Trust funds
Special studies, services and projects
403
Appropriation, permanent, indefinite
BA
Outlays
0
Total Federal funds Maritime Administration
BA
Total Trust funds Maritime Administration

400
400
571,412

400
400
616,172

651,895

0

321
196
498,610

647,828

664,880

BA

Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
Proprietary receipts from the public

321

400

400

0

196

400

400

BA
0
902 BA

0

300 BA

370

jj

A

400 BA
40U

3,109,148
3,789,848

2,879,595
3,012,553

3,076,315
3,216,189

_]m

_

1AQ

~~I4y
_4m

-203
_ 12,494

-42
-11,410

l m

.'.
-6,936

DA

806 BA

_239

_23g

_m

jjA

-4J65

-4,786

-4,100

BA

3,082,769

2,861,710

3,063,754

0

3,763,469

2,994,668

3,203,628

BA
0

98,305
89,925

89,073
90,023

60,610
79,030

376 BA

7r/-

0,Q

902

Total Federal funds
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
Proprietary receipts from the public

0CQ

_m$

_Hm

376

jjA

-34,434

-37,191

-41,581

403

§A

_m

_m

_m

452

Total Trust funds

306 BA

_Hm

f

-2,085

-1,538

Interfund transactions
See footnotes at end of table.




BA

47,624

34,785

3,470

0

39,244

35,735

21,890

376 BA

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

413

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Commerce—Con.
Summary—Con.
452

_44 f 513

-31,315

BA
0

Total Department of Commerce

|*A

3,083,041
3,755,361

2,861,880
2,995,788

3,063,924
3,222,218

11,060,468
A
43,900
1,087,632
12,180,800
^ 43,200

12,714,900

7,857,423
192,744
E
755,283
8,610,800
A
188,900

9,241,000

2,350,086
* 25,700
E
238,414
2,588,100
A
24,900

2,725,700

8,976,309
* 78,700
E
890,562
9,837,900
A
77,100

10,270,700

790,350
10,200
E
71,650
862,800
A
9,500

944,100

Department of Defense-Military
Military Personnel
Federal funds
General and Special Funds:

Military personnel, Army
Appropriation, current

051
BA

10,496,371

E

Outlays

0

Military personnel, Navy
Appropriation, current

BA

BA

2,227,052

BA

8,469,790

0

8,491,216

BA

659,341

0

Outlays
Reserve personnel, Marine Corps
Appropriation, current

630,853

See footnotes at end of table.

: QL 3

10,251,500
* 1,500

BA

268,054

0

242,012

A

938,300
^700

051
302,003
16,397
322,000

328,700

102,767
^7,400
E
9,333
115,500
* 6,500

123,200

E

327,000

051
BA

95,149

0

Outlays

2,719,200
A
800

051

Outlays
Reserve personnel, Navy
Appropriation, current

9,224,300
A
3,700

051

Outlays




2,230,122

0

Reserve personnel, Army
Appropriation, current

7,277,982

A

051

Outlays
Military personnel, Air Force
Appropriation, current

7,351,152

0

Military personnel, Marine Corps
Appropriation, current

12,697,300
^700

051

Outlays

340-000 0 - 8 1 - 2 8

10,469,138

90,756

122,200
A
800

414

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Military Personnel—Con.

Reserve personnel, Air Force
Appropriation, current

051
0

224,514

BA

918,050
887,947

BA

299,860

0

258,974
19,386
277,000

300,263

299,500

1,043,397
* 33,400
E
104,803
1,160,900
A
31,100

1,305,500

E

298,000

051

Outlays
National Guard personnel, Air Force
Appropriation, current

226,253

0

Outlays
National Guard personnel, Army
Appropriation, current

BA

1,293,700
A
2,300

051

Outlays
Total Federal funds Military Personnel

342,172
4
4,900
E
34,437
369,300
A
4,700

410,100
408,800
*2Q0

BA
0

31,014,142
30,841,733

36,708,790
36,711,000

38,363,400
38,291,000

BA

11,964,700

16,076,700

0

11,919,776

13,887,800
* 29,100
13,851,000
-* 29,000

BA

11,007,389

BA

2,985

Retired Military Personnel
Federal funds
General and Special Funds:

Retired pay, Defense
Appropriation, current

051

Outlays

16,048,900
-MOO

Operation and Maintenance
Federal funds
General and Special Funds:

Operation and maintenance, Army
Appropriation, current

051

Contract authority, permanent, indefinite
Liquidation of contract authority, currents
Outlays
Operation and maintenance, Navy
Appropriation, current

Contract authority, permanent, indefinite
Liquidation of contract authority, current
Outlays
See footnotes at end of table.




0

14,667,737

BA

153,567

A
(2,985)
12,212,000
* 114,000

10,621,246

BA

12,158,584
A
135,400
c
87,400
D
227,200

14,765,800

14,313,300
* 19,700

051

0

14,300,074

16,757,794
A
420,200
c
156,409
D
196,391
A

(153,567)
15,979,500
* 443,500

19,593,000

18,642,700
A
109,300

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

415

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Operation and Maintenance—Con.

Operation and maintenance, Marine Corps
Appropriation, current

051
BA

BA

Contract authority, permanent, indefinite
Liquidation of contract authority, current
Outlays
Operation and maintenance, Air Force
Appropriation, current

1,127,700

A

(4,077)
1,025,500
^ 9,500

819,249

BA

11,967,735

BA

388,743

0

1,102,700
A
1,300

11,874,047

13,531,346
A
424,900
c
101,000
D
103,000
A

(388,743)
13,106,300
* 749,900

16,568,600

16,128,100
* 56,900

051
BA

3,644,471

0

4,050,393
A
81,500
c
21,672
D
190,676
4,202,500
* 72,500

3,566,554

4,672,000

487,193
A
6,200
c
5,000
D
12,100
485,300
A
5,500

571,500

531,435
15,200

578,900

4,593,700
A
7,300

051
BA

440,364

0

455,274

BA

422,567

BA

Outlays
Operation and maintenance, Navy Reserve
Appropriation, current

1,006,800
4
6,800
c
9,088
* 5,012

051

Outlays
Operation and maintenance, Army Reserve
Appropriation, current

4,077

0

Contract authority, permanent, indefinite
Liquidation of contract authority, current
Outlays
Operation and maintenance, Defense agencies
Appropriation, current

845,490

8,786

560,400
A
600

051

Contract authority, permanent, indefinite
Liquidation of contract authority, current
Outlays

0

A
A

429,917

(8,786)
500,800
* 20,200

557,300
* 2,700

Operation and maintenance, Marine Corps Reserve
051
Appropriation, current
Outlays
Operation and maintenance, Air Force Reserve
Appropriation, current

Contract authority, permanent, indefinite
Liquidation of contract authority, current
Outlays
See footnotes at end of table.




BA

21,312

0

28,854
D
169
25,400

20,108

31,849

558,680
* 26,100
c
7,170
D
5,730

671,100

30,000

051
BA

496,392

BA

14,997

0

492,145

A

(14,997)
552,900
A
38,700

660,900
* 2,100

416

THE BUDGET FOR FISCAL YEAR 1982

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Operation and Maintenance—Con.
Operation and maintenance, Army National Guard
051
, BA

Appropriation, current

883,420
12,500
12,900
D
23,900

837,306

978,800

A

c

Contract authority, permanent, indefinite
Liquidation of contract authority, current
Outlays

BA

2,663
A

0

817,637

Appropriation, current

BA

1,238,377

Contract authority, permanent, indefinite
Liquidation of contract authority, current
Outlays

BA

(2,663)
933,200
A
13,700

44,235

968,600
A
1,400

Operation and maintenance, Air National Guard
051

A

0

National Board for the Promotion of Rifle Practice,
Army
051
Appropriation, current
BA
Outlays
Claims, Defense
Appropriation, current
Outlays
Contingencies, Defense
Outlays
Court of Military Appeals, Defense
Appropriation, current

1,418,607
* 72,100
c
16,400

0

1,685,900

1,248,080

(44,235)
1,372,100
A
109,100

1,657,100
* 6,900

411

825

444

30
3

80
0

50
0

112,900
120,099

135,850
140,500

243,500
233,000

051
BA
0
051
0

1
0

051
BA

2,099

2,197

2,607

0

1,460

2,500

2,500

BA

34,550

139,300

BA
0

5,735
3,897

1,100

Total Federal funds Operation and Maintenance... BA
0

46,364,888
44,770,127

54,073,528
52,117,000

946,167

1,076,400

787,355

925,000

Outlays
Foreign currency fluctuations, Defense
Appropriation, current
XIII Olympic winter games
Appropriation, current
Outlays

051
051

61,491,700
59,659,000

Procurement
Federal funds
General and Special Funds:

Aircraft procurement, Army
Appropriation, current

051
K

Outlays
See footnotes at end of table.




1,361,700
1,017,000

417

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Procurement—Con.
Missile procurement, Army
Appropriation, current

05L
BA

1,147,924

Reappropriation
BA
Outlays
0
Procurement of weapons and tracked combat vehicles,
Army
051
Appropriation, current
BA

2,400
650,558

1,078,000

1,711,868

2,582,200

1,519,800
* 1,650,500
1,327,000

* 2,719,800
Reappropriation
Outlays
Procurement of ammunition, Army
Appropriation, current
Outlays
Other procurement, Army
Appropriation, current

BA
0

Outlays
Weapons procurement, Navy
Appropriation, current

2,002,000

2,326,000

BA

1,136,425

1,531,000

0

1,271,385

1,239,000

1,755,659
* 60,541
1,444,000

BA

1,432,569

2,223,658
A
36,000

2,325,700

BA
0

47,000
1,456,519

1,674,500
* 2,500

1,873,700
A
13,300

BA

4,345,446

6,110,707

0

3,689,128

4,540,000

BA

1,984,314

2,738,132

BA
0

8,300
1,973,196

2,089,000

BA

6,447,951

7,455,700

BA
0

173,000
4,221,833

27,900
5,378,000

5,588,000

BA
BA
0

2,572,756
34,700
2,140,290

3,037,657

3,459,700

2,690,000

2,912,000

BA

283,785

486,813

746,300
* 426,100

366,064

* 2,000
394,800
A
200

476,300
^700

BA

7,897,164

9,674,143

BA
0

13,800
6,647,237

051

051

Reappropriation
Outlays
Aircraft procurement, Navy
Appropriation, current

12,100
1,248,564

051

051

* 6,960,300
5,571,000
* 2,717,800

Reappropriation
Outlays
Shipbuilding and conversion, Navy
Appropriation, current
Reappropriation
Outlays
Other procurement Navy
Appropriation, current
Reappropriation
Outlays
Procurement, Marine Corps
Appropriation, current

051

051

Reappropriation
Outlays
See footnotes at end of table.




K

6,639,600

051

OutlaysAircraft procurement, Air Force
Appropriation, current

2,325,000

051

8,264,000

K

9,469,900
8,895,000

418

THE BUDGET FOR FISCAL YEAR 1982

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Procurement—Con.
Missile procurement, Air Force
Appropriation, current

051
BA
BA
0

31,400
1,810,237

2,074,000

2^805,000

BA

2,623,241

2,999,372
4
4,000

4,013,200

BA
0

Reappropriation
Outlays
Other procurement, Air Force
Appropriation, current

2,112,131

2,444,692

2,774,600
MOO

3,212,200
H800

288,675

305,028

301,571

280,000

483,700
329,000

3,678

15,000

1,000

BA
0

8,361
35,282,816
29,020,668

44,951,427
35,422,000

BA

2,844,431

3,086,757

BA
0

2,000
2,707,031

2,941000

BA

4,547,433

4,889,057

3,140,917
K

4,274,600

051

Reappropriation
Outlays
Procurement, Defense agencies
Appropriation, current
Outlays
Procurement of aircraft and missiles, Navy
Outlays
Procurement of equipment and missiles, Army
Outlays

29,700

051
BA
0
051
0
051
0

Total Federal funds Procurement

3,000
49,065,100
40,120,000

Research, Development, Test, and
Evaluation
Federal funds
General and Special Funds:

Research, development,
Army
Appropriation, current

test,

and evaluation,
051
*3,577,200

Reappropriation
Outlays
„
Research, development, test, and evaluation, Navy

3,468,000

051
Appropriation, current

K

Reappropriation
BA
Outlays
0
Research, development, test, and evaluation, Air
Force
051
Appropriation, current
BA
Reappropriation
BA
Outlays
0
Research, development, test, and evaluation, Defense
agencies
051
Appropriation, current
BA
Outlays
See footnotes at end of table.




0

24,703
4,381,458

6,052
5,199,000

4,945,456

6,774,011

110,330
5,016,563

1,800
6,097,000

1,044,122

5,866,288

1,254,602

5,573,000

K

7,935,000

K

981,435

1,165,000

8,669,400

1,674,800
1,465,000

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

419

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Research, Development, Test, and
Evaluation—Con.
Director of test and evaluation, Defense
Appropriation, current

051
BA

42,100

0

40,391

39,000

* 53,000
44,000

13,560,975
13,126,878

16,054,379
15,441,000

19,840,688
18,485,000

BA

777,849

857,834

266,434
* 813,266

0

851,187

* 28,500
807,000
^ 4,000

BA

Outlays

42,500

576,500

Total Federal funds Research, Development,
Test, and Evaluation
BA
0
Military Construction
Federal funds
General and Special Funds:

Military construction, Army
Appropriation, current

051

Outlays
Military construction, Navy
Appropriation, current

051
775,273
A

Reappropriation
Outlays
Military construction, Air Force
Appropriation, current

BA
0

8,600
785,295

BA

582,256

K

353,217
1,074,183

23,000

610,400
A
4,600

• 801,800
^ 10,400

051
861,125
A

Reappropriation
Outlays
Military construction, Defense agencies
Appropriation, current

835,600
^ 7,400

BA
0

3,000
643,192

BA

K

480,000
1,668,700

30,000

646,000
A
3,000

.
734,000
A
12,000

224,350

245,600

20,700
* 248,400

-10,498

-* 12,000
171,600
MOO

242,800
* 3,200

051

Outlays

0

North Atlantic Treaty Organization infrastructure
051
Appropriation, current

BA

250,000

BA
0

16,968
126,000

* 390,000
Reappropriation
Outlays
Military construction, Army National Guard
Appropriation, current

051

Outlays
Military construction, Air National Guard
Appropriation, current

051

Outlays
See footnotes at end of table.




BA

23,700

42,269

0

57,039

32,000

BA

36,000

83,200

0

44,933

42,000

67,000
15,500
* 31,500
39,000
K

10,400
79,500
71,000

420

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Military Construction—Con.
Military construction, Army Reserve
Appropriation, current
Outlays
Military construction, Naval Reserve
Appropriation, current
Outlays
Military construction, Air Force Reserve
Appropriation, current

051
BA

30,000

46,942

0

46,366

32,600

BA

18,300

33,000

8,800
* 31,200
40,800

051
K

19,314

19,000

12,000

21,600

3,000
24,100
27,000

051
12,693

27,000

6,400
28,500
27,000

2,292,555
2,449,521

3,327,311
2,525,600

5,553,800
2,919,000

K

Outlays

0

Total Federal funds Military Construction

BA
0

Family Housing
Federal funds
General and Special Funds:

Family housing, Defense
Appropriation, current..

051
B
A
* 2,152,008

4

95,600
10,526
D
7,412
18,651

c

Reappropriation

BA

Outlays..

1,678,695

Foreign currency fluctuation, Construction, Defense
051
Appropriation, current
Reappropriation
Public Enterprise Funds:
Homeowners assistance fund, Defense
051
Appropriation, current
Authority to borrow, permanent
Outlays

1,784,700
* 74,300

K
1,992
1,951,200
* 3,800

-25,000
25,000

BA
BA
0

1,000
351
1,479

300
2,000

2,000
286
4,000

BA
0

Total Federal funds Family Housing

BA
BA

1,526,028
1,680,174

2,014,326
1,861,000

2,156,286
1,959,000

BA

6,667

2,760

2,565

11,500

Special Foreign Currency Program
Federal funds
General and Special Funds:

Special foreign currency program
Appropriation, current
Outlays
See footnotes at end of table.




051
* 3,083
5,500

421

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Revolving and Management Funds
Federal funds
Public Enterprise Funds:
Laundry service, Naval Academy
Outlays.....

051
-44

44

Intragovernmental Funds:

Army stock fund
Appropriation, current

051
BA

211,300
4

Contract authority, permanent, indefinite
Outlays

BA
0

Navy stock fund
051
Appropriation, current
BA
Contract authority, permanent, indefinite
BA
Outlays
0
Marine Corps stock fund
051
Appropriation, current
BA
Contract authority, permanent, indefinite
BA
Outlays
0
Air Force stock fund
051
Appropriation, current
BA
Contract authority, permanent, indefinite
BA
Outlays
0
Defense stock fund
051
Appropriation, current
BA
Contract authority, permanent, indefinite
BA
Outlays
O
Army industrial fund
051
Outlays
0
Navy industrial fund
051
Outlays
0
Marine Corps industrial fund
051
Outlays
O
Air Force industrial fund
051
Outlays
O
Defense industrial fund
051
Outlays
O
Army management fund
051
Outlays
O
Navy management fund
051
Outlays
O
Air Force management fund
051
Outlays
O
Army conventional ammunition working capital
fund
051
Outlays
O
Total Federal funds Revolving and Management
Funds
BA
O
See footnotes at end of table.




204,006
-47,831

4,000

-31,300

-86,300
4,234

23,100

19,400

28,300
442,856
6,988

17,435

4,108
2,661
-8,849

26,200

39
0
235,759
24,098

181,900
^ 4,000

42,800

68,000

232,300

35,000
450,310
-3,523

32,700

-462,100

-11,763

14,900

-7,800

-153,798

72,000

73,600

-2,581

70
0

30
0

-35,496

77,800

-32,800

1,471

3,500

3,800

5,659

-4,480

-19,983

42
8

6

2
5

5
4

9
4
-25.000

1,335,592
-245,627

71,717
443,400

275,769
-258,300

422

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Allowances
Federal funds
General and Special Funds:

Civilian and military pay raises
Appropriation, current
Outlays
Retired pay legislation
Appropriation, current
Outlays
Other legislation
Appropriation, current
Outlays

051

1

BA
0

3,770,970
'3,706,900

051

J

BA
0

J

-84,600
-84,600

051

J

BA
0

Total Federal funds Allowances

•'-476,702
-476,700

J

219,900
'219,900

BA

-84,600

3,514,168

0

-84,600

3,450,100

Trust Funds
Trust funds
Department of the Army trust funds
051
Appropriation, permanent, indefinite
Outlays
Department of the Navy trust funds
051
Appropriation, permanent, indefinite
Outlays
Department of the Air Force general gift fund 051
Appropriation, permanent, indefinite
Outlays
Surcharge collections, sales of commissary stores,
Army
051
Outlays
Department of the Navy trust revolving funds 051
Outlays
Department of the Air Force trust revolving funds
051
Outlays

BA
0
BA
0
BA
0

149
55
12,883
12,068
24
25

15
100
11,064
11,090
21
10

14
100
9,868
9,980
18
20

Trust funds:
(As shown in detail above)
See footnotes at end of table.




O

-8,768

-6,100

-6,400

0

20,630

14,500

13,000

13,056

11,100

9,900

14,782

14,600

11,700

143,348,363
133,565,815

171,036,538
158,327,900

196,340,694
180,679,300

BA

142,620,028

170,304,538

195,659,194

132,837,480

157,595,900

179,997,800

BA

13,056

11,100

9,900

0

Total Federal funds

-5,000

0

Deductions for offsetting receipts.Proprietary receipts from the public

-5,000

BA

Summary
Federal funds:
(As shown in detail above)

-9,228

0

Total Trust funds Trust Funds

0

14,782

14,600

11,700

BA
0
051

BA

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

423

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Military—Con.
Summary—Con.
Interfund transactions

051 BA
A

Total Department of Defense-Military

BA
0

,ACAA

ncnA

—11,993

,,„_„

—10,500

— 9,900

142,621,131
132,840,309

170,305,138
157,600,000

195,659,594
180,000,000

5,032
C
181

7,386

Department of Defense-Civil
Cemeterial Expenses, Army
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

705
BA

8,326

DU
£

6,380

9
6,400

BA

142,145

134,013

0

138,836

136,500

BA

1,659,752

1,659,333

1,585,742
c
1,100
D
8,450
£
600
1,620,000

1,718,500

0

Outlays

1,084,800

0

7,200

Corps of Engineers-Civil
Federal funds
General and Special Funds:

General investigations
Appropriation, current

301

Outlays
Construction, general
Appropriation, current

301

Outlays
Operation and maintenance, general
Appropriation, current

301
BA

941,580

148,000
* 2,000
148,900

1,703,300

0

886,333

902,605
15,300
18,750
*250
1,025,700

BA
0

170,000
156,420

146,000

20,000

BA

76,800

98,100

0

71,231

81,030
5,240
*360
86,300

97,900

BA
0

210,515
246,502

232,519
248,600

278,900
275,000

BA
0

4,000
3,896

5,000
5,000

5,200
5,200

c

D

Outlays
Flood control and coastal emergencies
Appropriation, current
Outlays
General expenses
Appropriation, current
Outlays
Flood control, Mississippi River and tributaries
Appropriation, current
Outlays
Special recreation use fees
Appropriation, current
Outlays
See footnotes at end of table.




1,084,600

301
301
D

301
303

424

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Civil—Con.
Corps of Engineers-Civil—Con.

Permanent appropriations:
(Water resources)
(Appropriation, permanent, indefinite)
(Outlays)
(Other general purpose fiscal assistance)
(Appropriation, permanent, indefinite)
(Outlays)

301
6A
0

1,782
2,306

1,948
1,870

1,948
1,948

6A
0

4,628
4,617

4,902
4,625

5,152
4,902

BA

6,410

6,850

7,100

0

6,923

6,495

6,850

22,900
40,000

852

Total Permanent appropriations
Public Enterprise Funds:

Alaska hydro-electric power development fund
Appropriation, current

271
BA

- 5,450

BA
0

50,000
67,260

43,225
66,270

-4,213

17,585

BA
0

40,504
34,430

39,000
39,000

40,000
40,000

BA
0

3,255,752
3,232,521

3,041,034
3,358,450

3,365,500
3,381,750

Intragovernmental Funds:

Revolving fund
Appropriation, current
Outlays
Consolidated working fund
Outlays
Trust funds
Rivers and harbors contributed funds
Appropriation, permanent, indefinite
Outlays

301
301
0
301

Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

271 BA

7

..

10

~n
-19,559

~~u
-21248

~J
-3tsn

-3J30

-3,740

BA

3,233,741

3,018,034

3,340,500

0

3,210,510

3,335,450

3,356,750

40,504
34,430

39,000
39,000

40,000
40,000

3,018,034
3,335,450

3,340,500
3,356,750

0
QA

~'
-18,192

806 BA
0
902
®A

300

Total Federal funds

Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

BA
0
301

BA

Total Trust funds

0

Total Corps of Engineers-Civil

BA
0

See footnotes at end of table.




.

-6,074
3,233,741
3,204,436

425

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING

(in

thousands of dollars)—Continued
1981
estimate

1980
actual

Account and functional code

1982
estimate

Department of Defense-Civil—Con.

Ryukyu Islands, Army
Summary

Federal funds:
Deductions for offsetting receipts:
Proprietary receipts from the public

800 BA
0

Soldiers' and Airmen's Home
Trust funds
Operation and maintenance
Appropriation, current

-410

BA
0

-410
-410

410
-410

410
-410

B
A

Total Ryukyu Islands, Army

-410

-410

19,506

20,326

23,825

705

^755
C
385
Outlays-

19,224

Payment of claims
Appropriation, permanent, indefinite
Outlays
Soldiers' and Airmen's Home revolving fund
Outlays

21,400

23,825

22,160
22,160

23,830
23,830

705
BA
0
705

16
16

0

Summary

Federal funds:
Deductions for offsetting receipts.Proprietary receipts from the public

705 BA
0

Total Federal funds

BA
0

Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

BA
0
705 BA
0

Total Trust funds

BA
0

Total Soldiers' and Airmen's Home

19,522
19,243
-2,490

-3,215

-4,021

BA
0

17,032
16,753
17,031
16,752

18,945
18,945
18,945
18,945

19,809
19,809
19,809
19,809

BA
0

699
616

643
679

668
666

Wildlife Conservation, Military Reservations
Federal funds
General and Special Funds:

Wildlife conservation, Army
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.




303

426

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Defense-Civil—Con.
Wildlife Conservation, Military
Reservations—Con.

Wildlife conservation, Navy
Appropriation, permanent, indefinite
Outlays
Wildlife conservation, Air Force
Appropriation, permanent, indefinite
Outlays
.

303
BA
0

100
93

129
123

151
163

BA
0

151
129

140
140

150
140

BA
0

950
838

912
942

969
969

303

Summary

Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

300 BA

Total Wildlife Conservation, Military Reservations
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

0

_g5Q

_gi2

-112

30

BA
0

3,265,028
3,239,739

3,047,252
3,365,792

271 BA

,

,,
JI

o
300 BA
BA
0
800
|*A
806 BA

-'
._19fl42

705

_ ^

-

-20,471

3,373,855
3,389,919
10

~u
-22,217

7
J

~
-410

-410

-410

r

Qfl? RA

Q

Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

-3,430

BA

3,241,656

3,022,930

3,347,476

0

Total Federal funds

-3,811

3,216,367

3,341,470

3,363,540

60,026
53,673

61,160
61,160

63,830
63,830

BA
0
301 BA

_ ^

-3,740

_sgm

705 BA
Total Trust funds

See footnotes at end of table.




17,032

18,945

19,809

10,679

18,945

19,809

BA

3,258,688

3,041,875

3,367,285

0

Total Department of Defense-Civil

BA

0

3,227,046

3,360,415

3,383,349

427

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Education
Office of Elementary and Secondary
Education
Federal funds
General and Special Funds:

Compensatory programs for disadvantage;! students
501
Appropriation, current
BA
Outlays
0
School assistance in federally affected areas 501
Appropriation, current
BA
Indefinite..
Outlays

3,873,225
3,636,958
805,000
20,000
690,170

Equal educational opportunities
Appropriation, current

BA

303,501
321,987

Outlays
Elementary and secondary education
Appropriation, current

932,384
-133,200

456,650
— 14,100

292,008
A
5,000
289,354
M50

306,043

H

291,217
H095

501
BA
0

120,300

501

162,933
BA

75,900

0

93,365

81,680
D
102
55,872

501

101,816
82,416

BA

Outlays-

3,594,897
1,190,105

Elementary and secondary education
Appropriation, current
Outlays
Library resources
Appropriation, current
Outlays

401,000

501

OutlaysSpecial programs and populations
Appropriation, current
Outlays
Indian education
Appropriation, current

790,000
"-148,000

3,838,135
* 9,326
"-52,150
3,374,246
M66
H
-3,998

^ 7,088
"-39,384

501
BA
0

1,031
2,378,504

BA
0

269
136,153

Total Federal funds Office of Elementary and
Secondary Education
BA
0

4,800,598
4,810,284

4,816,101
4,515,574

4,802,384
4,587,873

1,049,025
2,235
821,777

1,102,050

1,225,235

503

Office of Special Education and
Rehabilitative Services
Federal funds
General and Special Funds:

Education for the handicapped, gifted, and talented
501
Appropriation, current
BA
Reappropriation
BA
Outlays
0
See footnotes at end of table.




"1087^594

428

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Education—Con.
Office of Special Education and
Rehabilitative Services—Con.
Rehabilitation services and handicapped research
506Appropriation, current
Outlays

BA
0

574,270
426,886

965,875
959,790

1,010,716
1,002,983

Total Federal funds Office of Special Education
and Rehabilitative Services
BA
0

1,625,530
1,248,663

2,067,925
2,034,210

2,235,951
2,090,577

925,243

897,218

Office of Vocational and Adult Education
Federal funds
General and Special Funds:

Vocational and adult education
Appropriation, current

501
BA

902,599

" -11,862

Indefinite
Appropriation, permanent
Outlays

BA
BA
0

17,600
7,161
863,433

7,161
938,994
"-1,529

7,161
1,099,603
"-7,162

3,356,550
4
811,000

4,089,750

3,407,048
* 334,850

3,499,395
M46,507

2,312,479
"-78,728
2,168,199
"-59,046

2,345,576

Office of Postsecondary Education
Federal funds
General and Special Funds:

Student financial assistance
Appropriation, current

502
BA
BA
0

Student loan insurance
Appropriation, current

0

See footnotes at end of table.




1,407,977

2,369,656
"-19,682

502
BA

Appropriation, permanent
Reappropriation
Outlays
Higher education facilities loan and insurance
Appropriation, current
Appropriation, permanent, indefinite
Outlays

1,609,344

502

Outlays
Higher and continuing education
Appropriation, current

579,328
3,682,789

BA

Reappropriation
Outlays

2,916,935

416,025

BA
BA
0

,

2,700

BA
BA
0

2,189
609
-19,031

399,787

407,689
" -30,989
2,800
374
389,281
«—4,412

421,778

397,620
"-26,271

1,656
556
37,316

1,350
529
10,933

502

429

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Education—Con.
Office of Postsecondary Education—Con.
Public Enterprise Funds:

College housing loans
Appropriation, current
Appropriation, permanent
Outlays

502
BA
BA
0

13,645
212
14,082

14,271
279
31,779

12,879
232
2,926

Total Federal funds Office of Postsecondary Education
BA
0

5,540,987
5,485,604

6,797,937
6,305,015

6,872,094
6,681,084

Office of Educational Research and
Improvement
Federal funds
General and Special Funds:

Educational improvement
Appropriation, current
Outlays
Educational research and statistics
Appropriation, current
Outlays
Libraries and learning technologies
Appropriation, current
Outlays
Institute of Museum Services
Appropriation, current
Outlays
Educational development
Outlays
School improvement programs
Appropriation, current

501
BA
0
BA
0

Outlays..

97,396
94 602

503
503
BA
0

256,219
128,644

263,655
256,801

273,988
269,691

BA

10,900

12,857

16,937

0

483

13,000

15,000

0

10

10

10

BA

171,468

0

66,408

166,973
A
4,000
171,016
^600

^2,380

87,614
* 8,436
102,019
A
3,880

H556

503

503
501

Outlays..
Research and related activities
Appropriation, current

175,896
115 879

503
BA

80,359

0

32,701

Educational statistics
503
Appropriation, current
BA
Outlays
0
Salaries and expenses, Assistant Secretary for Education
502
Appropriation, current
BA
Outlays
0
National Institute of Education
503
Appropriation, current
BA
Outlays
0
See footnotes at end of table.
340-000 0 - 81 - 29 : QL 3




7,387
2 428

9,947
16137

6,788
17,229 ..
15,309
43,613

..

430

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Education—Con.
Office of Educational Research and
Improvement—Con.
Special projects and training
Appropriation, current
Outlays

503
BA
0

Total Federal funds Office of Educational Research and Improvement
BA
0

1,566
53,301
549,996
344,817

553,508
563,463

564,217
502,118

Special Institutions
Federal funds
General and Special Funds:

American Printing House for the Blind
Appropriation, current
Outlays
National Technical Institute for the Deaf
Appropriation, current
Outlays
Gallaudet College
Appropriation, current
Outlays
Howard University
Appropriation, current
Outlays

501
BA
0

4,349
4,349

4,921
4,921

5,595
5,595

BA
0

17,349
16,248

20,305
21,472

32,811
28,191

BA
0

48,341
52,940

49,768
56,630

61,532
64,065

BA
0

121,893
123,889

133,983
133,810

153,199
153,753

BA
0

191,932
197,426

208,977
216,833

253,137
251,604

BA

22,181

50,971

0

13,882

49,215
1,341
44,600

502
502
502

Total Federal funds Special Institutions
Office for Civil Rights
Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

751

Outlays

D

49,070

Departmental Management
Federal funds
General and Special Funds:

Salaries and expenses:
(Research and general education aids)
(Appropriation, current)

(Outlays)

503
BA

160,826

238,524
* 9,421

255,017

0

170,088

234,142

249,438

Office of Inspector General
751
Appropriation, current
BA
Outlays
0
Educational, research and training activities overseas:
(Special foreign currency program)
503
(Appropriation, current)
BA
(Outlays)
0
See footnotes at end of table.




12,989
11,041
3,000
3,561

3,000
2,500

1,000
3,000

431

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING

(in thousands of dollars)—Continued
1980
actual

Account and functional code

Department

of

1981
estimate

1982
estimate

Education—Con.

Departmental Management—Con.
Youth education and training
Appropriation, current
Outlays

501
J

BA
0

900,000
^ 50,000

Trust funds
Special statistical compilations and surveys
Appropriation, permanent, indefinite
Outlays

503
BA
0

325
27

Total Federal funds Departmental Management...

BA
0

163,826
173,649

Total Trust funds Departmental Management

BA
0

325
27

..
250,945
236,642

1,169,006
313,479

..

Office of Bilingual Education and Minority
Languages Affairs
Federal funds
General and Special Funds:
Bilingual and minority language education
Appropriation, current
Outlays

501
209,000
174,818

BA
0

Summary
Federal funds:
(As shown in detail above)

B
A
0

Deductions for offsetting receipts:
Proprietary receipts from the public

Total Federal funds

Trust funds:
(As shown in detail above)
Deductions for offsetting receipts-.
Proprietary receipts from the public

500 BA
0
902 BA
0

-24,557

-27,009

-29,205

-597

-860

-875

BA
0

325
27

503 BA

0

Total Department of Education

B
A
0




17,061,139
15,743,064

13,797,256
13,112,604

Total Trust funds

table.

15,666,491
14,853,802

B
A
0

0

See footnotes at end

13,822,410
13,137,758

15,638,622
14,825,933

17,031,059
15,712,984

15,638,622
14,825,933

17,031,059
15,712,984

-325
-298
13,797,256
13,112,306

432

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Energy
Atomic Energy Defense Activities
Federal funds
General and Special Funds:

Atomic energy defense activities - operating expenses
053
Appropriation, current
BA

2,396,147

2,937,323
3,696,366
A

Outlays

0

Atomic energy defense activities - plant and capital
equipment
053
Appropriation, current
BA

2,391,233

594,849

41,000
D
4,147
2,855,839
^ 35,000
665,305
B

Outlays

0

Total Federal funds Atomic Energy Defense Activities
BA
0

3,566,044
* 6,000

1,007,861

486,501

10,000
688,427
B
7,500

903,389
^ 2,500

2,990,996
2,877,734

3,657,775
3,586,766

4,704,227
4,477,933

339,900

378,015

344,573

372,000

130,000

126,400

124,198

138,347

2,197,887

2,298,754

Energy Programs
Federal funds
General and Special Funds:

General science and research - operating expenses
251
Appropriation, current
BA
Outlays
0
General science and research activities - plant and
capital equipment
251
BA
Appropriation, current
Outlays
0
Energy supply, R&D activities - operating expenses
271
Appropriation, current
BA

* 435,970
434,310

* 171,350
162,350

* 2,328,513
D

Outlays

0

Energy supply, R&D activities - plant and capital
equipment
271
BA
Appropriation, current

2,275,178

2,324
"-25,026
2,279,331
//_24,026

432,428

383,287

456,726

"-3,650
427,534
"-3,650

2,447,269
"-1,000

* 435,995
Outlays
See footnotes at end of table.




0

498,933

433

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1981
estimate

1980
actual

Account and functional code

1982
estimate

Department of Energy—Con.
Energy Programs—Con.
Uranium supply and enrichment activities
Appropriation, current
Contract authority, current
Outlays
Fossil energy research and development
Appropriation, current

271
BA

245,014

BA
0

242,809

31,755
D
17
1,254,045
196,261

BA

732,103

711,435

568,942
272,000

271
* 761,470

D

1,518
-25,450
730,909
H
-17,750
H

Outlays..
Fossil energy construction
Appropriation, current

0

714,219

BA

103,250

423,300

0

76,385

244,989

BA

111,221

226,062

749,343
/ _7,700
/

271
K

790,200
675,150

K

Outlays
Energy production, demonstration, and distribution

253,942

271
Appropriation, current
Outlays
Energy conservation:
(Energy conservation)
(Appropriation, current)

0

138,872
238,644
800,107

BA

-47,800

BA
0

158,750
567,703

B
A

43,000

62,000

6,513

30,000

BA
0

779,408
574,216

814,655
734,693

BA

-2,000,000

1,485,000

722,493
H _ 17,800

H

949,041
-18,000

452

(Outlays)

0

Total Energy conservation
Strategic petroleum reserve
Appropriation, current

* 871,658

577,658
H

(Reappropriation)
(Outlays)
(Area and regional development)
(Appropriation, current)

306,918

272

* 50,000
59,000
921,658
990,041

274
K
D

Outlays
Energy information administration
Appropriation, current
Outlays..

See footnotes at end of table.




3,650,408
2,566,678

0

342,008

2,017,970

BA

90,773

104,117

75,263

^557
102,301

276
K

127,178
127,206

434

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Energy—Con.
Energy Programs—Con.
Economic regulation:
(Energy information, policy, and regulation)
276
(Appropriation, current)

BA
* 184,126

B

(Outlays).
Federal Energy Regulatory Commission
Appropriation, current

0

132,415

BA

72,000
D
6,312
183,232
B
28,800

68,387

276
74,374
* 85,895

D

Outlays
Geothermal resources development fund
Appropriation, current

0

2,031
79,012

67,088

84,672

271
BA

Reappropriation
BA
Outlays
0
Strategic petroleum reserve entitlements and royalties
274
Appropriation, current
BA
Outlays
Alternative fuels production
Appropriation, current
Outlays
Payments to states under Federal Power Act
Appropriation, permanent, indefinite
Outlays

172,772
43,200

B

1,284
D
V
41,982
1,263

181

660

1,845,390

5,574
1,775

A

1000 000

0

248,000
1093 390

271
BA
0

5,518,000
26,487

200,000

225,000

BA
0

40
283

85
125

85
85

852

Public Enterprise Funds:

Spent fuel storage fund
Authority to borrow, current
Outlays
Trust funds
Advances for cooperative work
Appropriation, permanent, indefinite
Outlays

271
J

BA
0

J

300,000
-100,000

J

200,000

271
BA
0

5,348
-31,807

44,188
53,379

39,100
39,100

Total Federal funds Energy Programs

BA
0

8,899,547
5,591,380

10,708,615
8,829,985

10,969,306
11,042,392

Total Trust funds Energy Programs

BA
0

5,348
-31,807

44,188
53,379

39,100
39,100

See footnotes at end of table.




435

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1981
estimate

1980
actual

Account and functional code

1982
estimate

Department of Energy—Con
Power Marketing Administrations
Federal funds
General and Special Funds:
Operation and maintenance, Alaska Power Administration
271
Appropriation, current
BA

2,660

3,069

2,439

^150
3,211

3,496

BA
0

-19,144

16,700

136,180
-189,200

General and Special Funds:
Operation and maintenance, Southeastern Power Administration
271
Appropriation, current
BA

1,400

1,552

1,337

1,634

32,180

28,208

* 3,538
0

Outlays..
Public Enterprise Funds:
Bonneville Power Administration fund
Authority to borrow, permanent, indefinite
Outlays

271

Outlays
0
Operation and maintenance, Southwestern Power Administration
271
Appropriation, current
BA

* 7,237
6,931

* 21,269
Outlays
0
Continuing fund, Southwestern Power Administration
271
Appropriation, current
BA
Outlays
0
Construction, rehabilitation, operation and maintenance, Western Area Power Administration
271
Appropriation, current
BA

16,223

37,512

29,285
300

107

..

122,800

138,502

105,627

* 2,980
141,333

210,923

200
219

200
347

500
500

Public Enterprise Funds:
Colorado river basins power marketing fund, Western
Area Power Administration
271
Appropriation, current
BA
Outlays
0

5,152
-29,976

3,548
-9,561

-2,600

Total Federal funds Power Marketing Administrations
BA
0

164,392
76,832

178,624
191,176

379,798
59,335

* 210,774
Outlays
0
Emergency fund, Western Area Power Administration
271
Appropriation, current
BA
Outlays
0

See footnotes at end of table.




436

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTI
BUDGET
LISTING

(in thousands of dollars)—Continued
1980
actual

Account and functional code
and

Departi
Department

1981
estimate

1982
estimate

of Energy—Con.

Departmental Administration

Federal funds
General and Special Funds:

Departmental administration.(Energy information, policy, and regulation)
276
(Appropriation, current)

BA
* 401,692

B

(Outlays)
Special foreign currency program
Outlays

0

224,894

0

31

Deductions for offsetting receipts:
Proprietary receipts from the public

BA
0
270 BA

0
271 BA
0
274 BA
0
300 BA
0
400 BA
0
902 BA
0
Total Federal funds
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

233,195
224,925

303,120
293,452

401,692
369,602

12,288,130
8,770,871

14,848,134
12,901,379

16,455,023
15,949,262

-53,283

-57,642

-57,642

-2,204,727

-1,265,391

-1,518,653

-1,845,390

-248,000

-16,300

-16,300

-12,079
-112
-3

BA
0

10,017,926
6,500,667

11,663,411
9,716,6.56

14,614,428
14,108,667

BA
0

5,348
-31,807

44,188
53,379

39,100
39,100

271

BA
0

Total Trust funds
Total Department of Energy

See footnotes at end of table.




369,602

271

Total Federal funds Departmental Administration. BA
0
Summary
Federal funds:
(As shown in detail above)

41,000
D
13,106
252,452
B
41,000

-5,348

0

-37,155

9,191

BA
0

10,017,926
6,463,512

11,663,411
9,725,847

-44,188

-39,100

14,614,428
14,108,667

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

437

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services
Health Programs
Public Health Service
Food and Drug Administration

Federal funds
General and Special Funds:

Salaries and expenses
Appropriation, current

554

322,278

321,035
C
343
D
14,764
E
1,242
335,799

349,015

BA
0

4,372
2,385

28,253
11,000

15,000
13,680

0

Outlays
Buildings and facilities
Appropriation, current
Outlays

BA

320,852

0

352,974

1,073
325,224
325,736

365,637
346,799

367,974
362,695

1,395,044

1,312,413

904,739
* 629,413

554

Public Enterprise Funds:

Revolving fund for certification and other services
554
Outlays

Total Federal funds Food and Drug Administration
BA
0
Health Services Administration

Federal funds
General and Special Funds:

Health services
Appropriation, current

551
BA

c

1,701
8,289
E
2,704
^ —13,957
D

Outlays
Indian health services
Appropriation, current

Outlays
Indian health facilities
Appropriation, current

0

J

-5,463
1,396,870
"-6,952
J
- 5,463

1,310,760

1,296,798
"_3,570

BA

546;569

654,892

0

549,192

594,119
C
951
^8,155
E
4,621
598,999
84,469
^23,000
89,252

116,907

551

641,946

551
BA
0

Outlays

74,302
87,426

A

Emergency health
Outlays
See footnotes at end of table.




054
0

-1,262

85,494
12,880

438

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.

Health Programs—Con.
Public Health Service—Con.
Health Services Administration—Con.
Public Enterprise Funds:

Health professions graduate student loan insurance
fund
553
0
Outlays
Total Federal funds Health Services Administration
BA
0

-90

-225

-317

2,015,915
1,946,026

2,026,465
1,981,254

2,300,488
2,124,458

193,439

248,260

162,148
* 83,632

Centers for Disease Control

Federal funds
General and Special Funds:

Preventive health services:
(Health care services)
(Appropriation, current)

551
BA

A

3,860
D
319
-27,000
224,934
A
3,360
*-12,150

H

(Outlays)

0

BA

80,035

0

(Health research)
(Appropriation, current)

198,362

63,140

239,112
^500
"-10,150

552

(Outlays)
Total Preventive health services

81,181
* 1,389
76,075

81,500
77,926

BA
0

273,474
261,502

308,009
292,219

327,280
307,388

Total Federal funds Centers for Disease Control.. BA
0

273,474
261,502

308,009
292,219

327,280
307,388

971,257

970,650
D
6,385
E
2,129
H
-11,006
970,186
H
-4,066

1,010,463

National Institutes of Health

Federal funds
General and Special Funds:

National Cancer Institute:
(Health research)
(Appropriation, current)

(Outlays).




552
BA

862,709

986,502
" -7,325

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

439

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.

National Institutes of Health—Con.
(Education and training of health care work
force)
553
(Appropriation, current)

BA

28,612

30,680

31,298

" -2,559

(Outlays)

0

Total National Cancer Institute

24,320

26,059
" -2,174

26,290

National Heart, Lung and Blood Institute:
(Health research)
(Appropriation, current)

BA

999,869

996,279

1,041,761

0

887,029

990,005

1,005,467

BA

493,395

523,115
D
2,248

557,127

552

E
1,231
" -9,588

(Outlays)

0

483,302

522,434

"-3,811
(Education and training of health care work
force)
553
(Appropriation, current)

475,094

»-5,777

39,327

National Institute of Dental Research:
(Health research)
(Appropriation, current)

37,149
"-736

32,828

34,095
36,878
^ — 136 " - 6 0 0

BA

527,488

553,419

596,454

0

Total National Heart, Lung and Blood Institute....

34,093

0

(Outlays)

BA

507,922

513,450

552,935

63,951

66,282

71,136

552
BA

D

726

£
328
"-258

(Outlays)

(Outlays)

66,024

BA

4,352

0

4,494

60,069

68,454

*_147
(Education and training of health care work
force)
553
(Appropriation, current)

0

"-111

4,924.
" —44
4,407

"-25
Total National Institute of Dental Research

5,311
5,121

"-19

See footnotes at end of table.




BA

68,303

71,958

76,447

0

70,518

64,304

73,445

440

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
National Institutes of Health—Con.

National Institute of Arthritis, Metabolism, and Digestive Diseases:
(Health research)
552
(Appropriation, current)
BA

(Outlays)

0

318,269

349,579
D
1,347
E
1,427
^—1,871

311,909

349,919

*_468

» —1,403

22,414
-1,361

22,412

17,257

22,580
"-340

22,625
^ — 1,021

Total National Institute of Arthritis, Metabolism,
and Digestive Diseases
BA
0

341,206
336,273

371,535
333,681

390,536
370,120

National Institute of Neurological and Communicative
Disorders and Stroke:
(Health research)
552
(Appropriation, current)
BA

232,496

244,044
D
1,585
£
455
" -2,031

271,261

(Education and training of health care work
force)
553
(Appropriation, current)
BA

(Outlays)

(Outlays)

0

0

319,016

368,124

22,937

9,470
8,148

226,379

256,091

« —1,358
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0

217,421

H

^ —673

9,794
9,199

9,920
9,706

Total National Institute of Neurological and Communicative Disorders and Stroke
BA
0

241,966
225,569

253,847
234,220

281,181
265,124

National Institute of Allergy and Infectious Diseases:
(Health research)
552
(Appropriation, current)
BA

205,260

222,645

238,448

^ 1,672
£
610

(Outlays)

0

(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
Total National Institute of Allergy and Infectious
Diseases
BA
0
See footnotes at end of table.




178,451
10,104
8,781
215,364
187,232

217,320
9,710
9,386
234,637
226,706

228,396
9,731
9,318
248,179
237,714

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

441

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
National Institutes of Health—Con.

National Institute of General Medical Sciences:
(Health research)
552
(Appropriation, current)
BA

(Outlays)

0

263,387

277,867
D
353
£
115

304,104

246,313

245,734

281,217

(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0

49,081
45,940

57,809
51,045

57,931
55,469

Total National Institute of General Medical Sciences
BA
0

312,468
292,253

336,144
296,779

362,035
336,686

National Institute of Child Health and Human Development:
(Health research)
552
(Appropriation, current)
BA

197,252

213,520
D
1,300
*325
"-3,285
224,513
^ — 1,347

225,507

219,354
*-1,938

(Outlays)

0

154,569

(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0

11,701
9,250

10,045
9,400

10,342
9,700

Total National Institute of Child Health and
Human Development
BA
0

208,953
163,819

221,905
232,566

235,849
227,116

BA

108,303

115,582
D
600
M6
"-2,049

130,532

0

120,248

National Eye Institute.(Health research)
(Appropriation, current)

(Outlays)

552

(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)

0

Total National Eye Institute

BA
0

See footnotes at end of table.




4,686
3,983
112,989
124,231

100,184

121,418

^ —767

"-1,282

4,672
"-304
3,986
^ —258

3,869
3,305
"-46

118,547
103,145

134,401
123,395

442

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
National Institutes of Health—Con.

National Institute of Environmental Health Sciences:
(Health research)
552
(Appropriation, current)
BA
(Indefinite)

BA

(Outlays)

0

76,935

71,149

90,198
1,062
*136
» -3,258
D

105,174

83,358

97,926

* -1,661

"-1,597

(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0

6,958
6,435

Total National Institute of Environmental Health
Sciences
BA
0

83,893
77,584

95,209
88,146

112,498
103,037

BA

67,000

72,911

82,884

0

54,994

"-588
66,147

75,919

«_194

"-394

National Institute of Aging:
(Health research)
(Appropriation, current)

(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
Total National Institute of Aging
BA
0

(Outlays)

7,324
6,708

552

(Outlays)

Research resources-.
(Health research)
(Appropriation, current)

7,071
6,449

2,988
2,564
69,988
57,558

3,180
2,828
76,244
68,781

3,215
2,561
86,099
78,086

552
BA

168,519

0

165,441

183,709
D
162
£
54
"-10,561

191,323

(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
Total Research resources

See footnotes at end of table.




BA
0

677
664
169,196
166,105

158,194

182,210

" _ 4,477

"-6,084

730
628
174,094
154,345

788
747
192,111
176,873

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

443

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

Department of Health and Human

1981
estimate

1982
estimate

Services—Con.

Health Programs—Con.
Public Health Service—Con.
National Institutes of Health—Con.

John E. Fogarty International Center for Advanced
Study in the Health Sciences
552
Appropriation, current
BA

8,987

9,138

9,612

°129
£
24

Outlays
National Library of Medicine:
(Health research)
(Appropriation, current)

0

9,641

8,586

9,263

13,640
"-170

13,854

552
BA

0

(Outlays)

13,136

11,296

(Education and training of health care work
force)
553
(Appropriation, current)
BA

14,008

13,695

^ —126

"-44

30,843

31,090
1,076
*17
"-171

33,838

D

(Outlays)

0

26,523

33,043
«_87

33,488
"-84

Total National Library of Medicine

BA
0

43,979
37,819

45,482
46,838

47,692
47,055

BA

19,353

20,734
1,182
£
57
"-360

21,587

0

21,554

Office of the Director:
(Health research)
(Appropriation, current)

552

(Outlays)

D

(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
Total Office of the Director
Buildings and facilities
Appropriation, current
Outlays

1,683
1,874

19,241

21,056

"-328

"-32

1,815
1,601

1,937
1,874

BA
0

21,036
23,428

23,428
20,514

23,524
22,898

BA
0

3,250
56,018

11,750
27,767

10,310
26,041

63

28

552

Intragovernmental Funds:

National Institutes of Health management fund
552
Outlays
Consolidated working fund
Outlays
See footnotes at end of table.




0

877

0

10

552

444

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
National Institutes of Health—Con.

Service and supply fund
Outlays

552
0

Total Federal funds National Institutes of Health. BA
0

-1,581
3,428,935
3,222,305

3,593,769
3,409,896

3,848,689
3,655,283

672,231

694,741

398,047
* 273,140

Alcohol, Drug Abuse, and Mental Health
Administration

Federal funds
General and Special Funds:

Alcohol, drug abuse, and mental health:
(Health care services)
(Appropriation, current)

551
BA

D

1,358
610
"-76,500
719,319
^—7,650
E

(Outlays)
(Health research)
(Appropriation, current)

0

730,261

BA

233,426

237,968

254,660

112
1,740
*213
199,366

113,768

115,098

H

689,873
-62,000

552
C

249,102
* 27,240

D

(Outlays)
0
(Education and training of health care work
force)
553
(Appropriation, current)
BA

D

(Outlays)

0

Total Alcohol, drug abuse, and mental health

BA
0

Construction and renovation, St. Elizabeths Hospital
551
Appropriation, current
BA
Outlays
0
Saint Elizabeths Hospital
551
Appropriation, current
BA

Outlays

0

Total Federal funds Alcohol, Drug Abuse, and
Mental Health Administration
BA
0
See footnotes at end of table.




236,943
91,616
* 22,410

121,731

383
*102
124,568

104,491

1,019,425
1,106,652

975,825
1,035,603

1,061,555
969,307

1,500
8,525

4,135
91,915

10,290
105,779

102,323

94,273
1,358
D
3,964
£
109
97,900

1,111,340
1,213,110

1,077,029
1,142,028

1,167,334
1,083,070

c

103,473

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

445

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.

Health Resources Administration

Federal funds
General and Special Funds:

Health resources:
(Health care services)
(Appropriation, current)

551
BA

(Outlays)

0

(Health research)
552
(Outlays)
0
(Education and training of health care work
force)
553
(Appropriation, current)
BA

78,139

155,496
-6,849
207,143
" -2,055

158,436

H

189,632
4,756

H

687

590,763

160,495
-1,199
171

492,525

13,311
* 169,584

H

(Outlays)

0

407,985

-159,712
433,975
"-13,601

Total Health resources

BA
0

668,902
602,373

481,460
626,149

341,331
483,354

Payment of sales insufficiencies and interest
losses
551
Appropriation, current
BA

2,000

-1,230

-1,215

H

398,967
-75,080

Public Enterprise Funds:

Health education loans
Outlays
Nurse training fund
Outlays
Medical facilities guarantee and loan fund
Appropriation, current
Outlays

553
0

-3,055

553
0

-733

-250

-225

BA
0

45,000
32,163

32,200

35,000
31,850

Total Federal funds Health Resources Administration
BA
0

715,902
630,748

481,460
656,869

376,331
513,764

BA

95,629

106,541
C
27
D
2,268
*88

44,160

BA
0

64,046

77,397

551

Office of Assistant Secretary for Heaith

Federal funds
General and Special Funds:

Salaries and expenses:
(Health care services)
(Appropriation, current)

(Indefinite)
(Outlays)
See footnotes at end of table.
340-000 O - 81 - 30 : QL 3




551

* 47,392
76,276

446

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.

Health Programs—Con.
Public Health Service—Con.
Office of Assistant Secretary for
Health—Con.

(Health research)
(Appropriation, current)

552

6
A

81,351

(Indefinite)..
(Outlays)....

BA
0

59,842

62,016

Total Salaries and expenses-

BA
0

176,980
123,888

184,743
139,413

68,639
65,227
173,839
141,503

BA
0

75,808
71,945

91,958
77,054

106,172
92,300

BA
0

6,520
6,181

3,230

3,284

Retirement pay and medical benefits for commissioned
officers
551
Appropriation, current, indefinite
Outlays
Scientific activities overseas (special foreign currency
program)
552
Appropriation, current
Outlays

73,425
2,231

13,648

D

A

Public Enterprise Funds:

Health maintenance organization loan and loan guarantee fund
551
Appropriation, current
BA
Authority to borrow, current, indefinite
BA
Authority to borrow, permanent, indefinite
BA
Outlays
0

1

17,000
1

6,425

2^839

-15,644
15,644
16,805

Intragovernmental Funds:

Service and supply fund
Outlays
Miscellaneous consolidated working funds
Outlays

551
-1,575
552
6,694

-400

BA
0

5,686
4,766

4,620
4,700

4,620
4,600

Total Federal funds Office of Assistant Secretary
for Health
BA
0

259,308
213,558

293,701
222,136

280,011
253,892

5,686
4,766
8,130,098
7,812,985
5,686
4,766

4,620
4,700
8,146,070
8,051,201
4,620
4,700

4,620
4,600
8,668,107
8,300,550
4,620
4,600

Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefiniteOutlays

551

Total Trust funds Office of Assistant Secretary
for Health
BA
0
Total Federal funds Public Health Service..

BA
0

Total Trust funds Public Health Service..

BA
0

See footnotes at end of




THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

447

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Health Programs—Con.
Other Health Programs
Health Care Financing Administration
Federal funds
General and Special Funds:
Grants to States for Medicaid

551

Appropriation, current

BA

14,445,181

Outlays

0

13,956,700

18,896,208
' -94,700
18,214,808

* / —31,000
Payments to health care trust funds
Appropriation, current

17,266,823
' -31,000
16,483,498

'-94,700

551
BA

Outlays

0

7,968,156

7,802,861

9,577,120

14,555,120

9,619,263

' -36,000
14,555,120
' -36,000

Program management:
(Health care services)
(Appropriation, current)

551
BA

(Outlays)

0

97,631

71,404

93,872

D

102,714

3,874

93,083

' -2,880
97,628
'-2,880

(Health research)
(Appropriation, current)

552
BA

Total Program management

30,379

30,000

34,191

0

(Outlays)

17,733

24,000

27,353

Intragovernmental Funds:
Miscellaneous consolidated working fund
Outlays

128,010

127,746

134,025

0

BA

89,137

117,083

122,101

0

-795

'3,000
32,486,120

'61,000
39,040,120

27,020,951
J - 66,925

31,850,014
'-250,430

551

Trust funds
Federal hospital insurance trust fund
Appropriation, current
Appropriation, permanent, indefinite

Outlays

See footnotes at end of table.




551
BA
BA

25,414,753

0

24,287,539

448

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Health Programs—Con.
Other Health Programs—Con.
Health Care Financing Administration—
Con.
Federal supplementary medical insurance
fund
Appropriation, current
Appropriation, permanent, indefinite
Outlays

trust
551

BA
BA
0

' -30,000
17,800,000
15,194,238
'-195,295

BA
0

22,541,347
21,847,903

26,940,689
26,188,844

33,454,653
32,761,329

BA
0

35,689,773
35,033,857
30,671,445
29,660,888
35,695,459
35,038,623

44,877,120
39,938,620
35,086,759
34,240,045
44,881,740
39,943,320

56,871,120
46,598,527
42,122,760
41,061,879
56,875,740
46,603,127

676,933
675,080
1,039,501
1,031,670

672,066
672,066
1,092,180
1,087,180

848,698
848,698
1,105,765
1,100,765

BA

6,467,557

7,240,214
D
38,192

7,982,552

0

6,411,486

7,304,597

-45,000
8,016,551
L
-45,000

BA

7,634,821

7,727,460

6,262,298
'-531,000

BA
0

Total Trust funds Health Care Financing Administration

12,388,000
13,001,594
'-17,000

BA
0

Total Federal funds Health Care Financing Administration

10,275,020
10,746,318

74,000
7,308,358

7,793,065

8,215,703
'-531,000

Total Federal funds Health Programs-

BA
0

Total Trust funds Health Programs

BA
0

Social Security Administration
Federal funds
General and Special Funds:

Payments to social security trust funds
Appropriation, current
Outlays
Special benefits for disabled coal miners
Appropriation, current
Outlays
Supplemental security income program
Appropriation, current

601

BA
0
601
609

OutlaysAssistance payments program
Appropriation, current

609

Indefinite..
Outlays
Low income energy assistance
Appropriation, current

L

609

BA

1,850,000

0

1,850,000

'1,850,000
Outlays-

'1,850,000
Refugee assistance
Appropriation, current..
Outlays
See footnotes at end of table.




609

BA
0

516,900
367,785

690,457
579,376

652,157
658,592

449

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1982
estimate

1981
estimate

Department of Health and Human Services—Con.
Social Security Administration—Con.
Cuban and Haitian Entrants, reception and processing
609
Appropriation, current
Outlays
Cuban and Haitian Entrants, domestic assistance
609
Appropriation, current
Outlays
Payments to states from receipts for child support
609
Appropriation, permanent
Outlays
Trust funds
Federal old-age and survivors insurance trust fund
601
Appropriation, current
Appropriation, permanent, indefinite
Outlays
Federal disability insurance trust fund
Appropriation, current
Appropriation, permanent, indefinite
Outlays

BA
0

167,100
147 100

27,000
27,000

BA
0

100,000

90,000
153 000

88,000
82 700

BA
0

222
133

350
442

450
450

BA
BA
0

100,050,806
103,227,267

119,781,677
122,431,453

' 208,000
130,038,463
142,164,346
'17,000

BA
BA
0

17,388,408
15,331,828

12,890,389
17,452,825

'39,000
22,033,000
19,409,554
'-40,000
(3,125,420)

601

Limitation on administrative expenses

(2,444,791)

(2,654,864)
(139,700)

D

Limitation on research and statistics (Survey of
income and program participation)

(15,000)

Total Federal funds Social Security Administration
BA
0

16,509,934
15,794,512

19,568,019
19,586,826

18,240,920
20,224,459

Total Trust funds Social Security Administration.. BA
0

117,439,214
118,559,095

132,672,066
139,884,278

152,318,463
161,550,900

BA

2,888,554

2,562,210

0

2,763,340

3,135,850

BA

1,980,661

1,724,533

Human Development Services
Federal funds
General and Special Funds:

Grants to states for social services
Appropriation, current

506

Outlays..
Human development services:
(Social services)
(Appropriation, current)

3,132,100
-41,000
3,115,700
L
-41,000
L

506
° 1,420
-10,000
1,529,476

1,874,528
^220,000

H

(Outlays).

2,184,710

1,788,437
220,000
-4,500

A

" -5,500
See footnotes at end of table.




H

450

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Human Development Services—Con.
(Other income security)
(Appropriation, current)

609
BA

306,000
* 5,000
284,000
-* 5,000

346,000

(Outlays)

0

Total Human development services

BA
0

1,980,661
2,184,710

2,026,953
1,812,976

2,440,528
2,349,937

BA
0

365,000
395,262

365,000
365,000

384,982
384,982

Total Federal funds Human Development Services
BA
0

5,234,215
5,343,312

4,954,163
5,313,826

5,916,610
5,809,619

BA

132,220

150,907

0

138,476

126,468
D
9,416
133,836

Work incentives
Appropriation, current
Outlays

346,000

504

Departmental Management
Federal funds
General and Special Funds:

General Departmental management
Appropriation, current

609

Outlays
Office of Inspector General
Appropriation, current

609

Outlays
Office for Civil Rights
Appropriation, current

751

Outlays
Office of Consumer Affairs
Appropriation, current

506

Outlays
Policy research
Appropriation, current
Outlays

BA

71,495

0

61,623

BA

43,646

0

44,939

BA

1,904

0

1,928

149,391

71,990
2,212
81,643

80,515

17,920
1,116
21,296

25,899

D

D

2,156
D
176
2,322

79,365

25,548
2,649
2,636

609
BA
0

24,000
22,713

22,700
24,641

21,550
22,856

Intragovernmental Funds:

Working capital fund
Outlays
Consolidated working fund
Outlays
Grants management fund
Outlays

506
0

See footnotes at end of table.




2,636

0

5,006

3,933

200

273,265
274,967

254,154
270,307

281,520
279,996

52,688,859
51,073,679

59,863,095
59,411,004

66,561,810
67,375,953

552
0

Total Federal funds Departmental Management... BA
0
Summary
Federal funds:
(As shown in detail above)

90

506

BA
0

192

451

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Health and Human Services—Con.
Summary—Con.
Deductions for offsetting receipts:
Proprietary receipts from the public

500 BA
0

550 BA
0

902 BA
0
OQ

Total Federal funds

CD

Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions

BA
0

601 BA
0
CD

Proprietary receipts from the public

551 B
A
Dm

554

o

601 B
A
902

0
BA
0
QQ

Total Trust funds

CD

Interfund transactions

551 BA
0
BA
0
601 BA
0

Total Department of Health and Humani Services

See footnotes at end of table.




-603

-603

-16,543

-3,256

-3,256

-2,226

-2,667

-2,667

52,669,029
51,053,849

59,856,569
59,404,478

66,555,284
67,369,427

153,134,673
153,597,718

177,553,806
179,827,598

209,194,203
208,154,027

-1,441,988

-1,624,000

-1,926,000

-23,734

-27,000

-46,000

-3,882

-3,882

QQ

902

-1,061

BA
0

-114

-4,897
-178
-7
151,663,755
152,126,800

175,898,924
178,172,716

207,218,321
206,178,145

-7,802,869

-9,577,120

-14,555,120
'36,000

-675,080

-672,066

-848,698

195,854,835
194,702,700

225,506,307
227,328,008

258,405,787
258,179,754

452

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)
Account and functional code

1982
estimate

1981
estimate

actual

Department of Housing and Urban Development
Housing Programs
Federal funds
General and Special Funds:

Subsidized housing programs
Contract authority, current

604
BA

29,469,767

BA

Contract authority, permanent
Liquidation of contract authority, current..

26,662,599
39,538
(6,252,301)

32,335
(7,127,000)
A

Outlays-

4,529,336

Payments for operation of low income housing projects
604
Appropriation, current
BA

(256,966)
5,548,000
^ 89,000

Congregate services program
Appropriation, current

0

6,918,000
A
64,000

10,000

'1,265,000
100,000
928,800
B
43,000

1,084,000
B
57,000

604

OutlaysTroubled projects operating subsidy
Appropriation, current

824,318

BA

^"(8,835,000)

970,800

755,300
B

Outlays..

-1,037,000
29,782,073
30,300

K

0
604

10,000
^ —10,000
5,000

131

H

7,100
-1,800

BA

79,500

0

22,584

18,050
113,100

* 65,176
99,500

BA
BA
0

194,850
128,669
151,251

238,640
105,335
60,751

177,148
127,909
-104,454
^ —12,000

BA
0

805,928
752,942

780,918
800,000

773,848
780,000

159,304
(1,995,325)

150,062

1,100,000
30,920

(1,060,423)
5,822

91,701

K

Outlays
Public Enterprise Funds:

Federal Housing Administration fund
Appropriation, current, indefinite...
Authority to borrow, permanent....
Outlays

371

Housing for the elderly or handicapped fund
371
Authority to borrow, current, indefinite
Outlays
Low-rent public housing-loans and other expenses
604
Appropriation, current
Authority to borrow, permanent, indefinite
Liquidation of contract authority, current
Outlays
Nonprofit sponsor assistance
Outlays
Community disposal operations fund
Outlays
Rental housing assistance fund
Outlays
Revolving fund (liquidating programs)
Appropriation, current
Appropriation, permanent, indefinite..
Outlays
See footnotes at end of table.




BA
BA

A

0
0

-277

315

401

0

-429

-407

-372

0

604

33,523

467

5,617

1,449
439
-13,167

1,567
542
-14,769

451
604

41
5
BA
BA
0

84
6
-21,981

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

453

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Housing and Urban Development—Con.
Housing Programs—Con.
Intragovernmental Funds:

Disaster assistance fund
Outlays

453
0

Total Federal funds Housing Programs

BA
0

-7,190

-27,746

28,837,576
6,293,489

31,868,016
7,556,483

32,315,464
8,961,095

Government National Mortgage Association
Federal funds
General and Special Funds:

Mortgage assistance grant program
Appropriation, current

371
BA

* 490,000

Public Enterprise Funds:

Special assistance functions fund
Appropriation, current

371
BA
BA
BA
0

Emergency mortgage purchase assistance
Outlays
Management and liquidating functions fund
Outlays
Guarantees of mortgage-backed securities
Outlays

915
1,866,600
395,701

0

3,400
196,575
877
1,205,688
781,600
^ —3,425

1,353,000
A
4,050

1,039,294

-184,450

-213,900

0

Appropriation, permanent, indefinite
Authority to borrow, permanent, indefinite
Outlays

1,877

-28,333

-22,000

-20,000

O

-74,318

A

1,880
115

371
371
371

Participation sales fund:
(Mortgage credit and thrift insurance)
371
(Outlays)
0
(Other advancement and regulation of commerce)
376
(Outlays)
0
(Community development)
451
(Outlays)
0
(Higher education)
502
(Outlays)
0
(Health research)
552
(Outlays)
0
(Veterans housing)
704
(Outlays)
0
Total Participation sales fund

0

Total Federal funds Government National Mortgage Association
BA
0

See footnotes at end of table.




-81,800

-96,080

A _ 330

^ __3f600

25,541

34,643

-10,737

-7,090

-7,087

-7,802

291

819

-165

-354

-212

176

-409

-371

-340

16,294

55,415

-6,132

34,273

83,207

-25,000

1,869,392
1,366,617

1,406,540
569,832

491,995
998,470

454

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Housing and Urban Development—Con.
Solar Energy and Energy Conservation Bank
Federal funds
General and Special Funds:

Assistance for solar and conservation improvements
272
Appropriation, current
BA
Outlays
0

121,250
47,000

125,000
134,250

Community Planning and Development
Federal funds
General and Special Funds:

Community development grants
Appropriation, current
Outlays
Urban development action grants
Appropriation, current
Outlays
Planning assistance
Appropriation, current
Outlays
Urban homesteading
Outlays
Miscellaneous appropriations
Outlays

451
BA
0

3,752,356
3,901,648

3,694,600
3,937,900

3,960,000
3,997,765

BA
0

675,000
224,521

675,000
365,000

675,000
610,000

BA
0

37,500
52,112

33,750
40,000

35,000
35,000

6,533

13,467

451
451
451
0
451
0

2,016

11,295

109,500
179
164,864

129,980

134,000

132,880

135,000

Public Enterprise Funds:

Rehabilitation loan fund
451
Appropriation, current
BA
Reappropriation
BA
Outlays
0
Urban renewal programs
451
Liquidation of contract authority, permanent
Outlays
0

211,893

(67,453)
165,000

(160,754)
150,000

Total Federal funds Community Planning and
Development
BA
0

4,574,535
4,557,054

4,533,330
4,658,608

4,804,000
4,941,232

2,480

895

New Community Development Corporation
Federal funds
General and Special Funds:

New community assistance grants
Outlays

451
0

320

Public Enterprise Funds:

New communities fund
Authority to borrow, permanent, indefinite
Outlays

451
BA
0

46,933
45,461

49,450
49,240

36,622
36,222

Total Federal funds New Community Development Corporation
BA
0

46,933
45,781

49,450
51,720

36,622
37,117

See footnotes at end of table.




THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

455

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Housing and Urban Development—Con.
Neighborhoods, Voluntary Associations, and
Consumer Protection
Federal funds
General and Special Funds:

Housing counseling assistance
Appropriation, current
Outlays
Neighborhood self-help development program
Appropriation, current
Outlays
Mobile home standards program
Outlays
Mobile home inspection and monitoring
Appropriation, permanent, indefinite
Outlays
Interstate land sales
Appropriation, permanent, indefinite
Outlays

506
BA
0

9,000
7,934

10,000
9,420

BA

10,000

9,000

2,209

15,400

10,000
9,800

451
0

K 9,000
8,800

376
0

230

501

376
BA
0

6,093
2,422

4,750
8,421

5,225
5,225

300
498

300
300

376
BA
0

Total Federal funds Neighborhoods, Voluntary
Associations, and Consumer Protection
BA
0

198

25,291
12,795

24,050
34,240

24,525
24,125

BA

44,650

44,650

0

54,825

48,000

* 50,000
48,600

3,700

5,700
7,290

5,700
6,100

Policy Development and Research
Federal funds
General and Special Funds:

Research and technology
Appropriation, current

451

Outlays
Fair Housing and Equal Opportunity
Federal funds
General and Special Funds:

Fair housing assistance
Appropriation, current
Outlays

751
BA
0

Management and Administration
Federal funds
General and Special Funds:

Salaries and expenses, Including transfer of funds.(Energy conservation)
272
(Appropriation, current)
BA
(Outlays)
0
(Other advancement and regulation of commerce)
376
(Appropriation, current)
BA
(Outlays)
See footnotes at end of table.




0

2,255
1,918
9,224
7,945

10,847
D
678
10,981

11,843
11,732

456

THE BUDGET FOR FISCAL YEAR 1982
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1981
estimate

1982
estimate

Department of Housing and Urban Development—Con.
Management and Administration—Con.
(Community development)
(Appropriation, current).

451
BA

194,859

(Outlays)
0
(Public assistance and other income supplements)
604
BA
(Appropriation, current)

177,437

224,213

74,680
4,529
76,655

94,539

23,980

D

223,474

0
BA

18,360

0

17,823

21,705
1,430
22,371

285,536
264,831

339,653
328,444

356,830
352,513

0

-21

5,096

600
5,634

91,679

751

(Outlays).
Total Salaries and expenses, Including transfer
of funds
Low-income housing demonstration program
Outlays

61,626

CD CD

(Outlays)
(Federal law enforcement activities)
(Appropriation, current)

63,093

215,864
* 9,920
218,437

D

23,710

451

Intragovernmental Funds:

Working capital fund
Appropriation, current
Outlays

451
BA
0

-8,463

Trust funds
Gifts and bequests
Outlays

451

-16

1
3

0

285,536
256,347

339,653
333,540

Total Trust funds Management and Administration
0

-16

13

35,687,613
12,586,908

38,392,639
13,306,713

38,210,736
15,509,136

-469

-469

Total Federal funds Management and Administration
BA

Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public

Total Federal funds

See footnotes at end of table.




BA
0
376 BA
0
450 BA
0
902 BA
0
BA
0

357,430
358,147

-6,093
-123
-4,488

-1,300

-1,300

35,676,909
12,576,204

38,390,870
13,304,944

38,208,967
15,507,367

457

THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT

BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1980
actual

Account and functional code

1982
estimate

1981
estimate

Department of Housing and Urban Development—Con.
Summary—Con.
Trust funds:
(As shown in detail above)

0

Total Department of Housing and Urban Development

BA
0

-16

13

35,676,909
12,576,188

38,390,870
13,304,957

38,208,967
15,507,367

343,962

404,043

Department of the Interior
Land and Water Resources
Bureau of Land Management
Federal funds
General and Special Funds:
Management of lands and resources
Appropriation, current

302

B
A
0

Outlays..

353,459

354,275

10,803
324,859
* 52,111

383,835
^ 5,868

16,343
20,101

14,768
12,670

19,626
17,094

108,000
103,439

103,000
108,006

48,804
62,244

57,500
55,000

10,620
10,616

13,500
13,500

300
398

130

6,102
6,674

9,600
9,500

10,000
9,900

3,389
2,690

3,000
3,000

3,000
3,000

370,570
370,237

373,959
372,927

454,200
454,200
457,200
457,200

575,800
575,800
578,800
578,800

-2,396

30
0

Acquisition, constructi