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Budget
of the
United States
Government
Fiscal Year 1 9 8 6
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
THE BUDGET DOCUMENTS
Budget of the United States Government, 1986 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 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, 1986 is designed for use by the general public. It
provides a more concise, less technical overview of the 1986 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, 1986—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, and proposed general provisions applicable to the appropriations of entire agencies or groups of agencies. Supplemental
and rescission proposals for the current year are presented separately. Information
is also provided on certain activities whose outlays are not part of the budget-totals.
Special Analyses, Budget of the United States Government, 1986 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.
Historical Tables, Budget of the United States Government, 1986, is a new volume.
It provides data on budget receipts, outlays, surpluses or deficits, and Federal debt
covering extended time periods—in many cases from 1940-1990. These are much
longer time periods than those covered by similar tables in other budget documents.
The tables include various aggregations of budget components in current prices,
constant prices, and as percentages of the budget totals and of the gross national
product. The document includes, for example, data on receipts by major source from
1940 to 1990; and Federal debt from 1940 to 1990. The data for the years prior to
1986 have, where necessary, been restructured to be consistent with the concepts
and presentation used in the 1986 Budget, so these data series are comparable over
time.
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
PART 1. THE BUDGET MESSAGE OF THE PRESIDENT
Ml
PART 2. MAJOR BUDGET PROPOSALS
2-1
National defense
2-4
Entitlements and other mandatory programs
2-5
Discretionary programs
2-10
The credit budget
2-23
Management reform
2-24
PART 3. ECONOMIC ASSUMPTIONS AND THE BUDGET
3-1
The economic outlook: the recovery continues
3-2
Economic assumptions
3-10
Deficits, debt, and capital formation
3-19
Sensitivity of the budget to economic assumptions
3-20
Changes in the budget outlook since last year
3-23
PART 4. BUDGET RECEIPTS
4-1
Summary
4-2
Enacted legislation
4-3
Receipts proposals
4-8
Effect of enacted and proposed changes on receipts
4-13
Changes in budget receipts
4-14
Receipts by source
4-17
Proprietary receipts
4-19
PART 5. MEETING NATIONAL NEEDS: THE FEDERAL PROGRAM BY
FUNCTION
5-1
Introduction
5-2
National defense
5-4
International affairs
5-16
General science, space, and technology
5-27
Energy
5-33
Natural resources and environment
5-42
Agriculture
5-51
Commerce and housing credit
5-57
Transportation
5-67
Community and regional development
5-78
Education, training, employment, and social services
5-87
Health
5-103
Social security and medicare
5-110*
Income security
5-114
Veterans benefits and services
5-130
Administration of justice
5-141
General government
5-145
General purpose fiscal assistance
5-151
Net interest
5-156
Allowances
5-159
iii
IV
THE BUDGET FOR FISCAL YEAR 1986
Undistributed offsetting receipts
5-161
PART 6. PERSPECTIVES ON THE BUDGET
6-1
Relationship of budget authority to outlays
6-2
Limitations on the availability of funds
6-4
Fiscal activities outside the Federal budget
6-7
Budget funds and the Federal debt
6-25
The decrease in total 1984 outlays from the initial budget estimate
6-28
Comparison of relatively uncontrollable outlays and of receipts
6-33
The decrease in the total 1984 deficit from the initial budget estimate
6-39
Military retirement accruals
6-40
Allocation of windfall profit tax receipts
6-43
PART 7. THE BUDGET SYSTEM AND CONCEPTS
7-1
The budget process
7-2
Coverage^ of the budget totals
7-6
Budget authority and related transactions
7-8
The credit budget
7-11
Collections
7-13
Other transactions
7-14
Basis for budget figures
7-16
PART 8. THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-1
Explanatory note
8-2
Legislative branch
8-3
The Judiciary
8-14
Executive Office of the President
8-18
Funds appropriated to the President
8-22
Department of Agriculture
8-31
Department of Commerce
8-51
Department of Defense—Military
8-59
Department of Defense—Civil
8-72
Department of Education
8-78
Department of Energy
8-83
Department of Health and Human Services
8-88
Department of Housing and Urban Development
8-105
Department of the Interior
8-111
Department of Justice
8-124
Department of Labor
8-131
Department of State
8-137
Department of Transportation
8-143
Department of the Treasury
8-156
Environmental Protection Agency
8-170
General Services Administration
8-172
National Aeronautics and Space Administration
8-176
Office of Personnel Management
8-179
Small Business Administration
8-181
Veterans Administration
8-182
Other independent agencies
8-186
Allowances
8-215
Budget totals
8-216
PART 9. SUMMARY TABLES
9-1
Explanation of the summary tables
9-4
Table 1. Budget summary
9-10
Table 2. Budget receipts by source and budget outlays by agency, 1984-90
9-12
Table 3. Budget outlays by function, 1984-90
9-13
Table 4. Differences between current services and the budget: outlays by
function, 1985-90
9-14
CONTENTS
Table 5. Budget authority by agency, 1984-90
Table 6. Budget authority by function, 1984-90
Table 7. Differences between current services and the budget: budget authority by function, 1985-90
Table 8. Budget authority and outlays available through current action by
Congress
Table 9. Relation of budget authority to outlays
Table 10. Balances of budget authority
Table 11. Full-time equivalent of Federal civilian employment
Table 12. Budget financing and debt
Table 13. Budget receipts by source
Table 14. Offsetting receipts by type
Table 15. Outlays by function and agency
Table 16. Legislative proposals for major new and expanded programs in
the 1986 budget, projections of costs
Table 17. Credit budget: new direct loan obligations and guaranteed loan
commitments by agency
Table 18. Controllability of budget outlays, 1976-86
Table 19. Budget receipts by source, 1976-86
Table 20. Budget outlays by function and subfunction, 1976-86
Table 21. Federal transactions in the national income accounts, 1975-86
Table 22. Federal finances and the gross national product, 1977-88
Table 23. Composition of budget outlays in current and constant (fiscal year
1972) prices: 1966-88
Table 24. Budget receipts and outlays, 1789-1990
9-15
9-16
9-17
9-18
9-20
9-21
9-22
9-23
9-24
9-27
9-30
9-42
9-43
9-44
9-46
9-48
9-57
9-58
9-59
9-60
PART 1
THE BUDGET MESSAGE
OF THE
PRESIDENT
Ml
The Budget Dollar
Fiscal Year 1986 Estimate
Where It Comes From
Excise Taxes
Corporation
Income Taxes
8*
Social
Insurance
Receipts
30*
Individual
Income Taxes
37*
Where It Goes ...
National
Defense
29*
Direct Benefit
Payments
for Individuals
41*
Grants
to States
and Localities
10*
Other
Federal
Operations
5*
BUDGET MESSAGE OF THE PRESIDENT
To the Congress of the United States:
In the past 2 years we have experienced one of the strongest
economic recoveries of the post-war period. The prospect of a substantially brighter future for America lies before us. As 1985
begins, the economy is growing robustly and shows considerable
upward momentum. Favorable financial conditions presage a continuation of the expansion. Production, productivity, and employment gains have been impressive, and inflation remains well under
control. I am proud of the state of our economy. Let me highlight a
few points:
• The economy expanded at a 6.8% rate in 1984 and at a 6%
annual rate over the 2 years since the recession trough at
the end of 1982—faster than any other upturn since 1951.
• Confidence in the economy has prompted business firms to
expand their capital facilities. Real investment in new plant
and equipment has grown 15.4% annually since the end of
1982—faster than in any other post-war recovery.
• The ratio of real investment to real GNP has reached its
highest level in the post-war period.
• Industrial production is 23% above its level at the recession
trough in November 1982—a greater advance than in any
other recovery since 1958.
• Corporate profits have risen nearly 90% since the recession
trough in 1982—the fastest 8-quarter increase in 37 years.
• Civilian employment has grown 7.2 million over the past 25
months and the number of unemployed has fallen by 3.7
million. In the last 4 months alone, more than 1.1 million
Americans have found jobs.
• Inflation remains well under control. The December 1984 CPI
was 4% higher than a year earlier, about a third of the rate
of inflation this administration inherited. The GNP deflator,
the broadest measure of inflation, increased only 3.5% last
year and at only a 2.4% annual rate in the fourth quarter.
• The prime rate of interest is now only half of what it was
when I took office.
Contrast our current circumstances with the situation we faced
just 4 years ago. Inflation was raging at double-digit rates. Oil
prices had soared. The prime rate of interest was over 20%. The
economy was stagnating. Unemployment had risen sharply and
M3
M4
THE BUDGET FOR FISCAL YEAR 1986
was to rise further. America's standing in world opinion was at low
ebb.
All that, mercifully, is behind us now. The tremendous turnaround in our fortunes did not just happen. In February 1981, I
presented the four fundamentals of my economic program. They
were:
• Reducing the growth of overall Federal spending by eliminating activities that are beyond the proper sphere of Federal
Government responsibilities and by restraining the growth of
spending for other activities.
• Limiting tax burdens to the minimum levels necessary to
finance only essential government services, thereby strengthening incentives for saving, investment, work, productivity, and
economic growth.
• Reducing the Federal regulatory burden where the Federal
Government intrudes unnecessarily into our private lives, the
efficient conduct of private business, or the operations of
State and local governments.
• Supporting a sound and steady monetary policy, to encourage
economic growth and bring inflation under control.
FOUR YEARS OF ACCOMPLISHMENT
These policies were designed to restore economic growth and
stability. They succeeded.
The past 4 years have also seen the beginning of a quiet but
profound revolution in the conduct of our Federal Government. We
have halted what seemed at the time an inexorable set of trends
toward greater and greater Government intrusiveness, more and
more regulation, higher and higher taxes, more and more spending, higher and higher inflation, and weaker and weaker defense.
We have halted these trends in our first 4 years.
• The rate of Federal spending growth was out of control at
17.4% a year in 1980. Under my budget proposals the growth
of programmatic spending—that is, total Federal spending
except for debt service—will be zero next year—frozen at this
year's levels.
• Further, spending will grow only 30% over the 4 years from
1982 to 1986,. compared to its record pace of 66% between
1977 and 1981, and this despite legislated additions to my
program and the needed rebuilding of our defense capabilities.
• The Federal tax system was changed for the better—marginal
tax rates were reduced and depreciation reform introduced.
These reforms were designed to increase incentives for work,
training and education, saving, business growth, and capital
THE BUDGET MESSAGE OF THE PRESIDENT
M5
expansion. Tax loopholes have been closed, improving the
equity of the system.
• Domestic spending, which previously grew faster than any
other major part of the budget (nearly four-fold in real terms
between 1960 and 1980), will have been virtually frozen from
1981 to 1985.
• Our defense capabilities are now getting back to a level where
we can protect our citizens, honor our commitments to our
allies, and participate in the long-awaited arms control talks
from a position of respected strength.
• Federal credit programs, which had also grown out of control,
have been cut back, and their management has been vastly
improved.
• The rapid growth of regulations and red tape has also been
halted. The number of Federal rules published by agencies
has fallen by over 35% during the past 4 years, and many
unnecessary old rules have been eliminated. For the first
time, the Federal Register of new regulatory actions has
grown shorter for 4 consecutive years; it is now 41% shorter
than it was in 1980.
• Major management improvement initiatives are underway
that will fundamentally change the way the Federal Government operates. The President's Private Sector Survey on Cost
Control has completed its report, and many of its recommendations are included in this budget. The President's Council
on Integrity and Efficiency has reported $46 billion in improved use of funds through reduction of waste and fraud.
• The Federal nondefense work force has been reduced by over
78,000.
The proposals contained in this budget will build on the accomplishments of the last 4 years and put into action a philosophy of
government that is working and that has received the overwhelming endorsement of the American people.
THE 1986 BUDGET PROGRAM
If we took no action to curb the growth of spending, Federal
outlays would rise to over a trillion dollars in 1986. This would
result in deficits exceeding $200 billion in each of the next 5 years.
This is unacceptable. The budget I propose, therefore, will reduce
spending by $51 billion in 1986, $83 billion in 1987, and $105 billion
in 1988. Enactment of these measures would reduce the deficit
projected for 1988 to $144 billion—still a far cry from our goal of a
balanced budget, but a significant step in the right direction and a
42% reduction from the current services level projected for that
year.
M6
THE BUDGET FOR FISCAL YEAR 1986
Last year my administration worked with Congress to come up
with a downpayment on reducing the deficit. This budget commits
the Government to a second installment. With comparable commitments to further reductions in the next two budgets, and, I hope,
other spending reduction ideas advanced by the Congress, we can
achieve our goal in an orderly fashion.
The budget proposes a 1-year freeze in total spending other than
debt service. This will be achieved through a combination of freezes,
reforms, terminations, cutbacks, and management improvements in
individual programs. For a number of reasons, a line-by-line budget
freeze is not possible or desirable. Further, such an approach would
assume that all programs are of equal importance. Taken together,
the specific proposals in this budget hold total Federal spending
excluding debt service constant in 1986 at its 1985 level.
The budget proposals provide for substantial cost savings in the
medicare program, in Federal payroll costs, in agricultural and
other subsidies to business and upper-income groups, in numerous
programs providing grants to State and local governments, and in
credit programs. A freeze is proposed in the level of some entitlement program benefits, other than social security, means-tested
programs, and programs for the disabled, that have hitherto received automatic "cost-of-living adjustments" every year. The
budget proposes further reductions in defense spending below previously reduced mid-year levels.
Despite the reforms of the past 4 years, our Federal tax system
remains complex and inequitable. Tax rates are still so high that
they distort economic decisions, and this reduces economic growth
from what it otherwise could be. I will propose, after further consultation with the Congress, further tax simplification and reform.
The proposals will not be a scheme to raise taxes—only to distribute their burden more fairly and to simplify the entire system. By
broadening the base, we can lower rates.
THE BUDGET TOTALS
(In billions of dollars)
1984
actual
Receipts
Outlays
666.5
851.8
Deficit ( - )
1985
estimate
736.9
959.1
1986
estimate
1987
estimate
1988
estimate
793.7 861.7 950.4
973.7 1,026.6 1,094.8
-185.3 -222.2 -180.0 -164.9 -144.4
Note: Totals include outlays that are off-budget under current law, proposed to be included on-budget.
There will be substantial political resistance to every deficit reduction measure proposed in this budget. Every dollar of current
Federal spending benefits someone, and that person has a vested
self-interest in seeing these benefits perpetuated and expanded.
M7
THE BUDGET MESSAGE OF THE PRESIDENT
Freeze On Programmatic Outlays
$BIHions
$ Billions
1,000-
974
959
Debt :::::
::::: Service
800-
200-
U
V//////////A
^
y Prt>grammatic 'A
i
Outlays
^
Outers
/
ill
ml
i
1985
Ffecd Y«ars
Debt
:::: Service ::::
V///////////A
600-
400-
804
Estlmaie
-1,000
§§§§1
-800
-600
-400
-200
llBl
-fi
1986
Estimate
Prior to my administration, such interests had been dominant and
their expectations and demands had been met, time and time
again.
At some point, however, the question must be raised: "Where is
the political logrolling going to stop?" At some point, the collective
demands upon the public Treasury of all the special interests combined exceed the public's ability and willingness to pay. The single
most difficult word for a politician to utter is a simple,flat"No."
The patience of the American people has been stretched as far as it
will go. They want action; they have demanded it.
We said "no" frequently in 1981, and real spending for discretionary domestic programs dropped sharply. But we did not accomplish enough. We now have no choice but to renew our efforts with
redoubled vigor. The profusion of Federal domestic spending programs must be reduced to an acceptable, appropriate, and supportable size.
It will require political courage of a high order to carry this
program forward in the halls of Congress, but I believe that with
good faith and goodwill on all sides, we can succeed. If we fail to
reduce excessive Federal benefits to special interest groups, we will
M8
THE BUDGET FOR FISCAL YEAR 1986
be saddled either with larger budget deficits or with higher taxes—
either of which would be of greater harm to the American economy
and people.
1986 MANAGEMENT AND REGULATORY PROGRAM
Not only must both the scope and scale of Federal spending be
drastically cut back to reduce the deficit: we must also institute
comprehensive management improvements and administrative reforms to make sure that we use available funds as efficiently as
possible.
Tough but necessary steps are being taken throughout the Federal Government to reduce the costs of management and administration. Substantial savings in overhead costs have been achieved
under provisions of the Deficit Reduction Act of 1984. A 5% Federal civilian employee salary cut has been proposed; a 10% reduction
in administrative overhead has been ordered; termination of programs that have outlived their usefulness is proposed; outmoded,
inefficient agency field structures that have evolved over the past
half-century are being consolidated and streamlined to take advantage of efficiencies made possible by modern transportation, communication, and information technology.
Administration of Federal agencies is being made more efficient
through the adoption of staffing standards, automation of manual
processes, consolidation of similar functions, and reduction of administrative overhead costs. A program to increase productivity by
20% by 1992 in all appropriate Government functions is being
instituted, as are improved cash and credit management systems
and error rate reduction programs.
This management improvement program will result in a leaner
and more efficient Federal structure and will be described in a
management report that I am submitting to the Congress for the
first time shortly after my annual budget submission.
We have also made a great deal of progress in reducing the costs
imposed on businesses and State and local governments by Federal
regulations. These savings are estimated to total $150 billion over a
10-year period. We have reduced the number of new regulations in
every year of my first term and have eliminated or reduced paperwork requirements by over 300 million hours each year. In addition, the regulations are more carefully crafted to achieve the
greatest protection for the least cost, and wherever possible to use
market forces instead of working against them.
A recent Executive Order will strengthen the executive branch
coordination that has made these accomplishments possible. For
the first time, we will publish an annual program of the most
significant regulatory activities, including those that precede the
THE BUDGET MESSAGE OF THE PRESIDENT
M9
publication of a proposed rule. This will give Congress and the
public an earlier opportunity to understand the administration's
regulatory policies and priorities.
CONCLUSION
The key elements of the program I set out 4 years ago are in
place and working well. Our national security is being restored; so,
I am happy to report, is our economy. Growth and investment are
healthy; and inflation, interest rates, tax rates, and unemployment
are down and can be reduced further. The proliferation of unnecessary regulations that stifled both economic growth and our individual freedoms has been halted. Progress has been made toward the
reduction of unwarranted and excessive growth in domestic spending programs.
But we cannot rest on these accomplishments. If we are to attain
a new era of sustained peace, prosperity, growth, and freedom,
Federal domestic spending must be brought firmly under control.
This budget presents the steps that I believe must be taken. I do
not exclude other economies that Congress may devise, so long as
they do not imperil my fundamental constitutional responsibilities
to look after the national defense and the general welfare of the
American people.
Let us get on with the job. The time for action is now.
RONALD REAGAN
FEBRUARY 4,
1985
PART 2
MAJOR BUDGET
PROPOSALS
2-1
MAJOR BUDGET PROPOSALS
The budget reflects a determined effort to reduce the size of the
deficit by holding down Federal spending. Excluding debt service
costs, the budget proposals hold Federal spending in 1986 to $804
billion, the same level as in 1985. The budget proposes:
• a selective, 1-year freeze in funding for many programs and in
cost-of-living adjustments for some programs;
• a wide range of program terminations, reforms, and cuts;
• a 10% cut in administrative expenses for many programs;
• a 5% pay cut for civilian employees of the Federal Government; and
• various user fees to recover a portion of the costs of providing
special services and subsidies.
The budget proposes no changes in social security benefits. It
calls for additional cuts in defense spending but provides the funds
necessary to ensure our national security.
BUDGET TOTALS
(In billions of dollars)
1985
Current services:
Receipts
Outlays
Deficit ( - )
Proposed budget:
Receipts
Outlays
Deficit ( - )
1986
1987
1988
1989
1990
736.9 794.3 863.7 952.3 1,030.0 1,108.4
960.4 1,024.5 1,109.3 1,200.1 1,262.8 1,332.8
-223.6 -230.3 -245.6 -247.8 -232.8 -224.4
736 9
959.1
793 7 8617 950 4 1029 9 1107 7
973.7 1,026.6 1,094.8 1,137.4 1,190.0
-222.2 -180.0 -164.9 -144.4 -107.5
-82.4
The proposals in the budget reduce 1986 outlays by $50.8 billion
below the levels needed to maintain spending at current services.
In total, the budget proposals reduce outlays by $238.8 billion over
the next three years and $506.9 billion over the next 5 years.
Under the proposals put forth in the budget:
• Spending for national defense would be reduced by $8.9 billion in 1986 and $28.2 billion over 3 years from the levels
proposed in the Mid-Session Review of the 1985 Budget.
• Spending for entitlements would be reduced below currently
mandated levels by $13.9 billion in 1986 and $68.0 billion over
3 years.
2-2
2-3
MAJOR BUDGET PROPOSALS
• Spending for discretionary programs would be cut below the
levels needed to maintain current services by $21.2 billion in
1986 and $102.8 billion over 3 years.
• Changes in offsetting receipts would reduce outlays by $3.6
billion in 1986 and $9.6 billion over 3 years.
• As a result of these changes, debt service costs would be
reduced by $3.1 billion in 1986 and $30.2 billion over 3 years.
This section discusses the major proposals in the budget, and
compares them to the current services estimates, which assume no
change in policy. All outlay estimates cited include the outlays of
entities that are off-budget under current law, consistent with the
administration's proposal to shift these activities on-budget. This
section also discusses the current status of management reforms.
PROPOSED OUTLAY CUTS
(In billions of dollars)
1988
1989
1990
Total
1986-88
Total
1986-90
330.4
-9.2
368.5
-10.1
403.8
-11.5
441.6
-13.1
993.4
-28.2
1,838.9
-52.8
285.7
321.2
358.4
392.3
428.6
965.2
1,786.0
188.6
199.8
213.5
227.7
242.3
257.4
640.9
1,140.6
188.6
199.8
213.5
227.7
242.3
257.4
640.9
1,140.6
229.3
-0.2
238.4
-13.9
254.1
-24.1
272.4
-29.9
288.5
-38.2
305.6
-43.1
229.1
224.5
230.0
242.5
250.4
262.5
197.6
-1.5
188.3
-21.2
193.5
-36.2
201.1
-45.3
207.5
-50.3
196.0
167.1
157.3
155.8
157.2
-63.1
-0.1
-69.3
-3.6
-72.9
3.1
71.4
-2.9
-74.6
-2.7
-78.0 -213.7 -366.3
-1.9
- 9 . 6 -14.2
-63.2
-73.0
-76.1
-74.3
-77.2
-79.9 -223.3 -380.4
154.8
-0.1
172.8
-3.1
190.8
-9.9
201.8
-17.1
195.2
-22.7
192.7
30.2
565.4
30.2
953.3
-83.1
154.7
169.7
180.8
184.7
172.6
162.5
535.2
870.3
1985
1986
1987
253.2
+0.6
294.6
-8.9
Budget
Entitlements and other
mandatory:
Social security:
Current services
Policy change
253.8
Budget
Other:
Current services
Policy change
National defense:
Current services
Policy change
Budget
Discretionary programs:
Current services
Policy change
Budget
Offsetting receipts:
Current services
Policy change
Budget
Debt service:
Current services
Policy change
Budget
Total Budget Outlays:
Current services
Policy change
Budget
960.4
-1.4
959.1
765.0 1,359.1
-68.0 -149.2
697.0
1,209.9
213.4
583.0 1,003.9
- 5 4 . 5 -102.8 -207.6
158.9
480.2
796.2
1,024.5 1,109.3 1,200.1 1,262.8 1,332.8 3,333.9 5,929.4
-50.8 -82.7
105.3 -125.4 -142.7 -238.8 -506.9
973.7
1,026.6 1,094.8
1,137.4
1,190.0 3,095.1 5,422.5
2-4
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL DEFENSE
Since 1981, the administration has made important progress
toward ensuring that our defense capabilities are strong enough to
protect our national interests. The need to sustain the progress we
have already made, combined with the relentless growth in the
threats to U.S. security, requires continuing real growth in the
resources committed to our defense capabilities.
Budget authority of $313.7 billion is requested for the Department of Defense in 1986, a 5.9% increase over 1985 in real terms
(i.e., after adjustment for inflation). The 3-year budget request is
$29.6 billion below the current services level, reflecting the administration's efforts to hold down program costs. In keeping with past
practice, the current services baseline represents the most recent
NATIONAL DEFENSE
(Dollars in billions)
1987
Budget Authority
Totals:
Current services
Proposed savings
Major program changes:
Department of Defense—Military:
Current services
Proposed savings
Proposed total
Rate of real growth (percent).
Atomic energy and defense related:
Current services
Proposed savings
Budget Outlays
Totals:
Current services
Proposed savings
Major program changes:
Department of Defense—Military:
Current services
Proposed savings
Rate of real growth (percent).
Atomic energy and defense related:
Current services
I savings
1988
1989
1990
Total
1986-88
Total
1986-90
333.6
-11.4
371.9
-8.7
421.4
-10.0
460.6
-11.8
501.5
-13.4
1,127.0
-30.0
2,089.1
-55.2
324.8
-11.1
362.6
-8.6
411.5
-9.9
450.5
-11.7
490.9
-13.2
1,098.9
-29.6
2,040.3
-54.5
313.7
5.9
354.0
8.2
401.6
8.8
438.8
5.0
477.7
4.8
1,069.3
24.8
1,985.8
37.3
8.8
-0.3
9.3
-0.1
9.9
-0.1
10.1
-0.1
10.6
-0.2
28.1
-0.4
48.8
-0.7
294.6
-8.9
330.4
-9.2
368.5
-10.1
403.8
-11.5
441.6
-13.1
993.4
-28.2
1,838.9
-52.8
286.2
-8.7
321.5
-9.2
358.8
-10.2
393.8
-11.5
431.2
-12.9
966.5
-28.1
1,791.5
-52.5
277.5
8.3
312.3
7.7
348.6
6.8
382.3
5.2
418.3
5.3
938.4
24.7
1,739.0
38.2
8.4
-0.2
8.9
9.7
+0.1
10.0
10.4
-0.2
26.9
-0.1
47.3
-0.3
* $50 million or less.
previous Department of Defense-Military policy level, namely the
revised mid-session policy levels, as extended through 1990.
2-5
MAJOR BUDGET PROPOSALS
ENTITLEMENTS AND OTHER MANDATORY PROGRAMS
Under existing law, entitlements and other mandatory programs
are estimated to account for 43% of budget outlays in 1986. An
entitlement program is one that provides benefits to or for any
individual who meets the eligibility requirements established by
law. Many entitlements, such as social security and unemployment
benefits, are largely funded by social insurance taxes. Other entitlements, like medicaid, aid to families with dependent children,
and veterans compensation, are funded by annual appropriations.
In both cases, actual outlays for a program depend upon the
number of eligible individuals who apply and the amounts of benefits for which they are eligible. Outlays for certain other mandatory programs, such as farm price supports, also depend upon the
general eligibility and benefit criteria established by law.
Under existing laws and regulations, outlays for entitlements
and other mandatory programs are estimated to rise from $417.9
billion in 1985 to $438.2 billion in 1986 and to reach $500.1 billion
by 1988. The administration is proposing freezes in selected cost-ofliving adjustments and reforms in selected programs to restrain
the growth of entitlement spending. These proposals are estimated
to produce savings of $13.9 billion in 1986 and $68.0 billion over the
next 3 years.
RETIREMENT, DISABILITY, AND UNEMPLOYMENT BENEFITS
(Dollars in billions)
Totals
Current services
Proposed savings
Percent change
Major Programs and Changes
Social security:
Current services
Proposed savings
Railroad retirement:
Current services
Proposed savings
Military retirement:
Current services
Proposed savings
Federal employee retirement:
Current services
Proposed savings
Other retirement and disability:
Current services
Proposed savings
Unemployment:
Current services
Proposed savings
* $50 million or less.
1986
1987
275.9
-1.4
-0.5
293.1
-2.4
-0.8
199.8
Total
1986-88
Total
1986-90
1989
1990
311.1
-3.1
-1.0
329.6
-3.8
-1.2
348.6
-4.6
-1.3
880.1
-6.9
-0.8
1,558.4
-15.3
-1.0
213.5
227.7
242.3
257.4
640.9
1,140.6
3.7
3.7
-0.1
3.9
-0.1
4.1
-0.1
4.3
-0.1
11.2
-0.2
19.7
-0.4
18.3
-0.5
19.4
-0.7
20.6
-0.8
21.9
-0.8
23.1
-0.9
58.4
-2.0
103.3
-3.6
25.3
-0.8
27.1
-1.4
29.0
-2.0
30.9
-2.7
32.9
-3.3
81.4
-4.2
145.2
-10.2
12.5
-0.1
12.8
-0.2
13.2
-0.2
13.6
-0.3
13.9
-0.3
38.6
-0.5
66.0
-1.1
16.3
16.6
16.8
16.9
17.1
49.7
83.6
2-6
THE BUDGET FOR FISCAL YEAR 1986
Retirement, disability, and unemployment.—On a current services
basis, outlays for retirement, disability, and unemployment benefits are estimated to be $275.9 billion in 1986 and $311.1 billion in
1988. Social security accounts for roughly three-fourths of the outlays in this category. Most of the programs in this category are
financed primarily by payroll taxes and contributions. Almost all
retirement and disability benefits are indexed under current law
and receive annual cost-of-living adjustments (COLA's).
The administration is proposing a 1-year COLA freeze in retirement benefits for former military and civilian employees of the
Federal Government and in the industry pension component of
railroad retirement payments. Under this proposal, the January
1986 COLA for these programs would be eliminated. Black lung
benefits, which are tied to Federal pay rates, would be frozen at
the level existing before the proposed 5% cut in Federal pay until
Federal pay rates exceed the levels before the proposed cut in
Federal pay. No change is proposed in the COLA for social security, supplemental security income and veterans compensation.
The administration also proposes a number of legislative reforms
in retirement and disability benefits for Federal civilian employees.
The major reforms are:
• after the 1-year freeze, use of the lower of the CPI or Federal
white collar pay increase to determine the cost-of-living adjustment for civilian retirees, and a limit of 55% of the COLA
for benefits over $10,000;
• a reduction in the annuities of employees who retire early;
and
• revisions in the base used to compute benefits.
In total, these proposals are estimated to result in outlay savings
of $1.4 billion in 1986 and $6.9 billion over the next 3 years.
Medicare and medicaid.—Outlays for medicare and medicaid benefits are projected to rise from $94.3 billion in 1986 to $115.1 billion
in 1988 under existing laws and policies.
For medicare, the budget reflects a variety of administrative
actions and legislative proposals to freeze certain payments and
achieve other reforms. The rates paid to hospitals under the prospective payment system for diagnosis-related groups in 1986 are
assumed to be maintained at 1985 levels. Best available evidence
indicates that the rates for 1985, which were set in September
1984, appear too high. Legislation is being proposed to extend the
existing freeze on payments to physicians until October 1986.
The administration will also propose legislative reforms to:
• increase the proportion of the costs of supplementary medical
insurance financed by beneficiary premiums from 25% to
35% by 1990;
2-7
MAJOR BUDGET PROPOSALS
MEDICARE AND MEDICAID OUTLAYS
(Dollars in billions)
Totals
Current services
Proposed savings
Percent change
Major Programs and Changes
Medicare benefits:
HI (Part A):
Current services
Proposed savings
SMI (Part B):
Current services
Proposed savings
Premiums and collections:
Current services
Proposed savings
Medicaid:
Current services
Isavings
1988
1989
1990
Total
1986-88
Total
1986-90
103.6
-8.4
-8.2
115.1
-11.5
-10.0
128.0
-15.2
-11.9
142.1
-19.4
-13.7
313.0
-25.1
-8.0
583.1
-59.8
-10.2
50.4
-3.2
55.2
-4.7
61.0
-5.3
67.6
-6.0
74.6
-6.7
166.7
-13.1
308.8
-25.9
25.1
-0.8
28.4
-0.9
32.2
-1.2
36.3
-1.6
40.9
-2.1
85.6
-3.0
162.7
-6.7
-6.0
-0.2
-6.9
-0.7
-7.5
-1.7
-8.0
-3.0
-8.4
-4.6
-20.4
-2.6
-36.8
-10.3
24.7
-1.1
26.9
-2.1
29.4
-3.3
32.2
-4.6
35.0
-6.0
81.1
-6.5
148.3
-17.0
1986
1987
94.3
-5.1
-5.5
• index the deductible for supplementary medical insurance,
starting in 1987; and
• reduce the indirect medical education payment.
These and other proposals are expected to result in savings of
$4.1 billion in 1986 and a total of $18.7 billion over the next 3
years. Even with these savings, medicare outlays are expected to
grow at an average annual rate of 7.6% from 1985 to 1988.
The annual average rate of growth in Federal outlays for medicaid dropped from 14.2% in 1974-1981 to 6.2% from 1981 to 1983 as
a result of cost reforms enacted in 1981. However, these reforms
expired in 1984; in the absence of further reforms, the rate of
growth threatens to accelerate again. The administration is proposing legislation to limit the growth in medicaid benefits in 1986 to
$1 billion below the current services level. The administration is
also proposing to freeze the amounts that States receive for administrative expenses in 1986. In subsequent years, the growth in.
medicaid costs would be limited to the growth in the medical
component of the Consumer Price Index and administrative expenses would be limited to the rise in the implicit price deflator for
gross national product. The legislation would also give States additional flexibility to control costs and would remove burdensome
matching requirements. These proposals are estimated to save $1.1
billion in 1986 and $6.5 billion over the next 3 years.
Means-tested,—Outlays for means-tested programs, excluding
medicaid, are estimated to rise from $43.3 billion in 1986 to $46.8
2-8
THE BUDGET FOR FISCAL YEAR 1986
MEANS-TESTED ENTITLEMENTS—OUTLAYS
(Dollars in billions)
Total
1986-88
Total
1986-90
1986
1987
1988
1989
1990
43.3
-1.3
-3.0
44.8
-1.6
-3.5
46.8
-1.6
-3.5
47.2
-1.6
-3.5
47.4
-1.7
-3.7
134.9
-4.5
-3.3
229.4
-7.9
-3.4
9.1
-0.2
9.5
-0.2
9.7
-0.2
10.0
-0.2
10.1
-0.2
28.3
-0.6
48.4
-1.0
12.7
13.2
-0.1
13.7
-0.1
14.2
-0.1
14.6
-0.1
39.6
-0.2
68.4
-0.3
4.1
-0.6
4.5
-0.9
4.8
-1.0
5.2
-1.1
5.5
-1.2
13.4
-2.6
24.0
-4.8
3.3
-0.4
3.3
-0.4
3.0
-0.4
2.6
-0.3
2.5
-0.3
9.6
-1.2
14.6
-1.7
9.0
9.4
10.6
10.3
9.8
29.0
49.0
1.3
1.2
1.1
1.1
1.0
3.5
5.6
3.8
3.8
3.9
3.9
3.9
11.5
19.3
Totals
Current services
Proposed savings
Percent change
Major Programs and Changes
AFDC:
Current services
Proposed savings
Food stamps:
Current services
Proposed savings
Child nutrition:
Current services
Proposed savings
Guaranteed student loans:
Current services
Proposed savings
SSI benefits:
Current services
Proposed savings
Earned income tax credit:
Current services
Proposed savings
Veterans pensions:
Current services
Proposed savings
*$50 million or less.
billion in 1988 under existing law. The savings proposed for these
programs total $1.3 billion in 1986 and $4.5 billion over 3 years.
The administration is proposing reforms in food stamps, child
nutrition, and aid to families with dependent children (AFDC) that
would:
• require all employable AFDC and food stamp recipients to
engage in work-related activities as a condition of eligibility;
• target nutrition benefits to children from lower-income families and discontinue subsidies for children of families with
high income;
• freeze child nutrition reimbursement rates to schools and
other institutions for 1 year;
• replace the open-ended entitlement funding for State administration of AFDC, food stamps and medicaid with a fixed Federal grant; and
• give States greater flexibility to allocate administrative funds
efficiently, including transferring funds among State-administered public assistance programs.
These proposals are estimated to reduce outlays by $0.9 billion in
1986 and $3.3 billion over the next 3 years.
2-9
MAJOR BUDGET PROPOSALS
Proposed reforms for guaranteed student loans (GSL) include
reducing the subsidies paid to lenders, pegging the interest rate
that borrowers must pay to the 91-day bill rate paid by the U.S.
Treasury, limiting directly subsidized loans to students whose families have adjusted gross incomes below $32,500, and improving the
management of disbursements and collections. In addition, the administration proposes to set a cap of $4,000 a year on the total
amount of aid, including directly subsidized guaranteed student
loans, that a student can receive under Title IV of the Higher
Education Act. Any student who wishes to receive aid would be
expected to contribute $800 per year toward his or her education
costs. These reforms are expected to reduce outlays for GSL by $0.4
billion in 1986 and by $1.2 billion over the next 3 years.
No changes are proposed for supplemental security income (SSI)
benefits, veterans pensions, or the earned income tax credit.
Other mandatory programs,—This category includes a variety of
different programs, the outlays of which are determined by program eligibility and benefit criteria and which therefore are relatively uncontrollable under existing law. On a current services
basis, outlays for these programs are projected to be $24.8 billion in
1986 and $27.1 billion in 1988. The outlay savings proposed by the
OTHER MANDATORY OUTLAYS
(Dollars in billions)
1990
Total
1986-88
Total
1986-90
26.0
-17.5
-67.1
24.9
-17.3
-69.6
77.8
-31.5
-40.5
128.8
-66.3
-51.5
15.6
-7.9
15.4
-11.5
15.1
-11.2
42.8
-16.1
73.3
-38.8
4.6
-4.6
4.6
-4.6
4.6
-4.6
4.6
-4.6
13.7
-12.6
22.9
-21.7
1.5
1.6
+0.1
1.8
-0.1
2.0
-0.3
2.2
-0.4
4.9
9.0
-0.6
-0.2
-0.2
-0.2
-0.3
0.1
-0.3
0.1
-0.6
0.2
-1.2
Current services
Proposed savings
0.2
-0.1
0.2
-0.2
0.3
-0.2
0.3
-0.2
0.3
-0.3
0.7
-0.5
1.3
-1.0
Other:
Current services
Proposed savings
5.9
-0.3
5.0
-0.7
4.8
-0.7
3.7
-0.6
2.7
-0.6
15.7
-1.7
22.1
-2.9
Totals
Current services
Proposed savings
Percent change
Major Program Changes
Farm price supports:
Current services
Proposed savings
General revenue sharing:
Current services
Proposed savings
Federal employee health benefits:
Current services
Pension Benefit Guaranty Corporation:
Current services
Proposed savings
Crop insurance fund:
* $50 million or less.
1986
1987
1988
24.8
-6.1
-24.6
26.0
-11.8
-45.2
27.1
-13.6
-50.4
12.6
-2.0
14.6
-6.1
4.6
-3.4
1989
2-10
THE BUDGET FOR FISCAL YEAR 1986
administration are estimated to be $6.1 billion in 1986 and to total
$31.5 billion from 1986 to 1988.
Farm price supports is the largest program in this category. If
the present programs were left unchanged, outlays for commodity
price supports and related programs are projected to rise from
$12.6 billion in 1986 to $15.6 billion in 1988. The administration is
proposing legislation to bring loan rates and target prices into
alignment with market prices, to target payments and loans to
smaller-sized family farmers, and to phase out production controls.
This proposal will stabilize prices and improve our competitive
position in the world export market. The budget also reflects an
increased guarantee fee for export credit and a reduction in administrative costs. The proposals affecting farm price supports are
estimated to result in savings of $2.0 billion in 1986 and $16.1
billion over the next 3 years.
General revenue sharing currently provides $4.6 billion a year to
local governments. The administration is proposing legislation to
end the program in 1986, one year before the current authorization
expires. This termination is essential in order to achieve the President's goal of reducing the Federal deficit and is consistent with
other large reductions proposed in the budget. In an austere Federal budget, national priorities must be met first. The budget includes outlays of $1.2 billion for this program in 1986, reflecting
the final quarterly payment from the 1985 program.
The administration is again proposing legislation to encourage
Federal employees to seek lower-cost health coverage and to decrease the Federal share of the cost of these benefits. This proposal
would not take effect until 1987. The administration is also reproposing legislation to increase premiums paid by private employers
for Federal insurance of the private pension benefits they promise
their employees. Premiums would be raised to a level sufficient to
cover projected claims and amortize the current deficit of the Pension Benefit Guaranty Corporation over 15 years.
The budget proposes a 5-year phaseout of Federal operating and
premium subsidies in an effort to put Federal crop insurance on a
full pay-as-you-go basis by 1990. Other changes in mandatory programs include the proposed termination of subsidies for ship building and increased fees for mortgage backed securities guaranteed
by the Government National Mortgage Association.
DISCRETIONARY PROGRAMS
This category includes a wide range of programs subject to
annual appropriations or to loan limitations imposed in appropriation acts. It includes programs ranging from the basic activities of
government—such as the conduct of foreign affairs and the tax
collection system—to grants to State and local governments for
MAJOR BUDGET PROPOSALS
2-11
education, highway construction, and community development. It
also includes foreign assistance, space programs, law enforcement,
energy, flood control and land reclamation, air traffic control,
health research, veterans medical care, and other financial assistance and services.
While the level of funding for these programs is controlled by
appropriations limits, the outlay impact of changes in appropriations varies greatly. For activities such as salaries or operations
and maintenance, most of the funds are spent in the year for which
they are appropriated. In other cases, such as construction, only a
small portion of the funds is spent in the first year.
On a current services basis, outlays for discretionary programs
are estimated to rise from $188.3 billion in 1986 to $201.1 billion in
1988. The administration is proposing a 1-year freeze for many
discretionary programs and a 10% cut in most administrative services and overhead expenses. The budget also proposes that certain
programs be reduced below the freeze level and that other, lowpriority programs be terminated in 1986 or over a period of years,
and calls for increases in a few high-priority programs. The savings
proposed for discretionary programs total $21.2 billion in 1986 and
$102.8 billion over 3 years.
Dedicated funding and business operations.—This category in-
cludes programs, other than social insurance programs, that are
funded entirely or largely by special taxes or fees for business-type
operations. Current service outlays for these programs, net of offsetting fees, are estimated to rise from $18.7 billion in 1986 to $21.1
billion in 1988. The savings proposed in the budget reduce net
spending by $2.4 billion in 1986 and $10.1 billion over the next 3
years.
From 1983 through 1986, the amounts authorized to be spent
from the highway trust fund are estimated to exceed revenues
flowing into the fund by $9.5 billion. In view of this situation, the
administration proposes to freeze total obligations for Federal-aid
highways at $14.2 billion in 1986 and 1987. In 1988 and 1989, the
budget estimates assume obligation rates of $15.0 billion.
The administration requests $5.1 billion in 1986 budget authority
for activities of the Federal Aviation Administration, including
operations, capital investment, and grants for airports. This request continues modernization of the airway system, although the
amounts proposed in the budget are slightly below the current
services baseline. Aviation tax receipts in 1986 are estimated to be
$3.2 billion, less than two-thirds the amount of budget authority
planned for the program.
Federal grants to States for employment and unemployment insurance services are almost entirely financed from the Federal
unemployment tax levied on employers. These grants support the
THE BUDGET FOR FISCAL YEAR 1986
2-12
DEDICATED FUNDING AND BUSINESS OPERATIONS—OUTLAYS
(Dollars in billions)
1986
Totals
Current services
Proposed savings
Total
1986-88
Total
1986-90
1987
1988
1989
1990
18.7
-2.4
-12.6
20.4
-3.5
-17.3
21.1
-4.3
-20.2
21.7
-4.4
-20.2
22.5
-5.0
-22.4
60.2
-10.1
-16.8
104.4
-19.5
-18.7
13.7
+*
14.9
-0.9
15.7
-1.5
16.4
-1.8
17.1
-2.3
44.2
-2.4
77.6
-6.5
4.8
-0.1
5.1
-0.5
5.2
-0.6
5.4
-0.9
5.5
-1.1
15.1
-1.2
26.1
-3.2
1.0
-0.1
1.0
-0.1
1.1
-0.1
1.1
-0.1
1.2
-0.2
3.1
-0.2
5.3
-0.5
-0.4
-1.0
-0.5
-0.9
-0.4
-0.9
-0.4
-0.6
-0.5
-0.3
-1.3
-2.8
-2.1
-3.7
0.3
-0.4
0.2
-0.4
0.2
-0.4
0.1
-0.3
0.1
-0.3
0.8
— 1.1
1.0
-1.8
-1.1
-0.2
-1.2
-0.4
-1.4
-0.3
-1.5
-0.2
-1.5
-0.2
-3.7
-0.9
-6.7
-1.4
0.4
-0.6
0.3
-0.6
0.4
-0.7
0.3
-0.8
0.2
-0.8
1.0
-2:0
1.5
-3.5
0.2
0.3
_*
0.3
0.3
-0.1
0.3
-0.1
0.8
-0.1
1.5
-0.2
0.5
+0.1
0.6
+0.3
0.6
+0.4
0.6
+0.4
0.6
+0.4
1.8
+0.8
2.9
+ 1.6
-0.6
-0.1
-0.4
-0.1
-0.6
-0.1
-0.6
-0.1
-0.5
-0.1
-1.7
-0.2
-2.8
-0.3
Major Programs and Changes
Highways:
Current services
Proposed savings
Aviation:
Current services
Proposed savings
State employment service:
Current services
Proposed savings
Power marketing:
Current services
Proposed savings
Forest Service:
Current services
Proposed savings
FHA:
Current services
Proposed savings
Veterans housing loan guarantees:
Current services
Proposed savings
Surface mining reclamation:
Current services
Proposed savings
Superfund:
Current services
Proposed increases
Other:1
Current services
savings
* 50 million or less.
^ KflCnlQGS DUCWdf W3SI6
enrichment, and petroleum reserves.
total cost of job search and placement services for job seekers,
recruitment and special technical assistance for employers, and
administration of State unemployment insurance (UI) programs.
Working with the States, the administration is developing legislation that it will propose to devolve to the States, beginning in 1988,
full responsibility for managing and financing their employment
and unemployment insurance services. The Federal unemployment
tax will be reduced accordingly, offset by expected increases in
State deposits in the unemployment trust fund as States assume
responsibility.
The Federal power marketing administrations are required by
law to repay with interest the original Federal investment in hydroelectric generation and transmission projects, and a portion of
MAJOR BUDGET PROPOSALS
2-13
the irrigation investments. The budget proposes that the power
marketing administrations repay their debt to the Treasury in a
business-like way—on a regular and timely basis and at interest
rates that reflect the current cost of money to the government.
Total savings are projected to be $1.0 billion in 1986 and $2.8
billion over 3 years.
The Forest Service shares certain receipts received from timber
and sales on Federal lands with State and local governments. The
administration is proposing legislation to deduct the Federal costs
of obtaining these receipts before calculating the States' share.
Similar legislation is proposed for receipts from mineral leases.
As part of its effort to increase fees on Federal loans and loan
guarantees, the administration proposes to increase the fees on
loans made and guaranteed by the Veterans Administration (VA)
from 1.0% to 5.0%. Premiums on loans insured by the Federal
Housing Administration (FHA) will be raised from 3.8% to 5.0%.
These increases will reduce the Federal subsidy, cover VA losses,
and provide additional reserves to the FHA fund.
The budget levels for superfund, the program to clean up hazardous waste dump sites, are substantially above the current services
estimates. The administration will submit legislation that greatly
expands the national effort to clean up abandoned wastes. To pay
for this program, the legislation will triple the annual tax revenues
that finance it. There will also be a vigorous enforcement effort to
recover funds from responsible parties whenever they can be identified.
Forward-funded and related programs,—By law, appropriations
for some programs do not become available for obligation until the
fourth quarter of the year because they are intended to be used
primarily during the following year. Such programs are forwardfunded. Examples include education for the handicapped and compensatory education. In other cases, programs operate in this way
because of their relationship to the academic year, even though the
law does not require it. An example is student financial assistance.
The proposals in the budget reduce 1986 outlays by only $0.7
billion but will save $7.1 billion over 3 years.
The administration is proposing to rescind $245 million of 1985
budget authority for summer youth employment and grants for
services for dislocated workers for the program year that runs from
July 1, 1985 to June 30, 1986. In 1984, funding for these programs
exceeded the amount that could be utilized. The administration
also proposes to terminate the Job Corps program. The program
has a high cost per training year and a low job placement rate for
its trainees. Termination costs will be financed from the 1985 appropriation.
The administration proposes significant reforms for Federal stu-
2-14
THE BUDGET FOR FISCAL YEAR 1986
OUTLAYS FOR FORWARD-FUNDED AND RELATED PROGRAMS
(Dollars in billions)
1987
1988
1989
1990
Total
1986-88
Total
1986-90
20.6
-0.7
-3.4
21.2
-2.9
-13.6
21.9
-3.5
-16.0
22.7
-3.8
-16.7
23.5
-4.0
-17.2
63.7
-7.1
-11.1
110.0
-14.9
-13.6
3.7
-0.1
3.7
-0.7
3.8
-1.0
4.0
-1.1
4.1
-1.2
11.3
-1.8
19.4
-4.1
3.8
3.9
-0.2
4.0
-0.3
4.2
-0.3
4.3
-0.3
11.7
-0.5
20.2
-1.1
1.2
*
1.4
-0.1
1.4
-0.1
1.5
-0.1
1.5
-0.1
4.0
-0.2
7.1
-0.4
0.9
_*
0.9
_*
0.9
-0.1
0.9
-0.1
1.0
-0.1
2.6
-0.1
4.6
-0.3
0.2
0.3
0.3
-0.1
0.3
-0.1
0.3
-0.1
0.8
-0.1
1.3
-0.3
4.8
-0.3
4.9
-1.1
5.1
-1.3
5.3
-1.4
5.5
-1.4
14.8
-2.8
25.5
-5.6
0.5
-0.1
0.5
-0.2
0.5
-0.2
0.5
-0.3
0.5
-0.3
1.4
-0.5
2.5
-1.0
5.1
-0.1
5.2
-0.5
5.4
-0.5
5.5
-0.5
5.7
-0.6
15.6
-1.2
26.9
-2.2
0.3
0.3
0.3
0.3
0.3
1.0
1.6
0.2
0.2
0.2
0.2
0.2
+0.1
0.6
1.0
+0.1
1986
Totals
Current services
Proposed savings
Major Program Changes
Employment and training assistance:
Current services
Proposed savings
Compensatory education:
Current services
Proposed savings
Education for the handicapped:
Current services
Proposed savings
Vocational and adult education:
Current services
Proposed savings
Other elementary education.Current services
Proposed savings
Student financial assistance:
Current services
Proposed savings
Other higher education:
Current services
Proposed savings
National Institutes of Health:
Current services
I savings
Community service employment for
older Americans:
Current services
Public Broadcasting Corporation:
Current services
Proposed savings
* $50 million or less.
dent aid to cap costs in the currently open-ended system, reduce
program abuse, and target aid to needy students. The total amount
of aid any student could receive under Title IV of the Higher
Education Act in directly subsidized programs would be capped at
$4,000 a year. An eligibility limit of $25,000 in adjusted gross
income would be set for grants, direct loans, and subsidized jobs.
All students would be expected to provide at least $800 a year
toward their education in order to qualify for Federal student aid.
Budget authority for the remaining major education programs in
this category is proposed at the freeze level.
For the National Institutes of Health, the budget proposes to
continue to fund 5,000 new and competing research grants and 500
research centers in 1986 and thereafter. This is the same level of
program activity as in 1985.
MAJOR BUDGET PROPOSALS
2-15
Slow-spending programs,—More than half of the outlays for programs in this category results from budget authority provided in
earlier years. On a current services basis, outlays are projected to
rise from $40.4 billion in 1986 to $42.7 billion in 1988. The administration request for 1986 budget authority is $17.0 billion below the
current services baseline, which results in 1986 outlay savings of
$2.9 billion. The outlay savings from 1986 to 1988 are estimated to
be $16.0 billion.
The administration believes that the funding of local transportation is not a legitimate Federal role, since the benefits of mass
transit accrue locally, not nationally. Local governments whose
citizens benefit from local transit should bear the full costs of their
capital and operating decisions. The administration, therefore, proposes to terminate in 1986 the discretionary grants programs, to
end operating subsidies, to reduce formula-based capital grants to
$1.1 billion (the amount raised by the one-cent motor fuel tax for
transit), and to raise the required local share for formula capital
grants.
The administration believes that State and local governments
and the private sector also have the primary role in supporting
local development projects. The administration proposes to continue the community development block grant as the principal Federal community and regional development program, because it gives
State and local governments a source of funds with which to supplement their own resources in ways that they choose. Budget
authority requested for 1986 is 10% below the 1985 level. The
administration is proposing no further funding for urban development action grants and the Economic Development Administration
because these programs merely assist local governments in their
efforts to compete with other areas to attract private investment.
The administration is also proposing to terminate the Appalachian
Regional Commission and most grants for housing and rural development provided by the Farmers Home Administration. Rural communities will still receive funding from the CDBG program. Reductions are also proposed in community development programs of the
Tennessee Valley Authority.
The budget proposes a 2-year moratorium on funding for additional housing units subsidized by the Department of Housing and
Urban Development.
The budget recommends that funding by the Environmental Protection Agency for the construction of sewage treatment plants be
phased out by 1990, and that future grants be limited to projects
already underway. This program has achieved its original mission
of assisting local communities in eliminating the backlog of needed
construction. The administration proposes to phase out energy con-
2-16
THE BUDGET FOR FISCAL YEAR 1986
OUTLAYS FOR SLOW-SPENDING DISCRETIONARY PROGRAMS
(Dollars in billion)
1990
Total
1986-88
Total
1986-90
43.8
-9.0
-20.6
44.7
-10.5
-23.4
124.6
-16.0
-12.8
213.0
-35.4
-16.6
3.9
-2.1
4.1
-2.6
4.2
-2.7
11.5
-4.2
19.8
-9.5
3.5
-0.1
3.5
-0.3
3.7
-0.4
3.8
-0.4
10.6
-0.5
18.1
-1.2
0.5
0.6
-0.1
0.5
-0.2
0.5
-0.3
0.5
-0.5
1.6
-0.4
2.6
-1.2
0.6
-0.1
0.6
-0.2
0.6
-0.3
0.6
-0.4
0.6
-0.4
1.7
-0.6
2.9
-1.4
0.8
-0.2
0.8
-0.3
0.7
-0.5
0.7
-0.5
0.7
-0.5
2.4
-1.1
3.8
-2.1
11.0
-1.3
11.5
12.1
-2.1
12.6
-1.9
13.1
-2.0
34.6
-5.2
60.3
-9.0
1986
1987
1988
1989
40.4
-2.9
-7.3
41.5
-5.3
-12.7
42.7
-7.8
-18.2
4.0
-0.8
3.6
-1.3
3.5
*
Totals
Current services
Proposed savings
Percent change
Major Program Changes
Mass transit:
Current services
Proposed savings
Community development block grants:
Current services
Proposed savings
Urban development action grants.Current services
Proposed savings
Rural water grants and other FmHA:
Current services
Proposed savings
Other community development:
Current services
Isavings
Current services
Proposed savings
Sewage construction grants:
Current services
Proposed savings
Energy:1
Current services
Proposed savings
Veterans hospital construction:
Current services
Proposed savings
Rural conservation:
Current services
Proposed savings
Water resources:
Current services
Proposed savings
Other:
Current services
Proposed savings
2.6
2.4
2.4
-0.2
2.4
-0.4
2.4
-0.9
7.4
-0.2
12.2
-1.6
0.8
-0.2
0.8
-0.3
0.8
-0.4
0.8
-0.4
0.8
-0.4
2.4
-0.8
4.0
-1.5
0.8
1.1
-0.3
1.2
-0.4
1.4
-0.5
1.6
-0.7
3.2
-0.7
6.2
-1.8
0.3
-0.1
0.3
-0.2
0.3
-0.2
0.3
-0.2
0.3
-0.3
0.8
-0.5
1.3
-1.0
4.4
-0.2
4.3
-0.2
4.5
-0.1
4.4
*
4.4
+ 0.1
13.2
-0.5
22.0
-0.4
11.0
12.0
-0.4
12.2
-1.0
12.3
-1.4
12.3
-1.9
35.2
-1.4
59.9
-4.7
*$50 million or less.
1
Includes energy conservation and fossil R&D.
servation programs over the next 5 years because of the improvement in oil market conditions. In addition, the administration proposes to reduce fossil energy resfarch and development and emphasize more fundamental research in order to bring the program in
line with an appropriate governmental role.
MAJOR BUDGET PROPOSALS
2-17
The administration proposes an indefinite moratorium on further development of the Strategic Petroleum Reserve (SPR) at the
end of 1985, when the level of crude oil in storage will be 489
million barrels. In view of the rapid buildup of the reserve over the
past 4 years and the favorable changes in world oil markets, the
SPR can now provide considerably more protection against supply
disruptions than was envisioned when plans for a 750 million
barrel stockpile were set in 1979. The moratorium will reduce
outlays by $5.2 billion between 1986 and 1988. It will be reassessed
as warranted if fiscal and oil market conditions change. The SPR
will continue to be maintained in a state of standby readiness.
The budget does not propose expanded investment in veterans
hospital construction because the effects of the proposed reforms in
eligibility for veterans medical care are uncertain.
The proposed reduction in water resources programs reflects a 1year freeze, greater cost sharing, and termination of the watershed
programs of the Soil Conservation Services. Most of the proposed
funding for water resource development covers construction of
projects started in previous years and operation and maintenance
of completed projects. The levels proposed in the budget for the
Corps of Engineers are dependent upon enactment of proposed user
fees, which are not reflected in the table above.
Fast-spending discretionary programs.—The remaining discretionary programs cover a wide range of activities, including the
space program, energy research, and law enforcement. This category also includes the costs of administering most nondefense programs. On a current services basis, outlays are projected to rise
from $95.0 billion in 1986 to $102.7 billion by 1988. The savings
proposed in the budget reduce spending by $9.0 billion in 1986 and
$41.8 billion over 3 years.
The administration proposes to terminate community services
block grants, the work incentive (WIN) program, and the Legal
Services Corporation. The social services block grant would be
funded at its authorized level. Most of the remaining social services
programs are proposed for funding at the freeze level.
The administration proposes a gross funding level of $2.1 billion
in budget authority for low-income energy assistance in 1986, the
same as in 1985. In comparison to current services, this 1-year
freeze results in outlay savings of $0.1 billion a year. The remaining outlay reductions from current services—which range from $0.8
billion in 1986 to $1.0 billion in 1990—reflect proposed legislation
to use recoveries from petroleum price overcharges to help finance
this block grant. Total program levels for low-income energy assistance will not be affected by this legislative change.
2-18
THE BUDGET FOR FISCAL YEAR 1986
FAST-SPENDING DISCRETIONARY PROGRAMS—OUTLAYS
(Dollars in billions)
Totals
Current services
Proposed savings
Percent change
Major Program Changes
Strategic petroleum reserves:
Current services
Proposed savings
Social services and related:1
Current services
Proposed savings
Low-income energy assistance:
Current services
Proposed savings
Veterans medical care:
Current services
Proposed savings
Public and Indian housing:
Current services
Proposed savings
Health block grants and other:
Current services
Proposed savings
Amtrak:
Current services
Proposed savings
Economic support fund:
Current services
Proposed savings
Postal Service:
Current services
Proposed savings
Impact aid:
Current services
Proposed savings
NASA:
Current services
Proposed savings
Energy supply research:
Current services
Proposed savings
Park operations and land acquisitions:
Current services
Proposed savings
Civilian agency pay raise:
Current services
Proposed savings
Other:
Current services
Proposed savings
1988
1989
1990
Total
1986-88
Total
1986-90
98.4
-14.9
-15.1
102.7
-17.9
-17.4
106.7
-19.7
-18.5
111.4
-20.6
-18.5
296.1
-41.8
-14.1
514.2
-82.1
-16.0
2.0
-1.6
1.9
-1.8
1.9
-1.8
1.9
-1.8
1.2
-1.1
5.9
-5.2
9.1
-8.1
7.7
-0.9
8.0
-1.2
8.2
-1.3
8.4
-1.4
8.6
-1.5
23.9
-3.5
40.9
-6.4
2.2
-0.9
2.3
-1.0
2.4
-1.0
2.5
-1.1
2.5
-1.1
6.9
-2.9
11.9
-5.0
9.6
-0.3
10.2
-0.7
10.8
-1.0
11.4
-1.3
11.9
-1.6
30.7
-2.0
54.0
-4.8
3.4
-0.3
3.4
-0.8
2.9
-1.1
2.6
-1.1
2.3
-0.8
9.7
-2.3
14.6
-4.3
3.3
-0.3
3.5
-0.6
3.6
-0.6
3.7
-0.6
3.8
-0.7
10.4
-1.5
17.9
-2.8
0.8
-0.6
0.8
-0.8
0.8
-0.8
0.8
-0.8
0.8
-0.8
2.4
-2.2
4.1
-3.9
3.9
-1.1
4.0
-1.2
4.2
-1.3
4.4
-1.4
4.5
-1.5
12.1
-3.5
21.0
-6.5
1.0
+ 0.2
1.0
-0.9
0.9
-0.9
1.0
-1.0
1.0
-1.0
2.9
-1.6
5.0
-3.6
0.8
-0.1
0.8
-0.2
0.8
-0.2
0.8
-0.2
0.8
-0.2
2.3
-0.5
4.0
-0.9
7.8
8.2
-0.4
8.6
-0.7
9.0
-0.4
9.3
24.7
-1.2
42.9
-1.6
2.2
-0.2
2.3
-0.2
2.3
-0.2
2.3
-0.2
2.2
-0.2
6.8
-0.5
11.3
-0.9
1.3
-0.2
1.3
-0.3
1.4
-0.3
1.4
-0.3
1.4
-0.3
4.0
-0.8
6.8
-1.4
1.3
-1.3
3.2
-2.5
5.3
-3.6
7.5
-4.8
9.7
-5.9
9.8
-7.5
27.0
-18.2
47.7
-1.3
47.5
-2.4
48.5
-3.0
49.1
-3.3
51.1
-3.9
143.7
-6.7
243.8
-13.8
1986
1987
95.0
-9.0
-9.5
*1 $50 million or less.
Includes community services block grant, work incentive program, Legal Service Corporation, social services block grant, human development
and family and rehabilitation services.
MAJOR BUDGET PROPOSALS
2-19
The budget proposes a comprehensive reform of eligibility for
veterans medical care to target assistance toward the most deserving veterans—primarily those injured during military service and
those without the resources to defray all or part of their health
care expenses. The reform would restrict the use of the system by
veterans of all ages whose income exceeds the eligibility level. As
this reform takes effect and the veteran population ages, many
unused hospital beds will be converted to nursing home beds to
meet the needs of eligible aging veterans.
Because there is an adequate supply of health professionals, the
administration proposes to terminate direct clinical training grant
subsidies funded by the Department of Health and Human Services. Students in these programs will continue to receive assistance
through loan guarantees and revolving loan funds. The budget also
proposes to reduce funding for discretionary health grants and
increase third-party reimbursements for health services provided to
American Indians and Alaskan Natives.
The administration is also proposing to terminate the subsidy to
the National Railroad Passenger Corporation (Amtrak). Amtrak
carries less than 2% of intercity passengers and receives exceptionally large Federal subsidies relative to the number of passengers
carried ($35 per passenger in 1984).
Proposed funding for the economic support fund is substantially
below current services due to the deferral of any funding request
for assistance to Israel. A request for aid to Israel is anticipated as
a result of negotiations now underway in the context of Israel's
plans for economic reform.
The budget proposes to terminate in 1986 the Federal appropriation that reimburses the Postal Service for losses in revenue associated with carrying certain categories of mail at free and reduced
rates beginning in 1986. However, legislation will be proposed that
will enable the Postal Service itself to continue the subsidy for most
existing subsidized mailers. The budget also proposes to increase
the Postal Service's contribution for retirement beginning in 1986
by 2% each year until the Postal Service is paying the full cost of
benefits for its employees. Total outlays are $0.2 billion above
current services in 1986 but $1.6 billion below current services over
3 years.
The proposed budget for the National Aeronautics and Space
Administration (NASA) maintains U.S. leadership in space. The
budget continues design and development of the space station, and
maintains a strong program of research and development in space
science, space applications and supporting technology. Overall savings from the NASA baseline are achieved through a delay in the
schedule for initial operation of the space station, and through
deferral of other major projects in the areas of space science and
applications.
2-20
THE BUDGET FOR FISCAL YEAR 1986
The proposed budget for energy supply research and development reflects a shift away from Federal funding of costly development and demonstration projects.
The budget proposes a significant decrease in land acquisition.
The administration is proposing a 3-year moratorium on discretionary acquisition of recreation lands, postponing further expansion
until fiscal conditions improve.
The budget reflects a freeze of some but not all of the components of operating expenses of low-rent public housing programs.
This freeze would be applied to inflation factors for personnel and
related expenses provided in the operating subsidies formula. Utilities and other non-personnel costs that are generally completely
beyond the Public and Indian Housing Authorities' ability to control would not be affected by the freeze.
The budget includes no allowance for pay raises for civilian
employees of the Government in 1986. This reduces outlays by $1.3
billion below current services. The additional savings resulting
from the proposed 5% reduction in pay effective January 1, 1986,
are included in the estimates for specific programs and agencies.
DISCRETIONARY LOAN OUTLAYS
(Dollars in billions)
Totals
Current services
Proposed savings
Major Programs and Changes
Subsidized agricultural credit (ACIF):
Current services
Proposed savings
Rural housing (RHIF):
Current services
Proposed savings
Rural development (RDIF):
Current services
Proposed savings
Export-Import Bank:
Current services
Proposed savings
Small business assistance:
Current services
Proposed savings
Rural Electrification Administration.Current services
Proposed savings
Community development (FFB):
Current services
•$50 million or less.
Total
1986-88
Total
1986-90
11.3
-14.4
38.4
-27.8
62.3
-55.6
2.9
-4.0
2.3
-4.2
7.8
-10.2
13.0
-18.4
4.9
-3.5
5.0
-4.0
4.9
-4.2
14.0
-8.9
24.0
-17.1
1.1
-0.2
1.4
-0.4
1.2
-0.4
1.0
-0.5
3.7
-0.6
5.9
-1.6
1.0
-0.4
0.7
-1.4
0.5
-2.1
0.1
-2.4
0.1
-2.5
2.2
-3.9
2.5
-8.8
1.0
-0.3
1.1
-0.8
1.2
-1.0
1.2
-1.1
1.2
-1.2
3.3
-2.2
5.8
-4.5
2.7
-0.2
2.3
-0.5
2.2
-1.0
2.1
-1.4
1.7
-1.7
7.2
-1.7
11.1
-4.9
0.1
0.1
-0.1
0.1
-0.1
-0.1
-0.1
*
0.2
-0.2
0.1
-0.3
1987
1988
13.6
-6.2
12.1
-9.7
12.7
-11.8
12.6
-13.4
3.1
-3.0
2.2
-3.5
2.5
-3.7
4.5
-2.2
4.5
-3.1
1.2
-0.1
1989
1990
MAJOR BUDGET PROPOSALS
2-21
Discretionary loans.—The administration proposes that several
discretionary direct loan programs be terminated or greatly reduced in size. These programs benefit a select group of borrowers
by channelling subsidized credit to them at the expense of all other
borrowers who therefore have less total credit available to them
and must pay more for what is available. In most cases, borrowers
under these programs may turn to other sources of credit. Some of
the borrowers will be assisted by a higher level of Federal guarantees. The proposals for these programs would save $27.8 billion in
outlays over 1986 to 1988. Since repayments on existing loans will
more than offset the lower level of future disbursements in 1989
and 1990, the outlay savings will be larger than the program levels
in those years.
The administration is proposing to terminate:
• Small Business Administration direct loans;
• most loan programs in the Farmers Home Administration;
• community development loans made through the Federal Financing Bank; and
• the Export-Import Bank's direct loan program, which will be
replaced by an explicit interest rate subsidy fund.
The administration is also proposing reductions in the Rural
Electrification Administration's loan programs.
User fees and offsetting receipts.—In addition to the user fees
discussed in previous sections, the budget includes a number of
proposals to increase the fees paid by the users and beneficiaries of
Federal services. These proposals include:
• fees for harbors and inland waterways to recover most of the
Federal subsidies for operating locks and dredging channels
for commercial navigation, which are estimated to yield $0.4
billion in 1986 and $1.7 billion over 3 years;
• processing fees on passengers and commercial carriers entering the U.S. by land or sea, which are estimated to be $0.5
billion in 1986 and $1.5 billion over 3 years;
• fees to recover about 19% of the cost of Coast Guard services
for recreational and commercial mariners, which are expected
to yield $0.2 billion in 1986 and $1.2 billion over 3 years;
• fees on the meat and poultry industry to phase in full recovery of inspection and related costs;
• additional fees for recreational use of Federal lands and facilities, including national parks, forests, water resource projects,
and related facilities; and
• fees on borrowings by Government-sponsored enterprises.
2-22
THE BUDGET FOR FISCAL YEAR 1986
PROPOSED USER FEES
(In billions of dollars)
1986
User fees included in previous categories:
Entitlements (GSL)
Other mandatory:
CCC export credit
Pension Benefit Guaranty
GNMA and other
Dedicated taxes and business operations-.
Federal Housing Administration
Veterans housing
Other
Discretionary fast-spending
Discretionary loans.Agricultural credit insurance
REA
1987
1989
1990
Total
1986-88
Total
1986-90
-0.1
-0.2
-0.2
-0.1
-0.2
-0.2
-0.1
-0.2
-0.2
-0.2
-0.2
-0.2
-0.2
-0.2
-0.2
-0.2
-0.7
-0.5
-0.3
-1.1
-0.9
-0.7
-0.2
-0.6
-0.3
-0.6
-0.2
-0.1
-0.8
-0.1
-0.1
-0.1
-0.1
-0.1
-0.7
-2.0
-0.1
-0.3
-1.0
-3.5
-0.2
-0.5
-0.1
-0.2
-0.2
-0.2
-0.1
-0.2
-0.1
-0.5
-0.1
-0.8
-0.2
-1.5
-1.7
-1.9
-1.9
-1.9
-5.2
-8.9
-0.4
-0.5
-0.2
-0.1
-0.1
-0.6
-0.5
-0.5
-0.2
-0.1
-0.1
-0.1
-0.6
-0.5
-0.5
-0.3
-0.1
-0.2
-0.1
-0.7
-0.5
-0.5
-0.3
-0.1
-0.3
-0.1
-0.8
-0.5
-0.5
-0.3
-0.1
-0.3
-0.1
-1.7
-1.5
-1.2
-0.7
-0.3
-0.4
-0.2
-3.2
-2.6
-2.1
-1.4
-0.5
-1.0
-0.3
Subtotal.
-1.4
-2.1
-2.3
-2.5
-2.6
-5.8
-10.9
Total
-2.9
-3.8
-4.2
-4.4
-4.5
-11.0
-19.9
Subtotal, included previously..
-0.8
*
-0.1
-0.8
*
1
User fees not previously included:
Navigation fees
Customs fees
Boat and yacht fees
Meat inspection fees
Recreation fees
Government-sponsored enterprise fees
Other
*$50
million or less.
1
Offsetting receipts.
Several budget proposals other than user fees affect the levels of
offsetting receipts. These include:
• the proposed reduction in lending, which reduces estimated
interest income to the Treasury by $0.2 billion in 1986 and
$2.8 billion over 3 years;
• other proposals that, on net, increase interest income by $0.4
billion in 1986 and by $0.6 billion over 3 years;
• the proposed reimbursement from third-party insurers for
medical care provided by the Veterans Administration for all
non-service-connected veterans who have health insurance,
which is expected to yield $65 million in 1986, and $0.6 billion
over 3 years;
• the proposed sale of Conrail, which is expected to yield $1.2
billion in 1986;
• the higher level of military personnel proposed in the budget
and the proposed military pay increase in July 1985, which
are estimated to increase offsetting receipts from the employer share of contributions to military retirement by $0.5 billion
in 1986 and $3.3 billion over 3 years;
2-23
MAJOR BUDGET PROPOSALS
• the proposed increase in the Postal Service contribution for
retirement, which increases receipts to the civil service retirement and disability fund by $0.3 billion in 1986 and $1.6
billion over 3 years;
• the proposed 1986 cut.in civilian agency pay, which reduces
offsetting receipts from employing agencies to employee retirement funds by $0.4 billion in 1986, and $2.0 billion over 3
years; and
• the proposed sale of small business loan assets, which is expected to yield $0.7 billion in 1986 and $1.8 billion over 3
years. All loans are expected to be sold by 1990.
NON-USER FEE CHANGES IN OFFSETTING RECEIPTS
(In billions of dollars)
Interest income from FFB
Other Interest income
Sale of Conrail
Third-party reimbursements to VA
Military contributions to retirement
Postal contributions to retirement
Other contributions to retirement
Small business loan asset sales
Other
Total
Total
1986-88
Total
1986-90
0.3
2.8
-0.6
-1.2
-0.6
-3.3
-1.6
2.0
-1.8
0.6
8.7
-0.2
-1.2
-1.1
-8.1
-4.4
4.2
-2.3
1.2
0.8
-3.8
-3.2
1986
1987
0.2
-0.4
-1.2
0.1
-0.5
-0.3
0.4
0.7
0.2
0.9
-0.2
1.7
•
2.5
0.2
3.4
0.2
-0.2
-1.1
-0.6
0.7
-0.6
0.2
0.3
-1.7
-0.8
0.8
-0.5
0.3
0.3
-2.3
-1.2
1.0
0.5
0.3
-0.3
-2.5
-1.6
1.2
-2.2
-1.0
-0.5
-0.2
1988
1989
1990
*$50 million or less.
THE CREDIT BUDGET
The credit budget, with its appropriation act limitations on direct
loan obligations and guaranteed loan commitments is the means by
which new extensions of Federal and federally assisted credit are
controlled. For direct loan programs, the credit limitations indirectly affect new disbursements and net outlays. The lower level of
direct loan outlays discussed above are the result of lower levels of
direct loan obligations.
CREDIT BUDGET TOTALS
(In billions of dollars)
1985
Direct loan obligations
Guaranteed loan commitments
Total
1986
1987
1988
1989
1990
51.9
74.0
24.2
77.2
22.7
78.5
19.9
80.9
17.3
83.7
16.6
86.3
125.9
101.4
101.3
100.8
101.0
102.9
In line with the administration's efforts to control the cost of
Federal credit programs, this budget proposes reduced intervention
2-24
THE BUDGET FOR FISCAL YEAR 1986
in the Nation's lending markets through specific cuts in several
discretionary direct loan programs, and an initiative to place some
credit programs on a sounder actuarial basis. Several loan guarantee programs, such as the Export-Import Bank and the agricultural
credit insurance fund, are being increased in size to compensate for
the lower level of direct loan obligations.
For 1986, the administration proposes a total credit budget of
$101.4 billion, of which $24.2 billion is for direct loan obligations
and $77.2 billion is for guaranteed loan commitments. This is a
decline of 19% from the estimated 1985 credit budget total of
$125.9 billion.
The reduction is due largely to proposed cuts in discretionary
loan programs that were discussed earlier. The table below shows
the proposed decreases for these programs.
DISCRETIONARY LOAN PROGRAMS—DIRECT LOAN OBLIGATIONS—PRESIDENTIAL POLICY
(Dollars in millions)
1984
1985
Subsidized agricultural credit (ACIF)
Rural housing (RHIF)
Rural development (RDIF)
Export-Import Bank
Small business assistance (including FFB)
Rural Electrification Administration (including FFB)....
Community Development (FFB)
4,005
2,776
412
1,467
1,543
2,224
87
3,770
3,445
511
3,865
2,006
2,632
225
Total
Programs as a percent of total direct loan obligations.
12,514
32.0%
16,454
31.7%
435
168
62
685
1,060
2,410
9.9%
In addition to the proposed cuts in program levels, the administration is proposing that several credit programs be placed on a
sounder actuarial basis by requiring borrowers to share more of the
costs of the credit programs. These costs include defaults, interest
expenses, delayed repayments, and servicing and administrative
costs. For some direct loan programs, the administration is proposing that the interest rate on new loans will be the yield on newly
issued, equivalent-maturity Treasury securities plus IV&%, as well
as an up-front fee of 5% of the loan amount. The administration
also proposes that some guaranteed loan borrowers be required to
pay an up-front fee of 5% of the guaranteed loan amount, plus an
annual fee of 1%. The additional revenue generated by these proposals totals $4.0 billion over the 1986 to 1988 period.
MANAGEMENT REFORM
Modernization of Federal operations is an important part of this
administration's overall objectives of restoring efficiency, balancing
the role, and reducing the size of the Federal Government. A
MAJOR BUDGET PROPOSALS
2-25
smaller, but more efficient and productive, Federal establishment
that relies more on the private sector for performance of commercial-type activities is in keeping with the President's concept and
philosophy of government. The administration's management improvement program, Reform '88, is now well underway. It is a
comprehensive, vigorous approach to reforming the Federal Government's management processes. Significant accomplishments
have been achieved in the last 4 years.
This year, the President is issuing a management report, as
required by section 2903 of the Deficit Reduction Act of 1984
(DEFRA). This report describes the major management initiatives.
It also provides a status report on the Grace Commission recommendations and information on 1985 savings in specified categories, as required by section 2901 of DEFRA. A summary of the
President's strategy and accomplishments follows.
Eliminating fraud, waste, and abuse.—In 1981, the President's
Council on Integrity and Efficiency (PCIE), composed of departmental Inspectors General (IGs), was created to coordinate an aggressive campaign against waste and fraud. Armed with a strong Presidential mandate, they have made it possible for more than $46
billion to be put to better use. On a cumulative basis, over 10,000
successful prosecutions have been achieved, $273 million in investigative recoveries have been made, and over 9,000 administrative
actions have been taken against Federal and contractor employees
since 1981.
The PCIE is pioneering Federal improvements in computer security, the matching of computer files, and other innovative techniques for preventing waste and fraud from occurring in the first
place.
Follow-up on audits made by IGs, the General Accounting Office
(GAO), and others has become more timely and effective. The audit
backlog in civilian agencies has been reduced from $0.6 billion in
1981 to $0.1 billion at the end of 1984, and a new system in the
Defense Department has cut in half the funds tied up in unresolved audits, from over $1 billion in 1981 to $0.5 billion as of
September 30, 1984.
Controlling the cost of administering Federal programs.—The
goal is to reduce administrative overhead substantially. Toward
this objective, the administration has:
• reduced Federal civilian agency employment by the end of
1984 to 78,100 below the levels proposed for 1982;
• set into motion plans to consolidate payroll and personnel
systems and, thereby, reduce the number of systems from 134
at the end of 1983 to 10 by 1988;
2-26
THE BUDGET FOR FISCAL YEAR 1986
• cut the number of Federal Government publications by 25%,
from nearly 16,000 in 1981 to just over 12,000 in 1985, reducing costs by $35 million;
• made a start toward the goal of reducing the costs of Government work space administered by the General Services Administration by 10%, with expected cost reductions of $70
million in 1985; and
• achieved administrative streamlining by wider application of
staffing standards and automation of management processes.
Financial management.—Assuring better stewardship of Federal
funds has been a high priority. As a result, the Federal Government is improving the management of the $1 trillion that it handles each year. This reduces Treasury's financing costs and helps
avoid penalties for late payment. A credit management system to
handle the $315 billion in debt owed the Federal Government is
being established, using tools the private sector has found effective.
Standardized but adaptable financial management systems are
being developed—one for international agencies and another for
domestic agencies.
Productivity improvement—Fresh emphasis and definition is
being given to adopting the most efficient and productive methods
for conducting the Federal Government's business. The 30-year
policy embodied in OMB's Circular No. A-76 that requires review
of commercial-type activities for possible performance by the private sector is being revitalized. The number of positions reviewed
to determine whether the functions performed can be done more
efficiently by the private sector is expected to increase from 12,000
in 1984 to 35,000 a year in 1985. In addition, in-house management
efficiency reviews are being emphasized, and agencies are expected
to search for greater efficiency by reviewing an additional 150,000
positions in 1986. A productivity clearinghouse has been established to facilitate cost comparisons and adoption of uniform, accurate performance standards.
Information technology.—The administration has adopted a
three-point strategy to reestablish the Government's position as a
leader in efficient and productive use of information technology.
This strategy calls for: 1) the issuance of effective and up-to-date
guidelines; 2) early OMB involvement to assure their implementation; and 3) the development of objective measures to maximize the
return on the Federal Government's investments in information
technology. To carry out this strategy, agencies will be required to
document a 10% return on information technology investments.
Greater reliance will be placed on the acquisition of computer
MAJOR BUDGET PROPOSALS
2-27
software that is commercially available rather than customized.
Agencies will be required to adopt standards that foster exchange
of information among systems. Procedures will be developed to
exploit the economies resulting from the competitive nature of the
information technology marketplace. Finally, long-range planning
will assure that information technology investments are programbased and results-oriented.
Program delivery improvements.—The administration has made a
start at improving the accuracy and efficiency with which agencies
deliver services and benefits to the public. Initiatives include
streamlining the field structure of Federal agencies, which has
grown unnecessarily large and duplicative, to reflect the efficiencies that have been made possible by advances in communications,
transportation and information technology. In addition, efforts are
being made to institutionalize management reforms into program
operations. For example, the payment integrity project, established
in 1983, is working to reduce by 20% by 1988 the error rate in
making entitlement payments.
Integration of management savings into the budget—Efforts of
many previous administrations have been long on recommendations and short on implementation. This administration has carefully developed a process to ensure implementation through integration of management objectives and milestones into the budget.
This tracking system will permit OMB to monitor each agency's
execution of the management initiatives that have been included in
the 1986 budget. Annual management reviews will provide another
check on progress toward implementation and an opportunity to
seek additional improvements. Together, these efforts will ensure
that Reform '88 initiatives are made a permanent part of Federal
Government operations.
Status of Grace Commission recommendations.—Early in his administration, the President recognized the benefit of obtaining
advice on management improvements from business leaders and
authorized the establishment of the President's Private Sector
Survey on Cost Control (PPSSCC). Industrialist J. Peter Grace assembled 161 high-level private sector executives from many of the
Nation's leading corporations. The results of this effort were published in 47 reports that contained 2,478 recommendations on 784
issues.
Given the broad scope of the review, there was some overlap
among the reports, and, in some cases, the Commission could not
develop specific savings estimates. Excluding these items, the reports identified savings for 1,635 different recommendations. Seven-
2-28
THE BUDGET FOR FISCAL YEAR 1986
ty percent of these recommendations have been carried out or are
being proposed with the 1986 budget; the remaining 30% are undergoing further review. Most of the recommendations—879—have
already been implemented, and 269 are being transmitted with the
1986 budget. Congressional cooperation is needed to achieve the
savings from the management improvements included in the 1986
budget.
Selected 1985 management savings.—As required by section 2901
of the Deficit Reduction Act of 1984, the Office of Management and
Budget reviewed the 1985 appropriations for specified activities,
such as travel and consultant services, to determine whether reductions from the 1984 levels had been or should be achieved. As a
result of this review, the budget includes reductions of $0.4 billion
in 1985 funding levels.
A serious effort has been made to determine reasonable savings.
The achievement of most of these savings requires Congressional
approval of the rescissions proposed in the budget.
Efficiency in Government Legislation.—The President's comprehensive report on management initiatives asks Congress to enact
Efficiency in Government Legislation that would improve Federal
management by removing some of the obstacles that currently
prevent full implementation of the administration's management
improvement program. This proposal reflects the need for selected,
broad reforms that individual agencies alone cannot achieve.
PART 3
ECONOMIC ASSUMPTIONS AND
THE BUDGET
3-1
ECONOMIC ASSUMPTIONS AND THE BUDGET
This part of the budget discusses the economic assumptions underlying the 1986 budget estimates. The first section reviews the
recovery that has returned the economy to healthy growth with
moderate inflation, following many years of stagflation. The second
section presents the near-term forecast for 1985-1986 and the longterm economic assumptions that underlie the budget projections
through 1990. The third section discusses the relationship between
Federal debt and capital formation. The fourth section describes
the sensitivity of the budget to changes in economic assumptions.
The last section describes how economic developments and changes
in the economic forecast have modified the budget outlook since
last year.
THE ECONOMIC OUTLOOK: THE RECOVERY CONTINUES
When the administration took office in 1981, inflation was out of
control. The rapid increase in prices was hurting economic growth,
investment was being diverted into unproductive inflation hedges,
and normal business and household planning were being hindered
by the uncertainty surrounding the outlook for prices and costs.
Labor productivity in the economy's nonfarm business sector grew
at an annual rate of 2.0% between 1948 and 1981, but by only 0.6%
from 1973 to 1981. The collapse of productivity growth during the
1970's produced stagnating real wages even while nominal wage
rates were rising rapidly.
Under the circumstances, controlling inflation had to be the
administration's top priority. In 1980, inflation was running about
12%%; in the last 3 years, it has been only 4%. This dramatic
reduction helped convince American families and businesses that
they could plan for the future once again without fearing that
unpredictable price increases would make their plans futile.
The lower rate of inflation, together with the administration's
program to restore incentives for work, saving, and investment by
lowering tax rates and reducing the regulatory burden on business,
led to the robust economic recovery of the past 2 years. The recovery has fostered a new sense of confidence in America's economic
future as it offers the prospect of sustained economic growth with
low and stable inflation for the first time in many years.
3-2
ECONOMIC ASSUMPTIONS AND THE BUDGET
3-3
An Overview of the Recovery.—The recovery from the 1981-82
recession began in late 1982. It was sparked in part by a shift in
monetary policy that contributed to a surge of growth in the money
supply, a dramatic decline in interest rates, and a strong rally in the
stock market.
The boom in the stock market was part of a broader shift in the
public's asset preferences. For most of the previous decade, savers
who had invested in financial assets had been losers to a combination of inflation and taxes. Inflation drove interest rates up and
bond prices down, while eroding the real value of interest income
and dividend payments. Compounding the injury, taxes were levied
on the nominal income on these financial assets, "income" that
often was inadequate even to preserve the assets* value.
Similar problems were reducing business profitability. Depreciation allowances based on the historical cost of fixed capital understated true depreciation in a time of rapidly rising capital costs.
Conventional accounting practices also created fictitious inventory
profits when inflation was raising the true replacement cost of
goods sold. A growing burden of Federal regulation raised production costs, while limiting investment opportunities. The result of
these trends was a decline in profitability that was reflected in the
weak performance of corporate equities throughout the period.
Stock prices, even accounting for dividends, failed to keep up with
inflation in the 1970's.
It is not surprising that by the end of the decade investors were
searching for ways to shelter their wealth from the ravages of
inflation and the taxation of fictitious profits. The fact that these
"investments" were often unproductive hedges such as gold or
commodities spread the debilitating effects of the inflation from
the financial markets to the real economy. Therefore, the stock
market rally of the summer of 1982 was a significant event. It
signaled the beginning of a shift back from investment in unproductive inflation hedges and commodity speculation to investment
in productive capital assets.
The rally also marked a reevaluation by investors of the long-run
profitability of American business. That reevaluation was justified
as profits climbed in the first 2 years of the upturn at their fastest
pace in 37 years. The greatly improved earnings were achieved
even as inflation declined, in large part because a recovery in
productivity growth and moderate wage increases held down unit
costs and boosted profit margins.
The economy's recovery in 1983 was widely expected by forecasters, but they were surprised by the magnitude of the rebound.
From the fourth quarter of 1982, the trough of the recession, to the
fourth quarter of 1983, real GNP grew 6.3%; this was a faster rate
of growth than in all but 5 other years in the postwar period. Most
3-4
THE BUDGET FOR FISCAL YEAR 1986
UNIT PRICES, COSTS, AND PROFITS: NONFINANCIAL CORPORATE BUSINESS
(Percent change; annual rate)
Unit prices 1
Unit costs 2
Profit
margins 3
Total
profits 4
Recession:
1981:3-1982:4
First two years of expansion:
1982-4-1984-4
Average postwar expansion5
1
2
3
4
5
. .
4.1
6.8
-24.9
-28.1
3.1
0.4
38.8
50.4
2.4
1.1
13.6
22.9
The implicit price deflator for gross domestic product of nonfinancial corporate business.
Labor and interest charges plus non-factor costs (e.g., depreciation) divided by real output of nonfinancial corporate business.
Pre-tax profits (with inventory valuation and capital consumption adjustments) divided ! by real output
of nonfinancial corporate business.
A
Pre-tax profits (with inventory valuation and capital consumption adjustments) off nonfinancial
r - * — - - ' corporate
~ business.
•-.--„.
Excluding 1949 and 1980 expansions.
forecasters expected strong economic growth in 1984, and this time
they were correct: real GNP grew 5.6% (according to preliminary
figures from the Commerce Department). The 2-year average
growth rate of 6.0% was as strong as the recovery from any recession since 1950.
The last 2 years have also seen a rapid drop in unemployment.
In the 25 months from November 1982 to December 1984, the
civilian unemployment rate fell 3.5 percentage points, a larger
decline than in any recovery since 1950. It is also noteworthy that
the unemployment rate is now slightly lower than it was at the
peak of the last business cycle in July 1981. In every other recovery
since 1950, the unemployment rate at this point in the expansion
was still considerably above its level at the previous peak.
Consumer spending usually leads the recovery, and the current
upturn is no exception. During recessions, consumers tend to postpone purchases of housing and other "big-ticket" items like cars
and home appliances. An increase in consumer net worth and
declining interest rates releases this pent-up demand and helps
spur the recovery. From the third quarter of 1982 through the first
quarter of 1983, the increase in real personal consumption expenditures outpaced the increase in real GNP.
The recovery is also usually strengthened by the decisions of
business firms to restock inventories depleted during the recession.
In the initial year of the current recovery, real inventory investment rose a hefty $32 billion and accounted for about a third of the
real GNP gain.
As the recovery proceeded, however, it developed features that
were either not expected when it started, or that broke with previous business cycle experience. Most noteworthy have been the moderate inflation rate, the boom in capital spending, the dollar's
strength in the foreign exchange markets with the associated
inflow of capital from abroad, and high real interest rates. These
features are reviewed in the following sections.
ECONOMIC ASSUMPTIONS AND THE BUDGET
3-5
The Moderate Pace of Inflation.—The low inflation rate contin-
ues to surprise observers. Since the beginning of the long process of
disinflation in 1981, most forecasters have persistently overestimated prospective price increases. At the beginning of 1984, there were
widespread expectations that inflation would accelerate somewhat
before the end of the year. In the fourth quarter, however, the
GNP deflator rose at an annual rate of only 2.4%. For the year as
a whole, on a fourth quarter over fourth quarter basis, the deflator
rose 3.5%, about the same rate it has maintained since the trough
of the recession.
Although inflation was often stable or declining during the early
phases of previous postwar expansions, recent inflation is noteworthy for two reasons:
• The average inflation rate since the recession trough, 3.7%, is
lower than in four of the seven previous recoveries since
World War II, including the last three. This reverses a pattern evident since the early 1960's in which the inflation rate
was higher in each successive cyclical upturn.
• Given the substantial decline in inflation that occurred in
1982, many market forecasters expected disinflation to run its
course earlier in this recovery than in the immediately preceding cycles. Although inflation has not declined significantly since the trough of the recession, it has not risen, either.
Steady, moderate inflation over the long run requires a disciplined policy of moderate growth of the money supply by the
Federal Reserve. In the early 1980's, many questioned whether the
Federal Reserve could persevere in such a policy. Last year, however, it succeeded in holding money supply growth within its 4%-8%
target band for Ml, while the broader aggregates grew near the
upper bounds of their target ranges. The preliminary target for
this year, announced by the Federal Reserve in July, is 4%-7% for
Ml, slightly lower and narrower than the 1984 range.
In the short run, special factors can alter the rate of inflation.
During the present recovery, the most significant special factor
helping to lower inflation has surely been the extraordinary rise in
the exchange value of the dollar. In 1984, the dollar appreciated by
12%. This continued a trend that has pushed the dollar's value up
by 70% since the fall of 1980.
When the dollar appreciates, the prices of imported goods are
reduced, and the prices of competing domestic goods are also reduced, with a lag. It is estimated that the dollar's appreciation has
reduced the inflation rate by roughly one to two percentage points
annually for the past 4 years. Since the full adjustment process
takes up to 3 years, the dollar's appreciation in 1984 will continue
to put downward pressure on prices in 1985 and 1986 if the dollar
remains near its current level.
3-6
THE BUDGET FOR FISCAL YEAR 1986
Two other developments helped reduce inflation last year:
• Agricultural and other commodity prices declined in the
second half of 1984, after rising sharply in the early stages of
the recovery. Since many commodities are imported, their
prices were cut by the rise of the dollar.
• Oil prices continued to edge downward as stagnant demand
for oil produced excess supply on world markets. The average
price of imported oil has fallen by $2.60 a barrel since January 1983, and prices are expected to fall further in 1985.
Since the price of oil is quoted in dollars, a change in the exchange value of the dollar does not affect the price of oil directly,
but it does have important indirect effects. When the dollar rises,
as it did last year, foreigners must pay more for oil in terms of
their own currencies. This increase in the foreign price of oil
strengthened the trend toward reduced world oil demand, and
helped put downward pressure on the dollar price of petroleum.
Although the strong dollar was a major contributor to the moderation of inflation that has occurred since the peak of the last
business cycle, the moderation has proceeded far beyond what can
be traced directly to the strong dollar or to softening commodity
prices. Deregulation and a resurgence of entrepreneurial vigor—
spurred on, to be sure, by the inroads of foreign producers in U.S.
markets—have contributed to a highly competitive atmosphere.
Lower inflation expectations, engendered by the success in reducing inflation and the administration's commitment to an anti-inflation policy, have also contributed to the process. In addition, the
strong growth in productivity during the last 4 years, especially
when compared with the negative growth rates in 1979 and 1980,
has helped keep prices down. Together, these forces have produced
a marked reduction in inflation across the entire economy, extending far beyond the goods traded in international commerce. An
indication of this broad-based trend is the fact that wage inflation
has slowed down about as much in nonmanufacturing industries as
in the manufacturing sector.
The progress against inflation since 1981 has been remarkable,
but it would be premature to declare a final victory. After all, a
4% rate of inflation doubles prices in 18 years and that is a far cry
from price stability. Moreover, the special factors that have helped
to pull inflation down during the past few years may end or even
reverse themselves in the future. Had the exchange value of the
dollar not been increasing so rapidly, inflation would have proceeded
at a 5 to 5x/2% rate last year. The dollar cannot continue to rise
indefinitely. The relative price of oil should also stabilize eventually.
When this happens, there could be some acceleration of inflation.
Most importantly, inflation will not stay down unless the Federal
Reserve continues the policy of restrained growth of the money
ECONOMIC ASSUMPTIONS AND THE BUDGET
3-7
supply that was so important in reducing the rate of inflation in
the first place. Continued restraint can serve to prevent any unfavorable shocks that do occur in the future from initiating a new
cycle of rising inflation.
A gradual trend toward price stability provides the necessary
background for healthy economic growth. One of the keys to the
strong growth that has marked the present recovery has been the
fundamental change in the inflation outlook since 1981. To maintain this success, policies of feverish demand expansion must be
avoided. A commitment to steady reduction in the rate of growth of
the money supply will sustain real economic growth and permit a
return to price stability.
The Boom in Business Fixed Investment—The increase in capital
spending in the present expansion is far stronger than normal.
Over the past 2 years, real gross nonresidential fixed investment
increased at a 15.4% annual rate, compared with an average increase of less than 7% in previous cycles between 1950 and 1980.
Part of this investment boom simply reflects the severity of the
1981-82 recession. Investment is always depressed during business
downturns, and the deeper the recession, the further investment
has to recover in order to reach a normal level. However, even
after adjusting for the effect of the recession by measuring the
change in investment from the peak rather than the trough of the
cycle, the increase in capital spending remains impressive. Since
the July 1981 peak, real business fixed investment has grown at an
average yearly rate of 6.0%, more than three times faster than the
average gain over comparable stages of previous cycles.
There is a strong statistical relationship between the level of
business fixed investment and the change in business sales. This is
usually explained by businesses desire to maintain a stable capitaloutput ratio. If output rises, then so will the desired stock of
capital, and that leads to an increase in investment. This accelerator mechanism is clearly at work in the present expansion. The
normal response to a healthy increase in sales like that experienced in the past 2 years would be a boom in investment spending.
However, the growth in investment spending in the past 2 years
has been too large to be explained entirely by this factor. Other
forces were also at work:
• The administration's tax reform significantly raised depreciation allowances for many investments, reducing the real cost
of capital to business firms for a broad range of investments.
• High inflation raised the effective rate of business taxation in
the 1970's. Since 1980, the marked decline in inflation has
lowered effective business tax rates, and would have done so
even in the absence of more favorable depreciation allowances.
3-8
THE BUDGET FOR FISCAL YEAR 1986
• Prices of investment goods have been very stable in the current expansion, reflecting, in part, the strong dollar and the
heightened competition from foreign producers of capital
goods. The price deflator for nonresidential fixed investment
was slightly lower at the end of 1984 than it was 2 years
earlier.
• Low and stable inflation has also removed much of the uncertainty that was hampering investment prior to the present
recovery.
• The strong recovery, moderate wage demands, and a productivity rebound resulted in a sharp increase of nearly 90% in
corporate profits during the expansion's first 8 quarters.
Healthy profits, whether as a signal of future profitability or
because internally generated funds are cheaper than external
funds, are usually associated with an increase in investment.
The strength of business fixed investment has been concentrated
in expenditures for producers' durable equipment; investment in
nonresidential structures has experienced only a typical cyclical
upturn. The difference in the two components reflects, in part, the
relatively favorable tax treatment that equipment receives under
the current tax code.
The increase in capital spending has raised net investment as
well as gross investment, but not to the same extent. It is net
investment that determines the rate of growth of the capital stock
and helps to determine future economic growth, a fact that the
administration has taken into account in its economic assumptions.
The discrepancy between the two measures is partly accounted for
by the shifting composition of investment. The trend toward shortlived assets that depreciate more rapidly has raised the share of
capital replacement in total gross investment. Also depreciation
tends to be high relative to net investment during the earlier stages
of cyclical upturns. Because of the increase in depreciation, a high
level of gross investment is required to sustain a healthy rate of
economic growth.
The Dollar and the Net Inflow of Foreign Capital—The increased
profitability of U.S. investment opportunities as a result of tax
changes, rapid expansion, low inflation, and deregulation has attracted a record net inflow of foreign capital. The strong international demand for U.S. assets led to a rise of 70% in the multilateral trade-weighted value of the dollar since the third quarter of
1980.
The strength of the dollar has helped reduce inflation and has
benefited consumers. However, the counterpart of the dollar's rise
and the capital inflow has been a worsening of the U.S. current
account. The current account, the broadest measure of trade, serv-
ECONOMIC ASSUMPTIONS AND THE BUDGET
3-9
ices, and interest payments between the U.S. and other countries,
shifted from a nearly balanced position in 1980, to a deficit
amounting to 3% of GNP by the second half of 1984. A higher
dollar has made U.S. exports more expensive for foreigners, and
imported goods cheaper at home. This has encouraged a surge of
imports, while producing sluggish growth in the export and importcompeting sectors of the economy. The effect of the high exchange
rate has been compounded by the slow growth of the major European economies and the weak import demand and aggressive export
promotion of many heavily indebted less-developed countries.
During the 1950's and 1960's, the U.S. enjoyed persistent current
account surpluses which were used to finance capital investment
overseas. U.S. assets abroad exceeded foreign assets in the U.S. by
$150 billion at the end of 1982. However, during 1983, the surplus
of assets eroded to $106 billion, and eroded further in 1984. Sometime this year, recorded foreign assets in the U.S. will exceed our
assets abroad, making us a net debtor nation.
The continued inflow of capital has reduced the surplus on investment income which the U.S. has enjoyed over the past decade
by increasing interest payments to foreigners. In 1980, the U.S.
surplus on investment income amounted to $30 billion; by the third
quarter of 1984 it had eroded to $15 billion. Given the prospect of
large current account deficits for the forseeable future, the U.S.
will soon be making a net transfer of investment income to foreigners.
In the 1970's, the U.S. was able to run a large trade deficit while
maintaining a balanced current account since it received substantial net investment income from foreigners. In the future, we will
not be able to pay for imported goods with the proceeds from our
foreign investments. Instead, we will have to export in order to pay
interest on our foreign borrowing.
The recovery has been stronger in the aggregate than is typically
the case. Therefore, it is hard to argue that the high dollar and the
capital inflow have been detrimental to overall growth thus far.
The effects have been mainly compositional, with export and
import-competing industries adversely affected, while the benefits
have been spread more diffusely throughout the economy. The
long-run problems concern the consequences for the economy
should foreigners attempt to reduce their purchases of dollar assets
while we are still running a large current account deficit. Under
such circumstances, the inflation rate might temporarily rise as
the dollar's exchange rate falls. In addition, there could be a rise in
interest rates and slower overall economic growth.
High Real Interest Rates.—The real interest rate is the difference
between the prevailing market rate of interest and the rate
of inflation. It is the real interest rate that measures the true
3-10
THE BUDGET FOR FISCAL YEAR 1986
cost of borrowing and the true return to saving. By contrast, the
nominal interest rate, alone, conveys little significant information
about the cost of capital. Nominal rates of 10% can be either
excruciatingly high or ridiculously cheap, depending on how fast
inflation is eroding the value of money.
Since 1980, the inflation rate and inflation expectations have
declined substantially. Market interest rates have also fallen, but
by no more than the decline in inflation expectations. Consequently, real interest rates appear to have remained on a rough plateau
far above their historical values. As described above, capital spending boomed despite the apparently high real interest rates. The
administration's business tax cuts, lower inflation, and the fall in
the relative price of capital goods offset the high rates. Indeed,
some have suggested that the improved investment outlook is responsible for keeping real rates high by stimulating borrowing.
While strong business investment demand has undoubtedly contributed to keeping rates high, so has heavy Government borrowing. It would be wrong to attribute all of the increase in real rates
to only one component of the demand for savings. It is the combined demands of Government and business that have helped keep
real rates high. The decline in the deficit that would result from
enacting this budget should remove some of the strain on interest
rates, and permit the high long-term real rate to return gradually
to its historical norm.
ECONOMIC ASSUMPTIONS
This section describes the economic assumptions that underlie
the estimates in the budget. The current services estimates displayed in the budget are based on these same economic assumptions. Permitting the budget to proceed on a current services
basis—that is, with no future policy action to change program
spending or receipts—would change significantly, and for the
worse, the economic performance from what is assumed for the
budget. However, the convention of basing both the budget estimates and the current services estimates on a common set of
economic assumptions limits the differences between them to the
direct effects of proposed policy actions. This permits the current
services estimates to serve their purpose as a baseline against
which to measure the budgetary effect of policy proposals. In keeping with the usual practice, the assumptions are presented for
calendar years, rather than fiscal years.
The short-term forecast for 1985-86 is based on an assessment of
the implications of recent developments for the economic outlook.
Consequently, this section begins with a brief review of those developments. It is followed by a discussion of the short-range outlook,
accompanied by a table that presents the forecast through 1986.
3-11
ECONOMIC ASSUMPTIONS AND THE BUDGET
The section concludes with a discussion of the administration's
long-range economic assumptions for the 1987-1990 period, accompanied by a table in which these assumptions are presented in
detail.
Shifting Gears: The Pause of 1984.—Economic activity grew at a
rapid 8V2% annual rate in the first half of 1984. This continued the
trend evident in the second half of 1983 and helped to make the
recovery stronger than any other expansion since 1951. However,
in the third quarter of 1984, economic growth slowed abruptly to a
1.6% rate.
The growth of consumer spending lost momentum in the summer
months after a buying spree in the spring: real consumption expenditures, which grew at about an 8% annual rate in the second
quarter, were essentially flat from July to September. The lull in
spending was unexpected and resulted in a build-up of unwanted
inventories during the third quarter. Subsequently, excess inventories were reduced through a modest curtailment of production. By
the fourth quarter, the brief pause had ended. Real final sales rose
at a 8.3% annual rate, following a slight decline in the third
quarter. Moreover, the economy entered 1985 with considerable
momentum: consumer spending and industrial production accelerated in November and December and the inventory-to-sales ratio
fell, providing a stimulus to further increases in production and
employment during 1985.
COMPONENTS OF REAL GNP
(Percent change, annual rate)
1983 *
Real G N P
Final s a l e s
C h a n g e in b u s i n e s s i n v e n t o r i e s 2 . . .
. . .
6.3
4.1
36
1984
Ql
Q2
10.1
3.6
31.6
7.1
10.3
20.3
Q3
1.6
-1.0
30.6
Q4
3.9
8.3
14.2
1
Fourth quarter of 1982 to fourth quarter of 1983.
2
Dollar amount in billions of 1972 dollars.
The kind of economic growth the economy experienced in the
first half of 1984 is not sustainable on a long-term basis, but it is
typical of the early stages of a business cycle expansion. It is also
typical for the economy to pause following such periods of rapid
growth in order to consolidate earlier gains. In four previous postwar expansions, a pause occurred after six to eight quarters of
rapid growth. The previous pauses lasted two to three quarters
during which growth was below its long-term trend, but not negative. The pauses were followed by renewed economic growth. If the
economy continues to expand as it did in the fourth quarter, the
recent pause will be even briefer than usual.
3-12
THE BUDGET FOR FISCAL YEAR 1986
ECONOMIC ASSUMPTIONS AND THE BUDGET
3-13
Financial indicators also suggest that economic activity will continue at a moderately rapid pace this year. The Federal Reserve
has moved aggressively in recent months to increase the growth of
the money supply. The money supply, which fell slightly from June
to October, rose at a 10% annual rate in November and December.
Short-term interest rates, notably the Federal funds rate and the
91-day Treasury bill rate, fell over 2V2 percentage points from the
beginning of September to the end of December. The discount rate
was lowered 1 percentage point in two stages in November and
December. This shift in monetary policy should help ensure continuation of the expansion this year. The Federal Reserve is pursuing this monetary policy with due care that the rate of growth of
the money supply not become so rapid as to reignite inflationary
expectations. The Federal Reserve has been able to shift monetary
policy somewhat because inflation has remained low and the Federal Reserve and the administration are maintaining their antiinflationary commitment.
The Outlook for 1985-1986.—Although economic growth has revived following previous pauses, it has never resumed the very
rapid pace set in the recovery phase of expansions. It is relatively
easy to increase output during the initial recovery phase. Ample
supplies of unemployed labor and unused capacity are available to
meet any surge in demand. However, much of the unused supply is
absorbed in the initial stage of the recovery, and subsequent
growth depends on the economy's ability to add to its supplies of
labor and capital. It is then that the economy's supply-side becomes
the dominant factor in determining the rate of growth.
In the early stage of a cyclical recovery, any underestimate of
aggregate demand is likely to produce an underestimate of real
economic growth. This was the error forecasters made in 1983.
However, as the recovery proceeds, an underestimate of demand is
more likely to produce a mistakenly low estimate for the rate of
inflation. This was a common mistake in the late 1970's.
The forecast for 1985-86 assumes that monetary policy will avoid
excessive stimulus, while providing sufficient liquidity to sustain
the expansion. It is wrong to assume that, because a stimulative
monetary policy can produce a rapid rate of real economic growth
in the early stages of a business cycle recovery, it is capable of
producing rapid growth at any stage of the cycle. Experience suggests that attempts to do that result in accelerating inflation and a
premature end to what might otherwise be a long and healthy
expansion.
The highlights of the forecast include the following:
• Real GNP is expected to grow 4% in both 1985 and 1986. This
is consistent with a return to healthy expansion following a
temporary pause.
3-14
THE BUDGET FOR FISCAL YEAR 1986
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) 3
Annual economic assumptions:
Gross national product:
Current dollars*.
Amount
Percent change, year over year
Constant (1972) dollarsAmount
Percent change, year over year
Incomes-.
Personal income
Wages and salaries
Corporate profits before tax
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 average3
Insured, annual average4
Federal pay raise, January (percent):
Military 5
Civilian
Interest rate, 91-day Treasury bills (percent) 6
Interest rate, 10-year Treasury notes (percent)
Forecast
Actual
1983
1984»
1985
10.4
6.3
9.3
5.6
8.5
4.0
8.5
4.0
3.8
3.5
4.3
4.3
2.9
8.4
3.6
7.1
4.2
6.9
4.3
6.8
3,305
7.7
3,661
10.8
3,948
7.8
4,285
8.5
1,535
3.7
1,639
6.8
1,702
3.9
1,771
4.0
2,744
1,659
203
3,013
1,804
234
3,241
1,921
242
3,483
2,065
286
21.5.3
3.8
223.4
3.7
231.9
3.8
242.0
4.4
297.4
3.0
307.6
3.4
320.2
4.1
334.2
4.3
9.5
3.9
7.4
2.8
7.0
2.8
6.9
2.8
8.6
11.1
4.0
4.0
9.6
12.4
4.0
3.5
8.1
11.0
5.2
-5.0
7.9
10.3
1
2
Preliminary actual data.
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 required by law, in calculating automatic cost-of-living increases for indexed Federal programs. The manner in which this index measures
housing
costs changed significantly last month.
3
Percent of total labor force, including armed forces residing in the U.S.
4
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.
* A 3.0% military pay raise is projected for Jury 1985. The 1986 military pay raise is projected for October.
•Average rate on new issues within period, on a bank discount basis. These projections do not represent a forecast of interest rates.
• The GNP deflator is expected to rise 4.3% in both 1985 and
1986. This is a slight acceleration from its remarkably low
rate of increase in 1984, but it is still a moderate and predictable pace.
• The unemployment rate is expected to decline modestly in
1985 and 1986.
3-15
ECONOMIC ASSUMPTIONS AND THE BUDGET
LONG-RANGE ECONOMIC ASSUMPTIONS
(Calendar years; dollar amounts in billions)
Assumptions
1987
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)*
Unemployment rate (percent, fourth quarter) 2
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 before tax
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 2
Insured, annual average3
Federal pay raise (percent):
Military (October)
Civilian (January)
Interest rate, 91-day Treasury bills (percent) 4
Interest rate, 10-year Treasury notes (percent)
1989
1988
1990
8.3
4.0
7.9
4.0
7.4
3.8
6.9
3.6
4.1
3.8
3.5
3.2
4.1
6.5
3.8
6.2
3.5
6.0
3.2
5.7
4,642
8.3
5,017
8.1
5,399
7.6
5.780
7.1
1,841
4.0
1,915
4.0
1,989
3.9
2,061
3.6
3,747
2,237
336
4,019
2,425
360
4,312
2,624
377
4,596
2,824
396
252.1
4.2
262.0
3.9
271.4
3.6
280.4
3.3
348.1
4.2
361.7
3.9
374.8
3.6
387.2
3.3
6.6
2.6
6.3
2.5
6.1
2.3
5.8
2.2
5.4
3.0
7.2
9.3
5.3
3.0
5.9
7.3
5.0
3.0
5.1
5.7
NA
3.0
5.0
5.5
1
CPj for urban wage earners and clerical workers. Two versions of the CPI are now published. The index shown here is that currently used,
as 2required by law, in calculating automatic cost-of-living increases for indexed Federal programs.
Percent of total labor force, including armed forces residing in the U.S.
3
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
Average rate on new issues within period, on a bank discount basis. These projections assume, by convention, that interest rates decline with
the rate of inflation. They do not represent a forecast of interest rates.
• The downward trend in interest rates in the second half of
last year is not expected to be reversed. Both long-term and
short-term interest rates are projected to decline somewhat
over the 2-year forecast horizon, but long-term rates are expected to fall more than short-term rates.
The Long-Run Assumptions: 1987-1990,—The long-term economic
assumptions are not intended to be a precise forecast of future
economic conditions. They are projections of trends for the relevant
3-16
THE BUDGET FOR FISCAL YEAR 1986
economic variables. The projections are based on the presumption
that the fiscal policy proposed in this budget will be enacted, and
that the Federal Reserve will continue to pursue a policy of reducing the rate of growth of the monetary aggregates.
Real GNP is projected to grow at an annual rate of 4% in 1987
and 1988. Over the following 2 years, its projected growth rate
slows down to 3.6%, close to its long-run average. This is consistent
with a gradual decline in the total unemployment rate to 5.8% by
1990. Underlying the projected real growth rate are assumptions
that a strong increase in employment will occur and that output
per hour in the nonfarm business sector will grow at an average
rate of about 2% over the 1985-1990 period.
Although the annual rate of growth in the population over 16
should be about 1% for the next 5 years, the economic assumptions
call for an increase in employment substantially faster than that.
There are three reasons for this assumption.
• The demographic and social trends that have already produced substantial increases in female labor force participation
are expected to continue for the remainder of the decade.
• The number of people in the prime working ages of 25 to 54
will grow quite rapidly. This will raise the average rate of
labor force participation for the total population.
• The total unemployment rate is assumed to decline gradually
between now and 1990.
It is also assumed that a substantially faster growth of productivity than prevailed in the 1970's will be achieved. A variety of
administration initiatives have helped foster a business climate
that favors increases in efficiency.
• The most important factor justifying an optimistic productivity assumption is the strength in capital spending that has
marked the recovery so far.
• Stable, moderate inflation has reduced uncertainty about
future price increases, encouraging investment and long-term
planning.
• Lower inflation expectations have helped moderate wage and
salary demands, and more flexible work rules and fewer
strikes have helped raise labor productivity.
• Deregulation in transportation, energy, and finance has increased productivity in these sectors and lowered their relative prices, transmitting the benefits of deregulation and raising productivity elsewhere.
• Prime-aged workers between 25 and 54 make up an increasing share of the total labor force, and their greater experience
should raise average labor productivity.
• The prospect of stable or declining oil prices for the next
several years is not only a boon to consumers, but should also
ECONOMIC ASSUMPTIONS AND THE BUDGET
3-17
eliminate one of the main causes of the sudden shocks that
damaged productivity growth in the 1970's.
• The increase in research and development investment since
the late 1970's has produced a stream of new innovations that
will help to sustain productivity growth. Since 1978, the share
of GNP going to research and development expenditures has
increased 16%.
• Cost-cutting measures by businesses are likely to continue,
spurred in part by foreign competition.
From the cyclical peak in the third quarter of 1981 to the fourth
quarter of 1984, output per hour in the private nonfarm business
sector increased at an annual rate of 2%. This period covers both
the severe recession of 1981-82 and the two subsequent years of
recovery. It is perhaps too soon to state conclusively that the poor
productivity performance of the 1970's is over, but this sustained
period of normal productivity growth certainly justifies a modest
degree of optimism that the economy will be able to maintain 2%
productivity increases throughout the rest of the decade.
It is sometimes argued that the assumption that the economy
will resume its average rate of productivity growth is too cautious.
The claim is made that the economy can grow faster than 4% a
year, that it is capable of 5% growth, or even more. After all, the
economies of the Pacific Rim are growing at least this rapidly, and
the U.S. grew nearly this fast for some of the time in the 1960's.
Why not assume that the administration's policies will succeed in
achieving at least comparable growth during the rest of the 1980's?
It is, of course, impossible to prove that such rapid economic
growth could not happen, but there are good reasons to believe it is
highly unlikely.
• For 8 years following the trough of the 1960-61 recession, the
economy grew at an average annual rate of 4.9%. This is the
fastest the economy has grown in the postwar period for such
an extended interval, comparable to the time that will have
elapsed since the trough of the 1981-82 recession by the end
of the forecast interval in 1990. In the 1960's, expansionary
fiscal and monetary policies boosted the growth rate, but they
also carried the economy past the threshold where it was
possible for the rate of inflation to remain stable. When the
spending boom began, the inflation rate was less than 2% a
year; before the boom was over, it had nearly tripled. The
virulent inflation unleashed by these policies has only finally
been brought under control during the last 4 years.
• The long-term economic assumptions include an optimistic
projection of employment growth. If it is achieved, many relatively inexperienced workers will find employment between
now and 1990. Their productivity will not be as high as that
3-18
THE BUDGET FOR FISCAL YEAR 1986
of more seasoned workers. Faster productivity growth might
be achieved if employment growth is slower than projected in
the budget, but in this case the overall rate of economic
growth, which is the sum of employment and productivity
growth, would not be significantly higher.
• Recent evidence suggests that productivity growth has recovered somewhat from its dismal performance of the 1970's.
Over the last 3 V2 years it has averaged about 2%. But 2 years
into the recovery there is no hard evidence at all that it is
approaching the much more rapid rates that would be required for real GNP to grow at 5% a year or faster.
On the other hand, it has been argued that the assumption of 4%
economic growth for the next few years is far too optimistic and
that a more reasonable guess about future growth would be a rate
of increase in real GNP of 3%, or even lower. However, this assumes that the economy in the years ahead will not be able to
reach even its average level of performance in the earlier postwar
period. Such caution would seem unduly pessimistic. The recovery
that has occurred so far has been sparkling, and it is not unrealistic to assume that further improvement in the unemployment rate
and a closer approach to normal capacity utilization are feasible. If
economic growth over the next few years proceeds at no faster
than 3%, then improvements in unemployment, if any, are likely
to be very gradual.
An economic growth rate of 4% for the next several years is
achievable with appropriate monetary and fiscal policies. Faster
growth might be achieved, temporarily, by pursuing irresponsible
policies to stimulate demand, but this kind of demand-led growth
could not be sustained, and the attempt to do so would be highly
inflationary.
The administration assumes that the rate of inflation, as measured by the GNP deflator, will increase slightly to 4.3% in 1986,
and then decline gradually, falling to 3.2% in 1990. The administration remains committed to the policy of inflation reduction that
has already produced significant results and should continue to
produce them in the future. This would be a unique accomplishment. The postwar era has not yet seen such a lengthy period of
uninterrupted economic growth without an acceleration in the rate
of inflation. The key to this policy is the Federal Reserve's commitment to a gradual and predictable reduction in the rate of growth
in the money supply.
It is also assumed that real interest rates will gradually return
to their long-term average levels by the end of the projection
period.
ECONOMIC ASSUMPTIONS AND THE BUDGET
3-19
DEFICITS, DEBT, AND CAPITAL FORMATION
Despite the relatively strong 4% growth trend and the declining
interest rates incorporated in the assumptions, current services
budget deficits remain in the $220-$250 billion range each year
through 1990. Increases in the Federal debt of this magnitude can
have important economic consequences.
From the end of World War II until 1980, Federal debt became a
smaller and smaller share of total private wealth. This decline
occurred even though the Federal budget was in deficit most of the
years after World War II, and every year but one after 1960. The
reason for this decline is that the deficits were small enough so
that private saving and the revaluation of private wealth due to
inflation added to private wealth faster than the deficits added to
Federal debt. The recent large deficits, however, have caused a
sharp increase in Federal debt that has reversed the post-World
War II trend.
This trend in Federal debt relative to private wealth has important implications for capital formation. For the individual investor,
Government securities and other forms of investment are basically
similar. For the economy as a whole, however, there is a crucial
difference. Except for Government bonds, privately held wealth is
generally backed by some real physical capital in the economy.
Corporate bonds or corporate stocks, for example, are backed by
the capital investments of corporations. Similarly, bank certificates
of deposit are backed by the investment made by those borrowing
from banks. In contrast, Government bonds are not backed by real
capital, and do not represent any increment in capital for society.
Government debt is backed only by the taxing power of the Federal
Government.
Therefore, since savings used to purchase new Federal debt do
not represent additions to the economy's capital stock, those savings have an illusory quality. For the individual saver, buying
Government bonds raises his or her private wealth, but, for the
economy as a whole, Government debt does not add to the total
capital stock of the economy. This is the essence of the crowdingout problem. For a given level of private wealth, the more that is
accounted for by Federal Government debt, the less will be the
economy's total real capital stock.
In 1980, Federal debt accounted for about 6.2% of total private
wealth. By 1984, that figure had risen to 9.4%. If deficits were to
continue at the levels projected on a current services basis, the
share of total private wealth accounted for by Government debt
would continue to grow rapidly. Thus far in this recovery, in spite
of the growth of Federal debt relative to private wealth, domestic
investment has not been crowded out. This has occurred partly
because of the large net inflow of foreign savings. However, the
3-20
THE BUDGET FOR FISCAL YEAR 1986
long-term prospect of continued healthy growth in the real capital
stock remains threatened unless the measures proposed in this
budget to reduce the growth in Federal debt are enacted.
SENSITIVITY OF THE BUDGET TO ECONOMIC
ASSUMPTIONS
Both receipts and outlays are strongly affected by changes in
economic conditions. Budget estimates and projections, therefore,
are a function of the economic assumptions upon which they are
predicated, and are highly sensitive to changes in those assumptions.
The sensitivity of the budget aggregates to economic conditions
seriously complicates budget planning because forecasting the economy inaccurately leads to forecasting the budget inaccurately, and
economic forecasting is not an exact science. On the other hand,
the budgetary impacts of a specific change in an economic assumption are generally fairly predictable. Therefore, an approximation
to how the budget aggregates would change, given a specific set of
changes in the economic outlook, can be calculated using rules-ofthumb.
Rules-of-Thumb.—In applying these rules, it is important to consider the combined effects of all economic variables that change.
Many economic variables, such as real growth and the unemployment rate, are closely linked, and it may be unrealistic to assume a
change in one without taking into account an associated change in
the other. Again, if real growth changes, should the rate of inflation be assumed to be higher, lower, or unchanged? Should interest
rates change? In a dynamic economy, the tendency is for a shock to
be transmitted to almost every aspect of economic performance.
The following table shows, in its first bank of figures, the effects
on receipts, outlays, and the deficit of a hypothetical sustained one
percentage point higher rate of inflation, beginning January 1986.
It is assumed that real economic growth is unchanged, so that
nominal GNP growth must also be one percentage point higher.
Unemployment is assumed to be unchanged. With inflation one
percentage point higher, interest rates are also assumed to be one
percentage point higher. While nearly all receipts respond directly
and immediately to inflation, the outlay effects shown, other than
interest costs, are limited to those programs that respond automatically to inflation under current law, usually with a lag resulting
from a cost-of-living adjustment procedure. Defense spending and
Federal pay scales, for example, are not adjusted. Therefore, by
1990, the gain in receipts exceeds the increase in outlays by $24 V2
billion. Were more categories of outlays adjusted for the higher
inflation, the gap would vanish.
3-21
ECONOMIC ASSUMPTIONS AND THE BUDGET
The second bank of figures in the table shows the effect on the
deficit of assuming a rate of real economic growth one percentage
point lower than in the budget for the period 1986-90. No change
in the rate of inflation is assumed, so the rate of growth of nominal
GNP must also be one percentage point lower. Interest rates are
assumed to be unchanged, but the unemployment rate is assumed
to rise by one percentage point for each two percentage points that
the level of real GNP falls below its base path. By 1990, the deficit
is $73 billion higher.
The third bank of figures shows the budget implications of combining the first two banks of figures; that is, the effects of assuming no change in the rate of growth of nominal GNP, but a shift in
the composition of that growth to one percentage point higher
inflation and one percentage point lower real growth. Interest rates
are assumed to be one percentage point higher, and the unemployment rate is assumed to be higher than in the base path in accordance with the same relationship as used in the second bank of
figures. Except for some minor compounding effects, the third case
is essentially the sum of the first two. Also, the effects shown are
approximately symmetric, so that the effects of a percentage point
lower inflation and higher real growth would be of the same magnitude as shown in the table, but of opposite sign.
SENSITIVITY OF THE BUDGET TO RATES OF ECONOMIC CHANGE AND SHIFTS IN THE COMPOSITION
OF NOMINAL GNP
(Fiscal years, in billions of dollars, current law basis)
1986
Effect of a one percentage point change in annual
nominal GNP growth rate resulting from:
A one percentage point higher annual rate of
inflation (and interest rates) beginning January
1986:
Change in receipts
Change in outlays
Change in deficit
A one percentage point lower annual rate of real
growth beginning January 1986:
Change in receipts
Change in outlays
Change in deficit
Effect of a one percentage point higher annual rate of
inflation (and interest rates) and a one percentage
point lower annual rate of real growth, with no change
in the annual nominal GNP growth rate, beginning
January 1986:
Change in receipts
Change in outlays
Change in deficit
1987
1988
1989
1990
4.0
3.3
14.4
11.3
26.1
18.6
39.0
24.3
-0.7
-3.1
-7.4
-14.7^
-24.5
-3.4
0.7
-13.6
3.3
-26.0
7.4
-40.2
11.8
-55.8
17.2
4.1
16.9
33.4
52.0
73.0
0.5
3.9
0.6
14.8
-0.6
26.6
-2.7
37.3
-4.7
48.7
3.4
14.2
27.3
40.0
53.5
54.0
29.4
3-22
THE BUDGET FOR FISCAL YEAR 1986
The foregoing abstracts from possible changes in the assumed
income share composition of GNP that would likely accompany any
changes in the rate of real growth, the inflation rate, or interest
rates. Because different GNP components such as wages and salaries, nonwage personal income, and corporate profits are subject to
different taxes and tax rates, estimates of total receipts can be
significantly affected by changing the income shares. These relationships are too complex, however, to be reduced to simple rulesof-thumb, and are not further considered here, although it is important to be aware of their existence.
The final table of this section shows a disaggregated set of rulesof-thumb for the effects on outlays of changes in the unemployment rate, in interest rates, in Federal pay levels, and in inflation
as it affects indexed programs subject to automatic cost-of-living
adjustments (COLAs) under current law. For these COLAs, the
effects are shown both on the basis of current law, and as they
would be modified under the budget proposals. These effects were
discussed in more detail in the 1985 budget.
Changes in the Budget's Sensitivity to Inflation.—Over the years,
legislation has changed the automatic responses of the budget to
inflation. A prime example is the indexation of individual income
tax brackets, enacted in 1981, with the first adjustment effective
this year.
Previously, this tax was extraordinarily sensitive to inflation
because of "bracket creep." With graduated rates and brackets
fixed in nominal terms, inflation pushed people into higher and
higher marginal tax brackets, increasing the percentage of their
income paid as income tax, even when their real income was
unchanged. As a result, a percentage point of inflation that increased nominal personal incomes by a percentage point would
increase individual income tax receipts by 1.5%, with the "extra"
half a percent due to "bracket creep." By adjusting the tax brackets for inflation, indexation eliminates the extra half percent
"bracket creep," limiting the rise in receipts to the growth of
nominal income. The adjustments are not instantaneous; they occur
with about a 1-year lag after the inflation that triggers them.
Over the years, legislation has provided for automatic annual
cost-of-living adjustments to benefits paid out under a growing
number of entitlement programs such as social security, Federal
employee retirement, and food stamps. The enactment of medicare
and medicaid as open-ended entitlements created a category of
Federal program that is not explicitly indexed, but whose costs rise
directly with increases in prices charged for medical care. For still
other programs, such as aid to families with dependent children
and unemployment compensation, Federal costs are determined by
benefit levels set by the States.
3-23
ECONOMIC ASSUMPTIONS AND THE BUDGET
SENSITIVITY OF THE BUDGET TO ECONOMIC ASSUMPTIONS
(Fiscal years; in billions of dollars)
1985
1986
1987
1988
1989
1990
PRICES (EFFECT ON INDEXED PROGRAM OUTLAYS)
Sustained one percentage point higher rate of
inflation beginning July 1985:
Under current law
Under proposed law
One-time one percentage point jump in price
level occurring July 1985:
Under current law
Under proposed law
0.4
0.3
2.9
2.6
6.2
5.6
9.7
13.5
12.2
1.9
1.6
2.8
2.3
2.9
2.4
3.0
2.5
3.0
2.5
8.2
6.4
11.7
10.7
14.8
14.1
16.4
15.8
17.8
17.4
5.8
10.8
10.8
9.5
2.2
1.8
2.1
2.0
2.3
2.0
2.4
2.0
2.5
2.0
0.5
0.5
0.5
0.5
0.2
0.2
-0.1
0.3
0.3
-0.1
0.3
0.4
-0.1
0.3
0.4
-0.1
INTEREST RATES (EFFECT ON NET INTEREST)
Sustained one percentage point increase in
interest rates under budget policy deficits, beginning:2
January 1,1985
July 1,1985
2.6
0.4
INTEREST COST OF HIGHER FEDERAL BORROWING
Effect of $100 billion borrowing in 1986 2
UNEMPLOYMENT RATE
One percentage point higher rate beginning
January 1,1985:
Unemployment benefits
Other unemployment-sensitive outlays
2.1
1.0
FEDERAL PAY RAISES
Outlay effect of one percentage point increase:
Military personnel (October 1986)
Civilian employees (January 1987):
Department of Defense
Civilian agencies
Employer share, employee retirement
1
2
Omits increase in receipts due to higher Federal Reserve System deposits of earnings.
Includes subsequent interest on borrowing incurred to pay for previous interest costs.
Policies of targeting a specific rate of real growth for the defense
budget have meant that the defense budget must be fully adjusted
for inflation if the real growth target is to be achieved. Enactment
of Federal pay comparability was designed to index Federal employee pay scales to private sector pay, but the automatic adjustments can be overridden by Presidential and congressional action.
With the responsiveness of receipts to inflation greatly reduced
from what it used to be and the responsiveness of outlays increased, the deficit will not decline significantly due to continued
inflation. Policy actions, such as the spending "freeze" proposed by
the administration, are needed to reduce the deficit.
CHANGES IN THE BUDGET OUTLOOK SINCE LAST YEAR
The February 1984 budget projected 4.5% real GNP growth between the fourth quarter of 1983 and the fourth quarter of 1984. In
fact, growth was much higher than that in the first half of the
3-24
THE BUDGET FOR FISCAL YEAR 1986
year, and significantly slower in the second half, with the 4-quarter
change coming to 5.6%, 1.1 percentage point above the forecast.
Partly in consequence, the unemployment rate in the fourth quarter of 1984 was 7.1%, 0.6 percentage points below the forecast of
7.7%.
COMPARISON OF FEBRUARY 1984 AND CURRENT ECONOMIC ASSUMPTIONS
(Calendar years; dollar amounts in billions)
Nominal GNP:
1984 assumptions*
1985 assumptions
Real GNP (percent change): 2
1984 assumptions
1985 assumptions
GNP deflator (percent change): 2
1984 assumptions
1985 assumptions
Interest rate on 91-day Treasury bills (percent):
1984 assumptions
1985 assumptions
Unemployment rate (percent):
1984 assumptions
1985 assumptions
1
2
1984
1985
1986
1987
1989
3,626
3,661
3,955
3,948
4,299
4,285
4,660
4,642
5,035
5,017
5,419
5,399
4.5
5.6
4.0
4.0
4.0
4.0
4.0
4.0
4.0
4.0
3.8
3.8
5.0
3.5
4.7
4.3
4.4
4.3
4.1
4.1
3.8
3.8
3.5
3.5
8.5
9.6
7.7
8.1
7.1
7.9
6.2
7.2
5.5
5.9
5.0
5.1
7.8
7.4
7.6
7.0
7.3
6.9
6.8
6.6
6.1
6.3
5.7
6.1
Adjusted for July 1984 historical revisions.
Fourth quarter to fourth quarter.
The 4-quarter rise in the implicit price deflator for GNP, 3.5%,
was significantly below the forecast of 5.0%; partly in consequence,
the increase projected for 1985 has now been reduced from 4.7% to
4.3%. Overall, the 4-quarter change in nominal GNP, 9.3%, was 0.5
percentage point less than last year's forecast of 9.8%, as lower
than expected inflation more than offset higher real growth.
The 4-quarter rise in the Consumer Price Index, 3.6%, was 0.8
percentage point lower than the 4.4% forecast, resulting in a
lower January 1985 cost-of-living adjustment to social security and
other indexed programs' benefits than was projected last year.
Interest rates are now approximately at the levels forecast for
the first quarter of this year, although their average levels during
1984 were one or two percentage points above forecast. Forecast
errors for other economic assumptions bearing on the budget estimates were generally relatively small.
Since 1984 economic performance did not deviate markedly from
expectation, it affords little basis for substantial change to the
1985-89 economic outlook. Indeed, the current assumptions about
inflation, rates of real economic growth, and other relevant aspects
of economic performance for that period are much the same as the
assumptions used a year ago. In consequence, the budget outlook,
insofar as it is a function of economic assumptions, has not
changed radically since last year. The major differences are due to
3-25
ECONOMIC ASSUMPTIONS AND THE BUDGET
EFFECTS ON THE BUDGET OF CHANGES IN ECONOMIC ASSUMPTIONS SINCE LAST YEAR
(Fiscal years; in billions of dollars)
1985
1986
1987
742.6
953.6
810.9
964.7
877.9
1,009.1
966.4
1,072.1-
1,049.9
1,116.9
-211.0
-153.8
-131.1
-105.7
-67.0
-5.7
-17.2
-16.2
-16.0
-20.0
-2.4
-2.6
10.4
0.1
5.5
-4.8
-2.4
14.4
1.8
9.0
-5.9
-1.1
20.4
4.1
17.5
-6.5
0.2
22.7
6.3
22.7
-6.7
1.5
17.5
8.2
20.5
11.2
26.3
33.8
38.5
40.3
736.9
959.1
793.7
973.7
861.7
1,026.6
950.4
1,094.8
1,029.9
1,137.4
-222.2
-180.0
-164.9
-144.4
-107.5
Current budget estimates1 adjusted to February
1984 economic assumptions:
Outlays..
Deficit ( - )
Changes due to economic assumptions:
Receipts
Outlays:
Inflation
Unemployment
Interest rates
Interest on changes in borrowing..
Total, outlays..
Increase in deficit....
Current budget estimates.-l
Receipts
Outlays
Deficit ( - )
Addendum:
Increase in deficit due to:
Actual 1984 economic performance
Change in the forecast for 1985-1989
Percent due to 1984 economic performance..
1
9.4
1.8
(84)
11.2
15.0
(43)
14.5
19.3
(57)
18.2
20.5
(53)
19.4
21.1
(52)
Includes outlays that are off-budget under current law, but proposed to be placed on-budget.
higher interest rates, and to slightly lower inflation in 1984 and
1985, which reduces both receipts and outlays in all subsequent
years, with the reduction in receipts much greater than that in
outlays. As noted in the preceding section, this last point results
from attributing to inflation only those changes in outlays that are
an automatic response to inflation—for example, due to statutory
cost-of-living adjustments.
Last year's budget estimates reflected considerable improvement
in the economy and in the budget outlook since the preceding
budget. This did not compensate, however, for the large declines
that had by then occurred from the forecast in the March 1981
budget revisions, as shown in the final table. In this context, the
slight worsening of the budget outlook since last year (primarily
attributable to higher interest rates and lower than expected inflation) can be seen as a partial offset to the degree of improvement
that was projected last year.
3-26
THE BUDGET FOR FISCAL YEAR 1986
EFFECTS ON THE DEFICIT OF CHANGES IN ECONOMIC ASSUMPTIONS SINCE MARCH 1981
(Fiscal years; in billions of dollars)
1982
Increase in deficit, March 1981-January
1983
Decrease in deficit, January 1983-February
1984
Increase in deficit, February 1984-February
1985
Net increase in deficit, March
1981-February 1985
70.0
70.0
1983
1984
1985
1986
167.3
197.7
224.6
252.3
-11.8
-29.3
-37.2
-37.7
-5.3
11.2
26.2
163.1
198.6
240.8
155.5
PART 4
BUDGET RECEIPTS
4-1
BUDGET RECEIPTS
Budget receipts are taxes and other collections from the public
that result from the exercise of the Government's sovereign or
governmental powers. These receipts are compared with budget
outlays to determine the budget surplus or deficit.
This section of the budget discusses budget receipts for 1984 to
1988 and the legislative proposals and administrative actions affecting them.1
SUMMARY
Total budget receipts in 1986 are estimated to be $793.7 billion,
an increase of $56.9 billion from the $736.9 billion estimated for
1985. Receipts in 1987 and 1988 are estimated to be $861.7 billion
and $950.4 billion, respectively. These estimates include the effects
of:
• previously enacted tax legislation, the most recent of which is
the tax revisions and reforms provided in the Deficit Reduction Act of 1984; and
• the receipts proposals—primarily increased user fees and
trust fund reforms—in this budget.
BUDGET RECEIPTS BY SOURCE
(In billions of dollars)
1984
actual
Source
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts
Total, budget receipts
.
...
1985
estimate
1986
estimate
1987
estimate
1988
estimate
296.2
56.9
241.7
37.4
6.0
114
17.0
329.7
66.4
268.4
37.0
5.6
118
18.0
358.9
74.1
289.4
35.0
5.3
12.3
18.6
392.5
87.5
309.5
35.0
5.0
12.8
19.5
433.6
99.0
346.5
33.6
4.7
13.4
19.6
666.5
736.9
793.7
861.7
950.4
1
Detailed estimates of budget receipts by source for 1984 to 1986 are shown in Tables 13 and 19 of Part 9. The
economic assumptions on which the receipts estimates are based are presented in Part 3, and estimates of
receipts for 1984-90 are presented in table 2 of Part 9. Part 6 contains an analysis of the difference between
actual receipts for 1984 and the budget estimates for 1984 transmitted to the Congress in January 1983. Part 7
explains the conceptual basis for classifying certain amounts collected by the Federal Government as budget
receipts and other amounts as offsetting collections.
4-2
BUDGET RECEIPTS
4-3
Composition of budget receipts.—The Federal tax system relies
predominantly on income and payroll taxes. In 1986:
• Income taxes paid by individuals and corporations are estimated at $358.9 billion and $74.1 billion, respectively. These
sources combined account for 54.5% 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 $289.4 billion, 36.5% of the total.
• Excise taxes imposed on selected products, services, and activities are expected to provide $35.0 billion, 4.4% of the total.
• Estate and gift taxes, customs duties, and miscellaneous receipts are estimated at $36.3 billion, the remaining 4.6% of
budget receipts.
Under the tax policy and economic assumptions presented in this
budget, the income tax share of total receipts is projected to rise to
56.0% by 1988, 1.5 percentage points more than its 1986 share. This
rise is the combined effect of a 0.4 percentage point rise in the
individual income tax share to 45.6% and a 1.1 percentage point
rise in the corporation income tax share to 10.4%. Social insurance
taxes and contributions are projected to remain constant as a share
of total receipts at 36.5%. The excise tax share is projected to
decline to 3.5% in 1988, 0.9 percentage point less than for 1986.
The projected share of all other receipts declines by 0.6 percentage
point between 1986 and 1988.
ENACTED LEGISLATION
Several major tax laws have been enacted since this administration took office in January 1981. The first, the Economic Recovery
Tax Act of 1981 (ERTA), provides incentives for work, saving, and
investment. The major provisions of the Act include an across-theboard reduction in individual income tax rates and other reductions in individual income taxes; the annual adjustment of the zero
bracket amount, the personal exemption, and individual income
tax brackets for inflation beginning in 1985; and the accelerated
cost recovery system (ACRS) for depreciation of capital expenditures.
The second major tax law, the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), improves the fairness of the tax system
while preserving the incentives for work, saving, and investment
enacted in 1981. This Act increases receipts primarily by eliminating unintended benefits and obsolete incentives, and providing
mechanisms to increase taxpayer compliance and improve collection techniques.
4-4
THE BUDGET FOR FISCAL YEAR 1986
The Highway Revenue Act of 1982 is the third major tax law
enacted since January 1981. This Act increases the excise tax on
gasoline and diesel fuel by 5 cents a gallon and restructures other
highway related taxes to make the taxes paid by various highway
users correspond more equitably to the wear and tear that such
users cause to the highway system.
Three major laws affecting receipts were enacted during 1983:
the Social Security Amendments of 1983, the Interest and Dividends Tax Compliance Act of 1983, and the Railroad Retirement
Revenue Act of 1983. The first, the Social Security Amendments of
1983, assures the future solvency of the social security trust funds
through a combination of revenue increases and benefit reductions
that restores reserves to safer levels.
The major provision of the Interest and Dividends Tax Compliance Act of 1983 repeals the withholding of taxes on interest and
dividend income provided in TEFRA.
The tax increases provided in the Railroad Retirement Revenue
Act of 1983, together with the benefit reductions provided in the
Railroad Retirement Solvency Act of 1983, are designed to place
the railroad retirement program on a sound financial basis.
The most recent tax law is the Deficit Reduction Act of 1984
(DEFRA). The major provisions of this Act, which are described in
more detail below, are designed to increase the efficiency of the tax
system by curbing tax shelter abuse, limiting unwarranted tax
benefits, and increasing taxpayer compliance.
As a result of these legislated changes, taxes have been reduced
by $649.8 billion over the 1984-1988 period, relative to what they
would have been under pre-1981 tax law. As shown in the following
table, there is a net tax reduction every year during this period,
rising from $92.4 billion in 1984 to $167.2 billion in 1988.
NET EFFECT OF MAJOR ENACTED LEGISLATION ON RECEIPTS *
(In billions of dollars)
1984
1985
1986
1987
1988
1984-1988
Economic Recovery Tax Act of 1981
-136.8 -168.5 -210.8 -250.9 -283.0 -1,050.0
253.6
Tax Equity and Fiscal Responsibility Act of 1982
40.7
50.9
61.8
64.3
36.0
22.6
Highway Revenue Act of 1982
4.4
4.6
4.7
4.8
4.2
58.1
9.3
9.1
11.1
22.9
5.7
Social Security Amendments of 1983
-10.6
-2.4
-2.1 -1.7
-1.8
Interest and Dividends Tax Compliance Act of 1983.. - 2 . 6
4.2
0.7
1.1
1.1
1.1
0.2
Railroad Retirement Revenue Act of 1983
72.2
9.3
15.9
21.6
24.6
0.9
Deficit Reduction Act of 1984
Net tax reduction
1
- 9 2 . 4 -106.4 -131.4 -152.4 -167.2
-649.8
These estimates are based on the direct effect only of legislative changes at a given level of economic activity. Induced effects on the
economy are taken into account in forecasting incomes, however, and in this way affect the receipts estimates by major source and in total.
BUDGET RECEIPTS
4-5
The major revenue provisions of the Deficit Reduction Act of
1984 are described below.2
DEFICIT REDUCTION ACT OF 1984
Repeal of net interest exclusion.—Beginning in 1985, 15% of up
to $3,000 in annual net interest income for a single taxpayer
($6,000 for a married couple filing a joint return) could have been
excluded from tax. DEFRA repeals this provision.
Increase in distilled spirits excise tax.—The excise tax on distilled spirits is increased from $10.50 to $12.50 per proof gallon
effective October 1, 1985.
Extension of telephone excise tax.—The 3% telephone excise tax,
which was scheduled to expire on January 1, 1986, is extended
through December 31, 1987.
Restrictions on tax-exempt entity leasing.—The tax benefits attributable to property leased to a government or other tax-exempt
entity are reduced by DEFRA. Such tax-exempt-use property may
no longer be depreciated under ACRS. For example, real taxexempt-use property must be depreciated under the straight-line
method over the greater of 40 years or a period equal to 125% of
the lease term. In addition, the use of the investment tax credit for
tax-exempt-use property is further restricted. This provision generally applies to leases entered into after May 23, 1983, subject to
numerous transition rules.
Postponement of finance leasing rules.—The effective date of the
finance leasing rules provided in TEFRA is postponed four years
until January 1, 1988. These rules liberalize the definition of a
lease, enabling some unprofitable companies to sell otherwise unusable tax benefits.
Change in the depreciation period for real property.—The minimum recovery period for the depreciation of real property is increased from 15 to 18 years. This provision generally applies to all
property placed in service after March 15, 1984, with transition
rules for property subject to binding contracts or already under
construction on the effective date.
Modification of income averaging.—Under prior law, taxpayers
were allowed to determine their tax liability for a given year under
the income averaging method if their taxable income for that year
2
For a more detailed discussion of the Economic Recovery Tax Act of 1981, see Part 4 of the 1983 Budget. A
more detailed discussion of the Tax Equity and Fiscal Responsibility Act of 1982 and the Highway Revenue Act
of 1982 is provided in Part 4 of the 1984 Budget Detailed discussions of the Social Security Amendments of 1983,
the Interest and Dividends Tax Compliance Act of 1983, and the Railroad Retirement Revenue Act of 1983 are
provided in Part 4 of the 1985 Budget.
4-6
THE BUDGET FOR FISCAL YEAR 1986
exceeded 120% of their average taxable income for the four preceding years. DEFRA increases the 120% threshold to 140% and provides that only the three preceding years be taken into account.
Taxation of life insurance companies.—Substantial modifications
are made in the taxation of life insurance companies and products
that reduce the industry's tax liability. The definition of "life insurance" is also clarified.
Taxation of tax-exempt bonds.—The maximum amount of certain
types of private purpose industrial development bonds issued by a
State and the local governments within the State is limited to the
greater of $150 per capita ($100 after 1987) or $200 million per
year. Under prior law there was no limitation on the amount of
such bonds issued by State and local governments. The Act also
extends the tax-exemption for mortgage subsidy bonds, which had
expired on December 31, 1983, through December 31, 1987, and
denies tax-exemption to interest on most bonds that are federally
guaranteed.
Reduction in capital gains holding period.—The holding period
for long-term capital gains and losses is reduced from one year to
six months for assets acquired between June 22, 1984, and January
1, 1988.
Change in the taxation of partnerships.—The use of abusive partnership allocation and distribution schemes is curtailed. In addition, the Act specifies that the exchange of an interest in one
partnership for an interest in a different partnership does not
qualify as a like-kind (and therefore tax-free) exchange.
Curtailment of accounting abuses.—The Act corrects several technical accounting deficiencies that have led to serious taxpayer
abuse. These changes include the following: the tightening of rules
regarding deferred payment transactions to prevent substantial
mismatching of income and deductions, the establishment of rules
regarding the deductibility of prepaid expenses, and the extension
of current rules regarding the capitalization of construction period
interest and taxes to residential real property, other than low
income housing, owned by a corporation.
4-7
BUDGET RECEIPTS
EFFECT OF MAJOR ENACTED LEGISLATION ON RECEIPTS l
(In billions of dollars)
1984
1985
1986
1987
1988
Economic Recovery Tax Act of 1981
Individual income tax provisions
- 9 6 . 9 -114.3 -137.9 -164.3 -190.4
Capital cost recovery provisions:
Individual income taxes
Corporation income taxes
-4.4
-21.7
-5.8
-29.9
-7.9
-42.1
-9.6
-51.2
-10.2
-54.9
-26.1
-35.7
-49.9
-60.8
-65.1
Saving incentive provisions
-9.9
-12.6
Estate and gift tax provisions
-3.5
-4.9
-6.5
8.1
-9.6
Other:
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
_*
-0.7
0.5
-0.2
-0.1
-1.2
0.5
-0.3
*
*
0.6
-0.3
0.3
-0.1
0.7
-0.2
-0.4
-1.1
0.4
-0.7
0.6
-0.3
*
0.5
0.7
Subtotal, capital cost recovery provisions
Subtotal, other
Total, Economic Recovery Tax Act of 1981
Tax Equity and Fiscal Responsibility Act of 1982
Compliance and collection-.
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
16.5 - 1 8 . 2
186
-136.8 -168.5 -210.8 -250.9 -283.0
7.2
5.3
0.2
8.3
2.0
0.3
8.0
2.7
0.4
8.0
2.0
0.4
8.5
0.9
0.5
Subtotal, compliance and collection
12.7
10.6
11.1
10.5
9.8
Unintended benefits and obsolete incentives:
Individual income taxes
Corporation income taxes
Estate and gift taxes
4.0
12.1
0.2
4.7
17.8
0.2
6.4
28.3
0.2
8.4
38.6
0.2
9.1
42.9
0.2
16.3
22.8
35.0
47.3
52.3
Excise tax provisions
4.6
5.4
2.4
1.6
-0.7
Employment tax provisions:
Individual income taxes
Social insurance taxes and contributions
0.7
3.1
0.6
3.2
0.5
2.9
0.5
2.6
0.5
2.4
3.8
3.7
3.4
3.1
2.9
-1.0
-0.5
-1.2
-0.5
-0.6
-0.4
-0.3
-0.3
0.2
01
-1.5
-1.8
-1.0
-0.6
0.1
36.0
40.7
50.9
61.8
64.3
-1.2
-0.1
5.5
-1.2
-0.2
5.8
-1.3
-0.2
6.1
-1.3
-0.2
6.2
-1.3
0.2
6.3
4.2
4.4
4.6
4.7
4.8
Subtotal, unintended benefits and obsolete incentives
Subtotal, employment tax provisions
Other:
Individual income taxes
Corporation income taxes
Subtotal, other
Total, Tax Equity and Fiscal Responsibility Act of 1982...
Highway Revenue Act of 1982
Individual income taxes
Corporation income taxes
Excise taxes
Total, Highway Revenue Act of 1982
4-8
THE BUDGET FOR FISCAL YEAR 1986
EFFECT OF MAJOR ENACTED LEGISLATION ON RECEIPTS l —Continued
(In billions of dollars)
1984
1985
1986
1987
1988
Social Security Amendments of 1983
Individual income taxes
Social insurance taxes and contributions
-2.3
8.0
-0.6
9.9
-0.5
9.6
-0.6
11.7
-2.1
25.0
Total, Social Security Amendments of 1983
5.7
9.3
9.1
11.1
22.9
-2.6
*
-2.4
-2.1
_*
-1.7
_•
_•
-1.8
__*
-2.6
-2.4
-2.1
-1.7
-1.8
0.1
0.1
0.3
0.4
0.3
0.8
0.3
0.8
0.3
0.8
0.2
0.7
1.1
1.1
1.1
0.7
0.5
-0.1
-0.2
_*
5.6
3.3
__#
0.4
7.9
5.9
_*
1.9
0.3
9.9
8.1
_*
3.2
0.4
12.6
9.8
*
1.8
0.4
0.9
9.3
15.9
21.6
24.6
Interest and Dividends Tax Compliance Act of 1983
Individual income taxes
Corporation income taxes
Total, Interest and Dividends Tax Compliance Act of
1983
Railrnarf Potiramant PAUAIIIIA Art nf 1QH3
Individual income taxes
Social insurance taxes and contributions
Total, Railroad Retirement Revenue Act of 1983
Deficit Reduction Act of 1984
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Total, Deficit Reduction Act of 1984
ADDENDUM
Total effect on receipts by source:
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes
Estate and gift taxes
Total .
. .
-105.0 -117.0 -140.4 -165.5 -190.6
-9.3
-5.7 -10.5
6.4 - 4 . 3
14.3
11.9
16.2
29.4
14.4
10.1
9.6
10.7
7.2
11.3
-6.0
-3.3
-7.4
-8.9
-4.7
- 9 2 . 4 -106.4 -131.4 -152.4 -167.2
• $ 5 0 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 on the
economy are taken into account in forecasting incomes, however, and in this way affect the receipts estimates by major source and in total.
RECEIPTS PROPOSALS
Tax incentives for higher education.—The administration is again
proposing legislation to exclude from taxation the earnings on
savings deposited in special accounts that would be used to pay
future higher education expenses of dependent children. The maximum annual contribution to these accounts would be $1,000 per
child. However, this maximum would be reduced 5 cents for each
dollar that the taxpayer's adjusted gross income exceeds $40,000, so
that any taxpayer with adjusted gross income in excess of $60,000
would be ineligible.
BUDGET RECEIPTS
4-9
Eligible expenses generally would be tuition and room and board
incurred by a full-time student enrolled in a postsecondary education program leading to a degree or certification (including graduate school). In the case of part-time students in such a program,
only tuition would qualify. Special savings accounts would qualify
only if the dependent children on whose behalf the savings were
made were under age 18. In no case could an account be kept open
for a child over the age of 25. Eligible expenses would not include
amounts paid to schools that follow a racially discriminatory
policy. This proposal would be effective January 1, 1986, and is
estimated to reduce receipts by $0.1 billion in 1987 and $0.3 billion
in 1988.
Tuition tax credit—The administration is reproposing legislation
to provide taxpayers a nonrefundable credit for 50 percent of tuition expenses paid to private elementary and secondary schools for
certain qualified dependents. The maximum credit allowable for
each dependent would be $100 in 1985, $200 in 1986, and $300
thereafter, with the maximum amount in each year phased out for
taxpayers with adjusted gross incomes between $40,000 and
$60,000. Credits would not be allowed for expenses paid to private
schools that follow a racially discriminatory policy. This proposal,
which would be effective for expenses incurred after July 31, 1985,
is estimated to reduce receipts by $0.4 billion in 1986, $0.6 billion in
1987, and $0.9 billion in 1988.
Enterprise zone tax incentives.—Under current law, the only tax
incentive for the redevelopment of economically distressed areas is
a relaxation of limitations on tax-exempt financing for facilities
receiving assistance under the Urban Development Action Grant
program. The administration is again proposing that up to 25 small
areas per year (not to exceed 75 in total) be designated "enterprise
zones." Effective January 1, 1986, the following tax incentives
would be available for economic redevelopment in the zones: an
exemption from capital gains tax on certain qualified property; a
tax credit for employees equal to 5 percent of the first $10,500 of
wages earned; a tax credit for employers equal to 10 percent of any
qualified increases in their payrolls; a separate tax credit for employers of certain disadvantaged individuals equal to 50 percent of
the wages of such persons for the first three years of employment
(the percentage declines by 10 points in the fourth year and each
year thereafter); an increase of 50 percent in the regular investment tax credit for investment in equipment; a 10 percent investment tax credit for new construction and reconstruction of buildings; and continued availability of tax-exempt bond financing
beyond the 1986 sunset date for small issue bonds. These incentives, which generally would remain fully in effect for 20 years and
4-10
THE BUDGET FOR FISCAL YEAR 1986
be phased out over the succeeding four years, are estimated to
reduce receipts by $0.1 billion in 1986, $0.5 billion in 1987, and $0.9
billion in 1988.
Extension of Federal/State unemployment insurance coverage to
railroad employment—Railroad employment is the only sector not
covered by the Federal/State unemployment insurance system. The
separate Railroad Sickness and Unemployment Insurance Fund
(RSUI), which is financed by payroll taxes paid by rail employers,
is deeply in debt to the rail pension fund and under current law
would be unable to pay benefits on a timely basis beginning in
1985.
To ensure the timely payment of benefits to unemployed rail
workers, the administration proposes to extend Federal/State unemployment insurance coverage to railroad employment. Under a
transitional Federal program, all rail workers becoming unemployed after September 30, 1985, would be eligible for generally
higher benefits under the Federal/State system. Existing RSUI
debt repayment contributions would remain in place to finance
sickness payments and ensure that RSUI's debt to the rail pension
fund is repaid. This proposal is estimated to increase receipts by
$0.1 billion in 1986, and $0.2 billion in 1987 and 1988.
Financing and administering State Unemployment Insurance (III)
and Employment Service (ES) operations.—Employers currently are
subject to a Federal unemployment insurance tax (FUTA) on the
wages and salaries of their employees. The Federal Government
uses part of these taxes to finance the administrative costs of the
UI and ES programs and makes the major decisions regarding the
allocation of these resources among competing administrative
needs (claims processing, appeals, overpayment and fraud detection, etc.).
The State governments levy and collect the taxes that finance
the bulk of UI benefits, and decisions regarding the allocation of
administrative resources can have a major impact on UI tax requirements. The administration is therefore working with the
States to develop legislation that will be proposed to transfer responsibility for financing and administering the UI/ES system to
the States. Under this proposal the net FUTA tax rate would be
reduced effective January 1, 1988, resulting in an estimated reduction in these receipts of $1.8 billion in 1988. Since the States would
have responsibility for financing the administrative costs of the
system at that time, the estimated reduction in FUTA receipts is
expected to be offset by increased deposits by the States into their
accounts in the unemployment insurance trust fund. It is therefore
estimated that this proposal would have no net effect on receipts.
BUDGET RECEIPTS
4-11
Black lung disability trust fund.—Black lung disability benefits
are paid to coal miners (or to their survivors) who have been
determined to be totally disabled by black lung disease. Benefits for
miners determined to be eligible prior to 1973 are paid for by the
general fund of the Treasury. Benefits for miners determined to be
eligible since 1973 are the responsibility of the coal mining industry—either the coal mine operator found responsible for an individual miner's disease or the industry as a whole through the black
lung disability trust fund. This fund is financed primarily by a fee
on coal production. Additional funding includes repayable advances
from the Treasury when trust fund liabilities exceed income. Since
benefits have exceeded revenues for a number of years, the cumulative trust fund deficit is increasing at an alarming rate. In order
to move toward the future solvency of the trust fund and to fulfill
the original intent of the Congress that the cost of the program be
borne by the coal industry, the administration is proposing an
increase in the fee that would freeze the cumulative deficit over
the next five years. This change in the fee is estimated to increase
receipts to the trust fund by $0.2 billion in 1986, and $0.3 billion in
1987 and 1988.
State and local deposit of social security payroll taxes.—States
currently are required to make semi-monthly deposits of social
security taxes on their own behalf and for sub-State entities. Private employers and the Federal Government are required to deposit these taxes under an accelerated schedule. The administration is
requesting legislation that would remove the States' liability for
deposit of taxes by sub-State entities and conform the State and
local government deposit schedule to the private sector schedule
over a three year period beginning October 1, 1985. Late deposits
by State and local employers would be subject to the same penalty
rate (the prime interest rate) as private employers, rather than the
current interest charge of only 6%. These changes are estimated to
increase receipts $0.4 billion in 1986, less than $0.1 billion in 1987,
and $0.3 billion in 1988.
Equitable taxation of rail industry benefits.—Under current tax
law, a portion of social security equivalent benefits provided under
railroad retirement is subject to the Federal income tax. Payments
received from the rail industry pension plan are subject to the
Federal income tax to the extent that they exceed previously taxed
contributions. However, some rail industry pension benefits are
being taxed under the social security equivalent benefit rules. The
administration is proposing that effective January 1, 1986, these
pension payments be taxed under the same rules that apply to all
other payments received under the industry pension plan. This
4-12
THE BUDGET FOR FISCAL YEAR 1986
proposal is estimated to increase receipts by $0.1 billion in both
1987 and 1988.
Restructuring of the dependent care tax credit—The administration is again proposing to increase the dependent care tax credit to
40 percent of qualifying dependent care expenses for individuals
with an annual income of $10,000 or less. The credit would be
reduced as the individual's income increases above $10,000, and
would phase out completely when income reaches $60,000. This
credit, proposed to become effective January 1, 1986, is estimated to
reduce receipts by $0.2 billion in both 1987 and 1988.
Internal Revenue Service (IRS) user fees.—The administration is
proposing that the IRS impose a user fee of $100 on letters of
determination for pension plans and tax-exempt organizations.
These letters provide approval of tax status. A user fee of $100 is
also proposed for private letter rulings, which are requests by
taxpayers for clarification of the IRS position in unprecedented tax
situations. These fees, proposed to become effective October 1, 1985,
are estimated to increase receipts by less than $0.1 billion in each
year, beginning in 1986.
Hazardous substance response trust fund.—The administration
proposes to reauthorize and expand the taxing authority under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980. The taxes levied under this authority are used
to finance the Hazardous Substance Response Trust Fund, commonly referred to as "Superfund", which pays for the cleanup of
hazardous waste sites. The proposed taxes, which are estimated to
increase receipts to the trust fund by $0.9 billion over current law
in each year, 1986-1988, would be sufficient to finance the level of
spending proposed by the administration for hazardous waste site
cleanup in 1986 and later years. No appropriation from the general
fund of the Treasury will be requested.
Extension of research and experimental expenditures (R&E) tax
credit—The tax credit for incremental research and experimental
expenditures, which is scheduled to expire December 31, 1985, is
proposed to be extended for three years. Extension of this credit is
estimated to reduce receipts $0.7 billion in 1986, $1.3 billion in
1987, and $1.5 billion in 1988.
Increase in the District of Columbia (B.C.) employer contribution
to civil service retirement (CSR).—The D.C. Government currently
contributes 7% of wages and salaries to CSR; D.C. Government
employees contribute an additional 7%. The cost of civil service
retirement exceeds the combined contribution of the D.C. Government and its employees. Beginning in 1986, the administration
BUDGET RECEIPTS
4-13
proposes to increase the D.C. Government employer contribution
by 2% a year until it reaches about 29% of payroll—the level
necessary to cover the full cost of the program, when combined
with the employee contribution of 7%.3
t
IRS revenue initiative.—In 1986 the Internal Revenue Service
will begin initial phases of an initiative to close the gap between
taxes owed and paid, and to improve overall compliance with the
tax laws. Based on a Grace Commission recommendation, examination staffing will be increased by 2,500 full-time equivalent personnel in each year, 1987-89. Advance hiring will begin in 1986. Receipts are estimated to increase by $0.5 billion in 1987 and $1.5
billion in 1988 as a result of this initiative.
Tax simplification and reform.—The administration is not proposing legislation to simplify and reform the income tax system in
this budget. However, after completing consultations with members
of Congress, the administration will submit legislation to restore
fairness to the Federal income tax and to make it simpler, more
neutral, and more conducive to economic growth. Because tax
reform legislation will be revenue neutral, it is not essential that it
be reviewed at this time in the budget.
Although the administration continues to support legislation to
expand the limitations on individual retirement accounts for married couples with only one spouse working outside the home and to
impose a limitation on the amount of employer-paid health insurance premiums that employees may receive tax free, these proposals are not included in the budget because they will be part of the
forthcoming revenue neutral tax reform recommendations.
EFFECT OF ENACTED AND PROPOSED CHANGES ON
RECEIPTS
The actual change in receipts that will result from an enacted or
proposed tax revision will depend on both the direct effect of the
tax change and the indirect or "feedback" effect. The direct effect
is the increase or decrease in receipts due only to the tax change at
given levels of income. The indirect or feedback effect is the increase or decrease in receipts due to the effect of the tax change on
income levels.
The estimates of the effect of enacted and proposed tax changes
shown in this budget represent the direct effect of these changes on
receipts, based on levels of corporate and individual income that
reflect enactment of the tax change. The estimated indirect or
feedback effect on receipts due to the tax-induced change in in3
The administration proposes to increase the contribution of the Postal Service in the same way. Contributions of the Postal Service to CSR are shown on the outlay side of the budget and do not affect budget receipts.
4-14
THE BUDGET FOR FISCAL YEAR 1986
EFFECT OF PROPOSED LEGISLATION AND ADMINISTRATIVE ACTION ON RECEIPTS1
(In billions of dollars)
1985
Higher education tax incentive
Tuition tax credit
Enterprise zone tax incentives
Railroad unemployment insurance coverage
Black lung disability trust fund 2
State and local deposit of payroll taxes
Equitable taxation of rail industry benefits
Dependent care tax credit
IRS user fees
Hazardous substance response trust fund 2
Extension of R&E tax credit
Increase in D.C. employer contribution
IRS revenue initiative
Other
Total
ADDENDUM
Effect of proposals on receipts by source:
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions
Excise taxes .. .
Other
Total
1986
1987
#
1988
-0.4
-0.1
0.1
0.2
0.4
*
*
-0.1
-0.6
-0.5
0.2
0.2
*
0.1
-0.2
-0.3
-0.9
-0.9
0.2
0.3
0.3
0.1
-0.2
0.6
-07
*
0.7
-13
0.7
-15
*
*
0.5
*
1.5
*
*
0.2
-1.0
-0.7
-0.6
-0.8
0.5
1.1
0.1
-1.3
-1.2
0.2
1.2
0.1
-1.5
-1.0
0.5
1.3
0.1
0.2
-1.0
-0.7
*
*
*$5O
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 on the
economy
are taken into account in forecasting incomes, however, and in this way affect the receipts estimates by major source and in total.
2
Net of income tax offsets.
comes is not included in these estimates because it is already
included in gross receipts.
For example, the estimates of the effect of the Economic Recovery Tax Act of 1981 shown in this budget represent only the direct
effect of the changes provided in the Act. The increased receipts
resulting from the tax-induced increase in incomes are included in
gross receipts. The estimates of the direct effect of the Economic
Recovery Tax Act of 1981 on receipts therefore overstate, in this
sense, the net loss to the Treasury of the income tax reductions
and other tax changes provided in the Act.
The estimates in this budget of the effect of the administration's
proposals on receipts also represent only the direct effect of these
changes. The indirect effect of these proposals is likewise included
in gross receipts.
CHANGES IN BUDGET RECEIPTS
Budget receipts are estimated to increase by $70.4 billion in 1985,
$56.9 billion in 1986, $67.9 billion in 1987 and $88.7 billion in 1988.
The year-to-year changes can be divided between changes due to
4-15
BUDGET RECEIPTS
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, 1981, receipts would have risen by $71.9 billion in 1985, $71.5
billion in 1986, $82.9 billion in 1987, and $94.7 billion in 1988. Thus,
the combined effect of administrative action and enacted and proposed tax law changes, which is shown in the accompanying table,
reduces the growth in receipts by $1.5 billion in 1985, $14.7 billion
in 1986, $15.0 billion in 1987, and $6.0 billion in 1988.
COMPONENTS OF CHANGES IN RECEIPTS
(In billions of dollars)
1985
Growth in receipts:
Under existing law and administrative action and proposed
legislation
Under tax rates and structure in effect Jan. l r 1981
Difference
1986
1987
1988
70.4
71.9
56.9
71.5
67.9
82.9
88 7
94.7
-1.5
-14.7
-15.0
-6.0
4-16
THE BUDGET FOR FISCAL YEAR 1986
CHANGES IN BUDGET RECEIPTS
(In billions of dollars)
1984
under tax rates and structure in
effect January 1 , 1 9 8 1 1
Administrative action
Enacted legislative changes:
Economic Recovery Tax Act of 1981
Tax Equity and Fiscal Responsibility Act of 1982..
Highway Revenue Act of 1982
Social Security Amendments of 1983 2
Interest and Dividends Tax Compliance Act of
1983
Railroad Retirement Revenue Act of 1983
Deficit Reduction Act of 1984
Social security taxable earnings base increases: 6
$29,700 to $32,400 effective Jan. 1,1982
$32,400 to $35,700 effective Jan. 1,1983
$35,700 to $37,800 effective Jan. 1984
$37,800 to $39,600 effective Jan. ,1985....
$39,600 to $41,400 effective Jan. ,1986....
$41,400 to $43,200 effective Jan. ,1987....
$43,200 to $45,900 effective Jan. ,1988....
Social security (OASDHI) tax rate increases: 3 6
13.3% to 13.4% effective Jan. 1,1982
13.4% to 14.0% effective Jan. 1,1984
14.0% to 14.1% effective Jan. 1,1985
14.1% to 14.3% effective Jan. 1,1986
14.3% to 15.02% effective Jan. 1,1988
Other
Proposed legislation and administrative action:
Higher education tax incentive
Tuition tax credit
Enterprise zone tax incentives
Railroad unemployment insurance coverage
Black lung disability trust fund 5
State and local deposit of payroll taxes
IRS revenue initiative
Extension of R&E credit
Other
Total, receipts under existing and proposed legislation and administrative
action 4
1985
1986
1987
1988
749.4
821.3
0.2
892.8
0.2
975.7
0.2
1,070.5
0.2
-136.8
36.0
4.2
1.8
-168.5
40.7
4.4
6.3
-210.8
50.9
4.6
7.1
-250.9
61.8
4.7
8.6
-283.0
64.3
4.8
9.3
-2.6
0.2
0.9
-2.4
0.7
9.3
-2.1
1.1
15.9
-1.7
1.1
21.6
-1.8
1.1
24.6
3.9
3.8
0.7
4.6
4.4
2.3
0.7
5.2
5.1
2.7
2.1
0.7
6.1
6.1
3.2
2.5
2.2
0.8
7.2
7.3
3.9
3.1
2.8
2.5
1.3
1.5
3.8
1.6
10.0
1.3
1.6
11.8
2.2
2.7
1.8
12.7
2.3
4.2
-0.4
-0.1
-0.2
-0.3
1.9
13.6
2.5
4.5
11.0
-0.5
666.5
736.9
-0.1
-0.6
-0.5
0.2
0.2
-0.7
0.7
0.5
-1.3
0.6
-0.3
-0.9
-0.9
0.2
0.3
0.3
1.5
-1.5
0.7
793.7
861.7
950.4
-0.4
-0.1
0.1
0.2
0.4
*1 $50 million or less.
These figures assume a social security taxable earnings base of $29,700 through 1988.
2
Excludes the effect of increases in the OASDHI tax rate that are shown below.
3
The combined employer-employee old age and survivors, disability, and hospital insurance (OASDHI) tax rate.
4
These
estimates include both the direct and indirect effects of administrative action and legislative changes.
5
Net of income tax offsets.
6
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 that would occur if the rate and base were each changed separately.
BUDGET RECEIPTS
4-17
RECEIPTS BY SOURCE
Individual income taxes.—Individual income tax receipts are estimated at $329.7 billion in 1985 and $358.9 billion in 1986. These
estimates reflect the individual income tax reductions and other
tax revisions provided in ERTA, TEFRA, and DEFRA, which
reduce individual income tax receipts in 1985 and 1986 by a net
$113.1 billion and $136.8 billion, respectively. The proposed changes
in this budget are estimated to reduce individual income taxes by
$0.6 billion in 1986.
Individual income taxes in 1987 and 1988 are projected at $392.5
billion and $433.6 billion, respectively. The changes in individual
income taxes provided in ERTA, TEFRA, and DEFRA result in a
net reduction in individual income tax receipts of $162.1 billion in
1987 and $185.6 billion in 1988. The administration's proposals are
estimated to reduce individual income taxes by $1.3 billion in 1987
and $1.5 billion in 1988.
Corporation income taxes.—Corporation income tax receipts are
estimated at $66.4 billion in 1985 and $74.1 billion in 1986. These
estimates reflect the accelerated cost recovery system of depreciation and other provisions of ERTA, TEFRA, and DEFRA, which are
estimated to reduce corporation income tax receipts in 1985 and
1986 by $10.3 billion and $9.1 billion, respectively. The administration's proposals are estimated to reduce corporation income taxes
by $0.8 billion in 1986.
Corporation income tax receipts in 1987 and 1988 are estimated
at $87.5 billion and $99.0 billion, respectively. These estimates reflect net reductions of $6.2 billion in 1987 and $4.1 billion in 1988
due to enactment of ERTA, TEFRA, and DEFRA. The administration's proposals are estimated to reduce corporation income taxes
by $1.2 billion in 1987 and $1.0 billion in 1988.
Social insurance taxes and contributions.—This category includes
social security and railroad retirement taxes, unemployment insurance taxes and deposits, and other retirement contributions.
Receipts from this source are expected to be $268.4 billion in
1985 and $289.4 billion in 1986. These estimates reflect the increases in social security coverage and tax rates provided in the
Social Security Amendments of 1983, which are estimated to increase social insurance taxes and contributions by $9.9 billion in
1985 and $9.6 billion in 1986. The changes provided in ERTA,
TEFRA, and the Railroad Retirement Revenue Act of 1983 are
estimated to increase social insurance taxes and contributions by
an additional $4.5 billion in 1985 and $4.7 billion in 1986. The
scheduled increase in the social security taxable earnings base
4-18
THE BUDGET FOR FISCAL YEAR 1986
from $39,600 in 1985 to $41,400 in 1986 is also reflected in these
estimates.
The estimates for 1987 and 1988 are $309.5 billion and $346.5
billion, respectively. These estimates reflect the legislated increases
in social security tax rates provided in the Social Security Amendments of 1983 and annual increases in the taxable earnings base to
$45,900 by 1988. The increases in social insurance taxes and contributions provided in ERTA, TEFRA, and the Railroad Retirement
Revenue Act add $4.5 billion to receipts in 1987 and $4.4 billion in
1988.
Excise taxes.—Excise taxes are levied on a variety of products,
services, and activities. Receipts from these taxes are estimated at
$37.0 billion in 1985 and $35.0 billion in 1986. These estimates
include the windfall profit tax, which is estimated at $6.5 billion in
1985 and $5.0 billion in 1986. The estimates also reflect the increases in excise taxes on airport and airway users, cigarettes, and
telephone service provided in TEFRA, which add an estimated $5.4
billion to excise taxes in 1985 and $2.4 billion in 1986. The 5 cent
per gallon increase in the excise tax on gasoline and diesel fuel,
and other provisions of the Highway Revenue Act of 1982, add an
additional $5.8 billion to excise taxes in 1985 and $6.1 billion in
1986. DEFRA, which extended the excise tax on telephone service
and increased the excise tax on distilled spirits, is estimated to
increase receipts in 1985 and 1986 by $0.4 billion and $1.9 billion,
respectively. The administration's proposals increase excise taxes
by $1.1 billion in 1986.
The estimates for 1987 and 1988 are $35.0 billion and $33.6
billion, respectively. These estimates include $4.1 billion from the
windfall profit tax in 1987 and $3.5 billion in 1988. They also
reflect a net increase of $11.0 billion in 1987 and $7.4 billion in
1988 due to the provisions of TEFRA, DEFRA, and the Highway
Revenue Act. The administration's proposals increase receipts in
1987 and 1988 by $1.2 billion and $1.3 billion, respectively.
Estate and gift taxes.—Estate and gift taxes are estimated at $5.6
billion in 1985, $5.3 billion in 1986, $5.0 billion in 1987, and $4.7
billion in 1988. These estimates reflect reductions due to enactment
of ERTA and partially offsetting increases due to enactment of
TEFRA and DEFRA.
Other receipts.—Customs duties and miscellaneous receipts
(almost all of which are deposits of earnings by the Federal Reserve System) are estimated to total $29.8 billion in 1985, $31.0
billion in 1986, $32.2 billion in 1987, and $32.9 billion in 1988.
4-19
BUDGET RECEIPTS
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 explained further
in Part 7 and are shown in Table 14 of Part 9.
Budget Receipts
$ Billions
1,000
$ Billions
1,000
Totoh
— -800
800-
Excise Taxes and
Other Receipts
-600
Social Insurance Taxes
and Contributions
200- - ^
1976
77 78
Fiscal Years
79
80
81
82
83
84
85
86
87
Estimate
88
PART 5
MEETING NATIONAL NEEDS:
THE FEDERAL
PROGRAM BY FUNCTION
5-1
INTRODUCTION
This part of the budget presents Federal programs in terms of
functions, which are broad categories of activities with similar
purposes. The programs are grouped into functions so that related
Federal activities that meet particular national needs may be considered together, regardless of which agencies are responsible for
them. Therefore, to the extent feasible, the functional structure
classifies these activities according to their primary purpose. Each
activity is classified only in the function that defines its most
important purpose, even though it may serve more than one purpose.
There are 18 functions, plus two categories—allowances and undistributed offsetting receipts—that are not themselves functions
because they do not consist of programs, but are needed to encompass the entire budget. Each function, in turn, is divided into
several subfunctions, which are narrower and more homogeneous
groupings of programs. The functional classification has not
changed significantly since last year's budget.
The function-subfunction-program hierarchy is used in the tables
of budget authority and outlays that are presented for each function. These tables quantify the President's proposals; the accompanying text explains them. Each function starts with a statement of
the national needs served by programs in the function. A summary
paragraph or two describes the function and major proposals. Individual programs, arranged in subfunctions, are discussed in terms
of budget authority and outlays. These data reflect activities of the
Federal entities that are off-budget under current law, but which
the administration is proposing to include on-budget. Parts 6 and 7
of this volume discuss this proposal further.
While budget authority and outlays are the most important
measures of resources allocated to Federal programs, they do not
cover all Federal activities. Federal loan guarantees generally require no outlays unless the borrower defaults. To monitor and
control Federal credit activities, a separate credit budget measures
all guaranteed loan commitments and direct loan obligations. Most
functions contain Federal credit programs; the functional sections
discuss these programs and contain a table of credit activity. The
figures in these tables add up to the credit budget totals, which
appear in table 1 of Part 9 of this volume and are explained in
Special Analysis F, "Federal Credit Programs." Part 7 describes
5-2
INTRODUCTION
5-3
the concepts and definitions underlying the credit budget, and Part
6 discusses loan guarantees.
Tax expenditures, also not measured by budget authority or outlays, are another means by which the Federal Government can
achieve policy objectives. Tax expenditures are provisions of
income tax law that allow a preferential rate of tax, a special
credit, a deferral of tax liability, or a special exclusion, deduction,
or exemption. Most of the functions include a discussion, and in
some cases a table, of tax expenditures. The definition and measurement of tax expenditures are explained in Part 6 of this volume
and in Special Analysis G, "Tax Expenditures."
Other parts of the budget include tables that supplement this
part by showing more detailed data:
• Budget outlays by function and subfunction for 1976 through
1986 appear in table 20 of Part 9.
• Outlays and budget authority by function for 1984 through
1990 are contained, respectively, in tables 3 and 6 of Part 9.
• Budget authority and outlays for each agency and account are
shown in Part 8 for 1984 through 1986. Each account has a 3digit code indicating the function and subfunction in which it
is classified.
Data for earlier years are available in a new budget volume,
Historical Tables, Budget of the United States Government, 1986,
which may be purchased from the Government Printing Office.
5-4
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL DEFENSE
The objective of the national defense program is to protect the
Nation and its allies from foreign aggression. It seeks to preserve
peace by maintaining sufficient military strength to deter war.
Should war nonetheless occur, we must be prepared to defend
ourselves successfully, while minimizing the scope and intensity of
the conflict.
Deterring foreign threats to our vital interests and those of our
allies and friends depends on the maintenance of a full range of
defense capabilities. These include: strategic nuclear capabilities;
maritime strength; strong forces in Europe and other forward
areas critical to our defense; and the ability to deploy rapidly and
sustain our military forces worldwide.
The budget proposes $322.2 billion in budget authority and $285.7
billion in outlays for the national defense function in 1986. The
accompanying table shows budget authority and outlays for the
three major national defense subfunctions: military functions of
the Department of Defense, atomic energy defense activities, and
defense-related activities of other agencies.
Department of Defense-Military.—The $29.0 billion increase in
budget authority requested for the military functions of the Department of Defense in 1986 continues the administration's commitment to provide the military strength needed to ensure the
Nation's security. In the face of very large improvements in Soviet
military capabilities, U.S. forces must be strengthened to meet the
Soviet challenge and to protect our national interests. This requires that we continue efforts to:
• modernize all components of U.S. strategic forces to ensure
that they deter nuclear attack by their ability to survive and
retaliate should an attack occur;
• improve the readiness and combat endurance of conventional
forces and modernize the equipment of these forces;
• maintain sufficient maritime strength to assure our ability to
deploy U.S. forces to critical regions overseas to protect our
interests, support our allies, and assure continued access to
essential resources; and
• maintain alliances and coalitions to protect U.S. interests
worldwide and, in particular, to achieve NATO objectives.
Achievement of these objectives requires sustained increases in
defense resources over the coming years.
5-5
NATIONAL DEFENSE
NATIONAL DEFENSE
(Functional code 050; in millions of dollars)
1984
actual
Major missions and programs
BUDGET AUTHORITY
Department of Defense-Military:
Military personnel1
Operation and maintenance
Procurement
Research, development, test and evaluation...
Military construction
Family housing
Revolving funds and other:
On-budget under current law
Off-budget under current law#
Offsetting receipts-.
Existing law
Proposed legislation
Allowances: Civilian pay raises
Allowances: Military pay raises and benefits:
Existing law
Proposed legislation
Other legislation
Subtotal, Department of Defense-Military.
1987
estimate
1986
estimate
1985
estimate
68,448 73,425 75,762 77,719
78,219 82,450 95,834 108,754
96,807 106,813 122,432 141,223
31,464 39,280 42,607 49,289
5,517
8,887 10,520
7,057
2,894
3,895
3,283
4,324
64,866
70,950
86,161
26,867
4,510
2,669
2,823
2
1,650
5
1,889
5
2,361
4
2,830
3
-696
-723
-787
100
-809
-839
-772
115
3,811
7,733
454
189
-69
258,152 284,735 313,705 354,004 401,603
Atomic energy defense activities
Defense-related activities:
Existing law
Proposed legislation
Subtotal, Defense-related activities..
Total, budget authority
6,555
7,325
8,047
8,830
9,461
452
493
454
425
399
452
493
454
425
399
265,160 292,553 322,205 363,259 411,463
OUTLAYS
Department of Defense-Military:
l
Military personnel
Operation and maintenance
Procurement
Research, development, test and evaluation...
Military construction
Family housing
Revolving funds and other:
On-budget under current law
Off-budget under current law#
Offsetting receipts:
Existing law
Proposed legislation
Allowances: Civilian pay raises
Allowances: Military pay raises and benefits:
Existing law
Proposed legislation
Other legislation
Subtotal, Department of Defense-Military..
64,158
67,369
61,879
23,117
3,706
2,413
67,546
74,569
69,706
27,786
4,209
2,658
72,798
79,648
83,045
33,988
5,296
2,805
-1,107
2
103
5
530
5
-696
-723
-787
100
75,074 77,025
87,835 99,188
96,533 109,938
39,110 41,959
7,752
6,390
3,223
3,659
1,892
4
2,142
3
-839
100
-758
7,670
3,749
7
70
6
61
220,840 246,305 277,505 312,304 348,603
446
Atomic energy defense activities
Defense-related activities:
Existing law
Proposed legislation
Subtotal, Defense-related activities..
6,120
6,991
7,700
8,413
9,357
453
380
153
533
464
443
418
464
443
418
453
Total, outlays
227,413 253,830 285,669 321,160 358,378
I
I
I
I
I
1
Includes the adjustment to show military retired pay for 1984 on a basis comparable to 1985 and subsequent years. See the discussion in
Part 6.
#Proposed to be included on-budget.
5-6
THE BUDGET FOR FISCAL YEAR 1986
Fiscal year 1985 supplemental.—The administration will propose
1985 supplemental appropriation requests for $2.2 billion. These
funds are required to finance pay raises that became effective
January 1, 1985.
Budget authority requested for the Department of Defense-Military is shown by mission category in the second table in this
section. These categories are discussed below.
Strategic forces.—Since 1981, the administration has vigorously
pursued a program of strategic modernization consistent with a
policy of deterrence. The budget continues efforts to modernize our
nuclear forces. Only by establishing modern, capable U.S. forces do
we create the necessary incentives for the Soviet Union to negotiate genuine arms reductions.
Deployment of the Peacekeeper (MX) missile is essential to maintaining effective deterrence. The budget includes funds for continued Peacekeeper research and development, production of the missile, and modifications to the Minuteman silos that will hold the
new missiles. Also included in the 1986 program is an authorization request for the thirteenth Trident submarine, as well as development and production funding for the Trident II (D-5) missile,
which is scheduled to be deployed in late 1989.
MISSION CATEGORIES: DEFENSE, MILITARY
(Functional code 051; in billions of dollars)
Budget authority
Major missions and programs
Strategic forces*
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 3 ..
Administration and associated activities
Support of other nations
Total, budget authority..
1984
actual
1985
26.1
100.7
20.0
5.5
12.2
21.5
23.4
43.3
4.8
0.7
27.8
120.6
25.1
7.0
15.7
24.6
24.4
33.1
5.9
0.5
1987
estimate
1988
30.5
152.5
31.2
8.5
19.9
33.6
30.6
39.7
6.6
0.9
32.1
177.4
33.9
8.0
22.0
40.6
35.5
44.0
7.2
0.9
258.2 284.7 313.7 354.0
401.6
Prior-year funds and other financial adjustments..
Total obligational authority
1
2
0.6
258.2
29.9
132.1
27.9
8.0
16.9
30.4
26.5
35.6
5.9
0.5
0.7
0.8
0.8
285.3 314.4 354.8 402.4
Excludes strategic systems development included in the research and development category.
Excludes research and development in other program areas on systems approved for production.
s Military retired pay is included in training, medical and other general personnel activities through 1984. In 1985 and later years, military
retired pay is funded on an accrual basis with costs distributed to all mission categories.
NATIONAL DEFENSE
5-7
Modernization of our bomber force is continued with the procurement of 48 more B-1B multi-role bombers, development of a new
bomber and a new cruise missile using stealth technology, and
deployment of first-generation air-launched cruise missiles
(ALCM's). ALCM's have already been deployed on 90 B-52G's; modification of B-52H's to carry cruise missiles will begin this year.
Continued reengining of KC-135A tanker aircraft along with procurement of additional support equipment will further improve our
aerial refueling capability.
The budget proposes strengthening space surveillance capabilities; production of an anti-satellite system; and continued improvements in strategic command, control, communications, and intelligence systems.
General purpose forces.—General purpose forces, which deter or
counter non-nuclear military aggression, must be able to respond
effectively to the most demanding of potential conflicts—a war
between NATO and the Warsaw Pact—while retaining the flexibility to meet other threats to U.S. interests. Under the budget proposals for 1986, the following active forces will be supported: 18
Army divisions, 3 Marine divisions, 3 Marine and 13 Navy tactical
airwings, 26 wings of Air Force tactical aircraft, and a 555-ship
Navy (including strategic missile submarines and support ships).
Budget authority of $132.1 billion is proposed for general purpose
forces, a 9.5% increase over 1985. This provides for strengthening
our forces—including rapid response and deployment forces—by
increasing combat readiness and by fielding new and improved
equipment.
Army general purpose forces.—The budget supports the continued
acquisition of systems designed to improve the firepower, tactical
mobility, and survivability of our forces. Procurement of 840 M-l
Abrams tanks, 716 Bradley fighting vehicles, and other modern
fighting vehicles will support our armored combat capability.
Funds are requested for procurement of 144 AH-64 Apache attack
helicopters and for continued procurement of assault support helicopters, such as the UH-60 Blackhawk. The budget also supports
development of a new family of light rotorcraft (LHX) to perform
scout, utility, and attack missions as future replacements for existing helicopters.
The Army's conventional forces require a balanced mix of air
defense systems. These include short-range, point defense systems
such as the Stinger and Chaparral missiles and the Sergeant York
gun to defend elements of deployed divisions near the front lines.
They also include long-range, area defense systems like Patriot and
Hawk missiles to defend larger, more widely dispersed areas of the
battlefield. In 1985, the first Patriot missiles are being fielded with
5-8
THE BUDGET FOR FISCAL YEAR 1986
U.S. Army units in Europe, where they will form the backbone of
NATO's future air defense system. The budget supports deployment of additional Pershing II ballistic missiles in Europe as part
of NATO's theatre nuclear force modernization. Also, while we are
actively pursuing a verifiable ban on the production and stockpiling of chemical weapons, funding is being requested to develop and
produce binary chemical munitions to modernize our stockpile in
order to assure a credible deterrent against Soviet use of chemical
warfare.
Emphasis continues to be placed on realistic unit training and
greater participation of more mobile units in service-wide exercises.
Funding for spare parts and depot repair work makes an essential
contribution to meeting readiness objectives. The ability to sustain
our forces in conventional combat requires adequate levels of supplies, replacement equipment, and ammunition.
Armor and mechanized divisions are being reorganized to
streamline their structure, and efforts are being made to improve
the combat capability and the ease and speed of deployment of our
light forces. In 1985, the Army is converting an existing infantry
division to a new light configuration and adding one light division.
Another light division will be formed in 1986, increasing the overall number of active divisions to 18. This will be done within
previously planned manpower and equipment resources. The new
light divisions are smaller and require less strategic air- or sea-lift
than our current infantry divisions.
Navy general purpose forces.—In peacetime, the presence of Navy
forces provides a tangible demonstration of U.S. regional commitments. In the event of war, these forces must be able to defend the
sea lines of communication over which critical U.S. reinforcements
and resupply must travel to forward theaters. They must also be
able to conduct offensive operations, if necessary, against Soviet
naval forces and facilities.
The Navy's deployable battle force (including strategic missile
submarines and support ships) will increase from 542 ships in 1985
to 555 in 1986, and will reach the administration's goal of 600 by
the end of the decade. Navy shipbuilding plans for 1986-1990 new
construction include 11 AEGIS cruisers, 17 guided missile destroyers, 19 attack submarines, 12 amphibious ships, 24 support ships,
and 21 minesweepers. The 5-year plan also includes modernizing 2
aircraft carriers to extend their service lives by 15 years; modernizing amphibious assault forces; and reactivating the fourth Iowaclass battleship.
Active naval aviation forces consist of 16 tactical airwings (13
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 continued procurement of 18 F-14,
NATIONAL DEFENSE
5-9
84 F/A-18, and 46 AV-8B aircraft for the tactical air wings, as well
as 9 P-3C long-range patrol aircraft and 18 SH-60B LAMPS III
helicopters for anti-submarine warfare.
Realizing the full potential of the investment in naval ships and
aircraft requires highly trained crews. Navy tactical aircraft pilots
will average about 300 flying hpurs in 1986, up from 288 hours in
1985 and double that of their Warsaw Pact counterparts.
Expansion of naval ordnance inventories over the last several
years has contributed significantly to combat endurance. Special
attention has been paid to meeting requirements for torpedoes,
surface-to-air and air-to-air missiles, and anti-ship cruise missiles.
Air Force general purpose forces.—Tactical air forces consist of
fighter, attack, and special-purpose support aircraft. Their role is to
respond rapidly to aggression by quickly destroying enemy targets
and by providing an air defense umbrella for our combat forces. In
1986, the Air Force plans to procure 180 F-16's and 48 F-15's. Eight
of these F-15's will be a dual-role fighter-bomber version, the F-15E.
These aircraft will significantly improve the combat effectiveness
of our tactical forces due to their range/payload characteristics and
their ability to operate at night and in adverse weather.
The budget request provides for procurement of an additional
MC-130H special operations forces aircraft that will be able to
penetrate enemy air space at night and at low altitudes, and includes funds for highly accurate, precision-guided tactical bombs
and missiles. The ground-launched cruise missile is being procured
as part of NATO's long-range nuclear force modernization. Deployment of cruise missiles in Europe will continue in 1986.
The Air Force currently has 26 active tactical fighter wings. In
addition to the ongoing modernization program, the budget supports continued improvements to readiness through emphasis on
spare parts purchases, increased flying hours, and more realistic
training for aircrews. In 1986, Air Force tactical aircraft pilots will
average about 233 flying hours, double that of their Warsaw Pact
counterparts. Joint service exercises are planned, in which Air
Force, Navy, and Marine Corps units will conduct integrated operations to increase the combat proficiency of air crews.
Intelligence and communications.—In order to employ our
weapon systems and forces effectively, we must have the means to
direct them in accordance with national policy and military strategy. Information on both friendly and hostile, or potentially hostile,
forces must be gathered and evaluated, and decisions made. Decisions and operational orders, in turn, must be communicated to the
appropriate forces.
The budget provides for improvement in intelligence and communications by providing for development and modernization of com-
5-10
THE BUDGET FOR FISCAL YEAR 1986
mand centers, sensors, computers, satellites, and other communication links. These improvements will be made in five broad mission
areas: strategic and non-strategic nuclear force management; theater and tactical force management; world-wide information and
communication systems; electronic warfare; and intelligence.
Airlift and sealift forces.—In order to assure a forward defense
with limited peacetime presence, we must have the ability to deliver military personnel and combat equipment rapidly to crisis areas
anywhere in the world and to sustain them once deployed. The
budget reflects an expansion of our airlift capacity through procurement of 16 additional C-5B and 12 additional KC-10 cargo
aircraft, and through development of the C-17 cargo aircraft. The
budget also provides funds for the civil reserve air fleet (CRAF)
program, under which civilian passenger and cargo aircraft will be
available to augment military airlift forces during an emergency.
In addition, the budget supports continued efforts to improve capabilities of existing aircraft and increase their capacity through
modifications. Sealift capabilities will be strengthened by the addition of ships to the ready reserve force and the continued procurement of equipment to make container ships more useful for military purposes.
Stockpiling of equipment and materials near potential trouble
spots is critical to our ability to sustain deployed forces in distant
areas. The Army has stockpiled in Europe heavy equipment for four
Army divisions and supporting units and is acquiring equipment
for two more divisions. Equipment to support the rapid deployment
of tactical fighter squadrons is also being stockpiled in Europe.
National guard and reserves.—U.S. defense planning relies heavily on the ability of reserve components to respond quickly in times
of crisis. The budget reflects the continuing trend of improvement
in manning, training, and equipment. The reserve components—
the Army Reserve, Army National Guard, Naval Reserve, Marine
Corps Reserve, Air Force Reserve, and the Air National Guard—
have significantly increased their manning levels in recent years.
Selected reserve manpower is projected to reach 1,124,100 by the
end of 1986, a 4.4% increase over 1985.
The past practice of equipping guard and reserve units with
outmoded or excess systems is changing. In 1986, reserve components will receive modern systems such as M-l tanks, Bradley
fighting vehicles, F-16 and F/A-18 aircraft, and Perry-class guided
missile frigates.
Research and development.—Programs in this category fund all
research and development except further development of alreadyoperational systems. New weapon systems are developed, tested
NATIONAL DEFENSE
5-11
and procured to meet specific military requirements. At the same
time, a strong research and technology base must be maintained in
support of anticipated future requirements. Real growth of about
20% in budget authority for research and development is proposed
for 1986, with a continuing emphasis on strategic programs. Major
strategic efforts include the Peacekeeper and Trident II missiles.
The budget provides funds for a high priority development program
for a small land-based missile, which will carry a single warhead
and weigh less than 30,000 pounds. Also included in the budget is
an expanded effort on the administration's strategic defense initiative, a research program to explore the possibility of eliminating
the ballistic missile threat to the United States and its allies. This
initiative includes research on space surveillance and target acquisition; directed energy weapons; kinetic energy weapons; battle
management systems; and system survivability.
Tactical development efforts include a new Air Force tactical
fighter, a new Army helicopter and a Marine Corps tilt-rotor aircraft, a new attack submarine, a new transport aircraft, and an
advanced air-to-air missile.
Training, medical, and other general personnel activities,—General personnel activities include training and medical services for
active duty personnel. Beginning last year, military retired pay,
previously classified in this function, was reclassified in the income
security function. This change is discussed in Part 6. The budget
request would continue the improvements to individual training
begun several years ago. High priority is being placed on training
and facilities required to develop team proficiency of operational
units through realistic training that simulates actual combat conditions as closely as possible.
Military personnel and compensation.—The budget reflects a continued commitment to improved personnel readiness. Efforts to
attract and retain qualified personnel have been highly successful.
Despite a decline in the number of youth and a projected decline in
youth unemployment, the military services will increase strength
levels and man their forces with quality personnel. The budget
provides for a military pay increase of 3% in July 1985 to help
keep military compensation and benefits at attractive levels, but,
in view of current severe fiscal pressures, provides no additional
pay raise for 1986. The budget provides for increased reimbursement for temporary lodging expenses and for the costs of shipping
household goods. This will reduce the burden on military personnel
and their families when they are reassigned.
A contingency reserve has been established to provide for possible legislative initiatives now under consideration.
5-12
THE BUDGET FOR FISCAL YEAR 1986
The pay of Defense Department civilian employees will be reduced by 5% in 1986 as part of a Government-wide initiative to
help reduce the deficit.
SUMMARY OF ACTIVE MILITARY PERSONNEL AND FORCES
(Year end—i.e., as of September 30)
1984
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..
780
565
196
597
2,138
782
560
195
596
2,133
1985
1986
estimate
estimate
781
571
198
602
781
586
199
612
2,152
781
566
198
601
2,146
2,178
782
580
199
608
2,169
Strategic forces:
Intercontinental ballistic missiles:
Peacekeeper
Minuteman
Titan II
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.,
Battleships
Nuclear attack submarines
Other warships
Amphibious assault ships
Airlift and sealift forces:
C-5 airlift squadrons
Other airlift squadrons
Sealift fleet
1000 1,000
31
23
616 640
21
21
997
9
688
22
16
3
17
3
18
3
26
13
3
26
13
3
26
13
3
13
2
94
204
59
13
2
96
210
59
13
3
95
214
60
4
13
58
4
13
59
4
13
63
Management initiatives.—The administration seeks to strengthen
the U.S. defense posture in the most efficient manner possible. This
requires continuing efforts to improve management throughout the
Department of Defense. The administration will continue efforts to
improve weapons systems acquisition through multi-year procurement and realistic budgeting of costs. Competition will be empha-
NATIONAL DEFENSE
5-13
sized as a means to keep costs down, improve quality, encourage
innovation, and strengthen the defense industrial base.
A program has been initiated to end price abuses in spare parts
procurement. The program covers how spare parts are priced and
purchased; how they are controlled in inventory; and how they are
used and, ultimately, disposed of. As part of this program, the
Defense Contract Audit Agency (DCAA) has been directed to work
with the military departments and defense agencies to strengthen
pricing procedures and to assist in the negotiation of major spare
parts purchases.
Outlays for Department of Defense-Military programs covered by
section 2901 of the Deficit Reduction Act of 1984 have been reduced
by $388 million through a combination of congressional and administration actions.
Legislation will again be proposed to establish reimbursement
procedures for the civilian health and medical program of the
uniformed services (CHAMPUS) similar to those enacted in 1983
for medicare. This would lead to substantial savings and simplify
the processing of claims. Another proposal would allow the Federal
Government to seek reimbursement from private medical insurers
for care provided to their beneficiaries in military hospitals and
clinics.
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 at $2.4 billion in 1986.
Atomic energy defense activities.—These activities, conducted by
the Department of Energy, include research, development, testing,
and production of nuclear weapons; production of special nuclear
materials; storage of nuclear wastes from defense programs, and
design of reactors for nuclear-powered Navy vessels. The accompanying table shows the funding levels for these programs. In total,
budget authority of $8.0 billion is requested for 1986, compared to
$7.3 billion for 1985. Outlays are estimated to increase from $7.0
billion in 1985 to $7.7 billion in 1986.
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. Budget authority proposed for
1986 would provide for increased missile warhead production for
current and new weapon systems, and for increased production of
special nuclear materials for use in these warheads.
The defense nuclear waste management program provides interim storage for all defense nuclear wastes. The program also supports research and development activities for the isolation and
permanent storage of these wastes.
5-14
THE BUDGET FOR FISCAL YEAR 1986
The naval reactor development program includes the research
and development, design, procurement, and testing of prototype
reactors for current and future nuclear-powered naval vessels.
Other atomic energy defense and research and development programs cover security at defense nuclear facilities, security investigations, arms control and verification technology development, and
research to develop nuclear power sources for potential defense
applications.
ATOMIC ENERGY DEFENSE ACTIVITIES
(Functional code 053; in millions of dollars)
Major missions and programs
BUDGET AUTHORITY
Weapons research, development, test, and production...,
Weapons materials production and waste management..
Naval reactor development
Other research programs
Management savings (undistributed)
Total, budget authority..
OUTLAYS
Weapons research, development, test, and production...
Weapons materials production and waste management.
Naval reactor development
Other research programs
Management savings (undistributed)
Total, outlays
1984
actual
1987
estimate
estimate
3,702 4,203 4,593 4,951
2,217 2,485 2,692 3,032
493
497
569
613
143
173
207
248
-33 -14 -14
5,626
2,977
615
257
-14
6,555
9,461
1985
estimate
7,325
1986
8,047
8,830
3,513 3,968 4,309 4,689 5,460
2,001 2,267 2,644 2,913 3,012
557
465
622
584
639
141
170
204
241
260
-36 -14 -14 -14
6,120 6,991 7,700 8,413 9,357
Defense-related activities.—Activities of civilian departments and
agencies that support national defense include emergency management, maintenance of strategic stockpiles, and the Selective Service
System.
The Federal Emergency Management Agency conducts civil defense and other preparedness programs. The budget proposes a
reduction in civil defense funding from $181 million in 1985 to $119
million in 1986. The administration has decided that, in view of
severe fiscal pressures, the civil defense effort should be maintained at this lower level. This will maintain most existing emergency management programs, but will defer upgrading them. Proposed funding for other preparedness programs is generally at the
1985 level. The agency's defense-related outlays are estimated to
decline from $307 million in 1985 to $289 million in 1986.
To meet defense and essential civilian requirements for strategic
and critical minerals in the event of war, the General Services
Administration maintains a stockpile of such materials. An administration study to establish new stockpile goals is nearing comple-
5-15
NATIONAL DEFENSE
tion. Sales and acquisition levels for 1986 and beyond will be transmitted to Congress as soon as decisions are made on new stockpile
goals.
The Selective Service System is responsible for maintaining a
standby capacity to meet defense personnel requirements during
an emergency national mobilization. The budget includes estimated
outlays of $27 million in 1986. The budget request provides for
improving the Selective Service System's mobilization capability,
including recruiting and training of board members, strengthening
national registration, and, to ensure compliance with the law, prosecution of those who fail to register.
Credit budget,—Defense production guarantees of $25 million
committed in 1982 continue to be disbursed through the Federal
Financing Bank. These guarantees assist private businesses in fulfilling defense production contracts.
CREDIT PROGRAMS—NATIONAL DEFENSE
(In millions of dollars)
Actual
1984
Direct loans:
National defense programs:
Change in outstandings
Outstandings
National defense programs (loans made by FFB):
Change in outstandings 1
Outstandings
Guaranteed loans:
National defense programs:
Change in outstandings
Outstandings
Estimate
1985
1986
1987
-1
1
5
13
3
20
*500
thousand or less.
1
These are guarantees by the agency for loans that the FFB disbursed. In effect, they are commitments for FFB direct loans, and are counted
as such in the budget and the credit budget.
5-16
THE BUDGET FOR FISCAL YEAR 1986
INTERNATIONAL AFFAIRS
A primary responsibility of the Federal Government is protecting
and advancing the interests of the United States and its people in
international affairs. To fulfill that responsibility, the foreign
policy of the United States is directed toward achieving a world
order that provides peace, security, and prosperity, in which individuals may enjoy political and economic freedom. International
affairs expenditures proposed in this budget support U.S. foreign
policy and national security objectives.
For 1986, $20.6 billion in budget authority is proposed, $1.3 billion of which is associated with Federal Financing Bank (FFB)
direct loans for which guarantee commitments were made under
the foreign military sales credit program prior to 1985 and are
classified as off-budget under current law. Legislation will be proposed to bring the activities of the FFB on-budget. The FFB does
not undertake lending activity on its own initiative. It does so only
when another Federal agency guarantees repayment. Therefore,
the FFB loans guaranteed under the foreign military sales credit
program are classified in the international affairs function, just as
other FFB loans are classified in other functions according to the
purpose served. No new loan guarantee commitments are proposed
for the foreign military sales credit program in any year after 1984.
The addendum to the summary table on budget authority shows
international affairs programs as they would appear if the foreign
military sales credit program during the 1984-88 period were onbudget direct lending.
Outlays for 1986 are estimated to be $18.3 billion, including $0.3
billion in net disbursements on FFB loans included in this function. Total outlays in 1985 are estimated to be $19.6 billion.
For 1986, total new direct loan obligations for international affairs are proposed to be $8.1 billion, and total new guaranteed loan
commitments are proposed to be $12.2 billion, $12.0 billion of which
is proposed for the Export-Import Bank.
Foreign aid.-—Two budget subfunctions—international security
assistance and foreign economic and financial assistance—comprise
foreign aid.
International security assistance.—Security assistance programs
are vital instruments of United States national security and foreign policy, serving to strengthen allied and friendly governments
where the United States has special security concerns. These programs make it possible for other governments to strengthen their
economies and to acquire and use modern military equipment necessary for their defense. Security assistance also helps ensure U.S.
access to military bases and facilities overseas. For 1986, overall
INTERNATIONAL AFFAIRS
5-17
security assistance budget authority of $10.7 billion is proposed,
and outlays are estimated to be $9.2 billion. Because of their critical support of national security objectives some of these programs
do increase over 1985 levels.
Foreign military sales credit (FMSC).—The foreign military sales
credit program enables foreign governments to purchase U.S. military equipment, training, and design and construction services for
their security needs. In the face of challenges to U.S. interests and
economic difficulties in many parts of the world, the budget continues to include a substantial amount for concessional loans to foreign governments for the procurement of U.S. military goods and
services.
Prior to this year, most of the foreign military sales credit program consisted of guarantees of off-budget FFB loans to foreign
governments. Only forgiven loans (which are the equivalent of
grants) to Egypt and Israel used budget authority that was recorded on-budget. Starting in 1985, the technique for financing foreign
military sales was changed from guarantees of off-budget FFB
loans to direct loans on-budget. Therefore, no new loan guarantees
have been made. The amounts of budget authority and outlays for
this direct loan program are shown in the "on-budget under current law" lines for foreign military sales credit—$5.7 billion in
budget authority and $4.9 billion in outlays are estimated for 1986.
Of the budget authority, $1.8 billion is proposed for forgiven loans
to Israel and $1.3 billion for forgiven loans to Egypt.
Starting in 1986, the administration is proposing that FFB activities be brought on-budget as well. The amounts shown in the "offbudget under current law" lines of the tables constitute FFB disbursements on FMSC program loans guaranteed in years prior
to 1985: $3.1 billion in 1985, $1.3 billion in 1986, and less than
$0.3 billion in 1988. Disbursements net of repayments are treated
as outlays: $2.3 billion in 1985, $0.3 billion in 1986, and -$1.0 billion
in 1988.
Military assistance.—This grant military aid finances the same
types of articles and services as the foreign military sales credit
program. It is targeted to countries such as those in Central America where the repayment of loans would impose a severe economic
burden. For 1986, budget authority of $949 million is requested.
Economic support fund,—This program provides loans and
grants for general budget and balance of payments support to
friendly governments. It also finances individual development
projects where doing so would enhance our ability to achieve important national security objectives. The proposed budget authority
5-18
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: CONDUCTING INTERNATIONAL RELATIONS
(Functional code 150; in millions of dollars)
Major missions and programs
BUDGET AUTHORITY
Foreign aid:
International security assistance:
Foreign military sales credit:
On-budget under current law
Off-budget under current law#
Military assistance
Economic support fund
Other:
Existing law
Prooosed legislation
Offsetting receipts
Subtotal, International security assistance
Foreign economic and financial assistance:
Multilateral development banks
International organizations
Agency for International Development
Public Law 480 food aid
Peace Corps
Refugee assistance
Compact of Free Association (Micronesia)
Other:
On-budget under current law
Offsetting receipts
Subtotal, Foreign economic and financial assistance
Subtotal, 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
Offsetting receipts -.
Subtotal, International financial programs
Total, budget authority
ADDENDUM
International Affairs programs if the Foreign Military Sales
Credit program were on-budget direct lending:
Foreign aid:
Foreign military sales credit:
On-budget under current law
Off-budget under current law
Other foreign aid
Subtotal, foreign aid
Other international affairs programs
Total
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
1,315
3,503
712
3,389
4,940
3,147
805
3,841
5,655
1,311
949
2,824
5,779
524
970
2,883
5,901
262
991
2,941
110
214
108
-86
8,943
-93
12,854
-99
10,748
110
145
-105
10,306
112
278
-161
10,324
1,324
315
2,013
1,377
117
336
1,548
359
2,286
1,540
128
350
1,348
196
2,113
1,307
125
338
299
1,348
200
2,133
1,296
128
340
146
375
204
2,171
1,286
132
334
148
80
493
95
-459
96
-479
99
-604
101
-660
5,069
5,847
5,343
5,085
4,093
14,012
18,701
16,091
15,391
14,418
1,392
580
53
2,025
1,897
545
65
2,507
1,848
554
68
2,470
1,802
583
70
2,455
1,855
559
75
2,489
798
897
1,118
1,296
1,228
829
-801
7,774
-84
7,718
3,940
734
978
957
1,067
-85
4,588
87
891
-89
868
-90
977
24,553
26,693
20,569
20,010
19,111
1,315
4,401
9,194
14,910
10,541
25,451
4,940
55,655
5,779
5,901
9,125
14,780
4,479
19,259
'9,088
14,867
4,619
19,486
8,254
14,155
4,694
18,849
10,61*4
15,554
7,992
23,546 1
5-19
INTERNATIONAL AFFAIRS
NATIONAL NEED: CONDUCTING INTERNATIONAL RELATIONS—Continued
(Functional code 150; in millions of dollars)
Major missions and programs
OUTLAYS
Foreign aid:
International security assistance:
Foreign military sales credit:
On-budget under current law
Off-budget under current law#..
Military assistance
Economic support fund
,
Other:
Existing law
Proposed legislation
Offsetting receipts
Subtotal, International security assistanceForeign economic and financial assistance:
Multilateral development banks
International organizations
Agency for International Development
Public Law 480 food aid
Peace Corps
Refugee assistance
Compact of Free Association (Micronesia)
Other:
On-budget under current law
Off-budget under current law#
Offsetting receipts
Subtotal, Foreign economic and financial assistance
Subtotal, 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:
Existing law
Proposed legislation
Foreign military sales trust fund (net).
International monetary programs
Other
Offsetting receipts
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
1,060
2,818
928
2,874
2,802
2,340
848
3,937
4,863
282
958
2,825
5,573
-693
972
2,850
5,799
-1,001
993
2,887
331
343
385
396
388
-86
-93
-99
-105
-161
7,924
10,177
9,213
8,993
8,906
1,391
308
1,779
1,085
111
336
1,404
300
2,036
1,791
126
354
1,387
266
2,058
1,307
125
339
299
1,549
252
2,061
1,296
127
338
146
1,470
245
2,078
1,286
132
336
148
-33
-5
-493
-23
-19
-459
-12
-1
-604
_*
-660
4,478
5,523
5,278
5,153
5,035
12,402
15,700
14,491
14,146
13,941
1,251
580
51
1,541
549
62
1,831
551
72
1,870
578
70
1,968
558
72
1,882
2,152
941
2,454
2,517
2,598
682
1,041
1,305
1,278
1,068
1,359
—5
100
-7
-1,570
-11
-479
Subtotal, International financial programs.
-300
565
-340
-84
910
-284
-85
790
-253 -286 -314
-87
-90
364 -1,062 -1,985
Total, outlays
15,876
19,583
18,349
*$500 thousand or less.
#Proposed to be included on-budget.
-200
16,907
15,833
5-20
THE BUDGET FOR FISCAL YEAR 1986
of $2.8 billion for 1986 includes $396 million for direct loans and
$2.4 billion for grants. Budget authority for 1986 is $1.0 billion less
than the amount enacted for 1985. This difference is due in part to
the deferral of any funding request for Israel. This request has
been deferred since negotiations with Israel are still continuing in
an effort to determine the appropriate level of assistance in the
context of Israel's plans for economic reforms. As a result of these
negotiations, a request will be presented promptly to the Congress
along with a description of the necessary economic reforms.
Other.—The budget authority requested in 1986 for security assistance includes $37 million for peacekeeping operations, $66 million for international military education and training, and $5 million for anti-terrorism assistance. No budget authority is requested
for 1986 for the guarantee reserve fund, which makes payments to
the Federal Financing Bank to prevent losses on foreign military
sales credit due to reschedulings or delinquencies. For the future,
when additional funds are needed, the administration proposes
permanent indefinite budget authority for the fund.
Foreign economic and financial assistance.—An important com-
plement to security assistance is the achievement of international
policy objectives through foreign economic and financial assistance
programs. These programs are designed to encourage the expansion
of a market-oriented international economic system and to help
meet the development and humanitarian needs of developing countries. Budget authority requested for 1986 is $5.3 billion, a decrease
of $0.5 billion from the 1985 level.
Multilateral development banks.—The United States contributes to the World Bank group of institutions and the three regional
banks for Latin America, Asia, and Africa. These institutions provided more than $20 billion in long-term loans and technical assistance in 1984 and promoted sound economic policies in recipient
countries. Lending programs are funded through the direct contributions of members and through borrowing in world capital markets backed by callable capital, a means by which developed
member governments guarantee repayment of that borrowing.
Direct contributions and callable capital are provided in accord
with multi-year international agreements to replenish the resources of each bank.
The 1986 request for the banks includes proposed budget authority of $1.3 billion, plus $3.6 billion in callable capital. These
amounts represent payments on formal commitments previously
made to the banks. Approximately one-half of the proposed budget
INTERNATIONAL AFFAIRS
5-21
authority will be used to make the second installment of the seventh replenishment of the International Development Association.
A first payment is also proposed to the Inter-American Investment
Corporation, a new institution established to provide loan and
equity capital to the private sector in this hemisphere's developing
countries. Remaining funds will be used to make authorized annual
payments to other ongoing bank replenishments. For 1985, an additional $237 million in budget authority and $1,219 million in callable capital is being requested to permit the United States to
complete its commitments.
The administration intends to honor existing commitments to
the multilateral development banks, including the International
Development Association, the Asian Development Fund, the African Development Bank and the African Development Fund. In
light of the current severe fiscal pressures, the administration is
not budgeting at this time for the future replenishments of these
particular institutions.
International organizations.—Voluntary contributions of $196
million are proposed for several developmental, humanitarian and
scientific programs carried out by the United Nations and other
international organizations. The administration continues to believe that, useful as some of these programs may be, a higher
priority must be afforded other foreign assistance activities accomplishing the same objectives.
Agency for International Development (AID).—AID carries out
bilateral development assistance programs in more than 60 countries in Latin America, Africa and Asia. The agency also supports
the overseas humanitarian relief and development programs of
U.S. private and voluntary organizations and assists developmentrelated research activities in U.S. universities. Consistent with
fiscal restraint, proposed budget authority for AID programs for
1986 is $2.1 billion, slightly less than for 1985. Principal objectives
of bilateral development programs include supporting sound economic policies in recipient countries, utilizing the private sector as
a vehicle for economic growth, improving the capability of indigenous institutions in developing countries, and increasing the use of
science and technology in development.
Public Law 480 food aid.—Through concessional loans to foreign
governments for food imports and direct food distribution to the
needy, food aid serves a wide range of policy objectives, including
humanitarian relief, support of security objectives, economic development, and export market development. The budget includes a
5-22
THE BUDGET FOR FISCAL YEAR 1986
request of $1.3 billion in budget authority for 1986. A significant
portion of direct food donations will be devoted to meeting famine
relief and refugee needs in Africa. For 1985, the budget contains a
supplemental request of $185 million to meet emergency humanitarian needs in Africa, increasing the budget authority requested
for all P.L. 480 food aid to $1.5 billion. The budget also includes
supplemental requests totalling $50 million for international disaster assistance and emergency refugee aid. These three supplementals, along with the use of previously appropriated funds will result
in total U.S. emergency famine assistance to Africa of more than
$1 billion in 1985.
Peace Corps.—Budget authority of $124 million is requested in
1986, to allow the Peace Corps to maintain its world-wide program
and to expand its volunteer program in Central America.
Refugee assistance.—The United States will continue to aid refugees in Africa, the Near East, Pakistan, Latin America, and Southeast Asia and to resettle eligible refugees in the United States. The
1986 budget includes $338 million for refugee relief abroad and the
admission of 68,000 refugees to the United States. Funds for 1986
are also requested to reduce refugee welfare dependency for the
first 90 days after arrival in this country. This policy would encourage resettlement organizations to help refugees find employment
before they become dependent on welfare. Additional assistance
received by refugees once they are settled in the United States is
included in the income security function.
Compact of Free Association.—The people of the Federated States
of Micronesia and the Marshall Islands have approved the Compact
of Free Association negotiated by the United States and their
governments. Upon the Compact's enactment by the Congress, the
President will notify the United Nations Trusteeship Council of the
impending change in status of the two states. The Compact binds
the United States to make annual payments to the two states
during the next 15 years totaling $2.3 billion to aid in their successful development as sovereign states. Therefore, budget authority of
$299 million required for 1986 is requested.
Conduct of foreign affairs.—Funds for these programs primarily
cover the operating costs of the Department of State in administering United States foreign policy. They also provide contributions
assessed by international organizations of which the United States
is a member. Budget authority of $2.5 billion is proposed for 1986,
and outlays are also estimated to be $2.5 billion.
INTERNATIONAL AFFAIRS
5-23
Administration of foreign affairs.—The United States is committed to protecting its employees and facilities at diplomatic missions
against the rising incidence of terrorism while continuing to actively promote American interests abroad. To accomplish this important objective, very substantial increases are required in 1985 and
1986 for security personnel, equipment, and embassy construction.
Morever, personnel increases are requested to strengthen the State
Department's basic reporting and analysis capability. These improvements in the administration of foreign affairs increase outlays from $1.3 billion in 1984 and $1.5 billion in 1985 to $1.8 billion
in 1986.
International organizations and conferences.—The United States
recognizes the importance to the world community of a range of
international organizations but strongly believes that these international organizations must be managed efficiently and economically. Toward that end, the administration will continue to pursue
a restrictive budget policy for international organizations that emphasizes the need to reduce administrative costs and to eliminate
low priority and obsolete activities. For 1986, budget authority of
$554 million is proposed for assessed contributions to international
organizations and for international conferences. The recent decision of the United States to withdraw from the United Nations
Educational, Scientific, and Cultural Organization is reflected in
the 1986 and later estimates. In addition, savings of $48 million in
budget authority and outlays for 1988 are estimated from certain
planned efforts to reduce international organization assessments,
to include reforms in reimbursing organizations for taxes paid by
their American employees, and foreign exchange gains.
Foreign information and exchange activities.—The improvement
in foreign understanding of American society and United States
foreign policy is an important objective of this administration. Its
priority is reflected in the budget requests for programs in this
area. The United States Information Agency (USIA) conducts academic and leadership exchange programs, broadcasts worldwide
through the Voice of America radio in English and 41 other languages, produces and disseminates media materials, holds seminars, and operates libraries and cultural centers in 127 countries.
For 1986, the administration proposes $974 million in budget authority for that agency. This continues the administration's effort
to modernize and expand the Voice of America, the Nation's principal vehicle for communicating directly with the peoples of the
world. The modernization program totaling $1.3 billion through
5-24
THE BUDGET FOR FISCAL YEAR 1986
CREDIT PROGRAMS—INTERNATIONAL AFFAIRS
(In millions of dollars)
Actual
1984
Direct loans:
Foreign military sales credit-.
New obligations
Change in outstandings
Outstandings
Foreign military sales credit (loans made by FFB):
New obligations1
Change in outstandings
Outstandings
Economic support fund:
New obligations
Change in outstandings
Outstandings
Development credit:
New obligations
Change in outstandings
Outstandings
Development credit (loans held by F F B ) : 2
Change in outstandings
Outstandings
Public Law 480 food aid:
New obligations
Change in outstandings
Outstandings
Export-Import Bank:
New obligations
Change in outstandings
Outstandings
Other.
New obligations
Change in outstandings
Outstandings
Total, direct loans:
New obligations
Change in outstandings..
Outstandings
1,315
-86
140
Estimate
1985
1986 1987
4,940
421
562
5,655
1,874
2,435
5,779
2,314
4,750
1988
5,901
2,494
7,244
4,401
282 -693 -1,001
2,818 2,340
17,111 19,451 19,733 19,040 18,040
288
335
6,011
240
192
6,203
396
337
6,540
463
303
6,844
503
493
7,336
405
455
379
396
395
80
105
108
355
349
12,165 12,270 12,378 12,733 13,083
-5
11
~6
-5
1
-1
922
806 1,012
958
940
647
468
761
638
640
9,269 10,030 10,677 11,317 11,955
1,467 3,865
195 -1,032 -1,787
621
993
17,504 18,497 18,692 17,659 15,872
614
243
795
9,347
4,473
63,006
794
274
1,304
824
285
1,590
794
275
1,864
11,145 8,146
5,044 3,712
68,049 71,761
8,402
2,172
73,933
8,551
1,461
75,394
684
236
1,030
1990 includes funds for new transmitter facilities, for replacement
equipment on existing facilities and for expanded broadcasts. The
request also provides increases for Radio Marti, which broadcasts
to the people of Cuba, for the National Endowment for Democracy,
for educational and cultural exchange programs, and for the use of
international television to enhance understanding of United States
foreign policy.
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. For 1986, $142
million of budget authority is requested for the Board, which includes $40 million for modernization of transmitter sites.
5-25
INTERNATIONAL AFFAIRS
CREDIT PROGRAMS—INTERNATIONAL AFFAIRS—Continued
(In millions of dollars)
Actual
1984
1985
1986
1987
-27
200
-20
180
-20
160
40
200
1
200
242
60
1,294
310
158
195
206
1,451
1,657
150
199
1,856
150
197
2,052
Guaranteed loans:
Foreign military sales credit:
Outstandings
Development creditNew commitments
Change in outstandings..
Outstandings
Export-Import Bank:
New commitments
Change in outstandings..
Outstandings
Total, guaranteed loans:
New commitments
Change in outstandings..
Outstandings
Estimate
1988
7,149 10,000 12,000 12,000 12,000
245
678 1,268
902
510
5,684 6,586 7,264 8,532 9,042
12,150 12,150
1,507
707
9,080 10,587 11,295
7,391
277
7,177
10,310
1,040
8,217
12,195
864
Total credit budget (new obligations and new
commitments)
16,738
21f455
20,341
20,552
20,701
•500 thousand or less.
1
These are obligations made by the agency to guarantee loans that the FFB will disburse. In effect, they are obligations for
FFB direct loans, and are counted as such in the Budget and the credit budget. Policy responsibility for these loans rests with
the2guaranteeing agency.
The direct lending activities of the Overseas Private Investment Corporation are financed by the FFB. Loan assets are issued
by the agency. According to law, these assets are backed by loans that the agency continues to service. The agency guarantees
the loan assets, sells them to the FFB, and repurchases them upon maturity. FFB net outlays for this account represent
acquisition of loan assets less repurchases by the agency. Increases in the volume of sales of loan assets are added to the FFB
direct loan outstandings, while the agency's direct loan outstandings decrease by the amount of loan assets sold to the FFB.
International financial programs.—To assist in the steady growth
of the international economy, the United States conducts programs
to improve the functioning of the international financial system
and to facilitate U.S. participation in world trade, including arms
sales. For 1986, proposed budget authority is $0.9 billion, and estimated outlays are $0.4 billion for these programs.
Export-Import Bank.—The Bank's direct loan program is being
eliminated because of significant progress in export credit restraint
agreements with foreign governments, and as part of overall efforts
to reduce federally subsidized loans. Increased private sector involvement in export financing is encouraged. The Bank will increase its guarantee and insurance programs to facilitate the
export of U.S. goods and services. A $12 billion ceiling for guaranteed loan commitments is proposed for these programs in 1986. In
addition, the administration is requesting authority for an interest
rate subsidy program. The aggregate 1986 interest rate subsidy cost
will not exceed $100 million on a present value basis plus receipts
5-26
THE BUDGET FOR FISCAL YEAR 1986
from origination fees on affected guaranteed loans. The administration will continue to press for an international agreement ending
all officially subsidized export financing.
Foreign military sales trust fund (net).—Most sales of military
equipment and services to foreign governments are made by the
Federal Government. Income in this trust fund comes from payments by foreign governments that have purchased military goods
and services from the Government. Disbursements occur when payments are made to suppliers, and the net of the two constitute the
recorded outlays of the fund. These represent transactions on
behalf of foreign governments and are not a cost to U.S. taxpayers.
Outlays net of offsetting receipts are estimated to be $100 million
for 1986.
Special defense acquisition fund.—This fund finances the procurement of military equipment in advance of specific orders from
foreign governments. As a result, equipment on order for U.S.
military purposes need not be diverted to meet the pressing needs
of foreign countries. For 1986, an increase in the overall fund
capitalization and a 3-year limitation on obligations are proposed.
Net outlays for 1986 are estimated to be $36 million.
Tax expenditures.—In an effort to encourage exports, a portion of
the profits from the export sales of foreign sales corporations
(FSCs) are not subject to tax. In 1984 legislation was enacted authorizing FSCs as a replacement for domestic international sales
corporations (DISCs) in response to complaints by the members of
the European Community that DISCs violate the General Agreement on Tariffs and Trade (GATT). Also, tax expenditures occur
when Americans working abroad are permitted to exclude substantial amounts of earned income and housing allowances from taxation. Tax expenditures resulting from FSCs and the foreign
earned-income exclusion are $1.7 billion and $2.4 billion, respectively, for 1986. An additional tax expenditure of $650 million
results from the deferral of income tax on the undistributed earnings of foreign corporations controlled by U.S. shareholders. Total
tax expenditures for international affairs are $4.7 billion in 1986.
GENERAL SCIENCE, SPACE, AND TECHNOLOGY
5-27
GENERAL SCIENCE, SPACE, AND TECHNOLOGY
The programs in this function help to ensure U.S. strength and
leadership in science and space technology in the broad national
interest. Included are all the programs of the National Science
Foundation, the space programs of the National Aeronautics and
Space Administration, and the general science programs of the
Department of Energy. The 1986 budget request would maintain
U.S. leadership in space and continue the high level of funding for
science resulting from the significant growth in support of these
programs by the administration over the last 3 years. Proposed
budget authority for the programs in this function is $9.5 billion in
1986, a $410 million increase over 1985.
The continuing support for general science and space programs
in this function reflects the administration's view that the private
sector lacks sufficient incentives to make adequate investments in
such programs to serve the broad national interest. However, reductions in previously planned 1986 general science and space programs have been made possible by deferral of major new space
projects and by lower funding needs in the space shuttle orbiter
production program and ongoing construction projects in the general science programs of the Department of Energy.
Common to the programs in this function is the support of basic
research, accounting for more than one-third of overall Federal
funding for such research. The programs in this function are the
primary source of funding for the physical and engineering sciences, accounting for some 80% of the total Federal support for
these disciplines. The balance is provided mainly through programs
of the Department of Defense.
General science and basic research.—This area covers all the
programs of the National Science Foundation and the general science programs of the Department of Energy in high energy and
nuclear physics. Budget authority of $2.3 billion is proposed for
these programs in 1986, an increase of $28 million over the 1985
level.
National Science Foundation programs.—The principal mission of
the National Science Foundation (NSF) is to promote basic research in all fields of science and engineering. The NSFs broadbased research programs complement the more specialized support
of basic research by agencies in other functions, such as the Department of Defense and the National Institutes of Health, and
help to ensure balanced Federal support across the major scientific
disciplines. The budget includes $1.6 billion in proposed budget
authority for the NSF, an increase of 4.5% over the 1985 level.
5-28
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: INCREASING BASIC SCIENTIFIC KNOWLEDGE AND USE OF SPACE
(Functional code 250; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
1,328
635
1,506
727
1,574
685
1,634
789
1,696
837
1,964
2,232
2,260
2,422
2,533
4,101
1,747
3,906
2,021
4,022
2,265
3,886
2,357
4,081
2,417
868
142
954
977
990
996
BUDGET AUTHORITY
General science and basic research:
National Science Foundation programs
Department of Energy general science programs
Subtotal, General science and basic research
Space research and technology:
Space flight
Space science, applications, and technology
Supporting space activities:
On-budget under current law
Off-budget under current law#
Subtotal, Supporting space activities
1,010
954
977
990
996
Subtotal, Space research and technology
6,858
6,881
7,264
7,232
7,494
Total, budget authority
«
8,822
9,114
9,524
9,655
10,027
National Science Foundation programs
Department of Energy general science programs
1,198
650
1,429
687
1,540
697
1,605
738
1,653
787
1,849
2,116
2,237
2,343
2,440
4,028
1,687
3,914
1,890
4,004
2,144
3,891
2,278
3,919
2,367
746
7
886
-67
1,007
-107
995
-112
983
-98
754
819
900
883
885
Subtotal, Space research and technology
6,469
6,623
7,048
7,052
7,171
Total, outlays
8,317
8,740
9,285
9,395
9,611
OUTLAYS
General science and basic research:
Subtotal, General science and basic research
Space research and technology:
Space flight
Space science, applications, and technology
Supporting space activities:
On-budget under current law
Off-budget under current law#
Subtotal, Supporting space activities
#Proposed to be included on-budget.
Within this amount, the support of basic research, which increased
by 13% in 1985, will increase by about 7% in 1986 to $1.4 billion.
The NSF supports research at academic institutions, primarily
through research grants to individual scientists. In 1986, emphasis
will continue on the support of research in mathematics, the physical sciences, and engineering, with an overall increase of 8% for
budget authority in these areas. Areas to receive increased support
in 1986 include advanced materials research, mathematics, and
state-of-the-art instrumentation. In addition, emphasis will continue on increasing the access of academic scientists to the most
advanced computers. This increased computer access effort will
lead to the establishment of several new university computer centers dedicated to such use, and to the support of local and regional
GENERAL SCIENCE, SPACE, AND TECHNOLOGY
5-29
networks to permit researchers to access these new centers from
terminals close to their home laboratories.
The budget also includes $15 million in budget authority in 1986
to continue support for university-based engineering research centers. This program, initiated in 1985, will help to focus engineering
research in various disciplines on a cohesive effort in selected areas
of importance in fundamental research, such as microelectronics,
advanced materials research, and biotechnology.
In addition, for 1986 an increase of 8% over 1985, to $120 million,
is provided for the U.S. Antarctic program managed by the NSF, to
assure the necessary logistical support for Antarctic research programs and thus maintain an active and influential U.S. scientific
presence in that region.
Budget authority for NSF programs in science education, including the graduate fellowship program, is recommended to total $51
million in 1986. While this is a decline from 1985, the level of
activities financed by this program will remain at the 1985 level of
$82 million due to funds deferred in prior years. NSF programs in
pre-college science and mathematics are intended to complement
the efforts of State and local education agencies and the private
sector.
Department of Energy general science programs.—The general sci-
ence programs of the DOE continue to support basic research in
nuclear and high energy physics. The goal of this research is to
achieve a comprehensive understanding of the basic constituents of
matter and energy and the forces that govern their interaction.
Budget authority of $685 million is requested for support of these
programs in 1986, a decrease of 6% from 1985, largely reflecting
the lower overall funding needs of ongoing accelerator construction
activities in 1986.
The budget provides for procurement of capital equipment, investigation of advanced accelerator concepts and techniques, and other
operating activities.
The 1986 program allows for continued construction of the Stanford Linear Collider and funds to complete the Tevatron I modifications at the Fermi National Laboratory. The budget would continue to provide funds for the advanced accelerator research and
development associated with the construction of a new nuclear
physics electron facility at Newport News, Virginia. It also provides funds for preliminary research and development efforts required for the design of a next generation high energy particle
accelerator.
Space research and technology.—This part of the function covers
the space-related activities of the National Aeronautics and Space
Administration (NASA). To continue U.S. leadership in space, a
5-30
THE BUDGET FOR FISCAL YEAR 1986
strong and balanced program will be maintained in the primary
areas of space transportation, space science, and space technology.
Budget authority of $7.3 billion is proposed for these programs in
1986, an increase of $383 million over 1985.
Space flight.—The space flight programs help sustain and improve the Nation's ability to supply space transportation services
and to develop the facilities to establish a permanent U.S. presence
in space. These programs include the operation, upgrade, and logistical support of the four-orbiter space shuttle fleet; and the development, procurement, and operation of supporting technologies such
as the shuttle-borne Spacelab and the upper stage vehicles to carry
shuttle-launched payloads into high-Earth orbit and planetary missions. These programs also include development of the manned
space station.
Budget authority of $4.0 billion for these programs is proposed
for 1986, a 3% increase over 1985. Within this level, several important increases are made possible through savings resulting primarily from the completion of production of the four-orbiter fleet and
initial shuttle operating facilities, and by productivity savings and
increased commercial revenues associated with the growing maturity of shuttle operations.
These increases provide for an escalation in the shuttle flight
rate from 10-11 in 1985 to 13-14 in 1986, leading to a planned rate
of 24 flights per year by 1989; additional research and development
to improve the reliability of the shuttle's main engines and to
make them easier to maintain; and the development of an orbital
maneuvering vehicle to help ferry spacecraft in low-Earth orbit to
and from the shuttle.
Proposed budget authority for the manned space station program
increases from $150 million in 1985 to $230 million in 1986 to
prepare for the planned start of initial operating capability in the
mid 1990's. The space station will enhance space-based research,
help develop advanced technologies potentially useful to the economy, and encourage greater commercial use of space.
Space science, applications, and technology.—These programs in-
clude support for studies of the solar system and the universe;
studies in remote sensing of the Earth's resources and environment; and research on materials processing in space. Budget authority of $2.3 billion is proposed for 1986, a 12% increase over
1985.
In space science, the budget provides for major planned increases
to continue progress on ongoing flight missions and supporting
activities. Specifically, work is proceeding on the 1986 launches of
the Galileo orbiter/probe spacecraft to explore Jupiter; the U.S.
experiments for the international solar polar mission (renamed
GENERAL SCIENCE, SPACE, AND TECHNOLOGY
5-31
Ulysses spacecraft); and the Hubble space telescope. Spacecraft
development will continue for the gamma ray observatory, the
Venus radar mapper mission, and the Mars observer (formerly the
Mars geoscience climatology orbiter).
Increased funding is also proposed in 1986 to allow for the complex operations and data analysis associated with the planned 1989
Voyager 2 exploration of Neptune and to conduct several space
physics, astronomy and life sciences experiments on the shuttle.
For space applications, proposed activities in 198^ include space
experiments to study the Earth and its environment; research on
materials processing in space; and technology for space communications. Continued development of space-based remot^ sensing technologies will be pursued to help better understand the Earth's
environment and the interaction of the Sun and the Earth. In the
area of materials processing, increased funding will allow support
for the operation of the Microgravity Materials Science Laboratory
and an increased number of microgravity experiments to be conducted on the shuttle. The advanced communications technology
satellite development also will be continued for planned launch in
1989.
The basic space research and technology program of NASA is
applicable to, and supportive of all major space activities. Continued growth in funding is proposed for 1986 to help provide the
technology base for future space programs in areas such as propulsion, electronics, and materials research. In 1986, additional emphasis will be placed on investigating the radiation hardening of
spacecraft components, the control of large flexible structures in
space, and the design of a recoverable orbital transfer vehicle for
use in conjunction with the shuttle and permanent space facilities.
Much of this research will enhance the development of the space
station.
In addition, a new program is proposed to encourage and facilitate greater private sector investment and involvement in space.
This program will seek to involve nonaerospace firms and universities in exploring potential new uses of space for future economic
benefits.
Supporting space activities.—Budget authority of $1.0 billion is
proposed for spacecraft tracking, data gathering, and processing
support for the entire space program, an increase of $23 million
over 1985. This funding increase provides for payments for the
tracking and data relay satellite service and for other elements of
the space network as selected stations in the ground network are
phased out.
In the accompanying credit table, outstanding direct loans made
by the Federal Financing Bank for the construction and acquisition
5-32
THE BUDGET FOR FISCAL YEAR 1986
of the tracking and data relay satellite are reflected. No new
obligations for this account are expected.
CREDIT PROGRAMS—GENERAL SCIENCE, SPACE AND TECHNOLOGY
(In millions of dollars)
Actual
1984
Direct loans:
NASA space flight, control and data communications (loans
made by FFB): 1
New obligations
Chanee in outstandines
Outstandings
Total credit budget (new obligations)
142
7
955
Estimate
1985
1986
1987
1988
-67
888
-107
780
-112
668
-98
570
142
1
These are commitments made by the agency to guarantee loans that the FFB will disburse. In effect, they are commitments for FFB direct
loans, and are counted as such in the budget and the credit budget. Policy responsibility for these loans rests with the guaranteeing agency.
Tax expenditures.—In addition to direct Federal funding of basic
research, the 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 1986 estimate for this provision is $3.9 billion. A 25% tax credit is also
available to encourage certain basic research and experimentation;
the estimate for this tax expenditure is $1.6 billion in 1986. Tax
expenditures for general science, space and technology are estimated to total $6.2 billion in 1986.
ENERGY
5-33
ENERGY
The Nation requires adequate supplies of energy at reasonable
costs. The best way to meet this need is to let market forces work.
This policy produces favorable results, as evidenced by developments since January 1981 when the President completed the dismantlement of controls on U.S. oil markets. Oil prices have fallen.
The U.S. economy continues to expand, but the amount of energy it
needs is less today than it was 5 years ago. It is not necessary to
have substantial Federal spending to meet our national energy
needs.
This budget provides the resources needed to meet the Federal
Government's limited responsibilities with respect to energy. These
responsibilities include the establishment and the enforcement of
appropriate environmental and nuclear safety regulations, continuation of traditional Federal energy production activities, and support for longer-term research.
A total of $5.1 billion in budget authority is proposed in this
function in 1986, a decrease of $3.2 billion from 1985. This change
results primarily from an indefinite moratorium on further development of the strategic petroleum reserve and a major increase in
payments by the power marketing administrations on their obligations to the Treasury.
Energy supply.—The Federal Government's energy supply activities fall into four main categories: research and development programs, direct production programs, subsidies to foster private investment in synthetic fuels, and subsidies to certain electric utilities and telephone systems.
Private industry invests billions of dollars each year in research
and development (R&D), including R&D related to energy. Federal
Government spending should complement, rather than supplant,
private sector R&D investment. It can do this through support for
basic research where the benefits of the research do not readily
accrue to private investors. It can also do this through limited
support for other longer-term R&D that broadly serves the national
interest.
A total of $2.2 billion in budget authority is proposed for energy
supply research and development programs in 1986, about at the
level for 1985. Virtually all of these programs are funded through
the Department of Energy (DOE).
The request for nuclear fission R&D includes budget authority of
$233 million to clean up the waste from uranium mining and other
contaminated sites. This is an increase of $73 million over 1985.
For nuclear technology research, budget authority of $361 million
is proposed in 1986, a 12% reduction from the 1985 level. This
change reflects a shift away from supporting costly demonstrations
5-34
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: ENERGY
(Functional code 270; in millions of dollars)
Major missions and programs
BUDGET AUTHORITY
Energy supply:
Research and development:
Fission
Fusion
Fossil
Solar and renewable energy resources
Energy science
Other
Direct production (net):
Uranium enrichment
Nuclear waste disposal fund
Petroleum reserves
Tennessee Vallev Authority
On-budget under current law
Off-budget under current law#
Other power marketing
Subsidies for nonconventional fuel production:
On-budget under current law
Off-budget under current law#
Rural electric and telephone:
On-budget under current law
Off-budget under current law#
Proposed legislation
Subtotal, Energy supply
Energy conservation:
Conservation research and development
Conservation grants
Solar Energy and Conservation Bank
Subtotal, Energy conservation
Emergency energy preparedness:
On-budget under current law
Off-budget under current law#
Subtotal, Emergency energy preparedness
Energy information, policy, and regulation
Total, budget authority
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
635
468
262
257
594
44
614
437
287
242
654
61
631
390
172
197
665
149
742
406
227
205
722
152
634
422
235
212
751
157
382
-11
-1,311
102
-793
-1,019
170
-1,128
382
-922
181
-875
364
137
75
403
87
-569
335
196
73
-486
*
499
9
5
428
435
90
89
*
512
228
2,788
30
3,332
5,345
5,073
28
2,692
-7
4,216
26
2,030
-27
4,225
3,641
150
280
25
455
177
282
15
473
141
35
144
26
149
17
176
169
166
618
650
1,268
6
2,050
2,056
6
49
145
6
49
145
796
719
712
703
702
7,865
8,321
5,110
5,147
4,655
-495
*
637
22
1,750
and toward developing a broad technology base for several reactor
concepts potentially applicable to industrial development of future
nuclear power plants.
For nuclear fusion R&D, budget authority of $390 million is
proposed, a reduction of $47 million from the level enacted in 1985.
This reduction is consistent with shifting the emphasis of the program to resolving key scientific questions affecting the program's
near-term progress and to maintaining a balance between our domestic efforts and those abroad to allow for effective international
collaboration.
5-35
ENERGY
NATIONAL NEED: ENERGY—Continued
(Functional code 270; in millions of dollars)
Major missions and programs
1984
actual
1985
1986
estimate
1987
estimate
OUTLAYS
Energy supply:
Research and development:
Fission
Fusion
Fossil
Solar and renewable energy resources
Energy science
Other
Direct production (net):
Uranium enrichment
Nuclear waste disposal fund
Petroleum reserves
Tennessee Valley Authority
On-budget under current law
Off-budget under current law#
Other power marketing
Subsidies for nonconventional fuel production:
On-budget under current law
Off-budget under current law#
Rural electric and telephone:
On-budget under current law
Off-budget under current law#
Proposed legislation
Subtotal, Energy supply..
Energy conservation:
Conservation research and development.
Conservation grants
Solar Energy and Conservation Bank
Subtotal, Energy conservation
Emergency energy preparedness:
On-budget under current law
Off-budget under current law#
Subtotal, Emergency energy preparedness..
Energy information, policy, and regulation
Total, outlays
723
532
325
277
632
84
668
446
319
315
698
117
618
401
285
240
677
137
746
406
251
220
701
145
641
422
248
215
733
156
12
-58
-1,403
239
-812
-1,026
125
-976
298
-931
99
-883
185
137
-517
535
90
-304
165
87
-1,424
135
73
-1,381
-35
-40
-1,269
16
366
148
353
318
14
552
-1
662
-105
226
1,717
31
3,132
28
2,482
-7
26
1,780
-27
23
1,215
-52
3,252
4,949
3,170
2,994
2,028
163
356
152
367
26
150
196
35
150
96
150
52
527
545
381
246
202
189
2,329
2,518
276
1,630
1,906
236
148
385
177
146
177
146
790
764
736
710
698
7,086
8,164
4,671
4,127
3,073
*$500 thousand or less.
^Proposed to be included on-budget.
The budget also includes $172 million in budget authority for
research related to coal, oil, gas, and other fossil fuels, a reduction
of $115 million from 1985. This work will continue to emphasize
clean coal technologies. Budget authority of $197 million is proposed for R&D on solar and renewable energy resources, a reduction of $45 million from 1985.
The reduced level for fossil, solar, and renewable energy resources will still permit a vigorous research program to develop
further the technology base for future use by U.S. industry. Spending reductions are made possible by avoiding Federal investment in
5-36
THE BUDGET FOR FISCAL YEAR 1986
costly development and demonstration activities that are more appropriately the responsibility of the private sector.
For energy science programs, the budget includes $665 million in
budget authority in 1986, approximately the same level as in 1985.
These programs support energy-related basic research at major
universities and DOE national laboratories in the physical, biological, environmental, and engineering sciences. Their goal is to provide fundamental scientific knowledge and a broadened engineering data base for future development of energy technologies.
Other energy supply R&D programs include research on health
and safety issues and on advanced environmental control technologies carried out by the Environmental Protection Agency. Investments to reduce the use of energy at the national laboratories are
also included. Budget authority of $149 million is proposed for
these programs in 1986. This includes increases for research on
acid rain.
The Federal Government's direct production activities include
enriching uranium in Government-owned plants primarily for use
in civilian nuclear power reactors; providing for the permanent
disposal of commercial nuclear waste; producing and selling oil and
gas from the naval petroleum reserves (NPRs); and generating and
transmitting electric power at the Tennessee Valley Authority and
the five power marketing administrations.
Receipts from the sale of uranium enrichment services to foreign
and domestic customers are expected to cover program costs in
1986. In May 1985, the Department plans to issue a new business
strategy for conducting its uranium enrichment operations. The
new strategy will include a plan for repayment of the Federal
Government's investment in the enrichment enterprise. At present,
it is estimated that the uranium enrichment program will begin to
make payments to the Treasury in 1986. The specific amount of
these payments will be determined later.
The commercial nuclear waste program is financed by a fee on
electricity generated by nuclear power plants. Proposed budget
authority of $170 million in 1986 results from expenses of $571
million which are offset by receipts of $401 million. In 1985 utilities
are expected to make a one-time payment to the nuclear waste
disposal fund for the storage of spent fuel that already exists.
Receipts in 1985 of $1,120 million will offset expenses of $327
million. This large one-time receipt accounts for a net income to
the nuclear waste program of $793 million in 1985.
The budget assumes continued production of oil and gas at the
maximum efficient rate of production authorized by law at the
NPRs at Elk Hills, California and Teapot Dome, Wyoming. After
deduction of expenditures needed to operate these oil fields, net
ENERGY
5-37
receipts from the NPR program in 1986 are expected to be $1.1
billion, in line with their level in 1985. The budget also proposes
that the provision of law that earmarks $0.3 billion in NPR receipts in 1985 for use by the national defense stockpile fund be
repealed.
The Tennessee Valley Authority (TVA) anticipates borrowing
$403 million in 1986, $32 million less than in 1985, to finance
construction of two nuclear plants—Watts Bar and Bellefonte.
These plants are scheduled to become operational during the next
5 years, completing the nuclear construction program that began
in the 1960's. TVA's economic development programs are described
in the community and regional development function.
TVA leases nuclear fuel from the Seven States Energy Corporation. The Corporation borrows from the Federal Financing Bank
(FFB) to finance its purchases, with TVA as the guarantor through
long-term contractual agreements. This activity is summarized on
the accompanying credit table.
Various reforms are proposed to assure that the Bonneville
Power Administration and the other four power marketing administrations pay back their debt to the Treasury in a business-like
way—on a regular and timely basis, and at interest rates that
reflect the cost of money to the Federal Government. They would
increase Federal receipts by almost $1 billion in 1986 because of
the sizable $14 billion debt these agencies owe to the Treasury.
The Synthetic Fuels Corporation (SFC) provides subsidies for
nonconventional fuel production. With long-term world oil price
projections showing much less rapid growth than when the SFC
was created in 1980, prospects for near-term commercialization of
synthetic fuels have diminished substantially. The Congress, therefore, rescinded $7.4 billion previously available to the Corporation,
leaving a total of $7.9 billion available for SFC obligation at the
start of 1985, principally in the form of loan and price guarantees.
This amount is in addition to $741 million already awarded. The
Corporation estimates that it will make additional awards totaling
$4.1 billion in 1985 and $3.6 billion in 1986. Outlays from these and
other awards are expected to total $332 million in 1986. Outlays
may increase above these estimates depending on developments in
the world oil market, the terms and conditions agreed to by the
Corporation, and other factors.
The Rural Electrification Administration (REA) in the Department of Agriculture provides direct loans and guarantees of direct
loans by the FFB for the construction and operation of rural electric utilities and telephone systems. Total REA loans outstanding,
including FFB direct loans, are estimated to be $37.7 billion at the
end of 1985. The reduction in new loan obligations from $4.5 billion
originally estimated for 1984 to $2.1 billion actually made in 1984
5-38
THE BUDGET FOR FISCAL YEAR 1986
CREDIT PROGRAMS—ENERGY
(In millions of dollars)
Actual
1984
Direct loans:
Alternative fuels production (loans made by the FFB):*
Change in outstandings
Outstandings
Tennessee Valley Authority:
New obligations
Change in outstandings
Outstandings
Tennessee Valley Authority (loans made by the FFB)
New obligations*
Change in outstandings
Outstandings
Rural electrification and telephone revolving fund:
New obligations
Change in outstandings
Outstandings
Rural electrification and telephone revolving fund (loans
held by FFB): 2
Change in outstandings
Outstandings
Rural electrification and telephone revolving fund (loans
made by the FFB): 1
New obligations
Change in outstandings
Outstandings
Geothermal and other:
New obligations
Change in outstandings
.>.
Outstandings
Geothermal and other (loans made by the FFB): 1
Change in outstandings
Outstandings
Total, direct loans:
New obligations
Change in outstandings
Outstandings
Estimate
1985
1986
1987
1988
404
1,290
274
1,564
1,564
1,564
-105
1,459
60
3
261
58
2
263
66
3
266
74
2
268
83
8
276
137
137
1,556
90
90
1,646
87
87
1,733
73
73
1,806
-40
1,766
1,079
285
10,163
69
3,537
1,122
575
435
290
314
98
104
119
10,477 10,575 10,694 10,798
447
3,984
253
4,237
53
4,290
4,290
1,002 1,325
300
225
150
1,648 2,685 2,222 1,700 1,490
20,587 23,272 25,494 27,194 28,684
1
-3
13
36
32
45
20
14
59
20
16
75
20
16
91
-39
6
79
85
14
99
-1
99
-1
98
827
2,279 2,630 1,049
543
2,505 3,923 2,692 1,962 1,472
37,413 41,335 44,027 45,990 47,461
and $2.4 billion estimated for 1985 results from lower than expected demand for electricity and a surplus of electric generating capacity. A continuation of that trend, coupled with the administration's plans for increasing reliance on private financing by rural
electric systems, and the eventual phaseout of all REA lending
programs by 1990, allows for the further reduction in new loan
obligations to $0.9 billion for 1986. Legislation is being proposed to
provide all direct loans at the cost of Treasury borrowing plus
1-1/8%, thus reducing the subsidy now given by the current 5%
interest rate.
5-39
ENERGY
CREDIT PROGRAMS—ENERGY—Continued
(In millions of dollars)
Actual
1984
Guaranteed loans:
Biomass energy development:
Change in outstandings
Outstandings
Rural electrification and telephone revolving fund:
Change in outstandings
Outstandings
Synthetic Fuels Corporation:
New commitments
Change in outstandings
Outstandings
Geothermal and other:
New commitments
Change in outstandings
Outstandings
Total, guaranteed loans:
New commitments
Change in outstandings..
Outstandings
Total credit budget (new obligations and new
commitments)
Estimate
1985
1987
1988
168
213
262
475
468
-21
446
-31
415
48
910
-10
900
38
938
30
968
-10
958
78
78
78
419
419
497
478
476
973
389
381
1,354
85
69
6
4
34
104
36
140
77
216
—3
213
6
221
1,158
163
399
1,557
499
486
2,043
478
561
2,604
389
337
2,941
2,285
2,793
1,548
1,305
932
1
These are commitments made by the agency to guarantee loans that the FFB will disburse. In effect, they are commitments for FFB direct
loans,
and are counted as such in the budget and the credit budget. Policy responsibility for these loans rests with the guaranteeing agency.
2
The direct lending activities of the Rural Electrification Administration are financed by the Federal Financing Bank (FFB). Certificates of
beneficial ownership (CBO's) are issued by the REA. According to law, these certificates are backed by loans that the agency continues to
service. REA guarantees the CBO's, sells them to the FFB, and repurchases them upon maturity. FFB net outlays for REA represent acquisition of
CBO's less repurchases by REA. Increases in the volume of sales of CBO's are added to FFB direct loan outstandings, while the REA direct loan
outstandings decrease by the amount of CBO's sold to the FFB.
Energy conservation.—The budget proposes a total of $176 million in budget authority and $381 million in outlays in 1986 for
programs in this subfunction, including State and local grants and
energy conservation research and development.
Energy conservation R&D supports work to develop methods to
use energy more efficiently in buildings, transportation, and industrial processes. The programs proposed in the budget are designed
to complement the efforts that the private sector has undertaken
in response to market forces, and to avoid unnecessary subsidizing
of future private efforts. In keeping with this policy, the budget
proposes $141 million of budget authority in 1986 for conservation
R&D, a reduction of $35 million from 1985.
In addition to funding for energy conservation R&D, this subfunction includes State and local government energy grant programs. These grants are used to weatherize school buildings, hospitals, and the homes of low-income families. The budget proposes
that these programs be phased out over the next 5 years. In the
case of support for low-income weatherization, it assumes increasing reliance on charitable sources and State and local governments.
5-40
THE BUDGET FOR FISCAL YEAR 1986
Schools and hospitals have incentives to undertake these investments without Federal assistance.
The budget also proposes that, for the duration of Federal support, the weatherization and the schools and hospitals programs,
estimated to cost $191 million in 1986, be financed with funds
recovered by the Federal Government from petroleum pricing violations under the old oil price control program. Legislation is proposed in the budget to have these recoveries credited directly to the
accounts that finance the DOE energy conservation grant programs
noted above and to a Department of Health and Human Services
(HHS) program that provides help to the poor in paying their fuel
bills. Outlays for the HHS low-income energy assistance program
are included in the income security function.
Budget authority of $35 million is requested in 1986 for conservation grants. This covers only the cost of State planning and extension grants and program administration.
Emergency energy preparedness.— Administration policy for dealing with disruptions in oil supplies is to rely on market forces. To
supplement this basic approach, the administration has also made
a major commitment to building up the strategic petroleum reserve
(SPR). Rapid progress has been made in the past 4 years and the
SPR is expected to reach a level of almost 500 million barrels by
the end of 1985.
World oil market conditions have changed markedly since the
SPR was initiated. The world's supply of oil produced outside the
Middle East has increased. OPEC is under continuing pressure to
cut prices. In light of these significant developments, the SPR can
now provide a substantial level of protection in the event of an oil
supply disruption. Consequently, the administration is proposing
an indefinite moratorium on further development of the strategic
petroleum reserve after 1985. This moratorium will be reassessed
as warranted as fiscal and oil market conditions change.
The moratorium results in a reduction in budget authority for
the SPR in 1986 of $2.1 billion compared to 1985 and an outlay
reduction of $1.5 billion. Outlays of $236 million will be used to
complete construction of storage facilities and to maintain the
reserve in a state of readiness. Another $148 million in outlays
projected for the petroleum reserve in 1986 reflects payments for
deliveries occurring at the end of 1985. This amount is currently
off-budget but proposed to be included on-budget. Amounts appropriated in prior years but not needed by the program are being
proposed for deferral.
Energy information, policy, and regulation.—Budget authority for
energy information, policy, and regulation is proposed to be $712
5-41
ENERGY
million in 1986. Included in this total is $429 million to support the
work of the Nuclear Regulatory Commission.
This subfunction also includes, for the Department of Energy,
the operating expenses of the Federal Energy Regulatory Commission and the Energy Information Administration, as well as the
Department's general administrative expenses.
Tax expenditures.—To encourage energy exploration and production, the tax code permits certain capital costs to be deducted as
current expenses rather than amortized over the useful life of the
property. In addition, extractive industries are generally permitted
to use percentage depletion rather than cost depletion.
A variety of residential tax incentives stimulate energy conservation and encourage conversion to energy sources other than oil or
natural gas. Business investments in specified energy property are
also eligible for special tax credits, in addition to the normally
available investment tax credit.
Tax expenditures for energy are listed in the accompanying table
and discussed in more detail in Special Analysis G.
TAX EXPENDITURES FOR ENERGY
(Outlay equivalents; in millions of dollars)
Estimates
Description
Expensing of exploration and development costs:
Oil and gas
Other fuels
Excess of percentage over cost depletion:
Oil and gas
Other fuels
Capital gains treatment of royalties on coal
Exclusion of interest on State and local industrial development bonds for certain
energy facilities
Supply incentives
Conservation incentives
Alternative, conservation and new technology credits:
Supply incentives
Conservation incentives
Alternative fuel production credit
Energy credit for intercity buses
Special rules for mining reclamation reserves
Total (after interactions), energy
1984
1985
1986
1,595
2,060
2,245
1,640
550
165
1,545
605
190
1,435
645
205
145
155
180
415
325
450
295
175
70
260
5
35
15
15
3,665
250
135
40
15
40
4,010
45
5
45
3,685
*500
thousand or less.
1
The estimate of total tax expenditures for this function reflects interactive effects among the individual items. Therefore the estimates cannot
simply be added.
5-42
THE BUDGET FOR FISCAL YEAR 1986
NATURAL RESOURCES AND ENVIRONMENT
Federal natural resources and environment programs manage
public lands and resources for their preservation, conservation, and
economic development; work with State governments to ensure a
clean environment; and encourage increased knowledge and understanding of the environment.
Pollution control and abatement—Efforts to control pollution of
air, water, and land are carried out through direct Federal programs and through financial assistance to State and local governments.
Regulatory,
enforcement,
and
research
programs.—Proposed
budget authority in 1986 for regulatory, enforcement, and research
programs is 2% higher than in 1985. This budget continues all the
initiatives begun in 1985 and provides a substantial funding increase to implement the Hazardous and Solid Waste Act Amendments of 1984. The budget continues the aggressive development of
new hazardous waste regulatory responsibilities that began in 1985;
provides for immediate implementation of new enforcement authorities; and supports the ambitious schedules to issue permits
required by the new law. Budget authority for the Federal acid
rain task force, classified in the energy function, will be increased
by 37% to $85 million in 1986. Major new research activities will
be conducted, including a study of the mechanics by which acid
deposition may affect forests. Long-term monitoring of sensitive
watersheds will be expanded and special studies conducted to determine the factors affecting the rate of lake acidification.
Hazardous substance response fund.—The hazardous substance
response trust fund finances the cleanup of abandoned hazardous
waste sites and hazardous chemical spills. Budget authority of $900
million has been included for 1986 as a step toward a $1.1 billion
average annual program level for cleanup over the period 19861990. The administration will propose legislation to reauthorize the
program at the $1.1 billion level and to provide dedicated revenues
to finance it. No appropriation from general revenues will be requested. It is anticipated that cleanups will be undertaken at 56
sites and emergency responses will be needed at 190 sites in 1986.
An annual average of 75 fund financed cleanups is anticipated over
the period 1986-1990.
Sewage treatment plant construction grants.—This program assists State and local governments in building sewage treatment
systems. The budget requests 1986 budget authority of $2.4 billion
and begins a 4-year phaseout of this program. Grants are planned
to be limited to completion of projects currently underway. This
5-43
NATURAL RESOURCES AND ENVIRONMENT
NATIONAL NEED: USING AND PRESERVING NATURAL RESOURCES AND PROTECTING THE
ENVIRONMENT
(Functional code 300; in millions of dollars)
Major missions and programs
BUDGET AUTHORITY
Pollution control and abatement:
Regulatory, enforcement, and research programs..
Hazardous substance response fund
Oil pollution funds
Sewage treatment plant construction grants
Offsetting receipts.Existing law..
Subtotal, Pollution control and abatement..
Water resources:
Corps of Engineers.Existing law
Proposed legislation
Bureau of Reclamation
Other
Navigation fees (proposed).
Offsetting receipts
Subtotal, Water resources.
1984
actual
1985
estimate
1987
estimate
estimate
1,140
460
6
2,435
1,262
620
9
2,400
1,306
900
9
2,400
1,328
1,125
9
1,800
1,355
1,200
9
1,200
-3
-34
-38
-61
4,037
4,257
4,577
4,201
-69
-22
3,673
2,732
2,814
969
236
1,054
215
-158
-167
2,404
403
807
99
-403
-220
2,449
622
1,009
16
-622
-271
3,779
3,916
3,091
3,203
2,625
641
1,022
16
-641
-315
3,347
1,646
1,690
64
384
330
372
272
1,713
45
388
344
203
278
1,758
46
394
357
206
285
Conservation and land management:
Management of national forests, cooperative forestry,
and forestry research (Forest Service):
1,749
Existing law
Proposed legislation
505
Management of public lands (BLM)
342
Mining reclamation and enforcement
614
Conservation of agricultural lands
305
Other
Offsetting receipts:
-2,127
Existing law
Proposed legislation
Subtotal, Conservation and land management
1,389
Recreational resources: 1
Federal land acquisition.Existing law
Proposed legislation
Urban park ana historic preservation funds..
Operation of recreational resources:
Existing law
Proposed legislation
Offsetting receipts.Existing law
Proposed legislation
Subtotal, Recreational resources..
-2,650 -2,878 -3,020
106
109
110
134
793
569
203
-2,599
296
254
35
25
1,182
1,285
-61
-84
1,453
Other natural resources:
Program activities:
Existing law
Proposed legislation...
Offsetting receipts.Existing law
Proposed legislation...
Subtotal, Other natural resources..
1,622
Total, budget authority
12,280
474
373
618
281
45
-30
49
-30
49
-30
1,194
1,210
2
1,235
3
-51
-91
-53
1,070
1,088
-94
-55
1,107
1,629
1,765
1,539
90
1,508
55
1,565
30
-7
-4
-1
-14
-19
1,761
1,613
1,543
-1
-23
1,571
12,207
10,920
10,237
9,833
5-44
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: USING AND PRESERVING NATURAL RESOURCES AND PROTECTING 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 funds
Sewage treatment plant construction grants
Offsetting receipts:
Existing law..
Subtotal, Pollution control and abatement..
Water resources:
Corps of Engineers:
Existing law
Proposed legislation
Bureau of Reclamation
Other
Navigation fees (proposed).,
Offsetting receipts
Subtotal, Water resources.
1984
actual
1985
estimate
1986
1987
estimate
estimate
1,137
285
3
2,623
1,222
450
9
2,740
1,288
670
9
2,650
1,299
925
9
2,380
1,341
1,115
9
2,200
-3
-34
-38
-61
4,044
4,387
4,579
4,552
-69
-22
4,574
3,096
3,118
871
259
1,019
323
-158
-167
2,590
403
980
215
-403
-220
2,449
622
1,030
55
-622
-271
4,068
4,293
3,566
3,263
2,625
641
1,037
16
-641
-315
3,363
1,663
63
391
320
548
277
1,683
43
375
349
256
273
1,728
46
394
349
236
279
-2,650
106
-2,878
110
719
210
-3,020
109
120
Conservation and land management:
Management of national forests, cooperative forestry,
ana forestry research (Forest Service):
1,787
1,875
Existing law
Proposed legislation
511
469
Management of public lands (BLM)
284
206
Mining reclamation and enforcement
630
605
Conservation of agricultural lands
321
Other
320
Offsetting receipts:
-2,127 -2,599
Existing law
Proposed legislation
Subtotal, Conservation and land management
1,302
979
Recreational resources: 2
Federal land acquisition
Urban park and historic preservation funds..
Operation of recreational resources:
Existing law
Proposed legislation
Offsetting receipts:
Existing law
Proposed legislation
Subtotal, Recreational resources..
Other natural resources:
Program activities:
Existing law
Proposed legislation...
Offsetting receipts:
Existing law
Proposed legislation...
Subtotal, Other natural resources
Total, outlays
315
89
342
70
207
28
128
9
92
3
1,239
1,294
1,264
1,236
2
1,238
-61
-84
-51
-91
-53
1,581
1,622
1,361
1,231
-55
1,185
1,602
1,748
1,621
55
1,555
60
1,547
43
-7
-4
-1
-19
1,595
-1
-23
1,566
10,852
10,809
1,595
1,744
-1
-14
1,660
12,591
13,024
11,884
*$500
thousand or less.
1
Includes budget authority from State grants financed by the land and water conservation fund.
2
Includes outlays from State grants financed by the land and water conservation fund.
NATURAL RESOURCES AND ENVIRONMENT
5-45
proposal is consistent with the original mission of the program—to
assist communities in eliminating the backlog of needed construction. After phaseout, communities will be expected to finance waste
treatment facilities for future population growth through market
sources with such assistance as State governments may provide.
Legislation will be proposed to implement the phaseout.
Water resources.—Total net proposed budget authority of $3.1
billion for the Army Corps of Engineers, the Department of the
Interior's Bureau of Reclamation, and the Department of Agriculture's Soil Conservation Service (SCS) is a reduction of about 20%
from 1985 appropriations. The reduction is primarily due to (1) use
of approximately $200 million of unexpended prior year appropriations to help finance Bureau of Reclamation construction in 1986 at
the 1985 freeze level, (2) the declining construction program of the
Corps of Engineers, (3) termination of SCS's small watershed program and (4) enhanced cost sharing whereby beneficiaries of Federal water resource projects will pay a greater share of project costs
through increased user fees and non-Federal financing. Most of the
proposed funding for water resource development covers construction of projects started in previous years and operation and maintenance of completed projects.
Sixteen new construction starts and 16 projects proposed by the
administration in prior budgets are included in this budget. For
most of these projects, State and local governments and private
project sponsors have already demonstrated their intent to pay a
greater share of construction costs.
In anticipation of legislation to recover capital and operating/
maintenance expenses of the Nation's harbors and inland waterways now financed almost entirely by general tax funds, the
budget proposes funding for about $0.4 billion in construction, as
well as operation and maintenance costs from new navigation user
fees. These new fees will recover more of the Federal expenditures
that subsidize construction and dredging for commercial waterborne transportation.
Navigation services provided by the Corps of Engineers, as well
as the Coast Guard and other Federal agencies, are commercial in
nature, with benefits and costs quantifiable and beneficiaries identifiable. The administration believes more of the costs of these
services can and should be recovered from direct beneficiaries.
Also, additional user fees will serve as disincentives for unneeded
expansion of the inland and harbor systems and incentives for
users to support operating efficiencies wherever possible.
Similarly, other federally constructed water resource projects
such as multiple-purpose dams with hydroelectric power, irrigation,
flood control, and recreation outputs provide quantifiable benefits
to identifiable beneficiaries. These beneficiaries should also pay a
greater share of the capital costs of the facilities they use. The
budget therefore proposes greater concurrent recovery of construe
5-46
THE BUDGET FOR FISCAL YEAR 1986
tion-period costs from project beneficiaries, including users of the
Nation's commercial navigation system, on a "pay-as-you-go" basis.
The Soil Conservation Service small watershed program provides
flood control and drainage facilities that are usually within the
financial and engineering capability of non-Federal entities to provide for themselves. These facilities in some cases duplicate services of the Corps of Engineers and often provide added capacity to
produce surplus commodities. Funding for this program is therefore proposed for termination in 1986. Flood control and related
programs in which there is a Federal interest will remain available
through the Corps of Engineers. Direct Federal financial assistance
is proposed to be terminated for small agricultural flood control
and drainage works in which there is no Federal interest, with
resultant savings.
Conservation and land management—Changes in these programs
reflect the administration's efforts to improve the management of
the national forests and public lands, to streamline mineral leasing
programs, and to place maximum responsibility with the States for
surface coal mining regulatory and reclamation programs. A realignment of management responsibilities between the Forest Service and the Bureau of Land Management will result in saving
approximately $30 million in management costs per year when
fully implemented. This management realignment involves
changes solely within the Federal Government, and will not involve or affect sales or exchanges of land or other resources with
non-Federal entities.
Management of national forests, cooperative forestry, and forestry
research.—Proposed budget authority in 1986 for direct management of national forests is $1.7 billion. This amount provides for a
decrease in planned program levels in 1986 of $162 million, after
adjusting for funding for forest fire fighting, lapsing accounts, an
increase of $64 million in 1986 because of the transfer of forestry
activities of the Bureau of Land Management to the Forest Service.
This net decrease occurs primarily as a result of postponement of
construction and recreational land acquisition, supplemented by
reduced unit costs of timber sale preparation, a 4.5% reduction in
timber offered for sale, and termination of forestry grants to
States.
The productivity of national forest management will be improved
by carefully controlling costs, adjusting management procedures,
and paying close attention to benefit-cost relationships. The objective is to produce timber, recreation, and other products or services
at the lowest unit costs. Careful attention will be given to both
market and nonmarket values of resources, such as water quality,
and their associated costs.
Planned timber sales from national forest lands in 1986 of 10.7
billion board feet (BBF), together with the estimated 30 BBF sold
NATURAL RESOURCES AND ENVIRONMENT
5-47
but still uncut at the end of 1985, will be adequate to respond to
anticipated housing construction needs in 1986 and subsequent
years. Gross receipts from the harvest of timber are estimated to
be approximately $0.9 billion in 1986. Under current law, 25% of
these receipts is paid to States for schools and roads in the counties
of origin. The administration will propose legislation to deduct
appropriate Federal costs from receipts before calculating the
share paid to the States, thus converting to a net receipt sharing
basis. Federal payments in lieu of taxes on Federal lands, which
are classified in the general purpose fiscal assistance function, will
continue to be paid to counties.
Budget authority of $104 million in 1986 for forestry research
programs will continue to address high-priority projects while limiting Federal funding for research projects that directly support
private industry.
Budget authority for contributions to State and private forestry
programs will be reduced from $58 million in 1985 to $30 million in
1986. Funding will be retained to provide for national data collection, information dissemination, and limited but specialized technical assistance to States on national problems. General grants to
States for fire protection and forestry technical assistance on nonFederal lands are not proposed for 1986.
Management of public lands.—These programs provide for administration of approximately 310 million surface acres of public
lands for multiple use and about 370 million acres of federally
owned subsurface mineral rights.
In 1986 there are proposed jurisdictional realignments between
the Bureau of Land Management and the Forest Service with
reductions in Bureau of Land Management programs being offset
by increases in Forest Service programs. Continued emphasis will
be placed on mineral leasing, realty management, data support
systems, and renewable resource activities such as those affecting
water, timber, or wildlife, including hazardous waste assessment.
Mining reclamation and enforcement.—A budget authority decrease of $43 million reflects maturation of the program, balancing
annual obligations at a rate that can be sustained each year until
1992, the year of expiration of the statute earmarking receipts for
this program. Approximately 450 projects to reclaim abandoned
mined lands in 27 States will be financed by the $250 million
request.
Conservation of agricultural lands.—Budget authority for these
programs declines 40% in 1986 as a step toward a major restructuring that will sharply reduce Federal costs in future years. Federal
financial assistance for soil and water conservation of privately-
5-48
THE BUDGET FOR FISCAL YEAR 1986
owned lands will be terminated and a basic level of Federal technical assistance will be provided for soil and water resource problems. A much greater share of the role in financing and pursuing
good soil and water conservation practices on private lands is envisioned for State and local governments and landowners.
Recreational resources.—Net Federal funding for recreation is
proposed to be reduced from $1.5 billion to $1.1 billion. Land acquisition for parks and refuges is proposed to be reduced from $220
million to $13 million in 1986. Discretionary acquisitions for park
and refuge purposes are proposed to be deferred for 3 years. Grants
to States for acquisition and development of outdoor recreation
lands and for support of State historic preservation staffs are not
budgeted in 1986. These needs can be met through State, local, and
private resources and the positive effect of Federal tax incentives
on private investment in historic buildings.
The administration again proposes to increase fees for recreational use of national parks, forests, Corps of Engineers projects
and related facilities, so that those who use them will pay more for
their upkeep and maintenance than will those taxpayers who do
not use them. The agency collecting the user fee receipts will
retain them for operation and maintenance of recreation areas. For
1986, recreation receipts, including some receipts not counted in
this subfunction, are estimated to be about $131 million, $89 million above 1985.
Operation of recreational resources.—The $1 billion administration initiative to ensure the quality and accessibility of the national parks to all Americans by increasing maintenance and by restoring and constructing facilities has been essentially completed.
Therefore, the budget proposes $106 million to carry out essential
maintenance and improvement projects in the national park
system. A rescission of the $100 million in contract authority for
park road improvements funded through the highway trust fund
and included in the transportation function is proposed because the
National Park Service has no road projects remaining on its nearterm list of priority improvements and an estimated $135 million
remains unexpended from prior year trust fund allocations. Total
1986 budget authority of $644 million is proposed to operate and
maintain the national park system's 334 parks, covering 75 million
acres.
Other natural resources.—These activities focus on the understanding, conservation, and careful husbandry of the Earth's resources, structure, and environment through research and development and information dissemination programs. They comprise ele-
5-49
NATURAL RESOURCES AND ENVIRONMENT
ments of the Geological Survey, the Bureau of Mines, and the
National Oceanic and Atmospheric Administration (NOAA).
Requested 1986 budget authority of $104 million for the Bureau
of Mines is less than in prior years, and, as in 1984 and 1985, no
funds have been requested for the mineral institute program.
Bureau of Mines research activities will be focused on long-term
projects with high potential benefit that are more in line with
Federal concerns and responsibilities.
Funding for NOAA programs in this category reflects a decrease
of approximately 8% in budget authority from $1,137 million in
1985 to $1,042 million in 1986. Reductions are proposed for State
and industry financial assistance and lower priority research and
service programs. Estimated outlays for 1986 are $1,083 million.
This funding maintains priority life safety, resource management
and development programs, and atmospheric and oceanic research
and services. Increased funding is included to upgrade geostationary weather satellites and improve weather observation and forecasting.
Offsetting receipts.—Offsetting receipts from the entire natural
resources and environment function—primarily from user fees,
sales of products, rents and royalties—are expected to rise from
$2.8 billion in 1985 to $3.4 billion in 1986.
Management improvements.—Management improvements are
proposed to reduce outlays in this function by more than $100
million over the next 3 years, primarily through consolidating and
streamlining administrative activities.
Credit programs.—The 1986 credit budget proposes a decrease of
$23 million in obligations from 1985 in programs operated by the
Bureau of Reclamation. These direct loans are made to State and
local governmental entities for construction and rehabilitation of
irrigation systems and for storage of municipal or industrial water
supplies.
CREDIT PROGRAMS—NATURAL RESOURCES AND ENVIRONMENT
(In millions of dollars)
Actual
1984
Direct loans:
Water resources and other loan programs:
New obligations
Change in outstandings
Outstandings
Total credit budget (new obligations)
Estimate
1985
1986
1987
1988
52
47
418
74
57
475
51
48
523
51
47
570
12
1
571
52
74
51
51
12
5-50
THE BUDGET FOR FISCAL YEAR 1986
Tax expenditures.—As an incentive to encourage production, certain capital costs associated with exploration and development of
nonfuel minerals may be expensed rather than depreciated over
the life of the asset. In addition, most nonfuel-mineral extractors
use percentage depletion, rather than cost depletion. Percentage
depletion is more generous than cost depletion in that total deductions are not limited to the cost of the investment. The total
estimates for these two provisions are less than $2.5 million and
$625 million, respectively, in 1986.
Interest on State and local government debt issued to finance the
pollution control and waste disposal facilities of private firms is
excluded from income subject to tax; the resulting estimate for
1986 is $1.3 billion.
A special 25% tax credit is available for expenditures made to
restore certain historic structures. The 1986 estimate of $550 million for this provision includes the remaining tax subsidies from
special depreciation treatment available under prior law.
Special benefits are provided to the timber and iron industries in
order to encourage production. The gains on the cutting of timber
and royalties from iron ore deposits are taxed at capital gains
rates, which are lower than rates on ordinary income. For 1986,
this results in a tax expenditure of $720 million and $35 million,
respectively. Private forestry is additionally encouraged because a
limited amount of reforestation expenditures are eligible for special
tax credits and write-offs. This tax expenditure is $55 million in
1986.
Tax expenditures for natural resources and environment total an
estimated $2.7 billion in 1986.
AGRICULTURE
5-51
AGRICULTURE
Federal programs in this function help meet domestic and international trade demands for food and fiber while mitigating the
adverse effects of price fluctuations on farmers. The administration's budget and legislative proposals are intended to foster a
more competitive agricultural sector, while reducing the cost of the
present ineffective patchwork of farm programs. These goals would
be accomplished by eliminating the costly duplication of subsidies
that now distort agricultural markets and harm U.S. farm sales
overseas.
Existing programs artificially prop up agricultural commodity
prices with Commodity Credit Corporation (CCC) price support
loans, and guarantee high revenues with above-market CCC
"target prices" for all the production of participating farmers. In
addition, farmers are offered federally subsidized insurance against
crop losses from natural hazards and low-cost credit from the
Farmers Home Administration (FmHA) for continuing and expanding farm operations. As a result of these production incentives, an
excess supply of crops is produced and the surplus commodities are
bought and stored by the Government.
To help prevent an excessive buildup of farm stocks, other existing programs offset the production incentives caused by the Government subsidies described above by paying for acreage reductions. These CCC-funded supply control measures provide more
cash to farmers to help reduce excess production.
The combination of these two domestic actions—Government
subsidies to encourage production and other Government subsidies
to reduce excess production—raise U.S. prices well above world
market clearing levels. To offset the market effect of these double
subsidies an additional CCC export credit subsidy is offered so that
foreign buyers may pay less for U.S. farm produce. This total
system of Federal intervention is very costly to taxpayers, yet
provides inadequate response to the needs of the farm sector.
The administration's major proposals are:
• to reform CCC domestic and international agricultural subsidy programs to enable farmers to earn their income in the
commercial marketplace without high Federal price supports
or supply control; and
• to scale down Federal Government intervention and subsidy
in other areas of agriculture, particularly in credit, insurance,
applied research, and other business services.
Farm income stabilization.—This area represents 87% of estimated 1986 outlays in the agriculture function.
5-52
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: IMPROVED AGRICULTURE
(Functional code 350; in millions of dollars)
Major missions and programs
BUDGET AUTHORITY
Farm income stabilization:
Commodity price support and related programs:
Existing law
Proposed legislation
Crop insurance:
Existing law
Proposed legislation
Agricultural credit:
On-budget under current law
Proposed legislation
Off-budget under current law#
Other programs and unallocated overhead...
Subtotal, Farm income stabilization....
Agricultural research and services:
Research programs
Extension programs
Marketing programs:
Existing law
Proposed legislation
Animal and plant health programs:
Existing law
Proposed legislation
Economic intelligence
,
Other programs and unallocated overhead:
Existing law
Proposed legislation
Offsetting receipts
Subtotal, Agricultural research and services..
Total, budget authority
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
210
13,048
360
359
374
-118
436
-257
465
-328
2,517
1,935
1,478
1,932
926
-760
800
-800
2,068
-44
800
-800
11,395
10,579
9,866
"6,805"
54
51
9,945 20,724
11,316 14,343 15,283
— 1,821 -5,874 -7,578
805
334
782
343
738
265
769
271
791
276
126
127
125
-24
125
-28
125
-32
278
281
185
190
247
-12
186
247
-12
192
226
-12
198
196
213
-80
1,843
-91
1,845
209
_2
-90
1,643
207
-2
-89
1,680
207
-2
-89
1,689
11,788
22,569
13,038
12,259
11,555
Commodity price support and related programs.—Price support
and related programs were created to stabilize, support, and protect farm income and prices, and to facilitate the orderly distribution and maintenance of a balanced and adequate supply of agricultural commodities and their products. CCC provides price and
income support to producers of agricultural commodities through
loans, purchases, payments, and other means.
The administration proposes to set both price support loan rates
and target prices in alignment with market prices. This should
reduce the need for mandatory acreage reductions and paid diversions while still providing price stability. Furthermore, the elimination of artificially high prices should increase U.S. exports, thus
reducing the need for further export subsidies. During the next few
years, however, some planting limitations and export credit programs will be necessary until supply becomes more in balance with
demand and market clearing price levels are attained. The proposal will limit payments and loans so that the proportion of farm
5-53
AGRICULTURE
NATIONAL NEED: IMPROVED AGRICULTURE—Continued
(Functional code 350; in millions of dollars)
Major missions and programs
OUTLAYS
Farm income stabilization:
Commodity price support and related programs.Existing law
Proposed legislation
Crop insurance:
Existing law
Proposed legislation
Agricultural credit:
On-budget under current law
Proposed legislation
Off-budget under current law#
Proposed legislation
Other programs and unallocated overhead
Subtotal, Farm income stabilization
Agricultural research and services:
Research programs
Extension programs
Marketing programs:
Existing law
Proposed legislation
Animal and plant health programs:
Existing law
Proposed legislation
Economic intelligence
Other programs and unallocated overhead:
Existing law
Proposed legislation
Offsetting receipts
Subtotal, Agricultural research and servicesTotal, outlays
1984
actual
1985
estimate
7,364
15,081
576
421
1986
estimate
1987
estimate
1988
estimate
12,360 14,343 15,283
-1,821 -5,874 -7,578
349
-101
391
-198
442
-309
1,243
1,889
1,936
-53
-44
-51
1,410
1,175 -324 -2,377 -2,288
-760 -800
35
6
58"
50"
11,877 18,344 10,937
7,376
6,586
2,478
1,609
726
330
760
342
784
267
758
271
779
276
120
126
125
-25
125
-28
125
-32
296
283
250
-12
185
251
-12
191
233
-12
197
211
_2
-90
209
—2
-89
208
-2
-89
189"
172
212
•"-80"
1,736
1,821
1,691
1,673
1,682
13,613
20,165
12,629
9,049
8,268
# Proposed to be included on-budget.
income protected will be much larger for small family farmers
than for large corporate-style operations.
If present programs were unchanged, budget outlays for CCC
would total $73 billion over the 1986 to 1990 period. The administration's proposed budget and legislative program would reduce
outlays by $39 billion over the same period.
The value of agricultural exports in 1984 was $38 billion, while
imports totaled $19 billion, resulting in a positive agricultural
trade balance of $19 billion. The sheer magnitude of these exports
mandates the continued reliance on free-market commercial exports as the driving force in the success of U.S. agricultural trade.
Nevertheless, export credit assistance is provided by CCC for the
relatively small portion of export sales that could not occur without federally subsidized credit. Total export credit planned for 1986
is $5 billion. This is 145% over the 1981 level of total CCC export
credit assistance. The CCC guarantee fee will be increased to 5% in
5-54
THE BUDGET FOR FISCAL YEAR 1986
1986, providing $220 million a year in additional revenue, as part
of an administration effort to put Federal credit programs on a
more comparable basis with private credit.
Crop insurance.—The Federal Crop Insurance Corporation offers
insurance to producers against crop losses from natural hazards.
All-risk crop insurance is now available in all 3,000 agricultural
counties. Insurance in force is expected to reach $10.1 billion in
1986, an increase of $1.5 billion over the 1985 estimate. Outlays
will depend primarily on the weather, the number of participants,
and crop prices. The budget proposes a 5-year phaseout of Federal
operating costs and premium subsidies in an effort to put crop
insurance on a full "pay-as-you-go" basis by 1990.
This proposal will enhance the administration's efforts to develop
a fully commercial-type crop insurance program. The share of insurance volume delivered by private reinsurance companies has
increased from a level of 4% in crop year 1981 to about 70%
anticipated for crop year 1985. The proposal would provide more
efficiency in the areas of product pricing and delivery.
Agricultural credit.—The Nation relies primarily on private
credit for agriculture as in other sectors of the national economy.
However, the Federal Government provides 16% of total farm
credit, primarily for family farmers with limited resources. At the
end of 1984, outstanding FmHA agricultural credit insurance fund
direct loans totaled $25.9 billion. FmHA has lent about 53% of this
outstanding amount during the last 10 years. In 1984 alone, new
direct lending totaled $4.0 billion, with 26% of this amount going
for disaster loans.
In response to the financial difficulties of some farmers, the
President recently implemented several credit initiatives to restructure farm debt, thereby enabling farmers to avoid bankruptcies and foreclosures. This includes restructuring and deferring
payments on FmHA loans, new Federal guarantees of troubled
farm loans that have been written down by private lenders, and
credit counseling for farm borrowers.
Farm operating direct and guaranteed loan activity in 1986 is
estimated to be $3.4 billion. This level is about $850 million over
the 1985 level, and reflects a shift in emphasis from direct subsidized loans to guarantees of private loans. In addition, legislation
will be submitted to provide emergency disaster loans only where
Federal crop insurance is not available. These actions will reduce
the Federal cost and staffing requirements to administer the program while still ensuring the availability of credit to those qualified family farmers who cannot stay in business without Federal
lending assistance. The FmHA guarantee fee will be increased to
5-55
AGRICULTURE
CREDIT PROGRAMS—AGRICULTURE
(In millions of dollars)
Actual
1984
Direct loans:
Commodity price support and related loans (CCC):
New obligations
Change in outstandings
Outstandings
Agricultural credit insurance fund(FmHA):
New obligations
Change in outstandings
Outstandings
Agricultural credit insurance fund (loans held by
FFB): 1
Change in outstandings
Outstandings
Total, direct loans:
New obligations
Change in outstandings..
Outstandings
Guaranteed loans:
Export credit (CCC):
New commitments
Change in outstandings
Outstandings
Agricultural and emergency credit (FmHA):
New commitments
Change in outstandings
Outstandings
Total, guaranteed loans.New commitments
Change in outstandings..
Outstandings
Total credit budget (new obligations and new
commitments)
Estimate
1985
1986
1987
1988
8,507 7,928 5,345
5,461 9,216
-6,249 1,582 -1,167 -2,971 -2,528
9,758 11,340 10,173 7,202 4,674
4,005
131
410
3,770
435
1,392 -1,065
1,802
737
318
800
1,537
294
1,537
1,410
1,175 -1,084 -3,177 -3,088
25,517 26,692 25,608 22,431 19,343
9,465 12,986 8,942 8,246 5,639
-4,707 4,149 -3,315 -5,348 -5,616
35,685 39,834 36,518 31,170 25,554
4,179
332
4,690
5,000
2,741
7,431
5,000 5,000 5,000
1,615
954
9,046 10,000 10,000
443
103
1,128
706
6
1,134
3,000
1,378
2,512
3,000
3,000
5,512
3,000
3,000
8,512
4,622
435
5,818
5,706
2,747
8,564
8,000
2,993
11,558
8,000
3,954
15,512
8,000
3,000
18,512
14,087
18,692
16,942
16,246
13,639
1
The direct lending activities of the Farmers Home Administration (FmHA) are financed by the Federal Financing Bank (FFB). Certificates of
beneficial ownership (CBO's) are issued by the FmHA. According to law, these certificates are backed by loans that the agency continues to
service. FmHA guarantees the CBO's, sells them to the FFB, and repurchases them upon maturity. FFB net outlays for AC1F represent acquisition
of CBO's less repurchases by FmHA. Increases in the volume of sales of CBO's are added to FFB direct loan outstandings, while the FmHA's
direct loan outstandings decrease by the amount of CBO's sold to the FFB.
5% in 1986, providing about $120 million a year in additional
revenue.
Outlays arising from direct loans in the agricultural credit insurance fund are financed through the Federal Financing Bank. These
outlays, formerly off-budget, are now included in the Federal
budget totals.
Agricultural research and services.—-Research helps to increase
agricultural productivity and to expand knowledge of human nutrition and food safety. The 1986 research program will place higher
priority on long-term basic research. Applied research and develop-
5-56
THE BUDGET FOR FISCAL YEAR 1986
ment with early profit potential will receive reduced Federal effort,
since this is more appropriately financed by private industry.
Extension programs.—The Extension Service disseminates agricultural research and other information to farmers and consumers,
and supports home economics, agriculture-related youth programs,
and technical assistance to governments of rural communities.
About one-third of its cost is financed by Federal grants to States.
For 1986, budget authority is proposed at $265 million, a reduction
of $79 million or 23%, from 1985. Program priorities should focus
on the transfer of basic agricultural research information to farmers. To the extent that other extension service programs are
deemed needed at 1985 levels, the additional costs can be met by
the other cooperating parties in this program—States, counties,
and private donors.
Marketing programs.—The Federal Government provides a variety of services to aid in the orderly marketing of farm products such
as grain inspection and weighing; tobacco inspection; cotton classification; and meat, poultry, and livestock grading. Most of these
services are now provided on a user fee basis. Legislation will be
proposed to place more of them on a user fee basis, including
compliance and standardization for Federal grain inspection,
market news information and other activities of the Agricultural
Marketing Service, and investigations of market fraud involving
packers and stockyards.
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. The budget includes funds to support the
eradication of brucellosis infection in domestic livestock through a
disciplined Federal-State-industry cooperative program. The goal is
to completely eradicate the disease over the next few years after
which the Federal role will be reduced to surveillance only. User
fees are proposed for services rendered through the veterinary
biologies program and funding for the animal welfare program will
be eliminated.
Tax expenditures.—Agriculture is promoted by several tax expenditures. The tax code permits farmers to treat certain capital
outlays as current expenses, such as those for feed, fertilizer, and
planting, and allows capital gains treatment on the sale of certain
farm assets rather than treating them as ordinary income. The
1986 estimates for these two provisions are $715 million and $820
million, respectively. The tax expenditures for agriculture are $1.4
billion in 1986.
COMMERCE AND HOUSING CREDIT
5-57
COMMERCE AND HOUSING CREDIT
There is a recognized national need to promote the private financing of mortgage credit and to support an environment in
which there are fair and equitable opportunities for business development and growth. Commerce and housing credit programs supplement private sector financing of business and housing. Assistance is provided for mortgage credit, deposit insurance, and other
forms of commerce.
This budget reflects the administration's proposals to reduce domestic spending while enhancing the efficient and effective use of
limited Federal credit resources by:
• ensuring a strong private economy by acting only as a lender
of last resort for persons unable to obtain credit through
private sector credit markets;
• terminating new rural housing assistance provided by the
Farmers Home Administration, relying instead on programs
in the Department of Housing and Urban Development to
meet future rural housing needs;
• maintaining the availability of the Federal Housing Administration mortgage insurance programs while increasing revenues available to the mortgage insurance fund; and
• proposing to eliminate credit programs of the Small Business
Administration (SBA) that duplicate assistance provided more
effectively by the private sector, and transferring many of the
remaining SBA programs to the Department of Commerce.
To prevent the Government and Government-sponsored enterprises from competing unfairly with the private sector in the secondary mortgage market, the administration is proposing a fee on
borrowings and on mortgage-backed security issues of the Federal
Home Loan Mortgage Corporation (FHLMC), the Federal National
Mortgage Association (FNMA), and the Government National
Mortgage Association (GNMA). The improved competition these
fees would promote should allow the entire secondary mortgage
market to keep pace with changes in an increasingly deregulated
financial environment.
A variety of management reform initiatives are underway or
planned. Improvements in the Department of Commerce and the
Department of Housing and Urban Development (HUD) include
consolidating administrative services, integrating and improving
financial accounting and management systems, and evaluating specific functions to determine whether they can be accomplished
more efficiently by the private sector.
The budget proposes $7.8 billion in 1986 budget authority and
$2.2 billion in estimated outlays for commerce and housing credit.
Mortgage credit and deposit insurance programs and activities are
5-58
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: COMMERCE AND HOUSING CREDIT
(Functional code 370; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
208
564
128
20
152
7
274
565
2,606
5,020
700
381
2,275
4,445
2,280
26
2,515
30
2,594
30
46
20
9,430
7,539
2,473
2,703
3,462
879
1,041
39
38
36
919
1,403
1,575
213
264
513
465
737
1,798
2,443
1,827
815
1,238
651
775
159
-21
20
14
373
331
625
344
318
1,794
375
326
351
350
194
196
223
295
*
377
*
486
515
487
-1
485
-1
492
-1
2,455
3,522
1,268
1,251
12,437
7,822
4,786
5,952
BUDGET AUTHORITY
Mortgage credit and deposit insurance:
Mortgage Durchase activities (GNMA)
Mortgage credit (FHA)
Housing for the elderlv or handicaDDed
Rural housing programs:
On-budeet under current law
Off-budget under current law#
.. ..
Federal Savings & Loan Insurance Corp. and other
National Credit Union Administration
Subtotal, Mortgage credit and deposit insurance....
Postal Service:
On-budget under current law
Off-budget under current law#:
Existing law
Proposed legislation
,
Subtotal, Postal Service
Other advancement of commerce:
Small and minority business assistance:
On-budget under current law
Proposed legislation
Off-budget under current law#
Science and technology
Economic and demographic statistics:
Existing law
Proposed legislation
International trade and other:
Existing law
Proposed legislation
Subtotal, Other advancement of commerce
Total, budget authority
101
66
557
2,036 _,
13,264
a major portion of the assistance, with $2.5 billion in proposed
budget authority in 1986. In addition, the budget proposes $1.9
billion in direct loan obligations and $33.1 billion in guaranteed
loan commitments.
Mortgage credit and deposit insurance.—The most significant contribution the Federal Government can make to both the housing
industry and individual homebuyers is to promote prudent fiscal
and monetary policies that support stable, noninflationary economic growth and reasonable interest rates. Hence, the focus of Government mortgage credit programs will be on areas the private
sector does not serve.
Mortgage-backed securities.—The Government National Mortgage
Association (GNMA) supports the mortgage market through guarantees of mortgage-backed securities. For 1985, a new loan guaran-
5-59
COMMERCE AND HOUSING CREDIT
NATIONAL NEED: COMMERCE AND HOUSING CREDIT—Continued
(Functional code 370; in millions of dollars)
1984
actual
1985
estimate
estimate
1987
estimate
-186
842
-366
661
-241
-441
-802
572
-298
-447
-1,330
590
-371
-444
-1,546
444
2,340
1,090
-248
-561
193
2,229
2,335
-1,000
350
-822
2,492
-180
-1,500
57
-96
2,612
-1,192
-2,000
105
-124
3,766
2,179
-713
-2,517
2,629
-1,236
-2,500
-85
-135
-3,103
879
1,041
39
38
36
360
320
1,239
1,361
965
213
1,217
38
36
725
872
254
260
500
337
218
-81
-10
345
-47
-10
350
194
210
214
270
_•
347
_*
479
527
481
-1
573
-1
519
-1
Subtotal, Other advancement of commerce.,
1,913
2,447
1,702
1,315
1,238
Total, outlays..
6,917
5,987
2,206 -1,164
-1,829
Major missions and programs
estimate
OUTLAYS
Mortgage credit and deposit insurance:
Mortgage-backed securities (GNMA)
Mortgage purchase activities (GNMA)
Mortgage credit (FHA)
Housing for the elderly or handicapped
Rural housing programs:
On-budget under current law
Off-budget under current law#
Federal Deposit Insurance Corporation
Federal Savings & Loan Insurance Corp. and other
National Credit Union Administration
Subtotal, Mortgage credit and deposit insurance..
Postal Service:
On-budget under current law
Off-budget under current law#:
Proposed legislation
Subtotal, Postal Service
Other advancement of commerce:
Small and minority business assistance:
On-budget under current law
Proposed legislation
Off-budget under current law#
Science and technology
Economic and demographic statistics:
Existing law
Proposed legislation
International trade and other:
Existing law
Proposed legislation
321
2,103
-1,735
319
-439
74
-1,700
290
•$500 thousand or less.
^Proposed to be included on-budget.
tee commitment limitation of $68.3 billion has been enacted, and
guarantees are expected to be issued on about $38.2 billion in
securities. These securities are backed by pools of mortgages that
are either insured by the Federal Housing Administration or guaranteed by the Veterans Administration. For 1986, the administration proposes to retain the new commitment limitation at $68.3
billion. About $51.1 billion of commitments are expected to be
made, as shown in the credit programs table at the end of this
section. Table F-20 of Special Analysis F, "Federal Credit Programs/' shows the estimated new loans guaranteed of $36.5 billion.
The budget also reflects a proposal to increase the guarantee fee
that GNMA charges mortgage-backed securities issuers by 9 basis
points, from 6 to 15. This proposed fee is closer to that charged by
5-60
THE BUDGET FOR FISCAL YEAR 1986
other issuers of mortgage-backed securities and is part of a Government-wide effort to facilitate additional private sector activity in
the secondary mortgage market for home mortgages.
Similar fees are being proposed for the FHLMC and FNMA. The
administration also remains committed to the total privatization of
these two housing-related, Government-sponsored enterprises,
which receive special advantages in the securities markets that
completely private institutions do not receive.
Mortgage credit.—The Federal Housing Administration (FHA)
provides mortgage insurance on single-family homes, apartments,
mobile homes, and health care facilities. This insurance protects
lenders from loss in the event of default on loans and may thereby
enable borrowers to obtain loans that might otherwise not be available, or to obtain better loan terms than are available in the
absence of this insurance.
The FHA credit program is one of the largest Federal credit
operations. The most significant segment of this program is insurance of single-family home mortgages, accounting for about 87% of
the total volume of mortgages insured. Single-family mortgages of
up to $90,000 can be insured under the FHA with as little as 4.4%
down.
Housing activity is expected to remain strong in 1985 and 1986,
with housing starts expected to reach over 1.8 million units in
1986. Total mortgage originations are projected to increase by
almost 6% from 1984, reaching a total of about $215.8 billion in
1986. The limitation on FHA guaranteed loan commitments is
proposed to be maintained at $50.9 billion, the level since 1983.
Actual commitments for 1986, however, are anticipated to be about
$32.7 billion, 91% above the 1984 level of $17.1 billion.
Consistent with the administration's new initiative on credit user
fees, beginning in 1986 the premium collected by FHA for its
single-family insurance is proposed to be increased from 3.8% to
5.0%. This premium is collected at the time the loan is made and
may be paid in cash by the borrower or financed as part of the
loan.
The premium will provide additional protection to the FHA insurance fund in the event of unanticipated losses brought about by
slower appreciation in home prices, lower homeowner equity, and
insurance of riskier mortgages, e.g., adjustable rate and graduated
payment mortgages. Since the basic single-family insurance program operates as a mutual fund, premiums not needed to cover
losses are ultimately rebated to the borrowers.
The administration will continue to improve and streamline
FHA mortgage insurance processing. Fully half of FHA singlefamily insurance is processed directly by HUD-approved lenders,
significantly reducing the time necessary to process FHA loans.
COMMERCE AND HOUSING CREDIT
5-61
Housing for the elderly or handicapped.—In addition to supporting private market mortgage financing with FHA insurance, HUD
provides direct loans to finance the construction of rental housing
for the elderly and the handicapped. As part of the spending freeze,
the administration proposes a 2-year moratorium on new direct
loan obligations, with the program resuming at 10,000 units per
year beginning in 1988. Outlays for this program are estimated to
be $572 million in 1985 and $590 million in 1986 as disbursements
are made on prior years' loan obligations. The units constructed
under this program also receive section 8 subsidies to make them
affordable to low-income elderly or handicapped households. Section 8 subsidies are discussed in the income security function.
Rural housing programs.—The two principal loan programs of
the Farmers Home Administration (FmHA) have provided lowinterest direct loans to help low- and very-low-income families purchase homes and to support construction of privately-owned rental
housing.
The budget proposes a 2-year moratorium on new housing assistance commitments under HUD's programs. In addition, the budget
proposes to terminate the FmHA housing assistance programs. At
the end of the 2-year moratorium, HUD would expand its role in
rural areas and assume full responsibility for these housing assistance needs. Consequently, no new budget authority is proposed for
FmHA rural housing programs, with the exception of small
amounts to fund expiring rental assistance contracts and to repair
single family units occupied by low- and very-low-income FmHA
borrowers.
Beginning in 1988, HUD would expand its operations in nonmetropolitan areas, allocating half of its new commitments for assisted units to these areas. Since 1980, approximately 50% of all new
federally assisted housing units has been provided to rural communities.
Credit and banking.—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 insures the deposits of all federally chartered and many State chartered commercial and savings banks.
FDIC-insured banks suffered a record number of failures in 1984.
Despite these failures, revenues exceeded losses by $1.7 billion.
While providing $4.5 billion for the bailout of Continental Illinois,
FDIC to date has suffered no loss from this transaction. For 1985
and 1986, fewer failures are expected, with receipts exceeding expenses by $1.5 billion in each year. However, the continued ability
of the FDIC fund to generate income in excess of expenses will
5-62
THE BUDGET FOR FISCAL YEAR 1986
CREDIT PROGRAMS—COMMERCE AND HOUSING CREDIT
(In millions of dollars)
Actual
1984
Direct loans-.
Mortgage-backed securities (GNMA):
New obligations
Change in outstandings
Outstandings
Mortgage purchase activity (GNMA):
Change in outstandings
Outstandings
Mortgage credit (FHA):
New obligations
Change in outstandings
Outstandings
Housing for the elderly or handicapped:
New obligations
Change in outstandings
Outstandings
Rural housing (FmHA):
New obligations
Change in outstandings
Outstandings
Rural housing of FmHA (loans held by FFB): 1
Change in outstandings
Outstandings
Central Liquidity Facility (NCUA):
New obligations
Change in outstandings
Outstandings
Small business assistance-.
New obligations
Change in outstandings
Outstandings
Small business assistance (loans made by FFB):
New obligations 2
Change in outstandings
Outstandings
Small business assistance (loans held by FFB): 3
Change in outstandings
Outstandings
FDICNew obligations
Change in outstandings
Outstandings
FSLIC:
New obligations
Change in outstandings
Outstandings
Other.New obligations
Change in outstandings
Outstandings
Total, direct loans.New obligations
Change in outstandings..
Outstandings
Estimate
1985
1986
1987
1988
14
-1
5
15
16
1
6
17
1
7
17
1
7
-1083
2,382
-867
1,515
-667
849
-360
489
-150
339
456
-878
4,166
373
21
4,187
311
-112
4,075
368
-57
4,018
476
-28
3,990
666
685
5,155
600
567
5,722
50
578
6,300
20
1,060
7,361
567
670
8,031
2,776
89
436
3,448
-292
144
168
313
457
42
170
-1
456
457
1,090 2,335 -180 -1,192 -1,236
26,766 29,101 28,921 27,729 26,493
449
225
270
500
30
300
550
20
320
550
550
320
320
751
20
3,340
726
88
3,428
517
-999
2,429
424
-924
1,505
236
-941
564
478
263
1,215
680
510 -1,725
1,725
-10
30
-10
20
-10
10
-10
40
5,658
3,327
3,923
180
152
4,074
150
111
4,185
300
300
4,485
300
300
4,785
656
587
1,156
90
14
1,170
148
117
1,287
140
140
1,287
1,287
39
16
60
15
7
68
15
9
77
13
-6
54
13
-4
50
11,942 6,627 1,923 1,874 2,470
4,332 2,556 -2,544 -1,189 -1,398
48,914 51,470 48,926 47,720 46,322
5-63
COMMERCE AND HOUSING CREDIT
CREDIT PROGRAMS—COMMERCE AND HOUSING CREDIT—Continued
(In millions of dollars)
Estimate
Actual
1985
Guaranteed loans:
Mortgage-backed securities (GNMA): 4
39,665
New commitments
24,146
Change in outstandings
176,485
Outstandings
Mortgage credit (FHA):
17,071
New commitments
9,047
Change in outstandings
170,032
Outstandings
Rural housing (FmHA):
30
New commitments
-5
Change in outstandings
993
Outstandings
Small business assistance:
2,998
New commitments
80
Change in outstandings
8,859
Outstandings
FSLIC:
223
New commitments
74
Change in outstandings
1,763
Outstandings
Other:
77
New commitments
-54
Change in outstandings
205
Outstandings
Less guaranteed loans held as direct loans by GNMA: 5
-1,083
Change in outstandings
2,382
Outstandings
Total, guaranteed loans:
New commitments
Change in outstandings..
Outstandings
Total credit budget (new obligations and new
commitments)
1986
1987
1988
53,460 51,110 51,820 52,110
29,690 27,765 25,382 24,748
206,175 233,939 259,321 284,069
30,342
14,768
184,800
25
-206
787
32,737 34,839 36,696
16,207 18,425 20,032
201,007 219,433 239,464
20
69
857
6
6
863
4
4
867
3,310
410 -1,229 -2,410 -1,885
9,269 8,040 5,630 3,745
1,940
351
265
2,204
276
206
2,410
149
2,559
48
-37
168
-70
98
-71
27
-6
21
-867
1,515
-667
849
-360
489
-150
339
246
176
209
20,399 33,970 33,108 35,121 36,909
10,224 15,979 15,909 16,516 18,444
179,470 195,449 211,358 227,874 246,318
32,341
40,597
35,031
36,995
39,379
*500
thousand or less.
1
The direct lending activities of the Farmers Home Administration (FmHA) are financed by the Federal Financing Bank (FFB). Certificates of
beneficial ownership (CBO's) are issued by the FmHA. According to law, these certificates are backed by loans that the agency continues to
service. FmHA guarantees the CBO's, sells them to the FFB, and repurchases them upon maturity. FFB net outlays for RHIF represent acquisition
of CBO's less repurchases by FmHA. increases in the volume of sales of CBO's are added to FFB direct loan outstandings, while the FmHA's
direct
loan outstandings decrease by the amount of CBO's sold to the FFB.
2
These are obligations to guarantee loans that the FFB will disburse. In effect, they are obligations for FFB direct loans and are counted as
such3 in the budget and the credit budget. Policy responsibility for these loans rests with the guaranteeing agency.
Some direct lending activities of the Small Business Administration were financed by the FFB. Loan assets were issued by the agency.
According to law, these assets are backed by loans that the agency continues to service. The agency guarantees the loan assets, sells them to
the FFB, and repurchases them upon maturity. FFB net outlays for this account represent acquisition of loan assets less repurchases by the
agency. Increases in the volume of sales of loan assets are added to FFB direct loan outstandings, while the agency's direct loan outstandings
decrease by the amount of loan assets sold to the FFB.
• GNMA guarantees securities that are backed by pools of loans previously insured by the FHA, the Veterans Administration or the Farmers
Home
Administration. These secondary guarantees of loans are not added into guaranteed loan totals for the credit budget.
5
When guaranteed loans are acquired by a budget account, they become direct Toans and are counted as such in this table. This deduction for
GNMA eliminates overlap with direct loans presented above.
depend in part on repayments of loans acquired by the FDIC in the
Continental Illinois and other transactions.
The Federal Savings and Loan Insurance Corporation, under the
direction of the Federal Home Loan Bank Board, insures deposits
5-64
THE BUDGET FOR FISCAL YEAR 1986
of member savings and loan associations. The thrift industry has
not fully recovered from its 1981-82 crisis. Losses of $1.4 billion are
estimated for 1986 due to the anticipated liquidation of a number
of outstanding claims against the FSLIC.
The National Credit Union Administration (NCUA) regulates
credit unions, provides liquidity assistance to member credit
unions, and insures depositors' accounts. In 1985, member credit
unions will be assessed a one-time premium of 1% of their assets to
capitalize the share insurance fund, and collections are expected to
be $788 million in 1985.
Postal Service.—The Postal Reorganization Act of 1970 established the U.S. Postal Service as an independent part of the executive branch. This year the outlays for the general operations of the
Postal Service are included on-budget along with the direct Federal
appropriation to the Postal Service. Total outlays for 1986 are
estimated to be $1.2 billion.
The administration proposes to stop reimbursing the Postal Service for losses in revenue associated with carrying certain categories
of mail at free or reduced rates beginning in 1986. However, legislation will be proposed to enable the Postal Service itself to continue the subsidy for most existing subsidized mailers.
Additional legislation is proposed to require the Postal Service to
begin paying the full employer share of the actuarial cost of employee pensions. This proposal would require the Postal Service to
increase its contributions to the civil service retirement fund each
year until contributions equal the actuarial cost of benefits. Civil
service retirement fund receipts of these payments are classified as
undistributed offsetting receipts.
Other advancement of commerce.—Federal programs attempt to
support an environment for fair and equitable business opportunities by providing technical assistance, by developing and distributing scientific standards, by collecting and disseminating information on the economy and population, by administering U.S. trade
laws, and by providing export promotion assistance to small and
medium sized businesses.
Small and minority business assistance.—The budget request
seeks elimination of the credit programs of the Small Business
Administration (SBA) and the transfer of many remaining SBA
programs to the Department of Commerce. New direct loan obligations of $517 million are proposed to cover claims on defaulted SBA
guaranteed loans, which would be administered by the Treasury
Department. In addition, assets in the loan portfolio will be sold to
the public. Outlays for assistance to small business are estimated
COMMERCE AND HOUSING CREDIT
5-65
to total $689 million in 1986, a reduction of $683 million from the
estimated 1985 level.
The termination of SBA financial assistance programs is part of
the administration's overall effort to restrain and reduce Federal
credit programs and to increase reliance on the private sector. As a
group, small businesses will benefit more from the administration's
continuing efforts to stabilize financial markets, reduce inflation
and interest rates, and eliminate burdensome regulations than
they will from direct Federal credit subsidies. More than 99% of
small businesses already obtain financing without Federal assistance.
In addition, the budget proposes that some other noncredit business assistance programs of SBA (e.g., advocacy, minority small
business, and procurement) be combined with the Minority Business Development Administration into a new organization within
the Department of Commerce, the Administration for Enterprise
Development and Opportunity. These programs would operate at
current levels in 1986 with outlays of $97 million.
Other.—Several other programs support the advancement of commerce. A 36% increase in budget authority is being requested in
1986 for the International Trade Administration's monitoring and
enforcement of U.S. trade laws. The budget also proposes expansion of the standards development activities of the National
Bureau of Standards (NBS) in biotechnology, ceramics, and advanced quality control, offset by decreases in research on fires,
buildings, and computers. In addition, a new NBS research facility
will enable scientists to study the properties of advanced materials.
The administration proposes to terminate the U.S. Travel and
Tourism Administration. This policy recognizes the travel and tourism industry's ability to promote international 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. For example, the accelerated
cost recovery system (ACRS) increases incentives to invest in buildings, rental housing and capital equipment by permitting accelerated writeoff of such expenditures. To the extent that allowable
depreciation for tax purposes exceeds the rate at which assets
actually depreciate, business tax liabilities are deferred. The investment tax credit also provides incentives for investment in capital
equipment. Under the capital gains provisions of the tax code,
income from the sale of capital assets held for more than 6 months
is taxed at lower rates than income from regular sources.
The Federal Government also subsidizes homeownership by allowing deductions for mortgage interest and property taxes on
5-66
THE BUDGET FOR FISCAL YEAR 1986
owner-occupied homes. Additional benefits are provided by permitting capital gains on home sales to be either deferred or excluded
from income.
Tax expenditures for commerce and housing credit are listed in
the accompanying table and discussed in more detail in Special
Analysis G.
TAX EXPENDITURES FOR COMMERCE AND HOUSING CREDIT
(Outlay equivalents; in millions of dollars)
Estimates
Description
1984
Commerce and housing credit:
Dividend and interest exclusion
Exclusion of interest on State and local industrial development bonds
Exemption of credit union income
Excess bad debt reserves of financial institutions
Exclusion of interest on life insurance savings
Deducibility of interest on consumer credit
Deducibility of mortgage interest on owner-occupied homes
Deducibility of property tax on owner-occupied homes
Exclusion of interest on State and local housing bonds for owner-occupied
housing
Exclusion of interest on State and local debt for rental housing
Capital gains (other than agriculture, timber, iron ore and coal)
Deferral of capital gains on homes sales
Exclusion of capital gains on home sales for persons age 55 and over
Carryover basis of capital gains at death
Investment credit (other than employee stock ownership plans, rehabilitation
of structures, energy property, and reforestation expenditures)
Accelerated depreciation of rental housing
Accelerated depreciation of buildings other than rental housing
Accelerated depreciation of machinery and equipment
Safe harbor leasing rules
Amortization of start-up costs
Exclusion of interest on certain savings certificates
Reinvestment of dividends in public utility stock
Reduced rates on the first $100,000 of corporate income
Deductions for special percentage of taxable income for life insurance
companies
Total (after interactions), commerce and housing credit
1
:
1985
1986
1,875
410
1,100
4,690
12,985
23,030
8,930
700
2,210
455
1,395
5,020
14,790
25,140
9,815
730
2,590
490
1,655
5,370
16,030
27,575
10,870
1,315
665
29,010
2,355
1,040
6,045
1,670
865
30,430
2,485
1,120
6,850
2,115
1,085
31,995
2,670
1,205
7,690
27,860
715
6,490
14,630
2,935
290
110
670
8,860
29,500
800
8,555
21,465
2,640
400
30,140
880
9,725
22,945
2,245
460
685
9,290
170
9,975
950
1,335
1,425
156,860 176,735 188,995
The estimate of total tax expenditures for this function reflects interactive effects among the individual items. Therefore, the estimates cannot
simply be added.
TRANSPORTATION
5-67
TRANSPORTATION
The Federal Government seeks to facilitate a safe and efficient
national transportation system that contributes to the national
economy, advances interstate commerce, supports the national defense, and provides for the free movement of people and goods
among States.
An integrated and efficient national, State, and local transportation network requires the combined and cooperative efforts of the
Federal Government, States, localities, and the private sector. Each
level of government must promote and maintain those transportation services and facilities for which it is appropriately responsible,
with the Federal Government concentrating its efforts and limited
resources on the national transportation system. The private
sector, when freed of unnecessary governmental restrictions and
allowed to compete freely in the transportation market, is an invaluable partner with all levels of government in the effort to
ensure appropriate levels of transportation services at the lowest
reasonable cost.
This budget seeks $25.5 billion of budget authority in 1986 for
national ground, air, and water transportation systems, about $4
billion less than provided in 1985. Planned obligations for the
highway, aviation, and marine programs will remain approximately at 1985 levels, while major funding decreases are sought for
mass transit and railroads.
In addition, the administration will continue its efforts to eliminate unnecessary Federal transportation regulations and to remove
nonessential constraints on the competitive operation of the private transportation sector, especially the freight transportation industry. At the same time, the administration continues to stress
the importance of transportation users paying the full cost of the
transportation benefits they receive. For example, the budget proposes increased user fees for many services currently provided free
of charge by the Coast Guard to commercial and recreational boaters. To continue subsidizing certain transportation services at the
expense of taxpayers could result in an undesirable allocation of
society's resources by penalizing unsubsidized, but socially and economically useful, transportation services.
Ground transportation.—Proposed budget authority is $17.0 bil-
lion for highway, highway safety, mass transit, and railroad programs in 1986. The administration is committed to improving interstate highways and promoting highway safety, while reducing support for local mass transit and eliminating subsidies for Amtrak.
Highways.—The Surface Transportation Assistance Act of 1982
(STAA) authorized significantly increased spending for the Federal
5-68
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: EFFICIENT TRANSPORTATION SYSTEMS
(Functional code 400; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
13,800
14,855
15,310
-100
15,210
15,210
277
340
4,320
4,177
258
3
1,428
228
3
1,439
231
3
1,431
2,226
4
59
20,685
798
5
53
20,228
54
2
51
17,007
53
2
49
16,984
53
1
41
16,971
4,600
600
20
46
5,266
5,278
629
6
48
5,961
5,075
622
4,990
648
4,491
667
5,697
5,637
5,158
2,774
2,520
2,537
-11
-236
359
12
2,660
124
2,611
-12
-476
392
12
2,527
123
2,685
-12
-476
403
12
2,611
125
25,271
24,865
BUDGET AUTHORITY
Ground transportation:
Highways.Existing law
Proposed legislation
Highway safety:
Existing law
Proposed legislation
Mass transit
Railroads:
On-budget under current law
Off-budget under current law#
Regulation
Subtotal, Ground transportation..
Air transportation:
Airports and airways (FAA)
Aeronautical research and technology..
Regulation
Air carrier subsidies
Subtotal, Air transportation.
Water transportation:
Marine safety and transportation:
Existing law
Proposed legislation
Proposed boat and yacht fees..
Ocean shipping
Regulation
Subtotal, Water transportation
Other transportation
Total, budget authority..
459
11
3,244
114
29,309
-3
399
12
2,928
126
29,243 25,488
highway program through 1986. The act also raised the highway
motor fuels tax from 4 to 9 cents per gallon and restructured other
highway-related taxes. However, the funding levels for highway
programs authorized in the STAA exceed projected revenues by
$9.5 billion during the 1983 to 1986 authorization period. In view of
this situation and consistent with efforts to control the Federal
deficit, the administration proposes to freeze the Federal-aid highway program through 1987 at the 1985 obligation level of $14.2
billion.
The budget will continue to emphasize the interstate and primary systems, which account for 59% of the Federal-aid highway
program in 1986, an appropriate Federal concern because of their
role in interstate commerce and national defense. Rural and urban
roads remain primarily the responsibility of State and local governments, which must decide their own priorities and expenditures for
construction, maintenance, and rehabilitation.
5-69
TRANSPORTATION
NATIONAL NEED: EFFICIENT TRANSPORTATION SYSTEMS—Continued
(Functional code 400; in millions of dollars)
Major missions and programs
OUTLAYS
Ground transportation:
Highways
Highway safety:
Existing law
Proposed legislation
Mass transit
Railroads:
On-budget under current law
Off-budget under current law#.
Regulation
Subtotal, Ground transportation..
Air transportation:
Airports and airways (FAA)
Aeronautical research and technology..
Regulation
Air carrier subsidies
Subtotal, Air transportation..
Water transportation:
Marine safety and transportation:
Existing law
Proposed legislation
Proposed boat and yacht fees...
Ocean shipping:
Existing law
Proposed legislation
Regulation
Subtotal, Water transportation-
Other transportation....
Total, outlays..
#Proposed to be included on-budget.
1984
actual
1985
1986
estimate
1987
estimate
1988
estimate
10,520
13,077
13,664
13,904
14,021
240
285
3,811
4,217
306
3
3,330
287
3
2,305
255
3
1,877
2,447
-918
57
16,158
1,105
-9
54
18,729
420
-9
52
17,766
169
-10
49
16,707
73
-12
41
16,258
3,767
586
21
41
4,415
4,280
627
7
52
4,966
4,559
616
4,611
635
4,635
644
5,175
5,247
5,279
2,526
2,642
2,658
-11
-236
2,643
-12
-476
2,650
-1?
-476
384
-14
12
2,792
390
-14
12
2,542
374
-15
12
2,533
124
-3
473
..........
3,010
525
12
3,176
123
127
123
85
23,669 26,994 25,860 24,619 24,194
I
Several policy changes are reflected in the 1986 estimate. First,
various highway safety programs, totaling $45 million in the Federal Highway Administration, are proposed for transfer to the National Highway Traffic Safety Administration to consolidate all
safety programs in one location. Second, no funding of the $100
million parkways and park highway program is proposed because
the $1 billion park restoration and improvement initiative, begun
in 1982, has been completed, and because the National Park Service has no road projects on its near term list of priority projects.
Third, the 1985 obligation limitation for Federal-aid highways of
$13.2 billion is proposed to be frozen through 1986 and 1987. The
budget proposes to include within this limitation all highway programs except the minimum allocation and emergency relief programs, which are estimated to have a 1986 program level of $1.0
billion.
5-70
THE BUDGET FOR FISCAL YEAR 1986
Highway safety.—Proposed obligations for Federal highway
safety programs are frozen at 1985 levels. The 1986 funds would
maintain current support for Federal vehicle safety research and
development, for promulgation and enforcement of Federal safety
standards, and for grants to States to supplement State highway
safety programs.
In addition, the budget proposes to augment the automobile
safety initiative announced last July in conjunction with the automobile passive restraint rulemaking. Federal funds of $20 million
per year, to be matched by an equal amount of private funds, will
be used to encourage the use of seat belts or passive restraints in
vehicles. The Federal funds will support the efforts of State and
local organizations to develop awareness of the benefits of protecting the occupants of motor vehicles.
This budget also merges several separate traffic safety functions
under a single agency within the Department of Transportation.
Combining separate truck and auto safety offices would permit a
more coordinated and effective approach to highway safety.
Mass transit.—For 1986, the administration seeks four basic
changes in the programs of the Urban Mass Transportation Administration: (1) discontinuing all discretionary capital grants; (2)
maintaining a formula capital grant program, financed by one cent
of the Federal gas tax; (3) ending all Federal operating grant
assistance; and (4) increasing the minimum local match from 20%
to 30%. The 1986 budget authority for the formula capital grant
program would be $1.1 billion, 30% below the formula-based, capital grant assistance provided in 1985.
The changes in Federal assistance for local mass transit reflect
the administration's belief that support of essentially local activities is not an appropriate use of Federal resources. The Federal
Government, through its taxing and spending powers, should not
force taxpayers in one section of the country to pay for purely local
services to taxpayers in other sections of the country.
Furthermore, local transit deficits, which are currently supported by Federal assistance, are a direct result of local transit decisions; the Federal Government and nonresidents of transit service
areas have no voice in making these decisions, nor should they. If a
locality decides to extend service hours, expand service frequency,
charge below-market fares, or make expensive capital investments,
that locality, not the Federal Government, should bear the costs of
those decisions.
Continued Federal funding under a discretionary grants account
for new rail starts can result in the development of unnecessary,
inefficient, and expensive transit systems that cost more to operate
than other available transportation alternatives. A Federal com-
TRANSPORTATION
5-71
mitment to finance construction costs of all the projects suggested
by the Congress in its 1985 appropriations report language would
create an "unfunded liability" of several billion dollars that would
have to be addressed in the future by taxpayers. Since additional
funding will not be made available for new fixed guideway facilities in 1986 and subsequent years, current available funding for
1984 and 1985 will be utilized to complete committed fixed guideway projects which are now under construction or which can be
fully financed within these available funds. After meeting these
requirements, any remaining funding will be proposed for reprogramming to other transit activities.
As for other mass transit programs, the interstate transfer
grants-transit program would be funded from the highway trust
fund within current annual authorizations for the interstate transfer grants-highways program. The Washington, D.C., Metro would
be provided $250 million pursuant to the authorization provided in
the National Capital Transportation Amendments of 1979. The
administration will oppose any new special authorizations for specific transit projects and will oppose any extension to the existing
special authorization for the Washington Metro.
Railroads.—In keeping with the administration's policy of reducing Federal responsibility for rail activities unrelated to safety,
proposed budget authority for railroads in 1986 is reduced to $54
million, $744 million less than in 1985. The decrease is attributable
to the elimination of subsidies for Amtrak and Federal freight
assistance programs.
Since 1970, Amtrak has been federally subsidized through annual
appropriations. In 1985, the Federal Government paid for all capital investments and about half of Amtrak's operating costs—
amounts higher than for any other mode of intercity transportation. After more than 14 years of operation, Amtrak still serves
fewer than 2% of all intercity travelers. For these reasons, the
administration is proposing to terminate all Amtrak subsidies.
Amtrak will be able to continue service to the extent routes are
economically viable or States assist in maintaining this type of
transportation service.
Conrail, the Government-owned freight railroad that provides
service in the Northeast and Midwest, will not require operating
subsidies in 1986. The Northeast Rail Services Act of 1981 stipulated that the Federal Government should sell Conrail to the private
sector, and this effort is underway. Anticipated 1986 receipts from
this pending sale are reflected in the budget.
Air transportation.—Budget authority of $5.7 billion is requested
for air transportation in 1986, a decrease of $0.3 billion from 1985.
5-72
THE BUDGET FOR FISCAL YEAR 1986
Federal spending for air transportation is for the improvement,
operation, and maintenance of the national airspace system, airport grants, aeronautical research and technology, and the operation of two airports (National and Dulles) in the Washington, D.C.
area.
Airports and airways,—The safe and efficient movement of air
traffic nationwide is an accepted Federal responsibility and is
under the direction of the Federal Aviation Administration (FAA).
Budget authority of $5.1 billion is proposed for airports and airways in 1986.
The Airport and Airway Improvement Act of 1982 increased
aviation user fees for the airport and airway trust fund. The user
fee receipts finance the multi-year FAA capital modernization program, airport improvement grants, and a major share of FAA
operations and maintenance costs. Receipts are estimated to be $3.2
billion in 1986.
The administration requests budget authority of $1.3 billion for
the fourth year of the FAA capital modernization program. The
request represents a stabilization of funding levels for research,
development, and procurement of new facilities and equipment.
Proposed budget authority totals over $1.1 billion in 1986 for new
facilities and equipment, as well as $0.2 billion for research and
engineering. No new funds are requested for the modernization of
flight service stations and related facilities pending a study of
private sector services to assess their potential role and ability to
provide weather and other information services rapidly to pilots.
The FAA, therefore, will be evaluating the appropriate Federal
role of its flight service stations.
Airport improvement grants will emphasize compliance with airport safety standards, expansion, and noise reduction. The administration proposes obligations of $1.0 billion, the amount newly authorized for 1986 under the Airport and Airway Improvement Act
of 1982. Federal grants would be reduced substantially in 1988 and
beyond. Recent studies have concluded that many of the larger
airports are able to finance all of their capital improvements and
could be "defederalized."
The 1986 request for FAA operations and maintenance activities
and headquarters administration, $2.7 billion, provides the funds
for the second full "normal" year since the air traffic controllers
strike in August 1981. Legislation will be proposed by the administration to allow the airport and airway trust fund to finance 75%
of these expenses, or about $2.0 billion. This proposal is consistent
with a 1981 cost allocation study that showed that about 85% of
the cost of FAA programs as attributable to private sector users of
the system.
TRANSPORTATION
5-73
Primarily because of penalty provisions built into the 1982 act,
actual appropriations from the trust fund for FAA's cost of operating the airport and airway system have been substantially lower
than amounts contemplated in the Act and have resulted in an
overall user share of system costs well below the 85% share appropriately allocated to private sector users. Legislation being proposed will eliminate these penalty provisions. The legislation also
proposes to suspend the intragovernmental payments now being
made from the general fund of the Treasury to the trust fund in
the amount of the interest earned on the unexpended balances of
the trust fund. This transaction will correct the continued buildup
of artificially high balances in the trust fund.
The operations request also anticipates that it may be possible
for a considerable number of the FAA's activities to be operated
more cost effectively under contract, particularly selected equipment maintenance activities, flight service stations, and low-activity control towers. Accordingly, numerous site-specific cost comparisons are planned over the next several years.
Aeronautical research and technology.—The National Aeronautics and Space Administration conducts research in aeronautical
sciences and operates unique research and testing facilities to help
maintain U.S. leadership in aeronautics. The budget for aeronautical research and technology includes $622 million in budget authority for 1986, a decrease of 1.3% from 1985.
The budget reflects a strong program of fundamental aeronautical research, including continued development of the numerical
aerodynamic simulator to apply advanced computers in understanding complex aerodynamic problems. Emphasis would also continue on exploring important defense-related aeronautical technologies, such as the x-wing rotorcraft and oblique-wing aircraft.
Budget increases for research would be offset by decreases in the
funding needed to continue ongoing construction activities, by savings due to administrative efficiencies, and by termination of civilian-oriented technology development activities.
Regulation.—The Civil Aeronautics Board, which had been responsible for the economic regulation of international and domestic
aviation, went out of existence on January 1, 1985. Those Federal
activities that the CAB had carried out and that are still required
for international and domestic aviation, such as international route
decisions, have been assumed by the Department of Transportation.
Air carrier subsidies.—In conjunction with airline deregulation,
the air carrier subsidy program was designed to guarantee essen-
5-74
THE BUDGET FOR FISCAL YEAR 1986
tial air services to small communities. Consistent with the termination of the Civil Aeronautics Board on January 1, 1985, and the
airline industry's adaptation to a deregulated environment, the air
carrier subsidy program is proposed for termination in 1986.
Water transportation.—To meet its Federal responsibility in
water transportation, the administration requests $2.7 billion in
budget authority for 1986. This would allow the Coast Guard to
continue to improve its safety and marine law enforcement activities and the Maritime Administration to continue its support for
Federal ocean shipping programs. The budget also requests funds
for the Federal Maritime Commission and the Panama Canal Commission.
Marine safety and transportation.—Coast Guard services include
search and rescue, maintenance of navigation aids, enforcement of
maritime laws, and other activities.
The administration's request of $2.5 billion in 1986 budget authority for the Coast Guard represents a freeze at the 1985 level.
These funds would be used for Coast Guard operations and improvement of its shore facilities, vessels, and aircraft. In addition,
the budget includes a proposal to collect user fees for both direct
and indirect services provided by the Coast Guard to commercial
operators and recreational boaters. The offsetting receipts from
these user fees would recover an estimated $236 million in 1986
and $476 million annually from 1987 to 1990.
Following the delivery of several new vessels in 1985, four more
cutters will be delivered in 1986. Modernization of 28 of the fleet's
medium and high endurance cutters will continue in 1986, resulting in expanded capabilities and extension of the usable lives of the
cutters. The Coast Guard's air search and rescue operations will be
enhanced by the acquisition of new, faster aircraft with improved
radar and sensor equipment, as well as delivery of 26 new shortrange recovery helicopters during 1986. The investment in the
repair and replacement of shore facilities continues.
In 1986, over 12% of the Coast Guard's total budget authority
will be dedicated to interdiction of maritime drug smuggling. The
Coast Guard will expand its maritime drug interdiction capability
with five aerostats, large balloons that are connected by cable to
ships and equipped with radar systems, and seven high speed
patrol boats.
The Coast Guard will achieve $3.8 million in management savings in 1986 by contracting out for a number of support activities
that it presently performs in-house. In addition, a trial program to
contract out maintenance of over 1,300 navigational aids will be
underway in 1986.
TRANSPORTATION
5-75
Ocean shipping,—Programs in ocean shipping are administered
by the Department of Transportation's Maritime Administration,
the Panama Canal Commission, and the Federal Maritime Commission. Proposed budget authority for ocean shipping in 1986 is $359
million.
The Maritime Administration has traditionally provided subsidies to assist the U.S. merchant marine and ship-building industry
in competing with foreign maritime industries. In 1986, the administration will continue to provide operating subsidies to offset the
higher costs of operating U.S.-flag vessels.
Based on its 1982 review of U.S. maritime policy, the administration again proposes several initiatives to help revitalize the maritime industry. Included are legislative and administrative changes
that would streamline or eliminate many of the restrictions under
which the U.S. merchant marine now operates, thereby reducing
costs. One of the most significant elements of the administration's
policy is to permit subsidized U.S.-flag ship operators to build or
acquire their vessels in foreign countries. This will permit operators to acquire modern, efficient ships in a cost effective and timely
manner. Consequently, the administration continues to oppose ship
construction subsidies, a program that has been unsuccessful in
fostering a modern fleet of U.S.-flag vessels. The budget proposes
$300 million in budget authority for operating subsidies in 1986 to
meet the Federal Government's obligations on existing contracts;
no new contracts are anticipated.
The administration will seek to eliminate the double subsidy,
whereby U.S.-flag ocean liners carrying noncompetitive preference
cargo receive operating differential subsidy payments. This change
is being sought both to eliminate the unfair advantage these payments give subsidized operators over unsubsidized operators and to
enhance competitive efficiencies in the maritime industry.
For the Maritime Administration's operating and training expenses, the budget proposes a freeze at the 1985 level adjusted for
various administrative savings and one-time 1985 costs. Once
again, the administration proposes no funding for fuel for the State
school ships on the basis that this operating expense is not a
Federal responsibility.
Credit programs.—The Department of Transportation provides
direct loans and guaranteed loans for water and ground transportation projects as shown in the accompanying table. The largest loan
and guarantee programs are part of the Maritime Administration.
It guarantees construction mortgage loans to build U.S.-flag vessels
in the United States. It also makes direct loans in the form of
advances to operators to avoid defaults on federally guaranteed
loans. The administration is proposing $900 million for ship con-
5-76
THE BUDGET FOR FISCAL YEAR 1986
CREDIT PROGRAMS—TRANSPORTATION
(In millions of dollars)
Actual
1984
Direct loans:
Highways and mass transportation:
New obligations
Change in outstandings
Outstandings
Aid to railroads:
Change in outstandings
Outstandings
Aid to railroads (loans made by the FFB):
New obligations*
Change in outstandings
Outstandings
Aircraft purchase loan guarantees (defaults):
New obligations
Change in outstandings
Outstandings
Assistance to ocean shipping:
New obligations
Change in outstandings
Outstandings
.'
Other transportation programs:
Change in outstandings
Outstandings
Total, direct loans:
New obligations
Change in outstandings
Outstandings
Guaranteed loans:
Highways and mass transportation.Outstandings
Aid to railroads:
New commitments
Change in outstandings
Outstandings
Aircraft purchase loan guarantees:
Change in outstandings
Outstandings
Assistance to ocean shipping:
New commitments
Change in outstandings
Outstandings
Other transportation programs:
Change in outstandings
Outstandings
Estimate
1985
1986
1987
52
-41
211
50
-1
210
50
10
220
50
-45
175
50
-27
149
983
-61
1,410
16
40
1,450
10
1,460
-14
1,447
-1
1,445
6
-904
160
2
-5
154
-9
145
-10
135
-12
124
22
-41
89
-41
48
48
48
48
127
48
270
228
173
443
115
60
503
85
30
533
60
5
538
11
11
11
11
11
11
1,189
-988
2,151
297
165
2,316
165
71
2,387
135
-38
2,349
110
-35
2,314
997
997
997
997
997
12
-70
9
5
85
10
10
95
-91
4
-69
493
-45
448
-43
405
-43
362
-43
319
177
300
300
300
300
-274 -333 -266 -243 -220
7,046 6,713 6,446 6,203 5,983
-2
15
-2
13
-2
10
-4
6
-3
3
Total, guaranteed loans:
New commitments
Change in outstandings..
Outstandings
300
189
309
310
300
-415 -375 -302 -381 -266
8,631 8,256 7,953 7,573 7,307
Total credit budget (new obligations and new
commitments)
1,378
1
606
470
435
410
These are obligations made by the agency to guarantee loans that the FFB will disburse. In effect, they are obligations for FFB direct loans,
and are counted as such in the budget and the credit budget Policy responsibility for these loans rests with the guaranteeing agency. Totals for
loans for aid to railroads made by FFB in this table are not identical to the entries in the addendum to the national needs table for off-budget
Federal entities due to timing differences between budget authority and new obligations.
TRANSPORTATION
5-77
struction loan guarantees in 1986, of which $300 million will be
held in reserve to be used if needed for national security purposes.
Legislation will also be proposed to implement a multi-agency initiative that would increase the existing annual loan guarantee fee to
1% and impose a fee of 5% on both new loans guaranteed and
direct loans (advances). In 1986, the administration is proposing no
new commitments for guaranteed or direct loans to railroads.
Tax expenditures.—In addition to direct Federal funding, three
tax expenditures provide assistance to shipping concerns, mass
transit systems, and motor carriers. Certain companies that operate U.S.-flag vessels are able to defer taxes indefinitely on income
invested in construction, repair and modernization of ships; this
results in a tax expenditure of $40 million in 1986. The Economic
Recovery Tax Act of 1981 allows State and local governments to
issue tax-exempt bonds for mass transit vehicles and provides special writeoffs for motor carriers whose operating monopolies were
reduced in value by deregulation. These two tax expenditures are
estimated to be $60 million and $15 million, respectively. Total tax
expenditures for transportation are $115 million in 1986.
5-78
THE BUDGET FOR FISCAL YEAR 1986
COMMUNITY AND REGIONAL DEVELOPMENT
Federal programs for community and regional development support economic and social growth in urban and rural neighborhoods,
communities, and regions. The administration believes that the
most important stimulus to lasting community and regional development is a sound, expanding economy. The Federal Government's
role in achieving such an economy is to undertake responsible
fiscal policies that promote sustained growth and ensure limited
governmental interference in the private sector decisions that determine where development will occur. The administration continues to believe that any assistance should provide support in a
manner that gives primacy to private, State, and local discretion.
Federal policy for community and regional development emphasizes the primary role that private, State, and local resources must
play in community and regional development. The administration
recognizes that some Federal assistance may be necessary to supplement local resources in meeting essential or urgent needs, but
limits must be placed on such aid in light of the stronger fiscal
health of State and local governments relative to the Federal Government. Consistent with these policies, the administration proposes to continue the community development block grant program
as the principal Federal community and regional development program, because this program gives State and local governments a
source of funds with which to supplement other resources in ways
that they choose.
For 1986, the administration is requesting budget authority of
$5.1 billion for community and regional development, a reduction
of $2.9 billion from 1985. Outlays are estimated at $7.3 billion in
1986. For credit programs, new direct loan obligations and guaranteed loan commitments are estimated to be $445 million and $20
million, respectively, in 1986.
Community development—The foremost Federal program in this
category is the community development block grant program,
which is administered by the Department of Housing and Urban
Development (HUD).
Community development block grants (CDBG).—The community
development block grant program provides community and economic development support to cities, counties, Indian tribes, and
U.S. territories, to be used largely in ways of their choosing. After
certain funds are set aside for the Secretary's discretionary fund,
which provides grants for Indians, insular areas, and technical
assistance in support of CDBG activities, CDBG funds are allocated
by formula to States, large cities, and urban counties. Seventy
percent of these remaining funds go to the large city/urban county
5-79
COMMUNITY AND REGIONAL DEVELOPMENT
NATIONAL NEED: COMMUNITY AND REGIONAL DEVELOPMENT
(Functional code 450; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
3,468
3,472
3,125
3,278
3,412
71
440
300
315
113
440
116
137
69
224
251
263
243
241
4,818
4,276
3,504
3,658
3,872
1,164
1,375
294
1,012
167
86
-273
1,109
1,297
49
1,079
56
118
-283
872
502
15
1,044
855
216
10
1,078
891
248
6
1,098
39
-282
43
-297
50
-299
3,824
3,426
2,190
1,905
1,994
100
60
141
-366
-546
194
78
74
-336
-347
194
11
75
-305
-184
194
-565
-403
-219
' 5,129
5,160
5,648
BUDGET AUTHORITY
Community development:
Community development block grants
Community development loans (Off-budget under current law)#
Urban development action grants
Rental rehabilitation grants
Rental d e v e l o p m e n t g r a n t s
Other p r o g r a m s :
O n - b u d g e t under c u r r e n t l a w
Subtotal, Community development
. . . .
150
Area and regional development:
On-budget under current law
Off-budget under current law#
Economic development assistance
Indian oroBrams
Regional commissions
Tennessee Vallev Authority
Offsetting receipts
Subtotal, Area and regional development
Disaster relief and insurance:
Small business disaster loans:
Existing law
Proposed legislation
Disaster relief
National flood insurance fund
Other
Subtotal, Disaster relief and insurance
Total, budget authority
99
159
257
8,899
301
8,004
1
76
program and 30% to the State-administered small city program.
The States receive funds to distribute to their smaller communities
and rural areas by methods that they design.
In 1986, the administration proposes to change the statutory
distribution between the large city/urban county program and the
States program from 70%-30% to 60%-40%. The administration
proposes this change to increase the resources with which States
may serve rural areas currently served by the Farmers Home
Administration. Since the advent of the State CDBG program in
1981, rural areas have received more CDBG funding than under
the small cities program previously administered by HUD. Under
the proposed distribution formula, budget authority available to
the State-administered program will increase from $1.0 billion in
1985 to $1.2 billion in 1986. The administration proposes budget
authority of $3.1 billion for the total CDBG program in 1986, a 10%
reduction from the 1985 level.
5-80
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: COMMUNITY AND REGIONAL DEVELOPMENT—Continued
(Functional code 450; in millions of dollars)
Major missions and programs
1984
actual
1985
1986
estimate
1987
estimate
1988
estimate
3,819
3,900
3,520
3,360
3,216
31
454
42
500
75
20
25
522
150
112
23
442
75
137
-59
320
184
-2
4,220
155
-2
3,676
OUTLAYS
Community development:
Community development block grants
Community development loans (Off-budget under current law)#
Urban development action grants
Rental rehabilitation grants
Rental development grants
Other programs:
On-budget under current law
Off-budget under current law#
Subtotal, Community development..
216
324
4,520
4,861
288
-1
4,616
Area and regional development:
Rural development:
On-budget under current law
Off-budget under current law#.
Economic development assistance...
Indian programs
Regional commissions
Tennessee Valley Authority
Other
Offsetting receipts
Subtotal, Area and regional development-
1,253
335
216
1,108
221
166
8
-273
3,034
1,260
659
241
1,154
195
143
-4
-283
3,366
1,154
458
158
1,114
157
40
-8
-282
2,792
1,139
188
91
1,140
108
43
-8
-297
2,404
1,054
239
42
1,140
40
50
-9
-299
2,257
-419
-87
Disaster relief and insurance:
Small business disaster loans:
Existing law
Proposed legislation
Disaster relief
National flood insurance fund..,
Other
Subtotal, Disaster relief and insurance..
Total, outlays
46
243
146
149
119
200
65
147
326
-650
184
194
73
114
-84
-644
-39
194
26
74
-388
-444
-45
194
-7
75
-226
7,673
8,553
7,323
6,235
5,707
*$500 thousand or less.
#Proposed to be included on-budget.
Urban development action grants (UDAG).—The administration
proposes to terminate the UDAG program in 1986, as part of the
Government-wide effort to cut back local economic development
subsidy programs. These subsidies merely assist local governments
in their efforts to compete with other areas to attract private
investment. Federal funding of programs like UDAG which make
judgments on a project-by-project basis have the inappropriate
effect of distorting the economic decisions of firms and individuals.
Cities may, at their discretion, continue to use CDBG resources to
assist economic development projects. The $522 million in outlays
estimated for this program in 1986 reflects the continued spendout
of funds for projects approved in prior years.
COMMUNITY AND REGIONAL DEVELOPMENT
5-81
Rental rehabilitation grants.—In 1983, the administration proposed, and the Congress enacted, a new housing rehabilitation
program to support the voucher program in communities with an
insufficient supply of standard quality low- and moderate-income
housing. A total of $300 million in budget authority was made
available for this program, enough to allow the Federal Government to subsidize up to half the costs of rehabilitating an estimated
60,000 rental housing units by the end of 1986. In light of the
proposed 2-year moratorium on vouchers discussed in the income
security function, the administration also proposes a 2-year moratorium on the rental rehabilitation grant program. The program
would be restarted in 1988 in conjunction with the resumption of
the voucher program.
Rental development grants.—In the Housing Urban-Rural Recovery Act of 1983, the Congress created a new rental development
grant program to subsidize the construction or substantial rehabilitation of rental housing in low- and moderate-income neighborhoods experiencing a severe shortage of rental housing. This program was funded on a one-time demonstration basis for 2 years,
with a total of $315 million in budget authority made available.
The administration does not propose to continue this program because new housing construction is a very expensive way to house
the poor relative to more cost-effective approaches that rely on the
existing housing stock. Outlays for rental development grants
awarded in 1984 and 1985 are expected to reach $112 million in
1986.
Area and regional development.—Programs in this category support rural development, development programs of American Indian
tribal governments, and multi-State regional development.
Rural development.—The administration proposes to scale back
the Farmers Home Administration (FmHA) rural development
loan and grant programs in favor of HUD's State-administered
CDBG program. The FmHA program serves the same population
and provides funding for the same purposes as the CDBG program.
In addition, the administration is proposing to change the CDBG
distribution formula to provide more resources to smaller communities through the States program. Estimated outlays for rural
development are $1.6 billion in 1986.
Economic development assistance.—The Department of Commerce's Economic Development Administration (EDA) provides
public works grants to States, communities, and Indian tribes.
Since the administration continues to seek the termination of all
EDA activities, no new budget authority is requested for 1986, with
5-82
THE BUDGET FOR FISCAL YEAR 1986
the exception of small amounts of funding to cover ongoing administrative expenses associated with the expenditure of obligations
made in earlier years. In addition, the administration proposes to
rescind any unspent EDA funds. Outlays in 1986 are for projects
approved in previous years. EDA project grants lock resources into
unproductive areas and industries, thus subsidizing inefficiency.
Funds for locally-derived community and economic development
programs will continue to be available in 1986 through the community development block grant program.
Indian programs.—The three 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.
Outlays for the Indian programs and miscellaneous trust funds
for regional development administered by the Bureau of Indian
Affairs are estimated to be $1.15 billion in 1985 and $1.11 billion in
1986. The Department of Housing and Urban Development also
provides community development support specifically for Indians
through a set-aside in the community development block grant
program described above. Total outlays for special Indian programs
Government-wide, including programs in other functions such as
income security and education, are expected to be $2.8 billion in
1986. This does not include payments received by individual Indians from the miscellaneous trust funds or from programs available
to all qualified U.S. citizens.
Appalachian Regional Commission (ARC).—The ARC's programs
are intended to support development in the 13-State Appalachia
region. The Commission and both its highway and non-highway
programs are proposed for termination at the end of 1985. In
addition, the administration proposes to rescind uncommitted ARC
funds. Since the Appalachian Development Highway System is
eligible for funding through Federal aid for highways, States may
continue construction of the highways at their discretion. The administration's policy with respect to the ARC reflects reliance on
the private sector to provide the major stimulus for economic development and on the user-financed Federal highway program to
meet long-run Appalachian highway construction needs.
Tennessee Valley Authority (TVA).—The budget proposes the termination of direct support for TVA's regional economic, community, and agricultural development programs that are more appropriately private or State and local government responsibilities. These
programs have included activities such as promotion of tourism,
forestry and wildlife, and park operations. To the extent that Federal assistance might be warranted, it can be allocated more equi-
5-83
COMMUNITY AND REGIONAL DEVELOPMENT
CREDIT PROGRAMS—COMMUNITY AND REGIONAL DEVELOPMENT
(In millions of dollars)
Actual
1984
Direct loans:
Rural development insurance fund (FmHA):
New obligations
Change in outstandings
Outstandings
Rural development insurance fund (FmHA) (loans held by
FFB): 1
Change in outstandings
Outstandings
Economic development assistance:
New obligations
Change in outstandings
Outstandings
Small Business Administration disaster loans:
New obligations
Change in outstandings
Outstandings
Rural Telephone Bank:
New obligations
Change in outstandings
Outstandings
Other:
New obligations
Change in outstandings
Outstandings
Other (loans made by the FFB): 2
New obligations
Change in outstandings
Outstandings
Total, direct loans:
New obligations
Change in outstandings..
Outstandings
Estimate
1985
1986
1987
412
*
105
511
-5
100
62
-25
75
320
7,228
589
7,817
360
8,177
121
8,299
183
8,482
13
-87
624
12
-41
582
10
-72
511
15
-15
496
15
-15
481
243
-10
314
-536
4,960
600
168
-157 -1,452 -1,518 -1,329
4,803 3,351 1,833
504
143
74
1,327
185
134
1,461
185
133
1,594
139
149
1,743
92
104
1,847
113
21
1,490
154
55
1,544
20
10
1,554
16
-95
1,459
17
-89
1,370
87
31
242
225
42
284
24
307
21
329
-61
268
1,082
-178
15,975
1,687
367
445
175
616 -1,022 -1,322 -1,216
16,591 16,569 14,247 13,031
tably by programs administered nationally by other Federal agencies. TVA's basic responsibilities for water resources systems management and the national fertilizer research program would continue. Outlays for TVA's activities in this function are estimated to be
$40 million in 1986, down from $143 million in 1985. The TVA
power program, financed through the sale of electricity, will not be
affected by this reduction and is discussed in the energy function.
Disaster relief and insurance.—Providing insurance against
losses from floods, hurricanes, tornadoes, and other natural disasters is primarily the responsibility of private insurers. State and
local governments aid recovery when necessary, and Federal insurance and disaster relief programs are available to supplement
State and local resources when those resources are insufficient.
5-84
THE BUDGET FOR FISCAL YEAR 1986
CREDIT PROGRAMS—COMMUNITY AND REGIONAL DEVELOPMENT—Continued
(In millions of dollars)
Actual
1984
Guaranteed loans:
Rural development insurance fund (FmHA):
New commitments
Change in outstandings
Outstandings
Economic development assistance:
New commitments
Change in outstandings
Outstandings
Small Business Administration disaster loans:
Change in outstandings
Outstandings
Other:
New commitments
Change in outstandings
Outstandings
Estimate
1985
1987
124
-183
3,206
150
27
3,233
-210
3,023
-34
2,989
-323
2,667
11
-137
407
-54
353
-45
308
-34
273
-34
239
-5
4
-3
1
-1
19
-35
172
45
44
216
20
9
225
10
-13
212
5
-9
204
Total, guaranteed loans:
New commitments
Change in outstandings
Outstandings
154
-360
3,789
195
14
3,803
20
-247
3,556
10
-81
3,475
5
-366
3,109
Total credit budget (new obligations and new
commitments)
1,236
1,882
465
185
372
*500 thousand or less.
of CBOs less repurchases by FmHA. Increases in the volume of sales of
direct
loan outstandings decrease by the amount of CBO's sold to the FFB.
2
These are commitments made by the agency to guarantee loans that the FFB will disburse. In effect, they are commitments for FFB direct
loans, and are counted as such in the budget and trie credit budget. Policy responsibility for these loans rests with the guaranteeing agency.
Small business disaster loans.—Small Business Administration
(SBA) loans to homeowners and businesses that suffer losses as a
result of disasters are proposed for elimination. In many instances,
private insurance is available to cover losses. In general, the Federal Government should not provide assistance for losses resulting
from normal business risks. The existing portfolio of SBA disaster
loans would be transferred to the Department of the Treasury in
1986. Treasury will service, and subsequently sell, these loans.
Loan repayments and sales receipts for this program are estimated
to exceed gross outlays from prior commitments and other expenses by $466 million in 1986.
Disaster relief.—The Federal Emergency Management Agency
administers this nationwide program, which provides supplemental
assistance to individuals and State and local governments in the
event of a Presidentially-declared emergency or disaster. In addition, States or Federal agencies may be reimbursed for disaster
relief work performed under this authority. Budget authority of
$194 million in 1986 is expected to be sufficient to cover anticipated
COMMUNITY AND REGIONAL DEVELOPMENT
5-85
payments when combined with existing fund balances of $177 million.
National flood insurance fund.—The Federal Emergency Management Agency operates a national program of direct Federal
flood insurance at subsidized rates. Over the past 5 years, the
program has cost approximately $124 million pfer year. The administration proposes to continue the phaseout of this costly subsidy by
1988 through a combination of rate increases, coverage changes,
and optional deductibles, thereby recovering clearly allocable costs
of flood insurance from beneficiaries of this program. Beginning in
1986, administrative and other associated costs of flood insurance
will be folded into the flood insurance fund and will be recovered
eventually through flood insurance premiums. Outlays for this program are estimated to be $73 million for 1986.
Tax expenditures.—Direct Federal funding for community and
regional development is supplemented by several existing tax expenditures. Under certain conditions, taxpayers may elect to amortize rehabilitation expenditures for low- and moderate-income
rental housing over a 5-year period. The 1986 tax expenditure for
this provision is $75 million. Development is also assisted by the
exclusion of interest on State and local industrial development
bonds for airports and docks, as well as sports and convention
facilities. The estimate for this provision is $420 million in 1986.
Special tax credits are also available for rehabilitation of older nonresidential buildings. For 1986, the estimate for this program is
$365 million. Total tax expenditures for community and regional
development for 1986 are estimated to be $870 million.
The administration continues to support an enterprise zone program to provide tax incentives for the redevelopment of economically distressed areas. Following enactment, up to 25 small areas
per year would be designated "enterprise zones" over a 3-year
period. Businesses in the zones would be entitled to exemption
from tax for certain gains, and to tax credits for capital investment, for increases in employment, and for hiring disadvantaged
employees. A tax credit would also be provided to employees in the
zones. The tax expenditure from this proposal, assuming 25 zones
are designated in the first year, is estimated to be $305 million in
1986.
Related programs.—Many programs that fulfill other national
needs as their primary purpose also promote community and regional development. For example, Federal outlays for all civil
public works projects and grants for health, education, and transportation programs support State and local development. Commu-
5-86
THE BUDGET FOR FISCAL YEAR 1986
nity development is also encouraged by other Federal activities,
including 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.
EDUCATION, TRAINING, EMPLOYMENT, SOCIAL SERVICES
5-87
EDUCATION, TRAINING, EMPLOYMENT, AND
SOCIAL SERVICES
Federal programs for education, training, employment, and
social services are intended to: (1) assist parents, States, and localities in providing education, especially for educationally disadvantaged, low-income, and handicapped persons; (2) assist economically
disadvantaged or dislocated workers in gaining job skills and finding permanent, unsubsidized employment opportunities; (3) help
employers and employees maintain stable and productive relations;
and (4) help provide social services for needy children, families, the
elderly, and other groups. Historically, the responsibility for meeting most of these needs has rested with State and local governments and the private sector. Total outlays for this function are
estimated to be $29.3 billion for 1986. This is a 4% decrease from
the 1985 level of $30.4 billion.
EDUCATION
The administration's policies for education continue to emphasize
strong national leadership and dedication to the restoration of
excellence at all levels of education for all children; maintenance of
major grant programs that help States and localities provide additional services for the disadvantaged and handicapped; and improved targeting of postsecondary student aid.
Budget authority requested in 1986 for major education programs other than student aid is frozen at the 1985 level. While
many smaller programs are also frozen, a number of lower priority
programs are proposed to be terminated or reduced. Rescissions of
about $174 million in 1985 budget authority are also proposed. A
new student aid policy is proposed with substantial programmatic
reform and significant savings.
Elementary, secondary and vocational education.—The budget requests $7.5 billion in budget authority, $0.3 billion below 1985, for
these programs, which primarily help States educate students with
special needs.
Block grant and discretionary fund.—Requested 1986 budget authority is frozen at $500 million for the block grant and $32 million
for the related discretionary fund of Chapter 2 of the Education
Consolidation and Improvement Act. The block grant provides
States and localities with resources to be used for whatever aspect
of educational improvement they choose within the broad framework of the law. These resources can be used for a variety of
purposes including magnet schools and other desegregation activities and women's educational equity activities, currently financed
by federally directed categorical programs for which reduced or no
funding is requested in 1986.
5-88
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES
(Functional code 500; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
BUDGET AUTHORITY
Education:
Elementary, secondary, and vocational education:
Block grant and discretionary fund
Compensatory education
Education for the handicapped
Impact aid
Vocational and adult education
Other
Subtotal, Elementary, secondary, and vocational
education
479
3,488
1,241
600
839
596
532
3,696
1,321
695
838
670
7,243
Higher education:
Student financial assistance
Guaranteed student loan program:
Existing law..
Other..
Subtotal, Higher education
Research and general education aids...
Subtotal, Education
Training, employment, and other labor services:
Training and employment:
Block grants to States
Summer youth employment
Assistance to dislocated workers
Job Corps
Older Americans employment
Work incentive program
Other training programs
Federal-State employment services
Subtotal, Training and employment.
Other labor services
Subtotal, Training, employment, and other
labor services
Social services:
Social services block grant
Community service programs
Rehabilitation services
Family social services
Services for children, the elderly, and other special
groups
Domestic volunteer programs
Other
Subtotal, Social services....
Total, budget authority..
1987
estimate
estimate
532
3,647
1,306
543
838
615
532
3,753
1,353
582
838
615
532
3,887
1,400
605
838
614
7,752
7,481
7,673
7,876
3,977
4,871
3,569
3,728
3,880
2,256
3,744
723
6,956
732
9,347
3,330
-615
542
6,825
3,294
-364
538
7,196
2,892
-369
544
6,947
1,133
15,332
1,204
18,303
1,029
15,336
1,060
15,929
1,098
15,921
3,301
1,549
343
1,014
317
271
428
1,465
1,886
725
104
616
326
267
248
945
1,886
665
100
1,886
665
200
1,886
665
200
326
326
326
208
955
4,240
207
974
4,257
5,117
218
941
4,136
685
706
674
692
705
9,374
5,823
4,810
4,932
4,962
2,700
353
1,155
686
2,725
372
1,233
737
2,700
4
1,216
741
2,700
2,700
1,267
800
1,318
834
1,881
136
26
6,937
1,995
149
27
7,238
1,969
148
22
6,800
2,019
151
22
6,959
2,068
155
21
7,096
31,642
31,365
26,946
27,819
27,980
EDUCATION, TRAINING, EMPLOYMENT, SOCIAL SERVICES
5-89
NATIONAL NEED: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES—Continued
(Functional code 500; in millions of dollars)
1984
actual
1985
1986
estimate
1987
estimate
1988
516
3,077
953
578
743
653
438
3,566
1,403
747
914
593
518
3,787
1,241
635
858
631
532
3,698
1,312
585
847
616
532
3,738
1,343
594
840
613
6,520
7,661
7,670
7,590
7,660
3,743
4,506
4,447
3,761
3,749
3,245
3,431
-107
3,310
-412
3,301
-388
2,972
-368
394
676
613
7,383
8,506
7,959
458
-30
7,103
515
-30
6,839
1,210
15,112
1,225
17,393
1,187
16,816
1,130
15,823
1,100
15,599
1,545
688
172
581
321
265
274
798
1,886
775
170
548
326
60
237
930
1,886
707
178
79
326
1,886
665
194
4,644
1,894
775
184
600
319
267
274
986
5,298
4,931
207
944
4,327
197
962
4,230
639
711
679
690
703
5,282
6,009
5,610
5,016
4,934
2,789
346
1,414
659
2,750
372
1,105
744
2,702
129
1,134
748
2,700
9
1,257
784
2,700
Subtotal, Social services..
1,819
133
25
7,185
1,888
144
31
7,032
1,975
148
26
6,863
1,992
150
23
6,915
2,039
154
22
7,040
Total, outlays
27,579
30,434
29,288
27,754
27,573
Major missions and programs
OUTLAYS
Education:
Elementary, secondary, and vocational education:
Block grant and discretionary fund
Compensatory education
Education for the handicapped
Impact aid
..
Vocational and adult education
Other
Subtotal, Elementary, secondary, and vocational
education
Higher education:
Student financial assistance
Guaranteed student loan program:
Existing law
Proposed legislation
Other:
Existing law
Off-budget under current law#..
Subtotal, Higher education.
Research and general education aidsSubtotal, Education
Training, employment, and other labor services:
Training and employment:
Block grants to States
Summer youth employment
Assistance to dislocated workers
Job Corps
Older Americans employment
Work incentive program
Other training programs
Federal-State employment services
Subtotal, Training and employment
Other labor services
Subtotal, Training, employment, and other
labor services
Social services:
Social services block grant
Community service programs
Rehabilitation services
Family social services
Services for children, the elderly, and other special
groups
Domestic volunteer programs
Other
•$500 thousand or less.
#Proposed to be included on-budget.
326
1,302
824
5-90
THE BUDGET FOR FISCAL YEAR 1986
Compensatory education for the disadvantaged.—The bulk of this
activity is the major program of grants to local educational agencies for supplemental compensatory services for the educationally
disadvantaged. It also includes four grant programs to States for
other students with special needs and for program administration;
two small categorical grant programs for children from migrant
families; and funding of technical assistance and Federal program
evaluation. For most programs in this category, budget authority is
proposed at the freeze level. A significant program reform, which
will reduce budget authority to $233 million, or $42 million below
the 1985 level, is proposed for the State grant for migrant children.
Funding in 1986 would be concentrated on children who have
migrated within the last 4 years. Legislation will also be proposed
again to give States and local educational agencies the option of
providing compensatory education services through locally de- *
signed voucher programs.
Education for the handicapped.—Under the Education of the
Handicapped Act, formula grants help States and localities educate
handicapped children. Small discretionary grants support special
projects, demonstrations, research, and training. Budget authority
for the formula grants and most of the discretionary categorical
grants is proposed at the freeze level. For 1986, the administration
proposes reducing budget authority for training of special education personnel to $50 million, $11 million below 1985, because of
the lack of demonstrated need for Federal funding.
Impact aid.—This set of programs compensates school districts
whose enrollments and the availability of revenues are deemed to
have been adversely affected by Federal activities. Funds are also
available to restore educational facilities that have been damaged
in natural disasters. The major category of aid, for districts with
children who both live on and whose parents work on Federal
property, is proposed at the freeze level. No funds are proposed for
(1) new construction, other than for disaster-related construction,
or (2) the current authority to provide funds to school districts with
children who either live on or whose parents work on Federal
property or are in the uniformed services. In general, the presence
of these children imposes little or no burden on most districts.
Vocational and adult education.—Programs funded under these
two recently reauthorized statutes are proposed at the freeze level
in 1986. The vocational education funds, $738 million, provide
grants to help States improve secondary and postsecondary vocational training programs. Adult education grants, $100 million,
help States provide basic education and high school equivalency
programs to adults.
EDUCATION, TRAINING, EMPLOYMENT, SOCIAL SERVICES
5-91
Other elementary and secondary education.—This category includes grants to local and State governments for bilingual education, Indian education, and science and math education, as well as
technical assistance for desegregation activities. Budget authority
requests for the larger grant programs are nearly all at the freeze
level. Several of the smaller grant programs are proposed for termination, which would become effective for some in 1985 with the
rescission of $110 million of 1985 budget authority. States can meet
the goals of these programs by using block grant funds or their
own resources. The administration proposes a reduction of onethird in grants for technical assistance for desegregation activities
as part of a 3-year phaseout, since States and school districts are
improving and expanding their own capability.
Higher education.—The budget requests $6.8 billion in budget
authority for higher education in 1986.
Student aid.—Budget authority requested for student financial
assistance and guaranteed student loans for 1986, $6.3 billion, is $2.3
billion below the requested 1985 level.
The six current student aid programs will provide over $13 billion in grants, subsidized work, and direct and guaranteed loans for
the 1985-86 school year. Though most of this aid goes to help needy
students, some of it goes to the relatively well off and finances an
unreasonable share of cost at very expensive schools. It is appropriate for the Federal Government to help needy students obtain
access to postsecondary education, but it cannot afford, and should
not maintain the present excessive levels of spending under current unfocused policies. This budget includes significant reform
proposals:
• A cap is proposed so that no student could receive more than
$4,000 in Federal aid per year from combined awards financed
by Education Department student aid programs. Under current law, in some circumstances, a student could receive
about $11,000 per year in Federal grants, loans, and subsidized jobs.
• Students from families with adjusted gross income above
$25,000 (approximately the national median) would not qualify for grants, direct loans or subsidized jobs. Under current
law, 5% of Pell grants and over 20% of all campus-based
Federal aid (supplemental grants, subsidized jobs, direct
loans) go to those with family incomes above $25,000.
• Students from families with adjusted gross income above
$32,500 (130% of the median) would not qualify for loans that
are both directly subsidized and guaranteed. Under current
law, about 30% of directly subsidized, guaranteed loans go to
students with family incomes above this level. Such students
5-92
THE BUDGET FOR FISCAL YEAR 1986
could, however, qualify for guaranteed loans for which no
interest or other direct subsidies would be available.
• All students would be expected to provide at least $800
toward their education to qualify for Federal aid. Work-study
grants could be used to provide subsidized jobs to help satisfy
this requirement.
• Rules would be tightened to eliminate abuse of independent
student status, reduce excessive cost-of-living allowances in
award calculations, and require all recipients to have a high
school degree or equivalent.
• Application validation and new quality control policies will
provide strong incentives to address the grave error problem
in the Pell grant program (25% of all dollars are awarded in
error) and in the other student aid programs.
The guaranteed student loan (GSL) program would be further
modified so that:
• The currently excessive special allowance paid to lenders
would be reduced and restructured to conform more closely to
lender administrative costs. The revised special allowance
would be 1.5 percentage points on outstanding loans while the
student is still in school, and 3 points on outstanding loans
after the student begins repayment.
• To reflect changing costs of credit, borrowers would pay interest at a rate set annually at the rate of recent 91-day Treasury bills instead of the current fixed 8%.
• No further unneeded interest-free loan advances or administrative allowances would be provided to the State guarantee
agencies. Outstanding advances would be recalled. These
agencies can operate effectively without these funds.
• Federal default insurance payments would be adjusted to provide incentives for improved State and lender collections and
default reduction programs. New regulations will establish
tougher default prevention standards. Defaults are rising rapidly and must be controlled to preserve the integrity of the
program.
• Loan principal would have to be disbursed as needed, instead
of all at once. This will reduce unwarranted Federal expenses.
Later this year, the administration will propose to replace, beginning in 1987, all current student aid programs, except for GSL,
with a single State grant program that will simplify and make
more equitable and efficient the delivery of Federal aid. Within
broad Federal guidelines to assure targeting on the poor and institutional equity, States would have the responsibility for allocating
aid. The mix of grants, subsidized jobs, or direct loans would be
decided by States and schools.
EDUCATION, TRAINING, EMPLOYMENT, SOCIAL SERVICES
5-93
In order to operate the Pell grant program within the level of
funds available for 1985, the administration proposes appropriation
language to reduce the size of 1985-1986 school year awards established by the 1985 appropriation act. Schools will be notified that if
the language is not enacted by April 15, 1985, the statutory "linear
reduction" formula will be implemented, automatically reducing
awards so that total payments do not exceed available funds. The
administration's proposal would eliminate fewer recipients from
the program than would the linear reduction formula.
Other aid to higher education.—The largest programs in this
category are aid for developing institutions (including historically
black colleges), Howard University, and Gallaudet College. Most
activities are proposed for funding at the freeze level. No funding is
requested for several smaller, lower priority programs.
Research and general education aids.—The budget requests $1.0
billion in budget authority for these activities, which include educational research and statistics, the National Endowments for the
Arts and the Humanities, the Smithsonian Institution, the Library
of Congress, the Corporation for Public Broadcasting, and certain
Department of Education administrative expenses. No new funds
are provided for the Institute of Museum Services or the six programs supporting State, local, and research library activity. These
programs are not high priorities for Federal funds, and most have
met their objectives of stimulating other sources of funding.
Credit programs.—The GSL program is the principal education
credit activity. It now primarily insures State agency guarantees of
repayment of postsecondary education loans made by commercial
lenders to students and their parents. The budget projects that $7.5
billion in new GSL loans will be made in 1986. The outstanding
loan portfolio at the end of 1986 is expected to be $40 billion.
Defaulted GSL's for which Federal insurance payments have been
made become Federal obligations. Enhanced debt collection efforts
are expected to lead to a 39% increase in collections of defaulted
reinsured GSL loans from 1985 to 1986.
Under the national direct student loan (NDSL) program, schools
maintain revolving funds capitalized in part by Federal funds.
Changes in loans outstanding reflect the net of new Federal capital
less repayments and defaults. Beginning in 1987, the Student Loan
Marketing Association (SLMA) will repay loans from the Federal
Financing Bank which it used as capital for GSL secondary market
and other activities. SLMA does not plan any additional borrowing
from the FFB.
5-94
THE BUDGET FOR FISCAL YEAR 1986
CREDIT PROGRAMS—EDUCATION
(In millions of dollars)
Estimate
Actual
1984
1985
1986
1987
769
552
2,465
937
552
3,017
877
344
3,361
425
3,786
815
292
4,078
169
70
4,974
192
102
5,076
118
5,194
-45
5,149
-40
5,109
Direct loans-.
Defaulted guaranteed student loans:
New obligations
Change in outstandings
Outstandings
National direct student loans:
New obligations
Change in outstandings
Outstandings
SLMA obligations (loans made by FFB):
Change in outstandings
Outstandings1
Other education.New obligations
Change in outstandings
Outstandings
5,000
5,000
5,000
-30
4,970
-30
4,940
40
-400
3,137
-399
2,738
-54
2,684
-104
2,579
-110
2,469
Total, direct loans.New obligations
Change in outstandings..
Outstandings
979
222
15,576
1,129
256
15,831
877
408
16,240
885
245
16,485
815
111
16,596
Guaranteed loans-.
Guaranteed student loans:
New commitments
Change in outstandings..
Outstandings
Total credit budget (new obligations and new
commitments)
7,597 7,941 7,547 7,006 7,695
4,456 4,421 3,362 1,910
1,700
31,962 36,383 39,745 41,655 43,355
8,576
9,070
8,424
7,891
8,510
1
These are outstanding commitments made by the agency to guarantee loans that the FFB has disbursed to SLMA. In effect, they are
commitments for FFB direct loans, and are counted as such in the budget and the credit budget. Policy responsibility for these loans rests with
the guaranteeing agency.
Tax expenditures.—A variety of exclusions, exemptions and deductions provide assistance for education. Student loans are subsidized through the exclusion of interest on State and local student
loan bonds; students receive additional benefits because scholarship
and fellowship awards are not subject to tax. These two tax expenditures are estimated as $390 million and $650 million, respectively, in 1986. Other assistance is provided through a special tax
exemption available to parents of students age 19 or over and by
the deductibility of charitable contributions for education. Tax expenditures for these two items are $1.3 million and $1.5 billion,
respectively, in 1986. The exclusion of interest on State and local
debt for private nonprofit educational facilities results in a tax
expenditure of $200 million in 1986.
The administration continues to support enactment of a tuition
tax credit for parents with incomes below $60,000 who choose to
send their children to private elementary and secondary schools.
EDUCATION, TRAINING, EMPLOYMENT, SOCIAL SERVICES
5-95
This is an essential measure that supports freedom of educational
choice and is expected to help improve all aspects of elementary
and secondary education. The tax expenditure estimate for this
program is $635 million in 1986. Tax expenditures for education
total $4.0 billion in 1986.
The administration also proposes to exclude from tax the earnings on savings deposited in special accounts that will be used to
pay future higher education expenses of dependent children. The
maximum annual contribution to these accounts will be $1,000 per
child. This maximum will be reduced 5 cents for each dollar that
the taxpayer's adjusted gross income exceeds $40,000, so that any
taxpayer with adjusted gross income in excess of $60,000 will be
ineligible. If enacted, the proposal is scheduled to become effective
January 1, 1986, and produce a tax expenditure of $75 million in
1987.
TRAINING, EMPLOYMENT AND OTHER LABOR SERVICES
Federal training and employment programs are designed to improve individuals' abilities to obtain and retain jobs and to facilitate the operation of the labor market. Those who have difficulty
getting and keeping jobs may receive skill training or information
on the location of suitable jobs and how to seek them. Other labor
services include the compilation of labor statistics and the regulation of employer-employee relations. In 1986, outlays for these activities are expected to be $5.6 billion, a decrease of $0.4 billion
from the estimate of $6.0 billion for 1985.
Training and employment—The major Federal activities for
training and employment are financed through grants to States for
training those having greatest difficulties in the job market, helping experienced workers displaced from their jobs find new employment, providing subsidized jobs for youth in the summer, and operating the Employment Service. In addition, the Federal Government contracts for the operation of other job training programs,
including the Job Corps. The Job Training Partnership Act (JTPA),
which was implemented in 1984, fundamentally restructured the
major employment and training programs. Private sector involvement was strengthened, State control was increased, training was
strongly emphasized, and categorical programs were consolidated
into a block grant to provide State and localities greater discretion
in the use of funds. To provide lead time for adequate planning, the
budget authority enacted for a fiscal year finances a 12-month
program year beginning on July 1 of that year. The 1984 budget
authority for JTPA programs financed 21 months to cover an initial transition period and the 1984 program year.
5-96
THE BUDGET FOR FISCAL YEAR 1986
Block grants to States.—Under JTPA the States, operating in
close cooperation with private sector employers, design programs to
meet the needs of their populations and the opportunities in the
State job market. These programs are intended to prepare youth
and unskilled adults for entry into the labor force and to provide
job training to those who are in special need of such training in
order to obtain productive employment. Activities are designed in
conjunction with the Employment Service, educational institutions,
and other vocational activities in the area to prepare individuals
for jobs in the area. Although few restrictions are placed on the
States and the service delivery areas, JTPA requires that 70% of
the grant amount must be used for training, 90% of the participants must be economically disadvantaged, at least 40% of the
resources must be spent for youth, and welfare recipients must be
served on an equitable basis. Outlays of $1.9 billion in 1986 reflect
the budget authority provided to serve over 1 million people in
both program years 1986 and 1987.
Summer youth employment.—Under the summer youth employment program, grants are made to States in the spring of each year
to subsidize minimum-wage public sector jobs during the following
summer for youth between the ages of 14 and 20. The 1984 budget
authority provided $825 million for jobs in the summer of 1984 and
$725 million for the summer of 1985. The 1985 enacted budget
authority provides an additional $100 million for the summer of
1985, for a total of $825 million, and $725 million for the summer
of 1986. The appropriation for the summer of 1984 proved larger
than could be effectively utilized. Local areas had a total of some
$240 million unspent at the end of fiscal year 1984. Therefore, the
budget includes a proposal to rescind the extra $100 million enacted for the summer of 1985 and to modify the formula distributing the appropriation so that resources are targeted to those areas
with the greatest need. This will mean that service levels will be at
least as great in the summers of 1985 and 1986 as experienced in
the summer of 1984. The budget authority requested in 1986 for
the summer of 1987 is $60 million below the amount available for
the summer of 1986, reflecting both expected improvements in the
job market and a declining youth population.
To permit youth to gain the more valuable experience of work in
real private sector summer jobs, the administration continues to
urge a reduction in the minimum wage for youth during the
summer months. Such legislation will create more jobs by reducing
employers' costs to levels closer to the value of the work produced
by youth just acquiring job skills. Youths with greater skills will, of
course, be able to command higher wages. Limiting the reduction
to the summer will allay fears that youths will replace adults in
EDUCATION, TRAINING, EMPLOYMENT, SOCIAL SERVICES
5-97
jobs. In addition, the proposed legislation would penalize any employer who fires a worker in order to hire a youth at the lower
minimum wage.
Assistance to dislocated workers.—JTPA began a new grant program to help dislocated workers obtain new jobs because of the fear
that in a continually changing economy, some workers will find
they are unable to retain their jobs or find new ones requiring
their skills where they live. These workers can be shown new
occupations that use their skills, trained in new skills for which
there is a demand, aided in their job search, or helped to meet the
costs of moving to new locations where they have found long-term
jobs. Of amounts available for these grants, 75% are distributed to
States by formula, and the remainder is granted to States at the
discretion of the Secretary of Labor based on applications describing special needs.
Budget authority for JTPA grants in 1984 covered 21 months,
which included both an initial start-up period and the 1984 program year, which began on July 1, 1984. For the 1985 program
year, budget authority for grants to displaced workers was $223
million. In addition, budget authority of $26 million was enacted
for 1985 specifically for training assistance to workers determined
to have been displaced by increased imports. The types of service
requested by unemployed workers under the JTPA program have
resulted in a much less costly program than had been anticipated.
In particular, few workers have indicated a need for extensive
retraining, the most expensive of the authorized activities. As a
result, relatively little of the amounts appropriated have been used,
and $190 million in unspent funds were available on June 30, 1984,
the end of the start-up period. Therefore, the budget proposes to
rescind $120 million of 1985 budget authority for the JTPA program and $25 million of the amount provided for workers displaced
by increased imports. The administration proposes budget authority of $100 million for 1986 which, together with remaining unused
balances, will be sufficient to provide needed services to at least
150,000 displaced workers, including those displaced by increased
imports. Based on experience to date, the amount will be sufficient
to meet all expected needs.
Job Corps.—The Job Corps has now been operating for 20 years.
In 1985, the budget authority of $617 million would finance 40,400
training slots, at a cost of over $15,200 each. Despite the amount of
time available to develop an effective program and the large cost
for the program as a whole as well as per training slot, the Job
Corps has not been able to meet the needs of most of those it was
intended to serve. About 65% of those leaving the program each
year drop out without finishing training. Only 35% of all Job Corps
5-98
THE BUDGET FOR FISCAL YEAR 1986
participants are recorded as being placed in jobs. Even though the
Job Corps is intended to help those who are less job ready, this low
placement rate occurs despite the fact that between 20 and 25% of
those entering the Corps have completed 12 years of school. Therefore, the budget proposes to eliminate funding for the Job Corps in
1986. Since the 1985 appropriation is available for the July 1, 1985,
to June 30, 1986, period, it will provide sufficient resources for
closing down the program. States and localities will continue to
have Federal vocational education grants and the 40% of the JTPA
block grant that must be spent on youth to provide training for
those now going to Job Corps camps.
Older Americans employment,—Part-time public service employment for older workers is provided under Title V of the Older
Americans Act through contracts with eight national service organizations and through grants to States. Budget authority of $326
million is requested for 1986, the same as provided in 1985. Since
the wage payment is fixed by law, some 63,800 job opportunities
will be provided for older workers in 1985 and 1986. Outlays are
also estimated at $326 million in 1986.
Work incentive program.—This separate categorical program
has for years provided job services, training, and public service
employment to recipients of aid to families with dependent children (AFDC). Although its aim is to help curb welfare dependency,
it has not proved successful or cost-effective. The Job Training
Partnership Act now requires equitable service to AFDC recipients
in a program better designed to provide the skills needed for private sector jobs. The AFDC program itself has been reformed to
create new opportunities for work experience. Further work enhancement legislation is being proposed, as described in the income
security function. The need for this separate categorical program
has ceased; no budget authority is requested for 1986.
Other training programs,—Outlays of $237 million are estimated in 1986 for other national training programs, including special
programs for veterans, native Americans, and migrant and seasonal farm workers.
Federal-State employment services.—Under the Wagner-Peyser
Act, as amended by JTPA, grants for the Employment Service are
made to States under a formula based on each State's share of the
civilian labor force and of unemployed individuals. These grants
support the total cost of job search and placement services to job
seekers and recruitment and special technical services for employers. Almost all (97%) of the grants to States are financed from the
Federal unemployment tax levied on employers. Working with the
EDUCATION, TRAINING, EMPLOYMENT, SOCIAL SERVICES
5-99
States, the administration will develop and propose legislation to
devolve to the States the responsibility for managing and financing
their employment services and unemployment insurance services.
The Federal unemployment tax will be reduced accordingly, freeing tax resources for the states. The legislation would become
effective in 1988, allowing the states time to adjust their laws. This
proposal would encourage efficiency in State administration by
increasing the flexibility with which States carry out their programs. Certain employment services designed to meet national
needs would continue to be financed with grants under specific
agreements with the states. National activities to be financed in
1986 include special services to veterans, collection of general purpose labor market statistics, and determinations of labor needs
under immigration laws. In 1986, outlays for all these employment
service activities are estimated at $930 million.
Other labor services.—The Federal Government establishes and
enforces standards affecting the relationship between employers
and employees and between unions and their members. This includes enforcement of the minimum wage and related laws, regulation of welfare and pension plans, supervision of labor-management
relations, regulation of the equal employment practices of Federal
contractors, and assurances that elections of labor union officials
are democratic and that such officials do not abuse their stewardship. In addition, the Federal Government collects and disseminates employment and unemployment statistics and data on wages,
prices, and productivity. Outlays for these activities are estimated
at $679 million in 1986.
Tax expenditures.—Training and employment is encouraged
through a diverse group of tax expenditures. The largest employment incentive is provided by the deduction for two-earner married
couples, $7.7 billion in 1986. This provision, enacted as part of the
Economic Recovery Tax Act of 1981 (ERTA), reduces the marriage
penalty that arises because the income of second earners is stacked
on top of their spouse's earnings, and thus taxed at a higher
marginal rate than if the second earner had been taxed as a single
person. ERTA also expanded the credit for child and dependent
care and created a special exclusion for employer payments for
child care. These provisions, designed to provide work incentives
for families with children, are estimated to be $3.4 billion and $30
million, respectively, in 1986. The administration proposes to
modify the dependent care credit by increasing benefits for lowand moderate-income families. The effective date of the proposed
increase in the credit is January 1, 1986. If enacted, it will increase
tax expenditures by $235 million in 1987.
5-100
THE BUDGET FOR FISCAL YEAR 1986
The targeted jobs tax credit, estimated at $365 million in 1986, is
intended to provide incentives for employers to hire disadvantaged
individuals from certain target groups and recipients of certain
welfare payments. The credit will expire on December 31, 1985, and
is not proposed for extension. Special tax credits for employee stock
ownership plans (ESOPs) are designed to encourage employee ownership of their employer's stock. The tax expenditure for ESOP
provisions is $3.7 billion in 1986. Total tax expenditures for training and employment are $16.3 billion in 1986.
Related programs.—A number of other Federal programs are
related to training and employment. Job training services provided
by the Veterans Administration are included in the veterans function; job safety and health activities are included in the health
function; and activities relating to job discrimination on the basis
of race, age, or sex are included in the administration of justice
function.
SOCIAL SERVICES
The Federal Government makes grants to States and to local
public and private institutions to defray the cost of social services.
Beneficiaries are low-income persons, the elderly, the disabled, children, youth, and Native Americans. Federal outlays for social services are expected to decrease from $7.0 billion in 1985 to $6.9
billion in 1986.
Social services block grant.—Block grant funding of social services gives States discretion to determine which social services will
be offered and who will be eligible to receive them. Child day care,
foster care, child protective services, preparation and delivery of
meals, and legal services are some examples of social services
offered by the States. Block grant funds may also be used by State
and local governments for administrative costs and are distributed
among the States on the basis of population. States may transfer
up to 10% of their social services block grant allotment to other
block grants that support health services, health promotion and
disease prevention, or low-income home energy assistance.
Budget authority of $2.7 billion is requested for the social services block grant in 1986.
Community service programs.—In 1986, budget authority of $4
million is requested to close out the community services block
grant. States may continue community service programs under the
social services block grant.
Rehabilitation services.—Budget authority of $1.2 billion in 1986
is requested for these programs, which are aimed at helping phys-
EDUCATION, TRAINING, EMPLOYMENT, SOCIAL SERVICES
5-101
ically and mentally handicapped individuals become employed and
live more independently. Budget authority in 1986 for the major
grant to States for vocational rehabilitation services and most
smaller categorical authorities is proposed to be frozen at the 1985
level. Targeted reductions of $17 million below 1985 budget authority are proposed in several of the smaller project grant activities, to
eliminate one low priority program (recreation) and achieve needed
reforms in others.
Family social services.—In 1986, budget authority of $741 million
is requested for foster care, adoption assistance, and child welfare
services, training, and research. Funds support State programs to
reunite children with their families or, when this is not possible, to
place them promptly in adoptive homes. The administration proposes to freeze foster care, child welfare services, and child welfare
training at 1985 levels in 1986.
The budget reflects a policy that taking children from their
homes and placing them in foster care should be an explicitly
short-term, last resort solution to children's problems. A bonus
system will be proposed for 1986 to reward States that resolve
children's problems quickly, and return them to permanent homes.
The system will encourage reduction of duration and incidence of
foster care.
Services for children, the elderly, and other special groups.—In
1986, budget authority of $1.1 billion is requested to fund programs
that augment State, local, and nonprofit funds to improve the lives
of low-income, neglected, abused, or homeless children. Funding in
this area is almost entirely for Head Start, which aids local community groups in offering comprehensive development services to preschool children from low-income families. The 1986 funding level
will allow Head Start to maintain enrollment at more than 448,000
children.
In addition, budget authority of $789 million is requested to aid
the elderly, the developmentally disabled, and Native Americans.
Grants for services for the elderly are made to State and area
agencies on aging to finance programs for older Americans, particularly those with the greatest economic and social need. Services
for the elderly offered by the States include transportation, information and referral, legal aid, and home maintenance. In addition,
States use Older Americans Act funds to serve meals to senior
groups and to deliver meals to the homebound elderly.
Domestic volunteer programs.—The ACTION agency operates
programs to help citizens 60 and older provide various social services, pays stipends and other support costs of the volunteers in
5-102
THE BUDGET FOR FISCAL YEAR 1986
service to America program (VISTA), and provides small grants to
stimulate other volunteer services. In 1986, foster grandparents
will support 18,425 older volunteers to work with 65,000 children
with special needs. The senior companions program will provide
support for approximately 6,900 volunteers to work with 24,000
older shut-ins. The retired senior volunteer program (RSVP) will
support 407,000 part-time volunteers in 1986 who work on a great
variety of community needs. Funds requested for the VISTA program will support 2,200 paid volunteers, the same number as in
1985.
Tax expenditures.—The provision of social services by a wide
variety of private charitable and religious institutions is encouraged by the tax deductibility of contributions to those institutions.
The tax expenditure estimate for charitable contributions, other
than to educational and health institutions, is $13.2 billion in 1986.
For the same year, exclusion of parsonage allowances results in a
tax expenditure estimated at $175 million. In addition, the adoption of children with special needs is encouraged by a $1,500 item-,
ized deduction; this results in a tax expenditure of $15 million in
1986. For social services, tax expenditures total $13.4 billion in 1986.
Total tax expenditures for education, training, employment, and
social services are estimated to be $33.8 billion in 1986.
HEALTH
5-103
HEALTH
The Federal Government contributes to meeting the Nation's
health care needs by financing and providing health care services,
promoting disease prevention, and supporting research and training. Rapid inflation of health care costs remains a major problem
for both individuals and the Federal Government in meeting
health care needs. Increasingly expensive health care costs undermine the American people's ability to purchase needed health care.
Federal policies in the past have contributed significantly to the
growth of health care costs. The budget contains major initiatives
to reduce these cost increases that include building on reforms
legislated recently by the Congress and steps to control costs in
medicaid.
Health care services.—Four-fifths of Federal outlays for health in
this function is devoted to financing or providing health care services directly to individuals. Federal outlays for health care services
are estimated to rise from $27.2 billion in 1985 to $28.2 billion in
1986 and $29.5 billion in 1987.
Medicaid grants.—In 1986, Federal and State governments are
expected to spend $23.7 billion and $19.3 billion, respectively, to
finance health care for 22.5 million poor Americans.
The Omnibus Budget Reconciliation Act of 1981 significantly
reformed medicaid by increasing program economy and effectiveness, and controlling cost growth. However, these reforms expired
in 1984. The growth of Federal and State medicaid costs, which
dropped from a 15.3% annual rate during 1979-1981 to about 9%
from 1981 to 1983, now faces the threat of a return to double-digit
inflation.
For 1986, the administration proposes to reduce Federal medicaid
outlays by $0.9 billion from projected levels. In subsequent years,
medicaid cost growth would be limited to the increase in prices in
the medical care sector. The administration also proposes substantial new program reforms to increase significantly the States' ability to control costs. These reforms include increased flexibility to
target services and to offer alternatives to more costly services, and
new measures that would permit States to avoid medicaid costs
through improved third-party liability efforts.
In addition, the administration proposes to reform Federal funding for medicaid administrative costs. The current open-ended
State entitlement for Federal funding of administrative expenses
would be replaced by new Federal grants. As part of the administration's spending freeze plan, States would receive about the same
grant in 1986 as they received in 1985. In future years, increases in
payments to States would be limited to the growth in the implicit
5-104
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: HEALTH
(Functional code 550; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
20,674
21,845
24,631
-940
26,789
-2,017
29,285
-3,098
1,506
1,342
1,606
1,845
-56
2,066
-171
3,060
3,228
2,887
194
2,967
202
BUDGET AUTHORITY
Health care services:
Medicaid grants:
Existing law
Proposed legislation
Federal employees' health benefits:
Existing law
Proposed legislation
Other health care services:
....
On-budget under current law
Proposed legislation
Off-budget under current law#
Subtotal, Health care services
Health research:
National Institutes of Health research
Other research programs
Subtotal, Health research
Education and training of health care work force:
Research training
Clinical training
Other
Subtotal, Education and training of health care
workforce
Consumer and occupational health and safety:
Consumer safety:
Existing law
1
8
2,827
188
1
25,241
26,423
28,312
29,643
31,251
4,281
492
4,873
523
4,588
511
4,771
525
4,949
539
4,773
5,396
5,099
5,297
5,488
213
209
38
266
242
43
265
4
21
271
281
22
23
461
550
290
293
304
782
807
374
379
791
-115
-2
367
800
-231
-5
377
810
-345
-9
386
1,156
1,186
1,041
941
842
31,630
33,556
34,741
36,174
37,885
Proposed user fees
Other DroDOsed legislation
Occupational safety and health
Subtotal, Consumer and occupational health and
safety
Total, budget authority
price deflator for the gross national product (GNP deflator). Complicated and burdensome Federal-State matching requirements, detailed cost allocation plans, and Federal expenditure reviews would
be eliminated. States would have increased flexibility to use the
grants in the most efficient manner possible, including transferring
up to 10% of these grants to other State-administered public assistance programs. Similar funding changes are proposed for aid to
families with dependent children and food stamps, both described
in the income security function.
Federal employees health benefits (FEHB).—The budget includes
savings from the administration's proposal to reform the FEHB
program, which is the world's largest multiple-choice health plan.
5-105
HEALTH
NATIONAL NEED: HEALTH—Continued
(Functional code 550; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
20,061
22,985
24,631
-940
26,789
-2,017
29,285
-3,098
1,342
1,143
1,460
1,612
62
1,794
-53
3,134
3,121
2,886
194
11
2,952
202
-12
OUTLAYS
Health care services:
Medicaid grants:
Existing law
ProDosed legislation
Federal employees' health benefits.Existing law
ProDosed legislation
Other health care services:
On-budget under current law
Prooosed legislation
Off-budget under current law#
Subtotal, Health care services
Health research:
National Institutes of Health research
Other research programs
Subtotal, Health research
Education and training of health care work force:
Research training
Clinical training:
Existing law
Proposed legislation
Other
Subtotal, Education and training of health care
work force
Consumer and occupational health and safety:
Consumer safety:
Existing law
Proposed user fees
Other DroDosed legislation
Occupational safety and health
Subtotal, Consumer and occupational health and
safety
Total, outlays
-14
-4
2,874
188
-10
24,522
27,244
28,202
29,516
J1.071
3,963
416
4,437
524
4,681
524
4,416
525
4,581
544
4,379
4,961
5,204
4,942
5,124
195
234
265
251
260
166
202
16
-8
22
22
-8
296
28
41
177
-8
21
388
478
455
281
762
815
367
381
807
115
-2
369
813
231
-5
376
23
815
-345
-9
385
1,129
1,196
1,059
953
845
30.417
33.879
34.920
35,692
37,337
#Proposed to be included on-budget.
Since Federal employees pay a share of the cost of the FEHB
program and have many plan choices available to them, competitive market forces help to restrain FEHB cost increases.
The administration's FEHB reform legislation would build on the
competitive features of the FEHB program:
• The Federal Government's contribution for FEHB would no
longer be based on the average premiums of the six largest
plans in the program, but would be based instead on the GNP
deflator.
5-106
THE BUDGET FOR FISCAL YEAR 1986
• The current 75% limit on the Federal contribution to the
premium of any employee's health benefits would be dropped.
If an employee chose a plan with a premium lower than the
Federal contribution, he or she would be entitled to a rebate
of the difference between the contribution and the premium.
This would increase the incentives for employees to select
low-cost plans.
• A wider range of plans would be allowed to participate, increasing the number of choices available to Federal employees, further sharpening competitive forces.
Other health care services,—Budget authority of $1.6 billion is
requested for health block grants in 1986, $190 million more than
the 1985 level. This increase reflects proposed legislation to expand
the primary care block grant to include narrow categorical programs for black lung clinics, migrant health, and family planning.
The block grants allow States flexibility in coordinating and improving the effectiveness of services for their citizens. States are
able to streamline program administration because unnecessary
Federal regulatory, legal, and reporting requirements previously
imposed on States and grantees no longer apply.
Budget authority of $759 million is requested for the Indian
Health Service (IHS) in 1986. In addition, the IHS will collect an
estimated $52 million in third-party reimbursements for health
services provided to American Indians and Alaskan Natives.
Budget authority for the National Health Service Corps (NHSC)
is requested at a level of $50 million in 1986, a decrease of $25
million from 1985. Increased emphasis will continue to be placed
on encouraging NHSC scholarship recipients to enter into private
practice in areas with a shortage of health professionals.
For 1986, the administration requests $42 million in budget authority for the direct Federal subsidy for the care of District of
Columbia residents at Saint Elizabeths Hospital. This request, a
reduction of $7 million from 1985, represents the fourth year of a
10-year phasedown of the direct Federal subsidy for care of District
of Columbia residents. Legislation that passed late in the 98th
Congress (P.L. 98-621) will transfer Saint Elizabeths Hospital to the
District Government on October 1, 1987, and it affirms the continued phasedown of the direct Federal subsidies. In addition to continuing the phasedown of the direct Federal subsidy, P.L. 98-621
authorizes an additional Federal transition subsidy totalling $135
million over 1986-1991 to assist the District during its assumption
of full responsibility for Saint Elizabeths Hospital. This new subsidy will be requested as part of the 1986-1991 Federal payments to
the District of Columbia Government. The transfer and the phase-
HEALTH
5-107
down of t h e direct Federal subsidy for Saint Elizabeths Hospital
will make Federal policy with regard to the District of Columbia
consistent with the Federal relationship to other States and jurisdictions.
Health research.—In 1986, the Federal Government will provide
an estimated 85% of the Nation's expenditures on basic, healthrelated research, with the bulk of Federal support channeled
through the National Institutes of Health (NIH). Total outlays are
estimated to rise to $5.2 billion, up 4% from the 1985 level of $5.0
billion. To ensure this Nation's continued leadership in basic
health research, it is essential to provide stable support for such
research. At NIH, the 1985 program level of 5,000 fully-funded new
and competing research project grants and 500 research centers is
continued into 1986. As in 1985, the 1986 request would provide
training stipends to over 9,800 research trainees, thus contributing
to the growing supply of health researchers. Complementing the
NIH efforts, the Alcohol, Drug Abuse, and Mental Health Administration would continue to fully fund 500 new and competing project
grants.
Education and training of the health care workforce.—In 1986,
$290 million in budget authority is requested for these programs.
The outlays for research training, discussed in the preceding paragraph, are projected to be $265 million in 1986. Since the supply of
health care professionals is now adequate, direct Federal subsidies
for clinical health professions training are no longer essential.
Between 1965, when Federal subsidies for health professions training began, and 1983, the supply of physicians per capita grew by
49%, and surpluses in the 1990's are projected for most health care
disciplines. For this reason, no new budget authority is requested
for clinical training of health care professionals in 1986. Most of
the current subsidies will be spent by the end of 1986.
In 1986, 12,500 students in health professions programs will be
supported by an estimated $100 million in new loan guarantees
under the health education assistance loan program. An additional
38,900 health professions students will continue to receive assistance through revolving loan funds for health professions and nursing student loans. Direct support will continue for about 10,000
students pursuing careers in health-related research.
Consumer and occupational health and safety.—Budget authority
of $1.0 billion in 1986 is requested for protecting consumers from
unsafe and defective products and for protecting workers from
occupational hazards.
5-108
THE BUDGET FOR FISCAL YEAR 1986
Consumer safety.—Budget authority for consumer safety activities is proposed to be $674 million in 1986. Funding will support
research, consumer education, and the development of both voluntary and regulatory measures to protect consumers from unreasonable risks. Inspections will be continued to assure the safety and
efficacy of drugs, medical devices, and foods. Legislation will be
proposed to provide for more efficient meat and poultry processing
inspection methods and to phase in over 3 years full recovery of
inspection and related costs through fees assessed on the meat and
poultry industry. Charging such fees will not lower inspection
standards or affect consumer safety, but will reduce net Federal
outlays by $115 million in 1986 and $345 million per year by 1988.
Legislation is also being proposed to strengthen Federal enforcement powers under the meat and poultry inspection acts.
Occupational safety and health.—The budget includes $367 million in budget authority to improve occupational safety and health
in 1986. The Occupational Safety and Health Administration
(OSHA) and the Mine Safety and Health Administration (MSHA)
in the Department of Labor issue and enforce standards to eliminate workplace hazards causing injury, illness, or death. During
1985 and 1986, both OSHA and MSHA will continue efforts to
revise or eliminate standards that burden employers without enhancing protection for workers. Resources will be focused on those
activities most likely to ensure safe and healthful working conditions. Cooperative and voluntary efforts of employers and employees to increase workplace safety and health will be encouraged. All
mine inspections required by the Mine Safety and Health Act of
mines operating throughout 1985 and 1986 will be accomplished.
OSHA will conduct the same number of inspections per year in
1985 and 1986 as were conducted in 1984.
Credit programs.—The health function includes the health-related student loan programs described above and assistance to health
maintenance organizations. The proposed total credit budget for
health programs is $117 million in 1986.
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. The estimate for this
provision is $31.6 billion for 1986. Individuals also are permitted to
itemize as deductions certain expenses for health care. In 1986, the
5-109
HEALTH
CREDIT PROGRAMS—HEALTH
(In millions of dollars)
Actual
1984
Direct loans:
Health programs:
New obligations
Change in outstandings
Outstandings
Health programs (loans held by the FFB): ]
Change in outstandings
Outstandings
Total, direct loans:
New obligations
Change in outstandings..
Outstandings
Guaranteed loans:
Health programs-.
New commitments
Change in outstandings
Outstandings
Total credit budget (new obligations and new
commitments)
Estimate
1985
1987
1988
-68
582
14
4
587
17
9
595
19
12
607
22
16
623
-14
248
-4
244
-10
234
-11
223
-12
211
-82
831
14
*
830
17
-1
830
19
1
830
22
4
834
250
169
1,722
250
179
1,901
100
20
1,921
100
15
1,936
100
7
1,943
258
264
117
119
122
*$500
thousand or less.
1
The direct lending activities of these programs are financed by the FFB. Loan assets are issued by the agency. According to law, these
assets are backed by loans that the agency continues to service. The agency guarantees the loan assets, sells them to the FFB, and repurchases
them upon maturity. FFB net outlays for this account represent acquisition of loan assets less repurchases by the agency. Increases in the volume
of sales of loan assets are added to FFB direct loan outstandings, while the agency's direct loan outstandings decrease by the amount of loan
assets sold to the FFB.
estimated tax expenditure for these deductions is $3.9 billion. In
addition, health-related charitable contributions result in a tax
expenditure estimate in 1986 of $2.1 billion, and the exclusion of
interest on State and local hospital bonds results in an estimate of
$1.8 billion. Since 1982, a tax credit of 50% has been allowed for
qualified clinical testing of drugs used to treat certain rare diseases
or conditions. The tax expenditure estimate for this provision is $25
million in 1986. Estimated tax expenditures for existing health
provisions total $39.7 billion in 1986.
Related programs.—The Federal Government supports health-related expenditures that are reported in other functions. Among the
most important are medicare, discussed in the next function, and
medical care for veterans and military personnel, discussed in both
veterans benefits and services and national defense functions.
Agency contributions to Federal employees health benefits were
described under health care services but are included in individual
agency budgets.
5-110
THE BUDGET FOR FISCAL YEAR 1986
SOCIAL SECURITY AND MEDICARE
The Federal Government contributes to the income security and
health of aged and disabled Americans through social security and
medicare. Social security and medicare together represent more
than a quarter of estimated Federal outlays in 1986 and provide
benefits to one in every six Americans. Several proposals to control
medicare costs are being made.
Social security.—The old-age and survivors insurance (OASI) and
disability insurance (DI) programs affect most Americans, either
through benefits received or through payroll taxes deducted from
earnings. In almost all cases, beneficiaries paid into the system
during their working years to help support these programs. Outlays for the combined OASDI programs are estimated to increase
from $191 billion in 1985 to $202 billion in 1986 primarily because
of benefit increases tied to the Consumer Price Index.
The budget incorporates a management initiative to unify administration of social security benefits. The Social Security Administration (SSA) would pay benefits to all new railroad retirees and
to all retirees whose benefits have already been computed by SSA
but are paid through the Railroad Retirement Board (RRB). These
beneficiaries would be serviced at some 1,500 social security district
offices instead of the 100 RRB offices, and would benefit from the
improved service that is already resulting from modernization of
SSA's computer systems. Rail pension benefits would be unaffected
by this change.
The estimates for the DI program reflect enactment of the Disability Benefits Reform Act of 1984, which revised the process for
reviewing continuing eligibility for DI payments. The budget authority interfund transactions of $3.5 billion in 1985 and 1986
facilitate the financing of military service credit.
Medicare.—In 1986, the medicare program will provide health
insurance for 28 million aged persons and 3 million persons who
are disabled or suffer from end-stage renal (i.e., kidney) disease.
Medicare outlays have been growing rapidly in recent years,
having increased at an average annual rate of 13.2% since 1980.
Medicare current services outlays are projected to reach $87.5 billion by 1988. With savings from regulatory changes, outlays are
projected to be $84.2 billion in 1988. With additional savings from
proposed legislation, outlays in 1988 are projected to be $79.2 billion.
5-111
SOCIAL SECURITY AND MEDICARE
NATIONAL NEED: SOCIAL SECURITY AND MEDICARE
(Functional code 570; in millions of dollars)
Major missions and programs
BUDGET AUTHORITY
Social security:
Old-age and survivors insurance (OASI):
Existing law
Proposed legislation
Disability insurance (Dl):
Existing law
Proposed legislation
Interfund transactions
Subtotal, Social security..
Medicare:
Hospital insurance (HI):
Existing law
Proposed legislation
Supplementary medical insurance (SMI):
Existing law
Proposed legislation
Medicare premiums and collections:
Existing law
Proposed legislation
Interfund transactions:
Existing law
Proposed legislation
Subtotal, Medicare..
Total, budget authority
1984
actual
160,750
1985
estimate
175,984
1986
estimate
1988
estimate
189,554 201,979 241,055
273
44
250
20,655
25
27" ""3,500' - 3 , 5 0 0
178,512 199,418 207,007
17,735
1987
estimate
19,934
21,797
2
22,971
25
223,823
264,301
69,679
396
45,545
52,683
62,266
127
69,715
192
22,526
24,387
25,953
-527
29,601 33,632
- 8 3 4 -1,026
-4,942
-5,547
-5,927
-194
-6,855
-712
-7,466
-1,763
92
-52
63,220
71,473
81,698
91,107
93,452
241,732 270,891 288,705 314,930 357,753
OUTLAYS
Social security:
Old-age and survivors insurance (OASI).
Disability insurance (Dl)
Interfund transactions
Subtotal, Social security..
Medicare:
Hospital insurance (HI):
Existing law
Proposed legislation
Supplementary medical insurance (SMI):
Existing law..
Medicare premiums and collections.Existing law
Proposed legislation
Interfund transactions:
Existing law
Proposed legislation
Subtotal, Medicare..
Total, outlays
159,841
18,382
171,158
19,949
181,922
20,323
194,838 208,035
21,097 22,092
178,223
191,107
202,245
215,935
42,108
48,750
20,374
23,063
-10
25,984
-662
-4,942
-5,547
-5,927
-194
-6,855
-712
-7,466
-1,763
57,540
66,256
67,158
72,164
79,238
230,127
49,115 53,009 58,602
-1,158 -1,746 -2,136
29,264 33,046
- 7 9 5 -1,045
235,764 257,363 269,404 288,100 309,365
Medicare consists of two parts: hospital insurance (Part A), financed by social security payroll taxes, helps pay for care in hospitals, skilled nursing facilities, home health agencies and hospices;
and supplementary medical insurance (Part B), the voluntary part
5-112
THE BUDGET FOR FISCAL YEAR 1986
of the program, helps pay for doctor services in and out of the
hospital, hospital outpatient and laboratory services, durable medical equipment, treatment for end-stage renal disease, and medical
supplies. When medicare began in 1966, premiums paid by beneficiaries paid for 50% of the cost of Part B, with the remaining 50%
financed by general revenues. Between 1974 and 1982, however, the
Part B premium was allowed to grow no faster than the social
security cost-of-living adjustment. As a result, premiums financed
less than 25% of program costs in 1982, with the Federal Government financing the remaining program costs.
Hospital insurance.—Hospital inpatient services are projected to
account for four-fifths of the hospital insurance trust fund benefit
payments in 1986. Until 1984, medicare paid for hospital services
on a cost-reimbursement basis, giving hospitals little incentive to
control their costs. Medicare is now paying for hospital inpatient
services on the basis of prospective payment system (PPS) rates for
specific classes of diagnoses, giving hospitals the incentive to cut
unnecessary costs. Based on currently available information about
the types of cases, productivity, and costs per day, the 1985 PPS
rates, set in September 1984, appear excessive. The budget assumes
that the 1986 rates will be maintained at the 1985 level.
The limits on skilled nursing facilities, PPS-exempt hospitals,
and home health agencies would also remain at 1985 levels in 1986.
Reimbursement for direct expenses of medical education would be
frozen.
The administration is proposing legislation to reform medicare's
indirect medical education payment by eliminating the inappropriate doubling of the adjustment factor and to establish a nominal
copayment for home health visits after a beneficiary has 20 visits
in a year. Several other proposals would affect both the hospital
insurance and supplementary medical insurance trust funds: to
begin eligibility in the first full month when a beneficiary is 65; to
give working medicare beneficiaries over age 69 a choice between
medicare and employer-based private insurance as their primary
insurance plan, as is currently done for working beneficiaries who
are 65 through 69; and to establish a voluntary medicare voucher
that beneficiaries could use to purchase private health insurance.
Supplementary medical insurance.—The existing freeze on medicare payments to physicians is proposed to be extended until October 1986. In addition, payments for clinical laboratory tests, durable medical equipment, and other supplies would be frozen. The
budget also proposes to increase the proportion of the estimated
Part B program costs financed by beneficiary premiums from the
level of 25% in 1985 to 35% by 1990. Under this proposal, the
premium for 1986 would be set to cover 27% of program costs and
SOCIAL SECURITY AND MEDICARE
5-113
would be increased two percentage points annually until 1990. A
final legislative change, effective in 1987, would increase annually
the Part B deductible based on price changes; the current annual
deductible of $75 has not been increased since 1982.
Tax expenditures.—The exclusion from income tax of a portion of
social security benefits, including those for dependents and survivors, results in a 1986 estimated tax expenditure of $18.4 billion.
The Social Security Amendments of 1983 require that beginning in
1984 up to one-half of social security benefits be subjected to tax.
This provision affects single taxpayers whose incomes exceed
$25,000, or married taxpayers who file jointly and have incomes
exceeding $32,000. The threshold for married taxpayers filing separately is zero. This limited taxation of social security benefits has
reduced the tax expenditure estimates from levels prevailing under
prior law.
Related programs.—A number of programs related to social security and medicare are discussed in the health and income security
functions; payroll taxes are discussed in Part 4, "Budget Receipts/'
5-114
THE BUDGET FOR FISCAL YEAR 1986
INCOME SECURITY
Federal programs in the income security function help meet the
needs of individuals by insuring against loss of income resulting
from retirement, disability, death, or unemployment of a wage
earner, and by assisting the truly needy who are unable to provide
for themselves. The income security function includes retirement
and disability programs for Federal civilian and military personnel,
railroad employees, and coal miners. Retirement and disability
benefits are financed by a combination of employer and employee
contributions and direct Federal payments. The income security
function also includes unemployment compensation programs and
a wide range of housing, food, and cash assistance programs.
General retirement and disability insurance (excluding social security).—This subfunction includes programs that provide retirement and disability benefits for railroad workers and coal miners.
Railroad retirement.—The Railroad Retirement Board (RRB) will
administer retirement and disability benefits to 958,000 former
railroad employees, their dependents, and survivors in 1986. RRB
payments include benefits equivalent to social security, rail industry pensions, and federally subsidized windfall payments. Benefits
are financed through payroll deductions by railroad employers and
employees, payments from social security trust funds, and direct
subsidies from taxpayers. Estimated 1986 outlays of $4.0 billion
include $392 million for the Federal windfall subsidy component,
which represents a subsidy of over $1,000 per active railroad employee.
The budget proposes legislation to freeze the 1986 cost-of-living
adjustment (COLA) on the rail industry pension in 1986, to apply a
uniform COLA to all rail industry pension payments beginning in
1987, and to apply the rules for taxing social security benefits only
to the portion of railroad benefits that are equivalent to social
security. This legislation would end the inconsistency under current law of treatlhg some rail industry pension payments as if they
were social security payments.
Legislation reforming sickness and unemployment payments for
railroad employees is discussed in the unemployment compensation
section below. In addition, some technical and management
changes proposed under social security are discussed in the social
security and medicare function.
Special benefits for disabled coal miners.—Miners who suffer
from chronic dust disease of the lungs—black lung—and who meet
specified medical criteria are entitled to monthly cash payments
and medical benefits. Cash payments are also made to their de-
INCOME SECURITY
5-115
NATIONAL NEED: PROVIDING INCOME SECURITY
(Functional code 600; in millions of dollars)
Major missions and programs
BUDGET AUTHORITY
General retirement and disability insurance (excluding social security):
Railroad retirement:
Existing law
Proposed legislation
Special benefits for disabled coal miners:
Existing law
Proposed legislation
Other
Subtotal, General retirement and disability insurance (excluding social security)
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
6F436
5,482
5,773
125
5,135
54
4,969
-28
2,085
1,345
58"
1,624
40
68
1,578
10
76
1,599
-62
87
6,886
7,630
6,853
6,565
39,978
41,485
157
43,768
43
46,193
198
27,095
51
29,977
54
33,199
53
36,431
52
207
255
-22
254
-47
289
-48
67,331
71,906
77,270
83,115
24,320
20,987
24,320
20,987
21,195
76
21,271
21,989
107
22,096
21,639
121
21,760
9,467
1,718
10,759
885
499
1,011
1,904
999
5,181
999
1,120
14,949
-350
1,847
-25
1,344
50
280
354
158
26,401
96
3,428
94
4,392
94
6,908
8,570
Federal employee retirement and disability:
Civilian retirement and disability programs.36,727
Existing law
Proposed legislation
Military retirement:*
16,512
Existing law
Proposed legislation
Federal employees workers' compensation (FECA):
Existing law
216
Proposed legislation
Subtotal, Federal employee retirement and disability
53,455
Unemployment compensation:
Existing law
Proposed legislation
Subtotal, Unemployment compensation..
Housing assistance:
Subsidized housing
Public housing operating subsidies.,
Low-rent public housing loans:
On-budget under current law
Proposed legislation
Off-budget under current law#..
Other housing assistance
Subtotal, Housing assistance..
153
213
12,671
pendents and survivors. The basic monthly cash payment is based
on the GS-2 Federal salary level. Although Federal civilian salaries
are proposed to be reduced by 5%, the budget proposes to hold
black lung benefits at their current levels during 1986. Total outlays are estimated to be $1.7 billion in 1986.
Some but not all of the benefits are paid by the black lung
disability trust fund, which is financed by a fee on coal production.
This trust fund is projected to have a deficit of $2.9 billion at the
end of 1985. The budget proposes an increase in the coal fee to
stabilize the deficit at about that level through 1990.
THE BUDGET FOR FISCAL YEAR 1986
5-116
NATIONAL NEED: PROVIDING INCOME SECURITY—Continued
(Functional code 600; in millions of dollars)
Major missions and programs
Food and nutrition assistance:
Food stamps and aid to Puerto Rico-.
Existing law
Proposed legislation
Child nutrition and other programs:
Existing law
Proposed legislation
Subtotal, Food and nutrition assistance..
Other income security:
Supplemental security income
AFDC and child support enforcement:
Existing law
Proposed legislation
Earned income tax credit
Refugee assistance
Low income home energy assistanceExisting law
Financing from petroleum overcharges (proposed)..
Other
Subtotal, Other income securityTotal, budget authority
OUTLAYS
General retirement and disability insurance (excluding social security):
Railroad retirement:
Existing law
Proposed legislation
Special benefits for disabled coal miners:
Existing law
Proposed legislation
Pension Benefit Guaranty Corporation:
Existing law
Proposed legislation
Other
Subtotal, General retirement and disability insurance (excluding social security)
1984
actual
1985
estimate
1986
estimate
1987
12,548
12,568
12,701
-20
13,167
-42
5,687
5,981
18,235
18,549
6,274
-686
18,268
6,669
7,086
- 9 2 5 -1,018
18,869 19,703
8,651
9,210
9,861
10,279
11,542
8,862
8,919
1,193
542
1,054
405
8,926
-180
1,255
317
9,471
-159
1,175
322
9,690
-151
1,112
313
2,075
2,100
265
21,588
203
21,891
2,100
-809
174
21,643
2,188
-857
164
22,583
2,276
-905
166
24,043
138,838
162,045
144,147
152,063
162,093
3,716
3,895
4,057
-34
4,065
-61
4,227
-82
1,692
1,714
1,629
40
1,589
7
1,598
-56
-10
-12
-145
53
9
-184
63
14
-206
72
29
-231
83
5,504
5,580
5,481
5,567
44"
5,441
Federal employee retirement and disability:
Civilian retirement and disability programs:
Existing law
22,069 23,293
Proposed legislation
x
Military retirement:
16,471 15,809
Existing law
Proposed legislation
51
Federal employees workers' compensation (FECA):
219
207
Existing law
Proposed legislation
Federal employees life insurance fund
"1764" -719
Subtotal, Federal employee retirement and dis38,054 38,641
ability
Unemployment compensation:
Existing law..
Subtotal, Unemployment compensation...
estimate
13,700
-65
24,949 26,684 28,509
-741 -1,413 -2,002
18,291
-491
19,439
-713
20,636
-761
255
-22
-724
254
-47
-765
289
-48
41,518
43,440
45,816
16,751
10
16,761
18,421
16,780
16,297
—o
16,600
3
18,421
16,780
16,294
16,603
INCOME SECURITY
5-117
NATIONAL NEED: PROVIDING INCOME SECURITY—Continued
(Functional code 600; in millions of dollars)
Major missions and programs
Housing assistance:
Subsidized housing:
Existing law
Proposed legislation
Public housing operating subsidies..
Low-rent public housing loans:
On-budget under current law
Proposed legislation
Off-budget under current law#..
Other housing assistance
Subtotal, Housing assistance..
Food and nutrition assistance:
Food stamps and aid to Puerto Rico:
Existing law
Proposed legislation
Child nutrition and other programs:
Existing law
Proposed legislation
Subtotal, Food and nutrition assistance..
Other income security:
Supplemental security income
AFDC and child support enforcement:
Existing law
Proposed legislation
Earned income tax credit
Refugee assistance
Low income home energy assistance:
Existing law
Financing from petroleum overcharges (proposed).
Other
Subtotal, Other income security..
Total, outlays
1984
actual
1985
estimate
8,774
9,722 10,539
- 4 5 5 -1,446
1,126
1,255
1,135
1986
estimate
1987
estimate
estimate
10,988 11,505
-1,667 -1,822
1,004
1,003
.15,097
-350
-32
1,988
-25
-35
118
155
1,485
50
-37
136
11,270
25,355
12,304
11,960
418
354
-39
116
11,536
12,375
12,599
12,698
-14
13,158
-41
13,691
-64
5,679
6,066
6,238
-654
6,645
-912
7,062
-1,013
18,055
18,664
18,268
18,850
19,676
8,498
9,511
9,890
10,279
11,542
8,855
8,970
1,193
602
1,054
450
9,007
-180
1,255
362
9,471
-159
1,175
326
9,690
-151
1,112
317
2,026
2,100
254
2,188
-857
166
2,276
-905
167
21,427
212
22,296
2,100
-809
181
21,806
22,589
24,047
112,668
127,240
115,769
118,923
123,403
1,111
112
138
1
Includes the adjustment to show military retired pay for 1984 on a basis comparable to 1985 and subsequent years. See the discussion in
Part 6.
#Proposed to be included on-budget.
Pension Benefit Guaranty Corporation (PBGC).—This Government corporation was established in 1974 to insure pension benefits
promised workers by their private employers. When a defined benefit pension plan is terminated by a sponsoring employer, the
Corporation pays the monthly pensions required by the particular
plan, up to a maximum set by law. The Corporation may also lend
insolvent multi-employer plans the amounts needed to prevent termination, consequently forestalling Government responsibility to
pay benefits if the plan is terminated. PBGC revenues include
premiums charged to all employers with defined benefit plans,
earnings on investments, and collections from sponsors of terminated plans. Because liabilities assumed under terminated plans
exceed income from all sources, the Corporation has a growing
5-118
THE BUDGET FOR FISCAL YEAR 1986
deficit under current law that is expected to reach $853 million by
the end of 1986. The budget reflects the administration's request
that the Congress approve an increase in the single-employer premium to a level sufficient to cover projected claims, and amortize
the current deficit over a reasonable period of time. The administration also supports legislation to revise the insurance program
for single-employer plans in order to close loopholes in the Employee Retirement Income Security Act of 1974 that allow unwarranted
assignment to the Corporation of liabilities for unfunded benefits.
Federal employee retirement and disability.—There are a number
of employee retirement and disability programs in the legislative,
judicial, and executive branches of the Federal Government. The
largest program is civil service retirement and disability. Payments
to retired military personnel are also included here.
Civilian retirement and disability programs.—The civil service
retirement and disability system is the largest retirement program
provided for the Federal Government's 2.7 million employees.
Under existing law, in 1985 an estimated 2.0 million retirees and
survivors will receive payments totaling an estimated $23 billion in
outlays. Benefits are paid to former employees who meet eligibility
requirements based on age and length of service, and to their
survivors. Currently, full retirement benefits can begin at age 55
for employees with 30 years of service. Benefit levels are based on
the employee's three highest salary years and are indexed to the
Consumer Price Index (CPI). Current workers and their employing
agencies each contribute 7% of wages toward retirement costs. The
remainder—about 60% of total costs—is paid by taxpayers through
annual payments to the civil service retirement fund.
The civil service retirement system has historically been separate from the social security system. However, employees hired
after December 31, 1983, and senior policy officials are temporarily
covered under a combination of civil service retirement and social
security. In deciding to extend social security coverage to Federal
employees, Congress intended that a new Federal retirement
system supplementing social security would be in place by January
1986. In order to meet this goal, the administration plans to submit
legislation for a new system containing a defined contribution plan
and costing—including the employer share of the social security
tax—approximately 20% of payroll on an actuarial normal cost
basis.
The administration's priority continues to be to reform the high
costs and generous benefits of the current civil service retirement
system. The two aspects of the current system that diverge most
INCOME SECURITY
5-119
from private sector practice are retirement with full benefits at age
55, and full indexation of retirement benefits to the CPI. Therefore,
the administration proposes to:
• Reduce the annuities of employees retiring early.—The retirement age for full benefits would be raised to 65. Employees
could still retire at 55 with 30 years of service, but the benefits would be reduced by 5% for each year under 65 at the
time of retirement, such that the same lifetime benefit is paid
regardless of the age at which it begins. Employees who are
already 55 would not be affected, and the proposal would be
phased in over 10 years to avoid unduly upsetting the plans of
employees who are already near 55.
• Limit cost-of-living adjustments (COLAs).— Three proposals
would change the way civil service annuities are adjusted to
reflect changes in the cost of living. The scheduled January
1986 COLA would be eliminated. COLAs would resume in
January 1987, but the civil service retirement COLA would be
limited to the lower of the increase in general schedule pay or
the CPI. Furthermore, civil service retirement COLAs would
be limited to 55% of the revised COLA on the amount by
which annuities exceed $10,000 in 1987. The $10,000 level
would be adjusted by the COLA in future years.
In addition, the administration will propose the following reforms:
• change the base on which benefits are computed from the
highest 3 years to the highest 5 years of an employee's pay;
employees not eligible for retirement or within 3 years of
retirement eligibility would not be affected;
• phase out retirement credit for unused sick leave;
• conform civil service survivor, adult student, and minimum
benefits to those provided by social security;
• require the Postal Service and the District of Columbia to
phase in the paying of the full cost of employee pensions less
the employee's contributions; and
• discontinue retirement, life, and health insurance coverage
for employees first hired by the District of Columbia after
September 30, 1985.
In 1986, the package of civil service retirement reforms is estimated to increase receipts by $269 million and reduce outlays by
$731 million. Changes to other civilian retirement and disability
programs are estimated to reduce outlays by $10 million in 1986.
Military retirement.—Benefits are also paid to former military
personnel and their survivors. It is estimated that there will be 1.5
million military retirees and survivors in 1986 receiving a total of
$18.3 billion in outlays under current law. Normal retirement eligi-
5-120
THE BUDGET FOR FISCAL YEAR 1986
bility is attained at 20 years of service. The initial benefit is 2.5%
of final basic pay per year of service. For personnel entering after
September 1980, the average of the member's highest 3 years of
basic pay will be used, as specified by current law, instead of final
basic pay. Benefits are indexed to the CPI. Consistent with legislation for civil service retirement, the scheduled January 1986 COLA
for military retirement would be eliminated. Military personnel
also make contributions to and are eligible for social security.
Federal employees workers' compensation,—The Department of
Labor provides tax-free cash and medical benefits to Federal employees or their survivors for job-related injuries, illnesses, or
deaths. About 46,000 workers with long-term disabilities, or their
survivors, will receive monthly payments in 1985. As a result of
increased efforts to return recipients to work and to remove from
the rolls those no longer eligible, the estimated recipient levels for
1986 are unchanged from 1985. The administration proposes to
freeze the COLA for this program that otherwise would occur in
1986.
Federal employees life insurance fund.—The outlays of this fund
are payments to survivors of Federal employees and former employees. Premium payments to this fund are projected to exceed
outlays by $724 million in 1986.
Unemployment compensation.—About 97% of wage and salaried
employment in the United States is covered by unemployment
compensation programs, which pay benefits to individuals who are
temporarily out of work and are searching for jobs. Based on the
economic assumptions described in Part 3, an estimated average of
2.4 million workers per week will receive unemployment benefits
during 1985 and 2.3 million workers in 1986. Outlays are estimated
to decrease from $16.8 billion in 1985 to $16.3 billion in 1986
because of the decline in the projected average unemployment rate
from 7.0% in fiscal year 1985 to 6.9% in 1986.
Regular benefits, usually paid for up to 26 weeks, are financed by
a State tax on employers, and vary according to benefit levels set
by each State. State and Federal administrative costs are financed
by a Federal tax on employers. Legislation is being developed with
the States and will be proposed to reduce the Federal tax and have
the States finance their own administrative costs starting in 1988.
Extended unemployment benefits, which increase by 50% the
number of weeks an unemployed worker can receive unemployment compensation, are payable in States with high rates of unemployment among covered individuals, as defined by statute. The
total number of weeks of regular and extended benefits may not
INCOME SECURITY
5-121
exceed 39. Extended benefits are financed in equal portion by State
and Federal taxes on employers.
Benefits paid to former Federal civilian and military employees
are financed by the Federal agency that employed them. Additional benefits are available to certain workers in specific circumstances, such as former Conrail employees. Likewise, special trade
adjustment assistance benefits are available through September 30,
1985, for workers deemed unemployed because of increased imports.
In 1985 the Department of Labor, working with the State employment security agencies, is implementing a quality control program. The quality control system will uniformly measure the accuracy of unemployment insurance payments in a systematic and
representative sample of individual claims. It will identify eligibility and benefit errors and determine their causes. Using information from the system, State administrators will be able to identify
sources of payment inaccuracies and allocate resources to correct
them.
Without legislative action, the railroad sickness and unemployment insurance fund will be unable to pay full benefits on a timely
basis during 1986. The budget proposes to ensure comprehensive,
uninterrupted unemployment insurance coverage for rail workers
by extending Federal-State unemployment insurance coverage to
railroad employment beginning with a transitional program. Under
this proposal, all rail workers becoming unemployed after September 30, 1985 would be eligible for the generally higher maximum
weekly benefits available under the Federal-State program. Railroads would reimburse States for the costs of benefits paid during
the transition, allowing States time to gain experience with railroad employment before regular State unemployment insurance
contributions from the railroads begin. This proposal would ensure
full repayment of the rail sickness and unemployment fund's debts
to the rail pension fund.
Housing assistance.—The Federal Government provides housing
subsidies for low-income families and individuals through several
programs administered by the Department of Housing and Urban
Development (HUD) and the Department of Agriculture (USDA).
Eligibility for assistance is limited to households with annual incomes below 80% of median income in each community. In subsidized rental programs, tenants are required to contribute 30% of
their income toward their housing costs. At the end of 1984, 5.8
million households received housing assistance. As a result of 1985
and prior funding and completion of units already under construction, this number will grow to 6.2 million by the end of 1986—4.2
5-122
THE BUDGET FOR FISCAL YEAR 1986
CREDIT PROGRAMS—INCOME SECURITY
(In millions of dollars)
Actual
1984
Direct loans:
Low rent public housing:
New obligations
Change in outstandings
Outstanding
Low rent public housing (loans made by FFB): 1
Change in outstandings
Outstandings
Other income security:
New obligations
Change in outstandings
Outstandings
Total, direct loans.New obligations
Change in outstandings..
Outstandings
Guaranteed loans:
Low rent public housing:
New commitments
Change in outstandings..
Outstandings
Estimate
1986
1987
1,413 14,303
1,013 -1,216
1,216
1,822
1,395
634
112
2,178
-32
2,146
-35
2,112
-37
2,075
-39
2,035
2
_2
21
3
-1
20
2
-2
18
1
-4
15
3
-1
14
1,414 14,306
-1,123 -1,249
3,416 2,166
1,824
-36
2,130
1,396
-41
2,089
637
-40
2,049
13,723
51 -13,311 - 3 2 5
19,985 6,673 6,348
-350
5,998
-375
5,623
1,396
637
Total credit budget (new obligations and new
15,137
commitments)
1985
14,306
1,824
1988
1
These are commitments made by the agency to guarantee loans that the FFB will disburse. In effect, they are commitments for FFB direct
loans, and are counted as such in the budget and the credit budget. Policy responsibility for these loans rests with the guaranteeing agency. The
totals for low rent public housing loans made by the FFB in this table are not identical to the entries in the addendum to the budget authority
and outlays table for off-budget Federal entities due to timing differences between budget authority and new obligations.
million in HUD-assisted units and 2.0 million in USDA-assisted
units—an increase of over 2.4 million units since 1980.
The budget proposes a 2-year moratorium on funding for additional HUD subsidized housing units. Therefore, no budget authority for new units is proposed in 1986 for these programs. Due to
normal turnover in program beneficiaries, however, nearly 1 million families are estimated to begin receiving assistance during the
moratorium period.
In addition, the budget proposes to terminate the separate USDA
Farmers Home Administration (FmHA) housing assistance programs. This includes the FmHA credit activities supporting homeownership and rental housing construction described in the commerce and housing credit function. Consequently, no budget authority is requested for these programs except for small amounts to
fund expiring rental housing assistance contracts and to repair
single-family housing units occupied by low-income FmHA borrowers. At the end of the 2-year moratorium period, HUD will expand
its role in nonmetropolitan areas and assume full responsibility for
INCOME SECURITY
5-123
providing housing assistance in both rural and urban areas. The
allocation of the 100,000 new assisted units would be split evenly
between metropolitan and nonmetropolitan areas, thereby approximating the urban-rural distribution in the total HUD- and FmHAassisted units between 1980 and 1984. This change would consolidate housing assistance into one Federal agency, HUD.
Of HUD's privately-owned assisted units, 1.8 million are administered under the section 8 program. Its subsidies are either earmarked for specific units, or are "portable" and hence can be used
for any private units that satisfy housing quality standards and
rent at or below a specified level.
The new construction or substantial rehabilitation subsidies of
section 8 are earmarked for specific units. Commitments made for
these programs will result in $95 billion in Federal outlays over
the life of the subsidy contracts. Supplementing the required
tenant rent contributions, these subsidies help defray operating
and capital costs of the housing projects. In 1983, Congress repealed
authority to make new section 8 commitments except for units
designed to serve the elderly. At the end of 1984, 700,000 families
benefited from this program.
The section 8 existing program currently provides "portable"
subsidies for 770,000 families in standard quality units that rent at
or below specified levels. In 1983, the administration created the
housing voucher program. Like the section 8 existing program, the
voucher is "portable" and makes up the difference between a specified private market rent level and the required tenant rent contribution. Unlike the section 8 existing program, tenants retain the
savings if they select units that rent below the payments standards, giving them a powerful incentive to shop for high-quality but
low-cost units.
Publicly-owned rental housing is provided by Public and Indian
Housing Authorities (PHAs and IHAs). The Federal Government
uses an operating-cost formula to provide operating subsidies to
PHAs and IHAs to supplement the required tenant rent contributions. The budget includes $1.0 billion in budget authority for
operating subsidies for over 1.3 million public and Indian housing
units. This request reflects a 1-year freeze in personnel and related
expenses, but allows for inflation adjustments for utilities and
other nonpersonnel expenses that are generally beyond the PHAs'
and IHAs' ability to control. In addition, the budget projects savings of $35 million from making units ineligible for subsidies if
they are vacant for extended periods due to uninhabitability or
insufficient demand for those units.
The Federal Government is also obligated to amortize the costs
incurred by PHAs and IHAs to build or acquire housing units and
their subsequent modernization. Since the changes in the tax law
5-124
THE BUDGET FOR FISCAL YEAR 1986
in 1984, questions have been raised about the tax status of PHA
and IHA obligations financing these projects. Consequently, taxexempt financing has been suspended and replaced by direct Federal loans. Estimated outlays of $14.3 billion in direct loans will be
necessary in 1985 and $1.8 billion in 1986 to meet ongoing construction needs and to repay maturing PHA and IHA short-term
tax-exempt obligations. Since direct loans are being provided, no
new loan guarantee commitments will be needed.
In response to this situation, the budget proposes to reform
public and Indian housing capital financing. The proposal would
not affect program levels, but would eliminate an unnecessarily
complex financing procedure. For obligations incurred in 1985 and
prior years, legislation will be proposed to forgive both the direct
loans extended by HUD to the PHAs and IHAs and the Treasury
borrowings used by HUD to extend those loans and to relieve the
Federal Government of its obligations to provide debt service. By
1988, Federal outlays for these capital investment programs would
be less than if the financing reform proposal is not adopted. This
reform would move the repayment of $20 billion of principal up to
the next few years, producing a savings of over $15 billion in debt
service outlays over the next 30 years. In addition, this change
would substantially reduce the administrative burden of PHAs,
IHAs, and HUD by eliminating a cumbersome method of financing
capital construction obligations that ultimately have been incurred
by the Federal Government. That method is inefficient because the
revenue losses are greater than the interest savings from the use of
long-term tax-exempt financing.
In 1986, as part of the moratorium on new commitments, the
budget proposes to limit modernization funding to $175 million for
emergency capital needs, a $586 million reduction from previous
levels. Instead of requesting budget authority to amortize this capital expenditure over 20 years, the budget requests funds for 1
year. As with the financing reform discussed above, this would
result in future outlays savings.
Food and nutrition assistance.—Low- and middle-income families
and individuals receive food and nutrition assistance through a
number of Federal programs.
Food stamps and aid to Puerto Rico.—Food stamps help lower
income Americans maintain a nutritious diet. Eligible households
receive monthly allotments of stamps based on income and household size to finance food purchases. These benefits are entirely
federally funded; administrative costs are shared by the States and
the Federal Government. Beneficiaries receive a COLA each year,
INCOME SECURITY
5-125
with the next adjustment being made in October 1985. Monthly
food stamp participation is estimated at 20 million individuals in
1986, with associated Federal outlays of $11.9 billion under current
law. Outlays for the nutrition assistance block grant for Puerto
Rico are estimated to be $825 million in 1986.
The administration proposes to reform Federal funding for State
and local administrative costs. The current open-ended entitlement
for these costs would be replaced with a new Federal grant. Consistent with the spending freeze plan, the total 1986 administrative
grant would equal the 1985 level of spending—$840 million. In 1987
and future years, increases in payments to States would be set at
the rate of growth in the implicit price deflator for the gross
national product. Complicated and burdensome Federal-State
matching requirements, detailed cost allocation plans, and Federal
expenditure reviews would be eliminated. In addition, States would
have increased flexibility to allocate the grant in the most efficient
manner possible, including transferring up to 10% of these funds to
other State-administered public assistance programs. Similar
changes are proposed for aid to families with dependent children
(AFDC) and medicaid.
As in the case of AFDC, the administration is proposing that all
States adopt a community work experience program, which would
encourage recipients to work in the private sector or perform
useful public services. The net savings in 1986 are estimated to be
$14 million, but the number of recipients would not be significantly
affected.
Child nutrition and other programs.—The child nutrition programs subsidize meals for children in schools, child care facilities,
and other institutional settings. Approximately 14.1 million young
Americans will receive federally subsidized meals in 1986. Subsidies include both cash payments and commodities. Federal outlays
in 1986 are estimated to be $5.6 billion for all programs in this
category.
Legislation is proposed to better target Federal nutrition benefits
to children from lower income families. For students from nonneedy families, meal subsidies would be discontinued in school
lunch and breakfast programs and child care facilities. This proposal would save an estimated $613 million in 1986 outlays. Another
legislative proposal would eliminate the 1986 cost-of-living adjustment to child nutrition meal reimbursement rates, consistent with
the 1-year freeze policy. This measure would reduce 1986 outlays
by an estimated $35 million.
The special supplemental food program for women, infants, and
children (WIC) will provide nutritious food supplements every
5-126
THE BUDGET FOR FISCAL YEAR 1986
month to an estimated 3 million low-income women and their
young children in 1986. It is designed to lessen health problems
associated with inadequate diets during critical stages of child development. The administration is requesting $1,480 million in
budget authority in 1986, which is $56 million above the 1985 level.
Related food assistance programs in other functions.—The Commodity Credit Corporation (CCC) donates surplus food, such as
cheese, butter, and nonfat dry milk, for distribution to food banks,
charitable institutions, and schools. CCC commodities valued at
$1.3 billion are expected to be donated in 1986. In addition, the
Department of Health and Human Services administers a nutrition
program for the elderly with estimated 1986 outlays of approximately $500 million.
Other income security.—A number of other income security programs assist the poor. Estimated outlays for these programs are
$21.8 billion in 1986.
Supplemental security income.—The Federal supplemental security income program will make cash payments to about 4 million
needy aged, blind, or disabled persons in 1986. Benefits will automatically increase in January 1986 by the same percentage as
social security benefits. Federal outlays in 1986 are estimated at
$9.9 billion. Some States also finance supplements to the basic
Federal grant, which may be administered by the Federal Government at no charge to the States.
AFDC and child support enforcement.—Aid to families with dependent children (AFDC) helps State and local governments finance cash assistance to needy families. States administer the
AFDC program, determining guidelines for eligibility and the level
of benefits within broad Federal rules. The Federal Government
reimburses States, on average, for slightly more than half of the
benefit costs. Child support enforcement (CSE) finances most State
and local administrative expenses for establishing paternity and
collecting support from legally liable absent parents. These collections offset State and Federal AFDC costs. Federal outlays for
AFDC and CSE are estimated to be $8.8 billion in 1986, compared
to $9.0 billion in 1985. About 3.7 million families are expected to
receive AFDC benefits in 1986 under current law. Child support
collections on behalf of about 1.5 million of these families are also
anticipated.
Reforms enacted during the past 4 years have helped refocus
AFDC on its original goal: to serve as temporary aid where the
resources for complete self-support do not exist. These reforms
INCOME SECURITY
5-127
created new opportunities for work, corrected inequities that provided higher benefits from receiving Federal and State assistance
than from working, and retargeted assistance to the needy by
taking into account resources and income sources that were previously not counted. The Child Support Enforcement Amendments of
1984 reformed Federal financing rules to reward and encourage
increased CSE collections, improve cost effectiveness, and expand
services for nonwelfare families. These CSE reforms also strengthen family responsibility and improve the financial situation of
women.
The budget continues to propose selected reforms of AFDC. Legislation is proposed to require that employable AFDC applicants and
recipients engage in job search and work activities as a condition of
AFDC eligibility. The unsuccessful work incentive (WIN) program—classified in the education, training, employment, and social
services function—would be replaced by this reform. Other legislative proposals would correct undesirable incentives by prohibiting
unmarried minor mothers from leaving their parents' home to
qualify for AFDC, and by eliminating payments to employable
AFDC parents whose youngest child is age 16 or older.
In addition, the administration proposes to reform Federal funding for State and local AFDC administrative and training costs.
The current open-ended entitlement for these costs would be replaced with a new Federal grant. As part of the administration's
spending freeze plan, the total 1986 grant level would equal the
1985 spending level—$928 million. In 1987 and future years, increases in payments to States would be set at the rate of growth in
the GNP deflator. Complicated and burdensome Federal-State
matching requirements, detailed cost allocation plans, and Federal
expenditure reviews would be eliminated. In addition, States would
have increased flexibility to allocate the grants in the most efficient manner possible, including transferring up to 10% of these
funds to other State-administered public assistance programs. Similar changes are proposed for medicaid and food stamps.
These AFDC reforms would save an estimated $180 million in
Federal outlays in 1986 and a comparable amount in State and
local costs.
Earned income tax credit (EITC).—Wage earners with children
are eligible for tax credits if they earn less than $11,000. When the
credit exceeds a wage earner's income tax liability, the Treasury
Department makes a cash payment. Credits can be received as
additions to paychecks or as a lump sum at the end of the year.
Total 1986 outlays for these payments are estimated to be $1,255
million. When the credit does not exceed the wage earner's tax
5-128
THE BUDGET FOR FISCAL YEAR 1986
liability such that no direct Treasury payment is made, the credit
is considered a tax expenditure rather than an outlay. In 1986,
EITC tax expenditures are estimated to be $395 million.
Refugee assistance.—The Federal Government fully reimburses
States for initial costs associated with refugee and entrant resettlement, including preventive health activities, cash and medical assistance, employment, and English language training. Estimated
1986 outlays are $362 million. Assistance is designed to help refugees become self-sufficient as soon as possible after they arrive in
the United States. Aid to refugees while they are overseas is discussed in the international affairs function.
Beginning in 1986, resettlement organizations would provide
basic needs for refugees for the first 90 days after their arrival in
the United States. This policy would encourage resettlement organizations to help refugees find employment before they become
dependent on Federal and State aid and would focus voluntary
sector efforts on resettlement by shifting resources from such aid to
resettlement organizations.
Low-income home energy assistance.—The Department of Health
and Human Services gives States block grants to help pay the fuel
bills of low-income families. States can make direct cash payments
to eligible families, payments to fuel vendors, or payments to
public housing building operators. The States may also finance
weatherization of homes for some low-income families. For 1986,
the administration proposes to continue the current $2.1 billion
budget authority level. Legislation will be proposed to use recoveries from petroleum price overcharges to partially finance the block
grant. The oil overcharge monies appear in the tables as offsetting
receipts. Department of Energy programs, classified in the energy
function, for low-income home weatherization and energy conservation for schools and hospitals would also be funded through these
recoveries.
Tax expenditures.—The largest tax expenditure item in this function is the net exclusion of pension contributions and earnings,
including contributions to individual retirement accounts (IRAs)
and similar pension plans. The maximum IRA contribution is generally limited to $2,000 annually. However, married taxpayers
whose spouses have no earnings may invest up to $2,250 in a
spousal IRA.
Many tax expenditures related to income security programs
result from Government benefits not being included in the taxable
income of recipients. For example, workers' compensation benefits,
unemployment compensation received by lower income taxpayers,
5-129
INCOME SECURITY
and other income security assistance for the needy are excluded
from taxable income. In contrast, Federal employee retirement
benefits are subject to tax. Therefore, the receipt of such benefits
does not result in a tax expenditure.
TAX EXPENDITURES FOR INCOME SECURITY
(Outlay equivalents; in millions of dollars)
Estimates
Description
1984
Net exclusion of pension contributions and earnings:
Employer plans
Individual Retirement Accounts (IRAs)
Keogh plans
Exclusion of other employee benefits:
Premiums on group term life insurance
Premiums on accident and disability insurance
Income of trust to finance supplementary unemployment benefits.,
Additional exemption for elderly
Additional exemption for the blind
Tax credit for the elderly and disabled
Exclusion of disability pay
Exclusion of military disability pensions
Exclusion of railroad retirement system benefits
Exclusion of special benefits for disabled coal miners
Exclusion of workmen's compensation benefits
Exclusion of untaxed unemployment insurance benefits
Deducibility of casualty losses
Exclusion of public assistance benefits
Earned income credit *
Total (after interactions) income security'
1985
1986
64,655 72,010 80,655
15,920 17,620 19,570
2,525 2,710 2,925
2,575 2,770 2,900
175
170
175
20
20
20
2,530 2,685 2,955
40
45
50
195
225
225
35
120
120
125
525
450
455
155
150
150
2,270 2,435 2,615
1,845 1,405 1,205
530
615
700
515
520
530
370
355
395
91,925 103,045 114,345
1 The figures in the table indicate the tax subsidies provided by the earned income tax credit. The effect on outlays is: 1984 $1,193 million,
1985
$1,054 million, 1986 $1,255 million.
2
The estimate of total tax expenditures for this function reflects interactive effects among the individual items. Therefore the estimates cannot
simply be added.
5-130
THE BUDGET FOR FISCAL YEAR 1986
VETERANS BENEFITS AND SERVICES
Federal benefits and services for veterans and their survivors
recognize the sacrifices that veterans made in military service.
Benefits compensate for presumed loss of earnings resulting from
service-related disabilities, provide medical care for physical and
psychological disabilities, and assist returning veterans to prepare
themselves for civilian life. In addition, veterans benefits assist
needy veterans of wartime service and their survivors. Outlays for
veterans benefits and services are estimated at $26.8 billion in both
1985 and 1986.
The budget proposes two major reforms that would improve service delivery primarily to veterans injured during military service
and low-income veterans. First, the budget proposes to maintain
full services to veterans at all 59 regional offices while consolidating certain functions in the Veterans Administration's (VA's) Department of Veterans Benefits to achieve management efficiencies.
Second, a comprehensive reform to medical care eligibility would
allow scarce budgetary resources to be used to sustain quality care,
while maintaining medical care at no charge to the most deserving
veterans.
Income security for veterans.—In addition to Federal income security programs for the general population, such as social security
and unemployment insurance, several VA programs help certain
veterans and their survivors maintain their income when the veteran is disabled, aged, or deceased. Outlays for this purpose are
estimated to increase from $14.8 billion in 1985 to $15.1 billion in
1986.
Service-connected compensation.—Veterans with disabilities resulting from military service receive monthly compensation payments scaled to the degree of disability. The payment is made
regardless of the veteran's income or age. The amount depends on
the average reduction in earnings capacity that is presumed for
different individuals with the same degree of disability. Survivors
of veterans who die from service-connected injuries also receive
payments in the form of death and indemnity compensation. In
1985, benefits were increased by 3.2%. The administration is proposing legislation for an additional 4.1% cost-of-living increase in
compensation benefits, the same as the increase proposed for social
VETERANS BENEFITS AND SERVICES
5-131
security, effective with the January 1986 payments. Allowances
provided to compensate beneficiaries for dependents and clothing
would also be adjusted for increases in the cost of living.
The number of veterans and survivors of deceased veterans receiving compensation benefits is expected to decline from 2.6 million in 1984 to 2.5 million by 1988. However, because of the proposed cost-of-living adjustment, outlays for compensation benefits
are estimated to increase from $10.2 billion in 1985 to $10.5 billion
in 1986.
Non-service-connected pensions.—Pensions are provided to lowincome wartime-service veterans—combat and non-combat veterans
alike—who are 65 or older, or who have become permanently and
totally disabled subsequent to their military service. Survivors of
wartime-service veterans also may qualify for pension benefits
based on financial need. A 3.5% cost-of-living increase became
effective with the January 1985 payments. The next cost-of-living
increase, effective with the January 1986 payments, is estimated to
be 4.1%.
Although the number of veterans age 65 and over is expected to
double during the 1980's, the number of pension recipients is expected to decline from 1.5 million in 1985 to 1.4 million in 1986,
because veterans over age 65 increasingly have higher incomes.
Outlays for veterans pensions are estimated at $3.8 billion in both
1985 and 1986.
Burial and other benefits.—Families of deceased veterans who
received pension or compensation benefits and who are to be
buried in private cemeteries may receive allowances to apply
toward the purchase of burial plots. Families of these veterans also
receive burial benefits to assist in defraying funeral expenses. Outlays for burial and related benefits are estimated to increase from
$134 million in 1985 to $137 million in 1986.
Insurance programs.—The budget assumes that life insurance
programs for veterans and survivors of deceased veterans will continue to provide in excess of $150 billion of coverage to nearly 8
million veterans and active duty personnel in 1986. Direct loan
obligations against life insurance policies are expected to increase
from $150 million in 1985 to $156 million in 1986.
Veterans education, training, and rehabilitation.—In addition to
Federal programs that support education finance and job training
for the general population, and several programs run by the Department of Labor exclusively for veterans, two programs—the GI
bill and the post-Vietnam era education program—provide educa-
5-132
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: PROVIDING VETERANS BENEFITS AND SERVICES
(Functional code 700; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
10,004
10,222
3,916
128
1,249
23
7
-443
'3,811
134
1,249
21
11
-395
10,186
343
3,838
137
1,297
19
10
-415
10,066
783
3,836
139
1,319
17
11
-421
9,945
1,234
3,861
142
1,310
15
12
-409
14,884
15,054
15,414
15,751
16,110
1,443
9
1,182
1,026
868
757
225
242
217
1,251
1,110
974
405
-405
308
-308
369
-369
BUDGET AUTHORITY
Income security for veterans:
Service-connected compensation:
Existing law
Proposed legislation
Non-service-connected Densions
Burial and other benefits
National service life insurance trust fund
U.S. Government life insurance trust fund
All other insurance Drocrams
Insurance program receipts
Subtotal, Income security for veterans
Veterans education, training, and rehabilitation:
Gl bill
Post-Vietnam era education1
All-volunteer force educational assistance. .
. .
Veterans jobs program
Subtotal, Veterans education, training, and rehabilitation
Veterans housing:
Loan guaranty revolving fund:
Existing law
Proposed legislation
Housing Dropram receipts
Subtotal, Veterans housing
Other veterans benefits and services:
Cemeteries, administration of veterans benefits and
other
Non-VA support programs
Subtotal, Other veterans benefits and services
Hospital and medical care for veterans:
Medical care and hospital services
Construction
.
Medical administration, research, and other
Third party reimbursement (proposed)
Subtotal, Hospital and medical care for veterans...
Total, budget authority
130
1,582
50
1,232
260
307
-59
201
307
732
50
773
57
767
58
734
65
720
63
782
830
825
799
782
8,244
549
285
8,854
803
261
9,090
634
243
-65
9,326
779
247
-250
9,676
848
250
-265
9,078
9,918
9,902
10,102
10,508
26,528
27,340
27,393
27,763
28,374
tion, training, and rehabilitation benefits to veterans and military
personnel who meet specific eligibility criteria. A new test program, the all-volunteer force educational assistance program, will
provide education and training after military discharge to new
recruits who enroll after July 1985. Outlays for these programs are
estimated to decline from $1.3 billion in 1985 to $1.1 billion in 1986
and to $0.8 billion by 1988 because of a continued decline in the
number of eligible beneficiaries.
VETERANS BENEFITS AND SERVICES
5-133
NATIONAL NEED: PROVIDING VETERANS BENEFITS AND SERVICES—Continued
(Functional code 700; in millions of dollars)
Major missions and programs
OUTLAYS
Income security for veterans:
Service-connected compensation:
Existing law
Proposed legislation
Non-service-connected pensions
Burial and other benefits
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:
G.I. bill
Post-Vietnam era education 1
All-volunteer force educational assistance
Veterans jobs program
Other:
Existing law
Proposed legislation
Subtotal, Veterans education, training, and rehabilitation
Veterans housing:
Loan guaranty revolving fund:
Existing law
Proposed legislation
Direct loan revolving fund
Other (HUD participation sales trust fund)..
Housing program receipts
Subtotal, Veterans housing
Other veterans benefits and services:
Cemeteries, administration of veterans benefits and
other
Non-VA support programs
Subtotal, Other veterans benefits and services
Hospital and medical care for veterans:
Medical care and hospital services
Construction
Medical administration, research, and other..
Third party reimbursement(proposed)
Subtotal, Hospital and medical care for veterans...
Total, outlays
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
9,961
10,213
3,874
128
922
52
-94
-443
3,847
134
982
49
-75
-395
10,194
286
3,833
137
. 1,043
46
13
-415
10,060
722
3,835
139
1,089
42
-20
-421
14,400
14,754
15,135
15,446
9,939
1,171
3,860
142
1,110
38
-25
-409
15,826
1,408
-60
1,246
-33
874
37
30
761
19
68
17
88
-7
-7
1,034
40
8
35
1,359
1,295
1,110
933
841
370
425
-45
22
-59
244
-49
19
384
-605
-46
-21
288
-606
-42
-24
352
-749
-39
154
-288
-384
-283
707
44
751
766
58
823
765
52
817
732
63
795
718
69
786
8,124
481
257
8,742
583
296
8,861
9,621
9,052
762
245
-65
9,994
9,293
822
249
-250
10,114
9,628
880
250
-265
10,493
25,614
26,850
26,769
26,904
27,664
358
_7
_*
*$500 thousand or less.
1
Net of balances transferred for the Reinstated Entitlement Program for Survivors.
GI bill.—The GI bill provides education benefits ranging from
college courses to vocational and on-the-job training to veterans
and active duty military personnel who served, at least in part,
between February 1, 1955 and December 31, 1976. This program
5-134
THE BUDGET FOR FISCAL YEAR 1986
assists beneficiaries in making the transition from military to civilian life by helping them finance the education they might otherwise have received during the time they were in military service.
These benefits are also available to active duty personnel and
spouses and children of veterans who have died or have been
totally disabled in military service.
More than 80% of all eligible Vietnam era veterans who live in
the United States or Puerto Rico have used GI bill benefits. In
1986, nearly 450,000 GI bill trainees are expected to participate in
the program, compared with 490,000 in 1985. The number of GI bill
trainees, including dependents, will continue to fall in the future as
the number of eligible veterans and military personnel becomes
smaller. A 10% increase in educational assistance and vocational
rehabilitation benefits for Vietnam era veterans became effective
October 1, 1984, to help offset increases in education costs.
Currently, persons training under the GI bill are eligible to
borrow against their expiring entitlements. Because this program
is rarely used and the default rate now exceeds 70%, legislation is
being requested to repeal VA's authority to make such loans.
Post-Vietnam era education,—Individuals who entered military
service after 1976 are eligible for the post-Vietnam era education
program, which allows them to set aside $25 to $100 from their
monthly pay to finance future education. These amounts are
matched by the Government on a two-for-one basis and are returned to the beneficiary as education payments after discharge
from the military. The VA administers this program, but it is
funded by the Department of Defense (DOD). Enrollment in this
program will be closed in July 1985 for three years while the allvolunteer force educational assistance test program is in effect.
All-volunteer force educational assistance.—As a recruiting incentive, the Department of Defense Authorization Act of 1984
(P.L. 98-525) established a test education program with a larger
Federal contribution for individuals who enter the military between July 1985 and July 1988. An individual who enrolls upon
entering the military will have $100 deducted from his or her
monthly pay for 12 months. Upon completion of 3 years of
service, the individual is entitled to a basic monthly educational
assistance rate of $300 per month for up to 3 years, to be paid
by funds appropriated to the VA. DOD may fund—and VA administer—additional educational assistance to retain military personnel or to help recruit individuals with critical skills or specialties.
VETERANS BENEFITS AND SERVICES
5-135
Veterans housing.—In addition to assistance available to veterans
through the FHA mortgage insurance program, VA mortgage loan
guarantee and direct loan programs are expected to assist 225,000
veterans in obtaining mortgages in 1986. Guaranteed loan commitments and direct loan obligations for mortgage loans in 1986 are
estimated at $15.4 billion and $0.6 billion, respectively. The administration is proposing to charge origination fees for participation in
Federal credit programs. These fees should be large enough to
cover servicing costs and provide reserves against future default
losses. In line with this initiative, legislation is being proposed to
increase the fee charged on VA guaranteed housing loans and
vendee loans (which are direct loans made to veterans and nonveterans who purchase property from the VA portfolio) from the
current 1% to 5% of the mortgage amount, and to allow the
purchaser to add this amount to the mortgage. Veterans with
service-connected disabilities would continue to be exempt from the
fee. This change would be effective in October 1985. For vendee
loans, legislation will also be proposed to require a 1% fee, a 5%
downpayment, and private mortgage insurance as an alternative.
Additional legislation will be proposed to permit negotiated interest rates on VA guaranteed mortgages.
Other veterans benefits and services.—Veterans benefits are provided through a network of 59 regional offices located throughout
the Nation. The budget proposes that all 59 regional offices remain
open for business, and that all functions that require face-to-face
contact with veterans remain in place. In order to take advantage of improvements in communication and modern management
techniques, those functions that are performed without need for
direct contact with veterans are proposed to be consolidated and
centralized at three sites over 1986-88. These functions (e.g., adjudication of claims, and processing of applications for guarantees of
home mortgages under the G.I bill) could be more efficiently performed at central locations, where economies of scale could be
realized. Through attrition, employment would be reduced accordingly.
Several other initiatives are included in the budget to improve
the management of veterans benefits, including better use of contractor support for services that business can provide most efficiently, and achieving a return on the Federal Government's investment in automated data processing equipment in the form of
fewer administrative staff whose functions the equipment supplants.
5-136
THE BUDGET FOR FISCAL YEAR 1986
Management of the national cemetery system, for burial of eligible veterans, active duty military personnel, and their survivors, is
also included in this subfunction. Over 100 national cemeteries are
open throughout the Nation. Initial construction of a new national
cemetery in Florida is planned to begin in 1986. In addition, funding is being requested to acquire land in northern California for
another new national cemetery.
Outlays for other veterans benefits and services are estimated to
be $0.8 billion in both 1985 and 1986.
Hospital and medical care for veterans,—The VA provides medi-
cal services, including hospital, outpatient and nursing home care,
to veterans by operating a nationwide medical care system. It is
expected to handle nearly 19 million outpatient visits and treat 1.4
million patients in VA and community facilities. This program is
carried out in 172 hospitals, 229 outpatient clinics, 117 nursing
homes and 16 domiciliary facilities. In addition, the VA may contract for the care of veterans with service-connected disabilities
with another Federal facility or the private sector. Outlays for
medical programs are estimated to be $9.6 billion in 1985 and $10.0
billion in 1986.
Outyear projections reflect the best current estimate of budget
resources required for future system capacity. Because the eligibility reform discussed below could alter the ways in which veterans
use the system, the allocation of budget resources to and within the
medical system could change in future years.
Medical care and hospital services.—VA's primary health care
mission is to treat veterans who were injured during military
service for their service-connected disabilities. Currently, most of
the system's users are either veterans with service-connected disabilities or low-to-moderate-income veterans. However, many users
with no service-related disabilities have a higher income level and
should be able to defray some or all of the costs of their medical
care. This is especially true for younger veterans who are active in
the workforce and participate in private health insurance plans,
and for veterans over 65, most of whom are eligible for medicare.
Therefore, the budget proposes a comprehensive reform of eligibility for VA medical care that would allow VA to sustain quality
care for the most deserving veterans—primarily those with disabilities and those without resources to defray all or part of their
health care expenses.
Under the proposed reform, the VA would continue to fulfill its
primary mission of caring for service-connected disabilities and
VETERANS BENEFITS AND SERVICES
5-137
would provide medical care on a space-available basis without
charge to the following veterans:
• veterans with a VA compensation rating for treatment of
nonservice-related disabilities;
• veterans who were prisoners of war;
• Vietnam war veterans exposed to certain herbicides (Agent
Orange veterans);
• veterans exposed to ionizing radiation during service (Atomic
testing veterans);
• VA pensioners;
• World War I, Spanish American War, and Mexican border
period veterans; and
• veterans with incomes below an eligibility level set at twice
the VA pension income standard, regardless of age. This level
would be over $15,000 in 1986 for a veteran with one dependent.
The reform would restrict the use of the system by all veterans—
both under and over 65—whose income exceeds the eligibility level:
• In most cases, a higher income veteran would not be eligible
for VA health care until his or her out-of-pocket medical
expenses exceeded certain amounts.
• These out-of-pocket expenses, called the ' 'expected medical
expense contribution/' would be an increasing share of the
amount that the veteran's income exceeds the eligibility level.
This share would increase with income, from 25% to 90%,
requiring higher income veterans to finance a larger amount
of their medical expenses before entering the VA system.
• In emergency and extraordinary circumstances, these veterans could receive care in the VA system by making their outof-pocket contributions to the VA for the care that they receive.
• In exceptional and unusual circumstances, the Administrator
could waive the veteran's expected medical expense contribution.
Legislation will be proposed to require reimbursement from veteran-held private insurance plans for VA-sponsored care provided
to non-service-connected veterans. Health insurance premiums are
currently established to cover the insured individual, regardless of
veteran status and regardless of any individual veteran's choice of
health care provider. Allowing the government to recover costs
would shift the burden of paying for VA care of non-service-connected veterans from taxpayers to insurance companies and their
policy holders with only minimal effects on premiums.
5-138
THE BUDGET FOR FISCAL YEAR 1986
In the near term, as the reform takes effect and the veteran
population ages, the demand for nursing home beds is likely to
rise. As a cost-effective way to meet the needs of the veterans who
use the VA system in all parts of the Nation, many unused hospital beds would be converted to nursing home beds, and other
physical changes would be made to enhance the capability of existing VA facilities to provide long term care and nursing home care.
Funds from the medical care and minor construction appropriations would be used for this purpose, and would exceed $10 million
in 1986.
As a result of improvements in productivity, 1% fewer staff will
be required to treat the same number of patients. In order to
ensure that the operations of both existing and newly built facilities are adequately funded, outlays for medical care and hospital
services are estimated to be $9.1 billion in 1986, an increase from
the $8.7 billion estimated for 1985.
Construction of hospital and extended care facilities,—New
budget authority of $612 million is requested for VA medical construction in 1986, $157 million less than the enacted amount for
1985. An additional $160 million is available from prior year appropriations thus bringing the total construction program level to $772
million.
The budget proposes to maintain and upgrade the full network of
medical facilities throughout the Nation. Rather than defer maintenance, renovation, and modification of older facilities, the budget
continues funding to maintain and upgrade the physical system.
Budget authority of $304 million is requested to support 28 major
projects and other maintenance, safety correction, and design activities.
The budget proposes to continue the average rate of construction
over the last 10 years, replacing or modernizing two large hospitals
each year. In 1986 and 1987, construction funds are proposed for
four large hospital projects in Mountain Home, Tennessee; Houston, Texas; Philadelphia, Pennsylvania; and Augusta, Georgia. The
budget proposes $261 million for construction in 1986, to fund the
Mountain Home project and begin construction in Houston and
Philadelphia. In addition, two new nursing homes will be constructed in Amarillo, Texas and Tucson, Arizona.
Because the effects of the medical care eligibility reform in
different parts of the Nation cannot be known, expansionary investments are not proposed in this year's budget. Budget resources
VETERANS BENEFITS AND SERVICES
5-139
would be provided to expand facilities in later years in areas where
their future use by service-connected veterans exceeds current capacity.
Budget authority of $22 million is requested for 1986, $12 million
less than enacted for 1985, for grants to States for the construction
or repair of State homes for the care of aging veterans.
CREDIT PROGRAMS—VETERANS BENEFITS AND SERVICES
(In millions of dollars)
Direct loans:
Income security programs:
New obligations
Change in outstandings
Outstandings
Education programs.New obligations
Change in outstandings
Outstandings
Mortgage insurance and other housing programs:
New obligations
Change in outstandings
Outstandings
.
Total, direct loans:
New obligations
Change in outstandings..
Outstandings
Guaranteed loans:
Mortgage insurance and other housing programs:
New commitments
Change in outstandings
Outstandings
Total credit budget (new obligations and new
commitments)
Estimate
Actual
1984
1985
1986
1987
1988
131
-43
1,306
150
-27
1,279
156
-27
1,252
162
-14
1,238
168
-9
1,229
1
-5
57
1
-5
52
1
-6
46
1
-6
40
1
-6
35
945
-464
1,234
858
-75
1,159
643
-111
1,048
572
-47
1,001
519
-55
946
1,077
-511
2,597
1,009
-107
2,490
800
-144
2,346
736
-67
2,280
-70
2,210
16,465 15,174 15,429 15,373 15,360
5,449 9,550 9,403 9,167 8,959
125,390 134,940 144,343 153,510 162,469
17,542
16,183
16,229
16,109
16,048
Tax expenditures.—In addition to direct Federal funding, a
number of tax expenditures provide assistance to veterans. All
benefits administered by the Veterans Administration (disability
compensation, pension, and GI bill benefits) are excluded from
5-140
THE BUDGET FOR FISCAL YEAR 1986
taxable income. The estimates for these exclusions in 1986 are $1.7
billion, $190 million, and $110 million, respectively. Veterans are
aided in obtaining housing because interest on State and local debt
for veterans is not subject to tax. In 1986, the estimate for this
provision is $270 million. Total tax expenditures for veterans are
estimated to be $2.3 billion for 1986.
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, as well as
preference for Federal jobs. Some of these programs have components specifically intended to assist veterans.
ADMINISTRATION OF JUSTICE
5-141
ADMINISTRATION OF JUSTICE
One of the fundamental responsibilities of the Federal Government is to provide for the safety of its people and for the peaceful
and fair resolution of disputes. The purposes of Federal expenditures for the administration of justice are to protect persons and
property through enforcement of Federal laws, to provide Federal
courts to resolve disputes, to defend the public interest in criminal
and civil proceedings, and to operate detention and correctional
facilities for those charged with or convicted of violating Federal
law. The proposed budget authority for 1986 for this function is
$6.5 billion, approximately the same as the 1985 level.
A major focus of activity in 1985 and 1986 will be the implementation of the Comprehensive Crime Control Act, which became law
in October 1984. This Act makes important changes in Federal
criminal and civil law in the following areas:
• Bail reform.—The Act imposes tighter restrictions, such as
the requirement to consider the safety of people in the community before granting bail.
• Sentencing reform.—The entire Federal sentencing system
has been revised and parole provisions are being replaced
with sentencing guidelines.
• Drug enforcement amendments.—The Act gives the Federal
Government a greater ability to prevent the diversion of legitimate drugs to illicit uses.
• Forfeiture reform.—Criminal and civil forfeiture laws related
to organized crime and drug felony cases have been strengthened and clarified.
Federal law enforcement activities.—As in past years, over half of
the total Federal resources for the administration of justice are
dedicated to law enforcement activities. Proposed budget authority
of $3.7 billion in both 1985 and 1986 will maintain current activities in priority areas and provide additional resources to achieve
the reforms listed above.
Criminal investigations.—Criminal investigations are mainly carried out in the Justice Department by the Drug Enforcement Administration (DEA) and the Federal Bureau of Investigation (FBI).
They frequently work together with other Federal agencies in 13
regional organized crime drug enforcement (OCDE) task forces and
have concurrent jurisdiction to combat drug trafficking.
In addition, the FBI enforces a broad range of criminal statutes,
works with other Federal agencies, as well as State and local
authorities when appropriate, and assists States and localities
through training, dissemination of information, and other activities. Additional resources are being requested in 1986 to increase
5-142
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: ADMINISTRATION OF JUSTICE
(Functional code 750; in millions of dollars)
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
1,445
160
1,166
302
1,509
172
1,287
302
1,531
170
1,277
295
1,579
174
1,289
300
1,593
177
1,301
317
361
386
369
10
371
10
374
10
3,433
3,656
3,652
3,724
3,771
723
907
275
832
1,061
305
881
1,163
893
1,215
911
1,270
1,905
2,198
2,044
2,108
2,181
Federal correctional activities
495
599
593
665
590
Criminal justice assistance
215
227
252
258
262
6,047
6,681
6,542
6,755
6,805
1,301
158
1,127
267
1,543
167
1,282
295
1,514
166
1,268
288
1,530
171
1,265
294
1,539
173
1,275
311
352
394
368
6
372
10
374
10
Subtotal, Federal law enforcement activities
3,205
3,681
3,610
3,643
3,682
Federal litigative and judicial activities:
Civil and criminal prosecution and representation
Federal judicial activities
Representation of indigents in civil cases
676
878
271
847
1,043
302
879
1,150
37
880
1,173
890
1,224
1,825
2,192
2,066
2,053
2,114
494
580
632
633
604
136
233
280
6,686
6,587
Major missions and programs
BUDGET AUTHORITY
Federal law enforcement activities:
Criminal investigations (DEA, FBI and OCDE)
Alcohol, tobaccco, and firearms investigation (ATF)
Border enforcement activities (Customs and INS)
Protection activities (Secret Service)
Other enforcement:
Existing law
Proposed legislation
Subtotal, Federal law enforcement activities
Federal litigative and judicial activities:
Civil and criminal prosecution and representation
Federal judicial activities
Representation of indigents in civil cases
Subtotal, Federal litigative and judicial activities....
Total, budget authority
OUTLAYS
Federal law enforcement activities:
Criminal investigations (DEA, FBI and OCDE)
Alcohol, tobaccco, and firearms investigation (ATF)
Border enforcement activities (Customs and INS)
Protection activities (Secret Service)
Other enforcement:
Existing law
Proposed legislation
Subtotal, Federal litigative and judicial activities....
Federal correctional activities
Criminal justice assistance
Total, outlays
5,660
271
6,600
262
6,662
the FBI's foreign counter-intelligence activities, and to fund DEA
and FBI activities related to the Comprehensive Crime Control Act.
Budget authority requested for criminal investigations for 1986 is
$1,531 million, an increase of $22 million over the 1985 level.
Border enforcement activities.—The Immigration and Naturalization Service (INS) administers laws related to the admission, exclusion, deportation and naturalization of aliens. For 1986, the admin-
ADMINISTRATION OF JUSTICE
5-143
istration proposes a continuation of immigration activities at essentially the 1985 level.
The United States Customs Service administers laws regarding
assessment and collection of customs duties, excise taxes, fees and
penalties on imported merchandise; stopping and seizing contraband; and processing persons, carriers, cargo and mail into and out
of the United States. The budget proposal for Customs will increase
enforcement in the priority area of drug trafficking.
Budget authority for border enforcement activities is proposed to
be $1.3 billion in both 1985 and 1986.
Federal litigative and judicial activities.—The Department of Justice litigates all of the Federal Government's criminal cases and
most of its civil cases.
Civil and criminal prosecution and representation.—The passage
of the Comprehensive Crime Control Act will have a major impact
on the Department of Justice's criminal litigative activities. For
example, debt collection procedures will be strengthened, and fines
imposed will be raised. Changes in bail procedures will make it
more difficult for a defendant who is likely to be a threat to the
community to be released on bail. Furthermore, clarification of
forfeiture provisions will affect criminal litigation, and the provisions that establish Federal jursidiction over certain criminal offenses have the potential to increase significantly the workload of
Federal prosecuting attorneys. In addition, beginning in 1985, resources have been proposed for the U.S. Attorneys and Marshals to
support 85 new judgeships created by the Congress.
Federal judicial activities.—By law, budget requests from the
judiciary are included in the budget without modification by the
executive branch. The U.S. Courts have proposed budget authority
of $1,163 million in 1986 for judicial branch activities in this function, a $102 million increase over the 1985 level.
Representation of indigents in civil cases.—The Legal Services
Corporation is a private non-profit organization that funds State
and local agencies providing free civil legal assistance to the poor.
Grantees are currently involved in cases both for individual clients
and in broader "law reform" activities.
The administration again proposes that the Corporation not be
reauthorized, and that no further separate Federal funding be
provided. The social services block grant, which is discussed in the
education, training, employment, and social services function, includes adequate authority to fund legal services activities through
State and local governments. In addition, State and local bar associations have developed programs to provide free assistance to
indigent clients, and we expect these efforts to continue to grow,
5-144
THE BUDGET FOR FISCAL YEAR 1986
consistent with private attorneys' ethical obligations to provide
such free services.
Federal correctional activities.—The Federal Government is responsible for the care and custody of prisoners charged with or
convicted of violating Federal laws. In response to the continuing
growth of the Federal prisoner population, 10 additions to existing
facilities will be opened in 1986. Furthermore, additional renovation and expansion projects proposed in this budget will provide
future increases in prison capacity. A new 1,000 bed detention
center for illegal aliens, a joint venture by the Bureau of Prisons
and the Immigration and Naturalization Services, is scheduled to
open in 1986 in Oakdale, Louisiana. Construction funds for a new
prison in the southeast have been deferred. Budget authority
requested for correctional activities in 1986 is $593 million, about the
same as the 1985 level.
Criminal justice assistance.—Criminal justice assistance is provided through several programs. The State and local assistance
program provides training, and technical and financial assistance
to State and local criminal justice agencies through both formula
and discretionary grants. These grants support innovative projects
or programs of proven effectiveness.
In 1985, in accordance with the Comprehensive Crime Control
Act, the administration will begin a new crime victims initiative,
providing resources to State victim assistance and compensation
programs. Funds for this Federal assistance, up to $100 million
annually, will be derived from Federal criminal fines and penalties.
Although the Congress has continued to fund the juvenile justice
and delinquency prevention programs, the administration is again
requesting that no new budget authority be provided for these
programs because their primary objective—the separation of juvenile from adult offenders—has largely been accomplished. Resources to deal with serious juvenile offenders continue to be available through the State and local assistance program. In addition,
the administration proposes continuing the missing children program at the 1985 funding level of $4 million.
Budget authority of $252 million is proposed for criminal justice
assistance for 1986, an increase of $25 million over 1985.
Related programs.—A number of programs 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.
GENERAL GOVERNMENT
5-145
GENERAL GOVERNMENT
The general government function covers the overall management, policy, and central operations of the Federal Government,
including the legislative branch. This function focuses primarily on
Federal finances, tax collection, personnel management, and property control. A goal of this administration is to provide these basic
services in a business-like and efficient manner.
The four central management agencies—the Office of Management and Budget, the Office of Personnel Management, the General Services Administration, and the Department of the Treasuryare working with other agencies on a variety of management
reform initiatives. These management improvements include
streamlining financial systems, simplifying procurement procedures, increasing reliance on the private sector, and better handling of cash management and debt collection practices.
Budget authority proposed for general government activities for
1986 is $5.0 billion, a decrease of $0.7 billion from 1985. Major goals
in this function include broadening efforts to identify and collect
unpaid taxes and improving productivity in the Federal Government.
Legislative functions.—By law, budget estimates submitted by
the legislative branch are included in the budget without change.
Budget authority proposed for the legislative branch activities in
this function is $1.4 billion in 1986 and includes funds for the
operation of the Congress, the General Accounting Office, the Congressional Research Service, and similar activities. In this budget,
an amount equivalent to a 10% reduction from 1986 levels for the
legislative branch is shown as an executive branch recommendation. Executive branch agencies have made substantial reductions
in their estimates; this allowance encourages the legislative branch
to seek similar reductions. Some legislative branch activities
appear in other functions. A complete listing of the legislative
branch accounts is in the beginning of Part 8 of this volume.
Executive direction and management.—Budget authority proposed
for the Executive Office of the President and related activities is
$113 million in 1986, a decrease of $5 million from 1985.
Central fiscal operations.—The mission of central fiscal operations is to collect taxes, administer the public debt, supervise the
Federal Financing Bank, and carry out certain other financial
operations of the Federal Government. For 1986, $3.2 billion of
budget authority is requested, a decrease of $0.4 billion from 1985.
5-146
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: GENERAL GOVERNMENT
(Functional code 800; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
1,443
1,430
1,581
-193
1,552
-191
1,581
-195
1,443
1,430
1,388
1,362
1,386
BUDGET AUTHORITY
Legislative functions:
Existing law
Proposed legislation
Subtotal, Legislative functions
Executive direction and management:
Existing law
Proposed legislation
Subtotal, Executive direction and management
Central fiscal operations:
Collection of taxes
Surplus income, Federal Financing Bank
Other fiscal operations:
On-budget under current law
111
118
113
114
2
115
2
111
118
113
115
117
3,326
-170
3,551
-201
3,511
-206
3,687
-233
3,864
-231
314
264
269
-473
74
285
-493
62
298
-513
20
3,469
3,613
3,175
3,308
3,438
-118
17
93
344
-224
16
101
354
-199
15
100
338
116
15
102
339
-99
16
104
343
337
248
253
340
364
148
149
142
141
143
148
149
142
141
143
196
3
237
62
176
2
390
29
75
2
301
28
76
2
314
31
79
2
326
34
498
597
406
423
441
Pmoosed customs fees
Other proposed legislation
Subtotal, Central fiscal operations
General property and records management:
Real property:
On-budget under current law
Personal property
Records management
Other
Subtotal, General property and records management
Central personnel management:
Existing law
Proposed legislation
Subtotal, Central personnel management
Other general government:
Territories:
On-budget under current law
Indian affairs
Treasury claims
Other
Subtotal, Other general government
Deductions for offsetting receipts:
Existing law .
.
Prorjosed Government-soonsored enterprise user fees
Other proposed offsetting receipts
Subtotal, Deductions for offsetting receipts
Total budget authority
-513
-448
-446
-40
-18
-446
-134
-18
-513
-448
-504
-597
663
5,494
5,708
4,975
5,093
5,226
-446
-200
-18
5-147
GENERAL GOVERNMENT
NATIONAL NEED: GENERAL GOVERNMENT—Continued
(Functional code 800; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
1,319
1,464
1,588
-171
1,319
1,464
1,417
1,545
-179
1,366
1,565
-189
1,375
OUTLAYS
Legislative functions:
Existing law
Proposed legislation
Subtotal, Legislative functions..
Executive direction and management:
Existing law
Proposed legislation
Subtotal, Executive direction and management
Central fiscal operations:
Collection of taxes
Surplus income, Federal Financing Bank.
Other fiscal operations.On-budget under current law
Proposed customs fees
Other proposed legislation
Off-budget under current law#
Subtotal, Central fiscal operations
General property and records management:
Real property:
On-budget under current law
Off-budget under current law#
Personal property
Records management
Other
Subtotal, General property and records management
Central personnel management:
Existing law
Proposed legislation
Subtotal, Central personnel management
Other general government:
Territories:
On-budget under current law
Off-budget under current l a w # .
Indian affairs
Treasury claims
Other
Subtotal, Other general government
Deductions for offsetting receipts:
Existing law
Proposed Government-sponsored enterprise user fees..
Other proposed offsetting receipts
97
119
112
2
97
119
3,236
-170
3,469
-201
248
265
112
3,614
-233
3,787
-231
276
-473
67
257
-493
62
302
-513
20
3,207
3,365
-60
3,254
3,533
3,105
-111
-4
15
86
215
-60
-4
16
95
330
273
-5
15
104
341
214
—5
15
106
337
346
-6
15
108
341
201
376
182
239
112
139
153
143
141
142
139
153
143
141
142
175
*
3
237
143
207
*
93
-1
2
301
6
76
—1
2
314
8
390
399
78
-1
2
326
135
541
557
2
391
-14
586
Subtotal, Deductions for offsetting receipts-
-513
-448
Total, outlays
5,053
5,782
4,845
113
113
2
115
3,441
-206
-446
-40
-18
-504
*$500 thousand or less.
#Proposed to be included on-budget
111
513
-448
-446
-134
-18
-597
-446
-200
-18
-663
4,869
4,986
5-148
THE BUDGET FOR FISCAL YEAR 1986
Collection of taxes.—The funds supporting this mission are for
the Internal Revenue Service (IRS). Budget authority requested for
the IRS in 1986 is $3.5 billion, a slight reduction from the 1985
level. Within this level, the IRS plans to redirect resources in order
to increase tax revenues and expand voluntary compliance. During
the 1987-89 period, the administration proposes to increase the
staff of tax return examiners by the equivalent of 2,500 positions
each year. Advance hiring will begin in late 1986 in order to ensure
the revenue potential in 1987.
The IRS will continue its program begun in 1982 to modernize
and streamline its operations. Through these activities it will:
• begin the use of advanced technology for matching information on tax returns;
• begin implementing an automated data system for auditing
tax returns promptly and efficiently;
• automate the process that identifies unreported income; and
• continue research on a major redesign of the tax processing
system.
Federal Financing Bank.—Under current law, the Federal Financing Bank (FFB) is an off-budget Federal entity under the
supervision of the Treasury Department. Legislation will be proposed to include all of the transactions of the FFB on-budget.
Virtually all of the budget authority and outlays of the FFB are
recorded in other functions that reflect the primary purpose of its
activity. This function contains two credit programs financed by
the FFB—one for lease purchase agreements administered by the
General Services Administration, the other for loans to territories.
These programs are shown in the credit table below. No new
activity is proposed for credit programs in this function for 1986.
The FFB charges a fee to borrowers to cover its administrative
expenses. Any unused monies are transferred to central fiscal operations where they are shown as offsetting Treasury receipts and
recorded as surplus income of the FFB.
The FFB is discussed in Part 6 of this volume, in Special Analysis E, "Borrowing and Debt/' and in Special Analysis F, "Federal
Credit Programs." These sources also show FFB activity according
to the agencies that the bank services.
Other fiscal operations.—A legislative proposal for new customs
fees for processing passengers and commercial carriers will increase Treasury offsetting receipts by $473 million in 1986. Other
fiscal operations include the manufacture of coins by the Bureau of
the Mint and the printing of currency by the Bureau of Engraving
and Printing.
General property and records management—The General Services Administration (GSA) is the Government's builder, landlord,
5-149
GENERAL GOVERNMENT
CREDIT PROGRAMS—GENERAL GOVERNMENT
(In millions of dollars)
Actual
1984
Direct loans:
Loans to U.S. territories (loans made by FFB):
Change in outstandings 1
Outstandings
General Services Administration-.
Federal buildings fund (GSA) (loans made by FFB).
Change in outstandings
Outstandings
Total, direct loans-.
Change in outstandings..
Outstandings
Guaranteed loans:
Federal buildings fund (GSA):
Change in outstandings
Outstandings
65
Estimate
1985
64
1986
1987
1988
-1
64
-1
63
-1
63
-4
413
-4
409
—5
404
-5
399
-6
393
-5
478
-5
473
-5
468
-6
462
-6
456
-25
730
-27
703
-28
675
-30
645
-33
612
1
These are guarantees made by the agency for loans that the FFB disbursed. In effect, they are guarantees for FFB direct loans, and are
counted as such in the budget and the credit budget. Policy responsibility for these loans rests with the guaranteeing agency.
wholesaler, and retailer. Its services support the activities of other
Federal agencies. Record keeping activities, formerly carried out
under the auspices of the GSA, have been transferred to a separate
agency, the National Archives and Records Administration.
Central personnel management.—Personnel management func-
tions are carried out by the Office of Personnel Management
(OPM), the Federal Labor Relations Authority, and the Merit Systems Protection Board.
Other general government—Other activities in the general government function include payments of claims and judgments
against the Federal Government, funding for the territories, Indian
affairs, and other activities.
Territories.—Budget authority of $61 million is proposed for 1986
for continued support of the U.S. territories of Guam, American
Samoa, the Virgin Islands, and the Northern Marianas. Budget
authority of $14 million in 1986 is requested for Trust Territory of
the Pacific Islands operations, which includes Palau. The Compact
of Free Association has been approved by the people of the Federated States of Micronesia and the Marshall Islands. Upon enactment of the Compact by Congress, the trusteeship for these two
states will be ended. Funding for the Compact is discussed in the
international affairs function. At present Palau has not ratified the
Compact. The territories and the Trust Territory receive grants
and payments from many other Federal agencies for programs
classified in other functions.
5-150
THE BUDGET FOR FISCAL YEAR 1986
Indian affairs.—Funding for American Indians in this function
includes miscellaneous trust fund payments to tribes and program
support for the Navajo and Hopi Indian Relocation Commission.
Additional assistance to Indian tribes is also found in a number of
other functions—health; natural resources and environment; community and regional development; and education, training, employment, and social services.
User fees.—The 1986 budget proposes legislation that would
impose a user fee on certain Goverment-sponsored enterprises in
order to reimburse the Government for financial advantages that
stem from their special relationship with the Government.
Tax expenditures.—The tax code permits a 50% tax credit on
political contributions of up to $100 for individual returns and $200
for joint returns. The tax expenditure estimate for this provision is
$295 million in 1986.
GENERAL PURPOSE FISCAL ASSISTANCE
5-151
GENERAL PURPOSE FISCAL ASSISTANCE
General purpose fiscal assistance provides financial aid to State
and local governments without major restrictions or matching requirements. This assistance can generally be used for State or local
services, construction, debt retirement, and other purposes of general government. Programs in this category include general revenue sharing, payments to the District of Columbia, Forest Service
receipts paid to the States, payments in lieu of taxes, and payments
to territories and Puerto Rico. Outlays for this function are estimated to decline from $6.6 billion in 1985 to $2.8 billion in 1986.
General revenue sharing.—The general revenue sharing program
was first enacted in 1972 to bring the resources raised by the
highly responsive Federal tax structure to bear on the needs of
State and local governments, that had less flexible tax systems.
The program was also intended to make State and local officials
more responsive to local needs by giving them almost complete
discretion in determining how the aid would be used.
In 1981, States were eliminated from the program as their capacity to raise revenue improved. Local governments utilized revenue
sharing funds for basic services and they set a good example of
government efficiency, using less than 1% for administration. However, in recent years, local governments have become less dependent on general revenue sharing due in part to improvements in the
revenue-generating ability of local tax systems. While a few localities continue to rely heavily on general revenue sharing, the program accounted for less than 2.5% of total local government spending in 1983.
The Federal Government can no longer afford general revenue
sharing. The administration finds it necessary to propose legislation to end the program in 1986, one year before the end of the
current authorization. This termination is essential in order to
achieve the President's goal of reducing the Federal deficit and it is
consistent with other large reductions that are now needed to meet
this national problem. In an austere Federal budget, national priorities must be met first. These national priority needs can best be
achieved through block grants and other broad based support that
provide flexible Federal funding in areas such as health, community development, and job training.
Outlays for the general revenue sharing program are estimated
to be $1.2 billion in 1986, reflecting the final quarterly payment
from the 1985 program.
Other general purpose fiscal assistance.—Several other programs
provide funds with minimal restrictions to States and localities.
Outlays for these programs are estimated to be $1.9 billion in 1985
and $1.6 billion in 1986.
5-152
THE BUDGET FOR FISCAL YEAR 1986
NATIONAL NEED: FISCAL ASSISTANCE TO STATE AND LOCAL GOVERNMENTS
(Functional code 850; in millions of dollars)
Major missions and programs
BUDGET AUTHORITY
General revenue sharing:
General revenue sharing payments:
Existing law..
Administration.Existing law
Proposed legislation.
Subtotal, General revenue sharing..
Other general purpose fiscal assistance:
Payments and loans to the District of Columbia
Payments to States and counties from Forest Service
receipts:
Existing law
Proposed legislation
Payments to States from receipts under the Mineral
Leasing Act
Payments to States and counties from Federal land
management activities
Payments in lieu of taxes
Payments to territories and Puerto Rico
1984
actual
1985
estimate
1986
estimate
4,567
4,567
4,567
-4,567
4,574
4,575
1987
estimate
estimate
-2
570
499
498
507
506
203
239
423
-356
391
-340
419
-348
736
511
479
522
566
74
105
528
7
95
103
480
6
57
105
416
6
46
105
422
7
Subtotal, Other general purpose fiscal assistance...
2,223
1,933
1,628
1,659
59
105
433
7
1,747
Total, budget authority
6,797
6,508
1,634
1,659
1,747
4,567
4,610
4,576
-3,414
Other
OUTLAYS
General revenue sharing:
General revenue sharing payments:
Existing law
Proposed legislation
Administration:
Existing law
Proposed legislation
Subtotal, General revenue sharing..
Other general purpose fiscal assistance:
Payments and loans to the District of Columbia
Payments to States and counties from Forest Service
receipts:
Existing law
Proposed legislation
Payments to States from receipts under the Mineral
Payments to States and counties from Federal land
management activities
Payments in lieu of taxes
Payments to territories and Puerto Rico
Other
Subtotal, Other general purpose fiscal assistance..
Total, outlays
•$500 thousand or less.
4,573
4,617
7
-2
1,168
570
499
498
203
239
423
-356
391
-340
419
-348
736
511
479
522
566
70
104
507
6
2,197
6,770
95
103
480
7
1,934
6,552
58
105
416
6
1,629
2,797
46
105
422
7
1,659
59
105
433
7
1,747
1,661
1,747
507
506
GENERAL PURPOSE FISCAL ASSISTANCE
5-153
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 presence. The administration
requests $498 million in budget authority for the District of Columbia in 1986, net of loan repayments from the District. An estimated
$425 million is for the Federal payment and $52 million is for the
annual Federal contribution to the retirement funds for the District's police officers, firefighters, teachers, and judges, as required
under pension reform legislation enacted in 1979. The remaining
funds are requested for St. Elizabeths Hospital and for Federal
water and sewer payments.
Since 1983, the District of Columbia has successfully met its
short-term cash management needs through the private market. In
December 1984, the District sold $80 million in general obligation
bonds, which was its first long term bond issue that was not backed
by the Treasury. In anticipation of the District's continued success
in the bond market, no loan authority has been requested for 1986.
The administration will propose legislation to increase the District's contribution for civil service retirement beginning in 1986.
The contribution will increase by an additional two percent of
payroll each year until the District assumes the full cost of the
retirement benefits. This change will eliminate the Federal subsidy
currently provided to the District Government.
Other payments.—Some jurisdictions receive payments from the
Federal Government based on a percentage of Federal receipts
generated from the sale of timber, mineral leases, grazing permits,
and other activities on Federal property.
Payments to States and counties from Forest Service receipts will
return an estimated $239 million in 1985, and $67 million in 1986,
to States for the benefit of counties in which National forests are
located. These funds are to be used for schools and roads. The
administration is proposing legislation that will allow the Federal
Government to deduct the costs of managing the lands that generate these receipts before calculating the States' and counties'
shares. Upon enactment, the States and counties will receive the
same percentage of net receipts that they now receive of gross
receipts. Pursuant to the proposed realignment between the
Bureau of Land Management and the Forest Service, the payments
will include amounts distributed to counties from Oregon and California land grant receipts beginning in 1986.
Payments to States from receipts under the Mineral Leasing Act
are estimated at $511 million in 1985 and at $479 million in 1986.
The administration is also proposing to deduct the Federal costs of
obtaining Mineral Leasing Act receipts before calculating the
States' shares.
5-154
THE BUDGET FOR FISCAL YEAR 1986
CREDIT PROGRAMS—GENERAL PURPOSE FISCAL ASSISTANCE
(In millions of dollars)
Direct loans:
Loans to the District of Columbia:
New obligations
Change in outstandings
Outstandings
Estimate
Actual
1984
1985
1986
1987
1988
115
84
1,883
-107
1,776
-36
1,740
-39
1,700
-42
1,658
-373
-390
-233
-205
Guaranteed loans:
Guarantees of New York City loans:
Change in outstanding
Outstandings
Total credit budget (new obligations and new
commitments)
828
438
205
115
Payments to States and counties from Federal land management
activities are estimated to be $95 million in 1985 and $58 million in
1986 for shared revenues from oil and gas, coal, timber, and grazing activities on Federal lands. Beginning in 1986, the Forest Service will make payments to counties from Oregan and California
land grant receipts.
Payments in lieu of taxes provide fees to local governments for
some Federal lands located within their jurisdictions. The administration proposes to continue this program unchanged, estimating
outlays of $105 million for 1986.
Payments to territories and Puerto Rico are made because the
Federal Government returns certain taxes to the territories and
Puerto Rico. These payments comprise annual advance payments
of certain income tax withholding and excise tax collections involving Guam and the Virgin Islands, and excise tax withholding for
Puerto Rico. Outlays are estimated to be $480 million in 1985 and
$416 million in 1986.
Tax expenditures.—The Federal Government provides general
purpose fiscal assistance through several tax provisions. Interest on
State and local government debt is excluded from the taxable
income of both businesses, mainly commercial banks and casualty
insurance companies, and individuals. As a result, State and local
governments can borrow at lower interest rates than would be
possible if such interest were taxable. In effect, the Federal Government subsidizes States and localities by paying part of their
interest costs. Only the effect of excluding interest on general
purpose obligations and revenue bonds for public purposes such as
schools, sewers, and roads is included in this function. The exclusion of interest on tax-exempt bonds issued for private or quasipublic activities is covered in applicable budget functions, such as
GENERAL PURPOSE FISCAL ASSISTANCE
5-155
commerce and housing credit. The tax expenditure estimate for the
exclusion of interest on general purpose State and local debt is $8.7
billion in 1986.
The Federal Government also provides indirect assistance to
States and localities by allowing individuals to deduct nonbusiness
State and local taxes, primarily income and sales taxes, from
income in calculating their Federal tax liability. The value of this
assistance is estimated at $24.7 billion in 1986; the deductibility of
taxes on owner-occupied homes is accounted for in the commerce
and housing credit function.
As a means of providing assistance to U.S. possessions, primarily
Puerto Rico, the Federal Government permits a special tax credit
for qualifying U.S. corporations doing business in the possessions.
This tax credit, which effectively exempts earnings attributable to
the possessions, results in an estimated tax expenditure of $2.6
billion in 1986. Tax expenditures for general purpose fiscal assistance are an estimated $36.1 billion in 1986.
Related programs.—In addition to general purpose fiscal assistance, the Federal Government provides States and localities with
assistance through a variety of Federal grant-in-aid programs.
These programs, which range from relatively narrow categorical
programs to broader grant programs, are more restrictive than
general purpose fiscal assistance, and are designed to meet other
national needs and priorities. Therefore, they are not included as
general purpose fiscal assistance, although they provide, when
taken together, a large source—21% in 1984—of the financing of
total State and local expenditures. Total grant-in-aid outlays to
States and localities are estimated to decrease from $107.0 billion
in 1985 to $100.7 billion in 1986.
Grants are discussed in more detail in Special Analysis H, "Federal Aid to State and Local Governments."
5-156
THE BUDGET FOR FISCAL YEAR 1986
NET INTEREST
Net interest includes the Federal Government's cost of borrowing
and its income from lending money. Net interest outlays are estimated to rise from $130.4 billion in 1985 to $142.5 billion in 1986.
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 funds, revolving funds, and
deposit funds within the Federal Government. Outlays for interest
on the public debt are estimated to be $198.8 billion in 1986.
Estimates of interest outlays are directly affected by assumptions
about interest rates and the size of the debt. It is assumed that the
91-day Treasury bill rate will decline steadily from an average of
9.6% in calendar year 1984 to 5.9% by 1988. Despite the projected
decline in interest rates, interest on the public debt is estimated to
increase by $26.5 billion in 1985 and an additional $18.5 billion in
1986. These increases stem from higher debt outstanding primarily
due to Treasury borrowing to finance the Federal deficit. The
estimates include proposed legislation that decreases net trust fund
holdings of Treasury securities, and thus interest on the public
debt, as described below.
Interest received by trust funds.—Most trust fund balances are
required by law to be invested in Federal securities. The interest
outlays on this debt are included in interest on the public debt.
Interest earned by the trust funds is deducted in this subfunction
so that the functional total for net interest includes only the Government's net transactions with the public, not payments between
Government accounts. Trust fund interest earnings are estimated
to be $25.6 billion in 1985 and $29.1 billion in 1986.
More than half of these interest earnings is received by the civil
service retirement and disability fund, and about one-fourth is
received by social security and medicare. Legislation is proposed
for medicare and civil service retirement that will increase trust
fund balances invested in public debt and thereby increase interest
earnings. Other legislation, which is discussed in the transportation section, is proposed to reduce the surplus of the airport and
airway trust fund. The total effect of these and other proposals is a
net decrease in trust fund balances, as a result of which interest
received by trust funds and interest on the public debt is estimated
to decrease by $0.6 billion in 1986.
Other interest.—This subfunction includes interest payments by
the Government on tax refunds and, as an offset, interest collections from Federal agencies and the public.
5-157
NET INTEREST
NET INTEREST
(Functional code 900; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
153,822
180,293
2
199,392
-587
215,088
-74
223,665
327
153,822
180,295
198,805
215,015
223,992
BUDGET AUTHORITY
Interest on the public debt:
Existing law
Proposed legislation
Subtotal, Interest on the public debt
Interest received by trust funds:
Existing law
Proposed legislation
Subtotal, Interest received by trust funds
Other interest:
Interest on refunds of tax collections
Interest on loans to Federal Financing Bank
OCS interest
Other:
Existing law
Proposed legislation
Subtotal, Other interest
Total, budget authority
- 2 0 , 3 5 4 -25,552 -29,736 -34,250 - 3 8 , 9 9 1
587
-327
-2
' 74
-20,354 -25,554
29,149 - 3 4 , 1 7 7 - 3 9 , 3 1 8
1,187
1,301
1,185
1,182
1,258
- 1 5 , 1 3 5 - 1 7 , 6 2 3 -19,038 -19,050 -18,444
-18
- 9 5 3 -1,648
-8,558
-7,877
-7,989
-384
-8,200
-269
-8,045
-157
22,410 - 2 4 , 3 1 5 - 2 7 , 1 0 6 -27,985 -25,459
111,058
130,426
142,550
152,853
159,214
153,822
180,293
2
199,392
-587
215,088
-74
223,665
327
153,822
180,295
198,805
215,015
223,992
20,354
25,552
_2
29,736 - 3 4 , 2 5 0
74
587
38,991
327
-20,354 -25,554
29,149 -34,177
39,318
OUTLAYS
Interest on the public debt:
Existing law
Proposed legislation
Subtotal, Interest on the public debt
Interest received by trust funds:
Existing law
Proposed legislation
Subtotal, Interest received by trust funds
Other interest:
Interest on refunds of tax collections
Interest on loans to Federal Financing Bank
OCS interest
Other:
Existing law
Proposed legislation
Subtotal, Other interest
Total, outlays
1,187
1,185
1,182
1,301
1,258
- 1 5 , 1 3 5 -17,623 -19,038 - 1 9 , 0 5 0 -18,444
-18
-953 -1648
-8,559
-7,877
-7,989
-384
-22,410
24,315
27,106
111,058
130,426
142,550
-8,200
-269
-8,045
-157
27,985 - 2 5 , 4 5 9
152,853
159,214
Interest on refunds of tax collections.—Interest payments by the
Treasury on tax refunds are estimated to be $1.2 billion in 1985
and $1.3 billion in 1986. Under current law, the rate paid on
refunds of tax collections is set semi-annually at the prime rate.
Interest on loans to the Federal Financing Bank (FFB).—The FFB
is the major source of funds for a number of Government programs. The FFB is off-budget under current law, but legislation is
5-158
THE BUDGET FOR FISCAL YEAR 1986
proposed to include the activities of the FFB on-budget. The FFB
borrows directly from the Treasury and uses these funds to purchase agency debt and financial assets from various Government
programs, and to make direct loans to the public that are guaranteed by various agencies. It then pays interest to the Treasury on
its borrowings. Interest payments from the FFB to the Treasury
are estimated to be $17.6 billion in 1985 and $19.0 billion in 1986.
Other.—Offsetting interest collections other than from the FFB
are estimated to be $7.9 billion in 1985 and $9.3 billion in 1986.
These come from two principal sources: interest charged by Treasury to Federal agency revolving funds, which is by far the largest
source; and interest collected from the public by funds other than
revolving funds. Revolving funds, such as the agricultural credit
insurance fund, borrow from the Treasury primarily to finance
direct loans to the public, and then pay interest to the Treasury on
their borrowings. Other collections include interest on loans made
to the public by non-revolving funds, interest received from the
OCS escrow account, and interest paid by banks on Federal tax
collections deposited in those banks.
Net budgetary effect.—The Federal Reserve System owns Government securities for the purpose of implementing monetary policy.
Virtually all of the interest the Federal Reserve receives on these
securities is paid to the Treasury as deposits of earnings of the
Federal Reserve System and classified as budget receipts. As shown
below, deposits of earnings are projected to be $16.4 billion in 1985
and $16.9 billion in 1986. Deducting these receipts from the function totals shows the net budgetary effect of interest transactions
with the public:
(In millions of dollars)
Actual
1984
Net interest function
Deposits of earnings by the Federal Reserve System 1
Net budgetary effect
1
Estimate
1985
1986
1987
1988
111,058 130,426 142,550 152,853 159,214
15,684 16,419 16,932 17,708 17,805
95,374 114,007 125,618 135,145 141,409
Shown as budget receipts.
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 earned, but the holder of a U.S.
savings bond may defer paying tax until the bond is redeemed. The
estimate for this provision is $850 million in 1986.
5-159
ALLOWANCES
ALLOWANCES
The budget includes allowances to cover certain forms of budgetary transactions that are expected to occur, but are not reflected in
the program details shown in the preceding functions. When these
transactions actually take place, they are reported as outlays or
offsetting receipts for the appropriate agencies and functions
rather than as allowances. For this reason, allowances for completed years are always zero.
Two allowances are included in this category: civilian agency pay
raises and allowances for contingencies. They account for estimated
outlays of $24 million in 1986.
ALLOWANCES
(Functional code 920; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
705
1,711
BUDGET AUTHORITY
Civilian agency pay raises:
Civilian agency pay raises
Coast Guard military pay raises:
Existing law
Proposed legislation
Subtotal, Civilian agency pay raises
Allowances for contingencies:
Relatively uncontrollable programs
Other requirements
Total, budget authority
6
24
47
24
98
24
6
24
776
1,833
24
776
1,833
677
1,671
1,500
1,506
OUTLAYS
Civilian agency pay raises:
Civilian agency pay raises
Coast Guard military pay raises:
Existing law
Proposed legislation
Subtotal, Civilian agency pay raises
Allowances for contingencies:
Relatively uncontrollable programs.
Other requirements
Total, outlays
6
24
47
24
98
24
6
24
748
1,793
748
1,793
1,125
375
1,131
399
Civilian agency pay raises.—This allowance covers the costs of
future pay raises for civilian agency employees and Coast Guard
military personnel. Allowances to cover future pay raises for military and civilian personnel of the Department of Defense are included in the national defense function.
The administration proposes a 5.0% pay reduction for civilian
employees in 1986 relative to the 1985 level and a 3.0% pay increase for Coast Guard military personnel effective in July 1985,
5-160
THE BUDGET FOR FISCAL YEAR 1986
with no pay increase in 1986. The 1986 proposed pay reduction for
civilian employees is distributed by agency and function, and is
therefore not shown as an allowance. The President's final decision
on the 1986 civilian pay adjustment will be made after he reviews
the recommendations of his pay agent and the recommendations of
the Advisory Committee on Federal Pay, as provided for by law.
The pay raise allowances for 1987 and 1988 reflect the assumption
that Federal civilian employees will receive a 3.0% pay raise in
January of each year, and that Coast Guard military personnel will
receive pay increases in October of each year that are equal to pay
raises received by private sector employees.
Allowances for contingencies.—The Congressional Budget Act of
1974 requires that the budget include an allowance for unanticipated spending or savings in relatively uncontrollable programs, such
as social security, and an allowance for other unanticipated spending or savings.
The contingency allowance for relatively uncontrollable programs is estimated to be zero for all years because the chance of
these outlays being lower than the estimates is as great as the
chance of being higher. The contingency allowance for other requirements, however, does contain amounts for 1985 and 1986 to
account for potential reestimates and minor programmatic
changes.
5-161
UNDISTRIBUTED OFFSETTING RECEIPTS
UNDISTRIBUTED OFFSETTING RECEIPTS
Offsetting receipts are generally deducted from the budget authority and outlays of the agencies and functions of the receipt
accounts. In three instances, however, such collections are deducted
from the budget totals as undistributed offsetting receipts. These
are for the employer share of employee retirement, rents and
royalties on the Outer Continental Shelf, and the sale of Conrail.
Undistributed offsetting receipts are estimated to be $32.3 billion
in 1985 and $37.5 billion in 1986. Details of all offsetting receipts
are shown in table 14 in Part 9.
UNDISTRIBUTED OFFSETTING RECEIPTS
(Functional code 950; in millions of dollars)
Major missions and programs
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
BUDGET AUTHORITY
Employer share, employee retirement:
Military retired contributions*
Other contributions:
Existing law
Proposed legislation
Subtotal, Employer share, employee retirement
- 1 6 , 5 0 3 -17,017 - 1 8 , 2 3 2 -19,777 -21,359
-8,760
-9,977
11,048 - 1 2 , 0 4 9
-560
-781
-25,263 - 2 6 , 9 9 4 - 2 8 , 9 6 1 - 3 1 , 3 8 6 -34,189
Rents and royalties on the Outer Continental Shelf:
-6,694
Existing law
Prnnflspri Ippislatinn
Subtotal, Rents and royalties on the Outer Conti-6,694
nental Shelf
5,302
7,317
7,270
-4,837
-5,302
-7,317
-7,270
-4,837
1,200
Sale of Conrail (proposed legislation)
Total, budget authority
-10,463
-266
31,957 - 3 2 , 2 9 6 - 3 7 , 4 7 8 - 3 8 , 6 5 6 - 3 9 , 0 2 6
OUTLAYS
Employer share, employee retirement:
Military retired contributionsx
Other contributions:
Existing law
Proposed legislation
Subtotal, Employer share, employee retirement
-16,503
8,760
Sale of Conrail (proposed legislation)
Total, outlays
9,977
10,463 - 1 1 , 0 4 8 -12,049
-266
-560
-781
- 2 5 , 2 6 3 - 2 6 , 9 9 4 - 2 8 , 9 6 1 - 3 1 , 3 8 6 -34,189
Rents and royalties on the Outer Continental Shelf:
-6,694
Existing law
Proposed legislation
Subtotal, Rents and royalties on the Outer Continental Shelf
17,017 - 1 8 , 2 3 2 - 1 9 , 7 7 7 -21,359
6,694
-5,302
-7,317
-7,270
-4,837
-5,302
-7,317
-7,270
-4,837
-1,200
-31,957 - 3 2 , 2 9 6 - 3 7 , 4 7 8 - 3 8 , 6 5 6 - 3 9 , 0 2 6
1
Includes the adjustment to show military retired pay for 1984 on a basis comparable to 1985 and subsequent years. See the discussion in
Part 6.
Employer share, employee retirement—The payments made by
Federal agencies to employee retirement funds are counted as out-
5-162
THE BUDGET FOR FISCAL YEAR 1986
lays of the agencies and in the functions of the paying accounts.*
Since these are payments made by budget accounts to other budget
accounts, they must be deducted prior to arriving at total budget
authority and outlays in order to measure properly the Federal
Government's transactions with the public. The deductions are not
made against the paying agencies and functions because they are
deemed appropriate charges to be included in the costs of these
programs. Deductions are also not made against the receiving agencies and functions because the size of the deductions would cause
the budget authority and outlay totals to seriously understate the
amount of resources used to carry out these programs. Hence, the
deductions for these collections are recorded as undistributed offsetting receipts.
Almost all of these receipts are collected by the civil service
retirement fund and a new military retirement trust fund that was
established beginning October 1, 1984. (A detailed discussion of the
budget accounting for this trust fund may be found in Part 6.) Most
of the remainder is collected by the social security and medicare
trust funds.
The administration's proposal to require the Postal Service to
begin paying the full actuarial cost of employee pensions will increase employing agency contributions for employee retirement
and, therefore, undistributed offsetting receipts. This proposal is
discussed in greater detail in the commerce and housing credit
function.
Rents and royalties on the Outer Continental Shelf (OCS).—
Collections for rents and royalties on the Outer Continental
Shelf by the Federal Government are very large. They arise as a
benefit of land ownership by the Federal Government rather than
as a result of any major spending program. Their inclusion as an
offsetting receipt in any particular function would greatly understate the amount of Federal budget authority and outlays used to
carry out programs in that function; hence, they are undistributed
by function. These collections include cash bonuses received from
the leasing of OCS lands that have the promise of containing oil
and gas; annual rents on existing leases; and royalties, based on a
percentage of the value of production. Collections to which title is
in dispute are not recorded as offsetting receipts in the budget.
Until the dispute is settled, the collections are retained in an
account outside the budget, known as a deposit fund. When settlement is reached, only the amounts determined to belong to the
Federal Government are recorded as undistributed offsetting re-
1
Included in the estimate of employing agency payments to trust funds is the effect of future pay increases
assumed for Federal civilian employees, which are discussed in the allowances section.
UNDISTRIBUTED OFFSETTING RECEIPTS
5-163
ceipts. On September 30, 1984, deposit funds of disputed OCS collections held $6.4 billion of balances.
The 5-year OCS leasing program now in effect significantly accelerates leasing by offering larger areas and by streamlining leasing
procedures. The current estimates of $5.3 billion in 1985 and $7.3
billion in 1986 assume that four OCS sales will be conducted in
1985 and seven sales in 1986. 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.
Sale of Conrail.—The Northeast Rail Services Act of 1981 stipulates that the Federal Government should sell Conrail as part of a
market solution to rail problems. The administration proposes to
sell Conrail in 1986. According to normal budget accounting principles, the receipts from this sale would be treated as offsets to the
budget authority and outlays for Conrail in the transportation
function. However, since the receipts from the sale of Conrail are
relatively large and occur in only one year, this treatment would
seriously distort the budget estimates for the transportation function. Hence, the receipts are classified as undistributed offsetting
receipts.
PART 6
PERSPECTIVES ON
THE BUDGET
6-1
PERSPECTIVES ON THE BUDGET
This part of the budget explains several topics that help to
interpret the budget totals and to place the budget in perspective:
• the relationship of budget authority to outlays;
• limitations on the availability of funds;
• fiscal activities outside the Federal budget:
—outlays of the off-budget Federal entities (which are proposed to be included on-budget),
—Government-sponsored enterprises,
—loan guarantees, and
—tax expenditures;
• Federal debt and the relationship of budget funds to changes
in Federal debt;
• the difference between the initial 1984 budget estimate and
the actual outcome for:
—total outlays,
—outlays of relatively uncontrollable programs,
—total receipts, and
—the total deficit;
• military retirement accruals; and
• the allocation of windfall profit tax receipts.
RELATIONSHIP OF BUDGET AUTHORITY TO OUTLAYS
The Congress must usually provide budget authority, which is
generally in the form of appropriations, before Federal agencies
can obligate the Government to make outlays. For 1986, $1,060.0
billion of new budget authority is proposed for the Federal Government. x
Of this total new budget authority, $544.6 billion will require
congressional action. New budget authority of $708.0 billion will be
available through permanent appropriations 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. This gross amount of new budget authority is partially
offset by $192.6 billion of deductions for offsetting receipts, which
1
Budget authority is discussed further in Part 7 of this volume.
6-2
6-3
PERSPECTIVES ON THE BUDGET
consist of transactions within the Government and proprietary receipts from the public.
BUDGET AUTHORITY
(In billions of dollars)
1984
actual
Description
Available through current action by the
Congress:
Enacted and pending appropriations *
Proposed in this budget:
Appropriations
Supplemental requests
Rescission proposals .
To be requested separately:
Upon enactment of proposed legislation
Allowances:
Civilian agencies2
Department
of
DefenseMilitary 3
4
Other allowances
544.9
1985
estimate
1986
estimate
1987
estimate
1988
estimate
548.4
8.3
-17
0.2
552.1
3.5
608.0
664.5
-11.1
-5.8
-7.4
0.8
1.8
3.0
7.8
1.5
Subtotal, available through current action by the Congress
544.9
556.8
544.6
605.9
666.8
Available without current action by the
Congress (permanent appropriations):
Trust funds (existing law)
Interest on the public debt
Other
358.1
153.8
60.9
417.6
180.3
93.4
442.5
199.4
66.2
469.0
215.1
50.2
518.8
223.7
49.0
572.8
691.3
708.0
734.2
791.5
-168.0
183.2
-192.6
-197.1
-205.3
949.8
1,064.9
1,060.0
1,143.0
1,253.0
Subtotal, available without
action by the Congress
Deductions for offsetting receipts
Total, budget authority
current
*$50
million or less.
1
Includes an imputed amount in 1984 ($16.5 billion) for accruals for military retirement contributions in order to adjust data for comparability
with the military retirement presentation that begins in 1985. Deductions for offsetting receipts in 1984 include an amount equal to the imputed
accruals.
2
Allowance for civilian agency pay raises and Coast Guard military pay raises.
includes allowances for civilian and military pay raises for Department of Defense—Military.
4
Allowance for contingencies and other requirements.
Not all of the new budget authority for 1986 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. Any balances
remain available to these trust funds indefinitely in order to
finance benefits and other purposes specified by law.
• Budget authority for most major construction and procurement projects covers the entire cost estimated when the
projects are initiated, even though work will take place and
outlays will be made over a period extending beyond the year
for which the budget authority is enacted. Some exceptions
2
This subject is also discussed in a separate OMB report, "Balances of Budget Authority," which can be
purchased from the National Technical Information Service shortly after the budget is transmitted.
6-4
THE BUDGET FOR FISCAL YEAR 1986
are made to this convention, notably for water resource programs.
• Government enterprises are occasionally given budget authority for standby reserves that will be used only in the event of
special circumstances.
• Budget authority for the subsidized housing programs is equal
to the Government's estimated obligation to pay subsidies
under contracts, which may extend for periods of up to 40
years.
• Budget authority for most other long-term contracts also
covers the estimated maximum obligation of the Government.
• 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 contingent
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 never have
to be used.
As shown in the chart on the next page, $219.4 billion of the
budget outlays in 1986 (23% of the total) will be made from budget
authority enacted in previous years. At the same time, $305.7
billion of the new budget authority proposed for 1986 (29% of the
total amount proposed) will not lead to budget outlays until future
years. Thus, the total budget authority for a particular year is not
useful for the analysis of that year's 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 this volume and displayed in table 9
of Part 9.
LIMITATIONS ON THE AVAILABILITY OF FUNDS
Limitations on the availability of funds are a control mechanism
that supplements the use of appropriations or other budget authority discussed in the previous section. Limitations on the availability
of funds generally are not the source of authority to incur obligations; rather, they place a special ceiling on the use of authority by
limiting the amount that can be obligated or committed for a
specific purpose. These limitations are established most often
through the appropriations process.
Some limitations establish stricter control over amounts provided
by appropriations or other acts by limiting the amount to be allo-
PERSPECTIVES ON THE BUDGET
6-5
Relation of Budget Authority to Outlays - 1 9 8 6 Budget
$ Billions
New Authority
Recommended
for 1986
1,060.0
Unspent Authority
Enacted in
Prior Years
1,029.4
^
w
TO be spent m 1986
754.3
^
w
To be spent in
™2£?f*
/yib
^
W
^
W
Outlays
in 1986
973.7
Unspent Authority
for Outlays in
Future Years
1,096.2
cated for specific purposes within an appropriation or fund account.
• Many appropriation accounts provide funding for several activities. A limitation can single out and restrict the amount of
obligations for one or more of these activities within the
overall budget authority provided for the account. For example, the 1985 appropriation of $896 million for Operation of
Indian programs in the Department of the Interior includes
language specifying that an amount not to exceed $56 million
is available for higher education scholarships and assistance to
public schools.
• A limitation can be established on the amount that can be
used for a particular type of expense, such as the purchase of
passenger vehicles, travel, consultants, or publications. These
limitations can apply to (1) a single account; (2) all amounts
within a single appropriations act; or (3) amounts in more
than one appropriations act or amounts provided in substantive law.
Other limitations can affect the total level—not just the composition—of obligations and spending. They are used to control funds
that would otherwise become available under relatively broad authority provided in substantive law without Appropriations Committee action. In most cases these limitations apply either 1) to
6-6
THE BUDGET FOR FISCAL YEAR 1986
trust fund activities, which are normally financed through earmarked receipts, like the payroll tax receipts for the social security
trust funds; 2) to revolving funds, which finance business-type operations that generate their own income to pay their expenses; or 3)
to other accounts for which substantive law provides spending
authority.
Under the credit control system, limitations on Federal direct
loan obligations and guaranteed loan commitments are the principal method of controlling the allocation of Federal credit.3 These
limitations provide a mechanism for annual Congressional review
of the gross level of new loan activity including the loan activity
that affects outlays. All direct lending and all loan guarantees that
result in direct loans by the Treasury Department's Federal Financing Bank will result in outlays. The other guaranteed loans,
though also important because of effects of loan guarantees generally on the credit market and the economy, ordinarily do not lead
to Government spending except in the event of default.
Certain Federal program levels in addition to credit activities are
also constrained through the use of limitations on operating and
administrative expenses. For example, the use of the budget authority of the highway and the airport and airway trust funds is
controlled by limitations on the agencies* ability to obligate the
Federal Government to make payments. Non-loan, business-type
activities that are controlled through limitations include the Federal buildings fund and the national defense stockpile transaction
fund; both are controlled through limitations on the use of receipts.
For many trust funds, all receipts of the fund automatically
become budget authority and are available for spending. The Congress exercises control over the benefits that are paid from these
funds through the use of eligibility criteria and benefit levels established in substantive law. Through the use of limitations, the Congress can also exercise control over the administrative expenses of
these trust funds. Such limits apply, for example, to the old-age
and survivors insurance trust fund, the hospital insurance trust
fund, and the unemployment insurance trust fund.
SELECTED LIMITATIONS THAT AFFECT OUTLAYS
(In billions of dollars)
1984
enacted
Direct loans:
Direct loan obligations
Guaranteed loan commitments resulting in direct loans by the FFB
Program levels (other than loans)
Administrative expenses of trust funds
Total, selected limitations
1985
estimate
1986
estimate
11.9
8.8
16.9
27.7
12.3
2.6
17.9
24.3
2.0
0.3
16.8
23.7
65.3
57.1
42.8
3
The credit control system is discussed further in Part 7 of this volume and in Special Analysis F, "Federal
Credit Programs."
PERSPECTIVES ON THE BUDGET
6-7
The preceding table summarizes some of the major limits on the
availability of funds that affect budget spending. The amounts
identified do not include all limitations, especially for credit programs, but they illustrate that there can be significant spending
changes without changing budget authority.
FISCAL ACTIVITIES OUTSIDE THE FEDERAL BUDGET
The budget does not include a number of activities of the Federal
Government that result in spending similar to budget outlays.
These activities, nevertheless, channel economic resources toward
particular uses in ways that are analogous to the effects of budget
spending.
In previous years the outlays of the off-budget Federal entities
were a major exclusion from the budget. This year, however, the
Administration proposes to put these entities into the budget, so
that they will no longer be exceptions to the principle of a unified
budget. Accordingly, the data for the entities that are off-budget
under current law have been included in the budget for all years.
The reasons for this proposal, and the activities and background of
these entities, are discussed in some detail below.
This is followed by a discussion of fiscal activities that are properly outside the scope of the unified budget. The Governmentsponsored enterprises are outside the budget because of their private ownership. Loan guarantees allocate economic resources
toward particular uses by making credit available to borrowers at
more favorable terms than would otherwise be available in the
private market. Taxation and tax expenditures, which also have
significant allocative effects on the economy, are discussed subsequently.
The regulation of economic activity changes resource allocation
in different ways. Some types of regulation have economic effects
that in certain respects are similar to budget outlays by requiring
the private sector to make expenditures for specified purposes such
as safety and pollution control. The effects of this spending are
very important, but many of them have not been quantified satisfactorily and therefore cannot be clearly related to the budget.
Outlays of off-budget Federal entities.—The Federal Government
has used th6 unified budget concept as the foundation for its budgetary analysis and presentation since the 1969 budget. Starting in
1971, however, laws were enacted under which several Federal
entities were removed from the budget or created outside of the
budget. The off-budget Federal entities are federally owned and
controlled, but their transactions were excluded from the budget
6-8
THE BUDGET FOR FISCAL YEAR 1986
totals under these provisions of law. Thus, they have been exceptions to the principle of a unified budget.
In the past few years the trend toward steadily increasing the
number of off-budget Federal entities has been changed. Several
entities were put on-budget in a series of legislative actions. The
executive and the Congress have on several occasions expressed
concern about the practice of excluding some Federal outlays from
the budget and have taken steps to control off-budget spending. In
particular, this Administration has been very concerned about the
effects of off-budget direct loans in allocating credit toward specific
uses and about the necessity of financing these loans by additional
Federal borrowing from the public. Last year the Administration
supported the basic intent of the bills before the Congress that
would have included the outlays of the Federal Financing Bank in
the budget. These outlays comprise most of the spending that is offbudget under current law.
Legislative proposal—The Administration proposes that all the
off-budget Federal entities be placed on-budget, and thus that the
principles of the President's Commission on Budget Concepts be
adhered to. The Commission, whose recommendations underlie the
concept of the unified budget, declared: "Following from the definition of a budget as a basic part of a comprehensive financial plan,
the budget should include all programs of the Federal Government
and its agencies." 4 The unified budget concept, therefore, measures the Government's net fiscal transactions with the public.
The Administration believes that the comprehensive coverage of
the unified budget concept is needed for the budget of the United
States Government. Comprehensive coverage is necessary:
• to inform the public of the full extent of how much the
Government is spending both in total and for particular pur• to make rational and informed choices between public and
private activities;
• to establish priorities in allocating the Government's resources among alternative programs; and
• to understand and thereby influence the impact of Government spending on the economy.
Therefore, the Administration is proposing legislation to restore
the complete coverage of the unified budget by shifting the offbudget entities into the budget. In order to be consistent with this
proposal, the present budget volume and the other budget documents treat the entities that are off-budget under current law as
though they were on-budget. Thus, in the present budget documents, unlike the ones for previous years, the spending of these
4
Report of the President's Commission on Budget Concepts (Washington: U.S. Government Printing Office,
1967), p. 7. Also see the further discussion on pp. 24-25.
PERSPECTIVES ON THE BUDGET
6-9
entities is reflected in both budget outlays and the budget deficit;
and the appropriations requests and permanent budget authority
for their programs are included in the totals of budget authority
for the budget. This treatment extends throughout all schedules
and other presentations.5 6 The actual budget data for 1984 and all
previous years were revised to include the entities that are offbudget under current law, so that the year-to-year comparisons and
historical series would be as accurate and consistent as possible.
This change in treatment does not affect Federal borrowing or
debt. As shown in the table on page 6-26, the outlays of the offbudget entities have always had to be added to the on-budget
deficit to derive the total Government deficit, which, for the most
part, must be financed by borrowing from the public. When offbudget outlays are financed by Treasury borrowing, as is usual, the
additional debt is subject to the statutory debt limitation; when
financed by the entities' own borrowing, it is not. In either case the
additional debt is part of the gross Federal debt and adds to the
Federal debt held by the public.
The proposed treatment does not change the nature of the transactions recorded in the budget. Most of the outlays of the off-budget
Federal entities are incurred in order to carry out direct loan
programs. These programs have the same economic, financial, and
accounting characteristics as the direct loan programs in the
budget under current law, such as those of the foreign military
sales credit program and the housing for the elderly or handicapped fund. The outlays of the direct loan programs, whether onbudget or off-budget under current law, are approximately equal to
the difference between the new loans disbursed and the repayments of principal. Of the remaining off-budget outlays, some are
incurred for the Postal Service, which is a public enterprise fund,
analogous in its business-type operations to the Tennessee Valley
Authority. Finally, some off-budget outlays are for the strategic
petroleum reserve account to buy oil. This purchase is similar in
nature to the purchases of goods from the private sector by the
Department of Defense, the General Services Administration, and
most other Federal agencies. Thus, the outlays that are off-budget
under current law, like the outlays that are on-budget, are designed to allocate economic resources toward particular purposes of
the Federal Government.
Background and current operations.—The first departure from
the unified budget concept occurred in August 1971, when the
Export-Import Bank was excluded by statute from the budget. Fur6
Financial statements for those entities that are off-budget under current law are published in the Appendix,
Budget of the United States Government, Fiscal Year 1986, Part I.
6
The Board of Governors of the Federal Reserve System is a Federal organization. It is excluded from the
budget and from this discussion and the legislative proposals. Financial statements are published in the
Appendix, Part V, "Government-Sponsored Enterprises."
6-10
THE BUDGET FOR FISCAL YEAR 1986
ther departures followed in the next few years under various statutes. 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 it was initially classified as a deposit fund instead
of an off-budget Federal entity.
In subsequent years the trend toward steadily increasing the
number of off-budget Federal entities was changed. The ExportImport Bank, the Housing for the Elderly or Handicapped fund,
and the Pension Benefit Guaranty Corporation were put on-budget
by statute in different years. The operations of the Exchange Stabilization Fund were put on-budget in a series of legislative and
administrative actions. Most of the transactions of the U.S. Railway Association were brought into the budget by legislation that
required its purchases of Conrail securities to be included in the
budget. Whenever a former off-budget entity was put on-budget,
the budget outlays and deficits of previous years were revised to
include the entity to the extent feasible so that the historical series
measuring budget transactions would be as accurate and consistent
as possible.
Despite these reversals, two new off-budget Federal entities were
established to carry out energy programs. The Synthetic Fuels
Corporation was created outside of the budget in 1980, although all
of its funding is provided in the budget totals of the Treasury
Department. The cost of purchasing oil for the strategic petroleum
reserve was put off-budget beginning in 1982. The costs of operations, maintenance, construction, and administration, however,
remain in the budget.
Notwithstanding the exclusion of the off-budget entities from the
budget, some of the outlays related to their operations were nonetheless included in the budget totals. The budget totals included
the funding of the Synthetic Fuels Corporation, certain expenses of
the strategic petroleum reserve, the Federal payment to the Postal
Service fund, the administrative expenses of the U.S. Railway Association, and the administrative expenses and appropriations to reimburse losses of the Rural Electrification Administration lending
programs. Moreover, while the budget authority and outlays of offbudget Federal entities were excluded from the budget totals, some
of their activities were subject to other methods of Presidential and
congressional review. For example, the credit budget, discussed on
page 6-20 and in Part 7 of this volume, includes the direct loans and
guaranteed loans of off-budget entities as well as on-budget agencies;
6-11
PERSPECTIVES ON THE BUDGET
and the outstanding debt and annual borrowing of the Postal Service
are limited by statute.
Within Congress, the budget resolutions for 1980 recommended
that the congressional budget process should accurately relate offbudget activities to the budget. Following this procedural recommendation, the budget resolutions beginning in 1981 have included
targets for credit that covered the obligations for new direct loans
made by the off-budget Federal entities.
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. As the following table shows, the Federal Financing
Bank (FFB) accounts for most of the outlays that are off-budget
under current law. The only other off-budget entities with comparatively large outlays are, in some years, the strategic petroleum
reserve account and the Postal Service fund. The outlays of the
Postal Service fund and the Synthetic Fuels Corporation are calculated net of offsets for the payments that they receive from accounts in the budget. These offsets are estimated to be $1.4 billion
and $0.3 billion, respectively, in 1986. The payment to the Postal
Service fund is lowered in 1986 because of the proposal to abolish
the payment for revenue forgone from carrying certain mail at free
or reduced rates; this is an estimated $0.8 billion in 1985. The
payment to the Synthetic Fuels Corporation is to fund its entire
operations.
OFF-BUDGET OUTLAYS UNDER CURRENT LAW
1
(In billions of dollars)
Entity
Federal Financing Bank .
Rural Electrification and Telephone revolving fund
Rural Telephone Bank
Strategic Petroleum Reserve account
Postal Service fund
U S Railway Association
Synthetic Fuels Corporation
Total
1984
actual
1985
estimate
1986
estimate
7.3
10.4
0.1
*
2.3
.4
*
.1
1.6
.3
*
.1
.1
1.2
10.0
12.5
1.5
1987
estimate
-3.3
.1
-3.2
1988
estimate
-4.1
-.3
.1
4.3
*$50 million or less.
1
Proposed to be included on-budget.
The Federal Financing Bank does not operate programs itself.
Rather, the FFB finances other programs within the Government
by purchasing their debt securities, making direct loans on their
behalf, or purchasing their loan assets. FFB obtains the funds for
these transactions \>y borrowing an equal amount from Treasury.
The operation of the assisted programs remains with the agencies
that FFB finances.
6-12
THE BUDGET FOR FISCAL YEAR 1986
FFB purchases of agency debt securities do not increase FFB
outlays. An agency incurs outlays when it spends the proceeds of
its borrowing from the FFB, so FFB outlays must exclude this
borrowing transaction in order to prevent double counting.
In contrast, FFB outlays are generated by its direct loans and its
purchases of loan assets. Both types of transactions are connected
with loan guarantees by another agency. FFB makes direct loan
disbursements to the public upon the request of an agency, with
the repayment of the loan to the FFB being guaranteed by that
agency. These direct loans are outlays outside the budget under
current law but would be on-budget outlays under proposed legislation.
FFB purchases loan assets from various agencies, also upon
agency request. Loan assets are loans that an agency has made to
the public and for which repayments are still owed. The agency
guarantees the loan assets sold to the FFB, which ensures that the
FFB will be paid in the event of default. Loan asset sales are
offsets to the outlays of the agency that sells them, regardless of
whether they are sold to the FFB or the public. Sales thus reduce
the size of an agency's outlays immediately rather than over the
normal course of time during which the loans that are sold would
be repaid. Therefore, if the selling agency's outlays are included in
the budget, the budget outlays caused by its direct loans are offset
by the amount of its sales of loan assets. As a result, when the FFB
buys loan assets, under current law it effectively converts direct
loans that have already been made by another agency into offbudget direct loans of the FFB. Putting the FFB on budget will
have the effect that these transactions between two Federal agencies will not reduce the budget totals.
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
agencies continue to hold and service, and they comprise almost all
of the loan assets bought by FFB. 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 little 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." 7
The remainder of FFB outlays consists of the interest that it
pays on its borrowings from Treasury, its administrative expenses,
and its payment of surplus income to the general fund, the sum of
7
See Report of the President's Commission on Budget Concepts, pp. 8, 47-48 and 54-55.
PERSPECTIVES ON THE BUDGET
6-13
which is offset by the interest that it receives on its holdings of
loans and debt. Under current policy, the net interest received (less
administrative expenses) is paid in the same year to the general
fund. Therefore, this remainder is approximately zero, and FFB
outlays approximately equal direct loan disbursements to the
public plus purchases of loan assets from other agencies, less repayments.
Since the FFB finances other programs within the Government,
rather than operating programs itself, the Administration's proposal for putting the FFB in the budget would charge its outlays to
the agencies that use the FFB to finance their programs. This
proposal is consistent with the basic intent of several bills that
have been introduced in the Congress. This method of putting the
FFB in the budget would improve the review and control of Federal outlays by both the Congress and the executive branch. At the
same time, the proposed legislation would prevent agencies from
avoiding the budgetary control process by financing their programs
through fully guaranteed obligations of the type ordinarily financed in the investment securities market. Thus, this change
would improve budgetary control while maintaining the principle
of efficient debt management that was the purpose for setting up
the FFB. For transition purposes only, however, in this budget the
outlays of the FFB are charged to the Treasury Department, in
which the FFB is organizationally located, rather than the agencies
that use the FFB to finance their programs.
Because of this transition treatment, in several places the budget
documents attribute the FFB outlays that are made on behalf of an
agency to that agency itself. This is done so as to present the
effects of the FFB's transactions for different programs. The table
on the next page summarizes this attribution, showing the direct
loans to the public or purchases of loan assets, less repayments, for
selected agencies and programs. The FFB outlays are attributed by
function in the tables throughout Part 5 and elsewhere, and a
complete attribution by both agency and function is given in Part 8
in the section for the Treasury Department that displays the FFB.
As shown in this table, FFB finances a wide variety of programs.
FFB outlays for these programs reached a peak of $21.0 billion in
1981 but have declined every year since then, falling to $7.3 billion
in 1984. Although FFB outlays are estimated to rise in 1985, they
are estimated to fall very sharply in 1986 and to become jiegative
amounts of increasing size in 1987 and subsequent years. This
occurs primarily for two reasons: several lending programs financed by FFB are proposed to be terminated, and FFB will continue to receive repayments of principal on loans made in previous
years. These effects show up most strongly for the Farmers Home
Administration, which has accounted for a little over half of all
6-14
THE BUDGET FOR FISCAL YEAR 1986
ATTRIBUTION OF FEDERAL FINANCING BANK OUTLAYS
(In millions of dollars)
Description
Outlays from loans, by agency or program:
Farmers Home Administration: certificates
of beneficial ownership
Rural Electrification and Telephone revolving fund:
Certificates of beneficial ownership
Direct loans to public
Foreign military sales credit
Energy
Housing and Urban Development:
Community development grants
Low-rent public housing
Transportation: Railroad programs
National Aeronautics and Space Administration
Small Business Administration
Tennessee Valley Authority: Seven States
Energy Corporation
Other
Subtotal, outlays from loans
Interest, administrative expenses, and payment of surplus income
Total, FFB outlays
1984
actual
1985
estimate
1986
estimate
1987
estimate
1988
estimate
2,820
4,099
-904
-4,248
-4,141
69
1,648
2,818
366
447
2,685
2,340
353
253
2,222
282
14
53
1,700
693
-1
1,490
-1,001
-105
31
112
-904
42
-32
-5
25
-35
-9
23
-37
-10
-59
-39
-12
8
254
-67
500
-107
-1,735
-112
-10
-98
-10
137
22
90
-9
87
-16
73
-45
-40
-46
7,336
10,442
77
-3,306
-4,063
10,442
77
-3,306
-4,063
-60
7,277
FFB outlays since FFB began operation. The Farmers Home Administration direct loan programs are proposed for termination or
major reduction in this budget. In addition, FFB outlays for the
foreign military sales credit program decline beginning in 1985
because new obligations for direct loans are financed independently
from FFB; and outlays for the Small Business Administration are a
large negative amount in 1986 because of a proposed transfer of
these loans to a separate account in the Treasury Department
before being sold to the public. By 1988 the only program with a
large amount of new direct loans financed by the FFB is the Rural
Electrification and Telephone revolving fund.
Since the Farmers Home Administration is on-budget, FFB's purchase of its certificates of beneficial ownership reduces total onbudget outlays under current law as well as Farmers Home outlays. The total outlays of the Federal Government are not affected,
since the decrease in on-budget outlays under current law is exactly offset by the increase in off-budget outlays. Under the legislative
proposal to include FFB in the budget, the budget outlays of the
Federal Government will also not be affected by the FFB's transactions with the Farmers Home Administration. FFB's purchase of
certificates of beneficial ownership from the off-budget Rural Electrification and Telephone revolving fund reduces the outlays of this
6-15
PERSPECTIVES ON THE BUDGET
COMPARISON OF TOTAL FEDERAL OUTLAYS WITH CLASSIFICATION UNDER CURRENT LAW AND
WITH GOVERNMENT-SPONSORED ENTERPRISES
(In billions of dollars)
Federal Government
Fiscal year
Classification under current law
Tnfal hnrlnot
1013! DUQgci
On-budget*
Off-budget
2
Governmentsponsored
enterprises 3
1970..
1971..
1972..
1973..
1974..
195.7
210.2
230.7
245.7
269.4
195.7
210.2
230.7
245.6
267.9
0.1
1.4
9.6
*
4.4
11.4
14.5
1975..
1976..
TQ
1977..
1978..
1979..
332.3
371.8
96.0
490.2
458.7
503.5
324.2
364.5
94.2
400.5
448.4
491.0
8.1
7.3
1.8
8.7
10.4
12.5
7.0
4.6
2.3
9.7
24.5
25.9
1980..
1981..
1982..
1983..
1984..
590.9
678.2
745.7
808.3
851.8
576.7
657.2
728.4
796.0
841.8
14.2
21.0
17.3
12.4
10.0
25.3
33.4
42.4
34.3
44.7
959.1
973.7
1,026.6
1,094.8
946.6
972.2
1,029.9
1,099.1
12.5
1.5
-3.2
-4.3
44.3
43.2
(4)
(4)
1985
1986
1987
1988
estimate...
estimate...
estimate...
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 as on-budget instead of off-budget. The administrative expenses and interest collections of the Exchange Stabilization
Fund are included on-budget beginning in 1976, and the actual profits and losses realized from foreign exchange transactions are included
beginning
in 1979. Earlier data for the ESF are not available on a comparable basis.
2
Proposed to be included on-budget.
3
To prevent double counting, outlays of Government-sponsored enterprises exclude loans to other Government-sponsored enterprises and loans to
or 4from all Federal entities.
Not available.
fund to a very small amount, as shown in the preceding table on
the outlays of off-budget entities. The purchase reduces this fund's
outlays and augments the outlays of the FFB by an equal amount.
The table above compares total Federal outlays with the outlays that are on-budget and off-budget under current law.8 The
outlays of the entities that are off-budget under current law were
negligible in 1973 but grew rapidly afterwards for several years
and reached a peak of $21.0 billion in 1981. This was 3.1% of total
Federal outlays. The loan programs financed by the Federal Financing Bank were the primary reason for this growth. After 1981,
however, the off-budget outlays fell sharply, and by 1984 they had
approximately halved. They are estimated to decrease sharply
8
The historical data for on-budget outlays under current law include Federal entities that are off-budget
under current law for any period when they were in the budget, and include the present Government-sponsored
enterprises for periods when they had any Government ownership. The outlays of former off-budget entities are
included in the on-budget totals for all years to the extent practicable.
6-16
THE BUDGET FOR FISCAL YEAR 1986
again after 1985 and to become sizable negative amounts in 1987
and later years.
Government-sponsored enterprises.—Several Government-sponsored 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. In time, however,
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 Commission on Budget Concepts. The Commission
basically recommended that the budget exclude those Governmentsponsored enterprises that are entirely privately owned. However,
the Commission recommended that financial statements of their
operations be included in the budget documents, because the enterprises carry out federally designed programs and receive benefits
from their close association with the Government.9 10
These benefits differ from one enterprise to another and from
one type of debt security to another. In most cases, but not all, they
include such advantages as the following: their debt securities can
be held by federally regulated financial institutions under circumstances where other private securities or State and local securities
are not eligible; they are exempt from Federal income taxation; the
interest on their debt securities is exempt from State and local
income taxation; and the enterprises are perceived by the securities
market to have a special relationship with the Federal Government. Because of these benefits, the Government-sponsored enterprises can borrow at interest rates only slightly highar than the
interest rates paid by Treasury on Federal debt. Consequently, this
budget proposes that fees for this privilege be imposed on new
borrowings (including mortgage-backed securities) of the Government-sponsored enterprises.
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 from the unified budget. 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
9
Report of the President's Commission on Budget Concepts, pp. 29-30.
10
Financial statements for the Government-sponsored enterprises are published in the Appendix, Part V,
"Government-Sponsored Enterprises." Their borrowing and lending are discussed in Special Analysis E, "Borrowing and Debt," and Special Analysis F, "Federal Credit Programs."
PERSPECTIVES ON THE BUDGET
6-17
Marketing Association were later established with full private ownership. The Federal Home Loan Mortgage Corporation is not privately operated, however, because its board of directors consists
entirely of members of the Federal Home Loan Bank Board, who
are Federal Government officials appointed by the President.
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. The loans of these
enterprises primarily support housing, but also support agriculture
and higher education. As shown in the previous table, their outlays
have grown considerably—from relatively moderate amounts
through the middle 1970's to over $20 billion in 1978 and over $30
billion each year since 1981.
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 assumptions shown in
Part 3. These enterprises estimate that they will spend $43.2 billion
in 1986, which equals 4.4% of total Federal 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 1984-86, in billions of dollars: x x
1984 actual
Loans outstanding, end of year
Net loans
1985 estimate
314.1
53.1
1986 estimate
360.1
46.0
405.9
45.8
Loan guarantees.—Government-guaranteed loans are loans for
which the Government guarantees the payment of the principal
and the interest in whole or in part in the event of borrower
default. Loan guarantees are contingent liabilities of the Federal
Government. They generally do not result in budget outlays except
in case of default.
Guaranteed loans may be made to many types of borrowers,
including individuals, businesses, State and local governments, and
foreign governments. The guarantees may be full or partial, and in
some programs, such as the guaranteed student loan program, they
are supplemented by explicit subsidies or other forms of assistance.
Most guaranteed loans are made by banks or other private institutional lenders, and may take the form of mortgages or bank loans.
Others are sold in securities markets. In 1984, 27.5% of total guaranteed loan commitments were used to guarantee direct loans disbursed or purchased by the Federal Financing Bank, which is
described above on pages 6-11 to 6-15. An additional amount of
guaranteed loans originally made by private institutions is pur11
In order to prevent double counting in adding Government-sponsored loans to Federal direct loans and
guaranteed loans, this table excludes loans from one Government-sponsored enterprise to another, loans from
the Federal Government, and guaranteed loans acquired.
6-18
THE BUDGET FOR FISCAL YEAR 1986
Guaranteed Loans Outstanding
$ Billions
$ Billions
600
600
Held by Federal Financing Bank
500-
-500
Held by Government-Sponsored
Enterprises
Held by the Public
400-
-400
300-
-300
200-
-200
100
-100
1976 77
Fiscal Years
78
79
80
81
82
83
84
85
86
Estimate
chased and held by privately owned, Government-sponsored enterprises, as the chart above shows.
A loan guarantee transfers some or all of the default risk of the
loan from the private lender to the Government. Where the Government guarantees timely payment of 100% of the loan principal
and interest, it transforms a private loan into a near-government
loan financed by a near-government security. The guaranteed loan
will not have all the attributes of a Government loan, since private
lenders will negotiate different financial terms and conditions (e.g.,
fees) than would a Government agency. Nor will the guaranteed
loan have all of the attributes of a U.S. Treasury security. It will
be less liquid and may involve higher transaction costs.
Loan guarantees are designed to allocate economic resources to
particular uses by providing credit at more favorable terms than
are otherwise available in the private market. If loan guarantee
recipients are not sufficiently creditworthy to borrow without Federal assistance, the subsidy provided by the guarantee is large and
the guarantee will directly reallocate credit toward federally selected uses, thereby increasing the total volume of credit channeled
into these uses. This leaves a smaller supply of credit to be allocated to those potential borrowers who do not receive assistance, and
increases the interest rate to these borrowers. However, the guarantee does not always change the allocation of credit to such a
6-19
PERSPECTIVES ON THE BUDGET
Relative Shares of New Commitments
for Guaranteed Loans
75
75
1984
HousinQ ond Urbon
Development
1964
60-
-60
45-
-45
30-
-30
Department of
15-
Department of
Agriculture
Educatfon
Export-Import
Bank
-15
Other
Fiscal Years
large degree. Some beneficiaries of loan guarantee programs would
have been able to secure the funds privately, without Government
support. For example, guaranteed mortgage credit might be used to
finance, at a lower cost, a house that would have been purchased
anyway.
Many of the guarantee programs operated by the Federal Government began in efforts to revive the economy during the depression of the 1930s. The Reconstruction Finance Corporation, created
in 1932, was the forerunner of the Export-Import Bank, the Small
Business Administration, and other credit programs. The Nation's
single largest credit program, the Federal Housing Administration's (FHA) home mortgage insurance program, was created in
1934 to stimulate housing purchases.
During the 1950s and 1960s housing credit dominated Federal
credit activities. The home mortgage programs of the FHA and
Veterans Administration accounted for 95.6% of the total volume
of new commitments for guaranteed loans in 1964. As the chart
above shows, the range of activities financed with Federal guarantees has widened since that time. Guarantees are now offered for
business, agriculture, energy, and education, though housing continues to dominate. For the 1986 budget, home mortgage programs
6-20
THE BUDGET FOR FISCAL YEAR 1986
account for 62.4% of all new guaranteed loan commitments. Aid to
international business accounts for 15.8%. The remaining 21.8% is
primarily for the guaranteed student loan program and for agriculture.
Because loan guarantees are not included in the outlay totals,
they were formerly excluded as well from normal budget discipline.
In January 1980 a central control system for Federal credit was
instituted to subject guaranteed and direct loans to greater scrutiny throughout the budget process. This system consisted of the
Federal credit budget and appropriations bill limitations. The
credit budget covers all direct and guaranteed loans by Federal
agencies. Control is effected through appropriations bill limitations,
which cover 63% of all new guaranteed loan commitments to be
extended in 1986 and 33% of new direct loan obligations. (See Part
5 for a discussion of credit programs by function, Part 7 for a more
complete description of the credit budget and credit control system,
and Special Analysis F, "Federal Credit Programs/' for a detailed
discussion of Federal credit activities.)
Taxation and tax expenditures.—Taxation provides the Government with receipts, which withdraw purchasing power from the
private sector in order to finance direct Government expenditure.
The structure of the tax system has important effects on the allocation of resources among private uses and the distribution of income
among individuals. These effects are caused by the choice of taxes
and by the structural characteristics of each different tax—for
example, by the rate schedules, exemptions, deductions, and exclusions of the individual income tax. The effects of taxation on resource allocation and income distribution are analogous to the
effects of outlays.
Some features of the tax system have been defined as "tax expenditures" and receive special attention in the budget. Tax expenditures are defined as amounts attributable to provisions of the
Federal income tax laws that allow a special exclusion, exemption,
or deduction from gross income or that provide a special credit, a
preferential rate of tax, or a deferral of tax liability. The Congressional Budget Act requires that estimates of tax expenditures be
published in the budget.
Tax expenditures are so designated because they are one means
by which the Federal Government pursues public policy objectives,
and because in many cases they can be regarded as an alternative
means of achieving the same objectives as direct expenditures.
They can also be regarded as an alternative means of achieving the
same objectives as other instruments of Government policy, such as
loan guarantees, regulations, and provisions of the tax law other
than those provisions that cause tax expenditures. There are numerous examples of the similarity in objective between tax expend-
PERSPECTIVES ON THE BUDGET
6-21
itures and direct outlays. For instance, the cost of buying ships
built in U.S. shipyards is reduced both by construction subsidies
and by the deferral of tax on the shipping company income used to
buy new ships; and the cost of borrowing by eligible persons and
businesses is reduced both by direct loans at subsidized interest
rates and by tax exemption for bonds. Similarly, State and local
governments benefit both from direct grants and from the ability
to borrow funds at tax-exempt rates; and individuals benefit both
from social security payments and from the tax exemption of most
of these payments.
Tax expenditures ordinarily result from permanent legislation.
They therefore are not submitted to the Congress each year and do
not routinely receive a formal and systematic annual review. In
this sense they share a legislative status with entitlement programs, such as social security, which do not require annual appropriations. However, tax expenditures, other provisions of the
income tax, and other tax laws are generally reviewed whenever
fiscal policy decisions are considered regarding the overall level of
tax receipts. Many tax expenditures and other tax law provisions
were changed in the revenue acts of the last four years; and during
the past year the Treasury Department comprehensively reviewed
the income tax law including both its tax expenditures and its
other provisions.
The classification of certain provisions of law as resulting in tax
expenditures requires some baseline tax structure against which
the actual tax law can be compared. Deviations of the law from
this baseline are deemed to cause tax expenditures. The Congressional Budget Act does not provide an exact specification of the
baseline against which tax expenditures are to be measured.
The baseline used in the budget is intended to consist of the
general provisions of the Internal Revenue Code. For the individual
income tax, the baseline in the budgets since 1983 has included
those provisions that exist under current law for the definition of
taxpaying units (including the separate corporation income tax),
graduated rate schedules, personal exemptions, zero-bracket
amounts (standard deductions), and basic accounting rules. The
baseline before 1983 was similar but in addition required that the
time pattern of depreciation deductions approximate the useful life
of assets and that all cash transfers from government be included
in taxable income. By definition, characteristics of the tax structure included in the baseline do not give rise to tax expenditures.
The use of many of the general provisions of the Internal Revenue Code for defining both of these baseline tax structures makes
it clear that listing an item as a tax expenditure does not imply
that it is either a desirable or an undesirable provision. When
different provisions of the Code are considered to be in the base-
6-22
THE BUDGET FOR FISCAL YEAR 1986
line, the list of tax expenditures is different and the amounts of
particular tax expenditures may also be different. For example, in
contrast with the baseline used in earlier years, the baseline used
in the budgets since 1983 has considered the accelerated cost recovery system (ACRS) to be the general method for depreciating assets
and therefore has included ACRS as part of the baseline; this
baseline has also excluded public assistance payments from baseline income. Therefore, under this baseline, unlike the pre-1983
baseline, tax expenditures do not arise from either the use of ACRS
or the exclusion of public assistance benefits from adjusted gross
income. This year's tax expenditure estimates show tax expenditures relative to both of these baselines.
These two baselines are not the only ones that might be used. In
particular, a baseline tax structure might reflect a normative judgment about a fully comprehensive income tax base or consumption
tax base. A fully comprehensive income tax base, among other
changes, would adjust incomes for the effects of inflation; would
integrate the individual and corporation income taxes rather than
regarding the separate tax treatment of individuals and corporations as part of the baseline tax structure; would include imputed
income, such as the consumption benefits received from owneroccupied homes; and would tax income when it was accrued instead
of when it was realized. Thus, for example, the failure under
present law to take account of inflation in measuring capital gains,
depreciation, and interest income would be regarded as negative
tax expenditures. Alternatively, under a consumption tax base,
income would not be taxed until consumed. However, the proceeds
of borrowing and of withdrawals from savings accounts would be
taxable if they were used for consumption. Under either of these
alternative baseline structures, the list of tax expenditures and
their estimated amounts would be different than they are now.
Some of the items listed as tax expenditures under one or both of
the present baselines can be regarded to some degree as inexact
but practicable adjustments to correct for departures of the baseline from a fully comprehensive tax base. For example, the exclusion of 60 percent of long-term capital gains from taxable income
may be regarded as a method of adjusting for the overstatement of
real income from capital gains during a period of inflation. Similarly, the use of more accelerated depreciation methods than economic
life—which is a tax expenditure under the pre-1983 baseline—may
be regarded as a means of offsetting the failure to adjust depreciation deductions for increases in the price level.
Regardless of how the baseline is defined, the provisions of tax
law that do not result in tax expenditures deserve as much scrutiny as the provisions of tax law that do. This is because the other
provisions also have major effects on the allocation of resources
PERSPECTIVES ON THE BUDGET
6-23
and the distribution of income, and because these other provisions
may be alternative means of achieving the same objectives or
analogous objectives as tax expenditures achieve. For example,
investment in equipment may be stimulated by either an increase
in the investment tax credit or a decrease in the corporation
income tax rate; the former is a change in a tax expenditure, but
the latter is not. Similarly, income support may be provided by
either the exclusion of social security benefits from taxable income
or by the zero-bracket amount (standard deduction); the former
causes a tax expenditure, but the latter does not.
Tax expenditures are estimated in two steps. First, the revenue
loss of a tax provision is estimated, i.e., the difference between tax
receipts and what tax receipts would be if the tax law conformed to
a specified baseline. If removing a tax provision would increase
taxable income, for example, the revenue loss is estimated as the
increase in taxable income multiplied by the tax rate that would be
paid on the additional income.
The revenue loss is then adjusted to an outlay equivalent, i.e.,
the amount of outlays that would be required to provide an equal
after-tax income to the taxpayer (and thereby an equal incentive)
as the special tax provision provides. In many cases the required
outlays are greater than the revenue loss, because taxpayers would
have to pay taxes on the higher income derived from the outlays.
For example, one tax expenditure provision is the exclusion from
taxable income of the value of housing and meals supplied to
military personnel. If the Government were to repeal this tax
exclusion and instead pay higher salaries, the increase in salaries
would be taxed. Consequently, if the Government were to use taxable direct expenditures rather than tax expenditures and were to
provide the same total after-tax compensation, the increase in
direct outlays for higher salaries would have to be greater than the
revenue loss under the special tax provision. The Federal deficit
would be the same in either case, however, because higher outlays
would be required only to the extent needed to make up the difference caused by higher tax receipts.
This adjustment makes the tax expenditures more comparable
with direct outlays than the revenue loss would be and therefore
more useful in analyzing Federal programs. For some tax expenditures, though, the revenue loss is equivalent to a direct outlay
without any adjustment. Special Analysis G, "Tax Expenditures,"
presents estimates of tax expenditures defined both as outlay
equivalents and as revenue losses, but for program analysis in this
budget only the outlay equivalent estimates are used.
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 reductions in the
6-24
THE BUDGET FOR FISCAL YEAR 1986
income tax rate schedule enacted in 1981, for example, automatically decreased many tax expenditures below what they otherwise
would have been. A tax rate reduction decreases the amount of
receipts that would be gained by repealing deductions, exemptions,
and exclusions, because lower tax rates are applied to the increase
in taxable income.
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 using the zero-bracket amount
(standard deduction). Consequently, adding together separate tax
expenditures would usually be misleading, and they are not aggregated in this budget except for the specially computed totals by
functional category.
Tax expenditures are presented at two places in the budget. Part
5, "Meeting National Needs: the Federal Program by Function,"
discusses the major tax expenditures in each functional category,
together with outlays and guaranteed loans, in order to describe
more fully the Government's policy. Special Analysis G, "Tax Expenditures," analyzes the concept and measurement of tax expenditures and presents a complete list of tax expenditure estimates for
1984-86. The discussion in Part 5 and the functional totals are
based on the pre-1983 baseline.
As discussed in Part 4 of this volume, "Budget Receipts," the
Deficit Reduction Act of 1984 increased tax receipts significantly.
Some of its provisions repeal or reduce tax expenditures. For example, the Act repealed the exclusion of a limited amount of net
interest income that had been scheduled to begin in 1985, and it
limited the amount of tax-exempt, private purpose industrial development bonds. At the same time, the Act also extended or increased
a few tax expenditure provisions, such as continuing the tax-exemption for mortgage subsidy bonds through 1987.
The Administration is proposing a number of tax changes in the
present budget. Several new, expanded, or continued tax expenditures would serve diverse purposes. These tax expenditures include
a three-year extension of the tax credit for increasing research and
experimentation expenditures; a larger tax credit for dependent
care expenses paid by low income individuals; a group of incentives
6-25
PERSPECTIVES ON THE BUDGET
for the redevelopment of depressed areas designated as "enterprise
zones"; a tuition tax credit for students at private elementary and
secondary schools; and education savings accounts for college and
university expenses. Other proposed measures would change receipts but not tax expenditures.
BUDGET FUNDS AND THE FEDERAL DEBT
The budget consists of two major groups of funds: Federal funds
and trust funds. The Federal funds are derived mainly from tax
receipts 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.
BUDGET TOTALS BY FUND GROUP
(In billions of dollars)
1985
estimate
1986
estimate
1987
estimate
418.1
338.1
89.7
459.3
396.5
-118.9
493.5
421.3
-121.1
537.9
447.4
-123.7
588.9
496.1
134.6
666.5
736.9
793.7
861.7
950.4
636.3
305.2
-89.7
731.6
346.4
-118.9
734.9
359.9
-121.1
772.7
377.6
-123.7
827.8
401.5
-134.6
851.8
959.1
973.7
1,026.6
1,094.8
-218.2
32.9
-272.3
50.1
-241.4
61.4
-234.8
69.8
-238.9
94.5
-185.3
-222.2
-180.0
-164.9
-144.4
1984 actual
Budget receipts:
Federal funds
Trust funds
Interfund transactions
Total, budget receipts
Budget outlays-.
Federal funds l
Trust funds. .
Interfund transactions
Total, budget outlays
Budget surplus or deficit ( - ) :
Federal funds 1
Trust funds
Total, budget surplus or deficit ( - )
..
1988
estimate
1
Includes the outlays of the off-budget Federal entities, which have been excluded from the budget under current law but are proposed to be
included on-budget. In previous years they were shown as a grouping separate from Federal funds or trust funds.
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. Under
proposed legislation the budget includes the net transactions with
the public of the Federal Financing Bank and the other off-budget
Federal entities, which have been excluded from the budget under
provisions of law. The outlays that are off-budget under current
law are classified as Federal funds outlays when included in the
6-26
THE BUDGET FOR FISCAL YEAR 1986
BUDGET FINANCING AND CHANGE IN DEBT OUTSTANDING
]
(In billions of dollars)
Description
1984 actual
-185.3
Budget surplus or deficit ( - )
(-175.4)
(On-budget under current law)
(Off-budget under current law; proposed to be
included on-budget)
(-10.0)
Means of financing other than borrowing from
the public:
Decrease or increase ( - ) in Treasury operating cash balance
Increase or decrease ( — ) in:
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 2
Trust funds 3
Deposit funds 4
Total, change in Federal agency investments in Federal debt
Change in gross Federal debt
1986
estimate
1987
estimate
1988
estimate
(-209.8)
-180.0
(-178.5)
-164.9
(-168.2)
-144.4
(-148.7)
(-125)
(-15)
1985
estimate
-222.2
(3.2)
(4.3)
6.6
10.4
5.4
1.9
.5
9.4
.5
.6
9.4
-2.5
.5
.7
.8
14.5
20.8
7.4
.7
.8
-170.8
-201.4
-172.6
-164.2
-143.6
170.8
201.4
172.6
164.2
143.6
2.5
20.7
.8
2.2
60.3
.5
.8
62.3
-2.5
69.8
94.5
24.0
63.0
60.5
194.9
264.3
233.2
234.0
238.1
•$50 million or less.
1
Several amounts have been assumed to be zero in 1987 and 1988 because they are usually small and cannot be estimated accurately.
2
Includes the off-budget Federal entities, which have been excluded from the budget under current law but are proposed to be included onbudget.
3
Estimates for 1987 and 1988 are equal to the total trust fund surplus.
4
Only those deposit funds classified as Government accounts.
budget and are therefore shown as Federal funds outlays in this
table.12
Thus, as shown in the table above, the budget deficit or
surplus is the principal determinant of the change in the Federal
debt held by the public.13 The budget deficit, together with the
other factors noted in this table, is estimated to increase the Federal debt held by the public from $1,312.6 billion at the end of 1984 to
$1,686.6 billion at the end of 1986, with the increase in 1986 being
less than in 1985. Borrowing is projected on a basis consistent with
the economic assumptions that are explained in Part 3 of this
volume.
12
Special Analysis C, "Funds in the Budget," discusses further the two major groups of funds and the effect
on the accounts of shifting the off-budget Federal entities into the budget.
13
Table 12 in Part 9 of this Budget contains more detail on budget financing through 1986 and shows the
levels of debt from 1983 to 1986. Federal debt is discussed further in Special Analysis E, "Borrowing and Debt."
Historical data since 1940 are published in Historical Tables, Budget of the United States Government, FY1986.
PERSPECTIVES ON THE BUDGET
6-27
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 1986 gross Federal debt is estimated to
be $2,074.2 billion, of which debt held by the Government itself is
$387.6 billion. Thus, gross Federal debt is much larger than the
Federal debt held by the public.
Gross Federal debt is estimated to rise by $233.2 billion during
1986. As indicated in the lower section of the previous table, $60.5
billion of this increment will be held in trust funds and other
Government accounts. This is mainly due to the investment of
trust fund surpluses in Treasury 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 1984 the public
held $3.4 billion of agency debt, most of which was issued some
years ago. The greater part consists of revenue bonds issued by the
Tennessee Valley Authority and participation certificates in pools
of loans issued by the Government National Mortgage Association
on behalf of several agencies. Agency 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.
Almost all Treasury securities are covered by a general statutory
debt limitation. The present limit is $1,823.8 billion. However, the
debt subject to limit is estimated to rise to $1,837.4 billion by the
end of 1985. Therefore, to permit the Federal Government to meet
its obligations, the limit will have to be raised during 1985.
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 must be financed primarily by borrowing. This debt
is almost entirely subject to the statutory limit. As shown in the
table on the next page, the Federal funds deficit was $218.2 billion in
1984, and the increase in debt subject to statutory limit was $195.0
6-28
THE BUDGET FOR FISCAL YEAR 1986
FEDERAL FUNDS FINANCING AND CHANGE IN DEBT SUBJECT TO LIMIT
(In billions of dollars)
Description
Federal funds surplus or deficit (—)
(On-budget under current law)
(Off-budget under current law; proposed to be included on-budget)
Means of financing other than borrowing:
Decrease or increase ( - ) in Treasury operating cash balance
Increase or decrease ( - ) in:
Checks outstanding, etc
Deposit fund balances
Seigniorage on coins
Total, means of financing other than borrowing..
Decrease or increase ( - ) in investments in Federal debt by Federal
funds and deposit funds 1
Increase or decrease ( —) in Federal funds debt not subject to limit
Total, requirements for borrowing subject to debt limit
Change in debt subject to limit
1984
actual
1985
estimate
1986
estimate
-241.4
-218.2
-272.3
(-208.3) (-259.9) (-239.9)
(-10.0)
6.6
(-125)
(-15)
10.4
8.5
-2.5
.5
17.7
1.9
.5
26.7
10.7
6.5
-3.4
-.1
-2.7
-.1
1.7
-.1
-195.0
-264.4
-233.3
195.0
264.4
233.3
*$50 million or less.
* Only those deposit funds classified as Government accounts.
billion. Thus, the Federal funds deficit roughly accounted for the
increase in the debt subject to limit.
THE DECREASE IN TOTAL 1984 OUTLAYS FROM THE
INITIAL BUDGET ESTIMATE
Total outlays for 1984 were $851.8 billion, which is $10.7 billion
less than the initial estimate made by the Administration in its
budget transmitted to Congress in January 1983. Outlays that are
on-budget under current law account for $6.7 billion of this decrease, while outlays that are off-budget under current law account
for the remaining $4.0 billion. This is the first budget in recent
years to record a shortfall in spending and continues the trend
since 1980 of continually narrower differences between the initial
budget estimate and actual outlays. Although actual outlays exceeded the initial estimate in each of the preceding four years, the
percentage difference declined steadily from 9.3% in 1980 to 4.5%
in 1983. This section reviews the major causes of the 1984 decrease.
It includes the outlays of Federal entities that are off-budget under
current law in order to be consistent with the Administration's
proposal to move them on-budget.
The following table compares the initial outlay estimate with the
actual outlay total in current and constant dollars and as a percent
of GNP. Current dollar outlays were 1.2% below the initial estimate, while constant dollar outlays were 0.8% higher. The table
also compares defense with nondefense outlays in current dollars.
6-29
PERSPECTIVES ON THE BUDGET
1984 OUTLAY DIFFERENCES
(Dollars in billions)
January 1983
estimate
Total outlays:
Current dollars
National defense
Nondefense
Constant (fiscal year 1972) dollars
As a percent of GNP
Classification under current law:
On-budget under current law
Off-budget under current law l
1
Actual
Percent
change
862.5
245.3
617.2
363.5
24.7
851.8
227.4
624.4
366.3
23.8
-1.2
-7.3
+ 1.2
+0.8
-3.6
848.5
14.0
841.8
10.0
-0.8
-29.0
Proposed to be included on-budget.
Actual outlays for defense were 7.3% below the initial estimate,
while outlays for nondefense programs were 1.2% higher.
Chronology of outlay decrease.—The Administration's initial
outlay estimate for 1984 was $862.5 billion. The table below shows
subsequent revisions to this estimate. In April 1983, the estimate
decreased by $4.2 billion, largely as a result of a stronger than
forecast economic recovery, changes in agricultural market conditions, and lower projections of inflation. This decrease was mostly
offset by a $3.8 billion increase in July 1983. Higher than expected
CHRONOLOGY OF THE 1984 OUTLAY DECREASE
(In billions of dollars)
January 1983
862.5
Changes:
April 1983 (April Update): A $2.3 billion increase due to the 1983 jobs bill and a $1.9 billion
decrease in offsetting receipts from the Outer Continental Shelf were more than offset by a $2.5
billion decrease in farm price supports, a $4.2 billion net decrease in unemployment
compensation, and a $1.1 billion decrease in social security
-4.2
July 1983 (Mid-Session Review): A $3.0 billion decrease for the Department of Defense and a $2.8
billion decrease in unemployment compensation were more than offset by a $4.1 billion increase
in farm price supports, a $1.3 billion increase in mortgage credit and thrift insurance, a $1.0
billion increase in social security, and a $1.2 billion increase in net interest
+3.8
February 1984 (1985 Budget): Decreases of $4.7 billion in the Department of Defense and $4.2
billion in farm price supports were more than offset by increases in many programs including
$1.3 billion in social security, $1.6 billion in medicare, $1.4 billion in food and nutrition
assistance programs, and $1.7 billion in net interest, and a $1.5 billion decrease in offsetting
receipts from the Outer Continental Shelf
+7.9
April 1984 (April Update): The largest decreases were in farm price supports ($1.5 billion) and
unemployment compensation ($1.4 billion)
-4.3
August 1984 (Mid-Session. Review): A $1.7 billion increase in FDIC was more than offset by a
$3.9 billion decrease in the Department of Defense, a $1.4 billion decrease in medicare, and
$0.8 billion decrease in unemployment compensation
-7.7
October 1984 (Year-End Statement): Increases of $1.0 billion in farm price supports, $1.4 billion in
FHA, $1.0 billion in low-rent housing funds, and $1.7 billion in net interest were more than
offset by decreases of $6.2 billion for the Department of Defense, $1.5 billion in medicare, and
$2.7 billion for the Federal Financing Bank
-6.2
Total decrease
Actual
-10.7
851.8
6-30
THE BUDGET FOR FISCAL YEAR 1986
payments for farm price supports under the payment-in-kind program were the largest increase. In February 1984, the outlay estimate increased by $7.9 billion due to increases in many programs
that more than offset outlay decreases of $4.7 billion in the Department of Defense due to Congressional action on appropriations bills
and a $4.2 billion upward reestimate of outlays for farm price
supports. Estimated outlays fell by $12.0 billion overall in April
and August 1984, with the largest reestimates due to defense outlays and unemployment compensation. Lower than anticipated
spending by many agencies caused actual outlays to be $6.2 billion
below the August 1984 estimate. The largest shortfalls occurred in
the Department of Defense, medicare, and the Federal Financing
Bank.
Major causes of the decrease.—Actual 1984 outlays were $10.7
billion below the original estimate. The following table shows the
distribution of this decrease according to three categories: (1) policy
changes, (2) economic conditions, and (3) estimating and other differences. The amounts in the first two categories account for only
the major items while the third category is a residual. The figures,
therefore, are approximations.
Policy changes to the 1984 budget proposals were a result of
revised Administration proposals and congressional action that differed from the initial Administration proposals. The net increase
due to policy changes was $13.8 billion. Outlays for national defense programs were $5.3 billion lower than proposed, whereas
outlays for nondefense programs were $19.1 billion higher. A similar pattern also occurred for the two previous budget estimates.
Outlays for nondefense discretionary programs were about $9
billion above the Administration's proposals due to policy changes.
This includes increases in regular and supplemental appropriations
bills and the 4% pay raise for Federal civilian workers in January
1984. The 1984 budget assumed no increase in pay.
Outlays for benefit payments to individuals were also about $7
billion above the Administration's proposals due to policy changes.
About 70% of this increase is accounted for by changes affecting
medicare, unemployment compensation, food stamps, and aid to
families with dependent children. Outlays for these programs were
$5.3 billion above the Administration's proposals primarily due to
the failure of Congress to enact many of the Administration's cost
saving reforms. However, Congress did adopt most of the reforms
proposed by the bipartisan National Commission on Social Security
Reform and recommended by the Administration for the social
security program.
Policy changes for other mandatory programs and inaction on
several user fee proposals also increased outlays. Outlays increased
6-31
PERSPECTIVES ON THE BUDGET
SUMMARY OF REASONS FOR DIFFERENCE IN 1984 OUTLAYS
(In billions of dollars)
Total
Reasons for difference (net):
Policy changes
Economic conditions
Estimating differences and other changes,
+ 13.8
-17.0
-7.5
Total
-10.7
by $1.7 billion because of increases in direct export credit and the
failure of Congress to enact the Administration's proposal to freeze
target prices at 1983 crop levels for Commodity Credit Corporation
programs. Failure of the Congress to enact several proposed user
fees, including navigation user fees and Pension Benefit Guaranty
Corporation premium increases, raised outlays by almost $1.0 billion.
Economic conditions differed from those forecast in January 1983
as shown in the following table. Growth in real GNP exceeded the
growth projected by 3.2 percentage points in 1983 and by 1.3 percentage points in 1984. Inflation, as measured by both the GNP
deflator and the Consumer Price Index, was lower than projected
for both 1983 and 1984. The total unemployment rate also was
lower than anticipated in both years, by 0.9 percentage point in
1983 and 2.1 percentage points in 1984. Conversely, interest rates,
as measured by the 91-day Treasury bill rate, were 0.6 percentage
points higher than projected in 1983 and 1.7 percentage points
higher in 1984.
COMPARISON OF JANUARY 1983 ECONOMIC FORECAST AND ACTUAL ECONOMIC PERFORMANCE
(Calendar years)
January 1983
1983
Percent change:
GNP (constant 1972 dollars): 4th quarter over 4th
quarter
Inflation (4th quarter over 4th quarter):
GNP deflator
Consumer Price Index (CPI)
Total unemployment rate (annual average)
Interest rate (91-day bills, annual average)
1984
Actual
1983
Difference
1984
1983
1984
3.1
4.0
6.3
5.3
3.2
1.3
5.6
5.0
10.4
8.0
5.0
4.4
9.5
7.9
3.8
2.9
9.5
8.6
3.7
3.6
7.4
9.6
-1.8
-2.1
-0.9
0.6
-1.3
-0.8
-2.1
1.7
The difference between the economic forecast and economic performance resulted in a net outlay decrease of $17.0 billion. Estimates of the major components of this decrease are shown in the
following table. Lower than anticipated unemployment accounts
for almost all of the total net decrease, most of which was for
6-32
THE BUDGET FOR FISCAL YEAR 1986
unemployment compensation. Lower inflation reduced outlays by
$9.0 billion. Most of this decrease was for defense purchases, primarily because of lower than anticipated fuel costs; social security
and medical care programs account for most of the remainder.
Outlays increased by $1.8 billion due to the net effect of higher
interest rates and the lower borrowing requirements associated
with changes in economic conditions that reduced the deficit below
its initial estimate. Conversely, receipts for rents and royalties on
the Outer Continental Shelf were $5.2 billion lower than initially
estimated due to changes in economic conditions in world oil markets.
EFFECT OF DIFFERENCES BETWEEN ESTIMATED AND ACTUAL ECONOMIC CONDITIONS ON 1984
OUTLAYS
(In billions of dollars)
Unemployment rate differences:
Unemployment compensation
Other
Subtotal, unemployment rate differences
Price differences:
Cost of living adjustments:
Social security
Other
Medical prices:
Medicare and medicaid
Defense purchases
Subtotal, price differences
Difference
-12.9
-3.5
-16.4
-1.2
-0.4
-0.8
-6.6
-9.0
Interest differences:
Net Interest"
Interest rates
Differences in borrowing l
Guaranteed student loans
+3.0
—1.7
+0.5
Subtotal, interest differences
+1.8
Receipts from the Outer Continental Shelf
Other adjustments
Total
1
+5.2
+1.4
-17.0
Includes only the effect of differences in borrowing associated with differences in economic conditions.
Estimating differences and other changes account for a $7.5 billion
decrease in 1984 outlays. The largest estimating adjustment, $5.3
billion, was for the Federal Financing Bank (FFB). The largest
changes for FFB include a $3.0 billion decrease in the Rural Electrification Administration's loan programs due to a reduction in the rate
of growth in the demand for electricity that lowered the demand for
loans for new electrical power generation, and a $1.4 billion decrease
PERSPECTIVES ON THE BUDGET
6-33
in the foreign military sales credit program because of delayed
military purchases by foreign governments. The second largest
estimating adjustment was for farm price supports. Crop production
was lower than estimated due to weather conditions, resulting in
an outlay decrease of over $4.0 billion. This was offset in part
by increased outlays for subsidizing greater tobacco and dairy
production.
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 1984 budget, which was submitted in January 1983 for the
fiscal year ending on September 30, 1984.
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. Prior-year contracts and obligations are also
legally binding.
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. Budget estimates
of relatively uncontrollable outlays do not include the effects of
proposed legislation.
A number of factors may cause differences between the amounts
estimated in the budget and the actual outlays. 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.
The following table shows the differences between actual outlays
for relatively uncontrollable programs in 1984 and the amounts
6-34
THE BUDGET FOR FISCAL YEAR 1986
estimated in the 1984 budget. The list of programs is the same as
in Table 18 (Controllability of Budget Outlays) in Part 9. None of
the activities that are off-budget under current law and proposed to
be on-budget are included in these totals, because the data are not
identified by controllability classification. Actual outlays for relatively uncontrollable programs in 1984 were $624.1 billion, which is
$19.6 billion or 3.0% lower than the estimate based on existing law
in January 1983. Outlays for open-ended programs and fixed costs
were $11.3 billion below the initial estimate, while outlays from
prior-year contracts and obligations were $8.4 billion lower.
RELATIVELY UNCONTROLLABLE OUTLAYS FOR 1984
(In billions of dollars)
Relatively uncontrollable under present law
Open-ended programs and fixed costs:
Payments for individuals: *
Social security and railroad retirement
Federal employees' retirement and insurance
(Military retired pay)
(Other)
January 1983
estimate
(existing law)
Actual
Change
183.3
50.5
17.1
33.4
26.8
85.0
3.7
3.3
19.5
2.8
179.3
49.0
16.5
32.6
16.9
79.9
4.8
3.6
21.0
2.9
-4.0
-1.5
-0.6
-0.9
-9.9
-5.0
1.1
0.3
1.6
0.1
Subtotal, payments for individuals
374.8
357.4
-17.4
Other open-ended programs and fixed costs:
Net interest
General revenue sharing
Farm price supports (CCC)2
Other
105.8
4.6
9.6
-4.8
111.1
4.6
7.3
-1.6
5.2
*
-2.2
3.1
Subtotal, other open-ended programs and fixed costs
115.2
121.3
6.1
Total, open-ended programs and fixed costs
490.0
478.7
-11.3
85.9
67.8
79.5
65.8
-6.4
-2.0
Total, outlays from prior-year contracts
and obligations
153.7
145.3
-8.4
Total, relatively uncontrollable outlays
643.7
624.1
-19.6
Unemployment compensation
Medical care
Assistance to students
Food and nutrition assistance
Public assistance and related programs
Other.
Outlays from prior-year contracts and obligations*.
National defense
Civilian programs
*$50 million or less.
1
Beginning in the 1985 budget, the administrative costs of relatively uncontrollable payments for individuals, which are controlled through
limitations, are classified as relatively controllable. In addition, there were some changes in the treatment of interest payments for interfund
borrowing.
The January 1983 estimates were adjusted to be consistent with these changes.
2
The initial estimate of farm price supports was adjusted to reflect savings from the payment-in-kind program, which was implemented
administratively before the beginning of 1984.
Payments for individuals, which are essentially income transfers,
were 75% of all open-ended programs and fixed costs in 1984.
Actual outlays for this grouping were $17.4 billion lower than
PERSPECTIVES ON THE BUDGET
6-35
originally estimated. This decrease was the net effect of legislative
action, differences between actual and assumed economic conditions, differences between the anticipated and actual number of
beneficiaries, and technical reestimates.
Outlays for social security and railroad retirement, the largest
category of payments for individuals, were $4.0 billion lower than
estimated. Outlays for these programs were lower primarily because of the enactment of the Social Security Amendments of 1983
and the Railroad Retirement Solvency Act of 1983, which delayed
automatic cost-of-living adjustments. Outlays also decreased because lower than anticipated inflation reduced the size of the costof-living adjustment.
Outlays for Federal employees' retirement and disability insurance programs were $1.5 billion below the budget estimate. These
programs consist of military retired pay, civilian employee retirement and disability, and veterans service-connected compensation.
Except for veterans service-connected compensation, these benefits
are automatically indexed to the consumer price index. Outlays for
the indexed programs were below the initial estimates by $1.6
billion primarily due to lower than expected inflation and sixmonth delays in applying cost-of-living adjustments. Outlays for
veterans' compensation were $0.1 billion above the original estimate due to the net effect of congressional enactment of a cost-ofliving adjustment and a lower caseload than anticipated.
Outlays for unemployment compensation programs were $9.9 billion below the initial estimate. This decrease was the result of a
lower than forecast rate of unemployment offset partially by increases due to enacted legislation. Lower unemployment reduced
outlays by $12.9 billion; an extension of Federal supplemental unemployment compensation raised 1984 outlays by $3.0 billion.
Outlays for medical care were $5.0 billion lower than estimated.
Medicare outlays were $4.1 billion below the initial estimate as a
result of lower than anticipated medical prices and technical reestimates related to the new prospective payment system. Outlays for
the medicaid program were $0.9 billion below the initial estimate.
Assistance to students consists of GI bill benefits and the guaranteed student loans program. Outlays for the guaranteed student
loans program were $1.1 billion above the estimate due primarily
to the effect of higher than expected interest rates, loan volume,
and default rates.
Food and nutrition assistance includes the child nutrition and
special milk programs. Outlays for these programs were $0.3 billion
higher than estimated because a greater number of meals were
served than originally anticipated.
6-36
THE BUDGET FOR FISCAL YEAR 1986
Public assistance and related programs include public assistance
payments, supplemental security income, outlays for earned
income tax credits, and veterans non-service-connected pensions.
Outlays for these programs were $1.6 billion above the estimate.
The largest change, $1.0 billion, occurred in the supplemental security income program. This change was the net effect of a greater
number of beneficiaries and higher average benefits than anticipated, a delay in the cost-of-living adjustment, and legislation that
allowed a $20 monthly deduction from income used to calculate
benefit awards.
Relatively uncontrollable outlays for all other payments to individuals were $0.1 billion higher than estimated, due primarily to
higher than expected payments for black lung disabilities.
Open-ended programs and fixed costs other than payments for
individuals were 25% of all open-ended programs and fixed costs in
1984. Outlays for net interest were $5.2 billion or 4.9% higher than
the original estimate. This increase is the net effect of higher than
anticipated interest rates and less Federal borrowing than expected. The budget estimate assumed an 8.0% interest rate on 91-day
Treasury bills for fiscal year 1984, whereas the actual rate averaged
9.5%.
Outlays for farm price supports (Commodity Credit Corporation)
were $2.2 billion below the initial estimate. A large drop in crop
production due to a drought accounts for a decrease of $3.7 billion
in outlays. This was partially offset by a $1.4 billion increase in
outlays for export credit.
Outlays for prior-year contracts and obligations for civilian and
national defense programs were $8.4 billion below the initial estimate. National defense outlays were below the estimate because of
slower than anticipated spending. Outlays for civilian programs
were also lower than the initial estimate.
Comparison of actual and estimated receipts.—Budget receipts in
1984 were $666.5 billion, which is $6.8 billion greater than the
January 1983 estimate of $659.7 billion.
Differences in economic assumptions—higher than anticipated
incomes and interest rates, and lower than expected oil prices—
accounted for a net increase in 1984 receipts of $21.4 billion above
the budget estimate. This increase was partially offset by changes
in collection patterns and effective tax rates, which reduced receipts by $7.6 billion. Differences in tax law from the legislation
proposed in the budget reduced 1984 receipts by an additional $7.0
billion. These legislative differences consisted of congressional inaction on, or modification of, the proposals in the 1984 budget, and of
changes in law that were not proposed at that time.
A bipartisan social security plan, designed to ensure the future
solvency of the social security trust funds, was proposed in the 1984
PERSPECTIVES ON THE BUDGET
6-37
budget. This plan was estimated to increase 1984 receipts by $8.2
billion. Other proposals, which were estimated to increase 1984
receipts by a net $2.9 billion, included the taxation of employerpaid health insurance premiums in excess of a specified level,
increases in contributions to civil service retirement, tax incentives
for the redevelopment of economically distressed areas, a tuition
tax credit, and a jobs tax credit for the long-term unemployed.
Altogether, the January 1983 proposals were estimated to increase
1984 receipts by $11.2 billion.
Four major laws affecting 1984 receipts were enacted after January 1983: the Social Security Amendments of 1983, the Interest and
Dividends Tax Compliance Act of 1983, the Railroad Retirement
Revenue Act of 1983, and the Deficit Reduction Act of 1984. These
four Acts, together with several minor legislative changes, increased 1984 receipts by a net $4.2 billion, which is $7.0 billion less
than the $11.2 billion in increases that the administration had
proposed.
Many of the provisions of the Social Security Amendments of
1983 were modifications of the recommendations of the bi-partisan
National Commission on Social Security Reform, which were reflected in the January budget. The other major laws affecting 1984
receipts generally contained provisions that were not proposed in
January 1983. The primary feature of the Interest and Dividends
Tax Compliance Act of 1983 repealed the withholding of taxes on
interest and dividend income provided in the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA). The Railroad Retirement Revenue Act of 1983 included increases in railroad retirement taxes,
which—together with the benefit reductions provided in the Railroad Retirement Solvency Act of 1983—were designed to place the
railroad retirement program on a sound financial basis. The major
revenue provisions of the Deficit Reduction Act of 1984 (DEFRA)
affecting 1984 receipts reduced the tax benefits available to those
who lease property to governments and other tax-exempt entities,
restricted the use of tax-straddles to avoid tax, and reformed the
taxation of life insurance companies.
Individual income taxes were $296.2 billion in 1984, $0.6 billion
more than the budget estimate of $295.6 billion. Higher than anticipated personal incomes increased individual income taxes by
$5.9 billion. This increase was partially offset by different collection patterns and effective tax rates than had been assumed, which
reduced individual income tax receipts by $1.4 billion. Substitution
of the Social Security Amendments of 1983 for the bi-partisan
social security plan reflected in the 1984 budget, and repeal of the
withholding of taxes on interest and dividend income, reduced
individual income taxes by $0.8 billion and $2.6 billion, respectively. The Railroad Retirement Revenue Act and DEFRA, together
6-38
THE BUDGET FOR FISCAL YEAR 1986
COMPARISON OF ACTUAL 1984 BUDGET RECEIPTS WITH THE JANUARY 1983 ESTIMATES
(In bttNons of dollars)
Differences in
tax law
from
1983
Different
economic
conditions
Technical
factors
295.6
51.8
242.9
40.4
5.9
9.1
14.0
-3.9
0.6
-3.4
-0.3
5.9
11.8
3.5
-1.7
-1.4
-7.3
-1.4
-1.0
0.1
0.8
1.1
1.4
659.7
-7.0
21.4
1983
Individual income taxes
Corporation income taxes
Social insurance taxes and contributions..
Excise taxes
Estate and gift taxes
Customs duties
Miscellaneous receipts
Total
Net
Actual
1.9
0.6
5.1
-1.3
-3.0
0.1
2.2
3.0
296.2
56.9
241.7
37.4
6.0
11.4
17.0
-7.6
6.8
666.5
•$50 million or less.
with congressional inaction on several administration proposals,
reduced individual income taxes by a net $0.5 billion.
Corporation income taxes were $5.1 billion above the budget
estimate. Higher than anticipated corporate profits increased receipts by $11.8 billion. This increase was partially offset by different collection patterns and effective tax rates than had been assumed, which reduced receipts by $7.3 billion. Differences in tax
law from the changes proposed in January 1983 increased corporation income taxes by $0.6 billion.
Social insurance taxes and contributions (which are composed of
employment taxes and contributions, unemployment insurance receipts, and other retirement contributions) were $1.3 billion less
than the January 1983 estimate of $242.9 billion. Higher than
anticipated wages and salaries and self-employment earnings increased these receipts by $3.5 billion. This increase was partially
offset by a technical overestimate of collections of $1.4 billion. In
addition, substitution of the Social Security Amendments of 1983
for the proposed bi-partisan social security plan reduced these receipts by $1.6 billion. Congressional inaction on the administration's proposals to increase contributions to civil service retirement
and to tax a portion of employer-paid health insurance premiums
reduced this category by $1.2 billion and $0.6 billion, respectively.
Lower than estimated collections of the windfall profit tax, due
in large part to the unanticipated decline in oil prices, reduced
1984 excise taxes by $3.4 billion. This decline was partially offset
by a $0.4 billion increase in other excise taxes.
Estate and gift taxes and customs duties were above the January
1983 estimates by $0.1 billion and $2.2 billion, respectively. Higher
than expected imports, due primarily to the continued strength of
the dollar relative to foreign currencies, were in large part responsible for the increase in customs duties receipts.
PERSPECTIVES ON THE BUDGET
6-39
A $2.9 billion increase in deposits of earnings by the Federal
Reserve System, primarily reflecting higher interest rates than
anticipated in January 1983, accounted for most of the $3.0 billion
increase in miscellaneous receipts.
THE DECREASE IN THE TOTAL 1984 DEFICIT FROM THE
INITIAL BUDGET ESTIMATE
The preceding two sections discuss in detail the differences between the January 1983 budget estimates and the actual amounts
of Federal Government receipts and outlays in 1984. This section
summarizes the net impact of these differences on estimates of the
total deficit. The total deficit is the difference between receipts and
outlays, where outlays include the spending of Federal entities that
are off-budget under current law but are proposed to be included
on-budget.
The deficit for 1984 was originally estimated to be $202.8 billion;
the actual deficit was $185.3 billion, a $17.5 billion decrease. The
following table shows the approximate distribution of this difference according to three categories: (1) policy; (2) economic conditions that were different from the original forecast; and (3) estimating and other differences. Each category is subdivided to show the
impact of receipts compared to outlays. An increase in receipts is
shown as positive because it reduces the deficit, while an increase
in outlays is shown as negative because it raises the deficit.
SUMMARY OF REASONS FOR THE DIFFERENCE IN THE TOTAL 1984 DEFICIT
(In billions of dollars)
January 1983 estimate of deficit! - )
-202.8
iges:
Policy.
Outlays
Subtotal, policy
Economic conditions:
Receipts
Outlays
Subtotal, economic conditions
Estimating and other differences:
Receipts
Outlays
Subtotal, estimating and other differences
-7.0
-13.8
-20.8
+21.4
+17.0
+38.4
-7.6
+7.5
-0.1
Total, changes
+17.5
Actual deficitf - )
MEMORANDUM:
Total change in receipts
Total change in outlays
-185.3
+6.8
+10.7
6-40
THE BUDGET FOR FISCAL YEAR 1986
The actual deficit was below the initial estimate due to both
higher receipts and lower outlays. Changes in economic conditions
account for a $38.4 billion decrease. Receipts were raised by higher
than estimated incomes. Outlays were decreased by lower than
forecast unemployment and inflation. This decrease was partially
offset by policy changes, both revised Administration proposals and
congressional action that differed from the Administration's original proposals. These increased the deficit by $20.8 billion. Technical
reestimates, which decreased receipts and outlays, had the net effect
of further increasing the deficit by $0.1 billion.
MILITARY RETIREMENT ACCRUALS
In the past, retirement benefits paid to former military personnel were direct charges to the current operating costs of the Department of Defense. The budget authority and outlays for this
activity were included in the national defense function (subfunction
051: Department of Defense, Military). However, starting October 1,
1984, a new retirement system was placed in effect. Benefits are
now paid from the newly created military retirement trust fund.
This new trust fund is included in the civil activities administered
by the Defense Department, and in the income security function
(subfunction 602: Federal employee retirement and disability).
Sources of financing for the new trust fund.—The agencies that
employ active duty military personnel pay a charge adequate to
cover the anticipated future retirement benefits from the fund for
those services currently rendered (the "accrual charge"). The total
of the accruals paid over the service career of any cohort of military personnel, along with the accumulated interest on the balances, should be sufficient to finance all of the retirement benefits
paid to these personnel and their dependents. While most military
personnel and the associated accrual charges are financed from the
Department of Defense, Military (and subfunction 051), some military personnel are employed in the Corps of Engineers, Civil program (subfunction 301), and some are on detail to other agencies.
In each case, the agency and function responsible for paying the
current military salary also pays for the accrual charges.
Since the accrual charge is a payment by the Government to
itself, the collection is an offset against budget outlays. This offsetting collection is included in the agency and functional tables as
undistributed offsetting receipts (subfunction 951 employer share,
employee retirement).
The law establishing this new system also provided for an independent Board of Actuaries, which determines the appropriate percent of payroll charge for accruals. This Board will periodically
review trends in military pay, personnel retirement, and related
PERSPECTIVES ON THE BUDGET
6-41
factors in order to determine what changes—if any—must be made
to the accrual charges to keep them consistent with this objective.
Prior to the establishment of this fund, military retirement benefits were not pre-funded. The current value of military retirement
benefits that had been earned and will have to be paid out in
subsequent periods (the "unfunded liability") was estimated to be
approaching $0.5 trillion when the fund was established. Under
terms of the law establishing this fund, the unfunded liability will
be gradually paid off by the general fund over a period of decades.
These payments are included in the Department of Defense, Civil
portion of the budget (subfunction 054: other national defense); the
offsetting collections arising from these payments are offset in the
same agency and subfunction.
The income of the new trust fund is thus formed by the combination of the current accrual charges, the payments on the unfunded
liability, and interest on balances invested in public debt securities.
This income is significantly greater than the cost of current retirement benefits paid by the trust fund, so the trust fund is projected
to accumulate large balances. As a normal rule virtually all of the
balances are to be invested in public debt securities, so the fund
will be partially financed from interest income. The payments of
interest are made by the Treasury Department (subfunction 901,
interest on the public debt). The offsetting interest income is included in undistributed interest received by trust funds in the
agency presentation, and in net interest (subfunction 902; interest
received by trust funds) in the functional presentation.
Restructuring the historical data for comparability.—This new
system for financing military retired pay creates a severe discontinuity in the historical data base as between 1984 and 1985. It was
possible, however, to reconstruct the pre-1985 data on a basis
roughly comparable to the new system. The reconstruction was
done to show the agency and functional totals approximately the
way they would have appeared if the new system for paying for
military retirement had been in effect for all years. The reconstruction was done by making the following calculations for each year:
—estimating the amount of accruals that had been earned in
that year;
—imputing to (including in) the recorded costs of the Department
of Defense, Military and of the national defense function an
amount equal to these accruals, and imputing an equal amount
of undistributed offsetting receipts (employer share, employee
retirement); and
—shifting the current cash benefits (and budget authority for the
benefits) from the Department of Defense, Military to the Department of Defense, Civil, and from subfunction 051 to subfunction 602.
6-42
THE BUDGET FOR FISCAL YEAR 1986
COMPARISON OF 1984 OUTLAYS ON AN UNADJUSTED AND AN ADJUSTED BASIS WITH 1985
OUTLAYS
(In millions of dollars)
Amounts
SuMunctionai code and agency
1984
unadjusted
Department of Defense, Military
051 Retired military personnel cash benefits (Federal funds)...
051 Imputed accruals for currently earned military retirement..
051 AH other agency outlays
Total for agency
1984 adjusted
1985 estimate
204,334
16,503
204,334
246,300
220,805
220,837
246,300
16,471
22
15,838
9,551
-9,551
16,471
15,860
-20,333
-8,760
20,333
25,263
-29,093
-45,596
-25,554
-26,994
-52,548
220,805
220,837
246,300
-20,333
-8,760
16,471
-20,333
-25,263
15,860
-25,554
-26,994
191,712
191,712
209,612
16,471
Department of Defense, Civil: Military Retirement
1
602 Retired military personnel cash benefits (Federal funds)
2
602 Unitary retirement trust fund
054 Payment to military retirement fund (for unfunded liability).
054 Interfund transactions
Total for agency..
Offsetting receipts undistributed by agency: Interfund 1
902 Interest received by trust funds.
2
951 Employer share, employee retirement ..
Total interfund transactions
051
054
602
902
951
Recapitulation of above data by subfunction
Department of Defense, Military
Defense-related activities
Federal employee retirement and disability 3
Interest received by trust funds
Employer share, employee retirement
Total of above
1
The 1985 estimate is a relatively small carry over from prior year obligations. There wW be no remaining activity in this account in
subsequent years.
'For 1984 and prior years, the military retired pay was and is included as Federal fund (rather than trust fund) outlays. Hence, for those
years
the offset for Federal employee retirement is included as a Federal intrafund receipt rather than as an interfund receipt.
3
As a result of separate legislation, the monthly payments of benefits permanently site one day starting in 1985—from the last day of the
month to the first day of the next month. Hence, the decline from 1984 to 1985 is because 1985 has only 11 monthly payments.
These adjustments made the data for 1984 and earlier years as
comparable as possible to the data for subsequent years. TTie table
above shows the components of the agency and functional totals for
1984 that were affected by the adjustment for comparability, and it
shows for comparison the estimates for 1985 on the new basis.
As can be seen for 1984, the adjustment for imputed accruals has
virtually no effect on the totals for the Department of Defense,
Military, either for the agency or for the subfunction (subfunction
051). The increase from adding imputed accruals is almost entirely
offset by the decrease from deducting the cash benefits. However,
the adjustment does substantially raise the military retirement
components of the Department of Defense, Civil and subfunction
602 (Federal employee retirement and disability); it also causes
large increases in the undistributed offsetting receipts, both by
agency and by function (subfunction 951).
6-43
PERSPECTIVES ON THE BUDGET
In the 1985 budget the historical data for 1984 and earlier years
showed alternative series with and without the adjustment to accruals. This dual presentation is inevitably confusing and awkward. Hence, in the 1986 budget the affected data are shown only
one way—adjusted to include the imputed accruals—so that for all
years they are reasonably consistent with the current law and
budgetary practice.
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 a Windfall Profit Tax Account in the Treasury "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
1986 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, 1986
(In millions of dollars)
Section 102 Formula
Total net receipts
Allocation:
Low-income assistance
Energy and transportation programs
Income tax reductions
Total
1
2
1986 Budget
2,528
1,517
632
379
2,528
2,528
1
2
21806
22,437
44,243
This amount is the total outlays for the other income security subfunction (609).
This amount is the total outlays for all programs in the energy function (270) and the ground transportation subfunction (401).
PART 7
THE BUDGET SYSTEM
AND CONCEPTS
7-1
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 three main phases: (1) executive formulation and transmittal; (2) congressional action; and (3) budget execution and control. Each of these 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 culmination of
many months of planning and analysis throughout the executive
branch.
Formulation of a budget begins not later than the spring of the
year before it is transmitted. The budget is formulated in the
context of a multi-year budget planning and tracking system that
extends coverage to the 4 years following the budget year and
integrates long-range planning into the executive budget process.
This multi-year budget planning system requires that broad fiscal
goals and agency spending and employment targets be established
beyond the budget year.
During the period when a budget is 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. The President also receives
projections of the economic outlook that are prepared jointly by the
Council of Economic Advisers, OMB, and the Treasury. The next
step in the process occurs when the President establishes general
budget and fiscal policy guidelines. General policy directions and
planning ceilings for both the fiscal year that will begin about 15
months later and for the 4 years beyond are then given to the
agencies to govern the preparation of their budget requests.
The primary phase of the budget process involves the formulation and preparation of the President's budget for transmittal to
7-2
THE BUDGET SYSTEM AND CONCEPTS
7-3
the Congress. Throughout the fall and early winter, the executive
branch is involved in this phase of the process. Agency budget
requests are submitted to OMB, where they are reviewed in detail,
and recommendations are made. These recommendations may be
revised as a result of Presidential review. Fiscal policy issues,
which affect budget outlays and receipts, are reexamined. The
effect of budget decisions on receipts, budget authority, and outlays
in the years that follow are also considered and are explicitly taken
into account, consistent with the multi-year budget planning
system. 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 Congressional Budget Act of 1974 requires that current services estimates be transmitted to provide the Congress with a basis
for reviewing the President's budget. These estimates are projections of budget authority and outlays required to continue Federal
programs and activities without policy changes from the fiscal year
in progress. These current services estimates and similar estimates
for receipts are included in the President's budget to facilitate
comparison with the budget estimates. *
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 also enacts legislation affecting taxes and other
sources of revenue.
In making appropriations, the Congress does not 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 appropriations acts. However, in a
number of cases the Congress has voted permanent budget authority, under which funds 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.
1
See Special Analysis A, "Current Services Estimates."
7-4
THE BUDGET FOR FISCAL YEAR 1986
Congressional review of the budget begins when the President
transmits his budget estimates to the Congress, generally within 15
days after the start of each new session in January, as required by
law. The transmittal date may be modified by a joint resolution of
the Congress.
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 each standing
committee of the Congress to report on budget estimates to the
House and Senate Budget Committees by March 15. It also requires
the Congressional Budget Office to submit a fiscal policy report to
the two budget committees. The Congress adopts the first concurrent budget resolution as a guide in its subsequent consideration of
appropriations and revenue measures. The first budget resolution,
which is scheduled to be adopted by May 15, sets targets for total
receipts and for budget authority and outlays, in total and by
functional category.
Congressional budget resolutions do not require Presidential approval. Frequently there is informal consultation between the congressional leadership and the Administration, however, because
subsequent legislation developed to attain congressional budget targets must be sent to the President for his approval. In recent years,
the Congress enacted omnibus reconciliation legislation that reduced budget authority and outlays or increased revenues in response to directives in the concurrent budget resolution. Last year
the Congress enacted the Deficit Reduction Act of 1984, which cut
spending and raised revenues starting in fiscal year 1984.
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 requests for appropriations and examines in detail each
agency's performance. The Ways and Means Committee 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 as an enrolled bill, for
his approval or veto.
The Congressional Budget Act also calls for the Congress to
adopt a second concurrent budget resolution by September 15.
After the second budget resolution is adopted, the Congressional
THE BUDGET SYSTEM AND CONCEPTS
7-5
Budget Act provides that Congress may not consider any spending
or revenue legislation that would breach the totals specified in this
resolution. The Congress may, however, modify or waive the requirement not to exceed the resolution totals or adopt a new
budget resolution. In 1981, however, the second resolution simply
endorsed the totals in the first resolution. Congress has not passed
a second resolution since 1981. All subsequent resolutions have
included a provision that endorses the levels in the first resolution
if a second resolution is not adopted by October 1. The September
15 target was originally set in anticipation of the enactment of all
regular appropriations bills by that time.
When 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 financing
operations up to a specified date or until their regular appropriations are enacted.
Budget execution and control.—Once approved, the President's
budget, as modified by the Congress, becomes the basis for 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 or by activities, to ensure
the effective use of available resources and to preclude the need for
additional appropriations.
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 hand,
reserves may be established under certain circumstances 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 for other reasons. The
Impoundment Control Act of 1974 provides that the executive
branch, in regulating the rate of spending, must report to the
Congress any deferrals or proposed rescissions2 of budget authority; that is, any effort through administrative action to postpone or
eliminate spending provided by law. Deferrals, which are temporary withholdings of budget authority, may be overturned by an
act of the Congress at any time. Rescissions, which permanently
cancel budget authority, must be enacted by the Congress within
45 days of continuing session. Otherwise, the withheld funds must
be made available for spending.
2
See pages 7-9 for further discussion of these terms.
7-6
THE BUDGET FOR FISCAL YEAR 1986
COVERAGE OF THE BUDGET TOTALS
Agencies and programs.—The budget totals cover all agencies and
programs (including Government corporations) no matter how
funded. The transactions of several Federal entities are off-budget
under current law. Legislation will be proposed to include these
amounts in the budget totals. In all the budget documents, these
transactions are integrated with those of the on-budget entities.
The currently off-budget Federal entities proposed for inclusion
are:
Rural electrification and telephone revolving fund
Rural Telephone Bank
SPR petroleum account
Federal Financing Bank
Postal Service fund
United States Railway Association
United States Synthetic Fuels Corporation
The presentation for the Board of Governors of the Federal Reserve System is included in Part V of the Budget Appendix. Those
amounts are presented for information only because of the independent status of the System.
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, these enterprises are discussed in Part 6 of the Budget and Special Analyses E and F, and
financial statements are presented in Part V of the Budget Appendix.
Functional classification.3—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 Congressional budget resolutions establish 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
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 to it must be significant.
• Each basic unit of classification (generally the appropriation
or fund account) is classified into the single best or predomi3
Part 5 of this volume discusses the budget by function.
THE BUDGET SYSTEM AND CONCEPTS
7-7
nant purpose and assigned to only one subfunction. 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 according to
their primary 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.
To meet that requirement of law, the functional classification
was refined to focus more sharply on end purposes and accomplishments. Each major function is described in Part 5 ("Meeting National Needs: the Federal Program by Function") in the context of
national needs being served, and subfunctions are described in the
context of major missions devoted to serving national needs. In
addition, Part 5 addresses the requirements of the Full Employment
and Balanced Growth Act of 1978.
Types of funds.—Agency activities are financed through Federal
funds and trust funds.
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 and management funds, finance operations within and between
Government agencies and are credited with collections primarily
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. Trust revolving funds are credited
7-8
THE BUDGET FOR FISCAL YEAR 1986
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 financial assets.4
BUDGET AUTHORITY AND RELATED TRANSACTIONS
Budget authority.—Government agencies 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 in the form of budget authority. In addition, collections specifically authorized to be credited to appropriation and fund accounts (e.g., repayments of loan
principal) while not scored as budget authority, are also available
for obligation. Budget authority, and in some cases the use of other
resources, usually requires the approval of both authorizing and
Appropriations Committees. The availability or use of budgetary
resources may be restrained by the imposition of legally binding
limitations on obligations for direct loans or for other purposes.5
Budget authority and other budgetary resources permit obligations to be incurred. The amounts of budget authority requested
are determined by the nature of the programs or projects being
financed and the amount of other resources available for the purpose.
For activities such as operation and maintenance, entitlement
programs, and continuing research programs, for which the cost
depends upon the program level during the 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, budget authority is requested
in sufficient amounts at the time the project is initiated to complete it, 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 revenues to liquidate (pay) these
obligations. There is also authority to borrow; such budget authority permits obligations to be incurred and liquidated by using funds
that are borrowed, generally from the Treasury.
4
5
These categories of outlays are discussed in Special Analysis D, "Federal Invesment and Operating Outlays."
See, "Limitations on the Availability of Funds," Part 6.
THE BUDGET SYSTEM AND CONCEPTS
7-9
It is not 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 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 for trust funds, are made available for
obligation until 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 obligation 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 that will become available one year or more
beyond the fiscal year for which the appropriations act is passed
(advance appropriations). Accounts in which budget authority is
made available on these bases are listed in Part IV of the Budget
Appendix.
When budget authority is made available by the Congress for a
specific period of time, any part that is not obligated during that
period expires and cannot be used later. Congressional actions that
continue the availability of unobligated amounts that have expired
or would otherwise expire are known as reappropriations. The
amounts involved are counted as new budget authority in the fiscal
year of the legislation in which the reappropriation action is included, regardless of when the amounts were originally appropriated or when they would otherwise lapse.
A rescission is a legislative action that cancels new budget authority or the availability of unobligated balances, prior to the time
the authority would otherwise have expired. Rescissions of new
budget authority becoming available are downward adjustments to
such authority for that year. Rescissions of unobligated balances
reduce the amounts of those balances available for obligation. A
deferral is an executive branch action or inaction—including the
establishment of reserves under the Antideficiency Act—that
delays the obligation and expenditure of funds within the year that
the action is taken. Deferrals are not separately identified in the
budget.
Most authority to obligate funds is enacted by the Congress
during or immediately preceding the fiscal year in which it be-
7-10
THE BUDGET FOR FISCAL YEAR 1986
comes 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 as the
result of previously enacted legislation and does not require current action by the Congress (permanent authority). Such authority
is presented as "current" in the year in which the legislation is
enacted and "permanent" in succeeding years.
The amount of budget authority is usually stated specifically or
in an amount stated as "not to exceed" a specific aggregate sum 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 only to the amount of
debt 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 many special and trust funds, and in the amount needed to
finance obligations incurred or estimated to be incurred in the case
of certain appropriations, contract authority, and authority to
borrow.
Obligations incurred.—Following the enactment of budget authority and the completion of required apportionment action, obligations are incurred by Government agencies. Such obligations
include the current liabilities for salaries, wages, and interest;
agreements to make loans; contracts for the purchase of supplies
and equipment, construction, and the acquisition of land; and other
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 also may be liquidated
(and outlays recorded) by the accrual of interest on public issues of
Treasury debt securities (including an increase in the redemption
value of bonds outstanding); or by the issuance of bonds, debentures, notes, or monetary credits. Non-cash outlays also may occur
when a Government-owned asset is sold on credit terms. Refunds of
receipts are treated as reductions of receipts, rather than as outlays. However, payments for tax credits in excess of tax liabilities
are treated as outlays rather than as an adjustment to budget
receipts. Outlays during a fiscal year may be for payment of obligations incurred in prior years or in the same year. Outlays, therefore, flow in part from unexpended balances of prior year budget
authority and in part from budget authority provided for the year
THE BUDGET SYSTEM AND CONCEPTS
7-11
in which the money is spent.6 Total budget outlays are stated net of
offsetting collections.
Balances of authority.7—Not all budget authority enacted for a
fiscal year is obligated and paid out in the same year. In multipleyear or no-year accounts, budget authority that is still available for
obligation at the end of a year (unobligated balances) may be
carried forward for obligation in the following 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, payment may occur over several years. Obligated
balances of budget authority are carried forward until the obligations are subsequently paid.8
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
possible by the establishment of allocations from the "parent" account, that is, the account to which the appropriation was made.
Obligations incurred under 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).
THE CREDIT BUDGET9
The credit budget is a presentation of direct loan obligations and
guaranteed loan commitments in a framework for making policy
decisions on the amount of Federal credit to be extended. It also
provides a means to analyze, evaluate, and control Federal credit
activity. Development of the credit budget is integrated thoroughly
with the executive budget process. The credit budget totals and the
limitations on credit activity proposed for enactment in appropria6
See "Relationship of Budget Authority to Outlays", Part 6.
These balances may also include collections credited directly to appropriation or fund accounts.
Additional information is provided in a separate report, "Balances of Budget Authority," which is available
from the National Technical Information Service, Department of Commerce, shortly after the budget is transmitted.
9
The credit budget is shown by function in Part 5, and guaranteed loans are discussed in Part (> of this
volume. Credit schedules and proposed credit limitations in appropriations language are included in the Budget
Appendix. Additional information is provided in Special Analysis F, "Federal Credit Programs."
7
8
7-12
THE BUDGET FOR FISCAL YEAR 1986
tions language are transmitted to the Congress as part of the
President's budget.
Concepts used in the credit budget—The credit budget totals are
presented in two parts: total direct loan obligations and total guaranteed loan commitments. These totals are based on the following
concepts:
• All direct loan and loan guarantee activities of the Government are included.
• The credit budget totals measure gross levels of credit activity, without offsets for repayments and other recoveries,
except that existing loans that are extended on similar maturities are not treated as new loans. By excluding repayments
and other recoveries, the credit budget measures the level of
new program activity and thereby enables control to be based
on an activity over which the Government has discretion—
new extensions of credit.
• The credit budget is based on the amount of obligations incurred for direct loans and the amount of commitments for
guaranteed loans. Obligations for direct loans result from
agreements requiring the Government to make a loan immediately or at some future time. Commitments for guaranteed
loans result from agreements entered into by the Government
to guarantee the repayment of principal and/or interest.
Since guaranteed loans, unlike direct loans, do not require
obligational authority and do not require Federal disbursements, the amounts are not included in the President's
budget totals. They create Government liabilities of a contingent nature that result in obligations and outlays only in the
event of a borrower default. Direct loan obligations and guaranteed loan commitments occur when the Government becomes bound legally to extend credit assistance; the point at
which control can most directly be exercised.
• The amount of guaranteed loan commitments presented in
the credit budget is calculated on the basis of the full principal amount of the loan, even though the guarantee may
extend to only a portion of the loan principal. This is done in
order to show the full amount of the loans that may be made
under the guarantee program.
Limits on Federal credit programs.—Separate limitations on the
amount of new direct loan obligations and guaranteed loan commitments are proposed for enactment in the appropriations language for the accounts that support credit activities. These limitations, if enacted, place annual ceilings on credit programs that, in
most cases, would otherwise be relatively unlimited.
THE BUDGET SYSTEM AND CONCEPTS
7-13
Appropriation bill limitations are proposed for about 56% of the
credit budget totals. Exemptions are primarily for entitlements and
emergency and disaster programs. These programs can be controlled, however, through changes in authorizing legislation.
Since initiation of the credit budget, the Congress has voted nonbinding targets in the concurrent budget resolutions for total direct
loan obligations and total guaranteed loan commitments. Actual
control of credit program levels, however, remains with authorizing
legislation and appropriations acts.
COLLECTIONS
In general—Amounts collected by the Government are classified
into two major categories:
• Budget receipts, which are compared with budget outlays in
calculating the budget surplus or deficit.
• Offsetting collections, which are deducted from gross disbursements in calculating budget outlays.
Budget receipts.— These are collections from the public that
result from the exercise of the Government's sovereign or governmental powers. These collections, also called governmental receipts,
consist primarily of tax receipts (including social insurance taxes),
but also include receipts from customs duties, 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.
Offsetting collections.—These are amounts received from other
Government accounts or 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, collections deposited in receipt accounts). The offset is applied differently for each type.
When specifically authorized by law, offsetting collections are
credited to appropriation or fund accounts. In general, they may be
used without further action by the Congress. Collections are netted
against gross obligations in calculating outlays.
Offsetting receipts, generally, are deducted from budget authority
and outlays by 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. These collections arise out
of the business-type or market-oriented activities of the Government (for example, loan repayments, interest, sale of prop-
7-14
THE BUDGET FOR FISCAL YEAR 1986
erty and products, charges for nonregulatory services, and
rents and royalties).
Collections from rents and royalties from Outer Continental
Shelf (OCS) lands are deducted from total budget authority
and outlays for the Government as a whole rather than from
any single agency or subfunction. When there is a legal dispute over the disposition of these collections, the disputed
amounts are placed in deposit fund accounts and are not
included in the receipts totals. Upon settlement of such disputes, the amounts that the courts decide belong to the Government are added to other similar OCS receipts and deducted in the same manner. The one-time receipts from the sale of
Conrail also will be deducted from total budget authority and
outlays.
• Intragovernmental transactions.—These are payments into receipt accounts from governmental appropriation or fund accounts. Intragovernmental transactions are deducted from
both the outlays and the budget authority for the agency
receiving the payment, with two exceptions. Intragovernmental transactions that involve agencies' payments as employers
into employee retirement trust funds and interest received by
trust funds appear as special deduct lines in computing total
budget authority and outlays for the Government. Under current law, there are two major categories of intragovernmental
transactions—intrabudgetary receipts and receipts from offbudget Federal entities. Intrabudgetary receipts arise from
payments by on-budget accounts. Since the budget is presented on the basis of proposed legislation to move off-budget
transactions to on-budget status, this includes treating receipts from off-budget entities as intrabudgetary transactions.
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, where the payment and receipt both occur
within the Federal fund group; and (3) trust intrafund transactions, where the payment and receipt both occur within the
trust fund group.
OTHER TRANSACTIONS
Borrowing and repayment—Borrowing and debt repayment are
not treated as receipts or outlays. If they were, the budget would
be balanced simply by classifying borrowing as income or revenue.
This rule applies both to borrowing in the form of public debt
securities and to specialized borrowing in the form of agency securities, including the sale of certificates representing participation
THE BUDGET SYSTEM AND CONCEPTS
7-15
in a pool of loans. However, some sales of participation certificates,
which otherwise would be treated as borrowing, are required by
law to be treated as a sale of assets. This results in the proceeds of
such sales being credited to an appropriation or fund account with
a corresponding reduction in outlays and in the requirement for
new budget authority in that account.
To a large extent, such sales have been made by credit programs
to the Federal Financing Bank (FFB). Since the FFB is an offbudget entity under current law but will be presented on-budget in
accordance with legislation to be proposed, these sales do not lower
total budget outlays in this budget. This is due to the fact that the
FFB payments for the participation certificates will be included in
the budget outlay totals in the same amount as that which is
credited to the credit program accounts.
Exercise of monetary power.—Seigniorage is the profit from coining money. It is the difference between the value of coins as money
and their cost of production. 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 deficit or as a
supplementary amount to be applied to reduce debt or to increase
the cash in the Treasury in a year with a surplus. The increment
(profit) resulting from the sale of gold as a monetary asset also is
treated as a means of financing, since the value of gold is determined by its value as a monetary asset rather than as a commodity.
Balances in deposit fund accounts.—-Certain accounts outside the
budget, known as deposit funds, are established to record amounts
held in suspense temporarily (for example, proceeds from mineral
leases on the Outer Continental Shelf to which title is in dispute)
or held by the Government as agent for others (for example, 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). To the extent that transactions
are conducted with nongovernment entities, Treasury's cash balances are affected, even though the transactions are not a part of
the budget. To the extent that deposit fund balances are not invested, changes in the amounts are treated as a means of financing.
Exchange of cash.—The Government's deposits with the International Monetary Fund are considered to be monetary assets. Therefore, the movement of money between the IMF and the Department of the Treasury is not considered in itself a receipt or an
outlay, borrowing, or lending. In a similar manner, the holdings of
7-16
THE BUDGET FOR FISCAL YEAR 1986
foreign currency by the Exchange Stabilization Fund are considered to be cash assets. Changes in these holdings are outlays only
to the extent there is a realized loss on the exchange and are
offsetting collections only to the extent there is a realized profit.
BASIS FOR BUDGET FIGURES
In general—Outlays usually are stated in terms of checks issued,
including cash paid in lieu of checks, net of offsetting collections
received. When a financial instrument is developed to use as a
substitute for cash or checks, the monetary value of the instrument
is normally counted in the budget to prevent the use of cash
equivalent instruments that would otherwise avoid recording transactions as receipts or outlays. The accrual basis is used for interest
on the public issues of Treasury debt securities; however, interest
on special issues of the debt securities held by trust and other
Government accounts is stated on a cash basis. When a Government account purchases debt at a premium (or sells it at a discount), the difference between the purchase (or sales) price and the
redemption value is treated as an obligation and an outlay in the
year of the transaction in the investing account.
Data for 1984.—The 1984 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. However, it has been
adjusted to include the transactions of off-budget Federal entities,
which are proposed for inclusion in the budget totals.
Data for 1985.—Five of the regular appropriations acts for 1985
have been enacted (Energy and Water Development; Legislative;
Housing and Urban Development and Independent Offices; Commerce, Justice, and State; and Labor, Health and Human Resources and Education.) Five more appropriations bills were enacted in their entirety in a continuing resolution, Public Law 98473 (Defense; Foreign Assistance; Interior; Military Construction;
and Transportation). Finally, the three remaining appropriations
bills were enacted by reference in the same continuing resolution
(Agriculture; District of Columbia; and Treasury, Postal Service,
and General Government). Supplemental appropriations are proposed in the 1986 budget for various civilian agency pay raises,
principally those that were effective in January 1985, and for additional amounts requested to meet unforseen program requirements.
In addition, amounts are proposed for rescission, including
amounts of reductions for certain categories of spending (e.g.,
travel, consulting services, etc.) specified in section 2901 of the
Deficit Reduction Act of 1984.
THE BUDGET SYSTEM AND CONCEPTS
7-17
Where the word "enacted" is used with reference to 1985 as in
tables 1 and 9 of Part 9 of the Budget, the amount generally
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 both enacted budget authority and requested
supplemental.
Data for 1986.—This budget includes complete estimates for
1986. Part I of the Budget Appendix generally includes the proposed appropriations language for the various items identified in
the budget. In some instances, estimates are included in the budget
schedules without appropriation language for 1985 and 1986. For
these, proposed legislation may be required or the estimated
amounts will be requested later when the new legislation has been
enacted and the specific requirements are known. In certain tables
of the budget, the items for later transmittal and the related
outlays are identified separately. Estimates of the total requirements for 1986 include both the amounts requested formally and
the amounts planned for later transmittal.
Data for 1987 through 1990.—To place emphasis on longer term
objectives and plans consistent with the multi-year budget planning system, this budget presents estimates through 1990. These
data 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 expected additional changes. In the government-wide totals,
separate allowances for pay raises are shown for nondefense civilian employees (1987-1990) and military personnel of the Coast
Guard, Department of Transportation (1985-1990). Allowances for
pay raises for civilian employees (1987-1990) and military personnel (1985, 1987-1990) of the Department of Defense also are shown
separately but are included in the figures for that department.
An allowance for relatively uncontrollable programs is shown
separately, as required by the Congressional Budget Act. The estimates for such programs are zero because the probability of net
decreases or net increases for such programs is believed to be
equal. The allowance for other requirements contains amounts for
potential reestimates and minor programmatic changes. An
amount equivalent to a 10 percent reduction from the 1986 current
services levels for the legislative branch is included (as an executive branch recommendation) with the figures for that branch.
Executive branch agencies have reflected substantial reductions in
their estimates; this allowance encourages legislative branch action
to seek similar reductions.
7-18
THE BUDGET FOR FISCAL YEAR 1986
Budget authority and outlays included in the allowance section
are never appropriated as undistributed allowances, but rather
indicate the estimated budget authority and outlays that may be
requested.
PART 8
THE FEDERAL PROGRAM
BY AGENCY AND ACCOUNT
8-1
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, off-budget entities other
than the Board of Governors of the Federal Reserve
System will be presented on-budget, under proposed
legislation.Within the Federal Financing Bank (FFB) presentation, now included in the Department of the Treasury
Chapter, 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 table 15, 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.
8-2
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-3
BUDGET ACCOUNTS LISTING (in thousands of dollars)
1984
actual
Account and functional code
1985
estimate
1986
estimate
Legislative Branch
Senate
Federal funds
General and Special Funds:
Compensation of Members, Senate
801
Appropriation, permanent, indefinite
Outlays
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
Outlays
Total Salaries, officers and employees
BA
0
8,793
8,278
8,856
8,856
8,976
8,976
BA
0
60
48
60
60
60
60
BA
0
50
35
50
50
50
50
BA
160,347
174,162
0
151,707
165,642
D
4,301
169,943
BA
0
160,347
151,707
169,943
169,943
174,162
174,162
1,590
1,068
1,400
"37
1,437
1,590
1,318
1,068
1,437
1,437
1,590
1,590
545
399
565
565
575
575
12
8
12
12
12
12
1,981
1,981
1,981
Payments to widows and heirs of deceased members
of Congress
801
Appropriation, current
BA
Outlays
0
Office of the Legislative Counsel of the Senate 801
Appropriation, current
BA
Outlays
O
Total Office of the Legislative Counsel of the
Senate
BA
0
Office of Senate Legal Counsel
801
Appropriation, current
BA
Outlays
0
Expense allowances of the Secretary of the Senate,
Sergeant at Arms, and Doorkeeper of the Senate
and secretaries for the majority and
801
Appropriation, current
BA
Outlays
0
Joint Study Panel on Social Security Administration,
Senate
801
Outlays
0
Senate policy committees
801
Appropriation, current
BA
Outlays
Total Senate policy committees
Automobiles and maintenance
Outlays
See footnotes at end of table.
70 ..
70 ..
1,318
146 ...
1,898
0
1,670
1,898
D
50
1,948
BA
0
1,898
1,670
1,948
1,948
801
0
174,162
19 ...
1,981
8-4
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1985
estimate
1984
Account and functional code
1986
estimate
Legislative Branch—Con.
Senate—Con.
Inquiries and investigations
Appropriation, current
801
48,050
^3,448
48,050
* 3,448
53,916
46,916
44,221
51,498
51,498
53,916
53,916
9,614
15,318
652
480
10,341
10,341
711
711
9,659
9,659
760
760
34,421
41,214
43,989
25,698
41,214
43,989
34,421
25,698
42,057
42,057
43,989
43,989
1OO
170
12
12
13
13
265,796
250,623
287,490
287,490
295,743
295,743
BA
0
285
285
69
BA
0
35,600
35,467
36,410
34,954
BA
Outlays-
46,916
44,221
Total Inquiries and investigations
BA
0
Miscellaneous items
801
Appropriation, current
BA
Outlays
0
Secretary of the Senate
801
Appropriation, current
BA
Outlays
0
Sergeant at Arms and Doorkeeper of the Senate
801
Appropriation, current
BA
Outlays
0
Total Sergeant at Arms and Doorkeeper of the
Senate
BA
0
Stationery (revolving fund)
801
Appropriation, current
BA
Outlays
0
Congressional use of foreign currency, Senate 801
Appropriation, permanent
BA
Outlays
0
53,916
1,000
324
Public Enterprise Funds:
Senate restaurant fund (revolving fund)
Outlays
Recording studio (revolving fund)
Outlays
Senate barber shops (revolving fund)
Outlays
801
1,035
801
-62
801
-9
Total Federal funds Senate
House of Representatives
Federal funds
General and Special Funds:
Payments to widows and heirs of deceased members
of Congress
801
Appropriation, current
Outlays
Compensation of Members and related administrative
expenses
801
Appropriation, permanent
Outlays
See footnotes at end of table.
37,633
36,128
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-5
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Legislative Branch—Con.
House of Representatives—Con.
Mileage of Members
Appropriation, current
Outlays
House leadership offices
Appropriation, current
Outlays
801
BA
0
210
105
210
202
210
210
BA
3,215
3,240
3,357
0
2,823
3,331
3,223
BA
0
3,215
2,823
3,331
3,331
3,357
3,223
801
,
Total House leadership offices
Salaries, officers and employees
Appropriation, current
801
46,947
M30
D
1,176
48,123
*130
48,981
46,079
45,259
48,253
48,253
48,981
47,022
BA
37,836
44,325
0
40,813
37,808
^2,799
* 1,012
38,820
* 2,799
BA
0
37,836
40,813
41,619
41,619
44,325
42,552
Committee on Appropriations (Studies and Investigations)
801
Appropriation, current
BA
4,075
Outlays
Total Salaries, officers and employees
Committee employees
Appropriation, current
BA
46,079
0
45,259
BA
0
801
Outlays
Total Committee employees
Outlays
0
Total Committee on Appropriations (Studies and
Investigations)
BA
0
Committee on the Budget (Studies)
Appropriation, current
Outlays
Members' clerk hire
Appropriation, current
Outlays
Total Members' clerk hire
See footnotes at end of table.
47,022
42,552
3,377
4,315
*16
4,331
4,500
4,320
4,075
3,377
4,331
4,331
4,500
4,320
329
329
329
316
801
BA
0
299
267
801
BA
160,531
156,977
164,126
* 4,136
168,262
0
BA
0
169,641
169,641
160,531
156,977
168,262
168,262
169,641
169,641
8-6
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Legislative Branch—Con.
House of Representatives—Con.
Allowances and expenses
Appropriation, current
801
Outlays
Total Allowances and expenses
Stationery (revolving fund)
Outlays
Special and select committees
Appropriation, current
BA
122,002
0
112,966
BA
0
122,002
112,966
122,565
A
6,075
D
844
123,409
* 6,075
129,484
129,484
137,058
131,576
137,058
131,576
801
0
-175
-175
-175
BA
45,400
46,960
0
43,731
45,667
D
970
46,637
BA
0
45,400
43,731
46,637
46,637
46,960
45,082
801
Outlays
Total Special and select committees
Congressional use of foreign currency, House of Representatives
801
Appropriation, permanent
BA
Outlays
0
1,800
723
1,800
1,710
45,082
1,500
1,500
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
Page residence hall and meal plan
801
Outlays...
0
Total Federal funds House of Representatives
BA
0
31
31
31
-179
-179
-179
17
17
17
3
3
3
480,735
478,878
494,494
481,267
2,680
2,680
2,680
-76
457,332
442,414
Joint Items
Federal funds
General and Special Funds:
Joint Economic Committee
Appropriation, current
Outlays
Total Joint Economic Committee
See footnotes at end of table.
801
BA
2,512
0
2,306
2,569
D
75
2,644
BA
0
2,512
2,306
2,644
2,644
2,680
8-7
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
Legislative Branch—Con.
Joint Items—Con.
Joint Committee on Printing
Appropriation, current
801
Outlays
Total Joint Committee on Printing
BA
876
0
986
BA
0
876
986
909
"23
891
932
891
BA
0
786
1
785 ..
BA
0
6
13
13
13
13
BA
0
3,483
3,105
3,605
3,605
3,897
3,741
BA
0
731
294
956
956
1,078
1,035
BA
0
1,737
1,252
1,471
1,471
1,670
1,603
BA
0
213
224
141
141
109
109
73,944
11,853
73,944
* 11,853
144,458
945
945
945
945
Joint Committee on Inaugural Ceremonies of 1985
801
Appropriation, current
Outlays
Statements of appropriations, Senate
Appropriation, current
Outlays
Joint Committee on Taxation
Appropriation, current
Outlays
Office of the Attending Physician
Appropriation, current
Outlays
General expenses, Capitol police
Appropriation, current
Outlays
Capitol Police Board
Appropriation, current
Outlays
Education of pages
Outlays
Official mail costs
Appropriation, current
801
801
801
801
801
801
0
BA
Outlays
Total Official mail costs
Capitol Guide Service
Appropriation, current
Outlays
Total Capitol Guide Service
See footnotes at end of table.
84,144
A
0
111,145
BA
0
84,144
111,145
85,797
85,797
144,458
144,458
BA
794
810
954
0
737
830
954
BA
0
794
737
830
830
954
954
6
13
13
96,402
97,146
13
13
155,817
155,551
144,458
801
Statements of appropriations, House of Representatives
801
Appropriation, current
BA
Outlays
0
Total Federal funds Joint Items
- 4
801
BA
0
95,288
120,046
8-8
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Legislative Branch—Con.
Congressional Budget Office
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
801
Outlays
Total Salaries and expenses
BA
16,723
17,418
18,455
0
15,727
17,591
18,369
BA
16,723
17,663
18,455
0
15,727
17,591
18,369
Architect of the Capitol
Federal funds
General and Special Funds:
Office of the Architect of the Capitol: Salaries
Appropriation, current
801
Outlays
Total Office of the Architect of the Capitol
Contingent expenses
Appropriation, current
Outlays
Capitol buildings
Appropriation, current
4,906
5,675
4,754
5,137
C
25
D
94
5,235
0
BA
0
4,906
4,754
5,256
5,235
5,675
5,875
BA
BA
00
360
267
235
543
235
235
BA
BA
13,380
12,621
0
9,859
11,544
C
118
36
15,096
BA
0
13,380
9,859
11,698
15,096
12,621
16,221
BA
3,449
2,796
3,364
BA
0
230
3,688
4,237
3,785
BA
0
3,679
3,688
2,849
4,237
3,364
3,785
0
1,389
16,724
21,000
5,875
801
801
Outlays
Total Capitol buildings
Capitol grounds
Appropriation, current
BA
16,221
801
°4
Reappropriation
Outlays
Total Capitol grounds
West central front of the Capitol
801
Outlays
Congressional cemetery
801
Outlays
Master plan for future development of the Capitol
grounds and related areas
801
Outlays
Acquisition of property as an addition to the Capitol
grounds
801
Outlays
See footnotes at end of table.
0
5
0
0
294
6
1
4,673
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-9
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Legislative Branch—Con.
Architect of the Capitol—Con.
Senate office buildings
Appropriation, current
Outlays
Total Senate office buildings
801
BA
0
18,754
19,241
c
260
27,036
BA
26,233
19,501
23,598
0
18,754
27,036
28,948
Construction of an extension to the New Senate Office
Building
801
Outlays
0
House office buildings
801
Appropriation, current
BA
Outlays
Total House office buildings
Total Capitol Power Plant
5,014
22,750
41,323
0
21,414
340
24,976
27,041
BA
21,684
23,090
41,323
0
21,414
24,976
27,041
c
79
120
60
23,602
23,834
25,375
0
21,618
<70
24,572
26,895
BA
23,602
23,904
25,375
0
21,618
24,572
26,895
0
Alterations and improvements, buildings and grounds,
to provide facilities for the physically handicapped
801
Outlays
0
Structural and mechanical care, Library buildings and
grounds
801
Appropriation, current
BA
Outlays
0
Total Structural and mechanical care, Library
buildings and grounds
BA
0
See footnotes at end of table.
28,948
5,386
Expansion of facilities, Capitol Power Plant
801
Outlays
0
Modifications and enlargement, Capitol Power
Plant
801
Outlays
23,598
21,684
Acquisition of property, construction, and equipment,
additional House Office Building
801
Outlays
0
Installation of solar collectors in House office buildings
801
Outlays
0
Capitol Power Plant
801
Appropriation, current
BA
Outlays
26,233
97
155
1,114
39
692
87,570
600
5,709
7,380
7,134
90
15,244
24,480
87,570
7,134
5,799
15,244
7,380
24,480
c
8-10
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Legislative Branch—Con.
Architect of the Capitol—Con.
Library of Congress James Madison Memorial Building
801
Outlays
0
Total Federal funds Architect of the Capitol
252
102
BA
0
181,414
94,463
92332
146,166
119,571
155,080
BA
140,376
142,307
0
127,935
133,192
C
133
D
2,477
138,294
BA
0
140,376
127,935
135,802
138,294
142,307
145,786
BA
11,122
11,102
D
12,081
0
BA
0
11,180
11,122
11,180
11,333
11,501
11,333
12,035
12,081
12,035
Congressional Research Service: Salaries and expenses
801
Appropriation, current
BA
37,632
43,292
Library of Congress
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
503
Outlays
Total Salaries and expenses
Copyright Office: Salaries and expenses
Appropriation, current
145,786
376
m
Outlays
Total Copyright Office
0
37,255
39,833
»917
40,062
BA
0
37,632
37,255
40,750
40,062
43,292
43,012
Books for the blind and physically handicapped: Salaries and expenses
503
Appropriation, current
BA
35,099
38,402
36,783
38,402
36,783
Outlays
Total Congressional Research Service
Outlays
0
30,739
36,592
C
5
D
101
40,181
BA
0
35,099
30,739
36,698
40,181
43,012
Total Books for the blind and physically handi-
See footnotes at end of table.
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-11
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Legislative Branch—Con.
Library of Congress—Con.
Collection and distribution of library materials (special
foreign currency program)
503
Appropriation, current
BA
2,962
3,318
D
832
n
Outlays
0
Total Collection and distribution of library materials (special foreign currency program).... BA
0
Furniture and furnishings
Appropriation, current
3,577
2,406
2,962
3,745
3,329
3,577
832
2,406
BA
1,524
1,673
5,915
0
1,661
1,691
3,921
503
Outlays
Payments to copyright owners
Appropriation, permanent, indefinite
Outlays
Oliver Wendell Holmes devise fund
Appropriation, permanent, indefinite
Outlays
Trust funds
Gift and trust fund accounts
Appropriation, permanent, indefinite
3,745
376
BA
0
94,865
48,296
95,000
76,880
95,000
83,486
BA
0
4
2
BA
7,807
7,378
0
6,982
7,299
7,830
BA
323,584
324,765
337,837
0
503
12
12
8
8
503
Outlays
Total Federal funds Library of Congress
Total Trust funds Library of Congress
7,628
260r813
312,030
327,437
BA
7,807
7,378
7,628
0
6,982
7,299
7,830
BA
0
13,420
13,337
13,200
13,391
14,500
14,271
BA
0
86,580
66,536
80,800
72,540
78,900
75,720
BA
25,700
28,868
28,868
0
21,802
109
27,327
28,923
BA
25,700
28,977
28,868
0
21,802
27,327
28,923
-5,288
2,678
125,700
122,977
122,268
106,807
107,970
121,592
Government Printing Office
Federal funds
General and Special Funds:
Printing and binding
801
Appropriation, current
Outlays
Congressional printing and binding
801
Appropriation, current
Outlays
Office of Superintendent of Documents: Salaries and
expenses
806
Appropriation, current
Outlays
Total Office of Superintendent of Documents
D
Intragovernmental Funds:
Government Printing Office revolving fund
Outlays
806
0
Total Federal funds Government Printing Office... BA
0
See footnotes at end of table.
5,132
8-12
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actudl
Account snd functionsl code
1985
estimste
1986
estimate
Legislative Branch—Con.
General Accounting Office
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
801
BA
271,710
294,704
0
262,141
289,825
328,129
1,082
^39
A
1,121
D
339,639
5,674
Outlays
Total Salaries and expenses
A
BA
271,710
301,499
339,639
0
262,141
290,907
328,168
BA
15,965
24,556
0
14,872
22,344
»350
22,880
BA
15,965
22,694
24,556
0
14,872
22,880
24,331
United States Tax Court
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
752
Outlays
Total Salaries and expenses
Trust funds
Tax Court judges survivors annuity fund
Appropriation, permanent, indefinite
Outlays
24,331
602
BA
0
253
85
251
31
261
30
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
544
515
550
660
550
670
Other Legislative Branch Agencies
Federal funds
General and Special Funds:
Outlays
Total Botanic Garden
2,058
0
2,000
2,044
C
36
2,283
BA
0
2,058
2,000
2,080
2,283
BA
0
210
-37
2,197
2,197
2,323
2,323
Copyright Royalty Tribunal: Salaries and expenses
376
Appropriation, current
Outlays
Prospective Payment Assessment Commission
Appropriation, current
Outlays
See footnotes at end of table.
217
182
227
221
551
BA
0
-2,670
2,424
3,294
3,240
3,240
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-13
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Legislative Branch—Con.
Other Legislative Branch Agencies—Con.
Railroad Accounting Principles Board: Salaries and
expenses
801
Appropriation, current
BA
Outlays
0
Office of Technology Assessment: Salaries and expenses
801
Appropriation, current
BA
1,000
965
14,831
15,549
D
1,000
1,000
17,000
m
Outlays
Total Office of Technology Assessment
0
BA
0
13,579
14,831
13,579
15,675
15,855
15,675
16,990
17,000
16,990
Trust funds
Office of Technology Assessment: Contributions and
donations
801
Appropriation, permanent, indefinite
BA
Outlays
0
1
1
3
3
3
17,643
13,387
22,126
23,059
24,214
24,444
1
3
3
1
3
3
BA
0
1,771,155
1,581,293
1,768,683
1,784,117
1,932,594
1,931,982
803 BA
.
Total Federal funds Other Legislative Branch
Agencies
BA
0
Total Trust funds Other Legislative Branch Agencies
BA
0
3
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
908
Total Federal funds
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
j* A
-3J71
BA
0
1,767,288
1,577,426
BA
0
503 BA
A
908
8,061
7,068
JO1O
—4,0Id
9..
-5,012
oco
-5,008
1,763,417
1,778,851
1,927,324
1,926,712
7,632
7,333
7,892
7,863
cocn
CJ7C
— 0,oOc
—0,4/0
JA
_4M
-135
-135
Total Trust funds
BA
0
2,846
1,853
2,145
1,846
2,282
2,253
Total Legislative Branch
BA
0
See footnotes at end of table.
1,770,134
1,579,279
1,765,562
1,780,697
1,929,606
1,928,965
8-14
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Legislative Branch—-Con.
Allowances
Federal funds
General and Special Funds:
Allowance for ten percent reduction in Legislative
Branch (Executive recommendation)1 801
Appropriation, current
BA
Outlays
0
Total Federal funds Allowances
J
-192,661
' -171,468
BA
0
Total Legislative Branch with ten percent reduction
BA
0
-192,661
-171,468
1,770,134
1,579,279
1,765,562
1,780,697
1,736,945
1,757,497
BA
13,635
15,176
0
11,922
14,143
"281
13,270
BA
0
13,635
11,922
14,424
13,270
15,176
15,176
BA
2,571
2,106
0
1,616
2,242
c
20
3,310
BA
0
2,571
1,616
2,262
3,310
2,106
2,606
The Judiciary
Supreme Court of the United States
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
752
Outlays
Total Salaries and expenses
Care of the building and grounds
Appropriation, current
Outlays
Total Care of the building and grounds
752
Acquisition of property as an addition to the grounds
of the Supreme Court building
752
Outlays
0
Total Federal funds Supreme Court of the United
BA
States
0
1
Recommended for consideration under the plan to freeze FY 1986 spending at FY 1985 levels.
See footnotes at end of table.
15,176
6
16,206
13,538
16,686
16,586
2,606
...
17,282
17,782
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-15
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
The Judiciary—Con.
United States Court of Appeals for the
Federal Circuit
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
752
Outlays
Total Salaries and expenses
BA
4,730
5,720
4,422
5,150
D
87
5,193
0
BA
0
4,730
4,422
5,237
5,193
5,720
5,606
6,538
6,531
6,538
6,531
5,606
Court of Customs and Patent Appeals
Federal funds
General and Special Funds:
Salaries and expenses
Outlays
752
0
-1,436
United States Court of International Trade
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
752
Outlays
Total Salaries and expenses
BA
5,725
0
5,472
6,070
D
98
6,027
BA
0
5,725
5,472
6,168
6,027
Court of Claims
Federal funds
General and Special Funds:
Salaries and expenses
Outlays
752
0
40
25
Courts of Appeals, District Courts, and
other Judicial Services
Federal funds
General and Special Funds:
Salaries of judges
Appropriation, current
Outlays
Total Salaries of judges
See footnotes at end of table.
752
BA
73,275
0
73,203
BA
0
73,275
73,203
74,540
3,098
"1,910
76,450
^ 3,098
79,548
79,548
A
104,826
104,826
104,826
104,826
8-16
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING j n thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
The Judiciary—Con.
Courts of Appeals, District Courts, and
other Judicial Services—Con.
Salaries of supporting personnel
Appropriation, current
752
BA
Outlays..
331,230
Total Salaries of supporting personnel
Defender services
Appropriation, current
BA
0
332,500
331,230
BA
41,465
370,228
* 5,548
D
9,150
377,074
A
4,986
509,010
384,926
382,060
509,010
502,197
42,000
17,575
D
375
41,975
A
5,387
68,955
51,233
* 9,640
59,950
47,362
68,955
60,873
46,200
501,635
752
29,197
Outlays
Total Defender services..
Fees of jurors and commissioners
Appropriation, current
332,500
A
41,465
29,197
752
BA
42,400
0
43,054
42,000
1,700
42,107
A
1,615
BA
0
42,400
43,054
43,700
43,722
46,200
46,085
Expenses of Operation and Maintenance of the
Courts
752
Appropriation, current
BA
72,475
101,500
13,526
96,674
* 7,125
144,926
115,026
103,799
144,926
143,459
11,815
11,815
Outlays
Total Fees of jurors and commissioners..
Outlays
0
Total Expenses of Operation and Maintenance of
BA
the Courts
0
Salaries and expenses of magistrates
Outlays
Bankruptcy courts, salaries and expenses
Appropriation, current
137,058
* 6,401
0
-94
752
BA
107,795
0
106,653
116,950
* 2,540
118,154
107,795
106,653
119,490
118,154
Total Bankruptcy courts, salaries and expenses... BA
0
See footnotes at end of table.
72,475
67,470
A
46,000
752
Outlays
Services for drug dependent offenders
Appropriation, current
Outlays
67,470
A
752
BA
0
5,000
4,535
875
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-17
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
The Judiciary—Con.
Courts of Appeals, District Courts, and
other Judicial Services—Con.
Space and facilities
Appropriation, current
752
Outlays
Total Space and facilities
Furniture and furnishings
Outlays
Court security
Appropriation, current
136,364
0
131,945
BA
0
136,364
131,945
140,000
* 2,384
155,319
A
2,240
155,018
142,384
157,559
155,018
154,538
154,394
A
144
752
0
37
248
167
752
Outlays
Total Court security
Special rail reorganization court
Outlays
BA
BA
18,690
0
19,097
BA
0
18,690
19,097
25,500
1,492
19,470
A
1,492
38,116
26,992
20,962
38,116
30,248
A
30,248
752
0
Total Federal funds Courts of Appeals, District
Courts, and other Judicial Services
BA
0
230
278
299
829,964
806,557
972,016
954,567
1,067,051
1,054,507
BA
26,075
32,217
0
26,618
28,250
*86
Z)
452
28,500
^84
31,858
A
_2
BA
0
26,075
26,618
28,788
28,584
32,217
31,860
BA
8,565
0
7,906
BA
8,565
9,471
9,923
0
7,906
9,152
9,751
Administrative Office of the United States
Courts
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
752
Outlays
Total Salaries and expenses
Federal Judicial Center
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Total Salaries and expenses
See footnotes at end of table.
752
9,330
^51
D
90
9102
*50
9,923
9 750
A
_l
8-18
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
The Judiciary—Con.
Bicentennial Expenses, The Judiciary
Federal funds
General and Special Funds:
Bicentennial activities
Outlays
806
0
90
139
30
Judiciary Trust Funds
Trust funds
Judicial survivors' annuities fund
Appropriation, permanent, indefinite
Outlays
602
BA
0
Summary
Federal funds:
(As shown in detail above)
BA
0
Trust funds:
(As shown in detail above)
BA
0
Total The Judiciary
BA
0
12,802
3,148
891,265
863,207
12,802
3,148
904,067
866,355
14,306
3,801
1,038,366
1,020,273
14,306
3,801
15,681
3,956
1,138,731
1,126,067
15,681
3,956
1,052,672
1,024,074
1,154,412
1,130,023
Executive Office of the President
Compensation of the President
Federal funds
General and Special Funds:
Compensation of the President
Appropriation, current
Outlays
802
BA
0
250
234
250
250
250
250
BA
23,186
24,906
0
15,651
24,985
D
204
24,433
BA
0
23,186
15,651
25,189
24,433
24,906
24,166
The White House Office
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Total Salaries and expenses
See footnotes at end of table.
802
24,166
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-19
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Executive Office of the President—Con.
Executive Residence at the White House
Federal funds
General and Special Funds:
Operating expenses
Appropriation, current
802
BA
Outlays
Total Operating expenses
4,632
4,601
C
4,577
26
0
5,154
4,731
4,608
BA
4,632
4,658
4,577
0
5,154
4,731
4,608
BA
0
262
488
219
237
204
210
BA
1,593
1,659
Official Residence of the Vice President
Federal funds
General and Special Funds:
Operating expenses
Appropriation, current
Outlays
802
Special Assistance to the President
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
802
0
1,510
1,663
"13
1,625
BA
0
1,593
1,510
1,676
1,625
1,659
1,602
BA
0
2,464
2,144
2,560
2,509
2,301
2,255
Council on Environmental Quality and Office of Environmental Quality
802
Appropriation, current
BA
1,300
Outlays
Total Salaries and expenses
1,602
Council of Economic Advisers
Federal funds
General and Special Funds:
Salaries and expenses
802
Appropriation, current
Outlays
Council on Environmental Quality and Office
of Environmental Quality
Federal funds
General and Special Funds:
Reappropriation
Outlays
700
"5
705
2,137
1,065
BA
0
175
348
Total Council on Environmental Quality and
Office of Environmental Quality
BA
1,475
705
705
348
2,137
1,065
0
See footnotes at end of table.
8-20
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Executive Office of the President—Con.
Council on Environmental Quality and Office
of Environmental Quality—Con.
Intragovernmental Funds:
Management fund, Office of Environmental Quality
802
Outlays
0
Total Federal funds Council on Environmental
Quality and Office of Environmental Quality 6A
0
-57
1,475
348
705
2,080
705
1,065
2,726
2,791
Council on Wage and Price Stability
Federal funds
General and Special Funds:
Salaries and expenses
Outlays
802
0
5
Office of Policy Development
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
802
BA
0
2,861
2,582
3,020
3,106
BA
0
4,497
3,864
4,605
4,467
4,627
4,627
BA
14,295
15,597
0
13,862
16,172
»68
15,749
15,125
BA
0
14,295
13,862
16,240
15,749
15,597
15,125
National Security Council
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
802
Office of Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Total Salaries and expenses
See footnotes at end of table.
802
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-21
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Executive Office of the President—Con.
Office of Management and Budget
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
802
BA
37,311
38,500
°352
38,430
0
34,987
39,264
38,355
'1,611
BA
0
37,311
34,987
38,852
39,264
40,041
39,966
' 1,611
Outlays
Total Salaries and expenses
Office of Federal Procurement Policy: Salaries and
expenses
802
Appropriation, current
BA
Outlays
Total Office of Federal Procurement Policy
1,874
1,615
»15
0
1,781
1,651
BA
0
1,874
1,781
1,630
1,651
Total Federal funds Office of Management and
Budget
BA
0
39,185
36,768
40,482
40,915
1,611
'-1,611
1,611
'-1,611
40,041
39,966
Office of Science and Technology Policy
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
802
BA
Outlays
Total Salaries and expenses
1,950
0
1,744
2,194
D
20
2,214
BA
0
1,950
1,744
2,214
2,214
2,091
2,091
2,091
2,091
Office of the United States Trade
Representative
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Total Salaries and expenses
See footnotes at end of table.
802
BA
11,999
13,582
0
10,768
14,215
* 11,431
11,431
BA
0
11,999
10,768
13,582
14,215
11,431
11,431
8-22
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
Executive Office of the President—Con.
Property Review Board
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
802
BA
0
415
210
109
-15
96
109,064
95,317
115,400
116,736
111,115
110,187
178,000
"-26,000
152,000
Special Action Office for Drug Abuse
Prevention
Federal funds
General and Special Funds:
Miscellaneous expired accounts
Outlays
554
Summary
Federal funds:
Total Executive Office of the President..
BA
0
Funds Appropriated to the President
Appalachian Regional Development Programs
Federal funds
General and Special Funds:
Appalachian regional development programs
Appropriation, current
452
Outlays
BA
BA
159,400
0
212,178
149,000
* -99,000
189,000
» -5,000
159,400
212,178
50,000
184,000
Total Appalachian regional development proBA
grams ..
0
Public Enterprise Funds:
Appalachian housing fund
Outlays
452
00
Total Federal funds Appalachian Regional Development Programs
BA
BA
0
—2
159,400
212,178
50,000
183,998
152,000
Disaster Relief
Federal funds
General and Special Funds:
Disaster relief
Appropriation, current
453
BA
Outlays..
Total Disaster relief
See footnotes at end of table.
BA
0
100,000
K
243,014
200,000
194,000
194,000
243,014
100,000
200,000
194,000
194,000
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-23
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Funds Appropriated to the 1'resident—Con.
Disaster Relief—Con.
Trust funds
Bequests and gifts
Appropriation, permanent, indefinite
Outlays
453
BA
0
128
29
100
50
89
150
BA
0
1,000
373
1,000
1,000
1,000
1,000
Unanticipated Needs
Federal funds
General and Special Funds:
Unanticipated needs
Appropriation, current
Outlays
802
Expenses of Management Improvement
Federal funds
General and Special Funds:
Expenses of management improvement
Outlays
802
0
2
International Security Assistance
Federal funds
General and Special Funds:
Foreign military sales credit
Appropriation, current
152
BA
Outlays
Limitation on guaranteed loan commitments..
Total Foreign military sales credit
Guarantee reserve
Outlays
Economic support fund
Appropriation, current
Total Military assistance
See footnotes at end of table.
0
1,059,983
(4,401,250)
2,802,169
5,655,000
4,862,852
BA
0
1,315,000
1,059,983
4,939,500
2,802,169
5,655,000
4,862,852
K
0
'277,600
152
BA
Total Economic support fund
Outlays..
4,939,500
152
Reappropriation
Outlays
Military assistance
Appropriation, current
1,315,000
K
2,824,000
BA
0
144,807
2,873,811
3,937,252
2,825,000
BA
0
3,389,057
2,873,811
3,841,000
3,937,252
2,824,000
2,825,000
BA
711,750
805,100
0
928,007
848,018
* 949,350
957,536
BA
0
711,750
928,007
805,100
848,018
949,350
957,536
152
8-24
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Funds Appropriated to the President—Con.
International Security Assistance—Con.
International military education and training
Appropriation, current
152
Outlays
Total international military education and training-
Peacekeeping operations
Appropriation, current
Total Peacekeeping operations
Public Enterprise Funds:
Guarantee reserve fund
Appropriation, current, indefinite
Outlays
Total Guarantee reserve fund
51,532
56,221
0
43,870
55,750
* 65,650
61,241
BA
0
51,532
43,870
56,221
55,750
65,650
61,241
BA
56,200
44,000
0
39,150
43,000
BA
0
56,200
39,150
44,000
43,000
*37,000
40,900
37,000
40,900
0
-687
500
453
BA
0
247,950
109,000
239,000
BA
0
247,950
109,000
239,000
BA
0
5,523,539
5,192,084
9,794,821
7,925,689
9,531,000
9,025,582
-85,945
-93,200
-99,200
-72,372
-128,700
-384,400
5,365,222
5,033,767
9,572,921
7,703,789
9,047,400
8,541,982
152
Outlays-
Assistance for relocation of facilities in Israel
Outlays
BA
152
152
277,600
' -277,600
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
152 BA
0
908 BA
0
Total International Security Assistance
BA
0
See footnotes at end of table.
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-25
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Funds Appropriated to the President—Con.
International Development Assistance
Multilateral Assistance
Federal funds
General and Special Funds:
Contribution to the International Bank for Reconstruction and Development
151
Appropriation, current
BA
79,721
109,722
A
Outlays
0
Total Contribution to the International Bank for
Reconstruction and Development
BA
0
Contribution to the International Development Association
151
Appropriation, current
Outlays
Contribution to the International Finance Corporation
151
Appropriation, current
Outlays
Contribution to the Inter-American Development
Bank
151
Appropriation, current
BA
0
117,152
65,719
K
33,854
30,001
27,019
* 3,000
56,100
79,721
33,854
139,723
30,019
182,871
56,100
945,000
911,162
900,000
841,545
750,000
737,500
BA
0
* 35,033
*35,033
120,501
* 115,501
333,756
A
3,000
356,563
* 2,215
118,424
325,038
236,002
336,756
143,501
358,778
113,233
143,233
69,170
113,233
^91,232
108,265
Total Contribution to the Asian Development
Bank
BA
0
113,233
69,170
204,465
108,265
Contribution to the African Development Fund 151
Appropriation, current
BA
50,000
50,000
34,219
68,960
* 75,000
56,650
50,000
34,219
50,000
68,960
75,000
56,650
Outlays
BA
118,424
0
325,038
Total Contribution to the Inter-American Development Bank
BA
0
Contribution to the Asian Development Bank
Appropriation, current
Outlays
Outlays
151
BA
0
0
Total Contribution to the African Development
Fund..
BA
0
See footnotes at end of table.
143,501
123,240
H825
143,233
125,065
8-26
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Funds Appropriated to the President—Con.
International Development Assistance—Con.
Multilateral Assistance—Con.
Contribution to the African Development Bank
Appropriation, current
Outlays
International organizations and programs
Appropriation, current
151
BA
0
17,987
17,987
17,988
17,987
BA
315,164
358,676
307,965
299,708
196,211
265,519
151
17,987
17,987
K
Outlays
Total International organizations and programs...
BA
0
315,164
307,965
358,676
299,708
196,211
265,519
Total Federal funds Multilateral Assistance
BA
0
1,639,529
1,699,395
1,906,854
1,703,240
1,543,836
1,652,632
BA
1,400,372
1,651,522
Agency for International Development
Federal funds
General and Special Funds:
Functional development assistance program
Appropriation, current
151
* 1,655,900
Reappropriation
Outlays
» -5,168
BA
0
37,573
1,204,398
Total Functional development assistance program BA
0
Sahel development program
Appropriation, current
Outlays
American schools and hospitals abroad
Appropriation, current
1,425,000
* -2,500
1,437,945
1,204,398
1,646,354
1,358,809
1,655,900
1,422,500
BA
0
103,000
78,281
97,500
84,800
90,200
BA
30,000
30,000
0
25,975
28,100
* 10,000
22,800
BA
0
30,000
25,975
30,000
28,100
10,000
22,800
BA
50,500
25,000
151
151
Outlays
Total American schools and hospitals abroad
International disaster assistance
Appropriation, current
1,359,329
"-520
151
* 25,000
B
Outlays..
Total International disaster assistance
See footnotes at end of table.
BA
0
97,689
25,000
105,900
» 25,000
81,400
50,500
97,689
50,000
130,900
25,000
81,400
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-27
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
Funds Appropriated to the President—Con.
International Development Assistance—Con.
Agency for International Development—Con.
Operating expenses Agency for International Development
151
Appropriation, current
BA
372,512
391,533
358,064
382,931
* 387,000
382,330
Total Operating expenses Agency for International Development
BA
0
372,512
358,064
391,533
382,931
387,000
382,330
Payment to the Foreign Service retirement and disability fund
153
Appropriation, current
BA
40,620
40,562
1,302
43,122
Outlays
0
A
J
Outlays-
40,620
40,562
A
1,302
-7,560
43,122
' -7,560
Total Payment to the Foreign Service retirement
and disability fund
BA
0
Miscellaneous appropriations
Outlays
Public Enterprise Funds:
Housing and other credit guaranty programs
Appropriation, current
Outlays
Private sector revolving fund
Appropriation, current
Outlays
Development loans-revolving fund
Outlays
40,620
40,620
41,864
41,864
35,562
35,562
3,050
1,933
1,439
8,216
40,000
25,867
26,216
16,000
7,992
20,000
16,329
4,436
3,339
15,000
15,000
15,000
15,000
2,049,077
1,816,308
2,313,251
2,063,196
2,133,462
2,078,776
151
151
BA
0
151
BA
0
14,500
151
126
Intragovernmental Funds:
Advance acquisition of property-revolving fund
151
Outlays..
Office of the Inspector General of Foreign Assistance
151
Outlays
Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
-250
139
151
Summary
Federal funds:
(As shown in detail above)
See footnotes at end of table.
BA
0
8-28
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Funds Appropriated to the President—Con.
International Development Assistance—Con.
Agency for International Development—Con.
Deductions for offsetting receipts:
Proprietary receipts from the public
151
908
Total Federal funds
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
BA
QA
-360,870
-301,102
-309,795
BA
0
l r 315 f 940
1,083,171
1,687,841
1,437,786
1,479,059
1,424,373
BA
0
4,436
3,339
15,000
15,000
15,000
15,000
151 BA
_
^
_]5m
_
^
Total Trust funds
BA
0
7
-1,090
Total Agency for International Development
BA
0
1,315,947
1,082,081
1,687,841
1,437,786
BA
16,250
21,000
0
10,228
15,179
20,000
18,200
BA
0
16,250
10,228
21,000
15,179
20,000
18,200
BA
117,000
128,600
1,479,059
1,424,373
Trade and Development Program
Federal funds
General and Special Funds:
Trade and development program
Appropriation, current
151
K
Outlays
Total Trade and development program
Peace Corps
Federal funds
General and Special Funds:
Peace Corps operating expenses
Appropriation, current
151
K
Outlays
Total Peace Corps operating expenses
Trust funds
Peace Corps miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.
0
110,076
^ —1,231
126,378
*-1,046
BA
0
117,000
110,076
127,369
125,332
124,400
124,324
*-185
124,400
124,139
151
BA
0
180
534
550
450
600
600
8-29
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
Funds Appropriated to the President—Con.
International Development Assistance—Con.
Overseas Private Investment Corporation
Federal funds
Public Enterprise Funds:
Overseas Private Investment Corporation
Outlays
151
0
-99,039
0
(15,000)
-99,039
-104,389
"-838
(15,000)
-105,227
13,000
11,992
13,996
10,474
10,329
13,000
13,996
11,992
10,474
10,329
Limitation on direct loan obligations
Total Overseas Private Investment Corporation....
-110,067
(15,000)
-110,067
Inter-American Foundation
Federal funds
Public Enterprise Funds:
Inter-American Foundation
Appropriation, current
151
BA
Outlays..
Total Inter-American Foundation
BA
0
Trust funds
Gifts and contributions, Inter-American Foundation
151
Appropriation, permanent, indefinite
Outlays
BA
0
African Development Foundation
Federal funds
General and Special Funds:
African Development Foundation
Appropriation, current
151
BA
K
1,000
646
3,000
646
1,769
3,154
2,769
3,154
3,885
1,000
3,885
Total Federal funds International Development
Assistance
BA
0
3,104,719
2,818,473
3,757,825
3,189,938
3,176,994
3,123,491
Total Trust funds International Development Assistance
BA
0
192
-555
550
457
600
600
-4,669
10,000
Reappropriation
Outlays
BA
0
Total African Development Foundation
BA
0
International Commodity Agreements
Federal funds
General and Special Funds:
Contributions to international buffer stocks
Outlays
See footnotes at end of table.
155
0
8-30
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Funds Appropriated to the President—Con.
International Monetary Programs
Federal funds
General and Special Funds:
United States quota, International Monetary Fund
155
Appropriation, current, indefinite
BA
Outlays
0
Supplementary financing facility, International Monetary Fund
155
Outlays
0
Loans to international Monetary Fund
Appropriation, current
5,527,828
545,894
19,566
155
BA
2,245,771
Total Federal funds International Monetary Pro6A
grams
0
7,773,599
565,460
Military Sales Programs
Federal funds
Public Enterprise Funds:
Special defense acquisition fund
Outlays
155
0
-88,822
-13,451
35,924
10,435,717
(11,236,837)
10,936,403
12,834,000
(12,100,000)
11,900,000
13,378,000
(12,400,000)
12,500,000
0
-88,822
-13,451
35,924
BA
0
10,435,717
10,936,403
12,834,000
11,900,000
13,378,000
12,500,000
Trust funds
Foreign military sales trust fund
155
Contract authority, permanent, indefinite
BA
Liquidation of contract authority, permanent
Outlays
0
Summary
Federal funds:
(As shown in detail above)
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
155 BA
-11,236,837
0
-12,100,000
-12,400,000
Total Trust funds
BA
-801,120
-300,434
734,000
-200,000
978,000
100,000
Total Military Sales Programs
BA
0
-801,120
-389,256
734,000
-213,451
978,000
135,924
Petroleum Reserves
General and Special Funds:
Petroleum reserves
Outlays
See footnotes at end of table.
271
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-31
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
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)
1,136
BA
0
Deductions for offsetting receipts:
Proprietary receipts from the public
17,295,394
9,672,366
14,329,056
12,122,586
13,557,397
13,186,400
-85,945
-93,200
-99,200
Q
-433,242
-429,802
-694,195
BA
16,403,940
13,481,746
12,419,394
8,780,912
11,275,276
12,048,397
10,440,466
10,940,306
12,849,650
11,915,507
13,393,689
12,515,750
151 BA
152
f
QAO
DA
Total Federal funds
0
Trust funds:
(As shown in detail above)
BA
0
Deductions for offsetting receipts:
Proprietary receipts from the public
151
155
Total Trust funds
Total Funds Appropriated to the President
BA
Q A -11,236,837
-12,100,000
-12,400,000
BA
-800,800
734,650
978,689
0
-300,960
-199,493
100,750
BA
15,603,140
14,216,396
13,398,083
8,479,952
11,075,783
12,149,147
5,240
4,659
0
Department of Agriculture
Office of the Secretary
Federal funds
General and Special Funds:
Office of the Secretary
Appropriation, current
352
BA
5,095
D
129
"-114
Outlays
0
4,512
5,366
4,659
^ — 114
Total Office of the Secretary
See footnotes at end of table.
BA
5,095
5,255
4,659
0
4,512
5,252
4,659
8-32
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Office of the Secretary—Con.
Trust funds
Gifts and bequests
Appropriation, permanent
Outlays
352
BA
0
150
8
72
71
Departmental Administration
Federal funds
General and Special Funds:
Departmental administration
Appropriation, current
352
Outlays
Total Departmental administration
Standard level user charges
Appropriation, current
Outlays
Advisory committees
Appropriation, current
Outlays
BA
18,282
18,873
C
5
D
295
"-149
19,173
^ —149
16,776
0
15,806
BA
0
18,282
15,806
19,024
19,024
16,776
16,776
BA
0
64,270
56,136
67,254
67,254
77,300
77,300
16,776
352
352
BA
0
1,398
949
1,385
1,385
1,323
1,323
Intragovernmental Funds:
Working capital fund
Appropriation, current
Outlays
352
BA
0
-1,761
6,000
6,000
6,000
6,000
Total Federal funds Departmental Administration. BA
0
83,950
71,130
93,663
93,663
101,399
101,399
BA
7,466
6,799
0
6,917
7,615
D
62
"-497
7,677
*-497
7,180
7,180
6,799
6,799
Office of Governmental and Public Affairs
Federal funds
General and Special Funds:
Office of Governmental and Public Affairs
Appropriation, current
Outlays
352
Total Office of Governmental and Public Affairs.. BA
0
See footnotes at end of table.
7,466
6,917
6,799
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-33
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Office of the Inspector General
Federal funds
General and Special Funds:
Office of the Inspector General
Appropriation, current
352
BA
Outlays
44,996
42,296
Total Office of the Inspector General..
45,890
G
431
"-41
45,608
"-41
40,866
40,224
BA
0
44,996
42,296
46,280
45,567
40,866
40,224
BA
15,306
13,961
0
15,090
15,715
D
206
"-24
15,921
"-24
BA
0
15,306
15,090
15,897
15,897
13,961
13,961
BA
475,406
485,286
BA
0
2,800
481,307
487,022
"-1,313
2,800
485,804
"-1,313
BA
0
478,206
481,307
488,509
484,491
485,286
477,835
BA
77,925
0
3,886
23,050
"-20,950
19,204
«—3.154
2,100
16,050
64,865
"-19,626
Office of the General Counsel
Federal funds
General and Special Funds:
Office of the General Counsel
Appropriation, current
352
Outlays
Total Office of the General Counsel
13,961
Agricultural Research Service
Federal funds
General and Special Funds:
Agricultural Research Service
Appropriation, current
352
Appropriation, permanent
Outlays
Total Agricultural Research Service
Buildings and facilities
Appropriation, current
Outlays
Total Buildings and facilities
See footnotes at end of table.
477,835
352
BA
0
77,925
3,886
45,239
8-34
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Agricultural Research Service—-Con.
Trust funds
Miscellaneous contributed funds
Appropriation, permanent, indefinite
Outlays
352
BA
0
Total Federal funds Agricultural Research Service BA
0
Total Trust funds Agricultural Research Service... BA
0
732
1,352
556,131
485,193
732
1,352
2,000
2,000
2,000
2,000
490,609
500,541
485,286
523,074
2,000
2,000
2,000
2,000
289,276
*-151
257,798
^ — 151
251,161
Cooperative State Research Service
Federal funds
General and Special Funds:
Cooperative State Research Service
Appropriation, current
352
Outlays
Total Cooperative State Research Service
BA
247,655
0
239,490
BA
0
247,655
239,490
289,125
257,647
251,161
258,500
BA
334,340
264,808
0
329,580
343,727
"-310
342,093
*-310
BA
0
334,340
329,580
343,417
341,783
264,808
266,700
BA
10,382
11,400
11,100
258,500
Extension Service
Federal funds
General and Special Funds:
Extension Service
Appropriation, current
352
Outlays
Total Extension Service
266,700
National Agricultural Library
Federal funds
General and Special Funds:
National Agricultural Library
Appropriation, current
352
»64
"-11
Outlays
Total National Agricultural Library
See footnotes at end of table.
0
10,024
11,198
^-11
11,000
BA
0
10,382
10,024
11,453
11,187
11,100
11,000
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-35
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Statistical Reporting Service
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
352
Outlays
Total Salaries and expenses
Trust funds
Miscellaneous contributed funds
Appropriation, permanent
Outlays
BA
54,430
56,289
M,560
D
538
"-206
56,619
A
1,560
"-206
57,179
0
55,538
BA
0
54,430
58,181
57,179
55,538
57,973
56,349
56,349
352
BA
0
224
143
275
275
275
275
45,614
D
489
"-132
545
46,013
^ —132
44,596
Economic Research Service
Federal funds
General and Special Funds:
Salaries and expenses
352
Appropriation, current
BA
44,329
Reappropriation
Outlays
BA
0
40,929
BA
44,329
46,516
44,596
0
40,929
45,881
44,287
BA
0
44
55
54
54
24
24
BA
1,533
1,619
0
1,520
1,642
°34
"-32
1,603
^-32
BA
0
1,533
1,520
1,644
1,571
1,619
1,616
Total Salaries and expenses
Trust funds
Miscellaneous contributed funds
Appropriation, permanent
Outlays
44,287
352
World Agricultural Outlook Board
Federal funds
General and Special Funds:
World agricultural outlook board
Appropriation, current
Outlays
Total World agricultural outlook board
See footnotes at end of table.
352
1,616
8-36
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Foreign Agricultural Service
Federal funds
General and Special Funds:
Foreign Agricultural Service
Appropriation, current
352
Outlays
Total Foreign Agricultural Service
BA
83,983
83,448
D
274
"-424
83,722
"-424
82,446
0
73,711
BA
0
83,983
73,711
83,298
83,298
82,446
82,642
83,983
73,711
83,298
83,372
82,446
82,642
5,038
"-52
4,638
^-52
3,790
3,790
3,803
Salaries and expenses (special foreign currency program)
352
Outlays
0
Total Federal funds Foreign Agricultural Service.. BA
0
82,642
74
Office of International Cooperation and
Development
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Total Salaries and expenses
352
BA
0
-1,258
BA
0
5,016
-1,258
4,986
4,586
5,000
5,000
"-9
4,792
"-9
Scientific activities overseas (foreign currency program)
352
Appropriation, current
BA
Outlays
0
Total Scientific activities overseas (foreign currency program)
BA
0
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
See footnotes at end of table.
5,016
2,905
3,803
4,528
5,000
2,905
4,991
4,783
4,528
4,689
6,167
7,900
7,900
7,083
7,083
9,977
9,369
3,790
8,331
7,900
7,900
7,083
7,083
10,016
1,647
4,689
6,167
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-37
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Foreign Assistance Programs
Federal funds
General and Special Funds:
Expenses, Public Law 480, foreign assistance programs, Agriculture
151
Appropriation, current
BA
1,377,000
1,355,000
K
4
Outlays
1,307,000
1,085,393
185,000
1,590,000
A
201,000
1,307,000
1,377,000
1,085,393
1,540,000
1,791,000
1,307,000
1,307,000
BA
52,092
0
50,491
50,857
"-100
58,218
"-100
35,303
BA
0
52,092
50,491
50,757
58,118
35,303
0
5,169
9,000
11,000
BA
0
190,000
180,051
190,000
197,000
133,000
BA
0
8,800
8,800
10,200
8,137
11,363
12,362
0
Total Expenses, Public Law 480, foreign assistance programs, Agriculture
BA
0
Agricultural Stabilization and Conservation
Service
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
351
Outlays..
Total Salaries and expenses
Rural clean water program
Outlays
Agricultural conservation program
Appropriation, current
Outlays
Water Bank program
Appropriation, current
Outlays
Cropland adjustment program
Outlays
Emergency conservation program
Appropriation, current
Outlays
Dairy indemnity program
Appropriation, current
Outlays
Total Dairy indemnity program
See footnotes at end of table.
304
302
302
351
10,034
0
453
15
BA
0
BA
19,000
15,488
1,800
0
2,442
BA
0
1,800
2,442
351
100
"-88
100
"-88
12
12 ...
8-38
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Agricultural Stabilization and Conservation
Service—Con.
Forestry incentives program
Appropriation, current
Outlays
302
BA
0
12,500
10,826
12,500
13,443
11,994
Total Federal funds Agricultural Stabilization and
Conservation Service
BA
0
284,192
274,516
262,069
299,136
211,796
Federal Crop Insurance Corporation
Federal funds
General and Special Funds:
Administrative and operating expenses
Appropriation, current
351
BA
200,000
200,000
D
502
-1,906
239,234
H
Outlays
0
126,508
J
200,502
H
-1,906
-74,977
239,234
'-74,977
Total Administrative and operating expenses
BA
0
200,000
126,508
198,596
198,596
164,257
164,257
BA
160,000
110,000
50,000
135,000
0
449,141
222,227
' -42,952
109,497
'-25,817
BA
0
160,000
449,141
160,000
222,227
92,048
83,680
Total Federal funds Federal Crop Insurance Corporation
BA
0
360,000
575,649
358,596
420,823
256,305
247,937
93,575
66,205
131,959
12,866,409
Public Enterprise Funds:
Federal Crop Insurance Corporation fund
Appropriation, current
351
Outlays
Total Federal Crop Insurance Corporation fund
A
Commodity Credit Corporation
federal funds
Public Enterprise Funds:
Commodity Credit Corporation Fund
Appropriation, permanent, indefinite
Authority to borrow, permanent
Liquidation of contract authority, current
Outlays
Total Commodity Credit Corporation Fund
See footnotes at end of table.
351
BA
BA
0
BA
0
(9,607,431)
7,315,488
159,780
7,315,488
15,031,085
H
— 31
12,998,368
15,031,054
99,065
11,217,370
-1,821,130
L
12,343,523
L
-1,821,130
9,495,305
10,522,393
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-39
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Commodity Credit Corporation—Con.
General and Special Funds:
Temporary emergency food assistance program
351
BA
0
50,000
48,752
50,000
50,190
16,734
Total Federal funds Commodity Credit CorporaBA
tion
0
209,780
7,364,240
13,048,368
15,081,244
9,495,305
10,539,127
BA
2,017
2,345
2,173
0
2,006
"-36
2,448
"-36
2,214
BA
0
2,017
2,006
2,327
2,412
2,173
2,214
BA
29,905
30,340
28,392
27,817
"-288
30,987
"-264
28,389
"-24
29,905
27,817
30,376
30,723
28,392
28,365
197,862
215,964
" -215,964
215,964
"-215,964
Appropriation, current
Outlays
Office of Rural Development Policy
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
452
Outlays
Total Salaries and expenses
Rural Electrification Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
271
Outlays
Total Salaries and expenses..
Reimbursement to the Rural electrification and telephone revolving fund for interest subsidies and
losses
271
Appropriation, current
BA
Outlays
0
Total Reimbursement to the Rural electrification
and telephone revolving fund for interest
subsidies and losses
BA
0
See footnotes at end of table.
197,862
197,862
197,862
8-40
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Rural Electrification Administration—Con.
Purchase of Rural Telephone Bank capital stock
452
Appropriation, current
Outlays
BA
30,000
0
30,000
0
30,000
30,000
BA
BA
0
375
819
4,950
841
763
10,130
1,203
631
1,834
BA
0
1,194
4,950
1,604
10,130
1,834
1,834
Total Purchase of Rural Telephone Bank capital
stock
30,000
« -30,000
30,000
"-30,000
Public Enterprise Funds:
Rural communication development fund
Appropriation, current
Authority to borrow, permanent, indefinite
Outlays
452
Total Rural communication development fund
Rural electrification and telephone revolving fund
271
Authority to borrow, permanent
BA
Outlays
0
Limitation on direct loan obligations
Limitation on guaranteed loan commitments
Rural telephone bank
452
Authority to borrow, permanent, indefinite
BA
Outlays
0
Limitation on direct loan obligations
Y
323,917
^ —728
Y
(1,078,559)
Y
(4,145,000)
Y
Y
Y
(1,121,706)
(2,345,000)
Y
Y
Y
(575,000)
(300,000)
y
75,048
15,319
(220,000)
113,633
70,232
Y
(220,000)
657,926
275,220
145,613
111,085
171,574
128,147
BA
0
90,000
134,883
115,000
183,769
25,000
170,890
BA
330,403
327,251
16,866
227,940
Total Federal funds Rural Electrification Administration
BA
0
Y
Y
Y
141,348
97,948
(185,000)
Y
Y
Farmers Home Administration
General and Special Funds:
Rural water and waste disposal grants
Appropriation, current
Outlays
Salaries and expenses
Appropriation, current
Outlays
Total Salaries and expenses..
See footnotes at end of table.
452
452
4
0
324,079
D
8,035
"-1,315
334,671
A
16,023
"-1,315
BA
0
330,403
324,079
350,848
349,379
227,676
227,940
228,519
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-41
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Farmers Home Administration—Con.
Rural community fire protection grants
Appropriation, current
Outlays
Mutual and self-help housing
Appropriation, current
Outlays
Very low income housing repair grants
Appropriation, current
Outlays
Rural rental assistance payments
Appropriation, current
Outlays
Compensation for construction defects
Appropriation, current
Outlays
Rural housing preservation grants
Appropriation, current
Outlays
Miscellaneous expiring appropriations:
(Mortgage credit and deposit insurance)
(Outlays)
(Area and regional development)
(Outlays)
(Housing assistance)
(Appropriation, current)
(Outlays)
452
BA
0
3,250
2,952
3,250
3,377
2,325
BA
0
6,000
7,560
8,000
8,085
4,537
BA
0
12,500
13,643
12,500
12,039
625
BA
0
49,000
52,250
17,038
18,657
BA
0
2,000
395
1,000
1,000
BA
0
15,000
5,000
1,000
604
604
604
371
604
8,000
371
0
202
0
835
1,545
772
BA
O
4,393
11,075
10,771
9,699
BA
O
4,393
12,112
12,332
10,471
BA
BA
O
895,522
1,621,165
2,477,506
1,089,943
844,600
1,608,980
1,477,565
16
452
604
Total Miscellaneous expiring appropriations
Public Enterprise Funds:
Agricultural credit insurance fund
Appropriation, current
Authority to borrow, permanent, indefinite
Outlays
351
(2,987,000)
(2,612,000)
1,242,833
-44,000
(400,000)
BA
O
2,516,687
2,477,506
1,934,543
1,608,980
1,477,565
1,198,833
O
-1,021
492
609
BA
BA
BA
0
1,508,082
112,769
982,749
2,340,479
(3,265,000)
1,843,927
148,413
281,444
2,227,120
(3,238,000)
2,136,784
142,786
BA
O
2,603,600
2,340,479
2,273,784
2,227,120
2,279,570
2,490,927
J
Limitation on direct loan obligations
Total Agricultural credit insurance fund
Self-help housing land development fund
Outlays
Rural housing insurance fund
Appropriation, current
Indefinite
Authority to borrow, permanent, indefinite
Outlays
Limitation on direct loan obligations
Total Rural housing insurance fund
See footnotes at end of table.
371
371
2,490,927
(30,000)
8-42
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Farmers Home Administration—Con.
Rural development insurance fund
Appropriation, current
Authority to borrow, permanent, indefinite
Outlays
Limitation on direct loan obligations
452
BA
BA
0
477,829
229,198
753,116
(400,000)
560,005
76,000
709,270
(455,000)
612,098
3,239
747,400
(50,000)
BA
0
707,027
753,116
636,005
709,270
615,337
747,400
Total Federal funds Farmers Home Administration
BA
0
6,339,860
6,065,704
5,392,180
5,133,881
4,625,412
4,881,793
BA
355,085
354,179
0
353,051
356,364
G
8,365
" -5,174
364,323
" -4,864
354,849
"-310
BA
0
355,085
353,051
359,555
359,459
354,179
354,539
BA
15,619
11,574
0
15,444
14,654
"-235
14,906
"-221
12,481
"-14
BA
0
15,619
15,444
14,419
14,685
11,574
12,467
BA
8,675
6,895
0
8,250
8,750
"-133
8,750
"-125
BA
0
8,675
8,250
BA
195,200
0
218,244
Total Rural development insurance fund
Soil Conservation Service
Federal funds
General and Special Funds:
Conservation operations
Appropriation, current
302
Outlays
Total Conservation operations
River basin surveys and investigations
Appropriation, current
301
Outlays
Total River basin surveys and investigations
Watershed planning
Appropriation, current
301
Outlays
Total Watershed planning
Watershed and flood prevention operations
Appropriation, current
Outlays
6,895
6,990
301
Total Watershed and flood prevention operations. BA
0
See footnotes at end of table.
8,617
8,625
6,998
"-8
195,200
218,244
182,300
'-8,365
"-918
277,810
"-863
62,631
177,369
"-55
173,017
276,947
62,631
177,314
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-43
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Soil Conservation Service—Con.
Great plains conservation program
Appropriation, current
302
Outlays
Total Great plains conservation program
Resource conservation and development
Appropriation, current
21,315
21,017
21,315
"-126
21,481
«__118
0
7,402
18,412
«_8
BA
0
21,315
21,017
21,189
21,363
7,402
18,404
BA
26,000
10,000
0
29,523
26,000
"-164
28,357
«—154
21,540
"-10
BA
0
26,000
29,523
25,836
28,203
10,000
21,530
302
Outlays
Total Resource conservation and development
Trust funds
Miscellaneous contributed funds:
(Water resources)
(Appropriation, permanent, indefinite)
(Outlays)
(Conservation and land management)
(Appropriation, permanent, indefinite)
(Outlays)
BA
301
BA
0
459
1,271
600
3,824
460
1,611
BA
0
100
100
100
100
100
100
Total Miscellaneous contributed funds
BA
0
559
1,371
700
3,924
560
1,711
Total Federal funds Soil Conservation Service
BA
0
Total Trust funds Soil Conservation Service
BA
0
302
621,894
645,529
602,633
709,282
559
1,371
452,681
591,244
700
3,924
560
1,711
Animal and Plant Health Inspection Service
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
352
Outlays
Total Salaries and expenses
Buildings and facilities
Appropriation, current
Outlays
See footnotes at end of table.
BA
271,402
0
290,709
BA
0
271,402
290,709
BA
0
2,386
2,333
277,041
*-1,464
H
276,791
-1,464
275,577
275,327
242,004
^—12,298
242,004
J
-12,298
229,706
229,706
352
2,361
4,985
2,361
4,620
8-44
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Animal and Plant Health Inspection
Service—Con.
Trust funds
Miscellaneous trust funds
352
Appropriation, permanent, indefinite
BA
Outlays
0
Total Federal funds Animal and Plant Health
Inspection Service
BA
0
4,094
3,263
2,878
2,529
273,788
277f938
232,067
280,312
234,326
4,094
3,263
2,878
2,529
2,878
2,878
BA
6,861
6,936
6,820
0
6,049
Total Trust funds Animal and Plant Health Inspection Service
BA
0
293,042
2,878
2,878
Federal Grain Inspection Service
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
352
J
Outlays
Total Salaries and expenses
BA
0
6,861
6,049
6,994
"-94
6,900
6,900
-2,220
6,820
J
-2,220
4,600
4,600
Public Enterprise Funds:
Inspection and weighing services
Appropriation, current
Outlays
352
BA
0
6,000
-2,556
-283
Total Federal funds Federal Grain Inspection
Service
BA
12,861
6,900
4,600
3,493
6,617
4,600
0
Agricultural Marketing Service
Federal funds
General and Special Funds:
Marketing services
Appropriation, current
352
BA
30,924
29,464
*8
29,134
"-150
Outlays
0
38,314
30,305
"-150
Total Marketing services
See footnotes at end of table.
' -17,319
29,134
'-18,319
BA
30,924
30,155
11,815
0
38,314
30,155
10,815
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-45
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Agricultural Marketing Service—Con.
Payments to States and possessions
352
Appropriation, current
Outlays
Perishable Agricultural Commodities Act fund 352
Appropriation, permanent, indefinite
Outlays
Funds for strengthening markets, income, and supply
(section 32)
605
Appropriation, permanent, indefinite
Outlays
BA
0
1,000
898
990
1,808
BA
0
2,906
3,084
3,356
3,336
BA
355,947
487,263
0
417,178
377,928
355,947
487,263
380,430
417,178
377,928
353,790
69,301
65,525
76,216
75,382
76,367
76,367
Total Funds for strengthening markets, income,
and supply (section 32)
BA
0
3,356
3,356
380,430
J
359,983
-6,193
Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
Milk market orders assessment fund
Outlays
352
BA
0
351
0
Total Federal funds Agricultural Marketing Service
BA
-125
390,777
521,764
395,601
459,474
413,227
367,961
BA
0
69,301
64,235
76,216
75,257
76,367
76,367
BA
2,549
2,063
0
2,572
2,515
z>27
"-18
2,542
0
Total Trust funds Agricultural Marketing Service.
-1,290
Office of Transportation
Federal funds
General and Special Funds:
Office of Transportation
Appropriation, current
Outlays
352
2,063
"-18
Total Office of Transportation
See footnotes at end of table.
BA
0
2,549
2,572
2,524
2,524
2,063
2,063
8-46
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Food Safety and Inspection Service
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
554
BA
Outlays
0
338,808
338,437
353,239
11,396
» -2,473
347,799
D
J
- 2,000
347,799
363,946
H
-2,473
•*-2,000
Total Salaries and expenses
BA
0
Trust funds
Expenses and refunds, inspection and grading of farm
products
352
Appropriation, permanent, indefinite
BA
Outlays
0
338,808
338,437
362,162
361,473
825
615
345,799
345,799
848
848
752
752
83,187
1,000
"-684
83,761
^ — 684
79,065
Food and Nutrition Service
Federal funds
General and Special Funds:
Food program administration
Appropriation, current
605
Outlays
Total Food program administration
Food stamp program
Appropriation, current
BA
83,062
0
82,266
BA
0
83,062
82,266
83,503
83,077
79,065
79,576
BA
11,722,914
11,433,290
* 318,856
'-431
H
-8,762
11,876,074
D
79,576
605
Outlays
0
11,561,023
11,465,900
A
308,014
"-8,762
L
-20,320
11,861,973
M0,842
*-13,607
Total Food stamp program
Nutrition assistance for Puerto Rico
Appropriation, current
Outlays
Special milk program
Appropriation, current
Outlays
See footnotes at end of table.
BA
0
11,722,914
11,561,023
11,742,953
11,765,152
11,855,754
11,859,208
BA
0
825,000
814,226
825,000
833,411
825,000
825,000
BA
0
11,920
16,000
17,600
16,142
11,500
17,590
605
605
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-47
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Food and Nutrition Service—Con.
Child nutrition programs
Appropriation, current
605
BA
1,251,463
1,474,861
BA
0
2,307,295
3,536,378
2,329,819
3,835,859
BA
0
3,558,758
3,536,378
3,804,680
3,835,859
3,428,180
3,449,148
BA
0
1,400,150
1,397,777
1,448,501
1,519,453
1,513,849
1,511,040
BA
0
166,936
171,717
139,546
163,223
174,607
172,595
Total Federal funds Food and Nutrition Service.... BA
0
17,768,740
17,579,387
18,061,783
18,216,317
17,887,955
17,914,157
7,496
»37
"-34
7,672
"-34
13,416
Appropriation, permanent
Outlays
Total Child nutrition programs
Women, infants and children programs (WIC and
CSFP)
605
Appropriation, current
Outlays
Food donations program
605
Appropriation, current
Outlays
L
L
863,493
-685,960
3,250,647
4,097,380
-648,232
Human Nutrition Information Service
Federal funds
General and Special Funds:
Human Nutrition Information Service
Appropriation, current
352
Outlays
Total Human Nutrition Information Service
BA
6,148
0
7,322
BA
0
6,148
7,322
7,499
7,638
13,416
10,817
BA
9,013
9,035
"85
"-117
8,874
0
8,773
9,120
"-117
10,817
Packers and Stockyards Administration
Federal funds
General and Special Funds:
Packers and Stockyards Administration
Appropriation, current
352
Outlays
J
-4,437
8,874
^-4,437
Total Packers and Stockyards Administration
See footnotes at end of table.
BA
0
9,013
8,773
9,003
9,003
4,437
4,437
8-48
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Agricultural Cooperative Service
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
352
Outlays
BA
4,677
4,639
"-50
0
4,139
4,639
"-50
3,565
J
-1,565
3,565
J
-1,565
Total Salaries and expenses
Trust funds
Miscellaneous contributed funds
Outlays
BA
0
4,677
4,139
4,589
4,589
2,000
2,000
120,964
"-923
119,077
"-739
104,171
105,058
"-184
352
0
1
Forest Service
Federal funds
General and Special Funds:
Forest research
Appropriation, current
302
Outlays
Total Forest research
State and private forestry
Appropriation, current
Total State and private forestry
Outlays
Total National forest system
See footnotes at end of taNe.
108,555
0
108,811
BA
0
108,555
108,811
120,041
118,338
104,171
104,874
BA
60,579
29,723
0
56,854
58,315
"-463
59,008
"-370
32,866
"-93
BA
0
60,579
56,854
57,852
58,638
29,723
32,773
BA
922,807
1,045,680
* 61,247
"-12,134
1,039,157
1,056,724
993,753
61,247
"-9,709
302
Outlays
National forest system
Appropriation, current
BA
302
0
BA
0
922,807
1,056,724
A
1,094,793
1,045,291
'64,185
1,006,514
"-2,425
^63,023
1,103,342
1,067,112
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-49
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Forest Service—Con.
Construction
Appropriation, current
302
BA
251,724
36,972
-1,922
261,342
»-1,537
35,050
259,805
209,637
H
Outlays
Total Construction
Other 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
Range betterment fund
302
Appropriation, current, indefinite
Outlays
Land acquisition
303
Appropriation, current
Outlays
Total Land acquisition
Operations and maintenance of quarters
Appropriation, permanent, indefinite
Outlays
Forest Service permanent appropriations
Appropriation, permanent, indefinite
Outlays
Forest Service permanent appropriations
Appropriation, current, indefinite
Appropriation, permanent, indefinite
Outlays
0
292,201
BA
0
251,724
292,201
0
1,282
BA
0
780
367
766
766
780
780
BA
0
380
324
20
20
20
20
BA
0
4,028
4,301
BA
40,052
0
38,368
BA
0
40,052
38,368
BA
0
3,966
3,978
3,908
3,920
43,603
"-68
42,142
"-54
43,535
42,088
2,278
41,200
*-14
2,278
41,186
5,300
4,240
5,700
5,620
141,953
148,056
137,901
136,567
302
BA
0
134,368
72,027
852
J
BA
BA
0
203,331
203,331
238,842
238,842
BA
0
203,331
203,331
238,842
238,842
Intragovernmental Funds:
See footnotes at end of table.
5,244
302
Total Forest Service permanent appropriations
Working capital fund
Outlays
222,675
"-385
209,637
222,290
302
0
-21,915
J
-356,000
423,247
423,247
-356,000
67,247
67,247
8-50
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
1985
estimate
1986
estimate
Department of Agriculture—Con.
Forest Service—Con.
Trust funds
Miscellaneous trust funds
302
(Appropriation, current)
(Appropriation, permanent, indefinite)..
(Outlays)
BA
BA
0
231,109
134,546
88
153,270
153,104
90
158,382
152,522
Total (
BA
0
231,109
134,546
153,358
153,104
158,472
152,522
401
(Outlays)
32
BA
0
231,109
134,546
153,358
153,136
BA
0
34,808
81,711
31,615
77,515
Total Federal funds Forest Service..
BA
0
1,742,118
1,925,306
Total Trust funds Forest Service
BA
0
1,726,604
1,812,675
265,917
216,257
184,973
230,651
1,664,707
1,682,389
158,472
152,522
BA
0
31,886,246
38,175,148
43,850,561
46,252,752
38,232,764
39,897,348
-1,212,163
-1,229,449
Total Miscellaneous trust funds.
Reforestation trust fund
Appropriation, permanent, indefinite..
Outlays
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.
158,472
152,522
302
302 BA
O
302 BA
0
303 BA
0
554 BA
0
434
-691,352
4J14
'-115,151
BA
0
31,200,042
37,488,944
42,638398
36,888,164
45,040,589
38,552,748
BA
0
346,535
293,467
275,844
323,510
248,411
243,683
302 BA
0
-231,103
-153,270
-158,382
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-51
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Agriculture—Con.
Summary—Con.
352
^A
-80,468
Total Trust funds
BA
0
34,964
-18,104
31,703
79,369
90
-4,638
Total Department of Agriculture
BA
0
31,235,006
37,470,840
42,670,101
45,119,958
36,888,254
38,548,110
35,990
'992
"-499
35,596
'893
H
-4,149
35,309
36,558
'99
"-50
36,483
32,340
35,309
36,607
-90,871
-89,939
Department of Commerce
General Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
376
Outlays
Total Salaries and expenses
White House conference on productivity
Outlays
Special foreign currency program
Appropriation, current
Outlays
BA
37,539
0
34,153
BA
0
37,539
34,153
376
0
196
24
BA
0
693
92
500
600
376
Total Federal funds General Administration
576
BA
0
38,232
34,441
36,983
32,964
35,309
37,183
BA
27,707
14,522
0
27,337
28,500
"-120
28,020
"-120
BA
0
27,707
27,337
Economic Development Assistance
Genera/ Administration
Federal funds
General and Special Funds:
Grants and loans administration
Appropriation, current
Outlays
Total Grants and loans administration
See footnotes at end of table.
452
28380
27,900 -
16,534
14,522
16,534
8-52
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
estimate
Department of Commerce—Con.
Economic Development Assistance—Con.
Economic development assistance programs
Appropriation, current
452
Outlays
BA
266,000
0
252,131
Total Economic development assistance proBA
grams..
0
Miscellaneous appropriations:
(Other advancement of commerce)
(Outlays)
21,000
256,800
230,800
-40,600
190,200
0
1,509
6,396
* -5,531
0
1,509
865
2,400
452
0
8,790
3,590
0
-4
103
453
503
Total (Research and general education aids)
(Training and employment)
(Outlays)
H
376
Total (Other advancement of commerce)
(Area and regional development
(Outlays)
(Disaster relief and insurance
(Outlays)
(Research and general education aids)
(Outlays)
266,000
252,131
200,000
"-179,000
277,100
* -20,300
0
18,629
* -5,324
0
13,305
504
Total Miscellaneous appropriations
1,002
1,598 ....
0
9,788
6,800
16,570
0
-72,115
-47,000
-51,100
BA
0
293,707
217,141
49,380
244,500
14,522
172,204
-1,763
-1,086
367
385
200
200
Public Enterprise Funds:
Economic development revolving fund
Outlays
452
Total Federal funds General Administration
General Administration
Federal funds
Intragovernmental Funds:
Working capital fund
Outlays
Trust funds
Gifts and bequests
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.
376
376
BA
0
209
209
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-53
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Commerce—Con.
Bureau of the Census
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
376
Outlays
Total Salaries and expenses
Periodic censuses and programs
Appropriation, current
BA
77,369
0
80,473
85,500
"-241
82,924
"-214
87,962
87,686
*-27
BA
77,369
85,259
87,962
0
80,473
82,710
87,659
BA
78,220
81,000
105,802
376
"-791
Outlays
0
Total Periodic censuses and programs
Total Federal funds Bureau of the Census
80,562
91,298
97,320
"-520
"-271
BA
78,220
80,209
105,802
0
80,562
90,778
97,049
BA
155,589
165,468
193,764
0
161,035
173,488
184,708
BA
38,230
29,519
0
33,039
31,085
"-433
36,910
"-372
*-61
Economic and Statistical Analysis
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
376
Outlays
Total Salaries and expenses
Trust funds
Information products and services
Appropriation, permanent, indefinite
Outlays
29,740
BA
38,230
30,652
29,519
0
33,039
36,538
29,679
BA
0
30,174
25,949
31,330
31,330
33,330
33,330
0
-741
3,834
2,400
0
2,253
376
Economic Development Assistance
Regional Development Program
Federal funds
General and Special Funds:
Regional development programs
Outlays
Trust funds
Regional development commissions
Outlays
See footnotes at end of table.
452
452
530
200
8-54
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Commerce—Con.
Promotion of Industry and Commerce
International Trade Administration
Federal funds
General and Special Funds:
Operations and administration
Appropriation, current
376
BA
161,526
179,693
* 12,725
-21,533
200,080
H
-15,181
171,607
^ —821
H
Outlays
151,799
* 20,173
0
187,171
BA
0
161,526
187,171
170,885
184,899
171,972
170,786
0
5,937
2,382
839
»-6
Total Participation in United States expositions... 0
5,937
2,382
833
161,526
193,108
170,885
187,281
171,972
171,619
53,290
49,885
"-305
Total Operations and administration
Participation in United States expositions
Outlays
375
Total Federal funds International Trade Administration
BA
0
Administration for Enterprise Development
and Opportunity
General and Special Funds:
Enterprise development and opportunity
Appropriation, current
376
BA
Outlays
0
50,810
59,269
"-305
44,802
J
52,914
48,122
'47,623
Total Enterprise development and opportunity
White House Conference on Small Business
Appropriation, current
Outlays
BA
0
49,580
58,964
97,716
95,745
376
BA
0
Total Federal funds Administration for Enterprise
Development and Opportunity
BA
0
See footnotes at end of table.
53,290
50,810
'1,000
'1,000
533)
50,810
49,580
58,964
98,716
96,745
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-55
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Commerce—Con.
Promotion of Industry and Commerce—Con.
United States Travel and Tourism
Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
376
Outlays
Total Salaries and expenses..
BA
BA
11,986
0
8,854
BA
0
12,000
-3,885
13,978
-2,914
6,607
"-730
11,986
8,854
8,115
11,064
4,000
5,877
0
226,802
252,772
228,580
257,309
274,688
274,241
BA
981,767
1,113,066
Total Federal funds Promotion of Industry and
BA
Commerce
BA
H
H
4,000
Science and Technology
National Oceanic and Atmospheric
Administration
Federal funds
General and Special Funds:
Operations, research, and facilities
Appropriation, current
306
"-104,340
7
75,000
Appropriation, permanent, indefinite
Outlays
Total Operations, research, and facilities
Construction
306
Outlays
Coastal zone management
302
Appropriation, current
Outlays
Promote and develop fishery products and research
pertaining to American fisheries
376
Appropriation, permanent, indefinite
Outlays
Fishing vessel and gear damage compensation
fund
376
Appropriation, current
Outlays
See footnotes at end of table.
K
761,137
123,217
J
23,600
929,146
25,900
1,076,437
"-63,200
1
45,450
90,000
40,000
1,009,603
"-30,700
'22,050
^54,540
1,005,367
929,146
1,109,626
1,058,687
1,014,354
1,055,493
0
6,416
3,716
BA
0
13,356
34,774
18^040
BA
0
9,986
8,404
9,051
13,023
8,464
BA
0
1,732
1,521
2,550
2,475
BA
0
BA
0
8-56
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
1986
Department of Commerce—Con.
Science and Technology—Con.
National Oceanic and Atmospheric
Administration—Con.
Fishermen's contingency fund
Appropriation, current
376
Outlays
Total Fishermen's contingency fund
Foreign fishing observer fund
Appropriation, current
Outlays
Fisheries loan fund
Appropriation, current
0
484
BA
0
750
195
484
250
^500
281
^500
750
781
BA
0
5,802
5,821
4,500
7,122
4,500
4,500
BA
3,000
0
1,666
2,500
~ 1,550
5,392
"-1,550
BA
0
3,000
1,666
950
3,842
-132
BA
0
2,079
626
1,800
1,791
1,800
1,945
0
-28
-4,700
-5,000
BA
BA
0
9,400
9,306
746
750
746
376
Total Fisheries loan fund
Public Enterprise Funds:
Coastal energy impact fund
Outlays
Federal ship financing fund, fishing vessels
Appropriation, current
Authority to borrow, current, indefinite
Outlays
195
376
Outlays
Fishermen's guaranty fund
Appropriation, current
Outlays
BA
H
-132
376
452
376
A 4f404
9,400
9,306
2,300
2,300
4,404
6,704
6,704
BA
0
27,000
27,000
27,000
27,000
28,000
28,000
Total Federal funds National Oceanic and Atmospheric Administration
BA
0
1,050,917
998,136
1,133,381
1,111,556
1,021,404
1,068,491
Total Trust funds National Oceanic and Atmospheric Administration
BA
0
27,000
27,000
27,000
27,000
28,000
28,000
Total Federal ship financing fund, fishing vessels BA
0
A
Trust funds
Aviation weather services program
Appropriation, current
Outlays....
See footnotes at end of table.
306
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-57
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
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
81,573
101,631
84,739
"-1,472
Outlays
0
Total Salaries and expenses
67,078
97,180
88,983
"-1,109
"-363
BA
81,573
100,159
84,739
0
67,078
96,071
88,620
116,853
120,221
0
121,127
"-1,019
128,530
"-787
BA
116,853
119,202
116,293
0
121,127
127,743
116,957
3,765
3,764
0
-2,824
7,282
3,708
3,475
BA
0
3,765
-2,824
3,764
7,282
3,708
3,475
BA
120,618
122,966
120,001
0
118,303
135,025
120,432
12,756
13,694
National Bureau of Standards
Federal funds
General and Special Funds:
Scientific and technical research and services
Appropriation, current
376
BA
Outlays
Total Scientific and technical research and services
Intragovemmental Funds:
Working capital fund
Appropriation, current
* 116,293
117,189
"-232
376
BA
K
Outlays
Total Working capital fund
Total Federal funds National Bureau of Standards
National Telecommunications and
Information Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
376
BA
* 13,186
"-183
Outlays
0
BA
0
See footnotes at end of table.
14,223
17,305
13,230
12,756
14,223
"-183
13,511
17,122
13,186
13,230
8-58
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account 3nd functional cods
1985
estimate
1986
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
Outlays..
0
Total Public telecommunications facilities, planning and construction
BA
0
Total Federal funds National Telecommunications
and Information Administration
BA
16,521
24,000
-10,000
20,041
»-1,032
11,880
16,521
14,000
19,009
27,511
36,131
1,384,017
1,378,783
27,000
27,000
13,186
13,230
1,239,330
1,290,773
28,000
28,000
11,880
H
Total Federal funds Science and Technology
BA
0
Total Trust funds Science and Technology
BA
0
24,636
30,744
1,277,744
1,214,261
27,000
27,000
BA
0
2,030,304
1,910,185
1,895,080
2,126,330
1,787,132
1,991,188
-703
-5,959
-1,160
0
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
908 BA
0
Proprietary receipts from the public
Total Federal funds..
Trust funds:
(As shown in detail above)..
Deductions for offsetting receipts:
Intrafund transactions
Proprietary receipts from the public
Total Trust funds..
See footnotes at end of table.
306 BA
-3,000
0
BA
0
376
BA
0
BA
0
-35,244
-31,740
-31,740
1,988,269
1,868,150
1,854,381
2,085,631
1,739,832
1,943,888
BA
0
57,541
55,587
58,530
59,060
61,539
61,739
376 BA
0
376 BA
0
BA
0
J
-14,400
-1
-25,446
32,094
30,140
-27,006
-28,730
31,524
32,054
32,809
33,009
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-59
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Commerce—Con.
Summary—Con.
Interfund transactions
376 BA
A
Total Department of Commerce
BA
0
—%tcf
— 4,O£H
— 4,oU0
2,015,636
1,893,563
1,881,581
2,113,361
1,768,041
1,972,297
22,712,000
22,610,300
Department of Defense-Military
Military Personnel
Federal funds
General and Special Funds:
Military personnel, Army
Appropriation, current
051
Outlays
Total Military personnel, Army
Military personnel, Navy
Appropriation, current
Total Military personnel, Navy
Total Military personnel, Marine Corps
Total Military personnel, Air Force
Outlays
Total Reserve personnel, Navy
See footnotes at end of table.
15,235,113
BA
0
15,388,833
15,235,113
21,580,334
21,361,300
22,712,000
22,610,300
BA
11,445,908
17,221,400
0
11,339,590
15,701,274
*359,633
15,930,200
17,115,600
BA
0
11,445,908
11,339,590
16,060,907
15,930,200
17,221,400
17,115,600
BA
3,520,369
5,217,400
5,157,900
0
3,470,022
4,817,506
E
116,840
4,861,400
BA
0
3,520,369
3,470,022
4,934,346
4,861,400
5,217,400
5,157,900
BA
12,842,363
19,187,900
0
12,686,793
17,602,474
*417,679
17,992,400
19,098,600
BA
0
12,842,363
12,686,793
18,020,153
17,992,400
19,187,900
19,098,600
BA
0
1,361,150
1,315,623
2,077,853
1,952,400
2,394,400
2,337,200
BA
767,100
1,353,600
1,353,600
1,307,400
051
Outlays
Reserve personnel, Army
Appropriation, current
Outlays
Reserve personnel, Navy
Appropriation, current
0
21,097,085
E
483,249
21,361,300
051
Outlays
Military personnel, Air Force
Appropriation, current
15,388,833
051
Outlays
Military personnel, Marine Corps
Appropriation, current
BA
051
051
0
737,579
1,122,393
E
26,619
1,080,200
BA
0
767,100
737,579
1,149,012
1,080,200
1,307,400
8-60
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Military Personnel—Con.
Reserve personnel, Marine Corps
Appropriation, current
051
Outlays
Total Reserve personnel, Marine Corps
Reserve personnel, Air Force
Appropriation, current
176,200
290,000
161,338
267,186
E
3,078
246,900
0
BA
0
176,200
161,338
270,264
246,900
290,000
279,700
BA
388,750
622,500
363,767
566,631
12,776
548,100
0
BA
388,750
579,407
622,500
0
363,767
548,100
598,200
BA
0
1,882,980
1,776,326
2,889,559
2,707,700
3,430,800
3,314,600
BA
589,100
995,100
279,700
051
Outlays
Total Reserve personnel, Air Force
National Guard personnel, Army
Appropriation, current
Outlays
National Guard personnel, Air Force
Appropriation, current
BA
E
598,200
051
051
0
568,610
868,578
17,532
865,700
BA
0
589,100
568,610
886,110
865,700
995,100
978,600
BA
0
16,503,000
16,503,000
BA
0
64,865,753
64,157,761
68,447,945
67,546,300
73,425,100
72,798,100
BA
17,326,026
18,403,298
0
16,565,899
44,835
155,565
17,679,500
19,063,200
BA
0
17,326,026
16,565,899
18,603,698
17,679,500
20,190,630
19,063,200
E
Outlays
Total National Guard personnel, Air Force
Imputed accruals for military retirement costs
Appropriation, current
Outlays
978,600
051
Total Federal funds Military Personnel
Operation and Maintenance
Federal funds
General and Special Funds:
Operation and maintenance, Army
Appropriation, current
051
C
* 20,190,630
D
Outlays
Total Operation and maintenance, Army
See footnotes at end of table.
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-61
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Operation and Maintenance—Con.
Operation and maintenance, Navy
Appropriation, current
051
22,265,628
25,103,941
0
21,403,363
82,748
148,052
23,809,600
25,226,800
BA
0
22,265,628
21,403,363
25,334,741
23,809,600
25,797,700
25,226,800
BA
1,547,720
1,640,294
BA
* 25,797,700
C
D
Outlays
Total Operation and maintenance, Navy
Operation and maintenance, Marine Corps
Appropriation, current
051
c
Outlays
Total Operation and maintenance, Marine Corps..
Operation and maintenance, Air Force
Appropriation, current
K
1,667,400
0
1,431,123
4,200
D
6,400
1,536,700
BA
0
1,547,720
1,431,123
1,650,894
1,536,700
BA
17,770,345
19,093,165
0
16,849,907
39,170
81,130
18,593,300
20,154,500
BA
0
17,770,345
16,849,907
19,213,465
18,593,300
20,924,400
20,154,500
BA
6,526,614
7,076,069
1,588,400
1,667,400
1,588,400
051
* 20,924,400
c
D
Outlays
Total Operation and maintenance, Air Force
Operation and maintenance, Defense agencies
Appropriation, current
051
C
Outlays
Total Operation and maintenance, Defense;jgencies
Operation and maintenance, Army Reserve
Appropriation, current
0
6,068,457
6,815
D
99,715
7,012,600
BA
0
6,526,614
6,068,457
7,182,599
7,012,600
BA
692,390
724,400
Outlays
Total Operation and maintenance, Army Reserve.
7,405,300
7,568,900
7,405,300
051
c
See footnotes at end of table.
* 7,568,900
0
637,459
2,027
fl
6,273
680,200
BA
0
692,390
637,459
732,700
680,200
* 779,600
739,900
779,600
739,900
8-62
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Operation and Maintenance—Con.
Operation and maintenance, Navy Reserve
Appropriation current
051
BA
636,590
827,181
K
C
O
Outlays
Total Operation and maintenance, Navy Reserve.. BA
0
954,500
606,436
363
D
1,237
737,500
877,800
636,590
606,436
828,781
737,500
954,500
877,800
52,349
58,642
Operation and maintenance, Marine Corps Reserve
051
BA
Appropriation, current
* 61,600
0
Outlays
Total Operation and maintenance, Marine Corps
BA
Reserve
0
Operation and maintenance, Air Force Reserve
Appropriation, current
47,424
54,300
56,000
52,349
47,424
58,842
54,300
61,600
56,000
791,150
872,461
051
BA
K
C
0
Outlays
Total Operation and maintenance, Air Force ReBA
serve
O
907,700
732,866
4,182
D
4,618
865,100
877,700
791,150
732,866
881,261
865,100
907,700
877,700
1,188,390
1,424,293
Operation and maintenance, Army National Guard
051
BA
Appropriation, current
Outlays
Total Operation and maintenance, Army National
Guard
O
1,143,463
6,525
D
8,475
1,360,000
CO CD
C
1,188,390
1,143,463
1,439,293
1,360,000
BA
1,807,650
1,810,348
K
1,605,200
1,536,100
1,605,200
1,536,100
Operation and maintenance, Air National Guard
051
Appropriation, current
Outlays
Total Operation and maintenance, Air National
Guard
See footnotes at end of table.
0
1,690,885
11,103
°7397
1,906,800
CO CD
c
1,807,650
1,690,885
1,828,848
1,906,800
* 1,830,100
1,800,600
1330,100
1,800,600
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-63
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
estimate
Department of Defense-Military—Con.
Operation and Maintenance—Con.
National Board for the Promotion of Rifle Practice,
Army
051
Appropriation, current
BA
909
914
*920
Outlays
0
853
900
900
909
853
928
900
920
900
BA
136,900
146,500
0
123,804
140,400
* 158,300
157,100
BA
0
136,900
123,804
146,500
140,400
158,300
157,100
BA
3,372
2,870
0
2,320
2,400
3,200
2,700
BA
0
3,372
2,320
2,870
2,400
3,200
2,700
BA
0
50,000
14,090
17,000
800
BA
0
154,300
50,745
314,000
173,100
159,800
Total Federal funds Operation and Maintenance... BA
0
70,950,333
67,369,094
78,219,420
74,569,400
82,450,150
79,647,600
3,236,532
3,900,700
BA
0
2,164,570
600
2,739,500
3,303*200
BA
0
3,236,532
2,164,570
3,901,300
2,739,500
3,892,500
3,303,200
Total National Board for the Promotion of Rifle
BA
Practice, Army
0
Claims, Defense
Appropriation, current..
051
Outlays
Total Claims, Defense.
Court of Military Appeals, Defense
Appropriation, current
051
K
Total Court of Military Appeals, Defense..
Summer Olympics
Appropriation, current
Outlays
Environmental restoration, Defense
Appropriation, current
Outlays
051
051
Procurement
Federal funds
General and Special Funds:
Aircraft procurement, Army
Appropriation, current
051
BA
*3,892,500
Outlays
Total Aircraft procurement, Army..
See footnotes at end of table.
8-64
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Procurement—Con.
Missile procurement, Army
Appropriation, current
051
BA
Reappropriation
Outlays
BA
0
K
3,386,700
2,269,800
2,724,100
BA
0
32,600
2,079,003
2,836,100
2,079,003
3,158,300
2,269,800
3,386,700
2,724,100
Procurement of weapons and tracked combat vehicles,
Army
051
Appropriation, current
BA
4,550,119
4,548,100
Total Missile procurement, Army
« 5,739,100
Reappropriation
Outlays
BA
0
149,000
3,691,038
3,443,800
4,009,200
Total Procurement of weapons and tracked
combat vehicles, Army
BA
0
4,699,119
3,691,038
4,548,100
3,443,800
5,739,100
4,009,200
BA
1,980,100
2,646,300
0
1,825,562
1,217,500
BA
0
1,980,100
1,825,562
2,646,300
1,217,500
BA
4,672,428
5,122,450
0
3,807,287
3,775,200
BA
0
4,672,428
3,807,287
5,122,450
3,775,200
BA
10,157,608
10,903,798
8,039,962
9,014,800
12,062,600
10,373,900
BA
0
10,157,608
8,039,962
10,903,798
9,014,800
12,062,600
10,373,900
BA
3,693,779
4,353,611
BA
0
77,800
2,808,734
3,771,579
2,808,734
Procurement of ammunition, Army
Appropriation, current
051
Outlays..
Total Procurement of ammunition, Army
Other procurement, Army
Appropriation, current
Total Other procurement, Army
K
5,712,800
4,511,000
5,712,800
4,511,000
051
Outlays..
Total Aircraft procurement, Navy
Weapons procurement, Navy
Appropriation, current
2,635,000
2,419,700
2,635,000
2,419,700
051
Outlays..
Aircraft procurement, Navy
Appropriation, current
A
K
051
* 5,627,900
Reappropriation
Outlays
Total Weapons procurement, Navy
See footnotes at end of table.
BA
0
3,364,300
3,934,900
4,353,611
3,364,300
5,627,900
3,934,900
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-65
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
estimate
Department of Defense-Military—Con.
Procurement—Con.
Shipbuilding and conversion, Navy
ADDroDiiation current
051
Reappropriation
Outlays
Total Shipbuilding and conversion, Navy...
Other procurement, Navy
Appropriation current
Total Other procurement, Navy
Total Procurement Marine Corps
Total Aircraft procurement, Air Force .
Total Missile procurement, Air Force
Outlays
Total Other procurement, Air Force
See footnotes at end of table.
279,600
8,487,196
36,300
9,348,100
10,363,500
BA
0
11,484,848
8,487,196
11,620,826
9,348,100
11,411,600
10,363,500
BA
4,323,543
5,341,614
0
3,191,155
3,765,400
* 6,601,200
4,459,500
BA
0
4,323,543
3,191,155
5,341,614
3,765,400
6,601,200
4,459,500
BA
1,741,306
1,836,722
0
1,456,885
1,682,300
* 1,726,800
1,747,000
BA
0
1,741,306
1,456,885
1,836,722
1,682,300
1,726,800
1,747,000
BA
21,010,315
26,078,066
BA
0
323,100
12,991,850
15,318,100
18,322,600
BA
0
21,333,415
12,991,850
26,078,066
15,318,100
26,165,500
18,322,600
BA
7,743,638
6,888,345
BA
0
55,000
4,639,532
5,828,300
7,593,200
BA
0
7,798,638
4,639,532
6,888,345
5,828,300
10,862,700
7,593,200
BA
6,959,932
8,848,127
0
5,909,692
6,840,100
* 9,538,000
7,868,700
BA
0
6,959,932
5,909,692
8,848,127
6,840,100
9,538,000
7,868,700
K
11,411,600
K
26,165,500
051
Reappropriation
Outlays
Other procurement, Air Force
Appropriation, current
BA
0
051
ReaDDroDriation
Outlays
Missile procurement, Air Force
Appropriation, current. ..
11,584,526
051
Outlays
Aircraft procurement, Air Force
Appropriation, current
11,205,248
051
Outlays
Procurement, Marine Corps
Appropriation current.
BA
K
10,862,700
051
8-66
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Procurement—Con.
Procurement, Defense agencies
Appropriation, current
051
BA
Reappropriation
Outlays
Total Procurement, Defense agencies
National guard and reserve equipment
Appropriation, current
Outlays
Defense production act purchases
Appropriation, current
K
1,391,900
BA
0
21,500
764,281
3,100
925,800
1,172,000
BA
0
990,157
764,281
1,169,301
925,800
1,391,900
1,172,000
BA
0
176,000
16,406
380,000
169,300
239,100
051
051
BA
10,000
* 59,000
Total Defense production act purchases
Procurement of aircraft and missiles, Navy
Outlays
Procurement of equipment and missiles, Army
Outlays
BA
10,000
59,000
4,000
3,000
106,813,300
83,044,600
051
0
5,549
0
285
051
Total Federal funds Procurement
BA
O
86,161,305
61,878,987
96,806,860
69,706,300
BA
4,202,175
4,376,115
0
3,812,330
4,094,600
* 5,279,900
4,728,900
4,202,175
3,812,330
4,376,115
4,094,600
5,279,900
4,728,900
Research, Development, Test, and
Evaluation
Federal funds
General and Special Funds:
Research, development,
Army
Appropriation, current
test,
and evaluation,
051
Outlays
Total Research, development, test, and evaluation, Army
BA
0
Research, development, test, and evaluation, Navy
051
Appropriation, current
BA
7,581,718
9,251,506
Reappropriation
Outlays
BA
0
4,600
6,661,712
22,600
8,251,400
10,001,500
Total Research, development, test, and evaluation, Navy
BA
O
7,586,318
6,661,712
9,274,106
8,251,400
11,264,300
10,001,500
* 11,264,300
See footnotes at end of table.
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-67
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Research, Development, Test, and
Evaluation—Con.
Research, development, test, and evaluation, Air
Force
051
Appropriation, current
BA
Reappropriation
Outlays
K
15,578,500
BA
0
20,800
10,353,307
100
12,215,000
14,076,300
Total Research, development, test, and evaluation, Air Force
BA
0
12,257,706
10,353,307
13,506,347
12,215,000
15,578,500
14,076,300
Research, development, test, and evaluation, Defense
agencies
051
Appropriation, current
BA
2,769,420
4,236,327
K
Reappropriation
Outlays
7,053,900
BA
0
2,000
2,234,605
11,880
3,171,500
5,111,900
Total Research, development, test, and evaluation, Defense agencies
BA
0
2,771,420
2,234,605
4,248,207
3,171,500
7,053,900
5,111,900
49,000
59,000
0
54,737
53,300
* 103,500
69,300
BA
0
49,000
54,737
59,000
53,300
103,500
69,300
Total Federal funds Research, Development,
Test, and Evaluation
BA
0
26,866,619
23,116,691
31,463,775
27,785,800
39,280,100
33,987,900
1,184,140
1,593,137
874,276
1,005,400
2,020,900
1,405,200
BA
0
1,184,140
874,276
1,593,137
1,005,400
2,020,900
1,405,200
BA
1,231,517
1,534,592
0
1,027,732
1,133,900
* 2,085,200
1,494,400
BA
0
1,231,517
1,027,732
1,534,592
1,133,900
2,085,200
1,494,400
Director of test and evaluation, Defense
Appropriation, current
051
Outlays
Total Director of test and evaluation, Defense
Military Construction
Federal funds
General and Special Funds:
Military construction, Army
Appropriation, current
051
BA
Outlays..
Total Military construction, Army
Military construction, Navy
Appropriation, current
Outlays
Total Military construction, Navy
See footnotes at end of table.
A
051
8-68
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Military Construction—Con.
Military construction, Air Force
Appropriation, current
051
Outlays..
Total Military construction, Air Force
Military construction, Defense agencies
Appropriation, current
BA
1,459,993
1,572,655
0
1,209,003
1,333,600
BA
0
1,459,993
1,209,003
1,572,655
1,333,600
BA
281,802
302,198
233,255
267,300
* 309,600
330,700
BA
0
281,802
233,255
302,198
267,300
309,600
330,700
BA
50,000
107,200
0
141,853
180,000
98,000
220,000
50,000
141,853
107,200
180,000
98,000
220,000
BA
67,620
98,603
0
41,970
60,900
102,100
76,700
67,620
41,970
98,603
60,900
102,100
76,700
108,888
111,200
108,650
* 1,973,350
1,484,900
2,082,000
1,484,900
051
OutlaysTotal Military construction, Defense agencies
North Atlantic Treaty Organization infrastructure
051
Appropriation, current
Outlays
Total North Atlantic Treaty Organization infrastructure
BA
0
Military construction, Army National Guard
Appropriation, current
051
Outlays..
Total Military construction, Army National Guard. BA
0
Military construction, Air National Guard
Appropriation, current
K
K
051
K
73,575
94,500
137,200
104,700
108,888
73,575
111,200
94,500
137,200
104,700
BA
54,700
69,306
0
46,748
57,500
70,700
67,600
BA
0
54,700
46,748
69,306
57,500
70,700
67,600
OutlaysTotal Military construction, Air National Guard.... BA
0
Military construction, Army Reserve
Appropriation, current
051
K
Outlays
Total Military construction, Army Reserve
See footnotes at end of table.
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-69
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Military Construction—Con.
Military construction, Naval Reserve
Appropriation, current
051
Outlays
Total Military construction, Naval Reserve
Military construction, Air Force Reserve
Appropriation, current
30,605
60,800
0
BA
0
25,578
30,605
25,578
35,000
60,800
35,000
BA
41,200
67,800
0
31,583
BA
0
41,200
31,583
K
51,800
50,500
51,800
50,500
K
40,600
66,800
56,900
67,800
40,600
66,800
56,900
051
Outlays
Total Military construction, Air Force Reserve
Defense facilities replacement
Appropriation, current
Outlays
BA
051
K
BA
0
Total Federal funds Military Construction
BA
0
4,510,465
3,705,573
5,517,491
4,208,700
BA
1,235,007
1,328,378
33,000
* 4,500
7,057,300
5,296,100
Family Housing
Federal funds
General and Special Funds:
Family housing, Army
Appropriation, current
051
* 1,610,700
c
D
Outlays
Total Family housing, Army
Family housing, Navy and Marine Corps
Appropriation, current
0
1,011,506
1,419
2,020
1,242,000
BA
0
1,235,007
1,011,506
1,331,817
1,242,000
BA
611,149
657,789
Outlays
Total Family housing, Navy and Marine Corps
* 722,500
0
613,845
1,000
*493
606,500
BA
0
611,149
613,845
659,282
606,500
BA
804,581
884,111
Total Family housing, Air Force
See footnotes at end of table.
628,000
722,500
628,000
051
C
Outlays
1,610,700
1,342,300
051
c
Family housing, Air Force
Appropriation, current
1,342,300
0
772,403
956
*498
792,700
BA
0
804,581
772,403
885,565
792,700
* 929,400
815,000
929,400
815,000
8-70
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Family Housing—Con.
Family housing, Defense agencies
Appropriation, current
051
Outlays
Total Family housing, Defense agencies
BA
17,841
17,437
0
14,139
15,400
* 20,300
19,000
BA
17,841
17,437
20,300
0
14,139
15,400
19,000
Public Enterprise Funds:
Homeowners assistance fund, Defense
Authority to borrow, permanent
Outlays
051
BA
0
Total Federal funds Family Housing
376
609
200
1,200
150
800
BA
2,668,954
2,894,301
3,283,050
0
2,412,502
2,657,800
2,805,100
BA
3,050
8,650
0
1,412
1,200
Special Foreign Currency Program
Federal funds
General and Special Funds:
Special foreign currency program
Appropriation, current
051
Outlays
Total Special foreign currency program
BA
3,050
8,650
0
1,412
1,200
0
- 1
0
-196
K
2,100
2,500
2,100
2,500
Revolving and Management Funds
Federal funds
Public Enterprise Funds:
Defense production guarantees
Outlays
Laundry service, Naval Academy
Outlays
051
051
Intragovernmental Funds:
Army stock fund
Appropriation, current
Outlays
Navy stock fund
Appropriation, current
Contract authority, permanent, indefinite
Outlays
051
BA
0
388,600
74,874
366,448
77,500
442,000
144,500
BA
BA
0
632,869
249,371
-38,284
473,307
716,500
123,700
273,700
051
Total Navy stock fund
BA
882,240
473,307
716,500
-38,284
123,700
273,700
BA
0
20,780
34,129
34,908
6,500
42,700
14,500
BA
1,288,725
548,593
464,900
116,418
291,300
369,400
0
Marine Corps stock fund
Appropriation, current
Outlays
Air Force stock fund
Appropriation, current
Outlays
See footnotes at end of table.
051
051
0
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-71
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
43,600
-416,779
130,700
-250,300
193,500
-248,600
-36,071
-30,000
-14,000
-427,439
-120,000
-46,000
-37,000
-20,000
1,553,956
61,700
1,859,600
473,500
'453,543
' 446,200
'7,300
453,543
446,200
'188,700
'69,800
188,700
77,100
327
11
230
200
270
200
24,287
23,655
26,915
26,350
27,170
27,050
49
53
55
50
60
50
Department of Defense-Military—Con.
Revolving and Management Funds—Con.
Defense stock fund
051
Appropriation, current
BA
BA
Outlays
0
Army industrial fund
051
0
Outlays
Navy industrial fund
051
Outlays
0
Marine Corps industrial fund
051
0
Outlays
Air Force industrial fund
051
0
Outlays
Defense industrial fund
051
BA
Appropriation, current
BA
0
Outlays
Army management fund
051
Outlays
Navy management fund
051
0
Outlays
Army conventional ammunition working capital
fund
051
Outlays
0
n
Total Federal funds Revolving and Management
Funds
BA
0
-611
-194,740
150,000
-56,008
-15,442
8,849
-118,120
2,773,945
-1,069,421
Allowances
Federal funds
General and Special Funds:
Military pay raises and benefits
Appropriation, current
Outlays
Other legislation
Appropriation, current
Outlays
Total Federal funds Allowances
051
BA
O
051
BA
0
BA
0
Trust Funds
Trust funds
Department of the Army trust funds
051
Appropriation, permanent, indefinite
BA
Outlays0
Department of the Navy trust funds
051
Appropriation, permanent, indefinite
BA
Outlays
0
Department of the Air Force general gift fund 051
Appropriation, permanent, indefinite
BA
Outlays
0
See footnotes at end of table.
8-72
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Military—Con.
Trust Funds—Con.
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
Contract authority, permanent, indefinite
Outlays
Total Trust funds Trust Funds
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
0
-36,399
-8,100
2,100
0
-5,706
8,900
2,100
BA
0
21,065
-20,391
60,000
12,400
22,900
BA
0
45,728
-38,777
87,200
39,800
27,500
54,400
BA
0
258,800,424
221,572,599
285,365,941
246,983,400
314,359,400
278,132,500
051 BA
0
Proprietary receipts from the public
051 BA
1O.
~m
_mjJS
_6g/m
_
m m
BA
O
Total Federal funds
Trust funds:
(As shown in detail above)
'100,000
BA
258,126,522
284,668,341
313,698,800
0
220,898,697
246,285,800
277,471,900
BA
45,728
87,200
27,500
-38,777
39,800
54,400
BA
258,150,255
284,729,941
313,700,000
0
220,837,925
246,300,000
277,500,000
0
Interfund transactions
051
Total Department of Defense-Military
BA
Department of Defense-Civil
Cemeterial Expenses, Army
Federal funds
General and Special Funds:
Salaries and expenses
705
Appropriation, current
BA
Outlays
0
6,593
7,759
C
36
"17
7,510
BA
8,302
7,812
14,778
0
6,593
7,510
7,319
Total Salaries and expenses
See footnotes at end of table.
8,302
14,778
7,319
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-73
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Civil—Con.
Corps of Engineers-Civil
Federal funds
General and Special Funds:
General investigations
Appropriation, current
301
Outlays
Total General investigations
Construction, general
Appropriation, current
BA
135,810
138,000
G
2,200
"-2,000
140,200
" -2,000
119,000
0
138,621
BA
0
135,810
138,621
138,200
138,200
119,000
130,000
BA
926,804
890,000
-5,200
"-4,000
1,100,000
"-4,000
842,000
130,000
301
Outlays
F
0
1,102,701
BA
0
926,804
1,102,701
880,800
1,096,000
842,000
980,000
BA
1,184,492
949,000
(Outlays)
0
1,281,320
1,290,000
"-8,000
1,324,073
"-8,000
Total (Water resources)
BA
0
1,184,492
1,281,320
1,282,000
1,316,073
949,000
979,000
BA
0
6,000
5,925
15,000
15,927
12,000
12,000
BA
0
1,190,492
1,287,245
1,297,000
1,332,000
961,000
991,000
BA
0
10,000
36,821
25,000
40,000
25,000
25,000
BA
105,800
107,000
0
104,331
112,000
G
3,000
"-1,200
115,000
"-1,200
BA
105,800
113,800
107,000
0
104,331
113,800
107,000
Total Construction, general
Operation and maintenance, general:
(Water resources)
(Appropriation, current)
(Recreational resources)
(Appropriation, current)
(Outlays)
301
Outlays
Total General expenses
See footnotes at end of table.
979,000
303
Total Operation and maintenance, general
Flood control and coastal emergencies
Appropriation, current
Outlays
General expenses
Appropriation, current
980,000
301
301
107,000
8-74
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Civil—Con.
Corps of Engineers-Civil—Con.
Flood control, Mississippi River and tributaries
Appropriation, current
301
Outlays
BA
302,480
0
394,861
321,000
-1,000
350,000
H
-1,000
269,000
302,480
394,861
320,000
349,000
269,000
276,000
BA
0
3,274
3,600
2,500
3,184
2,500
2,500
BA
0
6,505
5,895
5,500
6,516
5,500
5,500
BA
0
9,779
9,495
8,000
9,700
8,000
8,000
BA
0
9,500
-16,382
BA
0
9,500
-16,382
Total Flood control, Mississippi River and tribuBA
taries
0
Permanent appropriations:
(Water resources)
(Appropriation, permanent, indefinite)
(Outlays)
(Other general purpose fiscal assistance)
(Appropriation, permanent, indefinite)
(Outlays)
H
276,000
301
852
Total Permanent appropriations
Intragovernmental Funds:
Revolving fund
Appropriation, current
Outlays
301
Total Revolving fund
Trust funds
Inland waterways trust fund
Appropriation, current, indefinite
Outlays
Rivers and harbors contributed funds
Appropriation, current, indefinite
Appropriation, permanent, indefinite
Outlays
Total Rivers and harbors contributed funds
7,000
7,000
10,000
» -3,900
7,000
7,000
6,100
301
BA
0
'196,000
196,000
J
301
BA
BA
0
54,321
50,240
52,000
56,000
'207,000
84,000
84,000
J
207,000
BA
0
54,321
50,240
52,000
56,000
291,000
291,000
BA
0
2,690,665
3,057,693
2,782,800
3,084,800
2,338,000
2,524,000
-6,605
-5,600
-5,600
-10,509
-11,000
-12,000
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
See footnotes at end of table.
301 BA
0
303 BA
0
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-75
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Civil—Con.
Corps of Engineers-Civil—Con.
RA
J
0
Total Federal funds
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
-21,000
BA
0
2,673,551
3,040,579
2,766,200
3,068,200
2,299,400
2,485,400
BA
0
54,321
50,240
52,000
56,000
487,000
487,000
301 BA
DA
J
Q
Total Trust funds
Total Corps of Engineers-Civil
-403,000
BA
0
1
-4,080
4,000
BA
2,673,552
2,766,200
2,299,400
0
3,036,499
3,072,200
2,485,400
BA
BA
0
'51,300
9,500,000
9,500,000
'54,100
10,000,000
10,000,000
' 51,300
'54,100
BA
9,551,300
10,054,100
0
9,551,300
10,054,100
21,800
4,300
BA
BA
0
'51,300
27,095,100
15,787,100
'54,100
29,976,700
18,286,900
'51,300
'-490,900
BA
27,146,400
30,030,800
0
15,838,400
17,796,000
Military Retirement
Federal funds
General and Special Funds:
Payment to military retirement fund
Appropriation, current, indefinite
Appropriation, permanent, indefinite
Outlays
054
Total Payment to military retirement fund
Retired pay, Defense
Appropriation, current, indefinite
Outlays
Trust funds
Military retirement fund
Appropriation, current, indefinite
Appropriation, permanent, indefinite
Outlays
Total Military retirement fund
602
BA
0
16,511,600
16,470,522
602
Summary
Federal funds:
(As shown in detail above)
Trust funds:
(As shown in detail above)
See footnotes at end of table.
BA
16,511,600
9,551,300
10,054,100
0
16,470,522
9,573,100
10,058,400
BA
27,146,400
30,030,800
0
15,838,400
17,796,000
8-76
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Civil—Con.
Military Retirement—Con.
054 BA
0
Interfund transactions
-10,000,000
/
BA
0
Total Military Retirement
Education Benefits
Trust funds
Education benefits fund
Appropriation, permanent, indefinite
Outlays
Soldiers' and Airmen's Home
Trust funds
Operation and maintenance
Appropriation, current
J
-54,100
27,146,400
15,860,200
30,030,800
17,800,300
49,700
100
225,060
8,300
702
BA
0
705
Outlays
Total Operation and maintenance
Capital outlays
Appropriation, current
Outlays
Payment of claims
Appropriation, permanent, indefinite
Outlays
Soldiers' and Airmen's Home revolving fund
Outlays
16,511,600
16,470,522
-51,300
BA
31,286
32,952
C
184
32,654
0
30,349
33,318
32,724
BA
0
31,286
30,349
33,276
33,318
32,654
32,724
BA
0
4,550
239
9,400
10,305
4,000
6,267
5
5
5
5
42,681
43,628
36,659
38,996
705
705
BA
0
705
0
6
Summary
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
BA
0
705 BA
Total Soldiers'and Airmen's Home
BA
0
35,836
30,594
_
m
31,532
26,290
-4,450
-4,600
38,231
39,178
32,059
34,396
1,393
73
610
Forest and Wildlife Conservation, Military
Reservations
Federal funds
General and Special Funds:
Forest products program
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.
302
BA
0
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-77
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Civil—Con.
Forest and Wildlife Conservation, Military
Reservations—Con.
Wildlife conservation
Appropriation, permanent, indefinite
Outlays
303
BA
0
1,589
1,268
1,650
1,780
1,675
1,805
BA
0
1,589
1,268
3,043
1,853
2,285
1,805
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
302 BA
r\
303
—1,<JBJ
f
-1,589
Total Forest and Wildlife Conservation, Military
Reservations
0
—ulU
-lf650
-1,675
-1,190
-480
19,212,156
19,536,076
12,344,955
12,667,263
12,409,163
12,591,524
_gm
_ ^
-321
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
- Proprietary receipts from the public
BA
0
301 BA
302
|?
_ ^
-1,393
-610
3fn RA
0
-12,098
-12,650
-13,675
RA
J
Q
Total Federal funds
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
-21,000
BA
19,193,453
12,325,312
12,368,278
0
19,517,373
12,647,620
12,550,639
90,157
80,834
27,290,781
15,938,128
30,779,519
18,330,296
BA
0
301 BA
QA
705
Total Trust funds
tnterfund transactions
See footnotes at end of table.
jj
'
A
BA
0
054
BA
-4,304
31,533
22,210
-4,450
27,234,331
15,881,678
-403,000
-4,600
30,287,919
17,838,696
8-78
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Defense-Civil—Con.
Summary—Con.
8A
' -51,300
' -54,100
30,008,343
18,977,998
32,602,097
20,335,235
3,488,250
3,077,304
3,695,663
3,565,930
3,646,615
3,787,389
600,300
577,676
695,000
746,779
543,000
634,629
528,367
758,109
547,909
* 100,000
Q
Total Department of Defense-Civil
BA
0
19,224,986
19,539,583
Department of Education
Office of Elementary and Secondary
Education
Federal funds
General and Special Funds:
Compensatory education for the disadvantaged 501
Appropriation, current
BA
Outlays
0
Impact aid
501
Appropriation, current
BA
Outlays
0
Special programs
501
Appropriation, current
BA
H
0
631,537
-80,000
514,414
«-8,800
701,216
» - 55,200
BA
0
528,367
631,537
678,109
505,614
647,909
646,016
BA
0
68,780
71,588
67,404
76,548
67,292
68,025
Total Federal funds Office of Elementary and
Secondary Education
BA
0
4,685,697
4,358,105
5,136,176
4,894,871
4,904,816
5,136,059
142,951
Outlays
Total Special programs
Indian education
Appropriation, current
Outlays
501
Office of Bilingual Education and Minority
Languages Affairs
Federal funds
General and Special Funds:
Bilingual education
Appropriation, current
Outlays
Total Bilingual education
See footnotes at end of table.
501
BA
169,365
0
167,400
172,951
-30,000
131,641
BA
0
169,365
167,400
142,951
131,641
H
H
167,679
-23,100
142,951
144,579
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-79
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Education—Con.
Office of Special Education and
Rehabilitative Services
Federal funds
General and Special Funds:
Education for the handicapped
501
Appropriation, current
Outlays
Rehabilitation services and handicapped research
506
Appropriation, current
Outlays
BA
0
1,240,645
952,778
1,321,270
1,402,790
1,306,100
1,241,049
BA
0
1,155,100
1,414,396
1,233,300
1,104,600
1,216,400
1,134,196
Total Federal funds Office of Special Education
and Rehabilitative Services
BA
0
2,395,745
2,367,174
2,554,570
2,507,390
2,522,500
2,375,245
Office of Vocational and Adult Education
Federal funds
General and Special Funds:
Vocational and adult education
Appropriation, current
Appropriation, permanent
Outlays
501
Total Vocational and adult education
BA
BA
0
831,884
7,161
742,537
831,314
7,148
914,349
831,314
7,148
857,834
BA
0
839,045
742,537
838,462
914,349
838,462
857,834
BA
0
3,976,860
3,743,262
4,871,000
4,505,792
3,569,000
4,447,395
BA
2,256,500
3,079,477
4
664,846
Office of Postsecondary Education
Federal funds
General and Special Funds:
Student financial assistance
Appropriation, current
Outlays
Guaranteed student loans
Appropriation, current
Outlays
Total Guaranteed student loans
See footnotes at end of table.
502
502
0
BA
0
3,245,226
2,256,500
3,245,226
2,796,575
* 634,639
L
-107,200
3,744,323
3,324,014
3,329,500
L
L
-615,018
3,279,495
* 30,207
-411,614
2,714,482
2,898,088
8-80
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Education—Con.
Office of Postsecondary Education—Con.
Higher education
Appropriation, current
502
BA
418,866
479,083
H
247,078
* 5,000
-59,750
Reappropriation
BA
Outlays
0
419,200
* 15,200
476,297
'-1,216
H
-19,260
441,462
*-9,424
H
-27,275
BA
0
426,001
419,200
434,533
455,821
252,078
404,763
14,194
5,629
17,996
1,996
Total Higher education
Higher education facilities loans and insurance 502
Appropriation, current
BA
Outlays
0
Public Enterprise Funds:
College housing loans
502
Outlays
0
7,135
19,846
-945
-238,818
-135,284
-238,818
-135,284
-35,817
6,679,207
7,167,925
9,064,050
8,155,972
6,553,556
7,716,425
BA
0
56,978
159,550
59,978
42,981
59,978
57,578
BA
0
86,880
87,059
125,000
123,276
94,871
Total Federal funds Office of Educational Research and Improvement
BA
0
143,858
246,609
184,978
166,257
59,978
152,449
23,890
22,078
24,390
28,682
24,400
24,400
Total College housing loans
0
Total Federal funds Office of Postsecondary Education
BA
0
-31,817
-4,000
A
Office of Educational Research and
Improvement
Federal funds
General and Special Funds:
Educational research and statistics
Appropriation, current
Outlays
Libraries
Appropriation, current
Outlays
503
503
Special Institutions
Federal funds
General and Special Funds:
Payments to special institutions:
(Elementary, secondary, and vocational education)
501
(Appropriation, current)
BA
(Outlays)
0
See footnotes at end of table.
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-81
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
estimate
Department of Education—Con.
Special Institutions—Con.
(Higher education)
(Appropriation, current)
(Outlays)
502
BA
0
Total Payments to special institutions
Trust funds
Promotion of education for the blind
Appropriation, current
Appropriation, permanent
Outlays
BA
0
221,310
154,031
245,200
176,109
229,440
316,898
253,830
345,580
10
10
20
221,309
222,499
245,709
246,899
501
BA
BA
0
y
Total Promotion of education for the blind
BA
0
10
10
20
Total Federal funds Special Institutions
BA
0
245,200
176,109
253,830
345,580
Total Trust funds Special Institutions
BA
0
10
-10
10
10
'-10
245,709
246,899
10 ...
20
Departmental Management
Federal funds
General and Special Funds:
Salaries and expenses:
(Elementary, secondary and vocational education)
501
(Appropriation, current)
BA
(Outlays).
17,377
0
18,908
Total (Elementary, secondary and vocational
education)
BA
0
17,377
18,908
(Higher education)
(Appropriation, current)
19,423
"-114
19,896
"-94
19,309
19,802
BA
(Outlays)
Total (Higher education)
(Research and general education aids)
jriation, current)
(Outlays).
Total (Research and general education aids)
17,923
—15
H
18,245
17,908
502
75,053
78,342
H
See footnotes at end of table.
18,245
0
82,530
-1,049
79,755
^ —871
BA
0
75,053
82,530
79,439
78,884
78,342
76,288
BA
117,980
103,323
0
127,449
120,664
* - 2,401
120,751
*-1,992
102,991
"-289
BA
0
117,980
127,449
118,263
118,759
103,323
102,702
76,414
"-126
503
8-82
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
Department of Education—Con.
Departmental Management—Con.
(Social services)
(Appropriation, current)
506
(Outlays)
BA
19,590
0
20,463
20,500
"-84
20,722
"-70
19,277
"-10
0
19,590
20,463
20,416
20,652
19,657
19,267
BA
57,385
57,775
58,097
60,312
"-541
64,487
"-449
55,140
"-65
57,385
58,097
287,385
307,447
59,771
64,038
297,198
302,135
57,775
55,075
277,342
271,240
1,133
1,054
1,269
1,122
205
1,781
1,026
1,133
1,259
3,050
2,148
288,518
308,706
172
297,198
305,185
277,342
273,388
15,446,635
15,534,565
18,472,215
17,421,245
15,545,314
16,902,878
-23,384
-30,666
15,423,251
15,511,181
18,441,549
17,390,579
10
172
10
25
Total (Social services).
(Federal law enforcement activities)
(Appropriation, current)
19,657
751
(Outlays).
Total (Federal law enforcement activities)
BA
0
Total Salaries and expenses
BA
0
Education and research overseas:
(Special foreign currency program) (Research and
general education aids)
503
BA
(Appropriation, current)
(Outlays)
0
(Special foreign currency program) (Social services)
506
(Outlays)
Total Education and research overseas
BA
0
Trust funds
Contributions
Outlays
503
172
Total Federal funds Departmental Management... BA
0
Total Trust funds Departmental Management
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
BA
0
502 BA
0
Total Federal funds
Trust funds:
(As shown in detail above)..
See footnotes at end of table.
BA
0
-32,606
15,512,708
16,870,272
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-83
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Education—Con.
Summary—Con.
Deductions for offsetting receipts:
Proprietary receipts from the public
908 BA
*
—1U
—lu
162
15
BA
15,423,251
18,441,549
15,512,708
0
15,511,343
17,390,594
16,870,272
6,554,875
7,333,701
8,046,900
0
6,119,707
» -8,280
6,999,717
H
-8,280
7,700,000
BA
6,554,875
7,325,421
8,046,900
0
6,119,707
6,991,437
7,700,000
BA
635,417
685,400
0
650,396
726,905
"-38
687,042
r
Total Trust funds
0
Total Department of Education
—lu
-»
Department of Energy
Atomic Energy Defense Activities
Federal funds
General and Special Funds:
Atomic energy defense activities
Appropriation, current
053
BA
Outlays
Total Atomic energy defense activities
Energy Programs
Federal funds
General and Special Funds:
General science and research activities
Appropriation, current
251
Outlays
696,900
*-38
Total General science and research activities
Energy supply, R&D activities
Appropriation, current
BA
635,417
726,867
685,400
0
650,396
687,004
696,900
1,958,165
1,969,671
271
BA
1,965,919
H
Outlays
Total Energy supply, R&D activities
See footnotes at end of table.
0
2,207,053
-2,676
2,203,580
* -2,676
2,020,275
BA
1,965,919
1,955,489
1,969,671
0
2,207,053
2,200,904
2,020,275
8-84
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
1986
estimate
Department of Energy—Con.
Energy Programs—Con.
Uranium supply and enrichment activities
Appropriation, current, indefinite
271
BA
2,233,963
0
1,864,241
Total Uranium supply and enrichment activities... BA
0
Fossil energy research and development
Appropriation, current
Indefinite
Appropriation, permanent
Outlays
1,650,300
"-968
1,788,094
"-968
1,649,332
1,787,126
2,233,963
1,864,241
271
BA
6A
BA
0
Total Fossil energy research and development
261,581
324,981
"-3,276
274,947
15,000
323,145
H
-4,136
156,909
15,000
284,842
BA
0
261,581
324,981
286,671
319,009
171,909
284,842
BA
256,581
13,649
0
136,230
156,874
"-181
141,166
^ — 181
BA
0
256,581
136,230
156,693
140,985
13,649
164,200
BA
430,291
176,130
(Outlays)
0
519,046
458,610
*-931
519,381
"-931
Total (Energy conservation).
BA
0
430,291
519,046
BA
0
617,960
188,930
BA
0
617,960
188,930
Naval petroleum and oil shale reserves
Appropriation, current
271
Outlays
Total Naval petroleum and oil shale reserves
Energy conservation:
(Energy conservation)
(Appropriation, current).
Strategic petroleum reserve
Appropriation, current
Outlays
272
See footnotes at end of table.
345,933
457,679
518,450
176,130
345,933
271,247
"-156
230,377
271,091
230,377
274
Total Strategic petroleum reserve.,
SPR petroleum
Appropriation, currentOutlays
164,200
274
BA
0
Y
Y
650,000
2,328,785
Y
Y
2,049,550
1,629,973
Y
148,342
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-85
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
Department of Energy—Con.
Energy Programs—Con.
Energy information administration
Appropriation, current
276
„
BA
58,500
Outlays..
Total Energy information administration
Emergency preparedness
Appropriation, current
56,391
BA
0
56,391
58,500
BA
BA
Total Emergency preparedness-
BA
32,300
Outlays
0
32,293
Total Economic regulation..
32,300
32,293
Federal Energy Regulatory Commission
Appropriation, current
Indefinite
6,096
"-51
4,980
"-51
5,873
6,045
4,929
5,873
5,873
24,742
"-156
27,601
"-156
23,092
24,586
27,445
23,092
23,458
5,873
23,458
276
BA
BA
Outlays
D
89,582
89,006
Total Federal Energy Regulatory Commission
1,627
95,677
"-204
99,436
"-163
30,102
"-41
29,491
BA
0
89,582
89,006
97,100
99,273
29,491
30,061
BA
0
2,100
1,131
121
17,732
72
1,022
BA
0
3,040
2,563
BA
0
3,040
2,563
3,189
BA
0
732
164
570
570
271
271
Total Alternative fuels production
58,900
58,823
58,823
276
Appropriation, current
See footnotes at end of table.
60,073
64,010
BA
0
Economic regulation
Payments to states under Federal Power Act
Appropriation, permanent, indefinite
Outlays
58,900
274
0
Geothermal resources development fund
Appropriation, current
Outlays
Alternative fuels production
Appropriation, current
Outlays
60,424
D
495
"-846
64,856
"-846
3,212
"-23
852
570
570
8-86
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Energy—Con.
Energy Programs—Con.
Nuclear waste disposal fund
Appropriation, current
Authority to borrow, current
Outlays
271
BA
BA
0
318,656
19
271,487
327,669
571,460
308,603
525,800
BA
0
318,675
271,487
327,669
308,603
571,460
525,800
BA
0
BA
0
BA
0
92,321
87,002
7,554,532
8,674,806
92,321
87,002
133,171
99,485
7,798,445
8,080,293
133,171
99,485
120,948
116,087
3,706,217
4,536,476
120,948
116,087
Federal funds
General and Special Funds:
Operation and maintenance, Alaska Power Administration
271
Appropriation, current
BA
3,410
3,272
3,233
"-29
4,010
*-29
750
3,410
3,272
3,204
3,981
750
371,730
-24,970
371,730
-24,970
263,200
-599,500
263,200
-599,500
35,744
"-15
29,269
"-15
39,800
35,729
29,254
39,800
55,300
Total Nuclear waste disposal fund
Trust funds
Advances for cooperative work
Appropriation, permanent, indefinite
Outlays
Total Federal funds Energy Programs
271
Total Trust funds Energy Programs
Power Marketing Administration
OutlaysTotal Operation and maintenance, Alaska Power
Administration
BA
0
Public Enterprise Funds:
Bonneville Power Administration fund
Authority to borrow, current
Authority to borrow, permanent, indefinite
Outlays
271
BA
BA
0
117,844
178,274
-193,672
BA
0
296,118
-193,672
Operation and maintenance, Southeastern Power Administration
271
Appropriation, current
BA
20,594
Total Bonneville Power Administration fund
General and Special Funds:
Outlays
0
Total Operation and maintenance, Southeastern
Power Administration
BA
0
See footnotes at end of table.
8,729
20,594
8,729
55,300
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-87
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Energy—Con.
Power Marketing Administration—Con.
Operation and maintenance, Southwestern Power Administration
271
Appropriation, current
BA
Outlays
0
Total Operation and maintenance, Southwestern
Power Administration
BA
0
36,229
26,457
31,208
"—243
42,092
"-243
29,500
38,600
36,229
30,965
29,500
26,457
41,849
38,600
194,630
218,230
"-432
206,610
150,121
225,819
*-432
244,000
194,630
217,798
207,500
150,121
225,387
244,000
Construction, rehabilitation, operation and maintenance, Western Area Power Administration
271
Appropriation, current
BA
Appropriation, permanent
BA
Outlays
0
Total Construction, rehabilitation, operation and
maintenance, Western Area Power Administration
BA
0
Emergency fund, Western Area Power Administration
271
Appropriation, current
BA
Outlays
0
Public Enterprise Funds:
Colorado river basins power marketing fund, Western
Area Power Administration
271
Outlays
0
Total Federal funds Power Marketing Administration
BA
890
500
553
500
-35,654
-9,000
-54,300
551,481
659,926
540,000
0
-40,194
266,501
-315,150
BA
366.056
356,034
170,424
Departmental Administration
Federal funds
General and Special Funds:
Departmental administration
Appropriation, current, indefinite
276
"-2,786
Outlays
Total Departmental administration
Summary
Federal funds:
(As shown in detail above)
See footnotes at end of table.
0
361,652
BA
0
BA
0
366,056
384,370
"-2,786
353,248
184,895
170,424
361,652
381,584
184,895
15,026,944
15,115,971
16,137,040
15,719,815
12,463,541
12,106,221
8-88
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Energy—Con.
Summary—Con.
Deductions for offsetting receipts:
Intrafund transactions
908 BA
A
Proprietary receipts from the public
017no
ottAn
—ZJ,/yo
—o0,04u
271 BA
276 BA
301
Total Federal funds
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
_216t671
-260,793
-32,520
-32,140
BA
0
10,538,926
10,627,953
11,407,744
10,990,519
9,688,689
9,331,369
BA
0
92,321
87,002
133,171
99,485
120,948
116,087
Q
A
271 BA
Total Trust funds
0
Total Department of Energy
BA
0
_ ^
;
_mm
-36,614
_
m m
-5,319
-33,686
-4,861
10,538,926
10,622,634
11,407,744
10,956,833
9,688,689
9,326,508
Department of Health and Human Services
Health Programs
Public Health Service
Food and Drug Administration
Federal funds
.General and Special Funds:
Program expenses
Appropriation, current
554
Outlays
Total Program expenses
Buildings and facilities
Appropriation, current
Outlays
BA
389,315
0
377,658
BA
0
389,315
377,658
BA
0
18,742
13,056
409,694
" -2,194
406,444
H
-1,975
409,072
410,957
"-219
407,500
404,469
409,072
410,738
554
1,450
11,869
14,951
Public Enterprise Funds:
Revolving fund for certification and other services
554
Outlays
0
Total Federal funds Food and Drug Administration
BA
0
See footnotes at end of table.
-1,130
408,057
389,584
408,950
416,338
409,072
425,689
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-89
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
Health Resources and Services
Administration
Federal funds
General and Special Funds:
Health resources and services:
(Health care services)
551
(Appropriation, current)
BA
1,166,130
1,263,144
552,173
* 411,200
^ —1,821
M90.100
(Outlays)
0
Total (Health care services)
(Education and training of health care work
force)
553
(Appropriation, current)
(Outlays)
1,202,976
1,239,113
^ — 1,821
957,207
L
190,100
BA
0
1,166,130
1,202,976
1,261,323
1,237,292
1,153,473
1,147,307
BA
209,454
244,578
^-2,500
"-442
3,920
0
171,545
208,760
» —442
168,984
BA
0
209,454
171,545
241,636
208,318
3,920
168,984
BA
1,375,584
1,502,959
1,157,393
0
1,374,521
1,445,610
1,316,291
BA
771,908
793,728
"-161
758,543
0
720,473
755,575
^ —161
755,916
BA
771,908
793,567
758,543
0
720,473
755,414
755,916
Total (Education and training of health care
work force)
Total Health resources and services
Indian health
Appropriation, current
551
Outlays
Total Indian health
Indian health facilities
Appropriation, current
551
Outlays
BA
53,595
61,634
0
69,432
57,515
69,616
0
-2,979
-3,849
10,612
*-7,900
0
-2,979
-3,849
2,712
Public Enterprise Funds:
Health professions graduate student loan insurance
fund
553
Outlays
Total Health professions graduate student loan
insurance fund
See footnotes at end of table.
8-90
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
Health Resources and Services
Administration—Con.
Health education loans
553
Outlays
Nurse training fund
553
Outlays
Medical facilities guarantee and loan fund
551
Appropriation, current
Outlays
Health maintenance organization loan and loan guarantee fund
551
Outlays
Limitation on direct loan obligations
0
-2,501
-2,000
-2,000
0
-253
-250
BA
0
32,000
31,510
26,500
26,301
25,000
30,446
522
(12,300)
2,193
(2,600)
-740
(700)
0
Total Federal funds Health Resources and Services Administration
BA
0
2,233,087
2,190,725
-250
2,384,660
2,280,934
1,940,936
2,171,991
343,825
-1,425
342,087
*-1,197
334,447
Centers for Disease Control
Federal funds
General and Special Funds:
Disease control, research, and training:
(Health care services)
(Appropriation, current)
551
BA
314,587
(Outlays)
0
303,007
Total (Health care services)
BA
0
314,587
303,007
342,400
340,890
334,447
326,461
BA
65,902
57,645
(Outlays)
0
57,121
66,705
"-836
61,569
"-702
64,355
"-134
Total (Health research)
BA
0
65,902
57,121
65,869
60,867
57,645
64,221
Total Disease control, research, and training
BA
0
380,489
360,128
408,269
401,757
392,092
390,682
Total Federal funds Centers for Disease Control.. BA
0
380,489
360,128
408,269
401,757
392,092
390,682
(Health research)
(Appropriation, current)
See footnotes at end of table.
H
326,689
*-228
552
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-91
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
National Institutes of Health
Federal funds
General and Special Funds:
National Cancer Institute:
(Health research)
(Appropriation, current)
552
(Outlays)
Total (Health research)
(Education and training of health care work
force)
553
(Appropriation, current)
(Outlays)
Total (Education and training of health care
work force)
Total National Cancer Institute
National Heart, Lung and Blood Institute:
(Health research)
(Appropriation, current)
BA
1,056,332
1,152,938
" -4,332
1,093,722
0
1,006,051
1,068,210
"-3,466
1,136,760
"-866
BA
1,056,332
1,148,606
1,093,722
0
1,006,051
1,064,744
1,135,894
BA
25,249
30,868
"-30
32,290
0
17,630
24,409
"-24
31,204
"-6
BA
25,249
30,838
32,290
0
17,630
24,385
31,198
1,081,581
1,023,681
1,179,444
1,089,129
1,126,012
1,167,092
763,174
733,246
BA
0
552
BA
674,650
"-1,401
(Outlays)
Total (Health research)
(Education and training of health care work
force)
553
(Appropriation, current)
(Outlays)
Total National Heart, Lung and Blood Institute....
National Institute of Dental Research:
(Health research)
0
618,828
BA
674,650
761,773
733,246
0
618,828
696,029
743,497
30,289
27,775
42,095
38,461
42,008
42,603
BA
704,939
803,868
775,254
0
646,603
734,490
786,100
BA
0
697,310
743,617
"-1,281 " - 1 2 0
552
(Appropriation, current)
BA
84,630
95,898
"-166
88,649
(Outlays)
0
77,580
87,908
"-157
81,666
"-9
BA
84,630
95,732
88,649
0
77,580
87,751
81,657
Total (Health research)
See footnotes at end of table.
8-92
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
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
(Outlays)
0
4,044
3,707
4,790
4,392
4,790
4,298
BA
0
88,674
81,287
100,522
92,143
93,439
85,955
National Institute of Arthritis, Diabetes, and Digestive
and Kidney Diseases:
(Health research)
552
(Appropriation, current)
BA
444,149
515,928
-1,171
492,323
Total National Institute of Dental Research
H
(Outlays)
0
411,002
460,938
*-1,116
493,257
*-55
Total (Health research)
BA
0
444,149
411,002
514,757
459,822
492,323
493,202
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
19,877
19,863
27,648
21,949
27,535
27,535
Total National Institute of Arthritis, Diabetes,
and Digestive and Kidney Diseases
BA
0
464,026
430,865
542,405
481,771
519,858
520,737
National Institute of Neurological and Communicative
Disorders and Stroke-.
(Health research)
552
(Appropriation, current)
BA
325,564
383,077
"-441
360,161
(Outlays)
0
295,757
336,874
^ —418
364,889
"-23
Total (Health research)
BA
0
325,564
295,757
382,636
336,456
360,161
364,866
(Education and training of health care work
force)
553
(Appropriation, current)
BA
10,319
13,808
13,733
"-21
(Outlays)
10,353
11,044
"-2Q
13,733
*-l
Total (Education and training of health care
workforce)
BA
0
10,319
10,353
13,787
11,024
13,733
13,732
Total National Institute of Neurological and Communicative Disorders and Stroke
BA
0
335,883
306,110
396,423
347,480
373,894
378,598
See footnotes at end of table.
0
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-93
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
National Institutes of Health—Con.
National Institute of Allergy and Infectious Diseases:
(Health research)
552
(Appropriation, current)
BA
310,715
359,050
"-428
340,675
(Outlays)
0
285,281
321,357
*-406
345,859
*-22
Total (Health research)
BA
0
310,715
285,281
358,622
320,951
340,675
345,837
11,915
10,670
11,886
12,067
370,537
331,621
352,561
357,904
422,923
399,072
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
8,881
8,154
Total National Institute of Allergy and Infectious
Diseases
BA
0
319,596
293,435
National Institute of General Medical Sciences-.
(Health research)
552
(Appropriation, current)
BA
365,661
"-211
(Outlays)
0
339,661
391,947
"-200
402,912
"-11
Total (Health research)
BA
0
365,661
339,661
422,712
391,747
399,072
402,901
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
50,276
45,652
59,337
54,993
59,412
59,988
Total National Institute of General Medical Sciences
BA
0
415,937
385,313
482,049
446,740
458,484
462,889
National Institute of Child Health and Human Development:
(Health research)
552
(Appropriation, current)
BA
265,096
298,282
"-309
278,071
(Outlays)
0
247,059
273,298
"-294
284,558
"-15
Total (Health research)
BA
0
265,096
247,059
297,973
273,004
278,071
284,543
See footnotes at end of table.
8-94
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
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
(Outlays)
0
10,950
10,435
15,013
10,405
15,013
14,262
Total National Institute of Child Health and
Human Development
BA
0
276,046
257,494
312,986
283,409
293,084
298,805
BA
151,001
176,192
"-173
158,905
(Outlays)
0
140,220
169,134
"-159
167,786
*-14
Total (Health research)
BA
0
151,001
140,220
176,019
168,975
158,905
167,772
National Eye Institute:
(Health research)
(Appropriation, current)
552
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
Total National Eye Institute
4,130
3,545
5,486
4,701
5,491
4,706
BA
0
155,131
143,765
181,505
173,676
164,396
172,478
National Institute of Environmental Health Sciences:
(Health research)
552
(Appropriation, current)
BA
173,551
186,082
"-542
173,963
(Outlays)
0
164,463
174,171
*-515
178,021
*-27
Total (Health research)
BA
0
173,551
164,463
185,540
173,656
173,963
177,994
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
7,046
6,682
8,737
8,178
8,648
8,851
Total National Institute of Environmental Health
Sciences
See footnotes at end of table.
BA
0
180,597
171,145
194,277
181,834
182,611
186,845
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-95
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
National Institutes of Health—Con.
National Institute on Aging:
(Health research)
(Appropriation, current)
552
BA
(Outlays)
0
Total (Health research)
BA
0
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
Total National Institute on Aging
112,484
139,592
129,829
97,620
"-196
120,818
*-186
131,920
"-10
112,484
139,396
129,829
97,620
120,632
131,910
2,808
2,400
4,929
4,382
4,929
4,926
BA
115,292
144,325
134,758
0
100,020
125,014
136,836
BA
242,448
302,923
"-250
261,931
(Outlays)
0
227,176
262,540
^ — 237
280,980
*-13
Total (Health research)
BA
0
242,448
227,176
302,673
262,303
261,931
280,967
Research resources:
(Health research)
(Appropriation, current)
552
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
Total Research resources
John E. Fogarty International Center
Appropriation, current
Outlays
Total John E. Fogarty International Center
1,102
1,109
683
956
1,190
BA
243,177
303,775
263,040
0
227,859
263,259
282,157
11,336
11,728
"-241
9,551
11,359
552
BA
0
BA
0
See footnotes at end of table.
729
9,232
9,251
"-196
"-45
11,336
11,487
11,359
9,232
9,355
9,206
8-96
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
National Institutes of Health—Con.
National Library of Medicine:
(Health research)
(Appropriation, current)
552
BA
13,320
18,723
"-85
17,856
(Outlays)
0
13,122
19,555
"-54
18,472
"-31
Total (Health research)
BA
0
13,320
13,122
18,638
19,501
17,856
18,441
(Education and training of health care work
force)
553
(Appropriation, current)
BA
36,293
37,187
"-269
35,464
35,754
36,962
^ — 172
36,687
"-97
36,293
35,754
36,918
36,790
35,464
36,590
BA
0
49,613
48,876
55,556
56,291
53,320
55,031
BA
24,582
35,240
"-182
32,853
(Outlays)
0
23,456
32,936
"-170
29,493
"-12
Total (Health research)
BA
0
24,582
23,456
35,058
32,766
32,853
29,481
3,064
2,864
2,857
2,565
26,720
25,496
38,122
35,630
35,710
32,046
25,040
17,896
21,730
19,450
14,900
12,355
(Outlays)
0
Total (Education and training of health care
work force)
BA
0
Total National Library of Medicine
Office of the Director:
(Health research).
(Appropriation, current)
552
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
Total Office of the Director
BA
0
Buildings and facilities
552
Appropriation, current
BA
Outlays
0
Intragovernmental Funds:
National Institutes of Health management fund
552
Outlays
0
See footnotes at end of table.
2,138
2,040
-10,057
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-97
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
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
-1,726
4,493,588
5,139,011
4,852,680
4,157,294
4,671,292
4,945,034
BA
0
469,003
500,820
503,000
472,153
490,000
495,280
BA
340,675
379,121
375,194
379,231
0
Alcohol, Drug Abuse, and Mental Health
Administration
Federal funds
General and Special Funds:
Alcohol, drug abuse, and mental health:
(Health care services)
(Appropriation, current)
(Outlays)
(Health research)
(Appropriation, current)
551
552
(Outlays)
Total (Health research)
0
276,086
-3,972
377,914
* -3,972
BA
340,675
375,149
375,194
0
276,086
373,942
379,231
38,337
27,602
43,000
41,438
21,000
21,226
BA
848,015
921,149
886,194
0
804,508
887,533
895,737
67,744
92,788
48,595
37,768
42,488
40,431
13,977
4,908
5,790
915,759
969,744
928,682
911,273
930,209
941,958
(Education and training of health care work
force)
553
(Appropriation, current)
BA
(Outlays)
0
Total Alcohol, drug abuse, and mental health
Federal subsidy for Saint Elizabeths Hospital
551
Appropriation, current
BA
Outlays
0
Construction and renovation, Saint Elizabeths Hospital
551
Outlays
0
Total Federal funds Alcohol, Drug Abuse, and
Mental Health Administration
BA
0
See footnotes at end of table.
H
8-98
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
Office of Assistant Secretary for Health
Federal funds
General and Special Funds:
Public health service management:
(Health care services)
(Appropriation, current)
551
BA
41,802
42,507
26,269
* 14,706
"-257
(Outlays)
Total (Health care services)
(Health research)
(Appropriation, current)
0
38,701
44,377
40,981
"-136 * - 1 2 1
BA
41,802
42,250
40,975
0
38,701
44,241
40,860
BA
63,770
59,296
64,180
552
"-236
(Outlays)
0
60,920
Total (Health research)
BA
0
63,770
60,920
59,060
63,447
BA
105,572
101,310
105,155
99,621
107,688
104,905
Total Public health service management
0
Retirement pay and medical benefits for commissioned
officers
551
Appropriation, current
Indefinite
Outlays
Scientific activities overseas (special foreign currency
program)
552
Outlays
Intragovernmental Funds:
Service and supply fund
Outlays
See footnotes at end of table.
BA
BA
0
Total Retirement pay and medical benefits for
commissioned officers
63,572
64,156
"-125 " - 1 1 1
73,750
72,113
72,121
71,324
64,180
64,045
99,702
L
-2,573
L
-2,573
80,033
BA
73,750
72,121
97,129
0
72,113
71,324
77,460
0
1,174
4,255
2,845
551
0
-15,908
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-99
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Public Health Service—Con.
Office of Assistant Secretary for
Health—Con.
Trust funds
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
551
BA
0
18,735
18,141
Total Federal funds Office of Assistant Secretary
for Health
BA
0
179,322
157,000
Total Trust funds Office of Assistant Secretary
for Health
BA
0
18,735
18,141
8,124
11,510
8,124
8,903
173,431
183,267
202,284
185,210
8,124
11,510
8,124
8,903
Total Federal funds Public Health Service
BA
0
8,610,302
8,166,004
9,484,065
8,883,797
8,725,746
9,060,564
Total Trust funds Public Health Service
BA
0
18,735
18,141
BA
15,568,108
16,293,491
BA
0
5,105,600
20,060,943
5,552,000
22,984,602
BA
0
20,673,708
20,060,943
21,845,491
22,984,602
23,690,469
23,690,469
BA
17,853,000
18,750,000
BA
0
156,000
17,917,010
459,000
19,261,000
19,659,000
- 736,000
427,000
20,086,000
^-736,000
BA
0
18,009,000
17,917,010
19,209,000
19,261,000
8,124
11,510
8,124
8,903
Other Health Programs
Health Care Financing Administration
Federal funds
General and Special Funds:
Grants to States for Medicaid
Appropriation, current
551
Appropriation, permanent
Outlays
Total Grants to States for Medicaid
Payments to health care trust funds
Appropriation, current
Appropriation, permanent, indefinite
Outlays
Total Payments to health care trust funds
See footnotes at end of table.
18,650,675
-940,206
5,980,000
24,630,675
L
-940,206
L
572
J
19,350,000
19,350,000
8-100
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Other Health Programs—Con.
Health Care Financing Administration—
Con.
Program management:
(Health care services)
(Appropriation, current)
551
BA
68,442
75,147
"-1,540
68,098
(Outlays)
0
105,609
Total (Health care services)
BA
0
68,442
105,609
73,607
63,140
68,098
67,328
BA
0
21,758
21,758
23,000
22,350
14,300
14,300
BA
0
90,200
127,367
96,607
85,490
82,398
81,628
BA
BA
0
45,731,854
42,294,943
52,683,000
48,751,008
^ —1,096
J
127,000
62,266,000
49,116,029
A
-1,096
'-1,158,000
BA
0
45,731,854
42,294,943
52,683,000
48,749,912
62,393,000
47,956,933
(Health research)
(Appropriation, current)
(Outlays)
552
Total Program management
Trust funds
Federal hospital insurance trust fund
Appropriation, current
Appropriation, permanent, indefinite
Outlays
Total Federal hospital insurance trust fund
572
Federal supplementary medical insurance trust
fund
572
Appropriation, current
BA
Appropriation, permanent, indefinite
BA
Outlays
0
See footnotes at end of table.
63,910
68,098
"-770 " - 7 7 0
y
22,525,541
20,374,362
2,000
24,387,000
23,064,006
A —1,040
' _ 10,000
J
-527,000
25,953,000
25,985,460
^ —1,039
' -662,000
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-101
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Health Programs—Con.
Other Health Programs—Con.
Health Care Financing Administration—
Con.
Total Federal supplementary medical insurance
trust fund
BA
0
22,525,541
20,374,362
24,389,000
23,052,966
25,426,000
25,322,421
Total Federal funds Health Care Financing Administration
BA
0
38,772,908
38,105,320
41,151,098
42,331,092
43,122,867
43,122,097
Total Trust funds Health Care Financing Administration
BA
0
68,257,395
62,669,305
77,072,000
71,802,878
87,819,000
73,279,354
Total Federal funds Health Programs
BA
0
47,383,210
46,271,324
50,635,163
51,214,889
51,848,613
52,182,661
Total Trust funds Health Programs
BA
0
68,276,130
62,687,446
77,080,124
71,814,388
87,827,124
73,288,257
BA
2,950,258
497,008
BA
0
3,954,261
6,877,870
512,722
3,500,000
3,229,000
3,741,722
BA
0
6,904,519
6,877,870
7,241,722
3,741,722
2,262,008
5,762,008
BA
1,068,000
1,036,520
BA
0
1,056,697
1,038,520
683,519
32,000
270,000
958,519
L
32,000
Total Special benefits for disabled coal miners.... BA
0
1,068,000
1,056,697
1,036,520
1,038,520
985,519
990,519
Social Security Administration
Federal funds
General and Special Funds:
Payments to social security trust funds
Appropriation, current
571
Appropriation, permanent, indefinite
Outlays
Total Payments to social security trust funds
Special benefits for disabled coal miners
Appropriation, current
L
609
Total Supplemental security income program
See footnotes at end of table.
1,765,000
2,262,008
* 3,500,000
601
Appropriation, permanent
Outlays
Supplemental security income program
Appropriation, current
Appropriation, permanent
Outlays
4
BA
BA
0
8,650,832
9,210,036
8,497,629
9,510,868
7,515,721
2,345,769
9,889,894
BA
0
8,650,832
8,497,629
9,210,036
9,510,868
9,861,490
9,889,894
8-102
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Social Security Administration—Con.
Assistance payments program
Appropriation, current
609
Appropriation, permanent
Outlays
Total Assistance payments program
Child support enforcement
Appropriation, current
Appropriation, permanent
Outlays
6,584,479
6,210,201
6,238,262
-180,000
2,095,000
8,333,262
L
-180,000
BA
0
1,718,000
8,345,814
2,073,000
8,363,219
BA
0
8,302,479
8,345,814
8,283,201
8,363,219
8,153,262
8,153,262
BA
BA
0
441,490
118,000
508,475
497,000
138,000
605,897
432,101
160,000
673,348
BA
0
559,490
508,475
635,000
605,897
592,101
673,348
BA
0
541,761
601,532
405,346
449,557
316,587
362,205
BA
2,075,000
2,100,000
0
2,025,707
2,100,000
BA
0
2,075,000
2,025,707
2,100,000
2,100,000
2,100,000
' -809,476
2,100,000
'-809,476
1,290,524
1,290,524
L
609
Total Child support enforcement
Refugee and entrant assistance
Appropriation, current
Outlays
Low income home energy assistance
Appropriation, current
BA
609
609
Outlays
Total Low income home energy assistance
Payments to states from receipts for child support
609
Appropriation, permanent
BA
Outlays
0
417
450
450
578
450
450
Trust funds
Federal old-age and survivors insurance trust fund
571
Appropriation, current
BA
Appropriation, permanent, indefinite
Outlays
BA
0
A
163,315,390
162,406,492
178,408,722
173,582,946
3,200,000
J
273,000
188,211,008
183,778,753
BA 163,315,390
0
162,406,492
178,408,722
173,582,946
191,684,008
183,778,753
Total Federal old-age and survivors insurance
trust fund
See footnotes at end of table.
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-103
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Social Security Administration—Con.
Federal disability insurance trust fund
Appropriation, current
571
A
BA
Appropriation, permanent, indefinite
Outlays
Limitation on administrative expenses
300,000
'25,000
20,431,000
20,399,437
(3,911,586)
BA
0
17,812,276
18,459,324
(3,718,303)
20,009,000
20,023,830
(3,787,515)
A
(-9,176)
BA
0
17,812,276
18,459,324
20,009,000
20,023,830
20,756,000
20,399,437
Total Federal funds Social Security Administration
BA
0
28,102,498
27,914,174
28,912,275
25,810,361
23,461,941
27,122,210
Total Trust funds Social Security Administration.. BA
0
181,127,666
180,865,816
198,417,722
193,606,776
212,440,008
204,178,190
BA
0
2,700,000
2,788,978
2,725,000
2,750,041
2,700,000
2,702,035
BA
1,881,234
1,969,167
0
1,819,071
1,996,154
"-1,334
1,888,804
H
-1,254
BA
0
1,881,234
1,819,071
1,994,820
1,887,550
1,969,167
1,975,443
BA
685,905
740,994
0
658,576
690,902
M6,404
"-396
689,173
^ 55,097
"-372
723,775
^24,398
"-24
BA
0
685,905
658,576
736,910
743,898
740,994
748,149
BA
0
270,760
264,639
266,760
266,760
59,914
Total Federal disability insurance trust fund
Human Development Services
Federal funds
General and Special Funds:
Social services block grant
Appropriation, current
Outlays
Human development services
Appropriation, current
506
506
Outlays
Total Human development services
Family social services
Appropriation, current
506
Outlays
Total Family social services
Work incentives
Appropriation, current
Outlays
See footnotes at end of table.
1,975,523
"-80
504
!
8-104
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Human Development Services—Con.
Community services
Appropriation, current
506
Outlays
Total Community services
BA
352,369
0
357,811
BA
0
352,369
357,811
372,435
"-34
367,453
"-29
372,401
367,424
3,864
128,795
"-5
3,864
128,790
Public Enterprise Funds:
Rural development loan fund
452
Outlays
0
Community development credit union revolving loan
fund
452
Outlays
0
Total Federal funds Human Development Services
BA
0
6,629
143
475
-1,500
350
-1,000
5,890,268
5,895,847
6,095,891
6,016,498
5,414,025
5,611,831
BA
157,963
127,749
0
154,888
133,000
"-1,246
133,588
^ —1,171
128,124
"-75
BA
0
157,963
154,888
131,754
132,417
127,749
128,049
BA
97,163
40,143
BA
0
88,086
53,391
"-496
9,000
68,709
"-466
44,659
"-30
BA
0
97,163
88,086
61,895
68,243
40,143
44,629
BA
0
18,945
18,430
17,850
17,491
15,636
15,663
Departmental Management
Federal funds
General and Special Funds:
General Departmental management
Appropriation, current
609
Outlays
Total General Departmental management
Office of the Inspector General
Appropriation, current
609
Appropriation, permanent
Outlays
Total Office of the Inspector General
Office for Civil Rights
Appropriation, current
Outlays
Office of Consumer Affairs
Appropriation, current
Outlays
Policy research
Appropriation, current
Outlays
See footnotes at end of table.
751
506
BA
0
2,011
1,867
2,096
2,017
1,988
1,959
609
BA
0
10,000
11,284
9,750
11,115
6,000
8,212
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-105
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Health and Human Services—Con.
Departmental Management—Con.
Intragovernmental Funds:
Working capita! fund
Outlays
506
0
-1,087
2,254
286,082
273,468
223,345
233,537
191,516
198,512
BA
0
81,662,058
80,354,813
85,866,674
83,275,285
80,916,095
85,115,214
BA
0
249,403,796
243,553,262
275,497,846
265,421,164
300,267,132
277,466,447
Total Federal funds Departmental Management... BA
0
Summary
Federal funds:
(As shown in detail above)
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
Proprietary receipts from the public
571
BA
551 BA
572
_17779
_7169
_7169
j ^ A -4,942,368
-5,547,000
-5,927,000
BA
J
-194,000
0
Qflft RA
™
Total Trust funds
Interfund transactions
-291
0
BA
0
571
572
-8,000
242,560,843
236,710,309
268,296,677
258,219,995
293,064,963
270,264,278
Q A -17,917,010
-19,261,000
-20,086,000
BA
§A
Total Department of Health and Human Services
-8,000
BA
0
-736,000
299,428,021
292,270,242
331,160,629
318,492,558
348,869,050
330,267,484
Department of Housing and Urban Development
Housing Programs
Federal funds
General and Special Funds:
Subsidized housing programs.(Community development)
(Contract authority, current)
(Outlays)
See footnotes at end of table.
451
BA
0
615,000
95,000
261,500
8-106
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
Department of Housing and Urban Development—Con.
Housing Programs—Con.
(Housing assistance)
604
(Contract authority, current)
BA
(Contract authority, permanent)
BA
(Liquidation of contract authority, current)
(Liquidation of contract authority, permanent)...
(Outlays)
8,774,084
Total (Housing assistance)
BA
0
Total Subsidized housing programs
BA
0
Troubled projects operating subsidy
Outlays
Congregate services program
Appropriation, current
Outlays
Housing counseling assistance
Appropriation, current
Outlays
Mobile home standards program
Outlays
Manufactured home inspection and monitoring
Appropriation, permanent, indefinite
Outlays
9,447,928
19,397
(10,495,293)
499,000
9,093,500
499,000
9,355,000
-13,257
-22,000
18,000
BA
0
4,176
4,144
10,000
5*500
BA
0
3,500
3,328
604
604
506
376
376
3,500
3,500
5,791
6,477
5,952
6,544
'263
5,950
4,924
5,791
6,477
5,952
6,807
BA
0
217
364
1,200
1,207
1,345
1,345
BA
BA
0
59,640
6,300
-365,930
(56,390)
167,683
40,332
-802,151
(65,448)
84,387
43,559
-1,330,370
(89,222)
BA
0
65,940
-365,930
208,015
-802,151
127,946
-1,330,370
BA
0
556,902
661,254
564,428
571,556
19,929
589,581
0
6
(1,790)
-140
(1880)
-427
(500)
0
-234
-159
-144
376
371
Total Federal Housing Administration fund
3,500
198
Total Manufactured home inspection and monitoring
BA
0
See footnotes at end of table.
(265*bbb)
' (455,000) '(1,445.500)
(11,240,000) (12,418,000)
9,722,000
10,539,000
' -455,000 ' -1,445,500
10,759,483
9,267,000
10,759,483
9,362,000
5,950
4,924
Housing for the elderly or handicapped fund
Authority to borrow, current, indefinite
Outlays
Nonprofit sponsor assistance
Outlays
Limitation on direct loan obligations
Community disposal operations fund
Outlays
499,000
9,467,325
8,774,084
10,082,325
8,774,084
BA
0
Interstate land sales
Appropriation, permanent, indefinite
Outlays
Public Enterprise Funds:
Federal Housing Administration fund
Appropriation, current
Authority to borrow, permanent, indefinite
Outlays
Limitation on direct loan obligations
10,759,483
371
604
451
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-107
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Housing and Urban Development—Con.
Housing Programs—Con.
604
Rental housing assistance fund
Outlays
0
-1,053
3,403
-1,000
BA
0
10,714,834
9,067,662
11,546,561
9,133,891
654,172
8,647,792
Payments for operation of low income housing
projects
604
Appropriation, current
BA
1,362,200
1,138,500
"-253,138
1,010,600
1,380,600
"-126,000
1,252,200
"-126,000
885,362
1,254,600
1,010,600
1,126,200
Total Federal funds Housing Programs
Public and Indian Housing Programs
Federal funds
General and Special Funds:
Reappropriation
Outlays
BA
0
355,538
1,135,116
Total Payments for operation of low income
housing projects
BA
0
1,717,738
1,135,116
Public Enterprise Funds:
Low-rent public housing-loans and other expenses
604
Authority to borrow, current, indefinite
BA
Authority to borrow, permanent, indefinite
BA
Outlays
0
1,120,000
1,111,012
-350,500
14,648,653
14,797,430
'-350,500
-24,700
1,846,600
1,988,479
J
- 24,700
Totai Low-rent public housing-loans and other
expenses
BA
0
1,120,000
1,111,012
14,298,153
14,446,930
1,821,900
1,963,779
Total Federal funds Public and Indian Housing
Programs
BA
0
2,837,738
2,246,128
15,183,515
15,701,530
2,832,500
3,089,979
1,059
350
J
J
Government National Mortgage Association
Federal funds
General and Special Funds:
Payment of participation sales insufficiencies
Appropriation, current
371
BA
Public Enterprise Funds:
Special assistance functions fund
Outlays
Emergency mortgage purchase assistance
Authority to borrow, permanent, indefinite
Outlays
Management and liquidating functions fund
Outlays
Guarantees of mortgage-backed securities
Outlays
See footnotes at end of table.
371
0
818,293
BA
0
%610
371
371
0
371
0
129,761
-85,401
-411,125
-410,688
-185,728
-241,305
-298,275
8-108
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Housing and Urban Development—Con.
Government National Mortgage
Association—Con.
Participation sales fund:
(Mortgage credit and deposit insurance)
(Outlays)
(Other advancement of commerce)
(Outlays)
(Community development)
(Outlays)
(Higher education)
(Outlays)
(Health research)
(Outlays)
(Veterans housing)
(Outlays)
371
0
-20,770
-29,773
-35,985
0
-20,555
-12,262
-12,828
0
259
423
50
0
-548
-17,568
-27,128
0
-889
-993
-1,088
0
-22,215
-18,709
-21,123
0
-64,718
-78,882
-98,102
Total Federal funds Government National MortBA
gage Association
0
100,669
612,207
350
-731,312
-807,065
25,000
7,927
15,000
26,300
35,000
BA
0
3,468,000
3,819,329
3,472,000
3,900,000
3,124,800
3,520,000
BA
0
440,000
453,905
440,000
500,000
522,000
BA
0
12,000
12,000
16,288
16,500
-16
603
-20
106
-390
452
-21,005
55,000
376
451
502
552
704
Total Participation sales fund
Solar Energy and Energy Conservation Bank
Federal funds
General and Special Funds:
Assistance for solar and conservation improvements
272
BA
Appropriation, current
Outlays
0
Community Planning and Development
Federal funds
General and Special Funds:
Community development grants
Appropriation, current
Outlays
Urban development action grants
Appropriation, current
Outlays
Urban homesteading
Appropriation, current
Outlays
Planning assistance
Outlays
Neighborhood self-help development program
Outlays
Miscellaneous appropriations
Outlays
451
451
451
451
0
451
0
451
0
Public Enterprise Funds:
Rehabilitation loan fund
Outlays
See footnotes at end of table.
12,000
14,535
451
-lf594
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-109
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Housing and Urban Development—Con.
Community Planning
ing and
an Development—
Urban renewal programs
451
Liquidation of contract authority, permanent
0
Outlays
Revolving fund (liquidating programs)
451
Appropriation, current
BA
Outlays
0
(50,000)
44,256
(22,902)
14,462
938
-37,100
395
-18,631
17,635
Total Federal funds Community Planning and
Development
BA
0
3,920,938
4,275,247
3,924,395
4,468,492
3,136,800
4,072,576
19,200
16,900
24,636
18,900
* 18,900
18,300
BA
0
19,200
24,636
16,900
18,900
18,900
18,300
BA
0
4,700
5,854
6,700
7,770
5,000
5,000
Policy Development and Research
Federal funds
General and Special Funds:
Research and technology
Appropriation, current..
451
Outlays
Total Research and technology
Fair Housing and Equal Opportunity
Federal funds
General and Special Funds:
Fair housing assistance
Appropriation, current
Outlays
Fair housing initiatives
Appropriation, current
Outlays
751
751
J
BA
0
Total Federal funds Fair Housing and Equal OpBA
portunity
0
10,000
'6,000
4,700
5,854
6,700
7,770
15,000
11,000
151,769
191,020
191,020
192,041
Management and Administration
Federal funds
General and Special Funds:
Salaries and expenses, Including transfer of funds*.
(Community development)
451
(Appropriation, current)
BA
(Outlays)
Total (Community development)
See footnotes at end of table.
0
139,935
190,537
-4,463
195,201
"-4,463
BA
0
151,769
139,935
186,074
190,738
H
192,041
8-110
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Housing and Urban Development—Con.
Management and Administration—Con.
(Housing assistance)
(Appropriation, current)
604
BA
125,682
78,111
"-1,834
80,026
H
-1,834
96,138
(Outlays)
0
115,859
Total (Housing assistance)
BA
0
125,682
115,859
76,277
78,192
96,138
91,685
BA
23,499
26,587
"-622
26,267
(Outlays)
0
21,666
27,245
"-622
27,782
Total (Federal law enforcement activities)
BA
0
23,499
21,666
25,965
26,623
26,267
27,782
Total Salaries and expenses, Including transfer
of funds
BA
0
300,950
277,460
288,316
295,553
313,425
311,508
(Federal law enforcement activities)
(Appropriation, current)
New community assistance grants
Outlays
91,685
751
451
0
3
886
Intragovernmental Funds:
Working capital fund
Outlays
451
0
Trust funds
Gifts and bequests
451
Appropriation, permanent, indefinite
BA
Outlays
Total Federal funds Management and Administration
BA
0
3,119
5
0
-
2
5
5
5
300,950
280,582
288,316
296,439
313,425
311,508
- 2
5
5
5
5
BA
0
17,924,029
16,520,243
30,981,737
28,922,010
6,970,797
15,379,090
BA
0
-2
5
5
5
5
Total Department of Housing and Urban Development
BA
0
17,924,029
16,520,241
30,981,742
28,922,015
6,970,802
15,379,095
Total Trust funds Management and Administration
BA
0
Summary
Federal funds:
(As shown in detail above)
Trust funds:
(As shown in detail above)
See footnotes at end of table.
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-111
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
Account and functional code
actual
1985
estimate
1986
Department of the Interior
Land and Minerals Management
Bureau of Land Management
Federal funds
General and Special Funds:
Management of lands and resources
Appropriation, current
302
BA
Outlays
Total Management of lands and resources
Construction and access
Appropriation, current
Outlays
Payments in lieu of taxes
Appropriation, current
Outlays
Oregon and California grant lands
Appropriation, current
0
418,113
385,853
-5,778
381,995
H
-5,778
BA
0
411,336
418,113
380,075
376,217
364,524
368,899
BA
0
3,070
2,969
1,203
2,261
1,203
2,500
BA
0
105,000
104,258
102,900
102,900
105,000
105,000
BA
48,536
0
52,509
54,289
"-679
53,746
« —679
BA
0
48,536
52,509
53,610
53,067
852
368,899
302
Total Special acquisition of lands and minerals...
BA
BA
0
BA
0
Land acquisition
302
Appropriation, current
BA
Outlays
0
Range improvements
302
Appropriation, current, indefinite
BA
Outlays
0
Recreation development and operation of recreation
facilities
302
Outlays
0
Service charges, deposits, and forfeitures
302
Appropriation, current, indefinite
BA
Outlays
0
Miscellaneous permanent appropriations:
(Conservation and land management)
302
(Appropriation, permanent, indefinite)
BA
(Outlays)
0
364,524
302
Total Oregon and California grant lands
See footnotes at end of table.
H
302
Outlays..
Special acquisition of lands and minerals
Appropriation, current
Authority to borrow, permanent
Outlays
411,336
14,700
1,300
16,061
15,400
15,339
15,400
15,339
16,000
16,061
1,300
1,300
1,300
1,300
4,201
1,263
2,695
1,890
3,472
10,000
10,882
10,000
9,750
10,000
9,750
3,860
3,368
4,070
3,742
5,920
5,560
7,046
7,046
5,600
5,600
500
500
8-112
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Interior—Con.
Land and Minerals Management—Con.
Bureau of Land Management—Con.
(Other general purpose fiscal assistance)
(Appropriation, permanent indefinite)
852
(Outlays)
Total Miscellaneous permanent appropriations
Intragovernmental Funds:
Working capital fund
58,566
79,894
11,908
55,620
79,894
11,908
BA
65,612
85,494
12,408
0
62,666
85,494
12,408
0
-1,938
2,456
» -2,951
-1,516
0
-1,938
302
Outlays
Total Working capital fund
Trust funds
Miscellaneous trust funds
Appropriation, current, indefinite
Appropriation, permanent, indefinite
Outlays
BA
0
-495
-1,516
100
600
700
302
Total Miscellaneous trust funds
Total Federal funds Bureau of Land Management
Total Trust funds Bureau of Land Management...
BA
BA
0
1
1,582
1,446
100
600
700
BA
1,583
700
700
0
1,446
700
700
BA
667,015
656,047
500,355
0
669,430
650,887
507,373
BA
1,583
700
700
0
1,446
700
700
Minerals Management Service
Federal funds
General and Special Funds:
Minerals and royalty management
Appropriation, current
Outlays
Total Minerals and royalty management
See footnotes at end of table.
302
BA
164,625
w
162,560
154,241
159,187
"-397
0
157,291
-1,764
184,287
H
-1,323
BA
164,625
160,796
154,241
0
157,291
182,964
158,790
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-113
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Interior—Con.
Land and Minerals Management—Con.
Minerals Management Service—Con.
Payments to States from receipts under Mineral Leasing Act
852
Appropriation, current, indefinite
Appropriation, permanent, indefinite
Outlays
Total Payments to States from receipts under
Mineral Leasing Act
BA
BA
0
735,891
735,943
A
800
510,455
510,455
^733
BA
735,891
511,255
479,083
0
735,943
511,188
479,150
900,516
893,234
672,051
694,152
633,324
637,940
70,695
75,092
79,921
71,371
M,800
"-546
75,778
H600
"-546
Total Federal funds Minerals Management Service
BA
0
479,083
479,083
*67
Office of Surface Mining Reclamation and
Enforcement
Federal funds
General and Special Funds:
Regulation and technology
Appropriation, current
302
BA
Outlays
0
Total Regulation and technology
Abandoned mine reclamation fund
Appropriation, current
BA
0
70,695
71,371
77,996
3,200
A
79,346
76,832
79,921
81,196
296,941
250,324
239,390
"-580
302
BA
271,228
H
0
134,667
-3,233
207,478
"-623
BA
0
271,228
134,667
293,708
206,855
250,324
238,810
Total Federal funds Office of Surface Mining
Reclamation and Enforcement
BA
0
341,923
206,038
373,054
283,687
330,245
320,006
Total Federal funds Land and Minerals Management
BA
0
1,909,454
1,768,702
1,701,152
1,628,726
1,463,924
1,465,319
Outlays
Total Abandoned mine reclamation fund
Total Trust funds Land and Minerals Management
BA
0
See footnotes at end of table.
1,583
1,446
700
700
700
700
8-114
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Interior—Con.
Water and Science
Bureau of Reclamation
Federal funds
General and Special Funds:
Construction program
Appropriation, current
301
Outlays
Total Construction program
Loan program
Appropriation, current
Outlays
General investigations
Appropriation, current
532,430
655,857
740,000
* -2,571
702,729
* -2,571
0
BA
0
695,318
655,857
737,429
700,158
532,430
700,000
BA
0
45,000
45,479
67,537
62,408
41,415
48,740
BA
34,057
32,050
0
35,063
35,566
"-209
35,979
*-209
BA
0
34,057
35,063
35,357
35,770
32,050
32,050
700,000
301
Total General investigations
32,050
301
BA
0
1,000
3,089
1,000
2,000
1,000
1,000
301
Outlays
Total Operation and maintenance
General administrative expenses
Appropriation, current
695,318
301
Outlays
Emergency fund
Appropriation, current
Outlays
Operation and maintenance
Appropriation, current
BA
BA
134,291
149,689
"-1,540
148,740
«-1,540
132,665
0
134,723
BA
0
134,291
134,723
148,149
147,200
132,665
130,170
BA
53,750
49,200
44,455
58,917
-1,468
65,965
H
-1,468
0
BA
0
53,750
44,455
57,449
64,497
49,200
49,200
130,170
301
Outlays
Total General administrative expenses
H
49,200
Colorado River dam fund, Boulder Canyon project
852
Appropriation, permanent, indefinite
Outlays
Miscellaneous permanent appropriations
Appropriation, permanent, indefinite
Outlays
BA
0
1,930
1,936
2,100
2,100
31,767
32,750
BA
0
254
249
350
350
350
350
852
Public Enterprise Funds:
Lower Colorado River Basin development fund
Outlays
See footnotes at end of table.
301
0
-35,024
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-115
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Interior—Con.
Water and Science—Con.
Bureau of Reclamation—Con.
Upper Colorado River Basin fund
Outlays
Trust funds
Reclamation trust funds
Appropriation, permanent, indefinite
Outlays
301
0
-20,032
301
BA
0
5,723
7,464
6,880
7,233
18,711
18,711
Total Federal funds Bureau of Reclamation
BA
0
965,600
865,795
1,049,371
1,014,483
820,877
994,260
Total Trust funds Bureau of Reclamation
BA
0
5,723
7,464
6,880
7,233
18,711
18,711
BA
377,672
413,173
-4,519
406,670
0
410,876
412,757
»-3,390
407,219
*-1,129
BA
0
377,672
410,876
408,654
409,367
406,670
406,090
Geological Survey
Federal funds
General and Special Funds:
Surveys, investigations and research
Appropriation, current
306
Outlays..:
Total Surveys, investigations and research
Barrow area gas operation, exploration, and development
271
Appropriation, current
BA
Outlays
0
Exploration of national petroleum reserve in
Alaska
271
Outlays
0
Trust funds
Contributed funds
Appropriation, permanent, indefinite
Outlays
BA
0
BA
0
Total Trust funds Geological Survey
BA
0
8,507
203
8,920
1,000
306
Total Federal funds Geological Survey
See footnotes at end of table.
13,000
32,843
H
500
500
390,672
452,226
408,654
418,490
500
500
500
500
406,670
407,090
500
500
8-116
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Interior—Con.
Water and Science—Con.
Bureau of Mines
Federal funds
General and Special Funds:
Mines and minerals
Appropriation, current
306
Outlays
Total Mines and minerals
Public Enterprise Funds:
Helium fund
Outlays
Trust funds
Contributed funds
Appropriation, permanent, indefinite
Outlays
BA
136,855
0
160,259
BA
0
136,855
160,259
0
-4,538
135,959
*-1,355
140,500
*-1,355
104,313
134,604
139,145
104,313
111,270
111,270
306
306
BA
0
Total Federal funds Bureau of Mines
BA
0
Total Trust funds Bureau of Mines
BA
0
Total Federal funds Water and Science
BA
0
Total Trust funds Water and Science
BA
0
433
576
500
500
136,855
155,721
134,604
139,145
433
576
1,493,127
1,473,742
500
500
500
500
104,313
111,270
500
500
1,592,629
1,572,118
1,331,860
1,512,620
7,880
8,233
19,711
19,711
305,138
-3,869
250
296,131
-3,752
298,735
250
296,846
^ — 117
6,156
8,040
Fish and Wildlife and Parks
United States Fish and Wildlife Service
Federal funds
General and Special Funds:
Resource management
Appropriation, current
303
BA
277,534
H
Appropriation, permanent, indefinite
Outlays
BA
0
276,678
H
Total Resource management
Construction
Appropriation, current
Outlays
Total Construction
See footnotes at end of table.
BA
0
277,534
276,678
301,519
292,379
298,985
296,729
BA
31,781
5,613
0
15,683
24,298
*-40
29,090
*-40
BA
0
31,781
15,683
24,258
29,050
5,613
23,245
303
23,245
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-117
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Interior—Con.
Fish and Wildlife and Parks—Con.
United States Fish and Wildlife Service—
Con.
Land acquisition
Appropriation, current
Outlays
Migratory bird conservation account
Appropriation, current
Appropriation, permanent, indefinite
Outlays
303
Trust funds
Sport fish restoration
Appropriation, current, indefinite
Outlays
Contributed funds
Appropriation, permanent, indefinite
Outlays
1,500
32,000
BA
BA
0
7,000
13,999
19,978
21,266
16,376
37,642
16,400
16,400
BA
0
20,999
19,978
37,642
37,642
16,400
16,400
BA
BA
0
5,760
7,057
12,657
5,645
7,040
12,600
5,645
7,040
12,600
BA
0
12,817
12,657
12,685
12,600
12,685
12,600
303
Total Operations and maintenance of quarters
Miscellaneous permanent appropriations
Appropriation, permanent, indefinite
Outlays
63,218
40,718
852
Total National wildlife refuge fund
Operations and maintenance of quarters
Appropriation, current
Appropriation, permanent
Outlays
52,297
20,389
303
Total Migratory bird conservation account
National wildlife refuge fund
Appropriation, current
Appropriation, permanent, indefinite
Outlays
BA
0
BA
BA
0
20,915
20,695
21,084
21,054
BA
0
20,915
20,695
21,084
21,054
124,158
148,200
111,800
120,200
303
BA
0
127,690
148,626
303
BA
0
44,000
42,680
303
BA
0
3,537
3,852
3,838
3,573
4,165
3,903
Total Federal funds United States Fish and Wildlife Service
BA
0
523,118
494,011
584,395
581,284
468,067
522,228
Total Trust funds United States Fish and Wildlife
Service
BA
0
3,537
3,852
3,838
3,573
48,165
46,583
See footnotes at end of table.
8-118
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
estimate
Department of the Interior—Con.
Fish and Wildlife and Parks—Con.
National Park Service
Federal funds
General and Special Funds:
Operation of the national park system
Appropriation, current
303
Reappropriation
Outlays
Total Operation of the national park system
National recreation and preservation
Appropriation, current
585,685
611,633
" -8,598
"589,972
616,570
642,070
604,260
603,035
585,685
589,972
BA
10,377
9,259
0
8,740
11,111
"-94
11,211
"-94
BA
0
10,377
8,740
11,017
11,117
9,259
9,268
BA
66,690
49,456
0
103,094
111,442
"-397
96,000
"-397
BA
0
66,690
103,094
111,045
95,603
49,456
93,000
1,065
1,476
616,390
BA
0
180
642,070
BA
0
303
Outlays
Total National recreation and preservation..
Construction
Appropriation, current
612,858
" -8,598
BA
9,268
303
Outlays
Total Construction..
Road construction
303
Outlays
John F. Kennedy Center for the Performing Arts
93,000
303
Appropriation, current-
BA
4,542
Outlays
0
4,399
4,529
4,506
*4,529
4,546
BA
0
4,542
4,399
4,529
4,506
4,529
4,546
BA
0
8,700
37,502
40,538
12,200
Total John F. Kennedy Center for the Performing
Arts
Urban park and recreation fund
303
Appropriation, current
Outlays
Illinois and Michigan canal national heritage-corridor
Commission
303
Appropriation, current
Outlays
Jefferson national expansion memorial commission
303
Appropriation, current
Outlays
See footnotes at end of table.
K
BA
0
245
245
BA
0
73
73
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-119
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1985
estimate
1984
actual
Account and functional code
1986
estimate
Department of the Interior—Con.
Fish and Wildlife and Parks—Con.
National Park Service—Con.
National park system visitor facilities fund
Appropriation, current
Outlays
Land acquisition
Appropriation, current
303
BA
0
5,800
640
5,880
8,440
8,500
8,500
BA
203,650
147,216
"-52
11,275
303
Contract authority, current
BA
-30,000
H
Contract authority, permanentOutlays
-30,000
J
-30,000
30,000
134,000
30,000
255,798
30,000
259,000
"-52
203,650
255,798
147,164
258,948
-21
231
26,500
25,480
51,103
29,412
26
34
994
552
1,020
1,423
0
(14,000)
1,166
(28,000)
18,201
* 25,066
211
0
1,166
43,267
211
BA
0
6,567
4,598
16,059
17,254
18,148
18,303
Total Federal funds National Park Service.
BA
0
943,823
1,104,968
910,713
1,055,081
669,739
868,702
Total Trust funds National Park Service
BA
0
6,567
5,764
16,059
60,521
18,148
18,514
Total Federal funds Fish and Wildlife and Parks.. BA
0
1,466,941
1,598,979
10,104
9,616
1,495,108
1,636,365
19,897
64,094
1,137,806
1,390,930
Total Land acquisition..
Planning, development, and operation of recreation
facilities
303
Outlays
Historic preservation fund
303
BA
Appropriation, current
0
Outlays
Commemorative activities fund
303
Outlays
Miscellaneous permanent appropriations
303
Appropriation, permanent, indefinite
BA
O
Outlays
Trust funds
Construction (trust fund)
Liquidation of contract authority, current
Outlays
1,035
1,035
303
Total Trust funds Fish and Wildlife and Parks
See footnotes at end of table.
16,181
401
Total Construction (trust fund)
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
11,275
134,000
BA
0
66,313
65,097
8-120
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
1986
estimate
Department of the Interior—Con.
Indian Affairs
Bureau of Indian Affairs
Federal funds
General and Special Funds:
Operation of Indian programs:
(Conservation and land management)
(Appropriation, current)
302
BA
(Outlays).
107,074
110,215
109,834
107,074
107,067
498,498
G
2,320
-3,315
499,996
H
-3,185
502,208
118,635
Total (Conservation and land management)
(Area and regional development)
(Appropriation, current)
110,150
G
543
"-478
110,292
w
—458
117,694
BA
0
117,694
118,635
107,087
"-20
452
BA
501,931
H
(Outlays).
506,415
Total (Area and regional development)
502,742
-130
11
BA
0
501,931
506,415
497,503
496,811
502,208
502,612
(Elementary, secondary, and vocational education)
501
(Appropriation, current)
BA
255,754
269,268
G
2,137
»-1,777
246,405
270,962
* _ 1,707
248,447
"-70
266,854
257,760
269,628
269,255
246,405
248,377
BA
0
886,479
882,810
877,346
875,900
855,687
858,056
BA
77,314
107,492
-5,000
70,245
(Reappropriation)
(Outlays)
BA
0
Total (Elementary, secondary, and vocational
education)
BA
0
Total Operation of Indian programs
Construction
Appropriation, current..
11,100
257,760
452
F
Appropriation, permanent...
Outlays
BA
0
101,108
127,500
4,900
96,844
Total Construction..
BA
0
77,314
101,108
102,492
127,500
75,145
96,844
BA
0
4,000
22,667
5,880
11,000
2,750
Road construction
452
Appropriation, current
Outlays
Payment to Utah Paiute Economic Development and
Tribal Government Fund
452
Appropriation, current
Outlays
See footnotes at end of table.
BA
0
2,450
2,450
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-121
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Interior—Con.
Indian Affairs—Con.
Bureau of Indian Affairs—Con.
Eastern Indian land claims settlement fund
Appropriation, current
Outlays
Miscellaneous permanent appropriations:
(Area and regional development)
(Appropriation, permanent, indefinite)
(Outlays)
(Other general government)
(Appropriation, permanent, indefinite)
(Outlays)
806
BA
0
900
1,203
452
BA
0
43,716
37,635
44,000
42,500
44,000
42,500
2,000
2,000
2,000
2,000
806
BA
0
Total Miscellaneous permanent appropriations
1,916
1,607
BA
45,632
46,000
46,000
0
39,242
44,500
44,500
3,218
(13,075)
8,500
(18,600)
4,962
(16,300)
3,167
4,470
1,485
5,955
3,850
1,280
Public Enterprise Funds:
Revolving fund for loans
452
Outlays
0
Limitation on direct loan obligations
Indian loan guaranty and insurance fund
452
Appropriation, current
BA
Outlays
0
Liquidation of Hoonah Housing Project revolving
fund
452
Outlays
0
Trust funds
Cooperative fund (papago)
Appropriation, permanent, indefinite
Miscellaneous trust funds:
(Area and regional development)
(Appropriation, current)
(Indefinite)
(Appropriation, permanent, indefinite)
(Outlays)
452
BA
Total Federal funds Bureau of Indian Affairs
See footnotes at end of table.
7,165
452
Total (Area and regional development)
Total Trust funds Bureau of Indian Affairs
3
BA
BA
BA
0
2,786
48,258
327,074
433,951
4,000
4,000
418,386
460,400
416,136
458,000
BA
378,118
422,386
420,136
0
433,951
460,400
458,000
BA
1,014,325
1,034,168
978,317
0
1,053,418
1,074,320
1,013,067
BA
385,283
426,236
421,416
0
433,951
460,400
458,000
8-122
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
1986
estimate
1985
Account and functional code
Department of the Interior—Con.
Territorial and International Affairs
Territorial and International Affairs
Federal funds
General and Special Funds:
Administration of territories
Appropriation, current
806
Outlays
Total Administration of territories
BA
81,756
0
BA
0
Trust Territory of the Pacific Islands
806
Appropriation, current
BA
Outlays
0
Micronesian claims fund, Trust Territory of the Pacific
Islands
806
Outlays
0
Payments to the United States territories, fiscal assistance
852
Appropriation, permanent, indefinite
BA
Outlays
0
61,333
70,445
75,557
^ 1,994
"-107
77,402
A
1,994
11
-107
81,756
70,445
77,444
79,289
61,333
64,606
114,109
104,206
98,795
126,589
13,500
28,345
64,606
1,578
65,258
65,161
63,000
63,000
66,000
66,000
261,123
239,812
239,239
270,456
140,833
158,951
BA
BA
0
44,068
15,730
44,633
65,526
39,939
39,540
BA
BA
0
420
569
1,960
2,742
BA
BA
0
800
1,868
735
1,000
0
736
707
0
94
14
0
830
721
Total Federal funds Territorial and International
Affairs
BA
0
Departmental Offices
Office of the Secretary
Federal funds
General and Special Funds:
Office of the Secretary
306
Appropriation, current
Outlays
Office of the Secretary (special foreign currency program)
306
Appropriation, current
Outlays
Construction management
306
Appropriation, current
Outlays..
Miscellaneous expiring appropriations:
(Water resources)
301
(Outlays)
(Conservation and land management)
302
(Outlays)
Total Miscellaneous expiring appropriations
See footnotes at end of table.
660
660
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-123
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Interior—Con.
Departmental Offices—Con.
Office of the Secretary—Con.
Intragovernmental Funds:
Working capital fund
Outlays
306
0
13,461
-548
BA
0
45,288
32,458
47,328
69,441
40,599
40,200
BA
0
19,542
18,513
20,256
20,000
18,417
18,190
BA
0
16,814
21,858
16,908
20,104
15,175
15,203
BA
0
81,644
72,829
84,492
109,545
74,191
73,593
BA
0
6,226,614
6,207,482
6,146,788
6,291,530
5,126,931
5,614,480
301 BA
_ # / #
-70,803
-74,852
j j * -1,203,217
-1,231,689
-1,260,665
Total Federal funds Office of the Secretary
Office of the Solicitor
Federal funds
General and Special Funds:
Office of the Solicitor
Appropriation, current
Outlays
306
Office of Inspector General
Federal funds
General and Special Funds:
Office of Inspector General
Appropriation, current
Outlays
306
Total Federal funds Departmental Offices
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
3ft? RA
™l
303
QA
{*A
J
-49,596
J
l
-67,705
106,442
-70,012
RA
J
0
306
452
908
Total Federal funds
Trust funds:
(As shown in detail above)
See footnotes at end of table.
*
-194
j*
A
- 5
-29,992
- 5
-43,857
-44,001
A
-44,001
J
BA
0
-6,784
4,863,775
4,844,643
-5,176
4,727,410
4,872,152
-7,029
3,746,817
4,234,366
BA
0
403,126
453,053
454,713
533,427
508,140
543,508
8-124
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Interior—Con.
Summary—Con.
Deductions for offsetting receipts:
Proprietary receipts from the public
301 BA
_ ^
302
JA
-1,583
303
JA
-3,537
306
J*
452
QA
ana
DA
0
Total Trust funds
BA
0
Interfund transactions
Total Department of the Interior
_]gJ]]
-700
-700
-3,838
-4,165
-1,000
-1,000
-224,483
-232,500
-237,600
-82,370
-74,620
-71,320
-.433
84,997
134,924
452 BA
0
806
_gm
135,175
213,889
174,644
210,012
^ M
-2'450
QA
-31,962
-75,000
-75,000
BA
0
4,916,810
4,947,605
4,785,135
5,008,591
3,846,461
4,369,378
Department of Justice
General Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Total Salaries and expenses
See footnotes at end of table.
751
BA
64,485
0
60,644
BA
0
64,485
60,644
71,150
*-3,890
D
1,068
"-166
70,136
^ — 3J90
"-166
68,162
66,180
K
63,243
61,978
^ —100
63,243
61,878
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-125
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Justice—Con.
General Administration—Con.
Intragovernmental Funds:
Working capital fund
Appropriation, current
751
BA
Outlays
0
-3,086
Total Working capital fund
0
-3,086
Total Federal funds General Administration
BA
0
64,485
57,558
BA
7,858
3,000
"-3,000
4,145
"-3,000
1,140
1,145
1,140
68,162
67,325
63,243
63,018
United States Parole Commission
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
751
8,913
*9,415
°160
Outlays
Total Salaries and expenses
0
7,088
9,020
9,235
BA
7,858
9,073
9,415
0
7,088
9,020
9,235
169,637
194,163
0
160,864
U348
D
3,308
"-470
196,560
^ 1,321
"-470
Legal Activities
Federal funds
General and Special Funds:
Salaries and expenses, General Legal Activities
752
Appropriation, current
BA
Outlays
Total Salaries and expenses, General Legal Activities
Salaries and expenses, Antitrust Division
Appropriation, current
K
200,277
196,271
*27
BA
169,637
198,349
200,277
0
160,864
197,411
196,298
BA
44,229
42,519
752
*43,476
Outlays
0
Total Salaries and expenses, Antitrust Division.... BA
0
See footnotes at end of table.
41,652
44,229
41,652
"665
"-65
42,277
"-65
43,119
42,212
42,685
43,476
42,685
8-126
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Justice—Con.
Legal Activities—Con.
Salaries and expenses, Foreign Claims Settlement
Commission
153
Appropriation, current
BA
843
929
0
596
935
843
596
929
935
879
26
10
15
Outlays..
Total Salaries and expenses, Foreign Claims Settlement Commission
BA
0
Payment of Vietnam and U.S.S. Pueblo prisoner of
war claims
153
Outlays
0
Salaries and expenses, United States Attorneys and
Marshals
752
Appropriation, current
BA
431,114
384,626
A
Reappropriation
Outlays
BA
0
2,536
381,221
Total Salaries and expenses, United States Attorneys and Marshals
BA
0
387,162
381,221
Support of United States prisoners
Appropriation, current
*478,057
13,722
D
6,151
G
1,636
437,183
^ 24,650
"-889
468,617
* 1,298
451,734
460,944
478,057
469,915
752
BA
51,465
63,240
A
40,241
Outlays..
Total Support of United States prisoners
Fees and expenses of witnesses
Appropriation, current
BA
0
-3,683
F
-1,636
64,284
A
-3,683
51,465
40,241
57,921
60,601
37,883
40,600
BA
Outlays..
See footnotes at end of table.
K
58,240
64,416
58,240
64,416
752
A
Total Fees and expenses of witnesses.
*879
BA
0
34,617
2,800
"-309
39,788
* 2,744
"-309
37,883
34,617
43,091
42,223
* 47,900
46,912
^56
47,900
46,968
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-127
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Justice—Con.
Legal Activities—Con.
Salaries and expenses, Community Relations Service
752
Appropriation, current
BA
32,327
33,000
*33,217
*135
»~43
Outlays
0
Total Salaries and expenses, Community Relations Service
BA
0
Assets forfeiture fund
Appropriation, current
17,337
32,327
17,337
38,805
H
38,637
-43
33,092
38,762
33,217
38,637
752
BA
Outlays
0
Total Assets forfeiture fund
BA
0
Total Federal funds Legal Activities
BA
0
723,546
676,554
BA
90,182
20,000
4
5,000
A
4,887
A
5,000
4,887
20,000
19,844
833,235
847,985
882,046
879,658
19,731
113
Interagency Law Enforcement
Federal funds
General and Special Funds:
Organized crime drug enforcement
Appropriation, current
Outlays
Total Organized crime drug enforcement
Federal Bureau of Investigation
See footnotes at end of table.
751
0
103,416
BA
0
90,182
103,416
1,500
*635
D
43
79,293
*635
2,178
79,928
13
13
8-128
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Justice—Con.
Federal Bureau of Investigation—Con.
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
751
BA
A
Reappropriation
Outlays
Total Salaries and expenses
1,500
C
342
D
14,928
* -3,505
4
10,000
1,144,962
A
-8,504
"-3,505
BA
0
915,549
BA
0
1,063,936
915,549
1,170,388
1,132,953
BA
290,623
329,988
"1,185,664
1,166,480
A
8,795
1,185,664
1,175,275
Drug Enforcement Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
751
Outlays
Total Salaries and expenses
Trust funds
Drug abuse prevention and control gift fund
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.
0
281,808
BA
0
290,623
281,808
751
BA
0
* 2,700
* 4,682
"-876
327,923
^ 2,700
"-876
336,494
329,747
K
345,671
338,470
345,671
338,470
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-129
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Justice—Con.
Immigration and Naturalization Service
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
751
BA
510,638
576,417
C
Reappropriation
Outlays
Total Salaries and expenses
* 577,510
86
* 9,475
"-947
A
6,586
582,046
A
-6,586
"-940
573,467
^ 4,500
*-7
577,510
577,960
BA
0
512,563
BA
0
510,638
512,563
591,617
574,520
BA
447,550
503,450
Federal Prison System
Federal funds
General and Special Funds:
Salaries and expenses
753
Appropriation, current
4
Outlays
Total Salaries and expenses
National Institute of Corrections
Appropriation, current
K
546,884
0
434,473
531,601
*247
BA
0
447,550
434,473
513,427
511,980
BA
17,300
14,000
0
11,306
"-894
14,870
"-894
17,842
546,884
531,848
754
Outlays
Total National Institute of Corrections
Buildings and facilities
Appropriation, current
3,083
C
735
D
6,610
"-451
509,595
* 2,836
*-451
K
13,120
BA
17,300
13,106
13,120
0
11,306
13,976
17,842
BA
47,711
86,056
0
52,180
"-13
68,093
*-13
100,156
BA
0
47,711
52,180
86,043
68,080
46,063
100,156
753
* 46,063
Outlays
Total Buildings and facilities
See footnotes at end of table.
8-130
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Justice—Con.
Federal Prison System—Con.
Intragovernmental Funds:
Federal Prison Industries, Incorporated
Outlays
Limitation on administrative expenses..
Limitation on vocational expenses
753
7,828
(1,676)
(5,701)
Trust funds
Commissary funds, Federal prisons (trust revolving
fund)
753
Outlays
Total Federal funds Federal Prison System
(2,074)
(6,994)
(2,070)
(6,920)
-662
BA
0
512,561
505,787
-662
612,576
594,036
606,067
649,846
BA
197,352
139,300
0
124,512
145,551
» -2,031
210,505
A
-4,497
" — 1,931
BA
0
197,352
124,512
143,520
204,077
Total Trust funds Federal Prison System
Office of Justice Programs
Federal funds
General and Special Funds:
Justice assistance
Appropriation, current..
754
Outlays..
Total Justice assistance.
Crime victims fund
Appropriation, current
Appropriation, permanent
Outlays
A
208,151
-6,210
"-100
139,300
201,841
754
Total Crime victims fund-
BA
BA
0
70,000
15,000
100,000
60,000
BA
0
70,000
15.000
100,000
60.000
Public Enterprise Funds:
Revolving fund
Outlays
754
Total Federal funds Office of Justice Programs.... BA
0
Summary
Federal funds:
(As shown in detail above)
See footnotes at end of table.
BA
0
178
31
197,352
124,690
213,520
219,108
239,300
261,841
3,461,181
3,185,013
3,837,243
3,854,622
3,908,916
3,955,316
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-131
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Justice—Con.
Summary—Con.
Trust funds:
(As shown in detail above)
Total Department of Justice
BA
0
BA
2
-662
3,461,183
2
3,837,243
3,908,916
0
3,184,351
3,854,624
3,955,316
82,739
67,625
62,914
0
77,318
H _ i92i
73^551
H
-1,730
64,091
"-174
BA
82,739
65,704
62,914
0
77,318
71,821
63,917
Department of Labor
Employment and Training Administration
Federal funds
General and Special Funds:
Program administration
Appropriation, current
504
BA
Outlays
Total Program administration
Training and employment services
Appropriation, current
504
BA
6,546,225
3,769,545
2,805,521
3,570,030
"-19,090
H
Outlays
Total Training and employment services
0
3,195,897
-255,983
3,651,502
^ — 13,823
BA
6,546,225
3,513,562
2,805,521
0
3,195,897
3,637,679
3,550,940
Community service employment for older Americans
504
Appropriation, current
BA
Outlays
Temporary employment assistance
317,300
326,000
326,000
0
321,348
318,931
326,000
0
-15,229
12,000
33,756
75,000
69,000
10,000
10,000
72,500
23,500
23,600
16,362
50,604
23,225
23,500
50,604
23,600
23,225
504
Outlays
Federal unemployment benefits and allowances
603
Appropriation, current
BA
Outlays
0
State unemployment insurance and employment service operations:
(Training and employment)
504
(Appropriation, current)
BA
(Outlays)
(Unemployment compensation)
(Outlays)
0
603
0
Total State unemployment insurance and employment service operations
BA
0
See footnotes at end of table.
4,162
72,500
20,524
8-132
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1985
estimate
1984
Account and functional code
1986
estimate
Department of Labor—Con.
Employment and Training Administration—
Con.
Advances to the unemployment trust fund and other
funds:
(General retirement and disability insurance
601
(Appropriation, current)
BA
731,339
(Outlays).
346,063
365,490
365,000
-235,000
L
20,000
365,000
J
-235,000
L
20,000
Total (General retirement and disability insurance
BA
0
731,339
346,063
365,490
150,000
150,000
BA
0
6,377,661
3,836,300
1,310,000
80,000
Total Advances to the unemployment trust fund
and other funds
BA
0
7,109,000
4,182,363
1,675,490
230,000
230,000
10
7
10
14
-41,048
962,900
963,837
A
-13,298
(122,172)
'(-119)
D
(143)
917,674
934,698
'-27,750
(124,070)
921,852
950,539
917,674
906,948
J
(Unemployment compensation)
(Appropriation, current)
(Outlays)
603
Intragovernmental Funds:
Advances to the Employment Security Administration
account of the Unemployment trust fund 603
Outlays
0
Trust funds
Gifts and bequests
Appropriation, permanent, indefinite
Outlays
Unemployment trust fund:
(Training and employment)
(Appropriation, current)
(Appropriation, permanent, indefinite)
(Outlays)
-120,925
504
BA
0
73
504
BA
BA
0
A
1,398,685
782,275
(Veterans employment and training)
Total (Training and employment)
See footnotes at end of table.
BA
0
1,398,685
782,275
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-133
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Labor—Con.
Employment and Training Administration—
Con.
(Unemployment compensation)
(Appropriation, current)
603
BA
(Appropriation, permanent, indefinite)
(Outlays)
BA
0
(Limitation on railroad unemployment insurance
administration fund)
^ 41,048
' 146,000
26,082,326
21,165,302
'67,000
28,493,643
25,306,489
27,337,100
21,836,163
(13,912)
(16,678)
^ (—502)
(9,205)
Total (Unemployment compensation)
BA
0
28,493,643
25,306,489
27,378,148
21,836,163
26,228,326
21,232,302
Total Unemployment trust fund
BA
0
29,892,328
26,088,764
28,300,000
22,786,702
27,146,000
22,139,250
Total Federal funds Employment and Training
Administration
BA
0
14,139,764
7,695,052
4,003,766
5,823,525
3,458,035
4,204,082
Total Trust funds Employment and Training Administration
BA
0
29,892,328
26,088,837
28,300,010
22,786,709
27,146,010
22,139,264
BA
62,136
56,002
0
55,664
60,211
*526
»-1,678
63,129
"-1,678
BA
0
62,136
55,664
59,059
61,451
56,002
57,007
-9,921
-12,136
"-228
'-145,105
(33,057)
^ (—228)
^ (244)
9,037
'-183,523
(32,346)
-157,469
-174,486
Labor-Management Services
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
505
Outlays
Total Salaries and expenses
57,007
Pension Benefit Guaranty Corporation
Federal funds
Public Enterprise Funds:
Pension Benefit Guaranty Corporation fund
Outlays
601
0
Limitation on administration
Total Pension Benefit Guaranty Corporation fund. 0
See footnotes at end of table.
-9,921
8-134
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Labor—Con.
Employment Standards Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
505
BA
Outlays
188,483
0
172,844
.
Total Salaries and expenses
BA
0
188,483
172,844
192,582
D
1,819
H
-2,235
192,405
u
-2,235
180,757
192,166
190,170
180,757
180,850
4,400
4,400
4,500
4,500
180,850
Special benefits:
(General retirement and disability insurance
601
(Appropriation, current)
(Outlays)
(Federal employee retirement and disability)
BA
0
4,100
4,100
602
(Appropriation, current)
BA
216,000
207,000
(Outlays)
0
218,694
207,000
216,000
218,694
207,000
207,000
233,000
233,000
BA
0
220,100
222,794
211,400
211,400
237,500
237,500
BA
861,785
941,781
D
176
963,244
Total (Federal employee retirement and disability)
BA
0
Total Special benefits
Trust funds
Black lung disability trust fund
Appropriation, current
_
Indefinite
Outlays
Total Black lung disability trust fund
See footnotes at end of table.
J
255,000
-22,000
J
255,000
-22,000
601
BA
0
576
865,267
756
943,640
BA
0
862,361
865,267
942,713
943,640
'-12,000
L
20,000
756
964,000
'-12,000
* 20,000
972,000
972,000
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-135
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Labor—Con.
Employment Standards Administration—Con.
Special workers' compensation expenses'
601
Appropriation, permanent indefinite
BA
Outlays
0
Total Federal funds Employment Standards Administration
BA
0
48,429
44,161
58,000
53,000
68,000
63,000
408,583
395,638
403,566
401,570
418,257
418,350
Total Trust funds Employment Standards Administration
BA
0
910,790
909,428
1,000,713
996,640
1,040,000
1,035,000
219,652
D
1,176
-1,694
222,001
H
-1,694
213,059
Occupational Safety and Health
Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
554
BA
212,560
H
Outlays
,
Total Salaries and expenses
0
207,225
213,857
BA
0
212,560
207,225
219,134
220,307
213,059
213,857
BA
151,397
144,767
0
150,223
150,550
D
1,435
^ —1,776
152,764
H
-1,776
BA
0
151,397
150,223
150,209
150,988
144,767
145,483
BA
137,337
148,294
0
131,778
152,860
D
932
« -5,765
155,562
» -5,765
BA
0
137,337
131,778
Mine Safety and Health Administration
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
554
,
Total Salaries and expenses
145,483
Bureau of Labor Statistics
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Total Salaries and expenses
See footnotes at end of table.
505
148,027
149,797
149,437
148,294
149,437
8-136
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Labor—Con.
Departmental Management
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
505
BA
Outlays
Total Salaries and expenses
Office of the Inspector General
Appropriation, current
102,330
D
1,070
"-728
107,258
"-728
93,608
1,079
K
0
84,557
96,153
BA
0
95,559
84,557
102,672
106,530
94,687
96,153
BA
38,000
33,554
0
36,370
39,323
»288
" -3,766
38,886
"-2,410
35,728
"-1,356
BA
0
38,000
36,370
35,845
36,476
33,554
34,372
505
Outlays
Total Office of the Inspector General
Special foreign currency program
Appropriation, current
95,559
505
Outlays
Total Special foreign currency program
BA
67
0
72
BA
0
67
72
67
"-20
67
"-20
47
47
47
47
47
47
Intragovernmental Funds:
Working capital fund
Outlays
505
0
Total Federal funds Departmental Management... BA
0
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
Total Federal funds
Trust funds:
(As shown in detail above)
See footnotes at end of table.
-678
133,626
120,321
138,564
143,053
128,288
130,572
15,245,403
8,745,980
5,122,325
6,793,222
4,566,702
5,144,302
BA
0
14,922,810
8,423,387
4,763,325
6,434,222
4,193,702
4,771,302
BA
0
30,803,118
26,998,265
29,300,723
23,783,349
28,186,010
23,174,264
BA
0
908 BA
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-137
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Labor—Con.
Summary—Con.
Deductions for offsetting receipts.Proprietary receipts from the public
908 BA
0
BA
0
Total Trust funds
601 BA
0
BA
0
603 BA
0
Interfund transactions
Total Department of Labor
BA
0
-450
-300
-300
30,802,668
26,997,815
29,300,423
23,783,049
28,185,710
23,173,964
-346,063
-365,490
-365,000
•"215,000
-10,553,202
-6,387,000
-4,977,000
34,826,213
24,521,937
27,311,258
23,464,781
27,252,412
22,818,266
Departmenib of State
Administration of Foreign Affairs
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
153
BA
K
1,475,103
* 87,121
"-2,432
Reappropriation
Outlays
Total Salaries and expenses
Representation allowances
Appropriation, current....
BA
0
3,500
1,031,448
BA
0
1,457,158
A
47,664
1,145,572
1,031,448
1,432,719
1,266,001
1,475,103
1,504,822
4,148
4,500
3,950
4,110
H700
4,672
4,148
3,950
4,500
4,110
4,700
4,672
153
Outlays..
Total Representation allowances
Protection of foreign missions and officials
Appropriation, current
1,242,755
^ 25,678
"-2,432
BA
0
153
BA
9,500
0
7,695
*9,900
9,824
Total Protection of foreign missions and officials BA
0
9,500
7,695
9,900
9,824
Outlays..
See footnotes at end of table.
8-138
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
1986
Department of State—Con.
Administration of Foreign Affairs—Con.
Acquisition, operation, and maintenance of buildings
abroad
153
Appropriation, current
BA
207,140
239,000
A
6A
0
Outlays..
3,000
186,159
Total Acquisition, operation, and maintenance of
buildings abroad
BA
0
210,140
186,159
Acquisition, operation, and maintenance of buildings
abroad (special foreign currency program)
153
Appropriation, current
BA
10,012
* 337,392
167,579
205,510
* 25,000
A
406,579
230,510
337,392
276,693
236,693
40,000
19,353
*2,707
A
11,348
2,000
14,911
^700
13,760
H300
Total Acquisition, operation, and maintenance of
buildings abroad (special foreign currency
program)
BA
0
10,012
11,348
21,353
15,611
2,707
15,060
Emergencies in the diplomatic and consular service
153
Appropriation, current
BA
4,356
5,000
Outlays..
* 4,400
A
Outlays..
Total Emergencies in the diplomatic and consular service
BA
0
Buying power maintenance
Appropriation, current
Payment to the American Institute in Taiwan
Appropriation, current
3,922
4,000
2,707
H000
5,000
1,000
4,356
3,922
9,000
3,707
4,400
6,000
153
BA
4,815
BA
9,380
9,800
0
10,127
9,690
10,000
9,948
BA
0
9,380
10,127
9,800
9,690
10,000
9,948
153
Outlays..
Total Payment to the American Institute in
Taiwan
See footnotes at end of table.
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-139
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of State—Con.
Administration of Foreign Affairs—Con.
Payment to the Foreign Service retirement and disability fund
153
Appropriation, current
BA
Appropriation, permanent, indefinite
Outlays
BA
0
Total Payment to the Foreign Service retirement
and disability fund
BA
0
109,190
227,900
337,090
337,090
337,090
106,738
* 5,399
230,000
336,738
^ 5,399
342,137
342,137
118,174
J
-99,440
233,000
351,174
J
-99,440
251,734
251,734
Intragovernmental Funds:
Working capital fund
Outlays
Trust funds
Foreign Service retirement and disability fund
Appropriation, current
Indefinite
Appropriation, permanent, indefinite
Outlays
153
0
235
602
A
BA
BA
BA
0
634,826
211,504
658,879
212,483
' -112,100
697,091
253,659
J
-9,900
Total Foreign Service retirement and disability
fund
BA
0
634,826
211,504
665,580
212,483
584,991
243,759
BA
0
3,768
3,877
4,000
3,900
4,000
4,000
Total Federal funds Administration of Foreign
Affairs
BA
0
1,725,513
1,584,279
2,235,588
1,879,461
2,095,936
2,078,753
Total Trust funds Administration of Foreign Affairs
BA
0
638,594
215,381
669,580
216,383
588,991
247,759
515,792
501,667
0
517,121
*-13,779
505,743
*-13,779
493,191
BA
0
515,792
517,121
487,888
491,964
495,235
493,191
Miscellaneous trust funds
Appropriation, permanent, indefinite
Outlays
6,701
153
International Organizations and Conferences
Federal funds
General and Special Funds:
Contributions to international organizations
Appropriation, current
153
BA
*495,235
Outlays
Total Contributions to international organizations
See footnotes at end of table.
8-140
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of State—Con.
International Organizations and
Conferences—Con.
Contributions for international peacekeeping activities
153
BA
Appropriation, current
0
Outlays
Total Contributions for international peacekeepBA
ing activities
0
Missions to international organizations
Outlays
International conferences and contingencies
Appropriation, current
47,400
53,446
47,400
*51,000
51,000
55,400
53,446
47,400
47,400
51,000
51,000
153
0
-170
BA
8,910
9,600
0
9,924
9,310
* 7,339
7,118
8,910
9,924
9,600
9,310
7,339
7,118
544,888
548,674
553,574
551,309
153
Outlays
Total International conferences and contingenBA
cies
0
International trade negotiations
Outlays
55,400
153
Trust funds
Gifts and bequests, National Commission on Educational, Scientific, and Cultural Cooperation
153
Outlays
0
Total Federal funds International Organizations
BA
and Conferences
1
0
580,102
580,322
Total Trust funds International Organizations and
0
Conferences
1
International Commissions
Federal funds
General and Special Funds:
International Boundary and Water Commission, United
States and Mexico:
Salaries and expenses
301
Appropriation, current
BA
Outlays
Total Salaries and expenses
See footnotes at end of table.
0
BA
0
10,776
11,600
9,805
11,368
10,776
9,805
11,600
11,368
* 10,066
10,240
10,066
10,240
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-141
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of State—Con.
International Commissions—Con.
Construction
Appropriation, current
301
BA
Outlays
0
Total Construction
American sections, international commissions
Appropriation, current
BA
2,400
1,353
2,125
672
* 2,557
2,170
2,400
2,557
0
1,353
2,125
2,170
BA
3,464
3,685
0
3,055
3,677
*3,755
3,746
3,464
3,055
3,685
3,677
3,755
3,746
BA
8,876
9,100
0
8,802
9,100
BA
8,876
9,100
9,900
0
8,802
9,100
9,900
301
Outlays
Total American sections, international commissions
BA
0
International fisheries commissions
Appropriation, current
672
302
Outlays
Total International fisheries commissions
Total Federal funds International Commissions
* 9,900
9,900
BA
23,788
26,785
26,278
0
23,015
26,270
26,056
BA
335,650
325,500
0
335,722
329,022
BA
335,650
325,500
337,680
0
335,722
329,022
334,168
25,000
24,945
5,000
Other
Federal funds
General and Special Funds:
Migration and refugee assistance
Appropriation, current
Outlays
Total Migration and refugee assistance
151
United States emergency refugee and migration assistance fund
151
Appropriation, current
BA
Outlays
0
International narcotics control
151
Appropriation, current
BA
Outlays
Total International narcotics control
See footnotes at end of table.
A
349
*337,680
334,168
41,200
50,217
0
33,257
43,874
BA
41,200
50,217
57,529
0
33,257
43,874
49,621
K
57,529
49,621
8-142
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of State—Con.
Other—Con.
Anti-terrorism assistance
Appropriation, current..
152
BA
2,500
5,000
0
246
4,500
5,000
4,500
BA
0
2,500
246
5,000
4,500
5,000
4,500
Appropriation, current
BA
1,683
Outlays
0
1,683
2,000
H000
4,000
BA
0
1,683
1,683
2,000
4,000
4,000
K
Outlays
Total Anti-terrorism assistance..
U.S. bilateral science and technology agreements
153
Total U.S. bilateral science and technology
Compact of free association
Appropriation, currents
„...
Appropriation, permanent, indefinite..
Outlays
151
BA
0
Total Compact of free association..
Soviet-East European research and training
Appropriation, current
K
BA
BA
0
299,270
299,270
153
Outlays..
BA
4,800
0
4,800
* 5,000
5,000
4,800
4,800
5,000
5,000
Total Soviet-East European research and training
BA
0
Payment to the Asia Foundation
Appropriation, current
Outlays
Total Payment to the Asia Foundation..
153
BA
9,900
9,600
0
9,601
9,600
*9,785
9,785
BA
0
9.90Q
9,601
9,600
9,600
9,785
9,785
4,420
4,424
945
1,455
refugees from Cambodia and
Special assistance
609
Vietnam
Outlays
International Center, Washington, D.C.
153
Appropriation, permanent, indefinite
BA
Outlays
0
Fishermen's protective fund
376
Outlays
Total Federal funds Other.,
See footnotes at end of table.
178,750
120,520
299,270
BA
0
2
2,240
1,446
61
393,173
382,306
424,537
423,226
719,209
712,799
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-143
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
1985
estimate
1986
estimate
2,722,576
2,569,922
3,231,798
2,877,631
3,394,997
3,368,917
-2,240
-4,420
-945
BA
0
2,720,336
2,567,682
3,227,378
2,873,211
3,394,052
3,367,972
BA
0
638,594
215,382
669,580
216,390
588,991
247,759
-2,301
-2,500
-2,500
636,293
213,081
667,080
213,890
586,491
245,259
-377,710
-384,001
-394,296
Account and functional code
Department of State—Con.
Summary
Federal funds:
(As shown in detail above)
BA
0
Deductions for offsetting receipts:
Proprietary receipts from the public
153 BA
0
Total Federal funds
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
602 BA
0
BA
0
Total Trust funds
153 BA
0
BA
0
803 BA
0
Interfund transactions
BA
0
Total Department of State
J
107,000
-41
-41
-41
2,978,878
2,403,012
3,510,416
2,703,059
3,693,206
3,325,894
Department 1 OfTransportation
Federal Highway Administration
Federal funds
General and Special Funds:
Motor carrier safety
Appropriation, current
401
Outlays
Total Motor carrier safety
BA
13,020
14,066
"-164
13,639
0
12,799
14,218
« —156
•^ -13,639
12,690
"-8
'-12,690
BA
0
13,020
12,799
13,902
14,062
-8
BA
0
1,750
350
560
BA
0
12,000
2,400
3,840
Auto pedestrian separation demonstration project
401
Appropriation, current
Outlays
Highway safety separation demonstration project
401
Appropriation, current
Outlays
See footnotes at end of table.
8-144
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
Department of Transportation—Con.
Federal Highway Administration—Con.
Railroad-highway crossings demonstration projects
401
Appropriation, current
Outlays
„
Access highways to public recreation areas on certain
lakes
401
Appropriation, current
Outlays
Waste isolation pilot project
401
Appropriation, current
Outlays
Miscellaneous appropriations
401
Appropriation, current
Outlays
Trust funds
Federal-aid highways (trust fund)
Contract authority, current
5,000
7,169
5,000
5,023
5,938
BA
0
4,270
13,619
5,000
8,003
7,988
BA
0
5,800
32
16,400
5,587
6,978
BA
0
1,000
284,791
218,915
181,713
BA
150,000
BA
13,635,387
(11,600,000)
10,226,764
(201,700)
(12,520,000)
14,838,423
(12,800,000)
12,791,000
(204,452)
(13,250,000)
'-100,000
15,311,096
(13,836,000)
13,457,000
(189,805)
(13,250,000)
13,785,387
10,226,764
14,838,423
12,791,000
15,211,096
13,457,000
9,802
(9,738)
10,000
(5,000)
12,169
10,530
(10,000)
(10,000)
BA
0
9,802
12,169
10,000
10,530
BA
0
10,000
10,259
10,000 ..
12,301
BA
8,500
8,500
8,422
9,214
8,500
' -5,000
6,785
'-4,003
8,500
8,422
8,500
9,214
3,500
2,782
401
Contract authority, permanent
Liquidation of contract authority, current
Outlays
Limitation on general operating expenses
Limitation on program level (obligations)
0
Total Federal-aid highways (trust fund)
Highway-related safety grants
Contract authority, current
Contract authority, permanent
Liquidation of contract authority, current
BA
0
BA
0
401
BA
BA
Outlays
0
Limitation on program level (obligations)
Total Highway-related safety grants
Trust fund share of other highway programs
Appropriation, current
Outlays
Highway safety research and development
Appropriation, current
401
401
Outlays..
Total Highway safety research and development. BA
0
See footnotes at end of table.
'-10,000
10,000
(9,000)
' (9,000)
11,544
'-11,544
(10,000)
13,549
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-145
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Transportation—Con.
Federal Highway Administration—Con.
Motor carrier safety grants
Appropriation, current
401
BA
14,000
-14,000
14,000
J
-14,000
8,000
14,000
0
1,671
18,842
BA
0
8,000
1,671
14,000
18,842
BA
0
114
2,750
950
8,820
(846)
9,130
8,655
0
6,800
(113)
7,414
0
1,433
3,848
3,126
0
-17,803
(30,000)
(50,000)
(50,000)
Total Federal funds Federal Highway Administration
BA
0
29,090
318,410
54,052
254,340
207,009
Total Trust funds Federal Highway Administration
BA
0
13,828,489
10,250,443
14,892,493
12,855,815
15,223,251
13,486,512
56,316
58,519
G
367
"-767
54,717
56,450
59,294
* 2,800
« —461
'3,040
60,906
'3,200
"-306
'3,040
56,316
56,450
58,119
61,633
57,757
66,840
Outlays..
Total Motor carrier safety grants
Intermodal urban demonstration project
401
Appropriation, current
Outlays
Miscellaneous trust funds
151
Appropriation, permanent
Liquidation of contract authority, permanent
Outlays
Miscellaneous trust funds-Highway
401
Outlays
Right-of-way revolving fund (trust revolving
fund)
401
Outlays
Limitation on direct loan obligations
BA
J
1,180
8,875
National Highway Traffic Safety
Administration
Federal funds
General and Special Funds:
Operations and research
Appropriation, current
401
BA
Outlays-
Total Operations and research
Motor carrier safety, NHTSA
Appropriation, current
Outlays
Miscellaneous safety programs
Outlays
See footnotes at end of table.
BA
0
401
J
BA
0
J
13,639
12,690
401
0
1,501
5,000
2,000
8-146
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Transportation—Con.
National Highway Traffic Safety
Administration—Con.
Trust funds
Trust fund share of operations and research
Appropriation, current
401
Outlays
BA
21,984
23,831
"-408
0
22,647
24,970
"_246
'5,000
23,413
"-162
J
4,003
21,984
22,647
23,423
24,724
30,455
27,254
148,100
(118,000)
176,500
(125,000)
117,395
127,400
*_50
(142,950)
(151,300)
' 10,000
132,000
(149,000)
' (9,000)
155,248
"_200
J
11,544
(155,300)
148,100
117,395
176,500
127,350
142,000
166,592
Total Trust fund share of operations and research
BA
0
Highway traffic safety grants
Contract authority, current
Contract authority, permanent
Liquidation of contract authority, current
401
BA
BA
Outlays
0
Limitation on program level (obligations)
Total Highway traffic safety grants
Motor carrier safety grants
Appropriation, current
Outlays
25,455
BA
0
401
J
BA
0
14,000
'14,000
Total Federal funds National Highway Traffic
Safety Administration
BA
0
56,316
57,951
58,119
66,633
71,396
81,530
Total Trust funds National Highway Traffic
Safety Administration
BA
0
170,084
140,042
199,923
152,074
186,455
207,846
BA
11,680
10,287
0
11,612
10,700
"-100
13,032
"-100
BA
0
11,680
11,612
10,600
12,932
10,287
10,587
Federal Railroad Administration
Federal funds
General and Special Funds:
Office of the Administrator
Appropriation, current
Outlays
Total Office of the Administrator
See footnotes at end of table.
401
10,587
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-147
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1986
estimate
1985
estimate
Department of Transportation—Con.
Federal Railroad Administration—Con.
Railroad research and development
Appropriation, current
401
BA
15,525
"-170
18,350
"-170
10,384
16,225
14,730
15,355
18,180
10,384
17,909
BA
25,191
23,200
^ 8,651
"-90
5,686
BA
0
60,782
98,360
60,000
8,651
"-90
35,747
Outlays..
14,730
Total Railroad research and development
Rail service assistance
Appropriation, current
BA
0
A
Total Rail service assistance
BA
0
85,973
98,360
31,761
68,561
5,686
35,747
BA
28,900
26,061
"-140
26,362
"-140
27,267
401
Outlays..
27,660
Total Railroad safety..
Conrail labor protection
Appropriation, current
Outlays
Commuter rail service
Outlays
Settlements of railroad litigation
Appropriation, current
BA
0
28,900
27,660
25,921
26,222
27,267
29,593
BA
0
61,000
57,806
15,000
45,500
18,302
401
0
BA
15,974
BA
0
26,905
42,879
BA
0
42,879
42,879
4
105
432
432
M05
537
537
401
BA
100,000
0
241,134
Total Northeast corridor improvement program.... BA
0
See footnotes at end of table.
92
401
Total Settlements of railroad litigation
Outlays..
29,593
603
Authority to borrow, current
Outlays
Northeast corridor improvement program
Appropriation, current
17,909
401
Authority to borrow, current..
Outlays
Railroad safety
Appropriation, current
16,225
100,000
241,134
27,800
"-200
240,000
"-200
27,600
239,800
115,000
115,000
8-148
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Transportation—Con.
Federal Railroad Administration—Con.
Grants to National Railroad Passenger Corporation
401
Appropriation, current
Authority to borrow, current
Outlays
BA
BA
0
818,598
1,119,635
1,957,069
"691904
200,000
Total Grants to National Railroad Passenger Corporation
BA
0
1^38,233
1,957,069
684,000
691,904
200,000
6,215
2,480
64
45,424
40,220
Total Railroad rehabilitation and improvement
BA
financing funds
0
64
45,424
40,220
11,145
Total Federal funds Federal Railroad AdministraBA
tion
0
2,284,954
2,502,889
810,774
1,146,428
53,624
438,283
BA
29,200
26,810
0
32,515
31,000
"-265
31,425
« —239
26,827
"-26
BA
0
29,200
32,515
30,735
31,186
26,810
26,801
BA
0
54,800
46,784
51,000
49,794
36,669
BA
0
295,400
591,090
250,000
472,876
367,594
BA
0
250,000
63,511
250,000
130,900
250,000
183,101
BA
2.388.592
1,394,950
2.449.500 ..
1,648,387
1,074,211
1,416,745
1,472,924
684,000
Public Enterprise Funds:
Alaska Railroad revolving fund
401
Outlays
Railroad rehabilitation and improvement financing
funds
401
Appropriation, current
Outlays
A
18,345
-7,200
Urban Mass Transportation Administration
Federal funds
General and Special Funds:
Administrative expenses
Appropriation, current
401
Outlays..
Total Administrative expenses..
Research, training, and human resources
Appropriation, current
Outlays
Interstate transfer grants-transit
Appropriation, current
Outlays
Washington metro
Appropriation, current
Outlays
Formula grants
Appropriation, current
Outlays
Miscellaneous expired accounts
Outlays
See footnotes at end of table.
401
401
401
401
401
922,819
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-149
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Transportation—Con.
Urban Mass Transportation Administration—
Con.
Trust funds
Formula capital grants
401
Contract authority, current
Liquidation of contract authority, current „
Outlays
„
Discretionary grants
401
Contract authority, permanent
Liquidation of contract authority, permanent
Outlays
Limitation on program level (obligations)
BA
„
1,100,000
(55,000)
55,000
0
BA
1,250,000
(242,000)
233,196
(1,225,000)
1,100,000
(450,000)
359,188
(1,120,000)
(720,000)
612,124
Total Federal funds Urban Mass Transportation
Administration
BA
0
3,017,992
3,545,595
3,031,235
3,806,067
276,810
2,611,195
Total Trust funds Urban Mass Transportation
Administration
BA
0
1,250,000
233,196
1,100,000
359,188
1,100,000
667,124
BA
2,530,000
664,800
0
2,313,363
1,512,600
"-18,888
1,556,056
"-17,000
693,600
" -1,888
BA
0
2,530,000
2,313,363
1,493,712
1,539,056
664,800
691,712
BA
56,900
16,357
0
50,177
66,900
"-1,065
66,633
"-1,044
15,455
"-21
BA
0
56,900
50,177
65,835
65,589
16,357
15,434
10,455
5,753
2,523
34,557
35,932
"-17
35,376
"-17
35,400
0
Federal Aviation Administration
Federal funds
General and Special Funds:
Operations
Appropriation, current
402
Outlays
Total Operations
Headquarters administration
Appropriation, current
Outlays
Total Headquarters administration
402
Facilities, engineering and development
402
Outlays
0
Operation and maintenance, Metropolitan Washington
Airports
402
Appropriation, current
BA
Outlays
0
Total Operation and maintenance, Metropolitan
Washington Airports
BA
0
See footnotes at end of table.
33,459
34,557
33,459
35,915
35,359
35,215
35,400
35,215
8-150
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account snd functional code
1985
estimate
1986
estimate
Department of Transportation—Con.
Federal Aviation Administration—Con.
Construction, Metropolitan Washington Airports
402
Appropriation, current
Outlays
Aircraft purchase loan guarantee program
Appropriation, current
Outlays
Public Enterprise Funds:
Aviation insurance revolving fund
Outlays
BA
0
14,250
18,042
BA
0
8,720
31,543
13,000
20,000
402
667
402
0
Trust funds
Grants-in-aid for airports (Airport and airway trust
fund)
402
Contract authority, permanent
BA
Liquidation of contract authority, current
Outlays
0
Limitation on program level (obligations)
Facilities and equipment (Airport and airway trust
fund)
402
Appropriation, current
BA
Outlays
13,000
22,684
0
-3,286
-3,096
-3,414
993,500
(745,000)
693,898
(800,000)
987,000
(810,000)
760,000
(925,000)
1,017,000
(693,000)
775,000
(1,017,000)
750,000
1,370,000
»-10,000
500,000
H
-2,900
1,146,500
267,686
H
845,000
-3,900
Total Facilities and equipment (Airport and
airway trust fund)
BA
0
750,000
267,686
1,360,000
497,100
1,146,500
841,100
Research, engineering and development (Airport and
airway trust fund)
402
Appropriation, current
BA
Outlays
O
Trust fund share of FAA operations
402
Appropriation, current
BA
263,452
146,219
265,000
300,000
196,500
196,100
0
256,973
1,110,000
840,760
1,202,711
2,043,471
BA
0
256,973
1,110,000
1,110,000
2,043,471
2,043,471
Total Federal funds Federal Aviation Administration
BA
0
2,644,427
2,453,753
1,608,462
1,666,012
729,557
761,470
Total Trust funds Federal Aviation Administration BA
0
2,006,952
1,364,776
3,722,000
2,667,100
4,403,471
3,855,671
Outlays
Total Trust fund share of FAA operations
See footnotes at end of table.
1,110,000
K
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-151
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Transportation—Con.
Coast Guard
Federal funds
General and Special Funds:
Operating expenses
Appropriation, current
403
BA
1,690,542
1,750,297
-14,724
1,718,400
*-14,724
1,735,573
1,703,676
1,767,101
346,500
"-500
525,000
*-500
303,058
669,000
467,989
346,000
524,500
303,058
450,000
8,600
5,200
8,400
10,000
B
5,000
5,200
H
Outlays
Total Operating expenses
Acquisition, construction, and improvements
Appropriation, current
0
1,657,500
BA
0
1,690,542
1,657,500
BA
669,000
0
467,989
Total Acquisition, construction, and improvements
BA
0
BA
Total Alteration of bridges
Total Retired pay
Outlays
Total Reserve training
See footnotes at end of table.
B
0
14,750
BA
0
8,600
14,750
13,600
15,000
5,200
6,800
BA
315,200
330,800
0
310,728
299,800
351,800
-11,300
350,800
'-11,300
BA
0
315,200
310,728
330,800
299,800
340,500
339,500
BA
55,355
58,833
27,359
*34,143
B
3,400
3,400
403
Outlays
Reserve training
Appropriation, current
450,000
403
Outlays
Retired pay
Appropriation, current
1,767,101
1,735,416
403
Outlays
Alteration of bridges
Appropriation, current
1,735,416
J
403
0
54,811
BA
0
55,355
54,811
G
1,468
*-441
60,301
*-441
59,860
59,860
61,502
61,502
61,502
8-152
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
19
Department of Transportation—Con.
Coast Guard—Con.
Research, development, test, and evaluation
Appropriation, current
403
BA
22,500
23,000
23,000
"-135
Outlays
0
19,811
23,000
23,000
"-135
Total Research, development, test, and evaluation
BA
0
Pollution fund
Appropriation, permanent, indefinite
Outlays
Offshore oil pollution compensation fund
Appropriation, current
Outlays
Deepwater port liability fund
Appropriation, current
Outlays
22,500
22,865
23,000
19,811
22,865
23,000
4,793
2,543
7,000
7,000
7,000
7,000
304
BA
0
304
BA
0
86
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
304
BA
0
1,000
0
-969
Intragovernmental Funds:
Coast Guard supply fund
Outlays
Coast Guard yard fund
Outlays
Trust funds
Boat safety
Appropriation, current
Outlays
Limitation on program level (obligations)
Coast Guard general gift fund
Appropriation, permanent, indefinite
Outlays
Miscellaneous trust revolving funds
Outlays
403
99
403
0
-9,302
5,000
5,015
12,500
10,730
(12,500)
13,625
13,750
(13,750)
28,625
28,625
403
BA
0
403
BA
0
18
2
80
50
80
50
0
26
25
25
403
Total Federal funds Coast Guard
Total Trust funds Coast Guard
BA
2,766,990
2,517,698
2,509,361
0
2,517,947
2,639,701
2,630,332
BA
12,518
13,705
28,705
0
10,758
13,825
28,700
0
13,695
9,585
361,634
(361,634)
329,200
(329,200)
384,260
344,200
Maritime Administration
Federal funds
General and Special Funds:
Ship construction
Outlays
Operating-differential subsidies
Contract authority, permanent, indefinite
Liquidation of contract authority, current
Outlays
See footnotes at end of table.
403
403
BA
0
299,500
K
(299,500)
310,174
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-153
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
dctusl
Account snd functions! code
1985
estimate
1986
estimate
Department of Transportation—Con.
Maritime Administration—Con.
Research and development
Appropriation, current
403
BA
11,385
2,900
0
10,005
12,200
*9,900
11,300
BA
0
11,385
10,005
2,900
12,200
9,900
11,300
BA
84,283
77,467
0
76,384
"-888
89,478
"-888
69,574
BA
0
84,283
76,384
76,579
88,590
59,312
69,574
0
23,351
85,369
3,900
'-13,500
0
23,351
85,369
-9,600
0
-616
0
-697
-950
-950
BA
0
185
317
385
385
385
385
BA
0
4
8
15
15
15
15
Total Federal funds Maritime Administration
BA
0
457,302
506,382
Total Trust funds Maritime Administration
BA
0
Outlays
Total Research and development
Operations and training
Appropriation, current
403
* 59,312
Outlays
Total Operations and training
Public Enterprise Funds:
Federal ship financing fund
Outlays
403
Total Federal ship financing fund
Vessel operations revolving fund
Outlays
War risk insurance revolving fund
Outlays
Trust funds
Special studies, services and projects
Appropriation, permanent, indefinite
Outlays
Gifts and bequests
Appropriation, permanent, indefinite
Outlays
403
403
403
403
189
325
408,679
538,994
368,712
380,498
400
400
400
400
-311
(1,842)
200
(1,890)
Saint Lawrence Seaway Development
Corporation
Federal funds
Public Enterprise Funds:
Saint Lawrence Seaway Development Corporation
403
Outlays
Limitation on administrative expenses
See footnotes at end of table.
0
-2,548
(1,800)
8-154
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Transportation—Con.
Office of the Inspector General
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
407
Outlays
Total Salaries and expenses
BA
26,795
27,900
-300
27,939
"-300
26,951
0
21,574
BA
0
26,795
21,574
27,600
27,639
26,951
27,089
BA
20,200
18,900
0
21,121
^850
19,400
19,053
BA
0
20,200
21,121
19,750
20,100
19,073
19,203
20,200
8,233
19,750
20,100
19,073
19,203
50,000
G
875
48,200
"-435
50,695
50,875
47,765
50,695
53,000
H
27,089
Research and Special Programs
Administration
Federal funds
General and Special Funds:
Research and special programs
Appropriation, current
407
Outlays
Total Research and special programs
10,073
9,000
K
Intragovernmental Funds:
Working capital
Center
Outlays
fund, Transportation
Systems
407
0
Total Federal funds Research and Special Programs Administration
BA
0
-12,888
Office of the Secretary
Federal funds
General and Special Funds:
Salaries and expenses
407
Appropriation, current
BA
41,275
Outlays
0
36,663
BA
0
41,275
36,663
Total Salaries and expenses
See footnotes at end of table.
53,000
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-155
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
1985
Account and functional code
estimate
Department of Transportation—Con.
Office of the Secretary—Con.
Payments to air carriers, DOT
Appropriation, current
402
BA
46,286
52,000
F
-2,710
(3,744)
40,920
53,009
BA
0
46,286
40,920
48,440
52,159
Transportation planning, research, and development
407
BA
Appropriation, current
4,878
5,700
"-65
5,760
"-65
5,458
5,635
5,695
5,458
6,100
Liquidation of contract authority, current..
Outlays
-.
Total Payments to air carriers, DOT..
0
Outlays..
Total Transportation planning, research, and deBA
velopment
0
4,995
4,878
4,995
Transportation research activities overseas (special
foreign currency program)
407
Outlays
6,100
19
Intragovemmental Funds:
Working capital fund
Outlays
Trust funds
Gifts and bequests
Appropriation, permanent, indefinite
407
-7,754
-162
407
BA
26
Total Federal funds Office of the Secretary
BA
0
92,439
74,824
Total Trust funds Office of the Secretary
BA
26
BA
0
„
104,950
105,476
56,153
59,100
11,396,505
12,005,010
8,641,319
10,271,079
4,111,637
7,215,909
-5,318
-5,700
-7,500
-16
-6,000
-6,000
-51,718
-52,917
-58,017
-6J58
-10,742
-11,883
Summary
Federal funds:
(As shown in detail above)
Deductions for offsetting receipts:
Intrafund transactions
Proprietary receipts from the public
See footnotes at end of table.
908 BA
0
304 BA
0
402 BA
O
403 BA
0
8-156
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of Transportation—Con.
Summary—Con.
QA
Total Federal funds
Trust funds:
(As shown in detail above)
Deductions for offsetting receipts:
Proprietary receipts from the public
J
-2,542
J
-236,317
BA
11,333,295
8,563,418
3,791,920
0
11,941,800
10,193,178
6,896,192
BA
0
17,268,258
11,999,540
19,928,521
16,048,402
20,942,282
18,246,253
_S43
151 BA
401
JA
_*/
_*,
403
jjA
-185
-385
Total Trust funds
BA
0
BA
0
Total Department of Transportation
17,261,180
11,992,462
28,594,475
23,934,262
-385
19,918,481
16,038,362
28,481,899
26,231,540
20,933,254
18,237,225
24,725,174
25,133,417
79,242
C
24
D
633
"-969
77,395
*-891
76,716
Department of the Treasury
Office of the Secretary
Federal funds
General and Special Funds:
Salaries and expenses
803
Appropriation, current
BA
67,152
Outlays
0
66,778
BA
67,152
78,930
76,716
0
66,778
76,504
75,605
37,000
1,107
37,000
Total Salaries and expenses
Presidential election campaign fund
Appropriation, permanent, indefinite
Outlays
Public Enterprise Funds:
Exchange stabilization fund
Outlays
806
BA
0
34,770
117,829
155
0
-246,009
0
-1,408
Intragovernmental Funds:
Working capital fund
Outlays
See footnotes at end of table.
75,683
"-78
803
-280,252
-288,568
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-157
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Treasury—Con.
Office of the Secretary—Con.
Trust funds
Gifts and bequests
Appropriation, current, indefinite
Appropriation, permanent, indefinite
Outlays
803
BA
BA
0
1,000
1,000
2,000
2,000
Total Gifts and bequests
BA
0
1,000
1,000
2,000
2,000
Total Federal funds Office of the Secretary
BA
0
Total Trust funds Office of the Secretary
BA
0
101,922
-62,810
115,930
-202,641
113,716
-212,963
1,000
1,000
2,000
2,000
7,785
Office of Revenue Sharing
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
851
BA
7,278
7,941
D
72
"-90
0
6,565
7,452
"-84
-1,785
7,245
*-6
'-1,750
BA
0
7,278
6,565
7,923
7,368
6,000
5,489
Payments to State and local government fiscal assistance trust fund
851
Appropriation, current
BA
4,566,700
4,566,700
Outlays
Total Salaries and expenses
Outlays
0
Total Payments to State and local government
fiscal assistance trust fund
BA
0
See footnotes at end of table.
4,566,700
4,566,700
4,566,700
J
4,566,700
'-4,566,700
4,566,700
4,566,700
^-4,566,700
4,566,700
4,566,700
8-158
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Treasury—Con.
Office of Revenue Sharing—Con.
Trust funds
State and local government fiscal assistance trust
fund
851
Appropriation, current, indefinite
BA
Appropriation, permanent, indefinite
BA
Outlays
0
4,566,700
4,566,588
4,566,700
4,610,073
Total State and local government fiscal assistance trust fund
BA
0
4,566,700
4,566,588
4,566,700
4,610,073
1,162,075
Total Federal funds Office of Revenue Sharing.... BA
0
4,573,978
4,573,265
4,574,623
4,574,068
6,000
5,489
Total Trust funds Office of Revenue Sharing
BA
0
4,566,700
4,566,588
4,566,700
4,610,073
1,162,075
BA
14,664
17,500
0
14,327
18,314
^102
"-75
17,976
*-75
BA
0
14,664
14,327
18,341
17,901
17,500
17,200
J
-4,566,700
4,566,700
4,576,170
^-3,414,095
Federal Law Enforcement Training Center
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
Outlays
Total Salaries and expenses
751
Construction, Federal Law Enforcement Training
Center
751
Outlays
0
Total Federal funds Federal Law Enforcement
Training Center
BA
0
See footnotes at end of table.
2,562
14,664
16,889
17,200
2,591
18,341
20,492
17,500
17,200
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-159
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Treasury—Con.
Financial Management Service
Federal funds
General and Special Funds:
Salaries and expenses
Appropriation, current
803
BA
Outlays..
223,081
Total Salaries and expenses..
Chrysler Corporation loan guarantee program
Appropriation, current
Outlays
Portfolio liquidation
Appropriation, current
Outlays
HUD public housing interest subsidy payments
Appropriation, current
Outlays
Claims, judgments, and relief acts
Appropriation, permanent, indefinite
Outlays
Advances to the railroad retirement account
Appropriation, permanent, indefinite
Outlays
Interest on uninvested funds
Appropriation, current, indefinite
Appropriation, permanent, indefinite
Outlays
See footnotes at end of table.
BA
0
239,995
223,081
BA
0
495
281
235,994
A
6,600
C
37
D
1,192
"-972
232,366
* 6,600
"-972
248,121
242,851
237,994
248,121
243,159
243,159
376
803
BA
0
' 73,961
' 66,565
604
BA
0
300,000
300,000
806
BA
0
235,517
235,516
BA
0
525,000
525,000
BA
BA
0
BA
0
601
908
Total Interest on uninvested funds
Payment of Government losses in shipment
Outlays
Postal savings system liquidation
Appropriation, current
Outlays
Energy security reserve
Outlays
Biomass energy development
Outlays
Public Enterprise Funds:
Business loan and investment fund
Appropriation, current
Outlays
239,995
390,420
390,440
301,170
301,170
17,455
17,250
20,471
20,471
'-10
19,686
19,686
17,455
17,250
20,471
20,471
19,676
19,676
135
122
47
159,447
320,976
900
800
803
0
806
BA
0
271
1,000
1,000
0
271
16,486
0
1,082
376
BA
0
'2,596,870
'2,841,870
8-160
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Treasury—Con.
Financial Management Service—Con.
Disaster loan fund
Appropriation, current
Outlays
Lease guarantees revolving fund
Outlays
Surety bond guarantees revolving fund
Appropriation, current
Outlays
Pollution control equipment contract guarantee
ing fund
Outlays
453
BA
0
' 36,300
'482,000
376
0
'1,550
376
BA
0
' 13,572
'18,000
0
'11,000
revolv376
Intragovernmental Funds:
Fishermen's protective fund
Outlays
Trust funds
Miscellaneous trust funds:
(Other veterans benefits and services)
(Appropriation, permanent, indefinite)
(Outlays)
(Other general government)
(Appropriation, permanent, indefinite)
(Outlays)
Total Miscellaneous trust funds
376
0
566
705
BA
0
7
7
7
7
BA
0
220
67
18
215
18
18
BA
0
227
67
25
222
25
18
806
Total Federal funds Financial Management Service
BA
1,019,462
953,742
3,289,670
1,020,397
1,109,376
4,306,813
227
25
25
67
222
18
0
Total Trust funds Financial Management Service. BA
0
Federal Financing Bank Activities
Funds Appropriated to the President
Federal funds
General and Special Funds:
Foreign military sales credit, FFB (loan guarantee
originations)
152
Authority to borrow, permanent, indefinite
BA
Outlays
0
Y
Y
y
y
3,502,858
2,817,589
3,146,960
2,340,260
Y
1,311,234
y
282,034
Public Enterprise Funds:
Overseas Private Investment Corporation, FFB (loan
asset sales)
151
Outlays
O
Total Federal funds Funds Appropriated to the
President
BA
0
See footnotes at end of table.
y
-5,333
y
-5,092
y
-5,136
3,502,858
3,146,960
1,311,234
2,812,256
2,335,168
276,898
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-161
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Treasury—Con.
Federal Financing Bank Activities—Con.
Department of Agriculture
Federal funds
Public Enterprise Funds:
REA, FF6 (loan asset sales)
Authority to borrow, permanent, indefinite
271
J
BA
Outlays
y
0
Total REA, FF6 (loan asset sales)
y
BA
0
REA, FFB (loan guarantee originations)
271
Authority to borrow, permanent, indefinite
BA
Outlays
0
Agricultural credit insurance fund, FFB (loan asset
sales)
351
Authority to borrow, permanent, indefinite
BA
Outlays
0
asset
371
BA
0
asset
452
BA
0
Total Federal funds Department of Agriculture.... BA
0
Y
69,200
y
y
2,395,039
1,648,189
Y
6,805,000
y
Y
447,006
-7,287
260,358
' - 7,287
y
260,358
447,006
447,006
253,071
253,071
y
447,006
69,200
69,200
2,885,000
2,685,000
Y
Y
J
y
Y
1,410,000
Total Agricultural credit insurance fund, FFB
(loan asset sales)
BA
0
Rural housing insurance fund, FFB (loan
sales)
Authority to borrow, permanent, indefinite
Outlays
Rural development insurance fund, FFB (loan
sales)
Authority to borrow, permanent, indefinite
Outlays
y
69,200
5,332,000
Y
1,175,000
6,805,000
1,410,000
Y
Y
Y
5,020,000
1,090,000
1,300,000
Y
320,000
15,589,239
4,537,389
Y
5,332,000
1,175,000
Y
4,445,000
2,335,000
1,183,814
Y
588,814
14,292,820
7,230,820
-760,000
y
926,000
J
-760,000
-324,000
166,000
-1,084,000
Y
K
2,432,000
2,222,000
Y
Y
26,000
-180,000
Y
y
360,282
360,282
3,237,353
1,571,353
Department of Defense-Military
Federal funds
Public Enterprise Funds:
DOD, Defense production guarantees, FFB (loan guarantee originations)
051
Authority to borrow, permanent, indefinite
BA
Outlays
0
Y
y
y
2,032
2,032
y
y
5,000
5,000
y
5,000
5,000
Department of Energy
Federal funds
General and Special Funds:
Geothermal resources development fund, FFB (loan
guarantee originations)
271
Authority to borrow, permanent, indefinite
BA
Outlays
0
See footnotes at end of table.
y
y
6,234
-38,766
y
y
y
y
79,108
79,108
14,258
13,908
8-162
THE BUDGET FOR FISCAL YEAR 1986
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Treasury—Con.
Federal Financing Bank Activities—Con.
Alternative fuels production, FFB (loan guarantee
originations)
271
Authority to borrow, permanent, indefinite
BA
Outlays
0
Total Federal funds Department of Energy
y
y
404,500
404,500
y
y
273,700
273,700
BA
410,734
352,808
14,258
0
365,734
352,808
13,908
Department of Health and Human Services
Federal funds
Public Enterprise Funds:
Medical facilities guarantee and loan fund, FFB (loan
asset sales)
551
Authority to borrow, permanent, indefinite
Outlays
Health maintenance organization loan and loan guarantee fund, FFB (loan asset sales)
551
Authority to borrow, permanent, indefinite
Outlays
BA
0
BA
0
y
y
-11,737
y
y
4,944
-463
Y
-5,793
Y
723
-2,662
Total Federal funds Department of Health and
Human Services
BA
0
y
y
y
2,600
-3,730
723
-14,399
y
700
-3,850
7,544
700
-4,193
-9,643
Department of Housing and Urban Development
Federal funds
General and Special Funds:
Community development grants, FFB (loan guarantee
originations)
451
Authority to borrow, permanent, indefinite
BA
Outlays
0
y
y
y
70,758
31,000
y
113,000
42,000
y
116,000
25,000
y
Public Enterprise Funds:
Low-rent public housing-loans and other expenses,
FFB (loan guarantee originations)
604
Authority to borrow, permanent, indefinite
BA
Outlays
0
y
y
153,451
111,658
y
-32,280
Revolving fund (liquidating programs), FFB (loan
guarantee originations)
451
Outlays
0
Total Federal funds Department of Housing and
Urban Development
BA
0
y
-34,690
y
-1,300
224,209
113,000
116,000
142,658
9,720
-10,990
Department of Interior
Federal funds
General and Special Funds:
Territory of the Virgin Islands, FFB (loan guarantee
originations)
806
Outlays
0
See footnotes at end of table.
y
-435
y
-468
y
-506
THE FEDERAL PROGRAM BY AGENCY AND ACCOUNT
8-163
BUDGET ACCOUNTS LISTING (in thousands of dollars)—Continued
1984
actual
Account and functional code
1985
estimate
1986
estimate
Department of the Treasury—Con.
Federal Financing Bank Activities—Con.
Department of Transportation
Federal funds
General and Special Funds:
Grants to National Railroad Passenger Corporation,
FFB (loan guarantee originations)
401
Outlays
0
Public Enterprise Funds:
Railroad rehabilitation and improvement financing
fund, FFB (loan guarantee originations) 401
Authority to borrow, permanent, indefinite
BA
Outlays
0
Y
- 880,000
y
Y
1,030
-23,973
Total Federal funds Department of Transportation
BA
Y
1,030
0
-903,973
Y
4,650
-5,461
Y
Y
1,600
-9,4
@FedFRASER