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SPECIAL ANALYSES
BUDGET OFTHE UNITED STATES
FISCALYEAR
I
TABLE OF CONTENTS
Page
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
Three measures of Federal financial transactions
Public enterprises, trust funds, and gross expenditures of the Government
Civilian employment in the executive branch
Investment, operating, and other expenditures
Federal credit programs
Federal activities in public works
Federal education, training, and related programs
Federal health programs
Federal research, development, and related programs
Federal aid to State and local governments
Principal Federal statistical programs
Foreign currency availabilities and uses
International transactions of the Federal Government
3
12
24
33
53
67
82
102
113
133
144
152
158
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FOREWORD
This volume of Special Analyses of the United States Budget, 1967,
contains facts and figures on special aspects of the President's budgetary recommendations transmitted in The Budget oj the United States
Government, 1967. Thirteen special analyses are included, of which
four (A through D) are reprints of analyses, already printed in the
budget document.
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.
SPECIAL ANALYSIS A
THREE MEASURES OF FEDERAL FINANCIAL TRANSACTIONS
Data on Government financial transactions are used for many purposes. No single set of accounts can serve all purposes equally well.
As a result, various budget concepts and forms have been developed
to meet different needs. The three measures of Federal receipts and
expenditures most commonly used are: (1) the administrative budget,
(2) the consolidated cash statement of Federal transactions, and (3)
the Federal sector of the national income and product accounts. A
reconciliation of these three measures is presented in table A-l.
For many years, the administrative budget served as the principal
financial plan for conducting the affairs of Government. It represents a focal point for management and decisionmaking with respect
to Government activities which are financed by the Government's
own funds. As long as almost all Federal financial transactions were
carried out with federally owned funds, the administrative budget
provided adequate coverage.
In recent years, however, trust fund operations which are not
included in administrative budget totals have grown rapidly. As a
result, the flow of financial transactions between the Federal Government and the public is considerably larger than is shown by the
administrative budget. For this reason, the consolidated cash statement of Federal receipts from and payments to the public is designed
to present more fully the flow of total cash transactions (excluding
borrowing) between the Federal Government and the public. Thus,
the consolidated cash statement is useful for determining Government
financing and net borrowing requirements and for analyzing the
Federal impact on money and credit.
Federal receipts and expenditures in the national income and product accounts provide a measure of the direct impact of Federal fiscal
activity on the Nation's current flow of income and output. This
measure was specifically designed to complement the data on private
expenditures and incomes contained in the Department of Commerce
national income accounts. The Federal sector account is especially
suited for an analysis of fiscal and economic policy.
For certain types of problems, none of these measures of receipts
and expenditures will serve adequately. Economic activity may be
affected by Government transactions which are not reflected immediately or fully in receipts and expenditures. For example, a
rapid expansion in new appropriations and in Government orders
could stimulate a rise in business activity well before either the
delivery of goods, the performance of services, or the payment for
them. The management of public debt, loan guarantees, and loan
insurance programs have a significant impact in the money and credit
markets of the economy not fully reflected by the level of budget
expenditures. Consequently, in evaluating the economic impact of
Federal Government activities, there is no substitute for complete and
detailed analysis of the Government program in all its aspects.
THE BUDGET FOR FISCAL YEAR 1967
Table A-1. RELATION OF THREE MEASURES OF FEDERAL RECEIPTS
AND EXPENDITURES, 1965-67
[In billions of dollars]
1965
1967
1966
actual
estimate
RECEIPTS
Administrative budget receipts
Plus: Trust fund receipts
Less: Intragovernmental transactions
Receipts from exercise of monetary authority
Equals: Federal receipts from the public
Less: Cash transactions excluded from Federal receipts
account:
Coverage differences:
District of Columbia
Other
Financial transactions: Receipts from loan repayments
Miscellaneous: Sale of land, etc
Plus: Items added to Federal sector account but not in cash
receipts:
Netting differences
Contributions to Government employee retirement
funds
Receipts netted against expenditures, etc
Timing differences: Excess of tax accruals ( + ) or
collections ( —) (corporate, personal, social insurance contributions, etc.)
Miscellaneous
Equals: Federal receipts, national income and product accounts
93.1
31.0
4.3
.1
119.7
100.0
33.5
4.5
.9
128.2
111.0
.3
.1
.3
.1
.3
.1
.4
.2
.1
.1
.2
.1
.7
.1
-.1
41.6
5.5
1.6
145.5
(2.2)
(-2.1)
(2.2)
(-2.3)
.2
*
1.0
.1
-2.6
.1
119.6
128.8
142.2
96.5
106.4
112.8
29.6
4.3
-.6
122.4
33.8
4.5
.7
135.0
37.9
5.5
.2
145.0
1.6
.2
.8
.3
1.0
.3
2.4
.9
.7
1.5
1.0
.4
-1.4
1.0
.7
.7
.1
-.1
(2.2)
(-1.5)
(2.2)
(-2.1)
1.5
_ 9
-.6
.1
.4
.4
.3
118.3
131.0
142.7
(2.2)
(-1.5)
EXPENDITURES
Administrative budget expenditures
Plus: Trust fund expenditures (including Governmentsponsored enterprises net)
Less: Intragovernmental transactions
Debt issuance in lieu of checks and other adjustmentsEquals : Federal payments to the public
Less: Cash transactions excluded from Federal sector expenditures account:
Coverage differences:
District of Columbia, Federal home loan banks, and
Federal land banks
Other
Financial transactions:
Net lending in cash expenditures
Net foreign currency purchases
Miscellaneous: Acquisition of land, etc
Plus: Items added to Federal sector account but not in cash
payments:
Netting differences
Contributions to Government employee retirement
funds
Receipts netted against expenditures, etc
Timing differences:
Excess of deliveries and accruals ( + ) or payments (—)
Checks outstanding and certain other accounts
Miscellaneous: Net expenditure of foreign currency
and other
Equals: Federal expenditures, national income and product
accounts
*Less than $50 million.
(2.2)
(-2.3)
SPECIAL ANALYSES
ADMINISTRATIVE BUDGET
The administrative budget covers receipts and expenditures of funds
owned by the Federal Government—the general fund, special funds,
public enterprise funds, and intragovernmental revolving and management funds. Interfund transactions between these Federal accounts
are excluded from the total while business-type activities (such as the
Post Office) are normally recorded as "net expenditures."
Although budget documents placed before the Congress have
regularly included both federally owned funds and funds held in
trust by the Government, only the former have been traditionally
used to calculate budget totals.
CONSOLIDATED CASH STATEMENT
The consolidated cash statement of Federal receipts and payments
is more comprehensive than the administrative budget in that it
includes the receipts and expenditures of trust funds as well as funds
wholly owned by the Federal Government. Since the consolidated
cash statement measures the flow of cash between the public and the
Government, intragovernmental transactions (transactions between
budget and trust fund accounts) are excluded. Government payments are recorded when checks are cashed while administrative
budget outlays are recorded when checks are issued.
FEDERAL SECTOR OF THE NATIONAL INCOME ACCOUNTS
The Federal sector of the national income and product accounts—
like the consolidated cash statement—includes most administrative
budget and trust fund transactions. However, in contrast both to
the consolidated cash statement and the administrative budget, only
those receipts and expenditures which directly affect the current flow
of income and output are recorded. The national income accounts
exclude all borrowing and lending transactions. The Federal sector
account, therefore, excludes transactions involving purely financial
claims such as loans and purchases or sales of land. Such transactions
represent neither the production of current output nor incomes, even
though they may have indirect effects on the level or composition of
economic activity.
Both the administrative budget and consolidated cash statement
count business tax receipts, like other receipts, as they are collected.
In contrast, the Federal sector account records some tax receipts—
particularly corporate income taxes—as they accrue, on the ground
that the main economic impact of these taxes is more closely associated with the accrual of liabilities than with actual cash collections.
Also, the Federal sector records most purchases of goods and services
when delivery is made, while the administrative budget records most
expenditures at the time checks are issued and the consolidated cash
statement when funds are withdrawn from Treasury accounts (cash
or checks-paid).
6
THE BUDGET FOR FISCAL YEAR 1967
Table A-2. FEDERAL RECEIPTS AND EXPENDITURES IN THE NATIONAL
INCOME ACCOUNTS (in billions of dollars)
Description
1965
actual
1966
estimate
1967
estimate
RECEIPTS, NATIONAL INCOME BASIS
Personal tax and nontax receipts
Corporate profits tax accruals
Indirect business tax and nontax accruals
Contributions for social insurance
Total receipts, national income basis
51.2
27.0
16.8
24.6
54.8
29.3
15.9
28.8
60.5
31.1
16.5
34.1
119.6
128.8
142.2
64.5
30.3
10.9
8.6
4.1
70.7
34.2
12.8
74.4
39.2
9.0
4.3
14.7
9.7
4.7
118.3
131.0
142.7
+1.2
-2.2
-.5
EXPENDITURES, NATIONAL INCOME BASIS
Purchases of goods and services
Transfer payments
Grants-in-aid to State and local governments
Net interest paid
Subsidies less current surplus of Government enterprises.
Total expenditures, national income basis
Surplus ( + ) or deficit (—), national income basis
Federal sector receipts.—Federal receipts on a national income
basis largely reflect the tax payments or liabilities of individuals,
corporations and other businesses arising out of incomes earned as
well as other tax and nontax receipts. These receipts are classified
into the following four categories: (1) personal tax and nontax
receipts, (2) corporate profits tax accruals, (3) indirect business tax
and nontax accruals, and (4) receipts from contributions for social
insurance.
Personal tax and nontax receipts consist mostly of individual
income taxes, estate and gift taxes, fines, fees, and rental receipts.
Corporate profits tax accruals represent the Federal tax liability
incurred and accrued by resident corporations on their corporate
earnings during the specified year or period. Collections of Federal
corporate income taxes usually lag the accruals. Indirect business tax
and nontax accruals consist primarily of excise taxes, customs duties,
and Federal receipts from rent and royalties. Receipts from contributions for social insurance are composed chiefly of employment
taxes, contributions to the retirement funds for Government employees, and deposits by the States to the unemployment trust fund.
Federal sector expenditures.—Federal expenditures on a national
income basis represent either purchases of currently produced goods
and services or outlays which directly affect current levels of income.
These expenditures are classified in the following five categories:
(1) purchases of goods and services, (2) transfer payments, (3) grantsin-aid to State and local governments, (4) net interest paid, and
(5) subsidies less current surplus of Government enterprises. The
definitions of the categories have been developed by the Department
of Commerce consistent with the framework of accounts covering
the Nation's total economic activity.
SPECIAL ANALYSES
1. Purchases of goods and services.—These purchases represent the
value of the Nation's currently produced output bought directly by
the Federal Government. Expenditures for goods and services
represent the production and use of resources and constitute a part
of the gross national product. They are reported in the national
income accounts net of Government sales of goods and services.
Purchases include the pay of active military and civilian employees
of the Federal Government, employer contributions for retirement,
insurance, and other benefits for Federal employees, deliveries of
equipment and supplies for defense and other programs, new construction and purchase of existing structures, payments on research
and development contracts with corporations and on similar grants
to private nonprofit institutions, expenditures for the purchase of
commodities to be donated to schools or similar institutions, and
generally, the administrative expenses of Government programs.
Net interest paid to (or received from) foreigners is included in (or
deducted from) puichases of goods and services.
2. Transfer payments.—Transfer payments consist of expenditures
by the Federal Government for which no current output or services
have been rendered; in other words, they are payments to certain
recipients for which no contribution to national production is made
during the time period under consideration. Transfer payments are
classified into two categories—domestic and foreign.
Domestic transfer payments consist of monetary transfers to persons
or nonprofit institutions in the United States (excluding territories and
possessions). Examples of domestic transfer payments are: Veterans
compensation, pensions, and benefits; retired pay to Federal civilian or
military personnel; unemployment benefits; old-age, survivors, and
disability insurance; nonrepayable outlays for scholarships and fellowships; and payments for construction of private nonprofit hospitals.
Although transfer payments do not directly enter GNP calculations
as a Federal Government component, they do enter into the income
stream and have an impact on national output when respent by
the recipients.
Foreign transfer payments consist of Federal nonmilitary transfers of
money, commodities, or services for which no dollar reimbursement is
received.
3. Grants-in-aid to State and local governments.—Grants, for purposes of the national income accounts, are Federal payments (other
than for interest on the public debt) to State and local governments,
including State and local educational institutions. Most of the
grants-in-aid and the shared revenues in Special Analysis J of the
budget are included in grants. Excluded, however, are items such
as (a) construction outlays for private nonprofit hospitals, (b) grantsin-kind such as farm commodities distributed to State and local government units, and (c) payments to Puerto Rico, the Virgin Islands,
and other possessions. Payments to public educational institutions
for research and development contracts are recorded as grants. Like
transfer payments and net interest paid, Federal grants-in-aid are
counted in the GNP when respent by recipients—in this case, as
purchases by State and local governments or as consumption expenditures of individuals receiving State or local transfer payments.
8
THE BUDGET FOR FISCAL YEAR 196 7
4. Net interest paid.—Net interest paid consists of the interest outlays to residents (including State and local governments) minus the
interest received from them.
5. Subsidies less current surplus of Government enterprises.—This
category consists of two elements which are consolidated for analytical
and statistical reasons: (a) subsidy payments to resident businesses,
and (b) the "current surplus" or "deficit," as the case may be, of
Government enterprises.
(a) In principle, a Government expenditure becomes a subsidy
when it enables a producer to sell goods and services below the costprice relationship determined by market forces or when it is a payment made to curtail production. By definition, therefore, subsidies
are made only to businesses organized for profitmaking purposes
(including farms). Examples of subsidies are Government payments
to farmers for land retirement, certain outlays for the export of surplus agricultural commodities by business, payments to air carriers,
and the operating differential subsidy of the Maritime Administration.
(b) Government enterprise is the term applied to those functions
of the Government (usually appearing in the budget as public enterprise revolving funds) whose operating costs are to a great extent
covered by the sale of goods and services to the public, as opposed
to being financed by tax receipts. In short, Government enterprises conduct operations which are of a commercial nature. The
difference between their sales and operating expenses constitutes the
surplus or deficit of government enterprises.
RELATIONSHIP OF CONSOLIDATED CASH STATEMENT TO THE ADMINISTRATIVE BUDGET
Certain adjustments are needed to derive the consolidated cash
statement from administrative budget totals, as summarized in
table A-l.
1. Trust funds.—The consolidated cash statement covers the
financial transactions of Federal trust funds (including Governmentsponsored enterprises) in addition to administrative budget receipts
and expenditures. Accordingly, excise taxes that support the highway trust fund, employment taxes, deposits by States for unemployment insurance, veterans life insurance premiums, and other trust
fund receipts are included along with the corresponding trust fund
disbursements.
2. Intragovernmental transactions.—Administrative budget receipts include amounts paid into the Treasury by trust funds. (These
amounts are also reported as trust fund expenditures.) Similarly,
there are trust fund receipts, such as interest on trust fund holdings
of U.S. securities, which are also reported as administrative budget
expenditures. In consolidating the transactions of budget and trust
funds, these intragovernmental transactions are eliminated from the
combined receipts and expenditures since no exchange of cash with
the public is involved in these operations.
9
SPECIAL ANALYSES
Table A-3. INTRAGOVERNMENTAL TRANSACTIONS EXCLUDED FROM
THE CONSOLIDATED CASH STATEMENT
[In millions of dollars]
Description
1965
actual
Administrative budget receipts which are trust fund expenditures:
Franchise taxes from Government-sponsored enterprises.
Dividends, interest, etc., from Federal National Mortgage
Association
Reimbursements for expenses and services
... ...
Repayment of advances from unemployment trust fund and
other
Total, administrative budget receipt items..
__
Trust fund receipts which are administrative budget expenditures:
Interest on trust funds.. _ _.
Contributions for military service credits
._
.
Federal supplementary medical insurance
Transitional coverage for hospital insurance
Payments to District of Columbia (including Federal grantsin-aid)
Employing agencies' payments to employees' retirement funds, _
Awards to Indian tribal funds _
__ __ __ _
Contributions to veterans life insurance funds
..
Other.
._
Total, trust fund receipt items..
Deductions from employees' salaries for retirement._
Total, intragovernmental transactions
.
.
1966
estimate
1967
estimate
5
5
5
17
66
16
72
22
76
106
21
2
194
114
105
1,770
14
1,822
122
26
1.970
122
550
283
102
1,111
58
7
1
101
1.136
86
7
1
152
1.150
85
6
1
3,063
1,046
3.301
1.069
4.318
1.077
4.303
4.484
5,500
3. Exercise of monetary authority.—These receipts now come mostly
from seigniorage; that is, they represent the difference between the
cost of the metal in coins and the face value of the coins as money.
Seigniorage is included in administrative budget receipts, but is not a
cash receipt from the public.
4. Debt issuance in lieu of checks.—In a few cases, Government
expenditures are made by issuing bonds or notes, or increasing the
value of bonds outstanding in lieu of issuing checks. Such transactions are recorded in the administrative budget as expenditures when
the debt is thus increased, even though no cash outflow takes place
until the debt instrument is redeemed.
For example, the administrative budget records interest on savings
bonds when it accrues (and is added to the redemption value currently
payable) rather than when it is actually paid. In computing cash
payments to the public, interest payments are included only when the
bonds are cashed. Therefore, an adjustment is made for the difference between the amount of interest accrued and the amount paid.
A second example involves transactions in special notes used to pay
certain U.S. Government obligations. The Government has paid a
10
THE BUDGET FOR FISCAL YEAR 19 67
portion of its subscriptions to the International Monetary Fund, the
International Development Association, and the Inter-American Development Bank in non-interest-bearing notes. The notes are considered administrative budget expenditures and become part of the
public debt when they are issued. However, they are not counted as
a payment to the public until they are redeemed for cash, at which
time they cease to be part of the public debt. Conversely, when the
institutions return cash to the Treasury in exchange for notes, payments to the public are reduced by the amount of the cash receipts and
a corresponding increase in the public debt takes place.
Table A-4. DEBT ISSUANCE IN LIEU OF CHECKS, NET (in millions of dollars)
Description
Accrued interest added to value of debt (savings
bonds, etc.)
Treasury notes issued for:
International Monetary Fund
International Development Association
Inter-American Development Bank
_.. _ . _
United Nations funds securities
Armed Forces leave bonds issued *
Adjusted-service bonds issued
Excess profits tax refund bonds issued 2 _ .
Total, debt issuance in lieu of checks, net
1965
1966
1967
End 1967
outstanding
715
711
448
-472
-4
-95
11
_l
*
*
-41
-1
*
*
-43
-75
-40
_l
*
*
75
3
5
1
1
250
574
289
16,521
13,269
3,167
*Less than one-half million.
Negative figures represent net redemption.
Reported as refunds of receipts.
1
2
5. Changes in outstanding checks.—Administrative budget and
trust fund expenditures are recorded at the time checks are issued.
To reflect more accurately the point in time at which cash payments
actually affect Treasury cash balances, an adjustment is made to
place expenditures on a checks-paid basis.
RELATIONSHIP OF FEDERAL SECTOR ACCOUNT TO THE CONSOLIDATED
CASH STATEMENT
There are a number of important differences between the Federal
sector account and the consolidated cash statement. These are shown
in table A-l.
Exclusions from the cash budget: Certain transactions reported
as receipts or expenditures in the consolidated cash statement are
excluded or treated differently in the Federal sector accounts:
1. Coverage differences.—Cash receipts and expenditures of the
District of (Columbia are excluded from the Federal sector and included
in the State and local government sector of the national income
accounts. Likewise, the net expenditures of the Federal Home Loan
Banks and the Federal Land Banks are classified elsewhere and excluded from the Federal sector accounts. Geographical exclusions
relate to Federal transactions with Puerto Rico, the Virgin Islands,
and other possessions.
SPECIAL ANALYSES
11
2. Financial transactions.—The Federal sector account excludes
financial transactions (cash loan repayments and disbursements)
since these reflect the exchange of one kind of financial instrument for
another. Also excluded are dollar cash outlays for the acquisition of
foreign currency—such as Commodity Credit Corporation payments
to exporters in exchange for foreign currencies received for the export.
3. Miscellaneous adjustments.—These include primarily transactions
involving the sale or purchase of land—items which are included in
the cash budget but not in the Federal sector account.
Additions to the cash budget: The Federal sector accounts include some transactions which are not reflected in cash receipts or
expenditures:
4. Netting differences.—Employer and employee contributions to
Federal employees' retirement funds are excluded from the consolidated cash statement as intragovernmental transactions. In the
national income accounts, however, these contributions are considered
to be part of the total compensation of Government employees and
part of contributions for social insurance. The deficit or surplus is
unaffected by the adjustment since total receipts and expenditures
are both increased by the same amount.
Expenditures in the Federal sector account for purchases, interest,
and the current surplus or deficit of Government enterprises are
recorded net of receipts derived from products or services sold, interest
received, and enterprise sales. Where these receipts are included in
cash receipts, they are netted against expenditures in the Federal
sector account. Again this adjustment does not influence the surplus
or deficit, for in effect both receipts and expenditures are decreased
by the same amount.
5. Timing differences.—Business taxes are recorded in the national
income accounts as they are accrued by the private sector, rather than
when they are collected by the Government. The principal timing
adjustments for expenditures are: (a) Federal purchases are measured,
insofar as is possible, in terms of the delivery of goods and services
to the Government, whereas cash payments for these deliveries may
precede or follow; and (b) interest on savings bonds and Treasury
bills is treated as an expenditure in the Federal sector account when
the interest is accrued, rather than when it is actually paid out in cash.
6. Miscellaneous adjustments.—This category consists primarily of
the net expenditures of foreign currency. Cash budget transactions
involve only dollar outlays; in the Federal sector account net foreign
currency spending is treated as if it were a cash outlay. Other
adjustments involve a few minor exclusions and imputations to cash
receipts and expenditures.
SPECIAL ANALYSIS B
PUBLIC ENTERPRISES, TRUST FUNDS, AND GROSS EXPENDITURES
OF THE GOVERNMENT
This analysis presents selected information on the financing of public
enterprise funds and the trust funds. It also covers certain receipts
and reimbursements from outside the Treasury to general fund
appropriations and other accounts which are netted in the administrative budget expenditures, and it indicates the magnitude of total
expenditures gross of such netting. Additional tables in this special
analysis relating to borrowing and investments in U.S. securities are
an integral part of the computation of the changes in public debt in
table 11 of part 2 of the budget.
PUBLIC ENTERPRISE FUNDS
The public enterprise funds are federally owned funds which carry
on a cycle of operations, primarily with the public, organized usually
on a business-type basis. Some of them are incorporated enterprises;
others are unincorporated. Their expenditures have been included,
on a net basis, in the administrative budget for many years. The
general fund usually supplies them with capital; the provision of such
capital, its return, and any dividends given to the general fund are
not counted in the budget totals as expenditures or receipts.
Expenditures and receipts.—Gross expenditures of public enterprise
funds are estimated to be $22.9 billion in 1967, and their receipts will
be $21.5 billion (table B-l), resulting in net expenditures of $1.4
billion which are included in the administrative budget totals. The
Commodity Credit Corporation and the postal fund together account
for slightly more than half of the expenditures. The figures for both
1966 and 1967 take account of both existing and proposed legislation.
The expenditures in table B-l include certain interfund payments
to the general fund, principally for interest (see note at end of table
14). The receipts shown in table B-l are generally from the public;
but they include some transactions from within the Government—
notably, the sales of Commodity Credit Corporation inventories
and services to appropriations for special activities, accounting for
$1.8 billion of the Commodity Credit Corporation receipts shown for
1967. The sales of Tennessee Valley Authority power to Government
agencies, payments by all agencies to the Post Office for postal services,
and interest paid to certain funds on their investments are other
examples of such intragovernmental receipts included in table B-l.
12
13
SPECIAL ANALYSES
Table B-1. GROSS EXPENDITURES AND APPLICABLE RECEIPTS OF
PUBLIC ENTERPRISE FUNDS (in millions of dollars)
Gross expenditures
Applicable receipts
Description
1965
actual
Funds appropriated to the President:
Economic assistance
Other
.
Department of Agriculture:
Commodity Credit Corporation
Farmers Home Administration
Rural Electrification Administration
(proposed legislation)
Other..
Department of Commerce
Department of Defense:
Military
Civil (Panama Canal Company)
Department of Health, Education, and
Welfare
Department of Housing and Urban Development:
College housing loan fund
Urban renewal fund.
Federal National Mortgage Association..
Federal Housing Administration
Public Housing Administration
Other
.
Department of the Interior:
Existing legislation
Proposed legislation
Department of Labor
Post Office Department
Treasury Department
General Services Administration
Veterans Administration
Other independent offices:
Export-Import Bank of Washington
Federal Savings and Loan Insurance
Corporation
Small Business Administration
Tennessee Valley Authority
Other
Total.
Receipts from the public
Receipts from other accounts.
1966
1965
1967
1966
1967
actual
51
61
273
72
233
5,179
630
4,259
941
3,889
1,706
196
M15
161
25
15
189
37
111
196
3 109
105
15
133
16
120
15
133
16
135
313
560
897
859
790
127
400
336
657
597
1,314 M.524
885
851
892
1,084
156
229
92
236
,446
975
560
29
147
133
219
283
5,834
1
*
55
197
5,467
1
*
146
167
223
5,608
1
*
613
607
1,000
145
1.011
105
1,016
121
7,084
870
6,716
967
5,954
1,073
26
68
189
40
164
13
123
13
134
804
113
500
371
32
21,128
1
* 912
96
244
235
2,016 5 2,242
770
959
642
813
37
6 131
199
4,663
1
*
63
139
225
4,730
1
*
62
146
287
5,080
1
*
592
734
1,425
920
1,376
40
608
413
34
1,281
*
7 574
455
32
1.161
1,908
1,590
22,750
22,944
318
264
323
47
17.214
302
351
7 659 7 906
356
371
43
40
19,672 21,524
(14,297) (16,776) (18,714)
(2.917) (2,896) (2,810)
*Less
than one-half million dollars.
1
Includes advances from foreign assistance and special export programs of $2,492 million in
1965,
$1,686
million in 1966, and $1,690 million in 1967.
2
Includes $549 million of receipts from sale of certificates of participation under proposed legislation.
3
Includes gross expenditures of $71 million and applicable receipts of $66 million under proposed
legislation to establish a revolving fund for consumer protective marketing and regulatory programs.
4
Includes $801 million of receipts from sales of participation in pooled loans under proposed legislation.
'Includes $383 million of receipts under proposed legislation for participation sales for FNMA.
Also includes gross expenditures of $88 million and receipts of $342 million in 1967 under proposed
legislation authorizing FNMA to sell participations in mortgages and other obligations of other agencies.
6
Includes receipts of $78 million from sale of participations under proposed legislation for public
facility
loans.
7
Includes gross expenditures of $216,525 thousand in 1967 and receipts of $350,000 thousand in
1966 and $599,817 thousand in 1967 under proposed legislation to sell participation certificates.
14
THE BUDGET FOR FISCAL YEAR 1967
Capital and borrowing.—Capital requirements of the public enterprise funds are usually supplied through new obligational authority
(either appropriations or some other form of NOA) from the general
fund. While most public enterprise funds are operated to be selfsustaining over a period of years, the largest—the Commodity Credit
Corporation—has incurred substantial losses in most years. Appropriations have been made regularly to make up for the loss in this fund,
the postal deficit, and other losses in a few smaller funds. Contract
authorizations have also been provided for the Commodity Credit
Corporation and for the Urban Renewal Fund of the Department of
Housing and Urban Development. Table B-2 reflects all such new
obligational authority.
Writeoffs shown here are primarily the return of capital or transfer
of dividends to the general fund of the Treasury; they include a few
cases of lapses of obligational authority.
The effect of these capital transactions, together with expenditures
and receipts, upon the public enterprise fund group may be summarized as follows (in millions of dollars):
Balances, start of year:
Cash and securities
Undrawn authorizations
Adjustments from other funds, net
New obligational authority
Restoration of undrawn authorization
Transfers from other funds
Applicable receipts
1965
8,301
25,297
148
5,962
22
19
17,214
1966
8,675
26,280
1967
11,515
27,235
7,921
6,053
165
19,672
21,524
Total available
56,964
62,713
66,327
Gross expenditures
Transfers to other funds
Writeoffs of authority
Balances, end of year:
Cash and securities
Undrawn authorizations
21,128
14
867
22,750
8
1,205
22,944
16
483
8,675
26,280
11,515
27,235
14,240
28,643
56,964
62,713
66,327
Total application and balances
Where the new obligational authority consists of authorizations to
expend debt receipts or appropriations to provide capital, rather than
to make up deficits or finance losses, it is customary for the amounts
thereof to become interest bearing when used or when credited to
the fund.
Upon the creation of new revolving funds, to finance programs
previously financed otherwise, capital may also be provided by the
transfer of assets, including appropriation balances, into the new
fund. Liabilities and obligations are taken over, also. This budget
proposes the conversion of" several programs to a revolving fund
basis, among them the three power administrations in the Department of the Interior.
Minor adjustments in capital occasionally include other transfers
to or from appropriations when authorized by law, and the transfer
of real or personal property into or out of a fund.
15
SPECIAL ANALYSES
Table B-2. NEW OBLIGATIONAL AUTHORITY AND WRITEOFFS OF
PUBLIC ENTERPRISE FUNDS (in millions of dollars)
N e w obligational
1965
actual
Funds appropriated to the President:
Economic assistance
1.199
Other
24
Department of Agriculture:
Commodity Credit Corporation..
2 1,932
3
Farmers Home Administration.. .
162
Other (proposed legislation) . .
Department of Commerce..
60
Department of Defense—Military...
Department of Health, Education, and
Welfare
Department of Housing and Urban Development:
College housing loan fund
.
300
Urban renewal fund
750
Federal National Mortgage Association
225
Public Housing Administration... . .
114
Other
. . .
Department of the Interior:
72
Existing legislation.
Proposed legislation
Department of Labor
781
Post Office Department
_
.. ... ...
Treasury Department
General Services Administration
150
Veterans Administration
______
Other independent offices:
Export-Import Bank of Washington
145
Small Business Administration n
48
Tennessee Valley Authority _ _
Other
Total
Writeoffs (including
capital transfers)
authority
Description
5,962
1966
1967
stimate stimate
1.053
133
2
3,568
102
20
105
1.121
26
2
24
32
*
*
6
303
2.528
85
1967
1966
stimate stimate
1965
actual
4
32
2
(5)
*
3
300
689
100
264
242
(8)
741
(8)
280
212
63
82
65
93
930
836
9
(7)
324
1
1
2
101
*
17
250
1
135
657
*
4
242
*
7
24
*
7
*
1
25
12
*
*
*
"60
50
116I
50
50
310
59
64
53
*
59
*
58
*
7.921
6.053
867
1.205
483
* Less than one-half million dollars.
1 Excludes transfer of $74 million from the military assistance appropriation to the Foreign military
sales fund.
2
Excludes increase or decrease in advances from special programs, net of research expenditures
reported elsewhere, amounting to $18,850 thousand in 1965, —$1,433 thousand in 1966, and —$7
million
in 1967.
3
Excludes restoration of undrawn authorizations to spend public debt receipts of $22,185 thousand.
4
Excludes adjustments of $13,406 thousand in expired appropriation accounts, resulting in a
reduction
of capital assumed at inception of the Economic development revolving fund.
5
Excludes unobligated balance of $1 million transferred to "Operations and maintenance, civil
defense"
(annuall appropriation
act).
_
ii
)
6
Includes reduction of $300 million in new obligational authority (authorization to spend public
debt receipts) under proposed legislation.
*,-,,,ro L
J
7 Excludes unobligated balance of $719 thousand and obligated balance of $I7,U58 thousand
transferred
to Urban mass transportation fund under "Other."
8
Includes reduction of $450 million in new obligational authority (authorization to spend public
debt
receipts) under proposed legislation for participation sales.
9
Excludes unobligated balances transferred from general fund accounts of $772 thousand to Bonneville Power Administration, and $3,586 thousand to Southwestern Power Administration. Also
excludes obligated balances estimated to be assumed at inception of the funds as follows: $89 thousand
for Southeastern Power Administration, $2,412 thousand for Southwestern Power Administration,
and $84,276 thousand for Bonneville Power Administration.
'0 Excludes unobligated balance of $692 thousand transferred to "Salaries and expenses, Mexican
farm
labor program."
.
. .
. .
11
Excludes unobligated balances transferred to Veterans insurance and indemnities appropriation
of 12$7 million in 1966 and $8 million in 1967.
.
Estimates for 1966 and 1967 include reductions under proposed legislation. It is estimated
that $292 million of program obligations will be financed by such legislation.
16
THE BUDGET FOR FISCAL YEAR 19 67
Balances available.—The balances of public enterprise funds are
shown in table B-3. They are there divided between the balances
which are accounted for as assets of the funds, and the undrawn
authorizations to obtain capital from the Treasury, to borrow, or
(in two cases) to contract in excess of their cash availability.
Table B-3. BALANCES OF PUBLIC ENTERPRISE FUNDS (in millions of dollars)
Cash balances in Treasury
and U.S. securities as of
Description
1965
actual
Funds appropriated to the President:
Economic assistance
Other
Department of Agriculture:
Commodity Credit Corporation
Farmers Home Administration
Other
Department of Commerce
Department of Defense—Military
Department of Defense—Civil (Panama
Canal Company)
Department of Health, Education, and
Welfare
.
Department of Housing and Urban Development:
College housing loans
Urban renewal fund
Federal National Mortgage Association.
Federal Housing Administration
Public Housing Administration
Other
Department of the Interior:
Existing legislation
Proposed legislation
Department of Labor
Post Office Department
Treasury Department
General Services Administration
Veterans Administration
Other independent offices:
Export-Import Bank of Washington
Loans to Federal Deposit Insurance
Corporation
Loans to Federal home loan banks
Federal Savings and Loan Insurance
Corporation
Small Business Administration
Tennessee Valley Authority
Other
Total.
Undrawn authorizations as
of June 30
June 30
3,094
9
115
41
129
19
1965
actual
1966
1967
3,166
183
3,310
173
199
44
199
144
56
306
<58
178
52
3 4851
52
205
21
22,418
132
3,526
18
21
5
1966
1967
199
292
2
3,985
106
300
10
10
951
,430
,807
415
500
930
10
4
79
393
37
987
89
301
79
1,145
153
678
103
446
79
,473
'457
702
112
496
892
855
779
223
500
956
48
34
120
305
545
*
1,509
31
115
309
627
*
*
,828
230
16
303
501
700
1,321
267
34
142
8,675
1,583
1,934
8 628
8 960
52
153
11,515
5
6
1,463
3,430
4,979
499
1.500
' 983
266
205
145
5,487
5,968
6,000
3,000
1,000
3,000
1,000
3,000
1,000
750
750
750
280
430
355
49
21
21
22
161
14,240 26,280 27,235 28,643
*Less than one-half million dollars.
1
Includes adjustment of —$12,175 thousand for unexpended balances of funds transferred from
the2 appropriation "Removal of surplus agricultural commodities (sec. 32)."
usand in 1965, $1,773,963
Includes unfunded balance of contract authority of $1,029,019 thousc
thousand in 1966. and $708,281 thousand in 1967.
"
includes »3U I million trom sale or certincates or participation under proposed legislation.
8
Cash includes $252,993 thousand and undrawn authorizations include —$66,735 under proposed
legislation
to sell participations.
7
Includes $77,700 thousand from sale of participations under proposed legislation for public
facility
loans.
8
Includes the net effect on cash because of sale of participations under proposed legislation.
17
SPECIAL ANALYSES
In most cases, a large part of the balances are obligated or reserved—
to pay loan commitments, purchase and construction contracts, or
other obligations entered into but on which the other party has not
yet required or earned the money. The balances include inactive
"standby" authority for loans to the Federal Deposit Insurance Corporation, the home loan banks, and the Federal Savings and Loan
Insurance Corporation. Also included is an unused balance for the
never-activated Federal Flood Indemnity Administration (HUD).
TRUST FUNDS
The trust funds are administered in a fiduciary capacity by the
Government. They are not included in the administrative budget
totals, and transactions between the general fund and the trust funds
are conducted "at arm's length"—that is, payments between them are
reported as expenditures and receipts of the funds involved.
Expenditures and receipts.—Trust fund expenditures are estimated
to be $37.9 billion in 1967, with receipts of $41.6 billion, as shown in
table B-4. The transactions of the Federal old-age and survivors
insurance fund are somewhat more than half of the totals.
Table B-4. EXPENDITURES AND RECEIPTS OF TRUST FUNDS
(in millions of dollars)
E xpenditures
Description
1965
actual
Federal old-age and survivors insurance
trust fund .
Federal disability insurance trust fund
Federal hospital insurance trust fund
Federal supplementary medical insurance
trust fund
Unemployment trust fund
Railroad retirement accountFederal employees funds
Highway trust fund
Veterans life insurance funds
Federal national mortgage association trust
funds
Other trust funds
Deposit funds
Interfund transactions (table 14, note)
Subtotal
Government-sponsored enterprises
Total
-.
Receipts
1967
1966
estimate estimate
1967
1966
estimate estimate
16,417
1,241
17,502
1,532
856
21,113
2,110
2,731
4,132
1,342
2,674
3,670
711
3,912
1,412
2,780
3,864
721
1,104
3,923
1,584
2,861
4,381
723
1,767
-48
-767
1,500
1,755
1,844
-638
-795
-767
37,313
31,047
33,539
41,608
31,047
33,539
41,608
15,962
1,498
18,848
1,940
53
19,877
1,942
2,426
3,130
1,185
1,410
4,026
616
2,890
1,240
1,617
3,970
543
899
2,947
1,274
1,744
4,080
672
91
1,400
1,753
-166
-793
28,258
1,379
33,293
493
569
29,637
33,786
37,882
1,189
-210
-638
1965
actual
500
The trust funds include a small group of trust revolving funds (see
table B-5) which, like the public enterprise funds, are stated on a
net expenditure basis in figures used elsewhere in the budget. The
Secondary market operations fund of the Federal National Mortgage
Association is the most significant in this group.
789-740 O—66
2
18
THE BUDGET FOR FISCAL YEAR 19 67
Table B-5. TRANSACTIONS OF TRUST REVOLVING FUNDS (in millions of dollars)
Applicable receipts
Gross expenditures
Description
1965
actual
Civil Service Commission (employees'
life insurance and health benefits) _. .
Federal National Mortgage Association
All other trust revolving funds. _
_
Total trust revolving funds,.
Receipts from the public .
Receipts from other accounts..
1966
1967
estimate estimate
1965
actual
1966
1967
estimate estimate
651
459
220
712
1.760
197
741
1.314
101
688
368
389
719
360
42
799
814
38
1,330
2,668
2,156
1,444
1,121
1,651
(797)
(647)
__
(892) (1,053)
(229) (598)
Treasury financing.—The principal financing provided by the
general fund to the trust funds is interest paid on public debt investments of the trust funds. The Government also contributes, as
employer, to the employee retirement funds, and under recent legislation, it contributes to the supplementary medical insurance and hospital insurance funds. Such payments are shown in table A-3 in the
special analysis, "Three Measures of Federal Financial Transactions."
Balances available.—Trust fund balances with the Treasury and
U.S. securities are shown in table B-6. These balances are reserved
to carry out the purposes of the trust.
Table B-6. TRUST FUND BALANCES (in millions of dollars)
As of June 30
Description
1964
actual
Federal old-age and survivors insurance trust fund...
Federal disability insurance trust fund .
Federal hospital insurance trust fund
Federal supplementary medical insurance trust fund.
Unemployment trust fund
..__
__
Railroad retirement account
Federal employees funds
Highway trust fund
Veterans life insurance funds
Federal National Mortgage Association trust fund.._
All other trust funds . .
Deposit funds. . .
Total
Balances available on an authorization
(table 10)
Unappropriated receipts:
Available as needed on an indefinite basis
Available for appropriation by Congress:
District of Columbia
United States Soldiers' Home
Highway trust fund
Unfinanced contract authorization
. .
Undrawn authorizations to borrow
Balances available on a cash basis.
1965
actual
1966
estimate
1967
estimate
19,726
2,264
20,180
2,007
18,835
1,599
803
6,859
3,859
14,844
641
6,779
13
1,420
2,334
7,861
4,016
16,108
285
6,874
20
1,732
2,544
8,882
4,188
17,271
179
7,053
8
1,731
2,710
20,071
1,768
1,108
205
9.858
4,498
18,388
480
7,104
8
1,807
2,759
58,739
61,627
63,259
68,054
70,377
73,501
74,392
78,861
56
36
25
25
-118
105
438
-10,041
-2,077
-133
107
209
-9,982
-2,112
-116
108
175
-10,404
-919
-117
105
393
-10,694
-519
58,739
61,627
63,259
68,054
basis
19
SPECIAL ANALYSES
The trust fund balances are affected by the transactions as follows
(in millions of dollars):
1965
Balances, start of year
Receipts
Borrowing from the public, net
Total available
Expenditures (excluding Government-sponsored enterprises)
Balances, end of year
Total application and balances
58,739
31,047
99
89,885
28,258
61,627
89,885
1966
1967
61,627
33,539
1,387
96,553
33,293
63,259
96,553
63,259
41,608
500
105,367
37,313
68,054
105,367
GOVERNMENT-SPONSORED ENTERPRISES AND ANNEXED BUDGETS
This budget includes with the trust fund expenditures certain
transactions of five Government-sponsored enterprises, stated on a
net basis. The transactions thus reported relate to investments in
U.S. securities and debt issuance for which the Treasury acts as fiscal
agent; amounts equal to the net debt issuance or net disinvestments
of such enterprises are used as an estimate of net expenditures.
The budget appendix includes detailed budget statements with
respect to seven self-supporting activities. All of the seven are
Federal activities. Three of the Government-sponsored enterprises
are in the annexed budget group. The other two—the Federal land
banks and the Federal home loan banks—are privately owned and
have been omitted from annexed budget coverage.
The principal volume of business in this group consists of loans
made by two mixed-ownership banking systems. The Federal intermediate credit banks—in which the Government interest is still
somewhat over half of the capital—are expected to continue a loan
business of over $5 billion a year. The Banks for cooperatives—in
which the Government interest has declined to less than a third of the
capital—will make loans of about $1.5 billion a year. Repayments of
loans to these enterprises are nearly as large.
Estimates for the Exchange Stabilization Fund of the Treasury for
1966 and 1967 are not available, except for administrative expenses.
Therefore, this title shows only the actual 1965 expenditures and
receipts of that fund. Table B—7 summarizes the expenditures and
receipts of these annexed budgets.
Table B-7. EXPENDITURES AND APPLICABLE RECEIPTS OF ACTIVITIES
COVERED BY ANNEXED BUDGETS (in millions of dollars)
Gross expenditures
Description
Milk Marketing Administration.
.
Comptroller of the Currency . . . .
Exchange Stabilization Fund. .
Board of Governors of Federal Reserve
System
Banks for Cooperatives . . .
. __
Federal Intermediate Credit Banks
Federal Deposit Insurance Corporation
Total
» Not available.
1965
actual
13
17
113
Applicable receipts
1966
1967
estimate estimate
13
19
0)
13
20
0)
1965
actual
13
19
54
1967
1966
esti mate estimate
13
21
13
20
0)
9
1,371
5,356
23
9
1.465
5,451
3
10
1.609
5,888
6
9
1.188
5,194
204
9
1.391
5.252
222
6,903
6.960
7.546
6.680
6.906
0)
10
1,524
5,676
231
7,475
20
THE BUDGET FOR FISCAL YEAR
1967
OTHER EXCLUSIONS FROM ADMINISTRATIVE BUDGET RECEIPTS
The law permits certain collections to be credited as reimbursements
to general fund appropriations. Such collections from outside the administrative budget accounts are identified in the detailed schedules
of the budget appendix as reimbursements from "non-Federal sources,"
distinguishing them from reimbursements within the administrative
budget sector. The intragovernmental revolving and management
funds also have some receipts from outside the Government. Table
B-8 reflects the estimated amount of such collections which are
credited to appropriations or to intragovernmental funds.
Most of the collections reported here are for the sales of supplies
and materials from the Department of Defense stock funds to authorized outside parties. Two Veterans Administration life insurance trust
funds receive credits from optional income settlements and other similar
adjustments, also reflected in this table.
Table B^8. REIMBURSEMENTS FROM NONFEDERAL SOURCES TO APPROPRIATIONS AND INTRAGOVERNMENTAL FUNDS (in millions of dollars)
Description
Funds appropriated to the President
Department of Agriculture
Department of Commerce.
Department of Defense:
Military
Civil
.
Department of Health, Education, and Welfare.
Department of the Interior
Department of Justice
Department of State
Treasury Department
Atomic Energy Commission
Federal Aviation Agency
General Services Administration
National Aeronautics and Space Administration
Veterans Administration
Other independent agencies
Trust funds
Total
1965
actual
1966
estimate
1967
estimate
5
25
2
5
25
2
.618
11
33
1,709
11
59
3
2
33
77
3
4
7
2
*
60
3
3
184
109
3
10
10
2
2
186
1,757
11
138
60
4
2
33
94
3
10
12
2
9
188
2,070
2,209
2,353
23
2
35
35
"Less than one-half million dollars.
GROSS EXPENDITURES OF THE GOVERNMENT
Table B-9 gives gross expenditures, on a checks-issued basis for
all Government-administered funds, except deposit funds; the latter
are excluded since they are for the most part suspense accounts.
The increase of nearly $30 billion from 1965 to 1967 is largely for
two functions—about $11 billion for national defense, in part due to
the buildup relating to Vietnam; and slightly over $11 billion for
health, labor, and welfare, mostly due to health service for the aged
and the increased expenditures from social economic trust funds.
21
SPECIAL ANALYSES
Table B-9. GROSS EXPENDITURES OF GOVERNMENT-ADMINISTERED
FUNDS (in millions of dollars)
Function
National defense
_ . _
. .. _
International affairs and finance
Space research and technology
Agriculture and agricultural resources
Natural resources
Commerce and transportation
._ .
Housing and community development
Health, labor, and welfare
_ .
Education
Veterans benefits and services
.
Interest
General government
Undistributed—special allowances
.
. _ ..
Total
The total is derived as follows:
Administrative budget expenditures (table 14)
Trust fund expenditures (tables 14 and B-4):
Total of such transactions
_.
_
.
Elimination of deposit funds included in total.
Intragovernmental transactions (table A-3):
Trust fund payments to the administrative budget
. .
Administrative budget payments to trust funds
Receipts from the public netted in conventional totals:
Receipts of public enterprise funds (table B-l)
.. _
Receipts of trust revolving funds (table B-5)
Reimbursements to appropriations and intragovernmental
funds (table B-8)
Substitution of annexed budgets:
Gross expenditures of annexed budgets (table B-7)
Elimination of net expenditures of Government-sponsored
enterprises (included in table B-4)..
._ . .
Total
1965
1966
1967
52,554
5,041
5,100
16,659
3,143
12,286
2,641
27,721
1,601
6,982
9,665
2,389
59,374
5,229
5,610
16,481
3,408
12,535
4,639
33,577
2,372
7,259
10,281
2,468
63,446
5,589
5,313
16,838
3.588
12,745
3,983
38,851
3,799
7,488
10,884
2,577
75
350
145,784
163,310
175,451
96,507
106.428
112,847
29,637
33,786
37,882
-194
-3,063
-114
-3,301
-105
-4,318
14,297
16,776
797
892
18,714
1,053
2,070
2,209
2,353
6,903
6,960
7,546
-1,379
145,784
-493
163,310
-569
175.451
210
166
48
BORROWING OTHER THAN FROM THE GENERAL FUND
The Tennessee Valley Authority has authority to borrow $750
million from the public. The Federal Housing Administration has
an indefinite authorization to issue short-term debentures in connection with its settlements. The Federal National Mortgage Association trust revolving fund has authority to issue its own debt instruments in an amount equal to 10 times the aggregate of its capital
and retained earnings. A few funds in liquidation are retiring earlier
debt issuances. Government-sponsored enterprises also have their
own borrowing authority. Some Government enterprise debt is guaranteed by the Treasury; some is not formally guaranteed. Borrowing
and repayments pursuant to these authorities are shown in table B-10.
A small portion of such borrowing is from other funds such as the
sale of Federal Housing Administration debentures to Federal National
Mortgage Association; the larger part is from the public and in effect
reduces the Treasury borrowing from the public (see table 11 of part 2).
22
THE BUDGET FOR FISCAL YEAR 19 67
Table B-10. DEBT ISSUANCES BY GOVERNMENT ENTERPRISES (OTHER
THAN BORROWING FROM THE GENERAL FUND) (in millions of dollars)
Description
1965
actual
End 1967,
estimate
1967
1966
ing
Borrowing from the public:
By public enterprise funds:
Federal Housing Administration l
Federal Farm Mortgage Corporation 1 _. . .
Home Owners Loan Corporation l
Tennessee Valley Authority
By trust funds:
District of Columbia Armory Board **
Federal National Mortgage Association . _ .
By Government-sponsored enterprises:
Banks for cooperatives.
Federal intermediate credit banks. _
Federal land banks. ..
Federal home loan banks
Total, borrowing from the public. _ . .
Borrowing from other funds:
By public enterprise funds:
Federal Housing Administration
Federal National Mortgage Association . . .
By Government-sponsored enterprise funds:
Banks for cooperatives ._ _
Federal intermediate credit banks
Federal land banks
Federal home loan banks .
Total, borrowing from other funds.
_
Total, debt issuances by Government enterprises
._
...
..
..
134
-203
*
*
45
-153
*
*
70
-143
*
*
100
395
99
1,387
500
3.685
185
131
52
127
72
182
561
547
326
246
301
303
807
2,755
4.132
5,299
1,366
2.055
1.315
17.228
-20
-39
-11
89
18
74
8
30
30
121
1
3
*
*
20
1
1
4
16
-1
-2
9
-26
-3
6
25
23
244
1,372
2.079
1.338
17,472
Note.— Negative figures represent net retirement of debt.
*Less than one-half million dollars.
Guaranteed by the Treasury (except for a small part of the HOLC obligations).
1
INVESTMENTS IN U.S. SECURITIES
A few public enterprise funds, a substantial number of trust funds
and the Government-sponsored enterprises may purchase Treasury
bonds or notes for investments. In addition, several funds acquire
some of the debt issued by Government enterprises, and the Federal
Housing Administration acquires some of its own debentures as investments. These investment transactions in securities issued by the
Government or its agencies are shown in table B - l l .
The public debt bought by the various funds enters into the computation of the debt as shown in table 11 of part 2.
23
SPECIAL ANALYSES
Table B-H. PURCHASES OF U.S. SECURITIES BY GOVERNMENTADMINISTERED FUNDS (in millions of dollars)
Transactions
End
Description
1965
actual
Investment in Treasury issuances (public debt):
By public enterprise funds:
Housing and Urban Development:
Liquidating programs
Federal Housing Administration
__
Public Housing Administration
Federal National Mortgage Association _
Federal Savings and Loan Insurance Coporation
_ _ __
Small Business Administration
Veterans Administration
_ _
.
Maritime Administration
By trust funds:
Federal old-age and survivors insurance trust
fund
Federal disability insurance trust fund _ _
Federal supplementary medical insurance trust
fund _.
.
_
Federal hospital insurance trust fund
Unemployment trust fund
_ _
Railroad retirement account
Federal employees' funds _
Highway trust fund
Veterans life insurance funds
District of Columbia municipal government
funds
Allother
.
By Government-sponsored enterprises:
Federal Deposit Insurance Corporation.- _.
Banks for cooperatives
_
Federal intermediate credit banks
Federal land banks
Federal home loan banks
By Exchange stabilization fund
Total, investments in Treasury issuancesInvestments in issuances of other funds:
By public enterprise funds:
Federal Housing Administration
Federal National Mortgage Association.
_ By trust funds:
Federal National Mortgage Association Veterans Administration
District of Columbia municipal government
funds
Total, investments in issuances of other
funds
- Total, investments in U.S. securities
1966
estimate
-195
-17
6
3
13
1967.
estimate
outstanding
3
469
12
50
207
261
5
351
1,925
5
29
*
28
*
38
2
218
7
461
-263
-1,443
-432
1,200
164
18,523
1,608
967
149
1.251
-344
103
790
1,003
174
1,156
-105
204
174
296
976
307
1.106
-90
51
174
1,086
9.764
4.396
18.236
70
7,098
_g
2
3
59
-8
29
4
60
180
*
-2
220
1
*
223
3,560
45
-104
101
100
1,900
2,349
1,912
4,921
69,734
2
-4
-25
85
-11
38
90
150
1
*
-6
-25
7
-4
6
25
23
244
2.355
1.936
4,944
69.978
-2
-60
Note.— Negative figures represent net reduction of investments.
*Less than one-half million dollars.
3
-120
5
31
1967
estimate
110
99
257
4
SPECIAL ANALYSIS C
CIVILIAN EMPLOYMENT IN THE EXECUTIVE BRANCH
Following 3 successive years of relatively stable Federal civilian
employment, the buildup of military support for Vietnam operations,
coupled with the conversion of military to civilian positions in the
Department of Defense and rising postal and other workloads, will
cause Federal employment to rise in fiscal years 1966 and 1967.
Every agency head has been directed to keep the work force at minimum levels by eliminating functions, consolidating operations, closing
unnecessary offices and installations, and abolishing vacancies. In
order for this program to achieve maximum results, primary attention
is being given to controlling employment in full-time permanent
positions.
FULL-TIME PERMANENT CIVILIAN EMPLOYMENT
Vigorous action by agency managers to carry out the frugality and
manpower control directives of the President has resulted in maintaining the same level of permanent full-time civilian employment
for the past 3 years—approximately 2,230,000.
The 1967 budget estimates that by June 1966 civilian employment
in full-time permanent positions will be 2,365,000. Since the 1966
budget was originally submitted last January, two major factors have
led to an increase in end-of-year civilian employment estimates:
First, the increased Defense and foreign assistance activities
associated with the heightened conflict in Vietnam, requiring
a rise of 79 thousand civilian employees;
Second, a series of management improvements which reduce
Government costs—chiefly a reduction in Post Office overtime
and the conversion of a number of Defense Department positions from military to civilian occupancy. These cost reduction actions will save money but require, in 1966, the
substitution of 66 thousand civilian employees for other
higher-cost employment services.
Aside from employment increases for these two purposes, civilian
employment at the end of June 1966 is estimated to be 20 thousand
lower than projected in last January's budget.
Approximately 56% of all Federal civilian full-time permanent
employment for June 1967, other than for Defense military activities, will be in three agencies: Post Office, Veterans Administration,
and Health, Education, and Welfare. Another 22% is found in
Agriculture, Treasury, Interior, Commerce, and the General Services
Administration. The remaining 22% is accounted for by more than
60 smaller agencies of the Government. Estimated civilian employment for the military activities of the Department of Defense, includ24
25
SPECIAL ANALYSES
Table C-l. SUMMARY OF FULL-TIME PERMANENT EMPLOYMENT IN
THE EXECUTIVE BRANCH
As of June
Agency
1965
actual
1966 estimate
In 1966
budget
Current
1967
estimate
Increase
1967
over
1966
Post Office Department
Department of Health, Education, and
Welfare
Veterans Administration
Department of the Interior
Department of Agriculture
Department of Commerce
Treasury Department
Department of Housing and Urban Development
General Services Administration
Agency for International Development...
Employment in other civilian agencies
Allowance for contingencies
461,211
458,134
481,250
500,000
18,750
81,741
147,007
56,716
80,103
29,162
83,494
88,094
149,331
58,000
82,214
30,400
89,400
92,500
145,700
57,540
81,070
30,360
85,000
99,010
150,850
59,500
82,850
31,840
86,200
6,510
5,150
1,960
1,780
1,480
1,200
13,427
35,370
14,713
255,141
14,458
38,450
15,528
264,805
2,030
14,300
35,750
14,900
258,130
1,900
15,350
15,750
260,600
4,800
1,050
1,000
850
2,470
2,900
Subtotal
Department of Defense, Military and
military assistance
,258,085 1,290,844 1,298,400 1,343,500
45,100
950,287 1,067,000 1,073,000
6,000
2,232,753 2,241,131 2,365,400 2,416,500
51,100
Total.
974,668
36,750
ing military assistance, is 44% of the total full-time permanent
employment for June 1967.
The most significant changes for 1967 compared with 1966 are
shown in table C-l. Of the total increase of 45,100 for the civilian
activities of the Government, 18,750 or 42% is for the Post Office,
and 6,510 or 14% is for the Department of Health, Education,
and Welfare.
Most of the added Post Office employment is to reduce still further
the large amount of overtime which many postal employees have often
been working, in some cases making their total workweek as much as
70 hours. An estimated 4.5% increase in mail volume, offset by a
continued advance in productivity, accounts for the remaining increase
in postal employment.
Almost 60% of the 1967 increase in employment for the Department
of Health, Education, and Welfare is attributable to recently enacted
legislation for hospital insurance for the elderly, and aid to elementary,
secondary, and higher education. The remaining 40% is principally
for water pollution control, direct medical care in Public Health and
Indian hospitals, and increased surveillance over dangerous drugs and
other toxic substances. The Social Security Administration is achieving a productivity improvement of 2.5% per year, principally by
automating the recomputation of benefits, with a saving of 1,742
man-years in fiscal year 1967. In addition-—
26
THE BUDGET FOR FISCAL YEAR 19 67
• The increase in the Veterans Administration is principally to
provide for the 82% rise in nursing home beds, the initiation and
expansion of the use of new medical techniques in hospitals for
veterans, and an improved quality of medical care for veterans.
• The growth in the Department of the Interior is chiefly to take
care of education of Indians on Government reservations; support
to the Office of Economic Opportunity for the Job Corps; new power
facilities; the Northwest-Southwest intertie; and anticipated increase of about 7% in visitors to the national parks.
• The increase in the Department of Agriculture is mainly to
provide for uncontrollable workload in meat and poultry inspections, expanded loan activities, and more visitors to the national
forests; it also provides for support to the Office of Economic
Opportunity, and for expansion of resource development projects.
• The increase in Treasury is primarily for rising workloads in
Internal Revenue operations due to an increase in the number of
tax returns of 1.3%, and the accelerated efforts in the Bureau of
the Mint to expand coin production, which will result in an increase
in the number of coins minted by 35% over 1966. Were it not for
anticipated improvements in productivity a substantially larger
number of employees would be required. The Bureau of Customs
will handle a 5% increase in inspectional workload with a 1.6%
increase in inspectors, an increase in productivity of 3.4%.
• Other increases are in the General Services Administration to
meet greater workloads in the operation of additional public buildings, and supply support activities; in the Tennessee Valley
Authority to provide for the operation of power units being completed and for construction for new water resource facilities; and in
other agencies to meet requirements for expanded services.
• A decrease in employment for the Federal Aviation Agency will
result from an increased productivity of 5% for airways facilities
operation and maintenance and other economy measures.
The following summary breakdown of changes in civilian employment during 1967 indicates the major factors at work:
Cost reduction; conversion of military
to civilian positions and reductions in
Post Office overtime
31.1 thousand
Increase in Post Office workloads
7. 8 thousand
Increases in major Great Society Programs—health, labor, education,
housing and community development,
economic opportunity program, and
aid to the needy
8.7 thousand
Veterans Administration, for improved
medical services
5.2 thousand
All other
—1.7 thousand
SPECIAL ANALYSES
27
TOTAL FEDERAL PERSONNEL
Almost nine-tenths of executive branch civilian employment consists
of permanent full-time employees. The remainder is made up of
temporary, part-time, and intermittent workers needed for seasonal
work and special assignments of short duration. In addition, the
total of Federal Government personnel includes military as well as
civilians. The grand total personnel of the executive branch was
5,183,000 in June 1965, and is estimated at 5,663,000 for June 1966,
and 5,831,000 for June 1967. Employment of the legislative and
judicial branches in June 1965 was about 32,000 in addition.
As of Ju ne
Civilian employment in the executive branch:
1965
actual
1966
estimate
Permanent full time
Other than permanent full time
Military personnel:
Department of Defense
Reimbursable details to other agencies
Treasury Department (Coast Guard)
2,653,142 2,987,343 3,093,109
1,841
2,343
2,331
31,776
34,153
35,336
Total executive branch personnel
Legislative and judicial personnel
5,182,849 5,663,039
31,851 = = = = =
Total
1
2,232,753 2,365,400
l
263,337
273,800
1967
estimate
2,416,500
283,500
5,830,776
=====
5,214,700
Includes 25,860 appointments under the President's youth opportunity campaign.
GEOGRAPHICAL DISTRIBUTION OF CIVILIAN EMPLOYMENT
Table C-2 presents data on the geographical distribution of Federal
employment. Most Federal employees—almost 83%—work in the
various States. A little over 11% are located in the Washington,
D C , metropolitan area. An additional 6% are in foreign countries
and in U.S. territories and possessions. Federal employment in
foreign countries has decreased by 3,726 since 1960. This has benefited our balance-of-payments position, as well as reduced costs.
PERSONNEL COMPENSATION AND BENEFITS
Estimates of the Federal payroll and related costs are shown in
table C—3. Direct compensation includes regular pay, and special
pay for overtime, holiday, and standby time, differentials for nightwork and oversea duty, flight and hazardous duty, etc. Related
personnel benefits include the Government's share of Federal retirement and old-age, survivors, and disability insurance costs; employees'
life insurance, health insurance and benefits, and similar payments;
cost-of-living and quarters allowances; uniform allowances (when paid
in cash); and, in the case of the military personnel, allowances for
subsistence, reenlistment bonuses, and certain other cash payments.
28
THE BUDGET FOR FISCAL YEAR 1967
Table C-2. FEDERAL CIVILIAN EMPLOYMENT BY GEOGRAPHICAL
LOCATION (as of June 1965)
Location
Washington, D.C., metropolitan
area
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland 3
Massachusetts
Mi chigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
.
New York
North Carolina
North Dakota
Total
280,019
61,915
14,006
22,049
15,327
251,375
36,605
15,596
3,584
55,044
62,363
23,044
7,151
101,315
34,832
17,416
20,470
28,377
24,846
14,847
51.194
61,129
45,780
26,866
18,172
55.339
9,781
15,593
7,133
4,437
56,033
24,534
177,187
31,688
7,282
Total
Location
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia 3
Washington
West Virginia
Wisconsin
Wyoming
_-.
_..
Total United States
Outside United States:
Territories and possessions
Foreign countries
Total outside United
States
Total employment
Legislative and judicial
Total employment, executive branch
Other than full-time permanentTotal, full-time permanent
employment, executive
branch
93.764
45.806
21,518
131,687
12,997
24,596
9.417
37.457
124.386
29,101
3.157
70.736
47.405
11.725
22.410
5.088
2.373,579
33.309
« 121.053
154,362
2,527,941
-31.851
2.496.090
-263.337
2.232.753
1
2
Distribution by State is partially estimated.
Includes 255,199 employees of the executive branch and 24,820 of the legislative and judicial
branches.
3
Excludes employment within the Washington, D.C., metropolitan area, which includes the District
of 4Columbia, and the adjacent counties and cities in Maryland and Virginia.
Includes 105,519 foreign nationals classified as Federal employees; excludes 130,451 foreign
nationals working for Department of Defense under contract agreements, or other arrangements
with foreign governments which provide for the furnishing of personal services.
The obligations to be incurred for civilian personnel compensation
and benefits in 1967 are estimated at $21.2 billion.
Some of the personnel are employed by trust funds (such as old-age
and survivors insurance) and some are employed by public enterprise
funds (such as the Post Office). After deducting for the costs of such
employees, the remaining personnel costs are $15.4 billion.
29
SPECIAL ANALYSES
Table C-3. ESTIMATED PERSONNEL COMPENSATION AND BENEFITS
[Fiscal years.
In millions of doll ars]
Description
Total civilian personnel costs:
Direct compensation. _
Personnel benefits
Total
Civilian personnel costs of trust funds:
Direct compensation
Personnel benefits
1965
1966
1967
17.450
1.400
18.900
1.500
19,600
1.600
18.850
20.400
21.200
550
50
700
50
700
50
600
750
750
4.200
300
4.500
350
4,700
400
4.500
4.850
5.100
12.700
1.050
13.700
1,100
14.200
1.150
13.750
14.800
15.350
8.800
2.750
10.000
3.000
10,900
3,200
11.550
13.000
14,100
1
Total
Civilian personnel costs of public enterprise funds (with their
own receipts):
Direct compensation
Personnel benefits
Total
Remaining personnel costs (i.e., excluding trust and public enterprise funds):
Direct compensation
_..
Personnel benefits
Total
MEMORANDUM
Total military personnel costs:2
Direct compensation
Personnel benefits
Total
1
2
_
.
. - -- . -
Includes annexed budget agencies.
Excludes Reserve components.
Government pay scales for "blue collar" workers have for many
years been subject to administrative adjustment to correspond to pay
for comparable work in private industry; as wages in private industry
advanced, Federal compensation for such workers also increased.
Pay for most other Federal workers has been set by statute. In
1962, the Congress adopted the principle of comparability with private
industry pay for the same work levels, and in pay scale changes
effective in October 1962, January 1964, July 1964, and October
1965, significant progress has been made toward the achievement of
comparability. The compensation figures reflect such changes, as
well as changes in the number of employees.
Special efforts were made last year, and again in the preparation
of this budget, to hold down unwarranted escalation in average grades
and salaries. In 1965, for the first time in a long period, there was
no Government-wide change in average grade of Classification Act
employees. Average salaries showed only a slight advancement (apart
from changes in pay scales), mostly due to within-grade salary advancements and reclassifications of new positions in certain agencies.
30
THE BUDGET FOR FISCAL YEAR
1967
CHANGE IN POSITION STRUCTURE
Changes have taken place in the position structure as a result of
changes in the character of the Government's workload and in the
employee skills required to deal with it. For example, between 1954
and 1965, greater specialization and emphasis on research and development led to an increase of 53% in the number of engineers in the
Federal service, and 83% in the number of physical scientists. During
this period, the Government's need for professional medical personnel
rose 3 1 % and for biological scientists, 46%. At the same time, the
expanded efforts to reduce employment and to increase productivity—
in many cases by shifting from manual to semiautomatic or automatic
processing methods—decreased the need for unskilled employees.
A recent analysis made by the Civil Service Commission shows the
following changes in position structure of Classification Act employees
between 1961 and 1965:
• Reduction in percentage of clerical and aide jobs (GS-1 to
GS-6) from 53.2% to 47.3% of total employment.
• Increase in percentage of professional, technical, and administrative jobs (GS-7 to GS-15) from 46.7% to 52.4% of total employment.
• Increase in GS-16 to GS-18 jobs from 0.1 to 0.3% of total
employment.
During this period many new programs were initiated and ongoing
programs were reoriented in scope and complexity with a resulting
greater need for higher level professional and technical personnel.
Continued vigilance is being exercised to assure that Federal agencies
do not adopt topheavy organization and position structures.
TRENDS IN NUMBERS OF EMPLOYEES AND WORKLOAD
With the continued growth in population, in national income, and
in economic activity generally, there has been a concomitant growth
in the volume of public services which the Government is called upon
to render. In the fiscal year 1967, for example, the participants in
the food stamp program will rise 44%; the square nautical miles surveyed by the Coast and Geodetic Survey will increase 19%; the
number of passport applications will rise 10%; coins minted will increase 35%; subsidized school lunches served will be up 6%; takeoffs
and landings at airports served by Federal towers will increase 10%;
establishments with Federal meat inspectors will rise 5%; the number of pieces of mail deposited in the post office will be up 4%; and
customs inspections of packages will rise 4%. The staffing for new
programs such as hospital insurance for the elderly, and increased
demands for services can be accommodated only by increased productivity or additional workers, or a combination of both.
The continuing concerted effort to utilize Federal employees more
effectively, to improve work methods and organization, and to utilize
new techniques to achieve improvements in productivity have resulted
in holding Federal employment to much lower levels than otherwise
would have been possible.
SPECIAL ANALYSES
31
Government Civilian Employment
Over the past decade, in fact, total Federal civilian employment
(including; temporary and part time) has not risen in step with related
factors. For example:
• In 1955, there were 14.3 Federal civilian employees for every 1,000
people in the Nation; in 1965, this number was reduced to 12.8.
Excluding the buildup of civilian support for Vietnam operations by
the Department of Defense, Federal employment per 1,000 population is expected to remain at approximately the 1965 level in
both 1966 and 1967.
• In 1955, one out of every three public civilian employees worked
for the Federal Government, and the other two for State or local
government units. In 1965, this ratio was one out of four, and it
will continue to drop.
32
T H E BUDGET FOR FISCAL YEAR
1967
A historical comparison of total Federal civilian employment in
the executive branch (including temporary and part-time employment) with employment by State and local governments and U.S.
population for 1942-67 is shown in table C-4.
Table C-4. GOVERNMENT EMPLOYMENT AND POPULATION, 1942-67
Government employment
Year
1942
1943
1944
..
„
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954 .
1955
1956
1957 .
1958
1959
1960
1961
- 1962
1963
..
1964
1965 . _. .
1966 (estimated)4
1967 (estimated)4
Population
Federal
Total
Federal emState and All govern- Federal as
executive1 local governployment
mental
percent of
United
per 1,000
branch
units
all
governStates
ments
(thousands) (thousands) (thousands) mental units (thousands) population
..
„
-_.
.
2,272
3.274
3.304
3.787
2,666
2,082
2.044
2.075
1.934
2,456
2,574
2,532
2,382
2.371
2,372
2,391
2,355
2.355
2
2,371
2.407
2,485
3 2.490
3
2.469
2.496
2.639
2,700
3,310
3,184
3.092
3.104
3.305
3.568
3,776
3.906
4.078
4,031
4,134
4,282
4,552
4,728
5,064
5.380
5.630
5.806
6,073
6,295
6,533
6,834
7.236
7.659
5.582
6.458
6,396
6,891
5,971
5,650
5,820
5,981
6,012
6,487
6,708
6,814
6,934
7,099
7,436
7,771
7,985
8,161
8,444
8,702
9,018
9,324
9,705
10,155
40.7
50.7
51.7
55.0
44.6
36.8
35.1
34.7
32.2
37.9
38.4
37.2
34.4
33.4
31.9
30.8
29.5
28.9
28.1
27.7
27.6
26.7
25.4
24.6
24.6
24.0
135,361
137,250
138,916
140.468
141,936
144.698
147.208
149.767
152.271
154,878
157.553
160.184
163,026
165,931
168,903
171,984
174,882
177,830
180,684
183,756
186,656
189,417
192,119
194,583
16.8
23.9
23.8
27.0
18.8
14.4
13.9
13.9
12.7
15.9
16.3
15.8
14.6
14.3
14.0
13.9
13.5
13.2
13.1
13.1
13.3
13.1
12.9
12.8
13.4
13.6
1
Covers total end-of-year employment in full-time permanent, temporary, part-time, and intermittent
positions.
2
Includes
piece-rate census workers employed for the decennial census.
3
Excludes 7,411 project employees in 1963 and 406 project employees in 1964 for the public
works
acceleration
program.
4
An official projection of population and of State and local government employment for 1966
and 1967 is not available. The percentages and ratios shown for these years are consistent with
a range of reasonable estimates based on recent trends in population and State and local
employment.
SPECIAL ANALYSIS D
INVESTMENT, OPERATING, AND OTHER EXPENDITURES
This analysis is designed to contribute to a greater understanding of
Government activities by dividing Federal administrative budget and
trust fund expenditures into several categories: (1) additions to
Federal assets; (2) additions to State, local, and private assets; (3)
developmental expenditures; (4) current expenses for aids and special
services; (5) retirement and social insurance benefits (trust funds
only); (6) other services and current operating expenses; and (7) unclassified (trust fund expenditures which do not properly belong in any
of the other categories). In each category where applicable, national
defense expenditures are reported separately from those for all other
(civil) programs.
Basically, this analysis distinguishes between two types of expenditures : Those yielding benefits primarily in the future and those providing benefits largely in the year in which they are made. The
former are essentially outlays of an investment nature while the latter
are principally current expenses for aids, special services, and social
insurance benefits. Expenditures yielding benefits over a period of
years are shown in the first three classes, while outlays providing
mainly current benefits are grouped in the remaining categories.
Expenditures from administrative budget funds are shown separately from trust funds in tables D-l and D-2. The sum of the budget
and trust fund totals is greater than the total of cash payments to
the public primarily because there are intragovernmental transactions.
1. Additions to Federal assets.—This category includes administrative budget expenditures for direct loans, such as loans to finance
private housing construction and encourage home ownership, to help
small businesses, to finance college dormitory construction, to aid farm
ownership and operation, to finance rural electric and telephone
systems, and to promote economic development abroad. (Most of
these programs are included in the budget total on a net basis; that is,
gross disbursements less receipts.) It also includes financial investments in certain international organizations and mixed-ownership
enterprises. Expenditures for public works, for changes in major
commodity inventories, for major equipment (including military
equipment), and for the acquisition and improvement of real property
and other physical assets are also covered.
Trust fund expenditures in this category consist primarily of mortgage purchases (ret of sales) by the Federal National Mortgage
Association in support of its secondary mortgage market operations,
and net loans by two Government-sponsored enterprises—banks for
cooperatives and the Federal intermediate credit banks.
33
789-740 O—-6C
34
THE BUDGET FOR FISCAL YEAR 1967
Table D-l. SUMMARY OF INVESTMENT, OPERATING, AND OTHER
EXPENDITURES (in millions of dollars)
Trust fund s
Administrative budget funds
Description
1965
Additions to Federal assets:
Civil:
Loans and financial investments . . . 1,873
Physical assets .
2,603
National defense
14,007
Additions to State, local, and private
assets:
Civil.. . .
1,535
National defense _. _
19
Developmental expenditures:
Civil
8.084
National defense
7.884
Subtotal, investment and developmental type expenditures:
Civil.
._
.
National defense
Current expenses for aids and special
services:
Civil
National defense
Retirement and social insurance benefits—
civil
Other services and current operating expenses:
Civil:
Interest
Other
National defense
.
._ .
District of Columbia, deposit funds, and
other unclassified items
Allowances and contingencies
Interfund transactions
Grand total
1966
1967
67 -2,338
3,208
3.309
16,272 17.854
1966
1965
1967
425
50
1,812
64
889
74
5,140
4,303
4.398
1,694
2.170
17
21
1
10,502
8,045
12.538
8,090
14,094
21,910
15,573
24,334
17,807
1,333
18,986
1.330
2
*
72
77
81
15,580
25,965
5.687
6.256
5.442
1
2
*
20,370
1,149
2,693
2,976
3,474
745
867
891
20.246
23.274
27.452
-30
6
208
6
224
6
11.435
3,878
26.920
12,104
3,777
30,897
12,854
3,865
33,426
928
992
1,158
-870
75
-647
350
-712
-638
-795
-767
96,507 106,428 112,847
29,637
33,786
37.882
"Less than one-half million dollars.
2. Additions to State, local, and private assets.—Federal outlays under
this heading add to State, local, and private assets. Grant-in-aid
expenditures which augment the physical assets of State and local
governments are primarily for the construction of highways (mainly
through the Highway trust fund), hospitals, airports, waste-treatment
works, watershed protection projects, schools in federally affected
areas, and public facilities under the area redevelopment program
and the temporary accelerated public works program. Federal
expenditures which increase the value of privately owned assets are
largely for the conservation and improvement of private farmland
and water, for grants to States for the building of private hospitals
and other health facilities, and for construction subsidies to the
merchant fleet. Trust fund expenditures in this category, in addition
to the highway program, include the net loans made by the Federal
land banks and the Federal home loan banks (Government-sponsored
enterprises in which the Federal Government no longer holds any
SPECIAL ANALYSES
35
capital stock); these loans strengthen lending institutions which
promote farming and individual home ownership.
3. Developmental expenditures.—Federal expenditures of this type
include outlays principally for research and development, education
and health, and other programs which increase the Nation's fund of
knowledge and technical skills and improve the physical vigor of the
population. The total of Federal spending shown in this category
does not fully reflect the Government's contribution to the productivity of the economy, since it excludes additions to physical assets, as
well as certain other programs which further this end. The latter
are classified in accordance with their principal purpose; thus, veterans
educational benefits are listed as veterans aids rather than as developmental outlays. Similarly, the training of military personnel or other
Government personnel is treated as an operating expense and not as
part of the Government's education and training programs.
4. Current expenses for aids and special services.—Expenditures
classified under this heading provide aids or special services to certain
groups—mainly in the year in which the outlays are made. In addition to such items as realized losses of the Commodity Credit Corporation on its farm programs, maritime, operating subsidies, veterans
pensions, and grants to foreign nations for economic and military
assistance, this category includes (a) administrative and other operating expenses attributable to investment-type programs which benefit
specific groups, and (b) the costs of maintaining the physical assets
related to those programs.
Only part of the Federal Government's aid to special groups is
reflected in this classification, which is limited by definition to current
expenses. For example, subsidies for the construction of private
merchant ships are classified as additions to private assets. Similarly,
outlays for which the Federal Government receives assets or collateral
(as the acquisition of farm commodities by the Commodity Credit
Corporation) are treated as additions to Federal assets. Many
indirect Government aids are excluded from this classification either
because they are not reflected in expenditures or cannot be readily
measured. Examples of such indirect benefits include low interest
rates on some loans and certain preferential tax treatments.
Although expenditures in this category essentially provide a direct
aid or special service yielding immediate benefits, some of the outlays
included contribute indirectly to the Nation's future development.
Among these are grants for slum clearance and urban renewal.
5. Retirement and social insurance benefits.—This category applies
only to trust funds. It covers benefit programs which (a) are financed from special taxes or contributions and (b) provide insurance
against the loss of income due to unemployment, retirement, disability,
or death. It does not include Government employees' health and
life insurance expenditures, which are in the form of subscription and
premium payments to approved private companies. It also excludes
such noncontributory programs as public assistance grants, military
retired pay, and veterans disability and death compensation and
pensions which are financed through the administrative budget.
36
THE BUDGET FOR FISCAL YEAR 1967
6. Other services and current operating expenses.—The outlays reported under this heading support a wide range of activities. They
consist mainly of current expenditures for: Pay and subsistence of
military personnel; repair, maintenance, and operation of physical
assets of the national military establishment and general purpose
public buildings; conduct of foreign affairs; tax collection; payment of
interest on the national debt; and operation and administration of
other direct Federal programs not elsewhere classified.
7. Unclassified.—Certain trust fund expenditures represent financial transfers to other trust or budget accounts and cannot be properly
classified into any of the categories described above. Advances and
repayments between the Railroad retirement account and the Unemployment trust fund (for railroad unemployment benefits) are
examples of such transactions. This grouping also includes the
expenditures of the District of Columbia which are for the most part
locally financed, but are accounted for as a Federal trust fund.
Deposit fund transactions (net) are also included here.
Recoverability oj expenditures.—In general, Government expenditures for assets are not expected to be recovered by specific revenues.
However, most loans, investment in commodity inventories, the construction of powerplants, and outlays for range and forest improvements on public domain and national forest lands are offset in whole
or in part by receipts to the Treasury through repayments and sales,
specific charges, or recoveries. Where such activities are carried on
through revolving funds, as in most loan programs, receipts are
credited directly against the expenditures and only the difference is
included in the expenditure total in the budget and in this analysis.
In other cases, the returns are included as miscellaneous receipts to the
Treasury rather than as offsets to expenditures.
Whether recovered by specific revenues or not, investment and
developmental expenditures in both physical and human capital add
to the wealth and income of the Nation and, by helping to expand the
tax base, augment the Government's potential future revenues.
However, this analysis does not attempt to measure the degree of
recoverability of these outlays, the potential gain in public revenues
which will be forthcoming from them, nor the duration of future
benefits and their discounted present value.
Comparison with capital accounting, budgeting, and funding.—The
purpose of this analysis is to provide a broad framework for understanding Federal expenditures, recognizing not only outlays to increase
physical capital and financial assets, but also developmental expenditures which represent an investment in human capital. It does not
distinguish precisely between capital and current items, although it
does provide useful general magnitudes. Moreover, it does not make
any allowance for depreciation and obsolescence on existing physical
assets, anticipated losses on loan programs, or profit or loss on sales of
assets at figures different from their book value. Agencies record such
allowances only for transactions where the data will serve program
and management needs, as in the case of the public enterprise funds.
As a result, it is not possible to determine directly from this analysis
the net addition to the value of federally owned assets.
37
SPECIAL ANALYSES
This analysis is not a capital budget in the sense of a long-range
program for the acquisition of assets, or a plan for separate financing
of capital expenditures. Some foreign governments and some State
and local governments fund a portion of their capital expenditures by
separate borrowing and exclude most or all such expenditures from
their computation of budget totals, except for annual charges to
amortize these capital outlays over a number of years. The U.S.
budget, on the other hand, treats outlays for investment items and
for other purposes alike in computing the budget surplus or deficit.
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars)
Description
1965
actual
1966
estimate
1967
estimate
Administrative Budget Funds
ADDITIONS TO FEDERAL ASSETS
Loans:
Civil:
To domestic private borrowers:
Funds appropriated to the President: Economic opportunity program
Department of Agriculture:
Commodity Credit Corporation: Price support, supply,
and related programs
Rural Electrification Adminstration
Farmers Home Administration:
Direct loans
Agricultural credit insurance
Rural housing insurance
Emergency credit revolving fund
Participation sales
Other
Department of Commerce: Economic development and
other
Department of Health, Education, and Welfare:
Higher education facilities construction..
Defense educational activities
Public health service and other
Department of Housing and Urban Development:
College housing loans
Housing for the elderly or handicapped
Federal National Mortgage Association:
Management and liquidating functions
Special assistance functions
Government mortgage liquidation
Participation sales
Federal Housing Administration
Other
Veterans Administration:
Housing loans:
Veterans direct loans
Loan guarantee revolving fund
Other
Federal Home Loan Bank Board
Small Business Administration: Revolving fund and other.
Other agencies
Total, to domestic private borrowers, civiL
17
30
25
-303
381
-217
190
-1,309
194
230
17
25
7
32
1
52
-98
-6
1
-560
47
2
131
16
41
55
179
28
157
43
151
56
-318
69
-102
-371
-23
-289
-351
-130
77
-242
-390
-35
14
-107
62
3
29
232
2
-647
-134
2
24
-50
3
-206
-56
2
-20
-410
448
-936
-3,233
28
48
-40
30
32
3
38
THE BUDGET FOR FISCAL YEAR 1967
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
actual
1966
1967
Administrative Budget Funds—Continued
ADDITIONS TO FEDERAL ASSETS—Continued
Loans—Continued
Civil—Continued
To State and local governments:
Department of Health, Education, and Welfare: Office of
Education
Department of Housing and Urban Development:
College housing loans
Public facility loans
Urban renewal fund
Other....
District of Columbia
Other agencies
Total, to State and local governments, civil.
To foreign borrowers:
Funds appropriated to the President: Economic assistance.
Department of State: Loan to the United Nations
Export-Import Bank of Washington
Total, to foreign borrowers, civilTotal, loans, civil
27
-202
-52
22
10
46
42
223
213
•106
1,094
1,050
-217
1,050
17
-399
876
668
846
1,547
-55
-2,492
-2
-2
27
-42
35
24
-44
33
1,570
-99
-2,459
National defense:
To domestic private borrowers: Other agencies
To foreign borrowers: Funds appropriated to the President:
Military assistance
Total, loans, national defenseTotal, loans
-203
Other financial investments—civil:
Investments in quasi-public institutions, trust funds, and
international institutions:
Funds appropriated to the President:
Economic assistance
Asian Development Bank
International Development Association
International Monetary Fund
Department of Housing and Urban Development: Federal
National Mortgage Association
Other agencies
-42
-19
75
-12
36
-12
Total, investments in quasi-public institutions, trust
funds, and international institutions
326
122
154
17
33
78
*
30
100
2
104
16
120
21
67
50
10
70
62
259
Public works—sites and direct construction:
Civil:
Funds appropriated to the President:
Economic opportunity program
Public works acceleration
Department of Agriculture:
Forest Service—
-Other
•Less than one-half million dollars.
39
SPECIAL ANALYSES
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars)—-Continued
Description
1965
actual
1966
1967
Administrative Budget Funds—Continued
ADDITIONS TO FEDERAL ASSETS—Continued
Public works—sites and direct construction—-Continued
Civil—Continued
Department of Defense—Civil:
Corps of Engineers
Other
.
Department of Health, Education, and Welfare:
Public Health Service
Other
Department of the Interior:
Bureau of Indian Affairs
.
National Park Service
Bureau of Reclamation
. - . ._
Bonneville Power Administration
Other
Post Office Department
Department of State
Treasury Department:
Coast Guard
Other
Federal Aviation Agency
General Services Administration: Public buildings
National Aeronautics and Space Administration
Veterans Administration: Hospitals and other
Tennessee Valley Authority.. _..
Other agencies
._
...
896
10
967
16
1,000
15
26
10
36
15
42
32
72
64
246
38
38
56
17
49
59
236
66
50
15
26
67
60
219
102
44
40
29
28
81
223
531
81
135
64
18
12
67
250
495
83
174
89
40
19
77
246
300
73
192
87
2,773
2,924
2,859
996
149
206
1,132
150
*
175
1,III
35
1
160
1,351
1,458
1,307
4,125
4,381
4, 166
-446
13
-197
17
20
-433
-180
-67
National defense:
Funds appropriated to the President: Expansion of defense
production
..
. ..
Other agencies
. ._
___ .
-73
30
-137
16
-182
13
Total, major commodity inventories, national defense
-43
-121
-169
Total, major commodity inventories
-476
-301
-236
Total, public works, civil.
National defense:
Department of Defense—Military:
Military construction
Family housing
_Other
Atomic Energy Commission
Total, public works, national defense _ .
Total, public works, sites and direct construction
.
Major commodity inventories:
Civil:
Department of Agriculture: Commodity Credit Corporation: Agricultural commodities
.
Department of the Interior
_. ._
Total, major commodity inventories, civil.
"Less than one-half million dollars.
__ . . .
40
THE BUDGET FOR FISCAL YEAR 19 67
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
actual
1967
1966
Administrative Budget Funds—Continued
ADDITIONS TO FEDERAL ASSETS—Continued
Major equipment:
Civil:
Post Office Department
Treasury Department: Coast Guard.
Other agencies
54
28
25
Total, major equipment, civil-
107
154
130
11,495
159
13,991
165
15,793
145
Total, major equipment, national defense.
11,653
14,156
15,938
Total, major equipment
11,761
14,310
16.068
2
25
52
25
25
70
55
25
67
109
-50
17
289
-13
16
158
-34
16
Total, other physical assets, civil.
156
411
286
National Defense:
Department of Defense—Military..
Atomic Energy Commission
155
867
155
669
155
590
Total, other physical assets, national defense
1,022
824
745
Total, other physical assets—acquisition and improvement.
1,178
1,235
1,031
18,483
19,648
18,724
258
117
45
14
44
46
50
42
38
13
3
63
*
73
16
101
*
National defense:
Department of Defense—Military.
Atomic Energy Commission
Other....
61
40
30
Other physical assets—acquisition and improvement:
Civil:
Funds appropriated to the President: Economic Opportunity Program
Department of Agriculture
Department of the Interior
Department of Housing and Urban Development: Federal
Housing Administration and other
Veterans Administration
Other agencies
Total, additions to Federal assets
ADDITIONS TO STATE, LOCAL, AND PRIVATE
ASSETS
State and local assets:
Civil:
Funds appropriated to the President: Public works acceleration
Department of Agriculture:
Watershed protection
Other
Department of Commerce:
Economic Development Administration
Office of Appalachian Assistance
Bureau of Public Roads: Forest highways and other
National Bureau of Standards
'Less than one-half million dollars.
41
SPECIAL ANALYSES
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1966
estimate
1965
actual
Administrative Budget Funds—Continued
ADDITIONS TO STATE, LOCAL, AND PRIVATE
ASSETS—Continued
State and local assets—Continued
Civil—Continued
Department of Health, Education, and Welfare:
Vocational education
Higher education facilities
School construction in federally affected areas
Regional medical programs
Hospital construction activities
Waste treatment works construction
Other: Public health and other
Department of the Interior:
Land and water conservation
Other
Federal Aviation Agency: Grants-in-aid for airports
Department of Housing and Urban Development:
Open space land and urban beautiftcation
Grants for basic water and sewer facilities
Urban mass transportation fund
Other
Other agencies
Total, State and local assets, civilNational defense: Department of Defense—Military.
Total, State and local assets
Private assets—civil:
Funds appropriated to the President: Public works acceleration
Department of Agriculture:
Soil conservation
Agricultural stabilization and conservation
Commodity Credit Corporation
Other
Department of Commerce: Merchant ships and other
Department of Health, Education, and Welfare:
Health educational facilities, construction
Private hospital construction
Health research facilities
Other
National Science Foundation
Other agencies
Total, private assets
Total, additions to State, focal, and private assets.
21
29
71
6
"io"
"\2
653
747
19
17
672
764
30
125
430
-3
1
92
133
402
33
1
110
124
33
6
40
2
24
130
37
16
50
3
882
947
,554
,711
1967
estimate
42
THE BUDGET FOR FISCAL YEAR 19 67
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
actual
1966
estimate
Administrative Budget Funds—Continued
DEVELOPMENTAL EXPENDITURES
Education, training, and health:
Civil:
Funds appropriated to the President: Economic opportunity program
Department of Agriculture: Extension Service
Department of Health, Education, and Welfare:
Office of Education:
Vocational education
Payments to school districts
Defense educational activities
Higher education facilities construction
Grants for public libraries
Elementary and secondary educational activities
Higher educational activities
Other
.....
.---"-;
Vocational Rehabilitation Administration
Public Health Service:
Chronic diseases and health of the aged
Community health
•
National Institutes of Health
Indian health activities
Other
Water Pollution Control Administration
Welfare Administration:
Grants, maternal and child welfare
Other
Other
.
Department of the Interior:
Bureau of Indian Affairs: Education and welfare
Other
Department of Labor:
Manpower development and training
Other
National Science Foundation
Other agencies
114
85
720
90
103
311
136
2
25
53
117
132
307
137
30
25
295
77
69
190
47
43
193
62
75
21
59
64
236
67
110
28
110
30
13
169
30
14
84
*
89
*
230
6
114
23
279
24
129
32
Total, education, training and health, civil.
1,997
3,403
National defense: Atomic Energy Commission..
17
17
2,013
3,420
4
7
56
6
111
47
30
21
130
56
32
21
22
23
28
34
Total, education, training, and health.
Research and development:
Civil:
Funds appropriated to the President:
Economic opportunity program
Other
Department of Agriculture:
Agricultural Research Service
Cooperative State Research Service
Forest Service
Other
Department of Commerce:
National Bureau of Standards
Other
"Less than one-half million dollars.
1967
estimate
43
SPECIAL ANALYSES
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
actual
1966
estimate
1967
estimate
Administrative Budget Funds—Continued
DEVELOPMENTAL EXPENDITURES—Continued
Research and development—Continued
Civil—Continued
Department of Health, Education, and Welfare:
Public Health Service:
National Institutes of Health
Other
Office of Education
Water Pollution Control Administration
Other
Department of the Interior:
Geological Survey
Bureau of Mines
Other
Federal Aviation Agency
National Aeronautics and Space Administration
Veterans Administration
National Science Foundation
Other agencies
4,555
37
147
53
Total, research and development, civil
5,902
National defense:
Department of Defense—Military:
Military personnel: Research and development
Procurement: Test and evaluation support
Research, development, test, and evaluation
Operation and maintenance
Other
...
Atomic Energy Commission
Military assistance
Total, research and development, national defense
Total, research and development
Engineering and natural resource surveys—civil:
Department of Agriculture
Department of Commerce
Department of Defense—Civil
Department of the Interior:
Geological Survey
National Park Service
Other
Other agencies
Total, engineering and natural resource surveys
Total, developmental expenditures
CURRENT EXPENSES FOR AIDS AND SPECIAL
SERVICES
Agriculture—civil:
Department of Agriculture:
Consumer and Marketing Service:
Removal of surplus agricultural commodities
Other
„
Agricultural Stabilization and Conservation Service:
Expenses
Sugar Actt
523
67
19
10
31
705
91
48
15
40
769
110
78
36
48
24
24
56
93
25
24
70
125
,097
42
178
64
26
26
75
155
,993
43
226
79
7,030
1,241
3
280
75
,370
35
10
,256
2
275
75
,400
40
10
,270
2
7,867
8,028
8,071
13,769
14,916
15,101
275
70
6,236
32
10
21
25
18
26
24
26
44
28
26
22
45
34
26
44
185
211
224
15,967
18,547
20,629
273
18
321
16
186
13
108
92
125
94
135
85
44
THE BUDGET FOR FISCAL YEAR 1967
Table D-2.
INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
1965
actual
Description
1966
estimate
Administrative Budget Funds—Continued
CURRENT EXPENSES FOR AIDS AND SPECIAL
SERVICES—Continued
Agriculture—civil—Continued
Department of Agriculture—Continued
Commodity Credit Corporation and special export programs:
Sales for foreign currencies
International Wheat Agreement
Transfer to supplemental stockpile
National Wool Act
Price support, supply, and related programs
Losses on long-term supply contracts
Other
Farmers Home Administration:
Direct loans
Salaries and expenses
Other
Other
Other agencies
1,293
35
41
23
3,399
200
9
1,114
75
34
38
2,670
301
-2
-29
41
-i
-29
49
-9
87
21
87
21
5,609
Total, agriculture
Business:
Civil:
Department of Commerce:
Patent Office
Maritime Administration: Ship operating subsidies and
other
Other
Department of Defense—Civil:
Corps of Engineers: Operation and maintenance
Other
Post Office Department
Treasury Department: Coast Guard: Navigation aids
Federal Aviation Agency: Operations
Civil Aeronautics Board: Payments to air carriers
Small Business Administration
Other agencies
Total, business, civil
National defense: Funds appropriated to the President: Expansion of defense production
Total, business
Labor—civil: Other agencies
4,904
30
33
226
62
197
63
113
-3
174
258
11
17
128
_7
246
258
492
79
5
37
,466
,531
498
80
134
14
,601
,545
24
28
278
-1
182
219
5
233
*
344
-14
-189
251
2
-286
*
84
107
Homeowners and tenants—civil:
Department of Housing and Urban Development:
Urban renewal
Government mortgage liquidation fund
Federal Housing Administration
Public housing...
Other
Federal Home Loan Bank Board
Other agencies...
Total, homeowners and tenants
"Less than one-half million dollars.
-
1967
estimate
45
SPECIAL ANALYSES
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
actual
1966
estimate
1967
estimate
Administrative Budget Funds—Continued
CURRENT EXPENSES FOR AIDS AND SPECIAL
SERVICES—Continued
Veterans—civil:
Department of Health, Education, and Welfare: Payments for
military service credits
Veterans Administration:
Compensation and pensions
Readjustment benefits
General operating expenses
Hospitals and medical care
Veterans insurance programs
Other
Other agencies
Total, veterans.
105
105
109
49
161
150
_a
-1
25
4,430
43
161
1,215
-19
13
7
4,365
132
159
1,259
-37
16
21
5,486
5,954
6,021
875
79
994
84
1,096
147
-141
25
286
-133
26
283
-106
30
986
,258
1.390
1,198
i ,316
1.114
2,185
2.573
2.503
43
54
87
34
179
*
52
150
299
43
329
37
133
168
19
3,059
33
68
512
10
4,152
89
89
186
*
56
26
23
,605
41
61
548
31
58
833
31
,595
54
61
582
30
5,203
5,955
19,139
20.316
21,520
International aids:
Civil:
Funds appropriated to the President:
Foreign economic assistance
Peace Corps
Department of Agriculture: Commodity Credit Corporation and special export programs: Emergency famine
relief to friendly peoples
Export-Import Bank of Washington
Other agencies
Total, international aids, civilNational defense: Funds appropriated to the President—Military assistance
Totai, international aids.
Other aids and special services—civil:
Funds appropriated to the President:
Disaster relief
Economic opportunity program
Department of Agriculture:
Special milk program
Food stamp program
School lunch program
Other
Department of Health, Education, and Welfare:
Hospitals and medical care
Health insurance for the aged
Assistance for Cuban refugees
Public assistance
Other
...
Department of the Interior: Bureau of Indian Affairs.
Post Office Department
Other agencies
Total, other aids and special services
Total, current expenses for aids and special services.
*Less than one-half million dollars.
46
THE BUDGET FOR FISCAL YEAR 1967
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars)—Continued
Description
1965
actual
1966
estimate
1967
estimate
Administrative Budget Funds—Continued
OTHER SERVICES AND CURRENT OPERATING
EXPENSES
Repair, maintenance and operation of physical assets (excluding
special services):
Civil:
Department of Agriculture: Forest Service
Department of Defense—Civil: Corps of Engineers
Department of the Interior:
Bureau of Land Management
National Park Service
Bureau of Reclamation.
Southeastern Power Administration
Other
:-.—"
----------General Services Administration: Public buildings
Tennessee Valley Authority
Other agencies
...
—
—
...
Total, repair, maintenance, and operation, civil
National defense:
Department of Defense—Military:
Operation and maintenance
Family housing
Atomic Energy Commission
Other agencies
.Total, repair, maintenance, and operation, national
defense
Total, repair, maintenance, and operation of physical
assets
143
110
179
148
87
29
25
54
1
46
269
-109
37
27
28
53
-24
7
257
-151
41
26
30
56
-25
7
266
-136
41
606
500
499
12,317
137
136
*
14,125
135
109
*
14,940
145
116
*
12,590
14,369
15,201
13,195
14.869
15.701
74
82
91
97
24
68
64
61
33
*
39
*
48
*
65
160
72
56
28
69
169
75
54
29
72
179
75
58
30
78
33
15
40
26
25
92
80
35
19
41
27
28
97
84
37
20
41
28
30
102
920
980
965
Regulation and control:
The Judiciary
Department of Agriculture:
Agricultural Research Service
Other
Department of Health, Education, and Welfare:
Food and Drug Administration
Other
Department of Justice:
Legal activities and general administration
Federal Bureau of Investigation
Immigration and Naturalization Service
Federal prison system
Department of Labor
Treasury Department:
Bureau of Customs
Coast Guard
Other......
Federal Aviation Agency
Interstate Commerce Commission
National Labor Relations Board
Other agencies
_
Total, regulation and control..
"Less than one-half million dollars.
_
47
SPECIAL ANALYSES
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
1966
1967
Administrative Budget Funds—Continued
OTHER SERVICES AND CURRENT OPERATING
EXPENSES—Continued
Other operation and administration:
Civil:
International activities:
Department of State:
Foreign affairs administration
International organizations and conferences
Educational exchange
Other
United States Information Agency
Foreign Claims Settlement Commission
Other agencies
Total, international activities
Federal financial activities:
Treasury Department:
Bureau of Accounts
Bureau of the Mint
Bureau of the Public Debt
Internal Revenue Service
Other
General Accounting Office
Other agencies
Total, Federal financial activities
Other direct Federal programs:
Legislative branch
Department of Commerce:
Environmental Science Services Administration
Other
Department of Defense—Civil
Treasury Department: Claims, judgments, and private
relief acts
General Services Administration
Civil Service Commission
Other agencies
Total, other direct Federal programs
Retirement, unemployment, and accident compensation for
Federal employees:
Department of Labor:
Unemployment compensation for Federal employees.-.
Employees' compensation claims and expenses
Treasury Department: Coast Guard retired pay and
Secret Service annuities
Civil Service Commission: Special payments and annuities
Other agencies
Total, retirement, unemployment, and accident compensation for Federal employees
195
93
54
2
159
35
3
185
102
53
2
161
2
4
191
107
52
2
162
2
4
541
509
521
32
15
50
587
12
45
5
31
27
50
606
12
48
5
33
35
51
630
13
49
4
746
780
814
135
149
162
87
86
6
48
98
7
60
74
101
23
42
34
70
26
52
9
94
23
61
521
472
515
122
53
100
46
100
37
42
44
94
4
98
4
106
5
310
289
296
12
45
40
48
THE BUDGET FOR FISCAL YEAR 1967
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
1966
ate
1967
Administrative Budget Funds—Continued
OTHER SERVICES AND CURRENT OPERATING
EXPENSES—Continued
Other operation and administration—Continued
Civil—Continued
Shared revenues and grants-in-aid:
Department of Agriculture: Forest Service
Department of the Interior:
Bureau of Land Management
Other..
Treasury Department
District of Columbia: Federal payment.
Other agencies
. _
-
34
37
38
-
69
35
43
38
16
70
38
43
39
22
76
37
45
39
18
_ . _.
234
248
254
.
2,351
2,298
2.401
National defense:
Department of Defense—Military:
Military personnel (excluding research and development).
Family housing
_Civil defense
. _ -.
_._ Other
Selective Service System
Other agencies
-- .-
14,496
177
58
-464
43
21
16,320
210
76
-160
60
23
17,875
210
74
14,331
16,529
18,224
.
16,682
18,826
20,625
.
11,346
12,000
12,750
77
*
91
*
91
*
89
104
104
11,435
12,104
12,854
42.233
46,779
50,145
-870
75
-647
350
-712
96,507
106,428
112,847
Total, shared revenues and grants-in-aid
Total, other operation and administration, civil.
Total, other operation and administration, national
defense
Total, other operation and administration..
_,
-12
53
25
Interest:
On the public debt
_ _. . . . -
Other interest:
On refunds:
Treasury Department
General Services Administration
On uninvested funds: Treasury Department
Total, other interest
-_
Total, interest
-
12
. .
-
-
Total, other services and current operating expenses
Allowance for contingencies
Interfund transactions
.. .
..
-.
Total, administrative budget funds
*Less than one-half million dollars.
-
. -
.
-
-
12
13
49
SPECIAL ANALYSES
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
actual
1966
Trust Funds
(Includes deposit funds and Government-sponsored enterprises)
ADDITIONS TO FEDERAL ASSETS
Loans—civil:
To domestic private borrowers:
Department of Housing and Urban Development: Federal
National Mortgage Association: Secondary market operations
Veterans Administration: Life insurance funds
Farm Credit Administration:
Banks for cooperatives
Federal intermediate credit banks
Other agencies
Total, loans to domestic private borrowers
49
39
1,503
40
189
149
-1
69
201
425
1,812
Public works—sites and direct construction:
Civil:
Department of Defense—Civil: Corps of Engineers and other
Other agencies
28
27
36
27
36
24
28
475
,876
3,919
3,861
561
660
300
142
1,221
442
Total, private assets
1.222
444
Total, additions to State, local, and private assets
5,141
4,305
Total, public works, civil
National Defense: Department of Defense—Military
Total, public works, sites and direct construction
Other physical assets—acquisition and improvement—civil
Total, additions to Federal assets
ADDITIONS TO STATE, LOCAL, AND PRIVATE
ASSETS
State and local assets—civil:
Department of Commerce: Highway trust fund and other
Private assets:
Civil:
Farm Credit Administration: Federal land banks
Federal home loan banks
Total, private assets, civil
National Defense: Atomic Energy Commission
DEVELOPMENTAL EXPENDITURES
Education, training, and health—civil
"Less than one-half million dollars.
789-740 0—66
4
50
THE BUDGET FOR FISCAL YEAR 19 67
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
actual
1966
1967
Trust Funds—Continued
DEVELOPMENTAL EXPENDITURES—Continued
Research and development—civil:
Department of Commerce: Bureau of Public Roads and other.
Other agencies
Total, research and development
66
5
71
74
6
76
*
Engineering and natural resource surveys—civil.
Total developmental expenditures
79
72
77
81
42
17
42
37
*
40
28
-220
*
-121
•151
CURRENT EXPENSES FOR AIDS AND SPECIAL
SERVICES
Agriculture—civilBusiness—civil:
Department of Commerce:
Bureau of Public Roads
Other
.—
Federal Deposit Insurance Corporation.
Other
Total, business.
Labor—civil: Department of Labor: Unemployment trust fund:
Grants for administration and other
Homeowners and tenants—civil.
Veterans—civil:
Veterans Administration: Life insurance funds and otherDepartment of Defense—civil
...
Total, veterans—civiL..
International aids:
Civil: Other agencies
..
National defense: Funds appropriated to the President—Military assistance advances
-..
Total, international aids.
Other aids and special services—civil:
Department of Commerce: Highway trust fund
Department of Health, Education, and Welfare:
Federal old-age and survivors insurance: Operating expenses..
Federal disability insurance: Operating expenses
Federal supplementary medical insurance: Operating ex- j
penses
Federal hospital insurance: Operating expensesDepartment of the Interior:
Indian tribal funds
Other..
*Less than one-half million dollars.
-180
-223
*
-144
441
502
557
*
-28
-16
578
7
507
7
628
7
585
51
SPECIAL ANALYSES
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars)—Continued
Description
1965
1966
1967
Trust Funds—Continued
CURRENT EXPENSES FOR AIDS AND SPECIAL
SERVICES—Co n tinu ed
Other aids and special services—civil—Continued
11
12
11
Total, other aids and special services—
1.780
2,127
2,429
Total, current expenses for aids and special services. _ _.
3.438
3,843
4,365
15,226
82
18,125
193
19,064
117
765
2,338
15.308
18,318
22,284
..
2.505
2,284
2,305
Civil Service Commission: Civil Service retirement and
disability .
..
... .
- .. ...
Railroad Retirement Board: Railroad retirement account _ . .
Other agencies . .
-.
1.308
1.116
8
1,486
1,176
10
1,658
1,195
11
2,433
2,672
2.864
20,246
23,274
27.452
2
3
3
27
4
28
4
28
5
—
31
32
33
Civil:
International activities:
Department of Justice:
Alien property fund: World War I I . . .
Other
.
Foreign Claims Settlement Commission: War claims fundOther agencies
-179
38
*
3
4
1
19
5
47
6
-
-176
29
91
...
*
Other agencies..
_
_
RETIREMENT AND SOCIAL INSURANCE BENEFITS
Insurance benefits—civil:
Department of Health, Education, and Welfare:
Federal old-age and survivors insurance...
Federal disability insurance trust fund
Federal supplementary medical insurance .
Federal hospital insurance
._
.
.
Total, insurance benefits,
..
_. .
.
-.
_._
...-
—
Unemployment benefits—civil: Department of Labor: Unem-
ployment trust fund..
- ..
Other retirement and social insurance benefits—civil:
Total, other retirement and social insurance benefits
.
Total, retirement and social insurance benefits
OTHER SERVICES AND CURRENT OPERATING
EXPENSES
Repair, maintenance and operation of physical assets, (excluding
special services)—civil- - .
.
...
. .
Regulation and control—civil:
Department of Agriculture: Inspection, grading, and other
Other agencies
...
. . . .
... . .
Total, regulation and control
.- - .
Other operation and administration:
Total, international activities
Federal financial activities.
'Less than one-half million dollars.
-- —
-
--
*
52
THE BUDGET FOR FISCAL YEAR 1967
Table D-2. INVESTMENT, OPERATING, AND OTHER EXPENDITURES
(in millions of dollars) —Continued
Description
1965
actual
1966
1967
Trust Funds—Continued
OTHER SERVICES AND CURRENT OPERATING
EXPENSES— Cont in u ed
Other operation and administration—Continued
Civil—Continued
Other direct Federal programs:
Civil Service Commission:
Civil service retirement and disability fund: Refunds..
Health benefits and life insurance
Other agencies
Total, other direct Federal programs
130
-36
2
129
-6
2
133
-58
2
96
125
78
19
19
173
188
Shared revenues and grants-in-aid
Total, other operation and administration, civil
National defense: Other agencies
6
Total, other operation and administration
-57
179
194
Total, other services and current operating expenses __
-24
214
230
UNCLASSIFIED
Payments to other trust funds:
Federal old-age and survivors insurance
Federal disability insurance
Alien property fund
Railroad retirement account
Payments to general fund: Unemployment trust fund
District of Columbia
Federal National Mortgage Association—secondary market
operations
Advances from District of Columbia
Deposit funds
436
24
10
58
184
384
446
30
150
52
104
446
521
40
25
68
85
489
42
*
-210
-75
5
-166
-36
14
-48
Total, unclassified
Interfund transactions
928
-638
992
-795
1,158
-767
29,637
33,786
37,882
Total, trust funds..
"Less than one-half million dollars .
SPECIAL ANALYSIS E
FEDERAL CREDIT PROGRAMS
INTRODUCTION
Federal credit aids help achieve basic objectives of Government
programs in six major areas. Most important are the loan, loan
insurance, and loan guarantee programs for: (a) improvement of
private housing and encouragement of homeownership; (b) development of agricultural and other natural resources; and (c) promotion
of economic development and military preparedness abroad. In
Major Federal Credit Programs
New Commitments
S Billioiu
-35
on
OR
— £J
Total
X
X
r^
/
1
*mimmmm
-15
15
Guarantees
and Insurance
-
to
5
01956
::
1957
1958
Fiscal Yean
1959
I960
1961
1962
1963
1964
1965
1966
(967
Estimate
addition, Federal credit programs provide significant assistance for:
(d) domestic business, e.g., small business generally, transportation,
and commercial fisheries; (e) community development and public
housing; and (f) education.
These programs supplement, rather than substitute for, private
credit. In some cases, they fill gaps by providing or stimulating a
type of credit not otherwise generally available to important groups
of borrowers. Often they assume or share in risks which private
53
54
THE BUDGET FOR FISCAL YEAR 1967
lenders, at least initially, cannot reasonably be expected to undertake.
Similarly, the terms on which the assistance is provided often are
more liberal, with longer maturities, smaller downpayments, or lower
interest costs than are generally available otherwise.
In several programs, the credit aids are part of a package of Federal
assistance. Such a package might also include, for example, grants
to provide necessary public facilities for depressed areas; grants for
work-training, education, and other types of community action to
help combat poverty; or technical aids to help underdeveloped countries plan and construct basic transportation systems.
Federal credit programs provide a means of helping borrowers
to help themselves. Unlike almost all other Government programs,
the initial expenditures involved are largely or wholly repayable, so
that the ultimate net cost is normally low. Some programs are fully
self-supporting; in most others, the income from interest payments or
insurance and guarantee fees covers most of the current expenses
(including Treasury borrowing costs) and/or provides reserves for
future losses. Customarily, administrative expenses are paid from
income, but occasionally separate appropriations are made to finance
them.
COVERAGE OF SPECIAL ANALYSIS
The overall level of Federal credit assistance has been growing
because of broadening by the Congress of existing programs and
initiation of other programs to meet new requirements. At the same
time, important changes in emphasis are occurring. Programs
established for temporary reasons in earlier years are liquidating their
operations as outstanding loans are repaid or privately refinanced.
Similarly, as private investors accumulate experience with ongoing
programs, they have often refinanced outstanding Federal loans and
directly financed the new credit requirements of borrowers.
This year's analysis presents separate information on major credit
programs administered by eight Cabinet departments and four other
agencies. The 1967 estimates reflect recent enactment of legislation
(a) enabling college and vocational students to obtain loans at belowmarket interest rates, (b) broadening credit aid by the newly created
Economic Development Administration for depressed areas and
economic development centers, (c) creating an insured rural housing
loan program and expanding other loan and loan insurance authorities
of the Farmers Home Administration, (d) authorizing a new land
development mortgage insurance program and making extensive
revisions in existing credit programs of the Department of Housing
and Urban Development, and (e) liberalizing credit assistance by the
Small Business Administration and 1the Farmers Home Administration for victims of Hurricane Betsy.
The totals also include estimates of the probable effect of proposed
legislation to (a) authorize sales of participations in pools of loans
made by the Departments of Agriculture, Health, Education, and
Welfare, and Housing and Urban Development, and by the Small
Business Administration; and (b) substitute federally assisted private
loans for the direct student loan programs of the Department of
Health, Education, and Welfare.
l See summary on pp. 64—66 for further details.
55
SPECIAL ANALYSES
The analysis includes (in tables E-2 and E-3) the total amounts,
but no detailed information, on outstanding loans and guarantees
and on net expenditures for numerous smaller or relatively inactive
credit programs administered by nine departments and four other
agencies; these account for about 0.6% of outstanding direct and guaranteed loans. Loan programs of important quasi-public agencies are
excluded from tables E-l to E-5, but their outstanding loans are
shown in table E-6. The analysis excludes borrowing from the
Treasury by other Federal agencies, whether for loans or other
programs.
NEW COMMITMENTS
New commitments are the best single measure of the short-run
trends in most Federal credit programs. They also give the best
Table E-1. NEW COMMITMENTS FOR MAJOR FEDERAL CREDIT PROGRAMS CLASSIFIED BY TYPE OF ASSISTANCE, MAJOR AGENCY OR
PROGRAM (in millions of dollars)
1965 actual
Agency or program
Direct
loans
Office of Economic Opportunity
Department of Agriculture:
Commodity Credit Corporation
Rural Electrification Administration
Farmers Home Administration, _
Department of Commerce:
Economic Development Administration.
Maritime Administration
Department of Defense: Military assistance credits
Department of Health, Education, and
Welfare:
Office of Education
Public Health Service
Department of Housing and Urban Development:
Federal National Mortgage Association.
Federal Housing Administration
Public housing program.
College housing program
Urban renewal program
Other major programs
Department of Interior: Reclamation loans.
Department of State: Agency for International Development
Treasury Department: Loans to District of Columbia
Veterans Administration
Export-Import Bank of Washington
Small Business Administration
Total by type of assistanceGrand total
-
1966 estimate
Guaranteed
and
insured
loans
20
Direct
loans
Guaranteed
and
insured
loans
44
77
.257
12
42
106
13
44
175
44
100
2,084
102
77
635
301
25
26
564
134
144
389
182
159
13
1,660
558
131
160
357
202
143
10
2,740
16,434
1,994
164
300
14.414
474
1,662
60
.657
77
481
852
462
3.030
1.645
68
49
435
.143
601
2,276
142
38
417
2,003
570
6,717
23.021
6,816
26,510
7,975
29.738
735
347
21
673
135
117
411
172
203
10
659
Guaranteed
and
insured
loans
8
355
477
8
371
428
9
69
Direct
loans
34
33
9 2,093
477
569
201
1967 estimate
15,001
710
646
143
2,982
33,326
889
646
2,866
2,286
183
28,362
36,337
56
THE BUDGET FOR FISCAL YEAR 19 67
advance indication of trends in the economic impact of these programs,
since changes in the level of new commitments usually precede corresponding changes in the volume of loans disbursed by either public
agencies or private lenders and in the purchase of goods and services
by the ultimate borrowers.
In this analysis, commitments are defined as approvals by Federal
agencies of direct loans or of insurance or guarantees of private loans.
They are shown on a gross basis, including administrative reservations or other commitments which do not later result in actual credit
extensions, as well as the unguaranteed portions of loans partially
covered by Federal guarantees.
Direct loans.—New commitments of almost $8 billion estimated for
direct loans in 1967 are $1.3 billion higher than the actual commitments made in 1965. The largest increases expected are for loans to
foreign borrowers by the Export-Import Bank and the Agency for International Development. Together they will make half of the new
direct loan commitments in 1967; this assistance will be an essential
part of our economic and trade development effort abroad. The other
half of the commitments will be divided among 18 other major credit
programs.
Guarantees and insurance.—New commitments for guarantees and
insurance of private loans will continue to rise to an estimated $28.4
billion in 1967, over 60% more than the actual commitments made 5
years previous (in 1962). Over half of the total new commitments
will be for housing loans insured by the Federal Housing Administration. Of the total guarantee commitments, $2.6 billion in 1966 and
$3.7 billion in 1967 represent guarantees by the Federal National
Mortgage Association and the Export-Import Bank of certificates of
participation in pools of loans. The Commodity Credit Corporation
expects to curtail sharply its guarantee commitments in 1967 in view
of reduced crop production forecasts and lower loan rates under the
1965 farm legislation.
Overlapping commitments.-—The total estimated commitments in
1967 of $36.3 billion include several cases where two or more types
of Federal assistance are provided for the same borrower or on the
same property or project at different stages in the financing process.
Guarantees of certificates of participation in pools of loans represent
the most important type of such overlapping. Other major examples
include: (a) commitments by the Federal National Mortgage Association for purchase of mortgages insured or guaranteed by other
Federal agencies, and (b) commitments by the Public Housing Administration .at successive stages in the financing of local low-rent
public housing.
OUTSTANDING DIRECT AND GUARANTEED LOANS
The best index of the level of Federal credit programs over a
period of years is provided by the total outstanding direct and guaranteed loans. By the close of 1967, these will total $138.4 billion for
major programs, and with smaller programs, $139.3 billion.
Outstanding direct loans will remain virtually unchanged in 1966
at the 1965 yearend level of $33.1 billion, but are expected to fall by
57
SPECIAL ANALYSES
Table E-2. OUTSTANDING DIRECT LOANS, AND GUARANTEED AND INSURED LOANS FOR MAJOR FEDERAL CREDIT PROGRAMS CLASSIFIED BY AGENCY OR PROGRAM (in millions of dollars)
1965 actual
Agency or program
Office of Economic Opportunity
Department of Agriculture:
Commodity Credit Corporation
Rural Electrification Administration..
Farmers Home Administration
Department of Commerce:
Economic Development Administration.
Maritime Administration
Department of Defense:
Military assistance credits
Department of Health, Education, and
Welfare:
Office of Education
Public Health Service
Department of Housing and Urban Development:
Federal National Mortgage Association..
Federal Housing Administration
Public housing program
College housing program
Urban renewal program
.
Other major programs
Department of Interior: Reclamation loans.
Department of State: Agency for International Development
Treasury Department:
Loans to District of Columbia...
Foreign loans
Veterans Administration
Export-Import Bank of Washington
Small Business Administration
Direct
loans
Guaranteed
and
insured
loans
17
1966 estimate
Direct
loans
Guaranteed
and
insured
loans
47
2,115
4,072
419
1,990
126
109
1967 estimate
Direct
loans
Guaranteed
and
insured
loans
71
819
542
4,456
1.225
727
1,874
4,262
2,054
,249
1.444
1.997
"419
183
101
454
246
92
3
488
79
40
110
75
287
538
13
758
38
2,121
527
60
1,927
196
342
300
49,042
5,033
1,382
90
8,997
144
848
59
1,427
490
59
2.170
214
421
105
1,930
52.448
5.541
1,042
451
59
1,651
4,505
56,960
1.647
25*
1,867
10,510
306
441
118
149
3,728
139
3.763
6,124
12.030
492
193
3.627
28,924
1.649
2,490
1,147
30,951
2,617
104
868
2,091
1,072
30.097
3.447
209
Total by type of assistance:
Major agencies or programs.
Other agencies or programs.
32.507
547
91.138
276
32.661
450
98.259
288
30,851 107,599
614
256
All agencies.
33,054
91,414
33.111
98,547
31,465 107,855
605
1,888
662
4.418
302
$1.6 billion in 1967. This decline, if realized, will reverse the continuous uptrend over the past decade and longer in the size,.of the
Federal loan portfolio. The overall reduction will occur despite sizable continuing increases over the 2-year period amounting to $3
billion for loans held by the Agency for International Development
and another $0.7 billion in loans of the Rural Electrification Administration and the Office of Education.
In almost all other long-established direct loan programs the increased emphasis upon substitution of private for public credit will
cause substantial reductions in outstanding portfolios—mainly because of the greatly expanded program for sales of participations in
pools of loans. The largest net reductions in 1966-67 will be con
58
THE BUDGET FOR FISCAL YEAR
1967
centrated in the Commodity Credit Corporation, the Federal National Mortgage Association, the Veterans Administration, and the
Export-Import Bank.
Simultaneous with this sharp cutback in direct loan portfolios, the
increase in outstanding Federal guarantees and insurance of private
loans will accelerate, amounting to $16.4 billion over the 2 years.
Mortgage and property improvement loans insured by the Federal
Housing Administration account for almost half of the anticipated
rise, and for over half of the total outstanding guaranteed and insured
loans at the end of 1967. Much of the remaining increase represents
guarantees by the Federal National Mortgage Association, the
Export-Import Bank and the Commodity Credit Corporation of
participations in pools of loans administered by these agencies.
Other substantial increases are estimated for the Farmers Home
Administration, under its broadened insurance authority, and for
the Public housing program. The outstanding volume of loans
guaranteed by the Veterans Administration will continue to decline
as the number of new loans shrinks and the rate of amortization on
existing loans rises.
The amounts shown include both the guaranteed and unguaranteed
portion of outstanding loans in order to give a more complete picture
of the economic impact of these programs and to tie in better with
banking statistics. Thus, they do not indicate the estimated contingent liability of the Federal Government. The major program
for which the contingent liability differs materially from the principal
amount of the loans is the veterans loan guarantee program; by the
end of 1967, the Government's liability will be about $13.3 billion
lower than the amount of guaranteed loans outstanding under that
program.
DISBURSEMENTS AND REPAYMENTS
Direct loans can have a major budgetary impact, since the difference
between disbursements and repayments represents net expenditures
or receipts. On the other hand, except to the extent that Federal
guarantees and insurance of private loans help to minimize direct
loans or to increase sales of such loans, they ordinarily have only a
minor effect on Federal expenditures. Net expenditures for Federal
credit assistance, in total, are relatively small, compared to the
economic impact of these programs.
Expenditures of all Government lending programs (with the major
exception of loans from trust funds or by quasi-public agencies) are
included in the administrative budget totals. In most currently
active loan programs, collections are offset directly against expenditures. In the case of the Rural Electrification Administration,
collections on loans are deposited to miscellaneous receipts, but
legislation is proposed to put this program on a revolving fund basis
effective for both 1966 and 1967. The proposed participation sales
legislation would also put the academic facility loan program of the
Department of Health, Education, and Welfare on a revolving fund
basis in 1967. In the case of foreign loans, disbursements and
repayments in foreign currencies are included in the analysis, though
they are not included in budget expenditures and receipts. Also
included is sales credit extended to buyers of federally owned assets,
even when no budget expenditures are involved.
59
SPECIAL ANALYSES
Table E-3. DISBURSEMENTS AND REPAYMENTS FOR MAJOR FEDERAL
CREDIT PROGRAMS CLASSIFIED BY AGENCY OR PROGRAM (in millions of dollars)
1965 actual
Agency or program
Office of Economic Opportunity
Department of Agriculture:
Commodity Credit Corporation
Rural Electrification Administration
Farmers Home Administration
Department of Commerce:
Economic Development Administration.
Maritime Administration
Department of Defense: Military assistance credits
Department of Health, Education, and
Welfare:
Office of Education
Public Health Service
Department of Housing and Urban Development:
Federal National Mortgage Association.
Federal Housing Administration
__.
College housing program
Public housing program
Urban renewal program
Other major programs
Department of the Interior: Reclamation
loans
Department of State: Agency for International Development
Treasury Department:
Loans to District of Columbia
Foreign loans
Veterans Administration
Export-Import Bank of Washington
Small Business Administration
Total.
Net addition to loans:
Major agencies or programs
Other agencies or programs
Adjustment for repayments going directly
into miscellaneous receipts
Adjustment for net expenditures in foreign
currencies, deduct
Adjustment for extensions of sales credit,
and other, deduct
Disbursements
1966 estimate
Repayments
17
Disbursements
Disbursements
Repayments
33
8
2.309
180
851
2
9
1.241
380
1.015
2.550
186
1.625
3
9
128
71
36
223
21
135
21
252
131
333
256
269
126
940
165
853
256
230
99
Repayments
32
2.103
381
828
57
1
2.406
177
589
2.092
370
918
2
12
59
69
42
86
133
13
244
25
203
157
262
176
272
107
699
197
36
165
226
18
12
911
151
32
235
223
17
183
163
276
235
242
104
1967 estimate
15
67
14
1,753
136
,662
149
1,682
161
62
59
466
658
530
49
35
1,247
1.057
580
46
529
403
444
43
33
574
620
212
3
102
719
1.109
7,982
6,188
,420
8.169
1,794
38
400
617
45
251
71
195
563
456
906
478
8.000 10,098
-2.098
4
267
581
51
53
Total administrative budget expenditures *
1
1,570
-99
-2.459
See special analysis D, p. 38.
Gross loan disbursements of major credit programs are expected to
rise by $0.4 billion in 1966 and to decline by the same amount in 1967
to $8 billion, the same level as in 1965. Repayments of $6.2 billion
in 1965, however, will increase to an estimated $8.2 billion in 1966
60
THE BUDGET FOR FISCAL YEAR 1967
and $10.1 billion in 1967. The shift from a net excess in expenditures
of $1.8 billion in 1965 to a net excess in receipts of $2.1 billion in 1967
arises predominantly from the greatly increased sales of financial assets
anticipated under proposed new legislative authority.
Net expenditures for loans in the administrative budget show comparable trends, declining from $1.6 billion in 1965 to a net excess in
receipts of $2.5 billion in 1967. The adjustments necessary to reconcile
the difference in levels are indicated at the end of table E-3.
PRIVATE PARTICIPATION IN FEDERAL CREDIT PROGRAMS
Despite the number and variety of major Federal credit programs,
they directly affect only a small fraction of the total volume of credit,
both public and private. Of the estimated private debt of $853 billion outstanding on June 30, 1965, direct Government loans and
guarantees of private loans to domestic private borrowers accounted
for about 11%. Federal guarantees or insurance of private loans
were responsible for most of the Federal assistance.
In recent years, and especially during the past year, emphasis
has been placed upon obtaining private participation in public credit
programs wherever consistent with achievement of the purposes of
such programs. Numerous methods are being employed to make this
policy effective, including: (a) limitation of direct lending to cases
where borrowers cannot otherwise obtain the funds on reasonable
terms; (b) liberalization in lending authority of private institutions;
(c) expanded use of Government guarantees and insurance of private
loans, as an alternative to direct loans; and (d) increased sales of
Government loans to private lenders.
Legislation is being proposed to authorize a Government-wide
program for the sale of participations in outstanding direct loans.
Under the expanded program, the Federal National Mortgage Association, as trustee, will continue to administer the pools of loans set aside
by the Veterans Administration and by its own special assistance
and management and liquidating programs. It will also administer
and sell certificates of participation in pools of loans set aside by
the Farmers Home Administration, the Office of Education, the
Small Business Administration, and the college housing and public
facility loan programs of the Department of Housing and Urban
Development.
The program authorized by this legislation will use many of the
techniques successfully employed in earlier sales of participations by
the Export-Import Bank and the Federal National Mortgage Association. In addition, new provisions will make it possible for the first
time to include in the pools many loans which bear interest rates
below current market levels. The agencies pooling such loans will
be authorized to make supplementary payments to the trustee,
which, together with the interest on the loans in the pools, will assure
a level of return adequate to attract private investment.
Largely as a result of this proposed legislation, sales of financial
assets are expected to increase from the $1.6 billion actually consummated in 1965 to $3.3 billion in 1966 and $4.7 billion in 1967. These
61
SPECIAL ANALYSES
Table E-4. DIRECT SALES AND PARTICIPATION SALES OF LOANS BY
MAJOR FEDERAL CREDIT PROGRAMS (in millions of dollars)
1965 actual
Agency or program
Department of Agriculture: Farmers
Home Administration
Department of Health, Education, and
Welfare: Office of Education
Department of Housing and Urban Development:
Federal National Mortgage Association..
Federal Housing Administration
Public housing program
College housing loans
Public facility loans
Veterans Administration:
Direct loan revolving fund
Loan guarantee revolving fund
Export-Import Bank of Washington
Small Business Administration
Total by type of saleGrand total
Present programs
Proposed legislation.
1
2
Direct
sales
Participation
sales
1966 estimate
Direct
sales
Participation
sales
40
35
1967 estimate
Direct
sales
Participation
sales
15
x
600
MOO
264
6
4
200
93
7
450
814
750
1.564
1,564
60
260
60
45
625
200
975
350
672
2.635
3,307
2,957
350
2
485
5
5
12
61
266
124
31
182
15
520
5
5
820
80
290
154
106
25
J
975
850
534
4,205
4,739
1,889
2,850
Under proposed legislation.
Includes $400 million under proposed legislation.
figures exclude sales made as part of the usual process of guaranteeing
or insuring loans, and sales from one Government agency to another,
as well as regular amortization and prepayments of principal.
Of the total sales anticipated in 1967, $4,205 million will be accomplished through sales of participations and $534 million from direct
sales of individual loans. The timing of sales and the specific assets
to be sold are subject to variation depending upon market developments and shifts in the inventory of available assets.
INTEREST RATES AND MATURITIES
Two of the major ways in which Federal credit programs help
achieve program objectives are by providing more favorable interest
rates or maturities than many borrowers can obtain from other
sources. Table E-5 summarizes the current range of interest rates
charged by the various major credit programs on direct loans (or prevailing on insured or guaranteed loans) and the customary maturities
for both direct and insured and guaranteed loans. These terms are
on newly committed loans by currently active programs, and do not
necessarily correspond to those on outstanding loans, or on loans
covered by commitments made in earlier years.
62
THE BUDGET FOR FISCAL YEAR 1967
Table E-5. INTEREST RATES AND MATURITIES FOR MAJOR ACTIVE
CREDIT PROGRAMS CLASSIFIED BY AGENCY OR PROGRAM,
DECEMBER 1965
Direct loans
Guaranteed and
insured loans
Agency or program
Interest
rate
(percent)
Office of Economic Opportunity
Department of Agriculture:
Commodity Credit Corporation
Rural Electrification Administration
Farmers Home Administration
Department of Commerce:
Economic Development Administration
Maritime Administration
Department of Defense: Military assistance credits
Department of Health, Education, and Welfare:
Office of Education
,.
Public Health Service
Department of Housing and Urban Development:
Federal National Mortgage Association..
Federal Housing Administration
College housing program
Public housing program
Urban renewal program
Other major programs
Department of Interior: Reclamation loans
Department of State: Agency for International Development
Treasury Department: Loans to District of Columbia
Veterans Administration
Export-Import Bank of Washington
Small Business Administration
Maturity
(years)
Interest Maturity
rate
(years)
(percent)
15-30
/
3'/2-4
2
3-5
15-25
3-10
0-5
3-51/4
4-6
3
4'/ 8
3-434
0-41/8
0-4'/8
/2
41/8
4-61/2
51/2
3-51/2
3
11-50
12-19
30-40
'/2-50
30-50
V4-1
'/2-40
1-50
22-50
5-40
30-40
25-30
l'A-15
1-30
V2-4
33-50
2
33/4-4</4
31/2-6
0-43/8
4'/ 4
41/2
5-35
1-50
4-8
37/8-5
47/8-5
4'/2-6
43/4
3-6
2
2-10
20-25
7-10
15
15
1/2-50
2V2-35/8
VH0
23/4-3
1/2-40
5-9
5'/ 4 -6'/ 2
4V2-8
3-8
3-20
30
0-7
1-30
1
2
3
When commodity loan is repaid by forfeiting collateral, no interest is charged.
Estimate. Program not yet fully operative.
On student loans, maturities begin when student leaves school and exclude periods of military
or 4 Peace Corps service.
In addition, property improvement loans are insured for 4-5% discount per year (equivalent
to over 8% simple interest), and with maturities of 6 months to 7 years.
Interest rates charged on direct loans vary greatly both among
the various Federal credit agencies and sometimes among the various
types of loans made by a single agency. Many of the differences in
rates reflect mainly differences in the cost of providing the loan
(including the cost of borrowing the necessary funds), of administering
the varying types of loans and of incurring the varying degrees of
risk of probable loss. In many cases, the rate charged is governed
by statutory limits or formulas. These sometimes are intended to
assure loans at rates below those prevailing in the private market or
below the cost to the Government, in order to provide special assistance to particular groups of borrowers as a method of accomplishing
Federal program objectives. In some cases, the rates charged reflect
mainly Government borrowing costs in earlier periods, rather than
current market yields of Government obligations.
Interest rates charged on insured and guaranteed loans tend to
correspond more closely to market rates of interest on comparable
loans by private lenders—allowing for the reduction or removal of
63
SPECIAL ANALYSES
the normal private credit risk. In a few cases, interest rates on insured
loans are deliberately set below the market rate and a secondary
market provided to assure the willingness of the private lender to
make the initial loans; for example, the Federal Housing Administration was authorized in the Housing Act of 1961 to insure certain
types of loans to finance moderate-income housing at rates well below
those prevailing in the private market, and the Federal National
Mortgage Association purchases all of such mortgages.
Maturities, both on direct and on insured or guaranteed loans,
often are substantially more liberal than on private loans of similar
types. Private lenders are often limited by law or supervisory policy
to shorter maturities. When a Federal agency insures or guarantees
the loans, however, these limitations customarily do not apply. When
borrowers are acquiring assets yielding income or tangible benefits over
a long period of years, long-term loans reduce periodic installments
and make it possible for borrowers to undertake such acquisitions with
reasonable assurance of repayment.
QUASI-PUBLIC CREDIT PROGRAMS
The Federal Government also has certain responsibilities for the
credit programs of mixed-ownership corporations and other public
agencies operating in whole or in part with private funds. Table E-6
summarizes the outstanding loans for eight institutions or groups of
institutions of this type which have important lending operations.
Table E-6. OUTSTANDING LOANS FOR MAJOR QUASI-PUBLIC CREDIT
PROGRAMS CLASSIFIED BY AGENCY AND PROGRAM (in millions of dollars)
Outstanding at end of fiscal year
Agency
1964
1965
1966
1967
757
2,504
931
2,687
1.008
2.900
1,100
3.124
2.021
2.069
3.609
4.174
506
93
550
645
78
5,881
6,325
595
83
8.195
9.121
3,516
4,769
4,058
5,586
4,493
5,400
4,677
5,800
79
657
Mixed ownership enterprises and trust funds:
Farm Credit Administration:
Banks for cooperatives
Federal intermediate credit banks
Department of Housing and Urban Development: Federal
National Mortgage Association (Secondary market
operations trust fund)
Veterans Administration:
National service life insurance fund
U.S. Government life insurance fund
Subtotal, mixed ownership and trust funds
Other major quasi-public credit programs:
Farm Credit Administration: Federal land banks
Federal Home Loan Bank Board: Federal home loan banks.
Federal Reserve, Board of Governors: Federal Reserve
banks
Subtotal, other quasi-public credit programs
Total
1
Estimatee are not available.
8,364 10,301
14,245 16,626
0)
0)
64
THE BUDGET FOR FISCAL YEAR 1967
Outstanding loans of the five groups of mixed-ownership enterprises
and trust funds for which estimates of future fiscal years as well as
actual data on the past years are available will increase from a total
of $6.3 billion in 1965 to an estimated $9.1 billion by the end of the
fiscal year 1967. Heavy net purchases of mortgages by the Secondary
market trust fund of the Federal National Mortgage Association are
primarily responsible for the anticipated increase.
All three other groups of institutions, which are privately owned,
increased their outstanding loans during the fiscal year 1965 by a
total of $1.9 billion to $10.3 billion. While no data are available on
the probable 1966-67 trends in discounts and advances by the Federal
Reserve banks, the Federal home loan banks and the Federal land
banks expect to add another $0.9 billion to their portfolios during the
2-year period.
SUMMARY OF LEGISLATION AUTHORIZING NEW AND BROADENED
FEDERAL CREDIT PROGRAMS
The following summary lists all legislation authorizing new Federal
credit programs or revising existing programs in major respects
enacted during the last session of Congress. It excludes simple
extensions in expiring laws and increases in funds for continuing
programs.
I. Department of Agriculture
A. Amendments to the Consolidated Farmers Home Administration Act of 1961—Public Law 89-240
(1) Authorizes direct and insured loans to rural public and nonprofit agencies for waste disposal systems, and (2) increases the
annual limitation on insured real estate loans.
II. Department of Commerce
A. Public Works and Economic Development Act of 1965—
Public Law 89-136
(1) Broadens eligibility for public facility loans and grants and
industrial and commercial loans in depressed areas, (2) authorizes
guarantees of working capital loans, (3) makes economic development
centers eligible for loans and grants to stimulate economic growth
of nearby depressed areas, and (4) increases annual authorizations.
III. Department of Health, Education, and Welfare
A. Higher Education Act of 1965—Public Law 89-392
(1) Authorizes advances to State and nonprofit loan insurance programs for college students, (2) authorizes payment to private lenders
of part of interest on insured loans, (3) authorizes Federal insurance
for students unable to obtain nonfederally insured loans, (4) liberalizes NDEA loan cancellation for elementary school teachers serving
in poverty areas, and (5) reduces interest rate on academic facility
loans.
SPECIAL ANALYSES
65
B. National Vocational Student Loan Insurance Act of 1965—
Public Law 89-287
Authorizes similar advances to non-Federal loan insurance funds,
interest contributions and Federal insurance as well as direct loans
for vocational students.
C Health Professions Educational Assistance Amendments of
1965—Public Law 89-290
Provides partial loan cancellations for doctors, dentists, and
optometrists practicing in shortage areas.
IV. Department of Housing and Urban Development (and other
agencies)
A. Housing and Urban Development Act of 1965—Public Law
89-117
(1) Authorizes (a) the Federal Housing Administration to insure
land development loans, (b) the Farmers Home Administration to
insure rural housing loans, and (c) the Small Business Administration
to guarantee lease payments by small businesses; (2) amends statutory
interest rate formulas for loans for (a) college housing, (b) housing
for elderly and handicapped, and (c) multifamUy housing for moderate
income families; and (3) makes numerous other detailed revisions in
existing mortgage insurance and direct loan programs.
V. Department of the Interior
A. Amendments to the Fish and Wildlife Act of 1956—Public
Law 89-85.
Amends statutory interest rate formula for fisheries loans.
VI. Department of Labor
A. Amendments to Manpower Development and Training Act of
1962—Public Law 89-15.
Creates pilot loan and grant program to finance relocation costs of
unemployed workers.
VII. Department of State (and other agencies)
A. Foreign Assistance Act of 1965—Public Law 89-171.
(1) Broadens investments eligible for Latin American housing loan
guarantees, (2) postpones deadline for 1 year for countries to meet
requirements for investment guarantees, (3) authorizes the Department of Defense to sell military assistance loans, with its guarantee,
and (4) increases development loan funds which the President may
make available to international lending institutions.
VIII. Treasury Department.
A. National Capital Transportation Act of 1965—Public Law
89-173
Authorizes additional loans of $50 million to the District of Columbia to finance its share of the National Capital rail rapid transit
system.
789-740 0—-66
66
THE BUDGET FOR FISCAL YEAR 1967
IX. Farm Credit Administration
A. Amendments to Federal Farm Loan Act and Farm Credit
Act of 1933—Public Law 89-237
Revises borrowing authority, stock subscription, and other requirements in order to expedite retirement of Government stock in the
Federal intermediate credit banks.
X. Small Business Administration (and Farmers Home Administration)
A. Southeast Hurricane Disaster Relief Act of 1965—Public Law
89-339
Authorizes partial cancellation of principal or waiver of interest due
on certain loans made by the Small Business Administration and the
Farmers Home Administration to victims of Hurricane Betsy.
SPECIAL ANALYSIS F
FEDERAL ACTIVITIES IN PUBLIC WORKS
Many types of public works, large and small, are needed to carry on
the civil and defense activities of the Federal Government. Some of
these works are built and owned by the Federal Government. Others
are constructed by State or local governments with Federal financial
assistance in the form of grants or loans. This public works analysis
brings together from various parts of the budget information on
Federal construction and federally aided State and local public works.
Federal expenditures also contribute significantly to the volume of
construction undertaken by private cooperatives and nonprofit groups
which provide services in the public interest. These activities are not
included in the public works tables, but are summarized in a separate
section of this analysis. The level of construction activity in the
private sector is also affected by other Federal programs. For example, Federal procurement—particularly of defense and space
equipment—results in private construction of industrial facilities
the cost of which becomes a component in the price of supplies sold
to the Government. Other construction aids to the private sector
take the form of leases, loans, loan guarantees, and tax concessions.
Table F-1. FEDERAL EXPENDITURES FOR PUBLIC WORKS,
FISCAL YEARS 1958-67 (in millions of dollars)
From budget accounts and trust funds
Total,
civil and
defense
public
works
Year
1958..
1959.
1960
1961
1962
1963..
1964
1965..
1966 estimate..
1967 estimate
-
..
.
.
5,070
6,684
6,846
6,823
6,938
7,196
8,346
8.886
9,167
8,939
Civil public works
Total
3,106
4,535
5,011
4.925
5,310
5,790
6,999
7,521
7,697
7,617
Federal
construction
1,254
1,521
1,643
1.878
2.085
2,321
2,691
2,800
2.961
2.902
Grants
1.735
2.871
3,211
2,897
3,018
3,280
4,167
4,553
4,528
4.854
Loans
(net)
National
defense
public
works
1,964
2150
,835
,898
6?7
405
,347
366
470
,322
117
143
156
149
207
190
142
167
209
-139
Note.— In this and the following tables, nonconstruction costs are excluded; proposed legislation is
included for the years 1966 and 1967. Details may not add because of rounding.
Federal and federally aided public works constitute an important
part of the aggregate annual volume of public construction. In
calendar year 1965 direct Federal public works expenditures accounted
for 19% of the total volume of public construction in the United
67
68
THE BUDGET FOR FISCAL YEAR 1967
States. The 8 1 % for State and local public works included two
components—the Federal aid segment of 16% and the State and
local funds of 65%.
Table F-2. EXPENDITURES AND 1967 NEW AUTHORIZATIONS FOR CIVIL
PUBLIC WORKS, BY AGENCY (in millions of dollars)
From budget accounts and trust funds
Expenditures
Type of program and agency
1965
actual
Federal construction:
Legislative Branch
_
Public works acceleration
Office of Economic Opportunity
Forest Service
Corps of Engineers—Civil
Public Health Service
Bureau of Indian Affairs
Bureau of Reclamation
Bonneville Power Administration
National Park Service
Post Office Department
International Boundary and Water Commission.
Coast Guard
Federal Aviation Agency
General Services Administration
National Aeronautics and Space Administration..
Veterans Administration
Tennessee Valley Authority
Other
Total, Federal construction.
Grants to State and local governments:
Public works acceleration
Soil Conservation Service
Economic Development Administration
Bureau of Public Roads
Office of Education
Public Health Service
Federal Water Pollution Control Administration.
Federal Aviation Agency
Department of Housing and Urban DevelopmentDistrict of Columbia
Other
Total, grants.
Loans to State and local governments, net:
Economic Development Administration
Bureau of Reclamation
Office of Education
Department of Housing and Urban DevelopmentDistrict of Columbia
Department of Agriculture
Other
Total, loans
Total, civil public works. *Les« than $500 thousand.
1966
1967
14
33
17
100
919
26
71
247
38
65
56
11
28
81
224
531
83
135
121
20
*
78
104
992
36
49
237
68
60
15
23
18
68
250
495
84
174
190
30
120
1.025
42
67
220
103
61
40
21
40
77
246
300
74
192
222
2,800
2,961
2,902
258
58
21
117
61
7
,923
129
65
77
65
10
10
64
7
66
67
,999
256
98
88
60
94
23
96
4,553
4,528
4,854
126"
11
5
6
15
15
5
120
38
12
3
15
14
20
-247
45
167
209
-139
7,697
7,617
,957
52
66
70
71
12
7,521
22
New
authorizations,
1967
estimate
SPECIAL ANALYSES
69
Federal expenditures for public works are a significant portion of
Federal outlays. Total Federal expenditures for public works in fiscal
year 1967 are estimated at $8.9 billion, of which $7.6 billion will be for
civil public works and $1.3 billion for military public works and atomic
energy facilities. The 1967 estimate is $228 million below the 1966
total. The largest decreases in direct Federal construction are in
military public works and space-flight facilities. Increases in grants
to States are more than offset by the reduction in net loan expenditures
for State and local public works under proposed legislation to facilitate
greater use of private credit through sales of shares in pools of loans
made by the Government.
About half of the expenditures in each of the three years, 1965, 1966,
and 1967, will be for grants, reflecting the $3.9 billion level of expenditures for the Federal-aid highway programs and the significant new
grant programs authorized in fiscal years 1965 and 1966. These
increases will be offset in part by the $110 million decrease in grants
for the public works acceleration program, which will be virtually
completed in fiscal year 1966.
CIVIL PUBLIC WORKS
Civil public works expenditures are estimated at $7.6 billion in
fiscal year 1967. Grants for the Federal-aid highway programs,
financed from trust funds, make up slightly more than half of this total.
Expenditures for the natural resources programs, most of which are
direct Federal expenditures, are estimated at $2 billion in 1967, about
26% of the total. The total estimate of $7.6 billion for 1967, however,
understates the amount of Federal construction activities. This is
because many of the Federal loan programs are shown on a net basis—
that is, loan repayments on prior-year construction facilities are
netted against the current expenditures estimated for the year, thus
understating the volume of assistance in the year for which the figures
are shown.
Many new grant programs for various types of public works were
authorized by the 89th Congress, particularly in the education and
health programs. Also, grants were authorized for highways in
Appalachia and for the Economic Development Administration.
New and continuing work.—In fiscal year 1967, direct Federal construction expenditures are estimated at $4.2 billion, of which $2.9
billion is for civil public works and $1.3 billion for defense construction, including atomic energy facilities. Table F-3 summarizes the
expenditures for direct Federal civil public works according to whether
the expenditures will be for projects started in a prior year, new projects to be started in 1967, or advance planning on projects to be
started after the budget year.
Most of the expenditures for civil public works in 1967 will be for
continuation of the $30.9 billion of construction that was started in
prior years. Prior-year expenditures on these projects amount to
$18.5 billion. Thus, $9.7 billion of expenditures will be required to
complete the work underway.
The 1967 budget provides funds for starting new projects for which
the total cost is estimated at $2.5 billion. First-year expenditures on
these projects in 1967 are estimated at $170 million.
70
THE BUDGET FOR FISCAL YEAR 1967
Table F-3. ESTIMATED COST OF 1967 DIRECT FEDERAL CIVIL PUBLIC
WORKS BY CONTINUING AND NEW WORK (in millions of dollars)
From budget accounts and trust funds
Agency or program
Continuing work:
Corps of Engineers
National Aeronautics and Space Administration..
Tennessee Valley Authority
Bureau of Reclamation
General Services Administration
Bonneville Power Administration
Forest Service
Veterans Administration
Federal Aviation Agency
National Park Service
Bureau of Indian Affairs
Post Office Department
Public Health Service
Office of Economic Opportunity
International Boundary and Water Commission..
Other
Total, continuing work.
New projects and features in 1967:
Tennessee Valley Authority
Forest Service
Coast Guard
Federal Aviation Agency
General Services Administration
National Aeronautics and Space AdministrationBureau of Indian Affairs
Corps of Engineers—Civil
Bureau of Reclamation
Bonneville Power Administration
Veterans Administration
Social Security Administration
Post Office Department
Other
Total, new projects and features.
A dvance planning:
General Services Administration J
Corps of Engineers—Civil
National Aeronautics and Space Administration.
Tennessee Valley Authority
National Park Service
Bureau of Reclamation
Other
Total, advance planning
Total, direct civil public works.
•Less
than $500 thousand.
1
Includes some site costs.
Total
estimated
Federal
cost
Expenditures
prior to
16.211
2,349
10.354
1,857
683
347
5,457
3.447
786
437
695
415
292
952
652
108
175
125
121
1967
estimated
expenditures
Required
to complete
4.859
1.446
296
68
573
219
55
59
308
12
58
95
59
724
998
285
153
213
212
96
96
68
63
60
57
39
31
30
20
247
30,904
18.531
2,668
9.705
243
30
27
27
559
94
47
237
3
1967
207
184
1.796
279
273
27
129
174
833
288
56
86
41
473
2
37
24
16
14
11
10
10
9
6
6
5
2
1
19
204
6
11
13
548
84
37
222
993
52
43
24
48
44
11
170
2.329
175
61
20
13
14
3
30
100
21
4
2
1
2
4
23
18
5
3
2
1
12
51
22
10
8
11
1
15
316
134
64
118
33,730
18.676
2,902
1.000
59
48
26
48
65
2.510
6
1
*
SPECIAL ANALYSES
71
In the water resources area, the Corps of Engineers will start construction of 25 new projects. The Bureau of Reclamation will start 3
large projects and a small project. The Tennessee Valley Authoritywill begin construction on the Tellico and Bear Creek projects and a
steam powerplant. The Soil Conservation Service will start construction on 35 new watershed projects.
The Bureau of Indian Affairs will give particular emphasis in 1967
to the construction of new schools for Indian children.
The General Services Administration will start construction of 36
Federal buildings.
The Social Security Administration will acquire sites and begin
construction of 30 district office buildings, as well as additional office
space at the Baltimore headquarters. All of this construction will be
financed from trust funds.
The $1.2 billion modernization program for veterans hospitals will
go forward in 1967. The Veterans' Administration expects to start
on the replacement and relocation of hospital projects in Tampa, Fla.,
and Northport, N.Y.
Construction will be undertaken by the Public Health Service on
new health facilities for the Indians. Public works to be undertaken
by the Coast Guard will include facilities such as air stations, family
quarters, cadet barracks, and navigation aids.
Among the projects to be started by other agencies are prison
facilities; overseas office buildings and residences by the Department
of State; and $94 million of new facilities by the National Aeronautics
and Space Administration.
Public works planning and surveys.—Construction of some types of
public works is preceded by preliminary surveys and general investigations which help to assure economic design of facilities. Comprehensive river basin planning requires coordinated long-range economic,
hydrologic, and land-use projections, which serve as a basis for planning individual water resource projects to be started in later years.
Expenditures for such studies are not included in the summary tables
of this analysis.
Expenditures of $64 million will be made in 1967 for advance
planning on specific projects, prior to start of construction (shown in
table F-3), include outlays for acquisition of some sites for buildings.
Advance planning will be started by the National Park Service on
parkways, roads, camping and picnicking facilities, and other construction to meet the recreational needs of the increasing number of
visitors to the park areas. The Public Health Service will begin
planning for modernization of a number of hospitals and construction
of an environmental health science center. In addition, the Department of Housing and Urban Development will disburse $20 million in
1967 to State and local government agencies for advance planning of
their public works. Such advance planning promotes economy and
efficiency.
72
THE BUDGET FOR FISCAL YEAR 1967
Authorized reserve of direct Federal public works.—Agencies
whose
programs regularly include construction of public works generally
have a reserve of projects previously authorized. Such projects require
only financing and planning for starting. The reserve provides a basis
for selection of projects which most adequately fulfill program needs
and budgetary policy. Table F-4 indicates the size and the status
of planning on the authorized reserve.
Table F-4. RESERVE OF PRESENTLY AUTHORIZED PROJECTS AND
PROGRAMS FOR UNDERTAKING AFTER 1967 (in billions of dollars)
Cost of authorized reserve
Agency
Corps of Engineers—Civil
.
Forest Service - Tennessee Valley Authority
Bureau of Land Management
Federal Aviation Agency
. .
General Services Administration.
Bureau of Reclamation.
Bonneville Power Administration
Other agencies _. _. Total
Estimated
total
Federal
cost
Status of plans as of
June 30. 1966
Contract
could
be let
Status of plans as of
June 30, 1967
In
process
Not
started
2.9
6.2
1.4
1.1
.6
.4
.4
.3
.5
.2
.1
*
.1
*
*
2.7
1.2
.6
*
.1
.2
.1
.3
.6
*
.2
.4
11.3
.9
5.2
5.2
.4
.6
.2
.1
.2
Contract
could
be let
In
Not
2.5
.1
2.3
1.2
.5
*
.1
.1
*
*
.3
2.6
4.6
4.2
1.4
.2
.4
*
.1
.2
.1
.3
.2
.6
.1
.1
.2
.3
.2
"Less than $50 million.
Civil public works by function.—The Federal public works activities
are classified in table F-7 by major functional categories.
The commerce and transportation function, with its large grant
outlays for highways and airports and its direct outlays for air navigation facilities and post offices, accounts for $4.3 billion of the $7.6
billion of estimated total expenditures for civil public works in the
1967 budget.
In contrast, expenditures of $2 billion for natural resources programs—the next largest functional category—are mainly for direct
Federal work. Construction of water resources and related power
developments are estimated at $1.6 billion in 1967 (table F-5).
Other expenditures will be for parkways, highways, roads and trails,
and recreational facilities in the national parks, forests, and Indian and
public domain lands; fish and wildlife facilities; and research and engineering facilities for the desalinization of sea and brackish water, coal
utilization, and conversion of junk automobiles into usable products.
In the agriculture function, the major share of the construction is for
research facilities and for the recently enacted program of grants for
rural water and sewer systems.
73
SPECIAL ANALYSES
Table F-5. BUDGET EXPENDITURES FOR WATER RESOURCES AND
RELATED DEVELOPMENTS (in millions of dollars)
Type
1965
actual
Flood control works:
Corps of Engineers—Civil
Grants . . .
Bureau of Reclamation
..
_
Soil Conservation Service (mostly grants) . .
International Boundary and Water Commission
Tennessee Valley Authority.
.
.
1966
1967
52.4
.2
3.0
379.9
18.3
15.0
56.1
1.5
3.2
394.4
20.7
11.6
59.1
2.6
3.9
468.9
1.8
474.0
3.1
492.3
1.7
88.6
12.0
10.6
8.2
41.5
14.9
14.9
13.0
73.7
13.9
12.5
8.0
119.4
84.3
108.1
259.0
.7
6.3
258.2
1.2
1.6
268.0
.1
.9
266.0
261.0
269.0
Multiple-purpose dams and reservoirs with hydroelectric power
facilities:
Bureau of Reclamation
Corps of Engineers—Civil
_ ..
. .
International Boundary and Water Commission _
Tennessee Valley Authority
100.9
241.8
8.5
11.9
139.1
322.8
8.2
33.5
104.4
333.9
5.4
33.6
Total, multiple-purpose facilities
Steam-electric powerplants: Tennessee Valley Authority..
363.1
45.9
503.6
47.5
477.3
67.4
...
55.4
47.9
37.6
2.8
68.3
41.2
66.1
4.2
68.3
30.4
101.5
4.8
_ ..
143.7
179.8
205.0
...
69.8
.3
77.0
20.0
1.0
98.5
21.0
.
34.3
1.2
20.2
50.8
-45.0
104.1
118.7
126.3
1,512.9
1.672.0
1,747.1
392.1
11.9
9.3
.
Total, flood control works
Beach erosion control: Corps of Engineers—Civil
Irrigation and water conservation works:
Bureau of Reclamation
Loan and grant program
Soil Conservation Service (mostly grants)
Bureau of Indian Affairs
. . .
.
.. .
Total, irrigation works
Navigation facilities:
Corps of Engineers—Civil
Saint Lawrence Seaway Development Corporation
Tennessee Valley Authority. . .
Total, navigation facilities
Power transmission facilities:
Tennessee Valley Authority
Bureau of Reclamation
Bonneville Power Administration
Southwestern Power Administration
..
..
Total, power transmission facilities. . . .
Water supply and waste disposal facilities:
International Boundary and Water Commission
Federal Water Pollution Control Administration
Farmers Home Administration
Department of Housing and Urban Development:
Grants
. . .- . .
Loans (net) _ . .
. . . .. . . . . .
.
.
.
.
Total, water supply and waste disposal
Total, water resources and related developments...
74
THE BUDGET FOR FISCAL YEAR 1967
Increases in the health, labor, and welfare programs are mainly in
the grants for hospitals, mental health centers, and water pollution
facilities. Expenditures for the construction of Job Corps centers
and related facilities are estimated to decrease from $78 million in
1966 to $30 million in 1967.
The major increase in the education function is for grants for higher
education facilities. New loans for college housing are estimated to be
$333 million in 1967. However, loans for college housing, shown on
a net basis, include proposed legislation to facilitate sales of shares
in pools of such loans, thus reducing 1967 expenditures for education
below the 1966 level. Similarly, expenditures for housing and community development, estimated at $88 million in 1966 and $128 million
in 1967, include loans on a net basis.
A major decrease of $195 million is estimated for the space program
(from $495 million in 1966 to $300 million in 1967), largely as a result
of completion of facilities for the manned lunar landing program.
NATIONAL DEFENSE PUBLIC WORKS
Department of Defense—Military.—The 1967 budget makes provision for implementing a 5-year force structure and financial plan to
strengthen and modernize the Armed Forces of the United States.
The construction program supports missions and activities of the
various services both at home and overseas. It includes facilities
used for operations, training, maintenance, research and development,
logistics, administration, and troop housing. The program also includes facilities to accommodate the transfer of missions resulting
from base closures.
Approximately $110 million of the $593 million of new obligational
authority for direct construction in 1967 is for facilities in support of
research and development. All facilities required to support the
realinement of the Army Guard and Reserve forces in 1967 will be
financed by prior-year funds.
Expenditures are estimated to decrease from $1.3 billion in 1966 to
$1.2 billion in 1967. The major decreases are in Air Force construction and family housing programs.
Atomic Energy Commission.—Expenditures during fiscal year 1967
will be primarily for continuation of work on production plants and
on research and development facilities previously authorized. New
projects proposed for 1967 include modifications and additions to
existing facilities, as well as additional research and development facilities for weapons development, reactor development, and research
in the physical and biomedical sciences.
AID TO COOPERATIVES AND NONPROFIT GROUPS
Federal grant and loan programs which provide aid for public works
of State and local governments sometimes include funds for private
nonprofit institutions which carry on similar construction activities,
such as those for educational opportunities, promotion of health, and
conduct of research. These aids for quasi-public construction activities are not included in the public works tables of this analysis. However, they are shown in table F-6.
75
SPECIAL ANALYSES
Table F-6. FEDERAL EXPENDITURES FOR CONSTRUCTION BY COOPERATIVE AND NONPROFIT GROUPS (not included in civil public works)
(In millions of dollars)
1965
actual
Program
Federal construction:
Howard University
Gallaudet College
Grants:
Hospital construction
Health professions educational facilities
Health research facilities
University laboratories
Higher education facilities
Public works acceleration program
Loans:
Rural electrification and telephones (net in 1966 and 1967).
College housing (net)
Higher education'facilities
1966
1967
3
124
130
24
37
50
42
33
40
8
30
Total.
381
157
2
190
151
55
779
692
146
44
40
50
103
194
-318
30
296
Table F-7. FEDERAL ACTIVITIES IN PUBLIC WORKS (in millions of dollars)
By major function and agency
Function, organization unit, and program
EXPENDITURES
NEW AUTHORIZATIONS
1965
actual
1967
1966
estimate estimate
1965
actual
1966
1967
estimate estimate
CIVIL PUBLIC WORKS
International Affairs and Finance
Department of State:
State Department and Foreign Service
buildings
Cultural and Technical Interchange
Center, Hawaii (grant)
U.S. Information Agency: Radio facilities
and special international exhibitions
Total, international affairs and
finance _ _ . _ . .
..
6.1
9.5
4.7
6.3
3.2
7.6
.2
.2
5.7
22.7
18.8
5.1
8.8
15.7
11.8
32.2
23.8
11.3
12.0
23.6
266.4
60.0
101.5
530.9
495.0
300.0
7.3
3.2
19.4
2.0
2.7
1.8
.2
15.2
2.0
20.7
.5
1.5
.5
.1
.8
1.6
Space Research and Technology
National Aeronautics and Space Administration:
Research and space flight facilities
Agriculture and Agricultural
Resources
Department of Agriculture:
Laboratories, research facilities, and
library
Grants for research facilities. __ . .
Soil Conservation Service: Resource
conservation and development loans..
76
THE BUDGET FOR FISCAL YEAR 1 9 6 7
Table F-7. FEDERAL ACTIVITIES IN PUBLIC WORKS
(in millions of dollars)—Continued
By major junction and agency
Function, organization unit, and program
NEW AUTHORIZATIONS
1965
1966
EXPENDITURES
1967
1965
1966
actual
actual
CIVIL PUBLIC WORKS—Continued
Agriculture and Agricultural
Resources—Continued
Department of Agriculture—Continued
Farmers Home Administration:
Rural renewal loans
Grants for rural housing
Grants for rural water and sewer
systems
Total, agriculture and agricultural resources
1.0
1.0
3.0
20.0
1.0
.7
3.0
3.0
20.0
26.0
12.0
46.9
33.1
2.9
42.8
.3
67.4
7.3
.3
62.1
5.7
.3
61.7
5.2
.3
58.3
4.4
.4
61.0
9.6
107.1
106.4
103.1
100.1
104.2
,060.5 1,026.9
20.2
27.1
18.3
20.7
894.6
24.5
11.9
964.0
28.0
18.3
Natural Resources
Department of Agriculture:
Soil Conservation Service: Flood Prevention and watershed protection:
Direct work
Grants
Loans
Forest Service:
Roads and research, recreational and
protective facilities
Department of Defense—Civil:
Corps of Engineers—Civil:
Flood control, navigation, and multiple-purpose projects with power_.
Trust funds
Grants
Department of the Interior:
Bureau of Land Management: Roads
and other facilities
Bureau of Indian Affairs: Irrigation
works, roads and schools
Ge ological Survey: Laboratory
Bureau of Mines:
Laboratories, demonstration plants,
and helium facilities
Appalachian mining area restoration
and anthracite mine drainage grants
Office of Coal Research: Demonstration plants
Bureau of Commercial Fisheries: Facilities
Bureau of Sport Fisheries and Wildlife:
Facilities
Appalachian restoration projects
(grants)
National Park Service: Parkways, roads,
buildings, and utilities 1
Bureau of Reclamation:
Irrigation and multiple-purpose projects with power i
Loans, small irrigation projects
Grants, small irrigation projects
See footnotes at end of table.
,022.7
20.1
11.9
19.1
17.
9.9
7.7
9.3
71.9
1.0
53.
75.2
71.2
49.4
.6
1.0
15.5
2.5
2.6
10.6
.4
.6
2.2
2.9
4.0
1.2
4.3
4.2
1.3
.5
4.3
3.8
9.3
18.3
3.2
8.2
8.0
1.2
.6
1.2
67.0
53.2
55.8
64.8
60.2
242.8
10.1
241.4
13.2
219.5
9.9
246.7
12.0
236.9
14.7
77
SPECIAL ANALYSES
Table F-7. FEDERAL ACTIVITIES IN PUBLIC WORKS
(in millions of dollars) —Continued
By major function and agency
Function, organization unit, and program
EXPENDITURES
NEW AUTHORIZATIONS
1965
actual
1967
1966
estimate estimate
1965
actual
1966
estimate
1967
stimate
CIVIL PUBLIC WORKS—Continued
Natural Resources—Continued
Department of the Interior—Continued
Power transmission facilities:
Bonneville Power Administration l
Southwestern Power Administration..
Office of Saline Water: Demonstration
plants and research facilities.
.. .
Department of-State:
International Boundary and Water
Commission: Water resources projects
and Chamizal settlement- .
Restoration of salmon runs, Fraser River
system
Facilities for International Pacific Halibut Commission (grant)
Tennessee Valley Authority: Power, water
resources and chemical facilities.
Total, natural resources
86.9
2.6
97.7
2.2
107.7
4.5
38.2
67. 7
4. 2
102. 6
2.8
1.4
5.6
9.4
.8
4. 3
7. 2
38.3
17.5
9.9
11.4
23. 0
21. 0
4. 8
1
3
.5
2
32.2
41.3
44.8
135.1
IV4. 4
192 !>
,842.7
,840.0
,813.8
,700.0
,850. 4
,972 9
258.4
33.2
117 0
1
70
34
Id 4
7.9
I 1)
15 4
1
15 5
8.4
60
6 .0
Commerce and Transportation
Funds appropriated to the President:
Public works acceleration:
Grants
Direct Federal work
Department of Commerce:
Economic Development Administration:
Grants for public facilities
Loans for public facilities . _ . .
Area Redevelopment Administration:
Grants for public facilities
Environmental Science Services AdCoast and Geodetic Survey: Observatories and facilities
Bureau of Standards: Buildings.
Weather Bureau: Facilities. . . . ._ . .
Maritime Administration: Library and
4.0
35.0
45.0
14.8
150.0
34.9
146.5
33.3
1.4
.6
5.6
.4
.8
.4
2
1.2
()
22.5
.3
11
16 3
.3
8.6
.6
(2)
.8
Bureau of Public Roads:
Federal-ai 1 highways and other trust
3,860 .8 3,89; .5
funds: Grants
3,790.9 3,938.5 4,044.8 3,919.0
.2
Woodrow Wilson Bridge
(2)
Appalachian development highways:
grants
.
.
129.6
19.6
101.1
(2)
199.6
Forest and public lands highways,
38.1
Grants
42.0
38.3
38.2
1.0
.1
.5
Control of outdoor advertising, grants
Department of Defense—Civil: Panama
Canal Company: Canal and harbor
b .8
improvements and bridge
.
1.;
5.8
See footnotes at end of table.
78
T H E BUDGET FOR FISCAL YEAR 19 67
Table F-7. FEDERAL ACTIVITIES IN PUBLIC WORKS
(in millions of dollars) — C o n t i n u e d
By major function and agency
Function, organization unit, and program
NEW AUTHORIZATIONS
1965
actual
EXPENDITURES
1967
1966
1965
actual
1966
1967
CIVIL PUBLIC WORKS—Continued
Commerce and Transportation—Con.
Department of the Interior: Alaska Railroad
Post Office Department: Improvements
and alterations
Treasury Department: Coast Guard: Air
stations, quarters, and navigation aids_.
Federal Aviation Agency:
Air traffic control, navigation, and research facilities
Dulles and National Airports
Federal-aid airport program: Grants
Federal Communications Commission:
Construction
St. Lawrence Seaway Development Corporation: Alterations
12.0
13.9
.4
48.2
56.3
15.0
40.0
19.6
29.1
27.8
17.8
39.6
48.2
1.2
28.0
76.9
75.0
50.0
63.4
4.3
73.0
3.9
60.0
1.3
4.1
10.9
17.8
21.7
49.0
1.9
75.0
4.5
70.6
65.0
.1
.1
.7
1.2
Total, commerce and transporta4,259.8 4,328.9 4,545.8 4,542.4 4,278.6 4.345.6
tion
Housing and Community
Development
Department of Housing and Urban Development:
Urban transportation grants
Public facility loans (net)
Grants for water and sewer facilities
Grants for neighborhood facilities
Advance planning, non-Federal public
works: Loans (net)
Liquidating programs: Loans (net)
Low-rent public housing loans (net) _ - _
National Capital Transportation Agency:
Land acquisition and construction
District of Columbia:
Loans for highway, sewer, and water
systems and other structures
Federal payment to District: Grant
Total, housing and community development
21.0
73.0
73.0
38.
100.0
12.0
14.0
100.0
25.0
7.9
15.0
-.4
11.3
8.0
22.5
1.2
1.2
31.0
-52.5
50.8
12.5
7.9
10.0
-.5
-3.1
-.5
3.7
17.1
.1
2.7
9.1
26.4
28.3
9.7
37.5
22.9
10.7
38.2
9.7
45.3
22.9
61.4
241.7
275.5
67.6
87.9
128.4
55.0
70.0
17.0
78.0
30.0
10.9
5.7
1.0
5.0
Health, Labor, and Welfare
Office of Economic Opportunity: Job
Corps centers and related facilities
Department of Health, Education, and
Welfare:
Food and Drug Administration:
Buildings
See footnotes at end of table.
4.1
79
SPECIAL ANALYSES
Table F-7. FEDERAL ACTIVITIES IN PUBLIC WORKS
(in millions of dollars) —Continued
By major junction and agency
Function, organization unit, and program
NEW AUTHORIZATIONS
1965
actual
1966
EXPENDITURES
1967
1965
actual
1966
1967
CIVIL PUBLIC WORKS—Continued
Health, Labor, and Welfare—Continued
Department of Health, Education, and
Welfare—Continued
Public Health Service:
Federal research facilities and National Library of Medicine
Indian health facilities x
._
Grants for public hospitals
Grants for health research facilities
Hospital planning grants, proposed
Grants for mental health centers
Federal Water Pollution Control Administration:
Buildings and facilities _
Grants, including proposed legislation.
Saint Elizabeths Hospital: Buildings
Social Security Administration: Buildings and district offices (trust fund) _.
Total, health, labor, and welfare. _.
16.5
9.6
64.1
22.5
9.0
86.3
1.5
9.0
14.3
94.5
1.5
35.0
50.0
18.3
14.6
98.0
1.5
5.0
50.0
93.0
2.0
121.0
2.0
4.6
188.0
2.1
69.8
.7
.3
4.7
11.4
.3
315.5
372.7
397.6
18O.(
8.9
48.8
17.3
32.1
9.9
12.4
100.0
340.0
40.0
30.0
8.2
60.0
3.6
28.1
14.2
70.0
1.5
2.0
1.6
25.0
77.0
3.0
88.5
3.0
4.7
11.4
28.1
10.0
265.2
288.6
8.2
29.2
11.3
35.0
14.4
30.0
21.3
1.1
5.0
51.0
33.0
10.0
20.0
162.6
39.0
24.1
68.7
93.1
-203.4
Education
Department of Health, Education, and
Welfare:
Office of Education:
Schools in federally affected areas:
At Federal installations
Grants
Higher education facilities:
Loans
Grants
Vocational schools (grants)
Libraries (grants)
Department of Housing and Urban Development: College housing loans (net).
National Science Foundation: Research
facilities
Smithsonian Institution:
John F. Kennedy Center for Performing
Arts
Museums
Total education
170.0
33.0
30.0
125.0
7.0
35.0
340.0
50.0
30.0
140.0
7.6
11.9
80
8.0
7.3
1.8
8.4
6.0
11.7
10.0
3.4
15.5
4.0
4.0
4.3
442.2
656.0
548.5
3.7
1.0
1.5
2.6
3.6
.2
146.8
264.1
107.4
Veterans Benefits and Services
Department of Defense—Civil:
Army: Cemeteries
United States Soldiers' Home (trust
fund)
See footnotes at end of table.
2.3
80
T H E BUDGET FOR FISCAL YEAR 1 9 6 7
Table F-7. FEDERAL ACTIVITIES IN PUBLIC WORKS
(in millions of dollars) —Continued
By major function and agency
Function, organization unit, and program
EXPENDITURES
NEW AUTHORIZATIONS
1965
actual
1966
1967
1965
actual
1966
1967
CIVIL PUBLIC WORKS—Continued
Veterans Benefits and Services—Continued
Veterans Administration:
Hospital and domiciliary facilities
Research facilities.
Construction of State nursing homes,
grants
Corregidor-Bataan Memorial .
American Battle Monuments Commission:
Memorials and cemeteries .
Total, veterans benefits and services-
98.1
2.4
90.5
.4
52.1
.4
.1
2.5
1.4
4.0
80.6
2.2
83.2
.4
73.1
.4
.5
.2
.9
1.0
.1
61.7
83.8
87.2
78.7
46.7
13.1
.4
18.5
1.9
14.2
9.0
4.2
3.3
4.4
.9
8.0
8.6
7.4
7.5
1.0
8.8
13.0
5.9
.3
2.4
2.3
5.1
104.3
95.8
3.5
2.5
79.7
4.8
12.2
10.9
General Government
Legislative branch:
Architect of the Capitol: Buildings and
James Madison library.
Government Printing Office: Annex
Department of Defense —Civil
Army: Power and water systems,
Ryukyu Islands: Loans
Canal Zone Government: ImprovementsDepartment of the Interior:
Office of Territories: Public facilities in
Samoa, Guam and the Trust Territory of the Pacific Islands:
Grants .
Loans
Department of Justice:
Immigration and Naturalization Service: Border facilities
Federal Prison System: Prison facilities.
Treasury Department:
Bureau of Customs: Border facilities
Bureau of Engraving and Printing: Air
conditioning
Bureau of the Mint: Philadelphia Mint..
General Services Administration: Construction of public buildings, sites and
planning 1
Central Intelligence
quarters
Agency:
.. _
Total, civil public works
See footnotes at end of table.
.3
.2
.3
.3
.2
23.0
4.3
3.5
4.3
11.2
8.9
.2
.2
.2
.2
.2
.2
5.8
16.5
22.3
.3
.1
3.0
8.5
2.5
16.4
242.7
207.0
223.8
249.6
246.1
.4
.7
1.3
254.0
313.9
324.2
229.0
Head..
Total, General Government
...
7.6
322.4
336.1
291.4
7,638.6 8,010.1 8,092.7 7,520.6 7,697.2 7,616.8
=====
81
SPECIAL ANALYSES
Table F-7. FEDERAL ACTIVITIES IN PUBLIC WORKS
(in millions of dollars)—Continued
By major function and agency
NEW AUTHORIZATIONS
EXPENDITURES
Function, organization unit and program
1965
actual
1966
1967
1965
actual
1967
1966
estimate <
NATIONAL DEFENSE PUBLIC
WORKS
Department of Defense—Military:
Interservice activities:
Construction, Defense agencies
Loran stations
^
Family housing
Civil Defense:
Grants for shelters
Emergency centers and shelters
Army:
Construction
Construction, Army Reserve
Construction, Army National Guard
(grants)
Navy:
Construction
Construction, Naval Reserve
Air Force:
Construction
Construction, Air Force Reserve
Construction, Air National Guard
14.4
5.0
156.3
219.8
5.0
5.3
3.5
7.8
16.0
345.2
5.0
921.1
190.6
10.8
10.0
269.9
7.0
627.2
9.5
133.6
5.4
373.1
5.0
14.0
693.8
4.0
10.0
242.9
3.6
9.4
7.5
31.7
40.0
10.0
150.0
75.0
3.3
4.0
.5
6.0
1.0
199.2
6.0
320.0
2.0
380.0
.3
8.0
8.7
245.1
6.8
275.0
6.0
250.0
6.0
489.6
3.6
13.8
465.0
4.0
10.0
385.0
5.0
10.0
149.1
175.1
Total, Department of Defense—
Military
Atomic Energy Commission: Facilities
,211.0 2,686.8
183.4
88.9
609.0 1,159.4
206.4
127.8
,294.5
175.0
162.0
160.0
Total, national defense public works
,394.4 2,775.7
736.9 1,365.7
,469.5
,322.0
9,166.7
,938.8
Total, civil and defense public works:
Budget accounts and trust funds
1
2
9,033.0 10,785.8 8,829.5
Includes small amounts from trust funds.
Less than $50 thousand.
789-740 0—(56
G
SPECIAL ANALYSIS G
FEDERAL EDUCATION, TRAINING, AND RELATED PROGRAMS
This analysis provides information on all programs of the Federal
Government which contribute to the support of education, training,
and related activities, regardless of the agency which administers
them or their primary purpose. It is the first comprehensive analysis
of Federal education, training, and related programs based on data in
the annual U.S. budget. The data cover fiscal years 1965-1967.
The Government will spend an estimated $8.4 billion in 1967 for all
education, training, and allied programs broadly defined. This total
encompasses all programs classified in the budget functional category
700, "education," for which expenditures in 1967 are estimated to be
$2.8 billion. In addition, it includes $5.6 billion for education and
training activities classified in other functional categories, including
training, conduct of research at universities, national libraries and
library aid programs, military professional and occupational training
with transfer value to the civilian economy, and aid for international
educational activities. Funds for facilities, aid for students, and
institutional support all are included.
Almost all of these education, training, and related expenditures
of $8.4 billion will be from administrative budget funds. They comprise 7.4% of all regular budget expenditures. Trust fund expenditures will total $15 million. Together budget and trust expenditures
for these programs account for 5.8% of Federal cash payments to the
public.
The $8.4 billion in estimated expenditures in this analysis is an
increase of $1.3 billion over 1966, and $3.2 billion over 1965. The
rise from 1966 is dampened by the effect of estimated receipts from
sales of participations in college facility loan pools and offsets due to
greater reliance on private credit for student loans under proposed
legislation. Expenditures for programs under existing legislation are
projected to total $9.3 billion in 1967, an increase of $2.2 billion from
1966 and $4.0 billion from 1965.
New obligational authority in 1967 for all the education, training,
and related programs will total $10.2 billion, $0.5 billion more than in
1966 and $3 billion over 1965. The gross amount of aid under Federal
programs in 1967 will actually be about $1 billion higher, because of
the proposed greater reliance on private credit. Although no new
obligational authority will be provided for college housing in 1967,
commitments for loans from available funds and receipts from loan
participation pool sales will continue at about the present level of
$300 million. It is also proposed that academic facility loans of
$100 million be financed from proceeds of loan participation pool
sales. Likewise, an estimated 829,000 student loans, totaling about
$800 million will be made for college and vocational training by
private institutions with Government interest subsidies through
guaranteed programs authorized by the Higher Education Act of
1965 or other laws.
82
83
SPECIAL ANALYSES
E d u c a t i o n - Program Trends
Federal Expenditures
Student A i d Programs
Billions
3 -
1956
58
60
62
64
66 67 1956
58
60
62
64
66 67
The development of Federal education, training and. related programs.—
The high value placed on education by the American people is reflected
in the substantial and increasing proportion of public, as well as
private, resources which are devoted to the support of education.
In the last decade, particularly, total outlays for education from all
sources have increased 50% in relation to the GNP, and in absolute
terms have risen two and one-half times. Federal aid to education has
grown rapidly during this period—as illustrated by the nearly fivefold increase in the programsi n the functional category "education."
The accompanying trend chart shows the contribution of new laws
since 1958 on the expansion of Federal aid for the segment of funds
normally classified in the budget as "education."
Although historically the financing of education has been preponderantly a State and local concern, Federal assistance for education
dates back to the allocation of public lands for support of schools
in 1785. It has been marked by such milestones as the Morrill Act
of 1862 which authorized grants of land or scrip for the establishment
of land-grant colleges, the Smith-Lever Act of 1914 relating to cooperative extension work by colleges, and the Smith-Hughes Act of 1917
and the George Barden Act of 1946 which provided support for
vocational and technical education.
84
THE BUDGET FOR FISCAL YEAR 1967
The rapid expansion of national defense and war-related programs
during and following World War II has resulted in enlarging the
Federal role in support of education and training:
• Millions of military personnel and civilians were trained in crash
programs during the war.
• The "GI bills"—the Servicemen's Readjustment Act of 1944
and the Veterans' Readjustment Assistance Act of 1952—while
primarily veteran's benefit programs, nevertheless resulted in about
$19 billion of Federal expenditures for college and below-college
education, and for on-job and on-farm training.
• Federal construction and operating assistance for schools in
districts affected by Federal activities, authorized in 1950 on a
greatly enlarged basis, remained for more than a decade the largest
source of Federal aid to elementary and secondary education.
Science activities and training, which received a considerable impetus
during World War II, have also had increasing Federal attention in
recent years:
• Major expansion of the National Institutes of Health during
the 1950's and the 1960's provided an effective focus for Federal
support of health and training and has resulted in increasing the
flow of research funds to universities.
• Establishment in 1950 of the National Science Foundation added
a new source of funds to promote basic science research and science
education.
• Concern over the large shortages in manpower trained in mathematics, science, and modern foreign languages following the first
Sputnik in 1957 led to the enactment of the National Defense
Education Act in 1958 which authorized a variety of support
programs for elementary, secondary, and college level education.
Shortages of highly trained professional personnel and technicians
have likewise led to the enactment of many training programs related
to specific fields or missions. A good example is the Health .Professions Educational Assistance Act of 1963, more recently augmented
by amendments in 1965. The Vocational Education Act of 1963 was
designed to reorient earlier Federal-State vocational education programs to meet current day needs for technicians. Growing awareness
of the necessity for retraining unemployed persons and for updating
skills in a rapidly changing economy similarly led to the Manpower
Development and Training Act of 1962.
The major effort launched by President Johnson in calendar 1964
to attack the causes of poverty has placed a heavy reliance on education and training. The Economic Opportunity Act of 1964 authorized
10 major action programs, including the Job Corps, Neighborhood
Youth Corps, Adult Literacy, Work Experience, College Work-Study,
and Community Action programs, which in 1967 will provide more
than $1 billion for basic adult education, work-training, preschool,
and other educational and training activities. The strengthening of
education through other programs is also a major part of the antipoverty effort.
The Government has made great strides in recent years in providing
direct Federal support for education at all levels. The Higher Education Facilities Act of 1963 authorized major Federal assistance through
SPECIAL ANALYSES
85
grants and loans for construction of undergraduate and graduate
academic facilities. Previously, Federal aid for facilities was essentially restricted to college housing loans, first authorized by the
Housing Act of 1950, and special-purpose grants, largely in the science
area.
The largest advances of all in Federal aid for education were made
by the 89th Congress. The Elementary and Secondary Education
Act of 1965 authorized more than $1 billion of Federal funds for 1966
alone to strengthen elementary and secondary education for children
from low-income families. It also authorized funds for supplementary educational centers and services; for school library resources,
textbooks, and other instructional materials; for regional education
"laboratories" designed to bring innovation to the classrooms; and
for strengthening State departments of education.
The Higher Education Act of 1965 authorized a major broadening
of Federal support of higher education including assistance for (1)
community service and continuing education programs; (2) college
library resources, library training and research; (3) strengthening of
developing colleges; (4) student assistance on a greatly enlarged scale
through educational opportunity grants up to $1,000, federally subsidized, guaranteed student loans, and an expansion and liberalization
of the college work-study program enacted in 1964; (5) instructional
equipment; and (6) liberalization of grants for higher educational
facilities. It also authorized new programs for graduate training
of schoolteachers and for establishment of a National Teacher Corps
which would serve some schools with large concentrations of the poor.
The National Foundation on the Arts and the Humanities Act, also
enacted in 1965, initiated Federal support of the humanities and the arts.
Federal funds
for education,
training,
and related programs
by
agency.—Ten Cabinet departments and more than 15 other agencies
support or conduct education, training, and related programs as an
integral part of their agency's mission. Table G-l summarizes the
funds for each agency.
Of the $8.4 billion in budget and trust fund expenditures estimated
for education, training, and related programs in 1967, $3.8 billion or
45% will be made by the Department of Health, Education, and
Welfare. Within this Department, in turn, the Office of Education
will spend 72% of the funds; the Public Health Service, including the
National Institutes of Health, about 23%. Expenditures for HEW
programs, especially in the Office of Education, are increasing sharply,
2%-fold from 1965 to 1967. Most of the HEW expenditures take the
form of grants-in-aid or loans.
The Department of Defense ranks as the next largest agency, responsible for $2.1 billion or 25% of all the expenditures in 1967, even
though specialized military training such as recruit and pilot training
have been excluded from this analysis. More than $1.5 billion of
the Defense expenditures are for training for skills and occupations
which have value in civilian life. In addition, the Service Academies,
which account for expenditures of $134 million in 1967, have been
included as higher education.
All of the remaining agencies of the Federal Government will
account for net expenditures of about $2.5 billion for education, train
86
THE BUDGET FOR FISCAL YEAR 1967
ing, and related programs in 1967, or 30% of the total, and a decline
of $152 million from 1966. Exclusive of the net receipts under proposed legislation mentioned earlier, the expenditures by all agencies
other than HEW and Defense will total $3.2 billion, or about $600
million more than for 1966.
These other agencies cover a wide range of activities:
• The National Science Foundation's programs have the objective
of strengthening basic research and education in the sciences.
• The Department of Labor finances programs for occupational
training and manpower research.
• The Veterans Administration supports the education of disabled
veterans, or those of recent service, children of disabled or deceased
veterans, and training in medicine and dentistry.
• The Department of Agriculture shares with State and local governments the support of the Cooperative Extension Service, the
principal public service organization of the land-grant universities.
• The National Aeronautics and Space Administration has grants
and contracts with academic institutions for research, assists graduate students in the sciences, and supports the construction of
academic science facilities.
Table G-l. FEDERAL FUNDS FOR EDUCATION, TRAINING, AND RELATED
ACTIVITIES BY AGENCY (in millions of dollars)
NEW OBLIGATIONAL
AUTHORITY
EXPENDITURES
Agency
1965
actual
1966
1967
1,508
3,305
3,479
677
186
748
234
753
347
113
55
31
1965
actual
1966
1967
842
1,511
2,718
487
71
626
143
681
192
57
30
23
86
43
32
111
51
35
2.441
3,789
ADMINISTRATIVE BUDGET
Department of Health, Education, and
Welfare:
Office of Education
Public Health Service:
National Institutes of Health
Other Public Health Service.
Vocational Rehabilitation Administration
Welfare Administration
Other Health, Education, and Welfare-
61
33
31
Total, Department of Health, Education, and Welfare
Department of Defense:
Military activities:
Army
Navy
Air Force
Other.,..
Civil activities
Total, Department of Defense
1
Office of Economic Opportunity
National Science Foundation
Department of Labor
Department of Housing and Urban Development
2,495
4,452
4,777
459
692
624
123
15
492
735
654
135
20
498
785
681
150
23
443
684
616
120
15
480
726
648
133
19
498
772
666
143
27
1,913
2.036
2,136
,877
2,006
2,106
457
420
413
835
480
410
929
525
415
92
309
242
637
365
291
1.010
425
293
300
300
221
240
-531
1,510
87
SPECIAL ANALYSES
Table G-l. FEDERAL FUNDS FOR EDUCATION, TRAINING, AND RELATED
ACTIVITIES BY AGENCY (in millions of dollars)—Continued
NEW OBLIGATIONAL
AUTHORITY
EXPENDITURES
Agency
1965
actual
1966
1967
1965
actual
1966
ADMINISTRATIVE BUDGET—Con.
Economic Assistance 1
Department of the Interior
Veterans Administration
Department of Agriculture
National Aeronautics and Space Administration
Atomic Energy Commission
Department of State
Peace Corps l
Smithsonian Institution
District of Columbia
Library of Congress
Military Assistance 1
General Services Administration
Federal Aviation Agency
National Foundation on the Arts and the
Humanities 2
Department of Commerce
Treasury Department
United States Information Agency
Department of Justice
Tennessee Valley Authority
U.S. Government Printing Office
U.S. Arms Control and Disarmament
Agency
National Capital Planning Commission..
Transitional grants to Alaska 1
Total net budget funds for education, training, and related activities
183
206
84
168
174
193
82
183
248
229
186
171
95
176
84
164
119
180
82
180
138
84
56
45
37
19
24
36
4
18
134
101
66
58
27
29
26
39
7
19
125
102
66
58
36
30
30
27
18
17
100
79
57
41
28
11
24
36
4
18
144
94
58
44
41
27
26
39
6
19
7
9
10
9
7
2
16
12
11
10
10
2
2
*
7
2
9
11
9
6
2
9,697
10,192
5,202
7,077
7,141
TRUST FUNDS
Department of Labor
General Services Administration
Library of Congress
National Foundation on the Arts and the
Humanities
Smithsonian Institution
Total, trust funds, for education,
training and related activities...
13
13
15
12
13
Total budget and trust funds for
education, training, and related
programs
7,154
9,710
10,207
5,214
7.090
1"Less than $500 thousand.
2 Funds appropriated to the
President.
Combined with National Council on the Arts.
88
THE BUDGET FOR FISCAL YEAR 1967
• The Department of the Interior provides elementary, secondary,
and college level education for Indians.
• The Agency for International Development finances both formal
and informal education and training of individuals in the developing countries.
The forward thrust of Federal education, training, and related
programs is indicated by the 43% increase of new obligational authority from 1965 to 1967. Of the $10.2 billion total for 1967, nearly
$4.8 billion is for the Department of Health, Education, and Welfare—
a growth of over 90% in 2 years. The Department of Defense's
share in the new obligational authority for 1967 is $2.1 billion, or 21%.
All other agencies will receive $3.3 billion, or 32%, of total new obligational authority for 1967.
Federal funds for education, training, and related programs by category
or type of aid.—Table G-2 shows the distribution of total new obligational authority and expenditures for the programs in this special
analysis for the 3 fiscal years 1965-67, showing the level of education
aided or the type of assistance provided.
The promotion of higher education will amount to $3.8 billion in
1967, 37% of total new obligational authority requested for 1967.
In this total, support of facilities, equipment, and institutional development, largely by the Office of Education and the National
Science Foundation, comprise over $1 billion. Support of undergraduate, graduate, and professional training, in which many agencies
participate, will account for nearly $1.3 billion. University-based
research, exclusive of educational research, which is financed largely
by agencies such as the National Institutes of Health, the National
Science Foundation, and the Department of Defense totals $1.3
billion. Because substantial receipts under proposed legislation from
sales of loan participations and because direct student loans will be
replaced by subsidized non-Federal loans, net expenditures in the
higher education category will total $2.4 billion, 28% of total expenditures.
The second largest category, $2.6 billion of new obligational authority, or 25%, will be for aid to preschool, elementary, and secondary
education. In this category, more than $1.3 billion will be for programs authorized by the Elementary and Secondary Education Act
of 1965, mostly for educationally deprived children from low-income
families. On an expenditure basis this category comprises $2.4
billion, 29% of total estimated outlays.
The third largest category, $1.6 billion in new obligational authority,
is for training of Federal governmental personnel. More than 90%
of these funds are for technical and professional training of military
personnel in skills which are usable in civilian occupations. The
amounts for the Service Academies and off-duty training are included
as higher education.
The fourth largest category, $1.4 billion of new obligational authority in 1967, is for vocational education, work training, and
other adult or continuing education programs. It encompasses
the vocational education programs of the Office of Education, the
Manpower Development and Training program of the Department
89
SPECIAL ANALYSES
Table G-2. FEDERAL FUNDS FOR EDUCATION, TRAINING, AND RELATED
PROGRAMS BY CATEGORY (in millions of dollars)
Category or type of aid
NEW OBLIGATIONAL
AUTHORITY
1965
actual
1. Preschool, elementary, and secondary:
(a) General support:
(1) Operations
(2) Facilities
(b) Education of special groups:
Existing programs
Proposed legislation
(c) Teacher training
Subtotal, preschool, elementary, and secondary
2. Higher education:
(a) Facilities, equipment, and institutional development of
physical facilities:
Existing programs
Proposed legislation
(b) Support of undergraduate students:
(1) Support of individuals:
Existing programs
Proposed legislation
(2) Institutional support
(c) Support of graduate and professional training:
(1) Support of individuals:
Existing programs
Proposed legislation
(2) Institutional support
(d) Research, except educational
research
(e) Other
Subtotal, higher education
3. Vocational education, work-training
and other adult or continuing
education:
Existing programs
Proposed legislation
4. Educational research, curriculum development, etc
5. Training of Federal governmental
personnel:
(a) Military personnel
(b) Civilian personnel
6. International educational activities
7. Other
Subtotal, existing programs..Subtotal, proposed legislation.
Total, budget and trust funds for
education, training, and related
programs
1966
1967
EXPENDITURES
1965
actual
1966
1967
522
206
752
194
685
160
497
127
549
158
643
169
197
1,318
94
540
111
106
1,539
6
210
75
110
1,446
6
172
1,036
2,370
2,600
793
1,357
2,436
1,041
1,245
,344
-300
331
557
899
-908
337
555
315
405
21
25
551
18
28
14
19
446
13
25
252
315
177
255
197
1,100
106
260
1,241
142
370
-13
314
1,311
190
117
934
105
185
1,117
124
1,205
158
3,054
3,783
3,813
,993
2,662
2.382
,123
,382
635
,055
1,303
30
61
134
1,393
34
155
39
74
125
1,366
68
276
173
1,451
87
291
208
1,511
96
346
261
1,358
72
195
133
1,434
82
219
207
1,496
86
255
272
7,154
9,710
10,462
-255
5,214
7,090
9,259
-873
7,154
9.710
10,207
5,214
7,090
8,386
310
-14
248
90
THE BUDGET FOR FISCAL YEAR 1 9 6 7
of Labor, and training components of numerous programs financed
by the Office of Economic Opportunity.
Federal funds for education, training, and related programs by budget
functional category.—Table G-4 lists the major Federal programs
covered in this analysis under the functional categories in which they
are regularly classified in the Federal budget. In each category the
programs are in turn listed by the agencies which administer them.
Programs classified in the "education" function of the budget,
comprise only $2.8 billion—one-third—of the total expenditures for
education, training, and related programs from the Federal Government. These are the programs which have as their end purpose the
promotion of education. They include all the activities carried on by
the Office of Education and by the National Science Foundation, and
these two agencies are the largest components. They also include
the college housing loan program of the new Department of Housing
and Urban Development, and certain other smaller programs, such
as education of Indians by the Department of the Interior, activities
of the Smithsonian Institution, and the Library of Congress.
Expenditures of $5.4 billion in 1967 are included for programs which
have as their primary purpose objectives other than the promotion of
education and training, but which, nevertheless, contribute significantly to advancing the search for knowledge and education broadly
defined. They are administered by a wide variety of other agencies
and are classified in other functional categories. A review of this
second group of programs indicates the extent to which the Federal
Government supports mission-related education and training which
contributes to the overall development of our human resources. In
1967, such expenditures are estimated as follows:
• $2.3 billions in "health, labor, and welfare." encompassing the
economic opportunity programs of $1 billion, the health research
and training programs of $900 million, the activities of the Welfare
Administration, Vocational Rehabilitation Administration, the
manpower development programs, and various other smaller
programs.
• $2.2 billion in "National defense," including $1.5 billion for
training of military and civilian personnel, nearly $0.3 billion for
research support by the Department of Defense, and more than $0.1
billion by the Atomic Energy Commission, mostly for research.
• $280 million for the expanded education aid programs in the
"international affairs" category, mostly through the Agency for
International Development and the Department of State.
• $176 million in "veterans benefits and services" for vocational
rehabilitation of disabled ex-servicemen, educational benefits for
children of deceased servicemen, proposed new readjustment
benefits, and training of VA medical personnel.
• $158 million in "agriculture and agricultural resources," primarily for cooperative research and extension services.
• $136 million for "space research and technology" for both mission
related research grants and contracts and graduate education in
science and technology through the NASA sustaining university
program.
SPECIAL ANALYSES
91
• $233 million in all other categories of the administrative budget,
including "natural resources/' "commerce and transportation,"
and "housing and community development."
Support of graduate and undergraduate students.—The Federal Government is playing an increasing role in the support of graduate and
professional training (1) directly, through fellowship and traineeship
programs included in this analysis, and (2) indirectly, through research
contracts and grants which support thousands of research assistants,
principally graduate students. Table G-3 presents preliminary
estimates of the number of individuals assisted, including rough
estimates of the number of assistantships. While the totals include
some undergraduates, the great majority of the individuals are
engaged in postgraduate training or study.
In addition to support for the individuals reported in table G-3,
several prog-rams also finance training for large numbers of teachers
through institutes, generally held in the summer. NDEA institutes
financed by the Office of Education are estimated to aid 28,000
teachers in 1967, 4,000 more than 1966 and about 7,600 more than
1965. Likewise, the science institutes financed by the National
Science Foundation are expected to assist nearly 39,000 high school
teachers in 1967, about the same number as in 1966, and 2,700 less
than in 1965.
The Higher Education Act of 1965 authorized a major expansion
in aid to undergraduate and graduate college students which is also
not reflected in table G-3. In 1967 well over 1 million students,
mostly undergraduates, will be assisted under this act, more than 3
times as many as in 1965 when 317,000 were aided through NDEA
student loans. In 1967, 220,000 students will be awarded scholarships, an increase of 105,000 over 1966; about 210,000 will be helped
through work study programs, a 60,000 increase; and 775,000 will
receive federally subsidized loans, a 475,000 increase. The NDEA
student direct loans, estimated at 400,000 in 1966, are expected to be
entirely replaced in 1967 by the new subsidized guaranteed loans.
Proposed legislation.—The budget contains several legislative proposals which significantly affect 1967 budget expenditures for education. Proposed legislation to authorize pool participation sales of
loans, with authority for supplementary funds necessary to assure
payments on certificates where loans have been made at interest rates
below current market levels, is estimated to result in net proceeds
from sales of $85 million in the HEW academic facilities program and
$823 million in the college housing program of the Department of
Housing and Urban Development. In addition, the legislation would
cancel $300 million of new obligational authority otherwise becoming
available in 1967 for college housing loans, since existing funds and
expected receipts from participation sales will be sufficient to continue
during 1967 the present rate of $300 million in new loan reservations.
Legislation to shift the National Defense Education Act student
loan program to the newly authorized subsidized loan guarantee program under the Higher Education Act, retaining the special assistance
to students who subsequently teach, is anticipated to reduce new obligational authority and expenditures, respectively, by $34 million in
1967. Similar legislation for students in the health professions will
reduce new obligational authority and expenditures by $21 million.
Table G-3. ESTIMATED NUMBERS OF INDIVIDUALS IN GRADUATE AND PROFESSIONAL TRAINING AIDED BY FEDERAL
FUNDS (in thousands)
1965
Department of Defense (Military)
Department of Health, Education, and Welfare:
Office of Education
Public Health Service:
National Institutes of Health
Other PHS
Other
Atomic Energy Commission _
National Aeronautics and Space Administration
National Science Foundation
Other . .
...
Total
*Less than 50.
Figures not available.
1
Research assistantships
F'ellowships
Agency
1966
1967
1965
14.8
24.0
5.0
.2
.1
.3
.1
4.8
*
5.4
.3
.3
.4
.2
4.0
*
5.6
.4
.9
.4
.2
3.8
*
18.2
25.5
35.3
1967
1965
1966
1967
10.8
14.5
24.9
36.3
22.1
22.2
6.0
*
4.5
.1
1.3
2.8
5.4
5.5
.1
1.3
4.2
5.4
6.9
.1
1.0
5.0
5.4
31.2
.6
4.7
4.3
1.4
11.5
5.5
35.3
.7
5.8
4.4
1.5
13.3
5.5
35.8
.9
7.7
4.5
1.2
14.8
5.5
35.2
40.1
46.9
51.5
88.2
105.9
121.7
1.5
6.9
8.3
7.0
.3
7.8
.4
8.0
.5
19.2
3.9
4.0
0)
5.1
4.1
0)
*
33.6
29.8
1966
15.1
1.8
4.0
.1
1965
14.5
15.1
0)
1967
14.5
14.5
14.5
7.6
1966
Total
Traineeships
SPECIAL ANALYSES
93
A proposal to expand programs to ease the readjustment of veterans
of recent service by providing education and training assistance would
require new obligational authority of $100 million and estimated
expenditures of $90 million in 1967.
Altogether the above legislative proposals woidd result in a net
reduction of $255 million in new obligational authority for 1967 and a
net decrease in expenditures of $873 million.
The 1967 budget also includes (1) funds for new and expanded programs to be proposed in the field of international education, (2) a
proposed reduction in aid for schools in areas affected by Federal
activities, and (3) recommendations by the President that the Elementary and Secondary Education Act of 1965 should be extended
beyond June 30, 1966, and improved, including an increase in the
income criterion for allocating funds for fiscal year 1968 from $2,000
to $3,000, repeal of the incentive grant provision for 1967, and changes
relating to grants for education of Indian children. The expenditure
effects of these latter proposals are not separately identified in the
budget.
Programs not covered by this special analysis.—Although
the scope of
this analysis is broad, it does not include a number of activities which
are closely allied and which are sometimes included in estimates of
expenditures for education. Examples of activities excluded are as
follows: Basic recruit training of military personnel and other strictly
military training, such as flight training, are excluded because of
limited transfer value to the civilian economy. Scientific research
conducted outside of academic institutions, or carried on in universitymanaged research centers under Federal contracts, is also omitted,
because the portion of their efforts devoted to training is generally
limited. The school lunch and special milk programs are omitted because they are largely of a welfare character and their effect on transmission of knowledge is indirect. University service contracts, for
example, for operating mental health centers, are excluded. Technical
assistance programs between governments or levels of governments
which do not involve educational institutions are not included. Finally, many small inservice training programs for Federal civilian
employees are not included because it was not readily feasible to
obtain the data.
Relationship of Federal aid to total national outlays for
education.—
The significance of the Federal expenditures for education reported
in this analysis may in part be appraised in the context of total national
expenditures for education from all sources, public and private. Preliminary estimates consistent with those published by the Department
of Health, Education, and Welfare in Health, Education, and Welfare
Trends indicate that the total national expenditures for education
covering current expenditures, capital outlay, and interest, but not debt
retirement, for both public and nonpublic schools and colleges reached
$39 billion during the school year ending 1965, approximately 6% of
the gross national product. Nearly $27 billion was spent for elementary and secondary education and slightly more than $12 billion for
higher education.
The HEW series, however, includes only funds obligated by educational institutions. It thus omits major federally operated programs
94
THE
BUDGET FOR FISCAL YEAR
1967
such as training of military personnel, the great bulk of on-the-job and
similar training activities outside regular schools, as well as the student
assistance which is paid to individuals rather than to the colleges. On
the other hand, the HEW series includes several major programs which
are omitted from the present special analysis, including the school
lunch program and about $560 million in funds for research and
development in university-managed off-campus research centers for
1965.
If the figures for the expenditures in this special analysis for fiscal
year 1965 are adjusted to correspond with those in the series prepared
by HEW, the Federal funds for elementary and secondary education
total approximatelv $1.3 billion, or about 5% of all public and private
outlays in the corresponding category; and funds for higher education
would total about $3 billion or about 25% of the national outlay in
this category reported by HEW. Overall the Federal contribution to
the direct financing of the Nation's educational institutions would be
about 11%.
Table G-4. FEDERAL FUNDS FOR EDUCATION, TRAINING, AND RELATED PROGRAMS BY BUDGET FUNCTION
(in millions of dollars)
Functional category, agency, and program
Functional
code
NEW OBLIGATIONAL
AUTHORITY
1966
1965
estimate
actual
ADMINISTRATIVE BUDGET FUNDS
National Defense:
Department of Defense:
Support of oversea schools for dependents
i
Service academies, construction, equipment, and operation
Research grants and contracts with educational institutions
Professional, technical, and related training:
Military personnel
Civilian personnel
Civil defense research and training
Other, mostly support for undergraduate students
Military assistance: Training of military and civilian personnel administered by
Department of Defense from funds appropriated to the President
Atomic Energy Commission:
Research, including conduct and facilities
Graduate and professional training and related support for higher education
Other
EXPENDITURES
1967
estimate
1965
actual
1966
estimate
1967
estimate
051
051
051
74
133
264
79
138
277
90
128
305
73
117
255
78
138
270
87
134
285
051
051
051
051
1,362
10
13
42
1,447
14
14
46
1,507
16
16
50
1,354
10
11
42
,431
13
13
45
1,492
16
16
50
057
36
39
27
36
39
27
058
058
058
72
7
5
87
8
6
67
7
5
1,977
2,120
2,209
Total, national defense.
2,018
2,155
2,242
152
45
58
58
44
46
153
8
9
10
9
10
151
6
7
10
7
9
153
45
53
50
46
49
153
5
6
6
5
5
International affairs and finance:
Peace Corps: Training activities
United States Information Agency:
Information center and library activities, Foreign Service Institute, etc
Department of State:
Salaries and expenses: Foreign Service Institute, etc
Mutual educational and cultural activities: Largely American and foreign student,
teacher, professor, specialist, and leader exchange programs
Educational and cultural affairs: Center for Cultural and Technical Interchange
Between East and West
Table G-4. FEDERAL FUNDS FOR EDUCATION, TRAINING, AND RELATED PROGRAMS BY BUDGET FUNCTION
(in millions of dollars) —Continued
Functional
code
Functional category, agency, and program
NEW OBLIGATIONAL
AUTHORITY
1965
1966
EXPENDITURES
1967
1965
1967
1966
e
ADMINISTRATIVE BUDGET FUNDS—Continued
International affairs and finance—Continued
Agency for International Development (funds appropriated to the President for
economic assistance): Educational and training phases of technical cooperation,
aid to educational institutions, and training of foreign nationals
.
U.S. Arms Control and Disarmament Agency: Research _.
.
Total, international affairs and finance. . .
183
1
174
1
248
1
95
*
119
1
160
1
294
307
382
202
231
280
251
138
134
125
100
144
136
355
13
11
9
11
12
13
355
355
355
49
86
2
53
90
9
46
93
3
49
85
2
53
91
4
46
93
6
149
163
151
146
160
158
402
401
18
*
20
1
20
1
18
*
20
1
20
1
400
28
30
31
28
29
31
..
Space research and technology:
National Aeronautics and Space Administration: Research and training . . . .
Agriculture and agricultural resources:
Department of Agriculture:
Agricultural research service: Training and research
Cooperative State research service: Payments to State agriculture experiment
stations for research .
Federal extension service for cooperative extension work
Other, including National Agricultural Library
....
Total, agriculture and agricultural resources
152
151
.. .
Natural resources:
Department of Agriculture: Forest Service: Largely payments of shared revenues
to States and counties for schools
Department of Defense—Civil: Corps of Engineers: Research and training
_
Department of the Interior:
Shared revenue payments to States and counties under miscellaneous permanent
appropriations, largely mineral leasing and grant lands (estimated portion for
school support)
.
.
Bureau of Indian Affairs: School construction, alteration, repair, and maintenance.
Water and saline water research
Fisheries and wildlife research and shared revenue payments to States
Tennessee Valley Authority: Mainly in-lieu-of~tax payments and cooperative research
401
401
404
54
6
1
36
9
2
61
9
2
35
4
21
8
2
401
35
8
2
2
109
98
127
502
506
6
2
6
3
6
6
502
501
10
18
10
19
11
17
18
19
11
17
36
38
40
34
38
39
19
29
5
30
27
2
37
19
29
35
27
39
97
44
180
180
262
270
255
172
147
112
186
255
225
293
140
145
6
47
30
120
4
44
20
160
6
Total, natural resources.
81
100
Commerce and transportation:
Department of Commerce:
Maritime Administration: State schools and other maritime training
Research and technical services
Treasury Department: U.S. Coast Guard, principally Coast Guard Academy, education of uniformed personnel and oversea dependents
-...
Federal Aviation Agency: Principally training of civilian Federal personnel
Total, commerce and transportation.
Housing and community development:
Department of Housing and Urban Development: Grants for training in community
development skills
District of Columbia: Prorated school portion of general Federal contribution
553
555
Total, housing and community development.
6
5
Health, labor, and welfare:
Office of Economic Opportunity (funds appropriated to the President):
Community Action program:
Head Start
Adult training, remedial education, research, etc
.„
Jobs Corps—Urban and rural centers
Neighborhood Youth Corps:
In-school and summer
Out-of-school
-.
Work Experience—Adult training, including remedial education
Adult basic education
VISTA—Training of volunteers
See footnotes at end of table.
655
655
655
154
655
655
655
655
655
104
2
36
18
I
6
48
16
4
5
5
10
34
30
1
7
3
1
45
21
5
Table G-4. FEDERAL FUNDS FOR EDUCATION, TRAINING, AND RELATED PROGRAMS BY BUDGET FUNCTION
(in millions of dollars) —Continued
Functional category agency, and program
Functional
code
NEW OBLIGATIONAL
AUTHORITY
1965
actual
1966
estimate
EXPENDITURES
1967
estimate
1965
1966
estimate
actual
1967
estimate
ADMINISTRATIVE BUDGET FUNDS—Continued
Health, labor, and welfare—Continued
Department of Health, Education, and Welfare:
Public Health Service:
Community Health:
Construction of medical schools and other health education facilities.
Construction of mental health facilities
Health professions training
.
Proposed legislation to convert loans to medical students to private subsidized
guaranteed loans
Research grants
Other
__ ._ __
..
Environmental health:
Research grants
Other
National Institutes of Health:
National Institute of General Medical Sciences:
Training
- __
. _
Research
National Institute of Mental Health:
Training
Research _ . .
,
Other National Institutes of Health:
Training
Research grants
Research facilities
Other Public Health Service
Welfare Administration:
Maternal and child welfare grants Public assistance grants to States and assistance to refugees
Juvenile delinquency and youth offenses research and other activities _ . . .
651
651
651
100
8
34
90
10
65
160
10
117
651
651
651
16
3
31
3
651
651
16
6
651
651
33
25
2
54
45
2
95
-21
25
3
14
3
29
3
-21
22
3
21
9
25
13
13
4
19
8
20
10
52
29
60
31
62
34
37
22
43
24
46
26
651
651
81
47
94
51
99
51
54
38
64
46
71
48
651
127
295
46
3
146
321
45
4
155
335
17
16
80
229
27
3
118
301
31
4
137
321
33
16
15
15
23
21
2
29
24
13
15
2
21
25
20
2
23
3
651
651
651
651
653
659
j
Vocational Rehabilitation Administration: Research and training
Other health, education, and welfare:
Water Pollution Control Administration: Fellowships and training grants
Freedmen's Hospital and St. Elizabeths: Medical training and other
Department of the Interior: Bureau of Mines: Health and safety training
Department of Labor:
Manpower Development and Training Act: Institutional and on-the-job training.
Apprenticeship, area redevelopment, and research activities. _.
659
6!
88
86
in
3
1
3
2
2
113
4
2
2
57
651
651
652
2
1
1
2
1
3
2
1
652
652
397
16
400
11
400
15
230
12
279
12
282
11
1,831
2,368
2,619
983
1,831
2,344
24
26
30
24
26
30
701
959
1,070
230
970
701
192
111
65
230
Total, health, labor, and welfare.
704
701
701
332
58
347
50
183
23
311
38
307
47
222
45
701
97
113
88
68
81
79
147
60
99
182
131
64
179
43
n
122
134
34
-34
141
27
40
60
101
64
-34
89
294
169
523
110
523
200
to to
Education:
Legislative branch: Library of Congress
Department of Health, Education, and Welfare:
Office of Education:
Elementary and Secondary Education Act of 1965:
Education of the disadvantaged (grants to school districts with families under
$2,000^1
'
Supplementary centers, schoolbooks, and strengthening State educational j
agencies
Aid to federally impacted school districts:
Operation
Construction
National Defense Education Act activities for elementary and secondary education: Primarily school equipment, guidance, testing
Aid for undergraduate and graduate college students:
Scholarships
Work-study
National Defense Education Act loans
Proposed legislation to convert NDEA loans to subsidized loan guarantees
Other, including loan guarantee program
Higher education academic facilities:
Grants for college, junior college, and graduate facilities
Loans
Proposed legislation for pool participation sales of loan obligations
_
Other aids to higher education institutions, including aid to developing colleges.
Expansion and improvement of vocational education
Grants for public libraries
I
1
87
60
28
162
55
62
243
55
104
240
58
30
132
26
41
173
35
70?
702
702
702
702
702
702
702
702
704
704
261
135
-85
83
205
51
Table G-4. FEDERAL FUNDS FOR EDUCATION, TRAINING, AND RELATED PROGRAMS BY BUDGET FUNCTION
(in millions, of dollars)—Continued
Functional
code
Functional category, agency, and program
EXPENDITURES
NEW OBLIGATIONAL
AUTHORITY
1967
1966
1965
1966
estimate
1965
1967
estimate
ADMINISTRATIVE BUDGET FUNDS—Continued
Education—Continued
Department of Health, Education, and Welfare—Continued
Office of Education—Continued
Teacher training:
Institutes
Fellowships
National Teacher Corps
Educational research and development:
National Defense Education Act
Cooperative research
_
.
Other
Other aids to education, including salaries and expenses of Office of Education,.
Special institutions and miscellaneous including American Printing House for the
Blind, Gallaudet College, Howard University, and educational TV.. . _ . . .
Department of Housing and Urban Development:
College housing loans.
.
. .
Proposed legislation for pool participation sales of loan obligations
Department of the Interior: Bureau of Indian Affairs: Indian education
. ..
National Capital Planning Commission
National Council on the Arts and National Foundation on the Arts and the Humanities.
National Science Foundation:
Basic research and specialized research facilities
. . .
Grants for institutional science programs
. .
Science education
. . . ..
Other science activities
--_
-Smithsonian Institution
Total, education
.
704
704
704
35
20
13
40
43
31
19
10
1
33
20
27
704
4
5
6
3
4
704
704
704
16
14
58
70
25
65
80
25
96
13
1
38
21
20
45
704
28
27
24
20
28
30
702
702
704
704
704
300
300
221
240
289
-823
98
2
*
107
300
-300
115
16
106
*
2
113
7
99
2
*
703
703
703
211
61
122
246
80
126
279
85
133
156
32
101
184
41
115
221
703
704
26
37
28
27
28
36
20
28
25
41
60
118
26
43
2,417
4,278
4,225
1,544
2,318
2,834
9
11
16
9
11
16
.
Veterans benefits and services:
Veterans Administration:
Compensation and pensions: Subsistence allowances for veterans in vocational
rehabilitation.. ._
30
800
5
58
24
76
8
Readjustment benefits: Principally aid under War Orphans' Educational Assistance Act and vocational rehabilitation for disabled veterans.- Proposed legislation: Readjustment benefits for veterans of recent service
Training of medical personnel engaged in VA medical activities _ . .
803
803
801-805
Total, general government
_
.-
-_
--
32
43
37
34
32
34
36
90
34
84
82
186
84
82
176
901-910
1
f
2
1
1
2
910
910
11
3
16
5
12
9
12
3
14
4
17
9
910
18
9
9
8
14
13
908
6
7
10
4
6
9
905
910
4
1
7
*
18
0
4
1
6
*
5
0
45
45
59
33
46
55
7,141
9,697
10,192
5.202
7,077
8,371
652
9
10
11
9
10
11
704
704
2
2
1
2
2
2
2
1
2
2
905
2
*
*
*
*
13
13
15
12
13
15
7,154
9.710
10.207
5,214
7.090
8.386
__
Total net administrative budget funds for education, training, and related
activities
TRUST FUNDS
Health, Education, and Welfare:
Department of Labor: Grants to States for school counseling and testing by employment service
_.
.
. - _
37
36
100
34
Total, veterans benefits and services
General government:
Legislative branch: Government Printing Office: Distribution to depository libraries
and library activities
- . -- . .
-. . „Department of Defense—Civil:
Canal Zone Government, contribution to schools
Ryukyu I slands administration, schools :
_.
Department of the Interior: Administration of territories, including Trust Territory
of the Pacific, prorated portion for schools __
Department of Justice: Vocational training in Federal prison industries and grants
for training in law enforcement
General Services Administration: National Archives services, Presidential library
activities, and national historical publications grants
..
.
.
Transitional grants to Alaska (funds appropriated to the President)...
43
Education:
Legislative branch: Library of Congress, gift and trust fund income accounts . . .
National Foundation on the Arts and Humanities, fund for private contributions
General government:
General Services Administration: National Archives gift fund
Total, trust funds
_.
Total, budget and trust funds for education, training, and related programs
"Less than $500 thousand.
__
SPECIAL ANALYSIS H
FEDERAL HEALTH PROGRAMS
This analysis provides a comprehensive summary of expenditures
for all the medical and health-related activities of the Federal Government. Tt includes those activities classified in the "health" function
as well as health programs included in other groupings. Government
cash payments to the public in this broad category will rise to an
estimated total of $10.3 billion in 1967. This total is derived from
$7.8 billion expenditures from administrative budget accounts and
$3.3 billion from trust funds, less interfund transfers of $0.8 billion.
This spending will finance a wide variety of activities—hospital care
and medical treatment in Federal and non-Federal facilities, construction of health facilities, health research and training, and a multitude
of preventive and community health and health-related programs in
Federal, State, and local governmental institutions and by private
hospitals, research organizations, and individual practitioners. The
expenditures from administrative budget funds continue to be the
largest segment of health spending and they will account for 7% of
total administrative budget spending. However, the program for
hospital insurance and supplementary medical benefits for the aged
under the social security system will be financed through trust funds
which will account for 29% of health expenditures in 1967.
F e d e r a l E x p e n d i t u r e s , Medical and Health-Related Activities by Category
Fiscal Year 1967 Estimated
Grants and Payments for Medical Care of Individuals
I 2.4
Direct Patient Care
Research Including Facilities
Construction of Health Facilities Direct, Grants, Etc.
Preventive and Community Services
Training Including for Research
I
102
Agencies Other than Department of HEW
Department of H£W
SPECIAL ANALYSES
103
Recent trench in Federal health-related expenditures.—Health programs are among the oldest activities of the Federal Government,
some of them predating the Constitution. The earliest were for
medical care of soldiers, merchant seamen, and veterans. Around
the beginning of the present century, the Federal efforts in health
research and consumer protection, such as those under the Pure Food
and Drug Act, made their appearance. Following World War IT, the
directly operated patient care programs of the Defense Department
and Veterans Administration overshadowed the other segments of
Federal health expenditure. Since that time, while expenditures for
these programs increased moderately, the role of the Federal Government shifted rapidly to one of large-scale grant support for health
infrastructure—at first hospital and other facility construction, medical research, and State and local community services for specific
disease categories or health problems, and, subsequently, health manpower, especially physicians, dentists, and nurses, and, provision of a
full range of facilities and services for comprehensive care to individuals or for specific problems such as water pollution. Today, with
hospital and supplementary health insurance for the aged through the
social security system and medical assistance payments for aged and
other needy through welfare grants, the Government role has moved
toward assuring to all citizens the availability and accessibility of high
quality medical care, regardless of income.
Although this special analysis has not existed long enough to provide a long-term series of data, comparable information is available for
fiscal 1958. The figures provide some perspective on the sharp change
taking place. In 1958, obligations for health activities totaled $3
billion, of which $1.9 billion were by the Defense Department and
Veterans Administration, largely for patient care in Federal facilities.
By 1967, total expenditures will have grown to $10.3 billion, and $3.3
billion of this spending will be for the new program of care of aged
patients who, traditionally, have not been Federal beneficiaries.
Thus, these expenditures for the social insurance medical programs
will exceed in 1967 the total Federal spending for health in 1958.
Another important change from the situation in 1958, reflecting the
changing content of the Federal Government's health role, is the
relative portion of the Federal health budget which is managed by the
Department of Health, Education, and Welfare. In 1958, the
programs of Health, Education, and Welfare accounted for $0.8
billion of the $3 billion Federal total. In 1966, the Department of
Health, Education, and Welfare is expected to spend $3 billion, 48%
of the total of $6.3 billion. Almost all of that spending is from
administrative budget funds. In 1967, with the addition of the trust
fund programs, HEW's total is expected to rise to $6.6 billion (adjusted
for interfund transfers), 64% of the total.
Distribution oj Federal health programs by agency.—Eight Cabinet
departments and more than a dozen other agencies conduct or support
health programs. In addition, every agency finances health programs
for Federal employees. Many of the health activities of these agencies
are not classified in the "health, labor, and welfare" function, but are
carried on as part of programs for other purposes and are classified in
the functional categories according to the basic purpose served, such
104
THE BUDGET FOR FISCAL YEAR 1967
as "national defense," "veterans benefits and services," etc. However, because these activities contribute to advancing the Nation's
health, they are included in this analysis. Thus, while the regular
functional classification shows expenditures of $3.6 billion in 1967 for
"health services and research"—all by the Department of Health,
Education, and Welfare—the amounts included in this analysis are
almost three times as large and cover many agencies. Table H-l
shows the expenditures for each agency.
As has been noted, 64% of all Federal budget and trust fund
spending for health in 1967 will be by the Department of Health,
Education, and Welfare. Spending by the Department of Defense is
increasing by $223 million, due to the military situation in Vietnam
and resultant increase in personnel strength of the armed services, and
will account for 14% of the total. The Veterans Administration is
estimated to account for another 14%. The bulk of the health
expenditures by the Department of Defense and the Veterans Administration are for the provision of direct care and treatment, most of
which is provided in their own hospitals and clinics. These two
agencies also have sizable expenditures for health facilities, for training,
and for support of health research.
The Department of Health, Education, and Welfare, on the other
hand, spends only a comparatively small portion of its health funds
to provide direct medical care in Federal facilities, principally for
merchant seamen and Indians in Public Health Service hospitals.
About half of the Department's expenditures, or $3.3 billion, will be
from trust funds and will reflect the first substantial impact of the
newly enacted program for health and medical care for older persons.
The largest proportion of the Department's health care outlays from
administrative budget funds continue to be for medical research and
training and for grants to States and localities to cover medical expenses of public assistance recipients and assistance for medical care
of the aged. The Department also spends substantial amounts
through the Public Health Service for grants for construction of health
facilities, for support of local and State community health, and for
environmental health activities.
The remaining $870 million of the estimated expenditures in 1967
will be made by more than 20 other departments and agencies.
Among these, the largest single amount is for the Department of
Agriculture for research and for meat and poultry inspection. Significant expenditures are also made by the Agency for International
Development and the Department of State which support health
activities in other countries, the Atomic Energy Commission with
its substantial biomedical research activities in the radiological field,
the National Aeronautics and Space Administration with research
activities in space medicine, and the National Science Foundation
which underwrites basic research in biosciences. The newly organized
Department of Housing and Urban Development makes advances
and loans for water and sewer facilities, for neighborhood health
centers, and other health facilities. The newly enacted programs
supporting health facilities and the 1965 expansion of water and sewer
facilities programs account for the more than threefold increase in
the Department's expenditures from 1966 to 1967.
SPECIAL ANALYSES
Distribution
105
of Federal health expenditures by category and by bene-
ficiary group.—Table H-2 shows the distribution of the total Federal
medical and health-related expenditures for the 3 fiscal years, 1965-67,
by six categories. The preceding chart on estimated expenditures
for 1967 depicts the distribution of the outlays in each category between
the Department of Health, Education, and Welfare and all other
agencies.
Of the total expenditures of $10.3 billion in 1967 for medical and
health-related purposes, $7 billion, or about 68%, will be for provision
of health care either directly in Federal facilities or financed by Federal
grants or payments for services by non-Federal facilities. This is an
increase of $4.1 billion from 1965, $3.4 billion of which is the change
from 1966 to 1967, mostly because of the trust-funded programs of
medical care for older people. These social security medical programs
are causing a reversal in the previously established ranking of the two
largest categories. Whereas direct patient care was the largest category of expenditure through 1966, the onset of large expenditures for
the new programs for the aged make the nondirect care category the
largest in 1967.
The direct care expenditures amount to $2.4 billion, or 23%, of total
expenditures. Most of this service is provided in hospitals of the
Department of Defense, Veterans Administration, and the Department
of Health, Education, and Welfare, which, in all, contain almost 10%
of all hospital beds in the United States.
Table H-3 shows the number of hospitals, hospital beds, and the
average daily number of patients during 1965-67. The number of
individual patients during any year is, of course, many times the
daily census because hospital stays average from 7 to 75 days for
most agencies. In addition to this large number of inpatients,
several million individuals each year receive outpatient care or treatment in the Federal facilities. The 1966 and 1967 increases shown
in the data for the Department of Defense reflect increased military
operations in Vietnam and supporting activities.
Over one-sixth of the population in the United States is potentially
eligible for direct hospital carp or medical treatment in Federal
facilities. Approximately 22 million living war veterans, including
some 2 million with service-connected disabilities, comprise the largest
single group of eligibles, although for ailments not related to military
service hospital care is provided only to the extent that the veteran
certifies that he is unable to pay for his care in private facilities.
Active duty and retired uniformed service personnel numbering 3.2
million and their 5.6 million dependents are also covered. Approximately 2.5 million Federal employees are entitled to treatment for
in-line-of-duty disabilities, although such injuries are comparatively
infrequent. Other eligible groups include 380,000 American Indians
and natives of Alaska, 118,000 American seamen, 21,500 inmates of
Federal prisons, and civilians in the Panama Canal Zone, narcotics
addicts, and patients with leprosy.
The second category of expenditures, which will become the largest
in 1967 and reach $4.6 billion, or almost 45% of the total, is for
grants and payments for hospital and health care in non-Federal
facilities. Hospital insurance and supplementary medical benefits for
the aged through social security accounts for 72% and grants by the
Department of Health, Education, and Welfare for medical care
106
THE BUDGET FOR FISCAL YEAR 196 7
through public assistance continue to rise. During 1967, an estimated
19 million persons will be eligible although about 4.4 million are
expected to receive benefits from the hospital insurance program and
about 4.1 million from medical insurance. Medical cost for about
860,000 aged will be met through the spatial Federal-State program of
medical assistance for the aged.
Under arrangements managed by the Civil Service Commission,
health benefits are provided'to over 2 million Federal civilian employees (90% of those eligible), and to 4.7 million of their dependents
under the Federal Employees' Health Benefits Act. A similar program provides benefits for 227,000 retired Federal employees and
their dependents. These payments are made from trust revolving
funds into which are deposited both agency and employee contributions. Since the health benefits funds are revolving funds, with
receipts offsetting expenditures, only the net effect of these transactions in the trust funds is included in the expenditures for this
category. The Government's contributions, amounting to $165
million in 1965, $169 million in 1966, and $174 million in 1967, are
included in the administrative budget figures and are mostly classified
in this category. Also included in this category are payments for
care of Federal beneficiaries, principally by the Veterans Administration and the Department of Defense in those cases where Federal
facilities are not available.
Of general benefit to the entire Nation are the infrastructure activities of the Federal Government such as health research, training, and
health construction assistance, and the preventive and community
services, all of which are discussed separately in following paragraphs.
Expenditures for these activities will total $3.3 billion in 1967, an
increase of $1.1 billion from 1965. These categories account for
almost 2 1 % of the increase over 1965 in total health outlays. The
amount of increases over 1965 is greatest for health research and
facilities ($408 million), but the other categories will have higher
rates of increase: Training (72%), preventive and community service
activities (52%), and construction of health facilities (49%). Much
of the increase in these programs reflects legislation enacted by the
88th and 89th Congresses for assistance to schools and to students in
medicine, dentistry, and other health professions, for programs to
combat mental retardation and promote mental health, for regional
medical programs to combat heart disease, cancer, and stroke, and
for increased Federal efforts for pollution control. Other expanding
areas include activities relating to pesticides, community health, and
foods and drugs.
About 73% of the $1.4 billion in Federal expenditures for healthrelated research and research facilities are by the Department of
Health, Education, and Welfare, particularly the National Institutes
of Health, which alone account for $815 million. The Department of
Defense, the Atomic Energy Commission, the National Science
Foundation, and the National Aeronautics and Space Administration
also make sizable outlays for health research.
Training, including training for research, accounts for $546 million in
1967 expenditures. Again, the Public Health Service, and especially
the National Institutes of Health, is the major source, although the
Department of Defense also spends significant amounts.
Of the $635 million for preventive and community health services,
$247 million will be spent by the Public Health Service, the Food and
107
SPECIAL ANALYSES
Drug Administration, and the Children's Bureau, all agencies of the
Department of Health, Education, and Welfare. The Federal
Government's programs of assistance to underdeveloped countries are
also responsible for about $100 million of the outlays and the Department of Agriculture programs account for most of the remainder.
The Hill-Burton hospital construction program accounts for $233
million out of $672 million to be spent in 1967 for construction of
facilities other than for research. The Veterans Administration's
expenditures of $68 million represent the seventh year of that agency's
15-year hospital replacement and modernization program. The
Department of Defense will also spend $115 million for construction.
Proposed legislation.—Legislation to fill significant gaps in Federal
health programs has been proposed by the President. The 1967
budget includes net new obligational authority of $94 million and net
expenditures of $26 million for the following items: (1) $23 million
in estimated expenditures for a new Federal-State partnership in
health service programs, systems-oriented studies of the organization
and delivery of medical care services, planning for accelerated modernization of obsolete hospital and health care facilities, training of
medical technologists and allied health professionals, and the improvement of Federal health organization and career development; (2)
$24 million for the control of environmental pollution through the
demonstration of water pollution control in selected river basins,
increased research and development and increased training in pollution sciences, and improved water pollution enforcement authority;
and (3) estimated savings of $21 million in expenditures from the
conversion of existing direct Federal loans to medical and nursing
students to a system of loan guarantees with interest subsidy.
Table H-1. FEDERAL EXPENDITURES FOR MEDICAL AND HEALTHRELATED PROGRAMS BY AGENCY (in millions of dollars)
1965
actual
Agency
1966
estimate
1967
estimate
ADMINISTRATIVE BUDGET
Department of Health, Education, and Welfare:
Public Health Service:
National Institutes of Health. _
..
Other
Water Pollution Control Administration
Welfare Administration
Social Security Administration
Other
_.
Total, Department of Health, Education, and Welfare
Veterans Administration
Department of Defense:
Army
Navy
Air Force _ . .
Other
Total, Department of Defense
- -
_
97.4
1,000.0
737.1
121.0
920.8
37.0
128.9
1,150.0
880.0
181.5
929.2
844.0
168.9
2,210.1
2,944.8
4,153.6
1,265.7
1,343.0
1,386.5
463.3
200.6
400.7
563.7
255.1
414.3
748.7
287.0
420.2
1.7
2.1
2.5
1,066.3
1,235.2
1,458.4
779.8
603.7
100.9
628.3
108
THE
BUDGET FOR FISCAL YEAR 1 9 6 7
Table H I . FEDERAL EXPENDITURES FOR MEDICAL A N D HEALTHRELATED PROGRAMS BY AGENCY (in millions of dollars)—Continued
Agency
ADMINISTRATIVE BUDGET
1965
actual
1966
estimate
1967
estimate
Continued
Agency for International Development
.
._
__.
Atomic Energy Commission ___ . . . _
_
Department of Agriculture
.
National Aeronautics and Space Administration
Department of Housing and Urban Development
__
National Science Foundation. _
. _. _
Civil Service Commission
._ .
...
Office or Economic Opportunity...
. . .. .
Department of State
__
__. _
Department of Labor
. . __
Department of justice
_
Peace Corps
._.
__
. .
_._ .
Panama Canal
...
___ __
__.
Small Business Administration
Department of the Interior ._. _
_
_
General Services Administration
United States Information Agency
._ _
. _
Federal Aviation Agency.._
Military Assistance Program
__
_
Transitional grants to Alaska. ._ __
_
...
Contributions by Federal agencies to Federal employees' health
benefits funds not included above
Total net budget expenditures for health.
Interfund transactions. _ _ . _
_
50.6
90.1
114.2
50.6
39.8
25.9
27.0
5.6
19.5
17.8
7.8
5.9
7.3
8.3
4.4
1.9
0.4
1.7
15.0
0.9
60.0
95
122
79
27
35
29
39.0
21.9
17.8
7.7
7.2
7.8
8.5
4.9
0.7
0.4
1.7
126.7
127.6
129.1
5,163.5
6,232.0
-37.0
7,860.3
-844.0
105.0
8.6
7.4
0.4
3,305.0
-7.9
8.5
0.3
-3.2
121.4
3,305.9
5,160.3
6,316.4
10,322.2
15.0
0.3
92.0
102
128,
75.
87.
35.9
31.7
74.9
23.8
20.3
8.0
7.5
7.8
10.3
4.9
0.4
1.7
20.0
TRUST FUNDS
Department of Health, Education, and Welfare: Social Security
Administration
_
CivilServiceCommission.net
__
_.
United States Soldiers'Home
__. __
Railroad Retirement Board
Total trust fund expenditures for health
Total budget and trust fund expenditures for health.
•10.0
6.9
Table H-2. FEDERAL EXPENDITURES FOR MEDICAL AND HEALTHRELATED ACTIVITIES BY CATEGORY (in millions of dollars)
Category
1965
actual
1966
estimate
Hospital and medical care in Federal facilities
2,022.0 I 2,209.9
Federal grants and payments for hospital and health care in nonI
Federal facilities
-.-913.8 i 1,374.9
Medical research, total
. _._
. -__
1,040.1 ', 1,320.6
(a) Conduct of research
_
_.. - ' (965.5) j (1,214.2)
(106.4)
(b) Research facilities
,
(74.6)
448.9
Training, including training for research
' 316.9
493.7
Prevention and community services
'
417.6 '
468.4
Construction of hospitals and health facilities
- . -_- . _'
449.9
Total expenditures from administrative budget and trust
accounts
1967
estimate
2,397.9
4,623.1
1,448.3
(1,235.1)
(123.2)
546.1
634.5
672.3
6,316.4 10,322.2
109
SPECIAL ANALYSES
Table H-3. FEDERAL HOSPITALS, OPERATING BEDS, AND PATIENT LOADS
1965
actual
Number of hospitals:
Defense
Health, Education, and Welfare
Veterans Administration
Other
__
Total
Number of operating beds:
Defense
Health, Education, and Welfare
Veterans Administration
(Nursing home beds included in total)
Other
Total
Average daily patient load:
Defense
Health, Education, and Welfare
Veterans Administration
(Nursing home beds included in total)
Other
Total
1966
estimate
1967
estimate
225
66
171
35
230
64
166
35
233
64
167
35
497
495
499
39,677
15,822
119,326
(208)
3,159
46,842
15,307
118,664
(1,645)
3,159
61,858
15,220
120,034
(3,000)
3,159
177,984
183,972
200,271
29,376
13,226
109,333
(150)
2,055
35,844
12,892
109,710
(1,510)
2,119
48,150
12,687
111,147
(2,790)
2,144
153,990
160,565
174,128
Table H-4. FEDERAL EXPENDITURES FOR MEDICAL AND HEALTHRELATED PROGRAMS (in millions of dollars)
Agency and program
Functional
code
1965
actual
1966
estimate
1967
estimate
ADMINISTRATIVE BUDGET FUNDS
National defense:
Department of Defense:
Hospital and medical care of military personnel and
their dependents, retired personnel and their families on a space available basis, and civilian employees and their dependents overseas^
Research in preventive medicine, improved methods
of caring for and rehabilitating the sick and injured,
and studies relating to medical problems of military
science
Professional and technical training of personnel
Construction of hospitals and medical facilities
Department of Health, Education, and Welfare: Stockpiling of medical supplies
Atomic Energy Commission: Research on the effects
and use of radiation
__
Total, national defense
,011.3
1,156.0
98.4
56.6
31.1
108.4
67.1
48.4
118.5
69.3
114.6
12.6
10.0
10.0
89.3
94.6
101.7
1,168.2
,339.8
1,570.:
051
051
051
051
059
058
110
THE BUDGET FOR FISCAL YEAR 196 7
Table H-4. FEDERAL EXPENDITURES FOR MEDICAL AND HEALTHRELATED PROGRAMS (in millions of dollars)—Continued
Agency and program
Functional
code
1965
actual
1966
estimate
1967
estimate
ADMINISTRATIVE BUDGET FUNDS—Continued
[ nternational affairs and finance:
Peace Corps: Assistance to underdeveloped countries
particularly for nursing and malaria eradication
projects- . .
.
- - . - - . United States Information Agency: Medical care of
Foreign Service officers who become ill abroad
Agency for International Development: Grants, loans,
and other assistance to underdeveloped countries in
meeting their most pressing health problems _
Department of State:
Contributions to international organizations, conferences, and medical and hospital care of Foreign
Service personnel and their dependents-,
.. _
Assistance to refugees from Communist countries,
except Cuba _ __ Mutual educational and cultural exchange activities
Military assistance program: Medical personnel and
construction
152
5.9
7.2
7.5
153
0.4
0.4
0.4
152
50.6
60.0
92.0
151
18.0
20.2
21.9
152
153
0.5
1.0
0.7
1.0
1.0
0.9
15.0
15.0
20.0
91.4
104.5
143.7
251
50.6
79.1
75.6
Department of Agriculture: Plant and animal research;
meat and poultry inspections . _
.
355
114.2
122.5
128.2
Natural resources:
Department of the Interior: Care of Aleut Indians in
Pribilof Island, Alaska, and grant to territories and
American Samoa
. ._
. ___.
910
4.1
4.6
4.6
506
8.3
8.5
10.3
553
39.8
27.2
87.1
Total, international affairs and finance
Space research and technology:
National Aeronautics and Space Administration: Research on health factors and human capabilities in advanced aerospace systems- _
Agriculture and agricultural resources:
Commerce and transportation:
Small Business Administration: Loans for construction
and operation of nursing homes and other healthrelated facilities
Department of Housing and Urban Affairs:
Advances and loans to local communities for construction of sewer, water, and other health-related facilities, and grants for urban services and community
facilities
111
SPECIAL ANALYSES
Table H-4. FEDERAL EXPENDITURES FOR MEDICAL AND HEALTHRELATED PROGRAMS (in millions of dollars)—Continued
Agency and program
Functional
cod
1965
actual
1966
estimate
ADMINISTRATIVE BUDGET FUNDS—Continued
Health, labor, and welfare:
Department of Health, Education, and Welfare:
Freedmen's Hospital: Operation of a community
teaching hospital serving Howard University Medical School
St. Elizabeths Hospital: Hospital care for the
mentally ill in the District of Columbia
Public Health Service:
Health services for Indians
Construction of Indian health facilities
..
Medical care of merchant seamen, narcotic addicts,
and other Public Health Service beneficiaries
Quarantine activities
Grants and loans for construction of hospital and
health facilities
Support of medical, dental, and nursing education
and training
__ _
Accident and disease prevention and control
Proposed legislation: Support for planning health
facilities and services, and for modernization
of obsolete medical facilities; conversion of
student loans to guaranteed loans
Scientific activities overseas
Construction of health facilities
Environmental health activities
National Institutes of Health:
Research
Training
Water Pollution Control Administration
Proposed legislation: Clean river demonstration
projects and expanded research and training
Welfare Administration:
Grants for maternal and child welfare
Assistance to refugees and repatriated U.S. nationals.
Public assistance grants for hospital and health care_
Vocational Rehabilitation Administration: Rehabilitation grants and research and training in problems
of handicapped individuals
Social Security Administration: General fund payments to trust fund
Food and Drug Administration: Enforcement of the
pure food and drug laws
Department of Labor: Accident prevention and administration of Federal employees workmen's compensation program
Department of the Interior: Health research related to
mine operation
Office of Economic Opportunity
Total, health, labor, and welfare.
651
3.9
4.5
651
9.9
12.8
651
651
62.2
9.2
66.7
8.0
651
651
54.5
6.9
58.0
7.5
651
200.5
205.6
651
651
31.9
197.3
80.5
255.3
651
651
651
3.9
16.5
52.1
5.0
25.0
67.3
651
651
651
587.3
145.6
100.9
749.2
195.2
121.0
651
653
653
72.1
2.1
142.4
554.0
3.5
775.0
659
38.9
56.2
37.0
654
651
40.6
51.1
652
6.8
6.9
652
655
0.3
5.6
0.3
39.0
2,203.0
2,973.0
1967
estimate
112
THE BUDGET FOR FISCAL YEAR 1967
Table H-4. FEDERAL EXPENDITURES FOR MEDICAL AND HEALTHRELATED PROGRAMS (in millions of dollars)—Continued
Agency and program
Func-
1965
1966
1967
code
ADMINISTRATIVE BUDGET FUNDS—Continued
Education:
Department of Health, Education, and Welfare:
Practical nurse training . .
Defense educational activities
.
National Science Foundation: Support of basic research
in health-related fields
_
704
702
4.9
3.1
4.9
3.9
5.0
7.8
25.9
33.9
35.1
35.9
43.9
48.7
804
1,265.7
1,343.0
1,386.5
906
501
908
11.0
1.7
7.8
10.9
1.7
7.7
13.0
1.7
8.0
906
27.0
29.2
31.7
905
1.9
0.7
910
910
7.3
0.9
7.8
0.3
7.8
57.6
58.3
62.2
Contributions by Federal agencies to employees' health
benefits fund not included above. . _
126.7
127.6
129.1
Total net administrative budget expenditures for
health
[nterfund transactions
5,163.5
6,232.0
-37.0
7,860.3
-844.0
482.0
-492.1
554.3
-545.7
593.9
-601.8
-10.1
8.6
-7.9
105.0
3,305.0
6.9
7.4
0.4
8.5
0.3
-3.2
121.4
3,305.9
5,160.3
6,316.4
10,322.2
703
Total, education
Veterans benefits and services:
Veterans Administration: Hospital, domiciliary, and outpatient care of veterans including medical research and
construction and modernization of facilities
General government:
Department of Labor: Hospital and medical care for
Federal employees injured in line of duty
.
Federal Aviation Agency: Research
Department of Justice: Medical care of prisoners
Civil Service Commission: Government contribution to
Federal employees' health benefit funds for retired employees and annuitants
General Services Administration: Matching grant for a
hospital in southeast Washington, D.C_ . . . . . . . .
Panama Canal: Medical and hospital care for civilian
and military personnel, sanitation and quarantine
Transitional grants to Alaska
Total, general government
TRUST FUNDS
Civil Service Commission (revolving funds): Expenditures
for employee health benefits. _
654
Receipts from employee and Government contributions.
Net expenditures from trusts revolving funds
.
Department of Health, Education, and Welfare: Social
Security Administration: Expenditures for hospital and
supplementary medical insurance
.
._
654
United States Soldiers Home: Hospital and domiciliary
care of retired and disabled enlisted personnel of the
Regular Army and Air Force . . .
__ . 805
Railroad Retirement Board
Total net trust fund expenditures for health
Total budget and trust fund expenditures for health.
SPECIAL ANALYSIS I
FEDERAL RESEARCH, DEVELOPMENT, AND RELATED PROGRAMS
Funds for science and technology are a significant fraction of the
Federal budget. Eleven executive departments and independent
agencies either support or are engaged directly in the conduct of
research and development to a substantial degree. Most of the effort
is related to the broad missions and responsibilities of these agencies,
while a part of the support is aimed at the general strengthening of the
Nation's scientific base.
Science and technology programs are reviewed on behalf of the
President by the Bureau of the Budget and the Office of Science and
Technology, and additional coordination is provided by the Federal
Council on Science and Technology. The President may also call
upon his Scientific Advisory Committee for advice and recommendations on special problems relating to the Nation's scientific progress.
This analysis summarizes separately Federal funds for the conduct
of research,
for development, and for facilities related to both activities.1 It also provides information on fields of science which are of
broad national interest involving the research and development
programs of several Federal agencies.
Development is financed by the Federal Government to design,
fabricate, test, and evaluate prototypes of materials, devices, systems,
or processes to accomplish specific agency missions. These include
prototypes of complex devices such as military weapons, space
vehicles, and nuclear reactors, and of "systems" for such purposes as
air defense and aircraft traffic control.
Research is supported not only to further specific agency missions—
often as a forerunner to development—but also to increase the broad
body of scientific knowledge which underlies the future advancement
of the Nation's welfare, economic growth, and security. Of particular
long run importance to the latter objective is Federal support of
basic research, especially that conducted in academic institutions.
Development.—Total Federal obligations for development are estimated to decrease slightly, from $10.5 billion in 1966 to $10.2 billion
in 1967. Expenditures will approximate $9.8 billion in both years.
While there will be changes in specific Defense development programs,
the overall funding level for the Department is estimated to be about
the same in 1966 and 1967. The small decrease in funds for the
National Aeronautics and Space Administration principally reflects
the shift in the manned lunar landing program from the more costly
development phase toward operational status. Minor changes are
Note.— Totals in text tables may not add due to rounding.
Generally excluded from this analysis are funds for routine testing, experimental production,
information activities, and training programs, This analysis also omits funds for research performed independently by contractors within overhead arrangements on some procurement contracts funded in Department of Defense procurement accounts and for the collection of generalpurpose statistics by the Census Bureau and other agencies.
1
113
789-740 0—66
8
114
THE BUDGET FOR FISCAL YEAR 196 7
estimated in expenditures for most other agencies; a decline in obligations for other agencies is estimated in 1967 particularly reflecting
major funding by the Federal Aviation Agency in 1966 of preliminary
design work on the supersonic transport.
Administrative Budget Obligations for Development
S Billions
-*«Total
10-
8-
1959
1960
1961
1962
1963
1964
1965
1966
Fiscal Ytan
1967
Estimate
Table 1-1. OBLIGATIONS AND EXPENDITURES FOR THE CONDUCT OF
DEVELOPMENT « (in millions of dollars)
Obligations
Agency
1965
Department of Defense—Military
National Aeronautics and Space
Administration
Atomic Energy Commission
Other
Total
1966
5,053.5 5,518.2
Expenditures
1967
1965
5,493.3 4,973.1
1966
1967
4,960.0
5,005.0
3,744.7 3,802.9 3.544.0 3,495.9 3,777.0
907.2
891.3
876.4
907.2
891.3
316.8
272.9
151.4
122.3
219.7
3,618.0
876.4
282.3
9,827.7 10,529.2 10,186.6
9,781.7
9,527.6 9,848.0
1
In this table and tables 1—2 through 1—4 for agencies other than the Department of Defense and
NASA "obligations" are generally "new obligational authority" which approximates "obligations"
for analysis purposes. In this table and tables 1—2 and 1—3, "obligations" and "expenditures" for
the AEC are accrued costs, which approximate obligations and expenditures for analysis purposes.
Research.—The overall Federal investment in research is estimated
to increase slightly, from obligations of $5.4 billion in 1966 to $5.6
billion in 1967, and from expenditures of $5.1 to $5.3 billion. While
research funds of the Departments of Defense, Agriculture, and
Interior, and the National Aeronautics and Space Administration are
115
SPECIAL ANALYSES
estimated to remain close to the same levels in 1966 and 1967, increases
are estimated for other agencies, particularly the Atomic Energy
Commission—for fundamental research; the Department of Health,
Education, and Welfare—for medical, environmental, and educational
research; the National Science Foundation—for basic research at
Administrative Budget Obligations for Research
Total
1959
I960
1961
(96S
1964
(963
1965
1966
1967
Estimate
Fiscal Yean
Table 1-2. OBLIGATIONS AND EXPENDITURES FOR THE CONDUCT OF
RESEARCH > (in millions of dollars)
Expenditures
Obligations
Agency
1965
1966
1967
1965
1966
Department of Defense—Military 1,738.4 1.897.9 1,812.1 1,650.0 1.810.0
National Aeronautics and Space
Administration
1.223.8 1.381.9 1,365.9 1,059.1 1,320.0
364.9
364.9
Atomic Energy Commission
333.5
393.1
333.5
Department of Health, Education, and Welfare
893.6
647.9
858.7 1,029.3 1,154.5
National Science Foundation
146.8
177.7
257.0
287.0
217.0
Agriculture
.. _
194.3
227.0
203.2
227.6
220.6
318.2
193.5
265.0
222.0
288.8
Other
(94.8) (108.7) (108.9)
(88.3) (100.9)
Interior
.
(127.2) (180.1) (209.3) (105.2) (164.1)
All other
Total..
!
4,796.7
5,447.4
Includes funds for basic and applied research.
5,551.5
4.225.2
5,058.2
1967
1,795.0
1,375.0
393. J
1,016.8
226.2
217.1
293.6
(106.1)
(187.5)
5,316.8
116
THE BUDGET FOR FISCAL YEAR
1967
academic institutions; and the Department of Commerce—particularly
for transportation research.
Although these increases are relatively small they further demonstrate the growing effort of the Federal Government to strengthen the
Nation's "civilian" scientific and technological capability, at the same
time continuing to maintain an adequate program of research and
development for the defense and space efforts. Research is increasing
significantly in such areas as education, water and air pollution,
transportation, and the utilization of natural and agricultural resources
as well as medical research.
To illustrate this trend, defense research—including military-related
Atomic Energy Commission programs—has risen only 1% since 1962,
while other research programs have almost tripled. Even excluding
the substantial increase in NASA programs, all other "civilian" programs are estimated to nearly double in the 5-year period—from $1.7
billion in 1962 to $3.2 billion in 1967. Of this increase of $1.5 billion,
less than one-third is accounted for by medical research programs of
the National Institutes of Health, despite the substantial growth
which programs of that agency have shown.
Basic research and support for academic science.—Continued attention has been given in the preparation of the 1967 budget to overall
Federal support of research in academic institutions. This is particularly reflected in the continued increase in funds for basic research,
which provides the foundation for applied research and development
and is a major factor in the maintenance of this country's leadership
in science and technology.
While much of the total for basic research is spent on the necessary
costs of spacecraft, launch vehicles, and other equipment to support
the scientific programs of the National Aeronautics and Space Administration (see table 1-6), and on the support of Federal or other
nonacademic laboratories, more than one-third is expended through
grants and contracts in colleges and universities—excluding "offcampus" laboratories operated under contract for the Federal GovTable 1-3. OBLIGATIONS AND EXPENDITURES FOR THE CONDUCT OF
BASIC RESEARCH' (in millions of dollars)
expenditures
Obligations
Agency
Department of Defense—Military
National Aeronautics and Space
Administration
Atomic Energy Commission
Department of Health, Education, and Welfare
National Science Foundation
Agriculture
Other .
Total
1
1965
1966
1967
1965
1966
263.1
273.0
297.1
250.0
260.0
275.0
511.7
258.2
605.5
285.1
658.5
310.9
440.5
258.2
580.0
285.1
665.0
310.9
301.1
217.0
73.9
69.8
355.2
257.0
85.0
79.8
390.5
287.0
83.5
88.6
263.7
146.8
70.9
64.5
302.4
177.7
84.9
75.3
344.6
226.2
82.1
83.2
1.694.8
1.940.7
2.116.2
1.494.7
1,765.4
1.987.0
Amounts are included in conduct of research, table 1—2.
1967
117
SPECIAL ANALYSES
ernment. Total Federal research funds to colleges and universities
proper, including funds for applied research—chiefly medical research
supported by the National Institutes of Health—are estimated to be
approximately one and a half billion dollars in 1967.
Federal research grants and contracts in academic institutions
have been, in the past, largely concentrated in a relatively few universities and focused on relatively short-range objectives, as the
most expeditious means of meeting the mission needs of individual
agencies for immediate research results. It is important to the longrange national interest that Federal research programs reach an
increased number of academic institutions and contribute to the
strengthening of these institutions. Specialized programs of agencies
such as the National Science Foundation, the Department of Health,
Education, and Welfare, and the National Aeronautics and Space
Administration have been directed toward strengthening academic
institutions and broadening Federal support of science activities in
academic institutions. In 1966 the President directed that, to the
degree consistent with their mission responsibilities, all agencies
administer their total research grant and contract programs so that
Federal funds will contribute more effectively to the long-range
strength of the Nation's structure for scientific research and education.
Under the 1967 budget, the President's policy will be further implemented by the agencies in the administration of their research funds.
Research and development facilities.—Total obligations for facilities
in support of Federal research and development programs are estimated to decrease from $849 million in 1966 to $617 million in 1967.
Expenditures will also decrease—from $1,054 million in 1966 to $841
million in 1967. These decreases largely reflect the completion of
major phases of test facilities and launch complexes related to the
National Aeronautics and Space Administration manned lunar
landing program. While variations occur between 1966 and 1967 in
the funding of facilities for other agencies, they do not signal significant
changes.
Table 1-4. OBLIGATIONS AND EXPENDITURES FOR RESEARCH AND
DEVELOPMENT FACILITIES (in millions of dollars)
1965
Department of Defense—Military .
National Aeronautics and Space Administration
Atomic Energy Commission
Department of Health, Education, and
Welfare
National Science Foundation
Agriculture
Other
Total
Expenditures
Obligations
Agency
1966
1967
1965
1966
1967
68.5
84.9
104.8
99.9
74.6
78.0
532.2
268.9
345.2
189.9
123.0
220.1
537.9
279.4
503.0
260.8
307.0
241.9
102.0
56.2
14.5
41.9
109.5
66.8
24.1
28.9
79.7
61.9
2.6
25.3
51.6
48.4
5.1
55.2
73.1
58.4
20.0
64.5
94.3
56.8
21.6
41.4
1,084.3
849.3
617.4 1,077.6 1,054.3
841.0
118
THE BUDGET FOR FISCAL YEAR 1967
Descriptions of the major agency research and development
programs are provided in the following section of this analysis.
PROGRAMS OF AGENCIES WITH MAJOR RESEARCH AND DEVELOPMENT
ACTIVITIES
DEPARTMENT OF DEFENSE
MILITARY
The programs of the Department of Defense include basic and applied research in subjects of potential military significance; exploratory, advanced, and engineering development of new systems and
system components; and development of weapons systems approved
for introduction into the operational forces. The principal amounts
for these purposes and for the operation of research and testing
facilities of the Department are carried in the budget under appropriations entitled "Research, development, test, and evaluation."
Certain supporting amounts are provided in the military personnel,
procurement, operations and maintenance, and military construction
appropriations, as indicated in table 1-5. Research and development
related to civil defense is financed under that heading.
The total research and development effort will be at substantially
the same level in 1966 and 1967. Of the totals shown in table 1-5 for
1967, 4% is for basic scientific research. Approximately 22% is for
applied research, including experiments with extensive equipment
requirements, designed to solve defense problems. Approximately
74% is for development, test, and evaluation of new military weapons
and equipments and for support of laboratory and test facilities for
defense research and development.
The total amount for basic research will increase in 1966 as shown in
table 1-3. Applied research, including projects with extensive equipment requirements, will decline slightly. In 1967 the major share of
development efforts will continue to be for conventional and limited
war weapons systems; work on future strategic weapons will increase.
The composition of the programs of the Department by major fields
of concentration is shown in table 1-5. Development of several
versions of the new F - l l l aircraft for use by both the Navy and the
Air Force, as well as smaller aircraft and helicopters to provide combat
support and mobility for the ground forces, will continue in 1967.
Development work already started on the new large C-5A cargo
transport aircraft will require increased financing in 1967. Missile
developments include the Army's project for the Nike-X antiballistic
missile system, a new surface-to-air missile system, the Navy's
Poseidon, and the new Air Force ballistic missile, Minuteman III.
Included in military astronautics are such space programs as the
manned orbiting laboratory (MOL) program, reentry and recovery
technology programs, and basic engine and vehicle development
efforts, such as the Titan III multipurpose space booster program.
Totals for the military space program are given in table 1-13. The
research and development totals also include substantial efforts for
antisubmarine warfare and in the development of improved combat
vehicles for use by our land forces. Provision is also made for support
of Government-owned laboratories and test installations such as
the Atlantic and Pacific missile ranges.
119
SPECIAL ANALYSES
Table 1-5. OBLIGATIONS AND EXPENDITURES OF THE DEPARTMENT OF
DEFENSE—MILITARY—RESEARCH AND DEVELOPMENT (in millions of
dollars)
Purpose and budget title
Obligations for the conduct of research and development:
Research, development, test, and evaluation:
Military sciences
Aircraft and related equipment. Missile and related equipment
Military astronautics and related equipment
Ships, small craft, and related equipment
Ordnance, combat vehicles, and related equipment. _
Other equipment
Program wide management and support
Emergency fund
1965
actual
1966
estimate
1967
estimate
619.8
1,094.9
1,955.0
896.7
257.0
342.2
774.6
446.7
606.9
1,225.7
1,964.0
,048
339
397
944
464.9
19.4
616.4
1,036.8
2,314.5
852.7
6,386.9
277.3
81.9
34,5
7,010.8
280.5
11.3
36.7
11.0
6,893.3
275.8
83.9
42.4
10.0
6,791.9
7,416.1
7,305.4
68.5
84.9
104.8
Total, direct obligations for research and development...
6,860.4
7,501.0
7,410.2
Total expenditures for research and development
6,723.0
6,844.6
6,878.0
Total, direct obligations, research, development, test, and
evaluation
Military personnel
Procurement
Operations and maintenance
Civil defense
Total, direct obligations, for the conduct of research and
development
Obligations for research and development facilities: Military
construction
77.1
271.1
360.2
865.5
451.1
125.0
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
All the activities of the National Aeronautics and Space Administration are classified as research and development for purposes of this
special analysis. The National Aeronautics and Space Administration
is responsible for the development, test, and operation of spacecraft
and vehicles for manned and unmanned exploration of space and other
nonmilitary applications, and for conducting the broad programs of
supporting research and development required for these purposes.
In addition, NASA is responsible for conducting research to advance
aircraft technology in support of both military and civilian interests.
The nature and composition of the research and development programs
of NASA are shown on table 1-6.
Total expenditures for NASA in 1967 are estimated at $5.3 billion, a
decrease of $300 million from the estimate for 1966. This decrease is
the first since NASA was established in 1958. New obligational
authority will also decrease from $5,175 million in 1966 to $5,012
million in 1967. The NASA program can be sustained at a lower
funding level than 1966 because a number of major projects will be
progressing from the more expensive development phase into the
operational phase and no new starts are planned that will require
equivalent 1967 funds.
Expenditures for research programs will increase somewhat from
1966 to 1967 while expenditures in the manned space flight and other
120
THE BUDGET FOR FISCAL YEAR 1967
advanced development programs begin to decline. Expenditures
for facilities reached a peak in 1965 and will decline in 1966 and 1967
as work on major portions of the manned lunar landing construction
program is completed.
NASA activities classified as basic research include space flight
programs in physics, astronomy, and the biological sciences, and the
planetary and interplanetary programs. Also included are the programs of supporting research and technology which result in preliminary investigations for, or instrumentation to be used in, the
above described flight programs. The preparation of the scientific
experiments carried on the manned flight missions, including the
development of research experiments for the lunar expeditions, is
also classed as basic research.
The other research category includes those activities directed
toward the application of new knowledge to the improvement of
space systems and aircraft. In this year's analysis it also includes
the Surveyor and Orbiter projects which, while generating a wealth
of data useful for basic research, are nevertheless now directed
primarily toward providing data needed for the design and operation
of manned lunar landing systems. The applications technology
satellite project is also placed in this category this year.
Table 1-6. EXPENDITURES OF THE NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION FOR RESEARCH AND DEVELOPMENT
(in millions of dollars)
Program and type of activity
1965
actual
Conduct of research:
Basic scientific research in space:
Spacecraft, instrumentation, conduct of experiments,
and supporting costs.. __ . . . .
. ..
Procurement of launch vehicles for basic research
purposes
-Other basic research in space science and technology..
1966
estimate
1967
estimate
295.8
385.0
480.0
39.5
105.2
60.0
135.0
50.0
135.0
440.5
565.7
580.0
665.0
665.0
640.0
52.9
75.0
70.0
...
1,059.1
1,320.0
1,375.0
Conduct of development:
Manned space flight and supporting development
Development of launch vehicles for research purposes. _.
Other development
.
.
3,210.8
94.3
190.8
3,557.0
60.0
160.0
3,418.0
35.0
165.0
3.495.9
3,777.0
3.618.0
7.0
444.0
86.9
8.0
400.0
95.0
7.0
240.0
60.0
537.9
503.0
307.0
5,092.9
5.600.0
5,300.0
Subtotal, basic research
._.
Other research
~. - ..
Procurement of launch vehicles for other research
purposes
Total, conduct of research.
Total, conduct of development .
..
Research and development facilities:
Facility grants to colleges and universities . .
Manned space flight and supporting facilities . . . .
Other research and development facilities..
.
Total, research and development facilities. . . . . _
Total, National Aeronautics and Space Administration
SPECIAL ANALYSES
121
The development category includes the development and operation
of manned space flight systems, except for the scientific experiments
discussed above. Development of launch vehicles for research
purposes is now included in this category rather than in basic research
as in past years. Other development activities are comprised primarily of the SNAP 8, M - l engine, large solid rocket, and Rover
nuclear rocket programs, the Nimbus meteorological satellite, and
supporting activities.
ATOMIC ENERGY COMMISSION
The Atomic Energy Commission's research and development programs account in 1967 for 66% of AEC's annual expenditures.
Research programs, which m 1967 constitute approximately 3 1 %
of the total conduct of research and development, are conducted in
the physical and biomedical sciences to secure a better understanding
of nuclear structure, nuclear processes, and the effects of nuclear
radiation on living organisms and systems. Of the total funds
programed for research, about 79% is considered to be basic or
fundamental research. The developmental activity primarily comprises programs to develop improved nuclear reactors for a variety
of power and propulsion applications, to design and test improved
nuclear weapons, and to develop the peaceful uses of radioisotopes
and nuclear explosives.
The major elements of the AEC research programs are in the
physical and biomedical sciences. The physical sciences research
program, which increases by 10% in 1967, consists of research in
high, medium, and low energy physics and in those aspects of chemistry, metallurgy, and mathematics, of particular importance to
nuclear science and technology. In addition, there is a continuing
program of research with themonuclear plasmas, the purpose of
which is to determine whether the energy released in themonuclear
reactions can be controlled.
Of special importance in 1967 are AEC's plans to increase by an
order of magnitude the intensity of the world's highest energy proton
accelerator at Brookhaven National Laboratory, and to design at
the Los Alamos Scientific Laboratory a very high intensity 800
million electron volt linear proton accelerator.
Studies are presently underway to choose the most appropriate
site for a 200 billion electron volt (Bev) circular proton accelerator.
This accelerator, with supporting equipment and facilities, has an
estimated capital cost of about $375 million. Design funds for the
200-Bev machine will be requested once a site has been selected and
the design has been authorized.
AEC's reactor development program includes efforts to develop
improved types of central station nuclear power reactors, nuclear
rockets (Project Rover), compact nuclear electric power sources for
space and other remote applications (Project SNAP), reactors for
naval propulsion, and to broaden the base of reactor technology. In
1967, continued emphasis will be placed on advanced power reactors
which make improved use of nuclear fuels, including the development
of "fast breeder" reactors which would produce more fuel than they
consume. In 1967 AEC will initiate design of a large fast flux test
facility for the fast breeder program. It is estimated that the total
construction cost of this facility would be about $75 million.
122
THE BUDGET FOR FISCAL YEAR 1967
Table 1-7. EXPENDITURES OF THE ATOMIC ENERGY COMMISSION FOR
RESEARCH AND DEVELOPMENT (in millions of dollars)
Conduct of research and
development
Research and development facilities
1965
actual
1966
1967
1965
actual
453.6
423.1
468.4
212.6
77.2
19.8
441.4
468.1
236.0
83.0
27.7
Total, Atomic Energy Commission. 1,240.7
,256.1
Program
Special nuclear materials and weapons
Reactor development
Physical research
Biology and medicine
Other research and development
477.6
1966
1967
72.5
94.5
31.7
73.0
99.8
95.2
9.3
2.2
83.1
8.4
2.3
64.6
82.0
81.6
11.0
2.8
,269.6
279.4
260.8
241.9
258.9
87.5
DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE
Expenditures by the Department of Health, Education, and Welfare
for research and development will increase by $162 million to a level
of $1,143 million in 1967. This increase occurs primarily in health
and health-related research—particularly in programs of the National
Institutes of Health. While support continues to be given to expanding the base of knowledge in the life sciences, increasing emphasis
will be placed on new and improved methods of prevention, diagnosis,
and care.
The scope and complexity of pollution problems necessitate a
major increase in expenditures to discover the basic mechanisms of
the health effects of pollutants and to develop methods for detection
and control. New programs of research will be initiated at the
National Environmental Health Sciences Center, and university
institutes of environmental health sciences will be expanded. The
new Water Pollution Control Administration will increase its research
on advanced waste treatment methods, and the Food and Drug
Administration will broaden its research efforts relating to drug
efficacy and safety.
Expenditures for Office of Education programs will rise sharply
reflecting a major expansion and change in direction authorized as a
part of the Elementary and Secondary Education Act of 1965. Under
that authority, support will be provided for regional educational
laboratories at which institutions of higher education, States, private
enterprise, and schools will work together to bring the results of
educational research and new curricular design to the Nation's classrooms. Increases will also be provided for research centers which
focus on current education problems such as education of the disadvantaged, individualized instruction, early childhood learning,
teacher education, and strengthening institutions of higher education.
Support will also be expanded for development of new curricular
materials.
NATIONAL SCIENCE FOUNDATION
Total expenditures of the National Science Foundation for the
support of basic research and research facilities will increase by an
estimated $47 million over the 1966 level of $236 million.
SPECIAL ANALYSES
123
The major increase in 1967 is for the support of basic research in
colleges and universities with emphasis on encouraging research at a
wider range of institutions than at the present time. Additional
funds are provided for the national research centers in the atmospheric
sciences and astronomy—mainly for the completion of a 150-inch
optical telescope for which the primary optical system was funded in
1965. Increases are also included for computing facilities, both to
assist universities to obtain additional computer capacity and to support computer operations for special scientific purposes. The estimate for Project Mohole to explore the physical properties of the
earth's inner layers includes funds for completion of the drilling platform. The Foundation's program in weather modification will be
expanded in 1967 in recognition of new opportunities for improving
the understanding of the various mechanisms for effecting modification of the weather. Support will be continued for the United States
Antarctic Program and for ocean sediment coring.
DEPARTMENT OF AGRICULTURE
Expenditures of the Department of Agriculture for research and
development are estimated to be $247 million in 1967 compared
with $255 million in 1966. Reductions in lower priority work in
farm, utilization, and marketing research at 69 separate locations will
permit the expansion of other research activities within the reduced
overall total, including research operations at more effective, new and
expanded farm and utilization research laboratories and watershed
research centers. The Department's economic research activities will
also increase.
An increase in the program of grants to the States for the conduct of
basic and applied scientific research at State experiment stations will
be more than offset by a decrease in grants to State experiment stations
under the Hatch Act.
While expenditures for facilities will continue at about the 1966
level, obligations will drop substantially, reflecting the completion of
funding for major research facilities.
DEPARTMENT OF THE INTERIOR
Expenditures of the Department of the Interior for research and
development will increase from $137 million in 1966 to $147 million in
1967. Efforts to improve conservation and sound use of the Nation's
natural resources are conducted by the Fish and Wildlife Service, the
Geological Survey, the Bureau of Mines, and the Offices of Saline
Water, Water Resources Research, and Coal Research. Research
also aids the improvement of resources management in such operating
bureaus of the Department as the Bureau of Reclamation and Bonneville Power Administration.
Research and development programs are seeking new and expanded
markets for coal, increased knowledge of the properties of oil shale,
and better techniques for recovery of oil from shale. Research on
the recovery and utilization of waste metal, particularly auto body
scrap, will be expanded in 1967. This will aid in the elimination of
unsightly auto junk yards throughout the country. Studies of the
geophysical and geochemical properties of the upper mantle of the
124
THE BUDGET FOR FISCAL YEAR 1967
earth's crust—which relate to the technology of obtaining deep-lying
mineral deposits—will be continued, as will research on geologic
hazards and prediction of earthquakes.
The water resources research of the Department will be increased
significantly, with emphasis on determination of the distribution of
natural chemicals and pollutants throughout natural water systems,
surface and underground supplies, augmentation of reservoir inflow
by weather modification, and conversion of salt and brackish water
to fresh supplies. Research on the effects on fish and wildlife of
pesticidal chemicals also will increase.
DEPARTMENT OF COMMERCE
Expenditures of the Department of Commerce for the conduct of
research and development will total $79 million in 1967, an increase
of $17 million over 1966. This increase is largely offset by a reduction
of $13 million from 1966 to 1967 in expenditures for construction of
research and development facilities as the new National Bureau of
Standards complex at Gaithersburg, Md., nears completion.
In 1967, expenditures for the high-speed ground transportation
research and development program, initiated in 1966, will increase by
$14 million, principally for investigation of new technology for
guideways, power, and control systems, and also for demonstrations
of high-speed rail passenger service. The National Bureau of Standards' research program provides for increased standard reference
data and performance criteria efforts and for more adequate services
and research in data processing standards and computer sciences. An
increase is also included for additional work in weather modification,
sea-air interaction, and environmental hazards by the new Environmental Science Services Administration. Much of this work was previously conducted in other parts of the Department.
SELECTED GOVERNMENT-WIDE SCIENTIFIC ACTIVITIES OF THE
FEDERAL GOVERNMENT
The following section presents a number of scientific activities of
the Federal Government on a Government-wide basis. In these
fields, and in many other fields, the office of Science and Technology,
with the advice of the President's Science Advisory Committee and
the Federal Council for Science and Technology, is active in improving the planning, coordination, and review of Federal research and
development programs. Funds for these scientific and technical
activities are included in the agency figures shown elsewhere in this
analysis.
ATMOSPHERIC SCIENCES
The atmospheric sciences are concerned with the physical and
chemical properties, composition, behavior, and processes of the
earth's atmosphere and the atmospheres of other planets. In the
following table research and development activities only are reported.
Weather services programs will be reported separately in a detailed
plan prepared by the Federal Coordinator for Meteorological Services
and Supporting Research, Environmental Science Services Administration, Department of Commerce.
125
SPECIAL ANALYSES
Table 1-8. OBLIGATIONS OF FEDERAL AGENCIES FOR ATMOSPHERIC
SCIENCES (in millions of dollars)
Agency
Departments of:
Agriculture
Commerce
Defense
Health, Education, and Welfare
Interior
_._
Atomic Energy Commission
Federal Aviation Agency
National Aeronautics and Space Administration
National Science Foundation
Total
1966
1965
0.7
14.9
76.3
2.0
1.6
7.1
1.9
22.9
207.5
1967
1.0
1.0
17.0
76.6
2.2
3.5
7.5
3.0
.4
24 .9
79.1
2.7
3.9
7.0
2.4
224.;
234.6
17.6
While overall funding for atmospheric research has been significantly influenced in the past by fluctuations in the costs of satellite
development and flight activities, these latter costs now are becoming
more stable. Exclusive of satellite programs, funding for atmospheric
sciences increased 12% to 14% per year from 1962 through 1966;
a 7% increase is estimated in 1967.
The Department of Commerce, through its new Environmental
Science Services Administration, will increase its efforts in weather
modification research and will also stress the development of means
of predicting and monitoring disturbances in the space environment
having important implications to man's use of the upper atmosphere
and space. Greater emphasis will also be placed on weather modification research by the National Science Foundation as it continues to
support basic research in the atmospheric sciences. The atmospheric
research aspects of the water resources program of the Bureau of
Reclamation of the Department of the Interior is planned to continue
at a slightly higher level for 1967.
The Department of Defense will emphasize research in aeronomy
(the upper atmosphere) and reduce efforts in meteorology (primarily
concerned with phenomena occurring within 50 kilometers of the
earth's surface); the Environmental Science Services Administration
will emphasize meteorology and reduce its efforts in aeronomy; and the
National Aeronautics and Space Administration will emphasize both,
as well as increasing its studies of the planetary atmospheres.
The distribution of Federal support for research in the areas of
meteorology, aeronomy, and the planetary atmospheres is as follows:
Table 1-9. OBLIGATIONS FOR ATMOSPHERIC SCIENCES BY
FUNCTIONAL AREA (in millions of dollars)
Functional area
Meteorological research and service system development
Upper atmosphere research
Studies of planetary atmospheres _ .
Total
1965
1966
1967
102.6
100.2
4.6
112. 8
105. 7
5. 6
118 .7
110 .1
5 .8
207.5
224. 1
234.6
126
THE BUDGET FOR FISCAL YEAR 1967
Applied research and development whose principal objective is to
improve operational weather services is included in the above amounts.
These projects will also be reported in the detailed plan prepared by
the Federal coordinator.
MEDICAL RESEARCH
Federal expenditures for medical and health-related research activities are estimated to be $1,448 million in 1967. This is an expansion
of about 10% over the 1966 level of $1,320 million.
Of the increase of $128 million in overall medical research expenditures in 1967, $113 million, or 88%, is in expenditures of the Department of Health, Education, and Welfare, predominately in the National Institutes of Health. Significant increases will occur in both
the extramural and the intramural programs of NIH. It is estimated
that by 1967, NIH will support approximately 38% of the total
national medical research effort of more than $2 billion in public and
private funds. Other increases in the Department of Health, Education, and Welfare result from a major expansion in environmental
pollution research and related health research through the programs
of the Public Health Service, the new Water Pollution Control Administration, and the Food and Drug Administration.
Table 1-10. EXPENDITURES OF FEDERAL AGENCIES FOR MEDICAL AND
HEALTH-RELATED RESEARCH (in millions of dollars)
1965
actual
Agency
Department of Health, Education, and Welfare:
Public Health Service
(National Institutes of Health)
Other
Total, Department of Health, Education, and Welfare
Department of Defense
Atomic Energy Commission
Department of Agriculture
National Aeronautics and Space Administration
National Science Foundation
Veterans Administration
Other
Total, medical and health-related research
Total, conduct of research
Total, research facilities
1966
estimate
666.1
(587.3)
28.1
858.1
(749.2)
50.9
694.2
98.4
89.3
38.0
50.6
25.8
40.9
2.9
909.0
108.4
94.6
40.0
79.1
35.0
50.4
3.6
1967
estimate
934.5
(815.0)
87.9
1,022.4
118.5
101.7
40.7
75.6
35.8
49.4
4.0
1,040.1
1,320.1 1.448.1
(965.5) (1,213.7) (1,324.9)
(74.6)
(106.4)
(123.2)
The increased level of medical research supported by the Department of Defense is principally for efforts to improve malaria control
and treatment measures for use in Southeast Asia. The Atomic
Energy Commission's biomedical research program, which is principally concerned with the effects of radiation on man and his environment, will continue to expand. The medical research programs of
the other agencies will be at substantially the same level in 1967 as
in 1966.
OCEANOGRAPHY
The national oceanographic program represents the coordinated
research and survey efforts of nine agencies to improve our under
127
SPECIAL ANALYSES
standing of the oceans in the pursuit of such national interests as
defense, the exploitation of food and mineral resources, the improvement of weather forecasting, and the prevention of pollution. To
achieve these goals the properties of the ocean must first be understood, and thus the largest effort is directed to ocean research. The
research program is directed to describing and understanding the
physical and chemical properties of the "world ocean," the effect of
the interrelationship of the ocean and the atmosphere, the distribution
of marine organisms, the structure of the ocean floor and its history,
and the modifications of the ocean by human activities. The survey
program provides basic data necessary for research, exploration, and
use of the oceans. The increase in survey effort reflects the addition
of modern vessels into the fleet and increased survey effort by the
Navy related to sound propagation.
To insure greater understanding of all Federal marine science and
technology, this year's analysis incorporates work in developing vehicles, structures, and other equipments for work in the ocean. Table
I—11 below identifies both the regular oceanography program, for
comparison with programs previously reported, and the consolidated
program for ocean technology and oceanography. The changes in
the total for ocean technology and the consolidated totals reflect in
part the phasing of construction and equipment contracts.
The programs of the several agencies which comprise the national
oceanographic program have been developed to meet agency requirements in consultation with the membership of the Interagency Committee on Oceanography of the Federal Council for Science and
Technology. The Committee has advised agencies on useful opportunities for ocean research, exploration, and equipment development,
and has helped to develop a balanced program that avoids duplicate
efforts and insures maximum exchange of information.
Table I-ll. OBLIGATIONS FOR OCEANOGRAPHY A N D OCEAN TECHNOLOGY BY FUNCTIONAL AREA (in millions of dollars)
1965
1966
1967
27.3
76.1
5.4
30.7
83.1
1.3
39.8
97.8
112.2
124.2
20.7
6.0
10.3
12.5
3.5
16.2
5.2
9.4
8.4
_..
37.0
25.4
29.8
...
134.8
62.0
137.6
40.6
154.0
65.9
Grand total, oceanography and ocean technology
196.8
178.2
219.9
Research ..__
__ - Ocean coring program
Surveys and data center. . . .
-
70.5
_ .
. .. .
.
_ . .
Subtotal, operating programs
. .
Ship construction
.
.. .. - ..
Facilities construction
..
._
Equipment development and procurement
Subtotal, capital programs
Total, oceanography
Ocean technology . .
_ ...
..
_.
-
_
.
...
_.
_ .
..
As shown in table I - l l above, the funds devoted to oceanographic
research and survey programs will continue to increase in 1967, while
obligations for capital programs will rise slightly. The decrease in
total obligations for 1966 results from larger construction obligations
128
THE BUDGET FOR FISCAL YEAR 1967
in 1965 for Project Mohole and the nuclear-powered research vehicle.
The decrease in National Science Foundation obligations in 1967 also
reflects certain startup costs in 1966 for the ocean coring program
which will not recur in 1967. The Foundations^ oceanographic research
program will continue to increase.
Table 1-12. OBLIGATIONS OF FEDERAL AGENCIES FOR OCEANOGRAPHY
(in millions of dollars)
1965
actual
Agency
1966
estimate
Departments of:
Commerce
Defense
Health, Education, and Welfare
Interior
State
Treasury
Atomic Energy Commission
National Science Foundation
Smithsonian Institution
196.
Total
1967
estimate
13.1
80.5
6.3
19.4
.5
2.1
11.6
43.2
1.5
16.
113.
9.7
19.5
.5
178.2
219.9
2.3
13.5
43.0
1.6
SPACE PROGRAMS
As shown on table 1-13, new obligational authority for the total
Federal space programs is estimated at $6.7 billion in 1967, a decrease
of $267 million from 1966. Expenditures decrease $320 million in
1967. The principal decreases are in the NASA program and largely
reflect the completion of the Gemini program and the projected
progress of the manned lunar landing program from the development
phase into the flight operations stage. Except for the operational
satellite programs of the Department of Commerce, amounts for the
space programs are classified as research and development and are
included in the totals in this special analysis.
Table 1-13. NEW OBLIGATIONAL AUTHORITY AND EXPENDITURES FOR
FEDERAL SPACE PROGRAMS (in millions of dollars)
NEW OBLIGATIONAL
AUTHORITY
Agency
National Aeronautics and
Space Administration 1_.
Department of Defense
Atomic Energy Commission
Department of Commerce:
Environmental Science
Services Administration. _
National Science Foundation
Total
1
1965
actual
1966
estimate
1967
estimate
1965
actual
1966
estimate
5,167.6
1,579.4
5,087.9
1.693.5
4,908.
1,620. 7
5 035.0
1 591.8
5 521.0
1 640.0
5 711 0
1 650.0
228.6
195.6
173. 5
232.2
201.0
m7
12.2
27.3
35. 8
24.1
19.2
27.0
3.2
3.6
2. 9
3.0
3.5
2.8
6,991.0
7,007.9
6,741. 2
6 886.1
7 384.7
7 064.5
Excludes aircraft technology.
EXPENDITURES
1967
estimate
SPECIAL ANALYSES
129
All activities of the National Aeronautics and Space Administration
are included in the amounts shown, with the exception of amounts
specifically identified with aircraft technology. Over two-thirds of
the 1967 expenditures will be devoted to the achievement of a manned
lunar landing within this decade. The balance of the NASA funds
provide for continuing unmanned space exploration with satellites
and probes, development of space applications, and a continuing
program of studies and supporting research.
The estimates for the Department of Defense include the projects in
the Department's astronautics budget activity and certain amounts
in other budget activities which contribute to the space effort, such
as missile development, range operations, and various supporting
research, development, and operating costs. The amounts shown
include funds for the manned orbiting laboratory (MOL), the communications, navigation, and nuclear detection satellite programs,
the Titan III space booster, and for supporting research and development.
For the Atomic Energy Commission, the table includes amounts for
development of nuclear rocket propulsion and nuclear power sources
for space applications, including production of isotopic fuels, and
amounts for aerospace safety. The amounts shown for Commerce
are primarily those related to the establishment and the operation of
a satellite system to observe meteorological conditions, and, therefore,
are not included in the total for research and development in this
special analysis. The amounts for the National Science Foundation
are for research in astronomy using rockets and satellite-borne
observation instruments.
WATER RESEARCH
The Committee on Water Resources Research of the Federal Council
for Science and Technology has worked intensively during 1965 to
develop a balanced, long-term plan for water resources research.
The recommendations of the Committee have been independently
reviewed by a panel of experts convened under the aegis of the
President's Science Advisory Committee, and a report will be published this spring to provide program guidance for the agencies
having responsibilities relating to water.
In planning their 1967 programs, agencies considered the emerging
priorities identified during the Committee's planning process. The
total for water resources research in 1967 is $15 million larger than
1966, as shown in Table 1-14. An increase has been provided for
research to improve the water resources planning process. Dramatic
changes in our planning needs and in water resources management
problems make this a vital research area. Increases have been provided for research on pollution control and for saline water conversion
processes.
789-740 O— t
130
THE BUDGET FOR FISCAL YEAR
1967
Table 1-14. OBLIGATIONS OF FEDERAL AGENCIES FOR WATER
RESEARCH AND SURVEYS (in millions of dollars)
Agency
Departments of:
Agriculture
Commerce
Defense
Health, Education, and Welfare
Interior
Atomic Energy Commission
_
National Science Foundation
Tennessee Valley Authority
Total
1965
actual
1966
estimate
19t>7
estimate
13.7
.9
3.6
13.5
33.2
2.8
1.7
.6
16.5
1.0
3.9
17.7
47.5
2.7
1.9
16.5
1.0
5.6
23.9
54.7
2.7
2.0
70.0
92.0
107.3
SCIENCE INFORMATION
A strong national scientific and technological effort demands
effective mechanisms for the handling of scientific information. To
evolve an overall national network able to handle efficiently the data
produced by expanding research and development activities, existing
information activities must grow in a coordinated manner. For this
reason leadership by the Office of Science and Technology and the
interagency Committee on Scientific and Technical Information of
the Federal Council for Science and Technology has been intensified
during the past year. Attention has been focused on the integration
of Federal science information activities, developed to meet agency
mission needs, into broader national systems. This Committee of
the Federal Council on Science and Technology has recently completed
a far-reaching study, "Recommendations for National Document
Handling Systems in Science and Technology." This study is an
important step toward development of a comprehensive course of
action so that information activities within individual departments
and agencies will be developed in a coordinated, nonduplicative
manner.
In fiscal year 1967, emphasis will continue to be placed on developing
a national network of information systems. Approximately $60
million will be provided for the support of research and development
on scientific and technical information systems, techniques, and
devices.
131
SPECIAL ANALYSES
SUMMARY DATA
Table 1-15 below gives historical data on total research and
development expenditures by major agency. Table 1-16 following
provides information on expenditures for the conduct of research and
development and for research and development facilities by agency
and major subdivisions for the fiscal years 1965, 1966, and 1967.
Table 1-15. BUDGET EXPENDITURES FOR RESEARCH AND
DEVELOPMENT, 1954-66 (in millions of dollars)
Fiscal year
1954
1955
1956.
1957
1958
1959.
1960
1961
1962
1963
1964
1965
1966
1967
1
2
Department of NASA*
Defense '
2.487
2,630
2.639
3,371
3,664
4.183
5.654
6,618
6,812
6,849
7,516
6,728
6,850
6,886
90
74
71
76
89
145
401
744
1,257
2,552
4,171
5,093
5.600
5,300
AEC
383
385
474
657
804
877
986
111
784
335
505
570
517
.511
D/HEW
63
70
86
144
180
253
324
374
512
632
791
707
980
1.143
Includes civil functions,
National Advisory Committee for Aeronautics prior to 1958.
NSF
4
9
15
31
33
51
58
77
105
142
197
195
236
283
Other
121
140
161
183
220
293
315
356
403
478
496
587
778
816
Total
3,148
3,308
3,446
4,462
4.990
5,803
7.738
9.278
10.373
11,988
14.676
14,830
15.961
15.939
132
THE BUDGET FOR FISCAL YEAR 1967
Table 1-16. ADMINISTRATIVE BUDGET EXPENDITURES FOR FEDERAL
RESEARCH AND DEVELOPMENT PROGRAMS (in millions of dollars)
Conduct of research and
development
Description
1965
Department of Agriculture:
Agricultural Research Service
Cooperative State Research Service
Forest Service
.
. .
Other
1966
1967
111.0
46.6
28.3
15.3
130.3
57.8
28.7
18.1
126.8
47.2
33.
17.8
201.2
234.9
224.9
22.4
10.0
28.3
11.0
24.9
1.1
11.9
6.0
16.7
19.7
20.5
14.3
45.4
62.0
Research and development facilities
1965
1.
1966
1967
3.
2.
3.
10.
11.0
5.
20.0
21.6
28.9
24.2
11.1
79.4
28.9
24.2
11.1
6,623.1 6.770.0 6.800.0
7.9
4.6
5.2
99.9
74.6
78.0
6,627.7 6.775.2 6.807.9
99.9
74.6
78.0
Department of Health, Education, and
Welfare:
6.6
12.4
10.5
Food and Drug Administration
19.0
78.1
47.8
Office of Education
590.0
878.9
796.3
Public Health Service
(National Institutes of Health)
. (552.3) (705.8) (768.2)
9.5
35.6
15.4
Water Pollution Control Administration.
30.0
43.3
37.1
Welfare Administration and other
.1
51.5
(35.0)
Total, Department of Agriculture
Department of Commerce:
National Bureau of Standards
Weather Bureau
.. ..
Environmental Science Services Administration
Office of Transportation Research
.
Other
Total, Department of Commerce
Department of Defense:
Military
.
Civil
Total, Department of Defense
Total, Department of Health, Education, and Welfare
Department of the Interior:
Geological Survey
. _
Bureau of Mines
Bureau of Commercial Fisheries
Office of Saline Water
Other
655.1
3.1
1.7
8.-9
1.1
17.4
66! 9 65.7
(40.3) (41.8)
10.0
907.1 1.048.3
51.6
73.1
94.3
.
.
24.0
24.0
19.4
10.7
25.9
24.7
24.5
22.3
12.0
35.1
25.6
26.3
23.5
15.1
35.8
.1
.1
5.9
.8
3.7
.6
.6
6.0
4.3
6.9
.2
1.9
2.5
7.2
8.7
Total, Department of the Interior..
104.0
118.6
126.3
10.6
18.4
20.5
1,240.7 1.256.1 1.269.6
Atomic Energy Commission
93.2
125.0
155.1
Federal Aviation Agency
..
National Aeronautics and Space Administration
.
_ 4,555.0 5.097.0 4.993.0
146.8
226.2
177.7
National Science Foundation
4.2
55.9
55.9
Office of Economic Opportunity
36.6
42.6
42.2
Veterans Administration
42.8
69.2
54.4
Other
-.
.-
279.4
6.1
260.8
2.1
241.9
2.3
537.9
48.4
503.0
58.4
307.0
56.8
6.0
3.6
8.2
11.5
6.8
.7
3,752.8 4,906.2 5.098.5 1,077.6 1,054.3
841.0
Total, research and development
SPECIAL ANALYSIS J
FEDERAL AID TO STATE AND LOCAL GOVERNMENTS
Federal aid to State and local governments in recent decades has
become a major factor in the cooperative financing of essential government functions. The rudiments of the present system date back
more than 100 years to the enactment in 1862 of the Morrill Act.
This act established land-grant colleges and instituted certain federally
required minimum standards which are characteristic of the present
grant-in-aid system. Federal aid was later initiated for agriculture,
highways, vocational education and rehabilitation, forestry, and public
health. In the depression years, Federal aid was extended to meet
economic security and other social welfare needs. More recently, significant efforts have been made to broaden elementary, secondary, and
higher educational opportunities; to develop economically depressed
areas of the Nation; to help finance health services and medical care
for the indigent; and to launch a concerted attack on poverty.
Special efforts are being made to coordinate and further improve the
various Federal aid programs in 1967. The proposed Intergovernmental Cooperation Act, already before the Congress, would improve the
administration and facilitate congressional review of Federal grantsin-aid. It would also provide a means for coordinating intergovernmental policy in the administration of grants for urban development.
Federal Aid to State and Local Governments
Budget and Trust Fund Expenditures
1956
1957
1958
Fiscal Years
1959
I960
1961
1962
1963
1964
1965
1966
1967
Estimate
133
134
THE BUDGET FOR FISCAL YEAR 1967
The growth of Federal aid programs.—In 10 years, total Federal aid
to State and local governments will have more than tripled, rising
from $4.1 billion in 1957 to an estimated $14.6 billion in 1967. In
relation to total Federal cash payments, Federal aid will have doubled.
In the same period, expenditures by State and local governments from
their own funds also will have doubled.
Although the number and variety of Federal aid programs have
increased markedly in the last several decades, about 53 percent of
total expenditures in 1967 for assistance to State and local governments will be for two major programs—highway construction and
public assistance grants. In the decade ending in 1967, highway construction grants will have increased more than fourfold, rising from
$955 million in 1957 to an estimated $4.1 billion in 1967, the largest
increase in Federal aid for any single grant program during this period.
Grants for public assistance will have more than doubled since 1957,
increasing from $1.6 billion to an estimated $3.6 billion in 1967.
Increasing population and rapid urbanization have led to greater
responsibility, particularly at the State and local level, for providing
essential public services in education, health, housing, urban renewal,
highways, and public transportation. Continuing economic change
has stimulated programs for safeguarding the economic security of
individuals. While the major burden of such public services rests
with the approximately 90,000 State and local governmental jurisdictions, the Federal Government plays a vital role, both through direct
operation of programs and by providing financial assistance to State
and local governments. Furthermore, by encouraging a sound and
growing economy, the Federal Government helps State and local
governments indirectly by promoting a growing tax base.
Major program changes for 1967.—In 1967, total expenditures underexisting and proposed programs for financial assistance to other levels
of government will increase substantially. The total is estimated to be
$1.3 billion more than for 1966 and $3.5 billion more than the actual
total for 1965.
The major increases in grants for 1967 over the 1966 estimates are as
follows:
• Educational assistance programs are estimated to rise by $728
million to a total of $1.9 billion, largely reflecting new legislation
enacted by the 88th and 89th Congresses for elementary, secondary,
vocational, and higher education and for libraries.
• Economic opportunity programs will increase by $268 million to
an estimated $1.1 billion.
• Grants for housing and community development are up by an
estimated $189 million (27.5%) over 1966, as programs to assist in
solving urban slum, growth, and transit problems are intensified.
Smaller increases will occur in the food stamp program ($41 million)
and in grants for vocational rehabilitation ($91 million).
Significant decreases in expenditures in 1967 are expected to occur in:
(1) accelerated public wwks ($117 million), as most projects are now
completed; (2) college housing loans ($295 million), reflecting proposed
sales of shares in pools of these loans; (3) educational assistance to
federally affected areas ($90 million), as a result of recent studies of
this program, and the impact of the large new Federal programs which
meet many of the same needs; and (4) medical assistance for the
aged ($75 million), reflecting the effect of medical health insurance
Digitized programs.
for FRASER
135
SPECIAL ANALYSES
Table J-l. FEDERAL AID BUDGET AND TRUST FUND EXPENDITURES BY
AGENCY (in millions of dollars)
Agency
Executive Office of the President
__ __ .„_ .
Funds appropriated to the President:
Economic opportunity programs
Other
Department of Agriculture
Department of Commerce
__.
Department of Defense—Military
Department of Defense—Civil
Department of Health, Education, and Welfare..
Department of Housing and Urban Development.
Department of the Interior. _
Department of Justice
Department of Labor
„
__
Department of State
Treasury Department
..
Federal Aviation Agency
General Services Administration
Veterans Administration
Other independent offices
_.
District of Columbia 1
Total, budget and trust fund expenditures for Federal aid.
1965
actual
1966
estimate
0.6
1.2
115.0
331.7
924.8
4,034.7
32.7
16.9
4,210.6
693.8
138.1
821.9
279.2
1,024.5
4,037.9
32.0
21.2
5,341.6
783.9
202.9
415.8
533.2
4.4
4.4
5.1
60.2
70.6
61.6
65.0
1.9
8.1
9.4
.7
9.4
1967
estimate
1,089.8
50.4
884.0
4,255.2
37.7
22.5
6,639.0
594.5
238.8
10.0
558.2
5.4
64.1
60.0
58.0
12.3
61.7
8.7
19.3
108.0
11,127.4
13,299.8
14,646.7
1
Represents Federal payments and loans to the District of Columbia for operations and capital
improvements.
Federal aid programs by function and agency.—In 1967, Federal aid
for health, labor, and welfare activities will amount to $6.6 billion,
45% of the total. Of this amount, $4.6 billion will be for programs administered by the Department of Health, Education, and Welfare.
About 30% of total Federal aid, or $4.3 billion, will be spent for
commerce and transportation activities of which highway construction
under the Department of Commerce will account for $4.1 billion.
Most of the remaining 25% will be distributed between education
(13%) and housing and community development (6%). The detailed
table at the end of this analysis lists the various programs of Federal
aid to State and local governments by function, type of aid, agency,
and major program groups.
To place the composition of current Federal aid payments in perspective, table J-2 displays a similar distribution of aid by major function
for earlier years. In 1955, prior to the advent of the expanded Federal-aid highway program, nearly three-fifths of total payments were
made for health, labor, and welfare programs. Public assistance
payments alone accounted for nearly one-half of the total. Commerce and transportation activities comprised one-fifth, and agriculture and education, combined, formed another 16% of total aid payments.
The Federal-aid Highway Act of 1956 significantly altered the
pattern of aid to State and local governments. By 1960, with the infusion of more than $2% billion in additional funds for highway grants,
commerce and transportation programs moved to the ascendant
position in Federal assistance activities. While all of the other functional categories shown in the table grew in absolute amount, only
housing and community development also grew faster than total aid.
136
THE
BUDGET FOR FISCAL YEAR
196 7
Table J-2. PERCENTAGE DISTRIBUTION OF FEDERAL AIDS TO STATE
AND LOCAL GOVERNMENTS BY FUNCTION
Function
1965
actual
Agriculture and agricultural resources.
Natural resources
Commerce and transportation
Housing and community development
Health, labor, and welfare
Education
Other
Total
1967
estimate
5
2
39
6
40
6
1
3
2
30
6
45
13
1
100
100
In more recent years, both the nature and number of aid programs
have changed appreciably in response to the needs of State and local
governments. There have been a number of new programs enacted
in the last 3 years, aimed primarily at broadening the scope of individual opportunity and development. The cumulative effect of
these programs has been to place the principal emphasis of Federal
aid once again on health, labor, and welfare activities—as well as to
give added impetus to education and housing and community development efforts. In 1967, education and health, labor, and welfare
programs will account for 58% of estimated total aid payments.
Like the earlier periods, nearly all the functional categories will
have increased in absolute amount. Between 1965 and 1967, education aid is estimated to increase by $1.2 billion, while health, labor,
and welfare payments will rise by about $2.1 billion. Together,
these two categories account for over 94% of the estimated total
increase in aid payments between 1965 and 1967.
Table J-3. FEDERAL AID EXPENDITURES IN RELATION TO TOTAL
FEDERAL EXPENDITURES AND TO STATE-LOCAL REVENUE
Total expenditures for aid to State and local
governments, budget and trust accounts
Amount
(millions)
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966 estimate
1967 estimate
- ..
- -
- -
$3,124
3,753
4.111
5,072
6,813
7,174
7,283
8,167
8,818
10,314
11,127
13,300
14,647
As a percent
of total cash
payments to
the public
4
5
5
6
7
8
7
8
8
9
9
10
10
As a percent
of State-local
revenue J
1]
12
11
12
15
14
13
14
14
15
15
(2)
(2)
1
Based on compilations published by Governments Division, Bureau of the Census. Excludes
State-local
revenue from publicly operated utilities, liquor stores, and insurance trust systems.
2
Not available.
137
SPECIAL ANALYSES
Federal aid in relation to total Federal and State-local
outlays.—
Total financial aid from budget and trust accounts of $14.6 billion
will represent about 10% of estimated total Federal cash payments
to the public, the same percentage as in 1966. As a source of State
and local revenue, Federal aid payments from both trust fund and
budget accounts in 1965 were an estimated 15% of all general revenue
available to these jurisdictions.
Types of Federal aid.—Federal financial assistance to State and
local governments takes the form of direct grants-in-aid, shared
revenue, and net loans and repayable advances. Grants to States
and localities are the most significant type of Federal aid. In 1967,
it is estimated that $14.6 billion or 99.3% of total expenditures for
all three types of aid will take the form of grants-in-aid. Shared
revenue will account for $202 million, or 1.4%, and net loans and
repayable advances will have a net repayment of $106 million, due
mainly to proposed sales of pools of these loans. Apart from these
types of Federal aid, many other Federal expenditures which are not included in this analysis, such as contractual payments or grants to
public institutions for research and training in special fields, affect
the finances of State and local governments.
Table J-4. TYPES OF FEDERAL AID BY FUNCTION, 1967 (in millions of dollars)
Function
National defense
International affairs and finance
Agriculture and agricultural resources - Natural resources
Commerce and transportation
- - -Housing and community development
Education
Veterans benefits and services
General government- .
_
Total
Grantsin-aid
38.8
5.2
428.1
193.1
4,308.0
877.6
6,615.0
2,033.0
8.7
43.0
14,550.4
Shared
revenues
Net loans
and reTotal aids
payable
advances
72.1
5.1
38.8
5.2
430.7
342.5
4,323.5
905.9
6,615.0
1,856.3
8.7
120.2
202.1
-105.8
14,646.7
130.0
2.6
19.4
15.5
28.3
-176.7
Types of grant-in-aid formulas.—Before the 1930's, Federal grants
were apportioned among the States either as a flat sum per State or
on the basis of relative State population. With the growth in the
number and variety of grants, the methods of allocating the funds
have undergone considerable change. A major feature of this change
since World War II has been the increased use of fiscal equalization
provisions. Before the war, Federal grants went in largest proportion
to the States with greater resources. More recently, many of the
grant programs have taken some account of variations among States
in relative fiscal capacity. In fact, several of the new grant programs
enacted during the past 3 years use a "fiscal capacity" index.
Most present Federal grant programs have two distinct but
coordinate provisions to determine State shares of grant funds. The
first is an apportionment formula which specifies the proportion of
138
THE BUDGET FOR FISCAL YEAR 1967
Federal grant funds for which each State is eligible. The second
provision, a matching formula, specifies to what extent a participating
State must share in the costs of the program.
Apportionment formulas vary considerably, but most often incorporate one or more of the criteria embraced by the so-called PFN
formula: Population, Financial ability, and Need for the program.
• Program need is usually measured by the total population or
the relevant population group.
• Financial ability is typically measured by relative per capita
income. This is the case, for example, in grants for school lunches.
Matching requirements—requiring States to share in program
costs—are common elements of most grants. The matching or
cost-sharing requirements are of two kinds: variable matching, which
takes account of the differing abilities of the States to support their
aided functions; and fixed ratio matching under which each State is
required to share in the same proportion of program cost.
The forthcoming Annual Report of the Secretary of the Treasury for
1965 (table 85, part A) provides more detailed information concerning
the actual 1965 grants-in-aid and shared revenues. Among other
things, it will show the expenditures made in each State under the
various aid programs.
Table J-5. FEDERAL AID TO STATE AND LOCAL GOVERNMENTS
(in millions of dollars)
Agency and program
Functional
code
1965
actual
1966
estimate
1967
estimate
BUDGET AND TRUST ACCOUNTS 1
Grants-in-aid and shared revenue ?
National defense:
Executive Office of the President:
Office of Emergency Planning—Federal contributions
to State and local planning
Department of Defense—Military:
Civil defense shelters andfinancialassistance. .
Construction of Army National Guard centers. . _ . .
059
0.6
1.2
1.1
051
051
21.6
11.1
24.0
8.0
29.0
8.7
33.3
33.2
38.8
153
4.4
4.8
5.2
351
352
352
354
387.2
.2
368.7
20.0
3.0
1.5
264.1
21.0
3.0
2.2
355
355
355
.3
45.4
81.9
1.7
56.8
86.9
1.6
46.4
87.2
Total, national defense
International affairs and finance:
Department of State: East-West Cultural and Technical
Interchange Center
Agriculture and agricultural resources:
Department of Agriculture:
Commodity Credit Corporation and Consumer and
Marketing Service:
Removal of surplus agricultural commodities and
value of commodities donated
.
Rural water and waste disposal facilities
Rural housing for domestic farm labor . .
....._
Resource conservation and development.
. _. .
Agricultural Research Service: Grants for basic
scientific research . _
..
. .
Agricultural experiment stations . .
Cooperative agricultural extension service
See footnotes at end of table.
139
SPECIAL ANALYSES
Table J-5. FEDERAL AID TO STATE AND LOCAL GOVERNMENTS
(in millions of dollars)—Continued
Agency and program
Functional
code
1965
actual
1966
estimate
1967
estimate
BUDGET AND TRUST ACCOUNTS 1— Continued
Grants-in-aid and shared revenue 2—Continued
Agriculture and agricultural resources—Continued
Department of Agriculture—Continued
Payments to States, territories, and possessions, Consumer and Marketing Service
Commodity Credit Corporation: Grants for research.
1.5
1.1
1.0
517.6
541.3
428.1
401
58.3
61.0
65.6
402
15.4
16.1
15.8
402
33.5
36.2
37.5
401
11.9
18.3
20.7
401
1.7
2.0
401
401
.9
1.1
355
355
Total, agriculture and agricultural resources
Natural resources:
Department of Agriculture:
Watershed protection and flood prevention
Grants for forest protection, utilization, and basic
scientific research
National forest and grassland funds; payments to
States and counties (shared revenue)
Department of Defense—Civil: Corps of Engineers:
Payment to California, flood control
Payments to States, Flood Control Act of 1954 (shared
revenue)
Department of the Interior:
Payments to States and counties from grazing receipts,
grasslands, and sales of public lands (shared
revenue)
Bureau of Indian Affairs: Resources management
Bureau of Reclamation:
Grants
Payments to Klamath area, Arizona and Nevada
(shared revenue)
Office of Water Resources Research
Payments from grant lands: Oregon, California, and
Coos and Douglas Counties (shared revenue)
Mineral Leasing Act payments (shared revenue)
Bureau of Mines: Mine drainage, solid waste disposal,
and Appalachian mining area restoration
Aid for commercial fisheries
Payment to Alaska from Pribilof Island fund (shared
revenue)
Fish and wildlife restoration and management
Wildlife refuge fund and grasslands payments (shared
revenue)
Land and water conservation grants
Department of State: Pacific Halibut Commission
Federal Power Commission: Payments to States
(shared revenue)
Tennessee Valley Authority: Payments in lieu of taxes
(shared revenue)
Water Resources Council
Total, natural resources.
Grants-in-aid
Shared revenue
See footnotes at end of table.
401
401
401
402
403
403
404
404
404
21.4
47.4
.4
1.0
20.2
.6
6.1
.7
6.2
20.9
48.0
22.3
53.3
.6
2.3
14.0
2.8
20.0
.2
19.4
37.8
.3
45.6
.2
404
405
404
.4
.1
401
.1
401
401
9.0
10.2
11.5
2.0
223.3
283.6
323.1
(107.1)
(116.2)
(163.5)
(120.1)
(193.1)
(130.0)
1.5
.1
140
THE BUDGET FOR FISCAL YEAR 1967
Table J-5. FEDERAL AID TO STATE AND LOCAL GOVERNMENTS
(in millions of dollars) —Continued
Agency and program
Functional
cod
1965
actual
1966
estimate
1967
estimate
BUDGET AND TRUST ACCOUNTS »— Continued
Grants-in-aid and shared revenue 2—Continued
Commerce and transportation:
Funds appropriated to the President: Public works
acceleration
Department of Commerce:
State marine schools
Forest and public lands highways
Highway beautification and control of advertising
Appalachian development highway system
Federal aid highway program (highway trust fund). _
Improvement of weights, measures, and technology--.
Office of State Technical Services
Office of Appalachian Assistance: Special grants and
research
Economic Development Administration grants
Area redevelopment assistance
Regional economic planning
Appalachian Regional Commission:
Administrative budget
Other (trust fund)
Federal Aviation Agency: Federal aid airport program. _.
Small Business Administration: Research and management counseling
507
288.4
124.9
502
503
503
503
503
506
506
.6
38.1
.1
*
.6
42.0
12.8
19.6
507
507
507
507
3,979.5
8.4
507
507
501
70.6
506
.2
Total, commerce and transportation.
Grants-in-aid, administrative budget.
Grants-in-aid, trust fund
.6
101.1
,923.1 M.027.7
6
5
5.6
2.0
4.8
9.0
6.0
2.0
19.5
72.6
6.0
5.5
65.0
.1
60.0
4,386.0
4,212.5 4,308.0
(406.5)
(3,979.5)
(289.4) (280.2)
(3,923.2) (4,027.8)
Housing and community development:
Department of Housing and Urban Development:
Low-income housing demonstration program
Low-rent public housing program
Urban planning grants
Open space land and urban beautification
Grants for basic water and sewer facilities
Grants for neighborhood facilities
Demonstration city grants
Urban renewal
Urban transportation assistance
Other aids for urban renewal and community facilities.
District of Columbia: Federal payment
551
552
553
553
553
553
553
553
553
553
555
1.3
206.3
16.6
5.9
2.0
236.3
20.0
17.5
1.2
1.2
1.9
253.6
22.0
29.1
50.8
12.5
5.0
373.5
280.6
11.1
329.5
31.9
37.5
48.7
61.9
559.2
688.4
877.6
659
42.8
149.8
42.3
655
655
655
655
655
5.0
41.1
44.3
20.2
4.4
147.0
280.1
221.0
130.2
43.6
255.0
389.1
247.0
138.7
60.0
659
659
263.0
31.8
272.3
85.4
202.3
126.5
Total, housing and community development.
65.0
2.4
Health, labor, and welfare:
Funds appropriated to the President:
Disaster relief
Office of Economic Opportunity:
Community action programs:
Head Start
Other
Neighborhood Youth Corps
Work experience
Other
Department of Agriculture:
Special milk and school lunch
Food stamp
See footnotes at end of table.
141
SPECIAL ANALYSES
Table J-5. FEDERAL AID TO STATE AND LOCAL GOVERNMENTS
(in millions of dollars) —Continued
Agency and program
• unc:ional
code
1965
actual
1966
estimate
1967
estimate
221.1
(146.1)
140.0
10.5
BUDGET AND TRUST ACCOUNTS i— Continued
Grants-in-aid and shared revenue 2—Continued
Health, labor, and welfare—Continued
Department of Health, Education, and Welfare:
Community health—hospital construction
(Portion to private, nonprofit institutions)
Other community health activities
Environmental health
Medical services: Hospitals and medical care, Hawaii;
and Indian health facilities
National Institutes of Health:
Operation, support, and improvement grants,
mental health
Construction of community mental health centers..
Construction of health research facilities
Regional medical programs
Grants for waste treatment works and water pollution
control
Maternal and child welfare
Medical care for the aged (public assistance)
Public assistance (exclusive of medical care for the
Vocational rehabilitation
Administration on Aging
Department of Labor:
Manpower development and training activities
Grants to States for administration of employment
security programs (trust fund)
Equal Opportunity Commission
651
651
651
651
651
651
651
651
651
193.3
196.6
(124.9)
(131.6)
63.2
4.9
93.3
1.2
1.2
1.2
26.3
1.6
3.6
5.0
46.8
25.0
1.5
35.0
1.9
7.6
651
651
651
75.0
97.5
272.2
84.9
121.0
364.1
107.0
146.1
288.8
653
659
659
2,787.2
101.5
*
3,240.8
168.6
3,306.2
259.8
6.0
652
22.5
652
652
393.3
4,477.4
Total, health, labor, and welfare
3.0
82.8
57.6
450.4
500.6
.9
6,180.0
6,615.0
(4,084.2) (5,729.6) (6,114.3)
(450.4) (500.6)
(393.3)
Grants-in-aid, administrative budget.
Grants-in-aid, trust fund
Education:
Department of Health, Education, and Welfare:
Assistance to schools in federally affected areas
Elementary and secondary educational activities
Defense educational activities:
Assistance to elementary and secondary education.
Educational statistics program
Higher education facilities construction
Higher education activities
Assistance to land-grant colleges
Vocational education
Arts and humanities educational activities
Grants for library services and construction
Training teachers of the handicapped
Community services and National Teacher Corps
Civil rights educational activities
Teaching of the blind
Educational television facilities
Department of the Interior: Bureau of Indian Affairs:
Education and welfare services
See footnotes at end of table.
701
701
340.6
342.0
295.0
252.0
1,200.0
701
704
702
702
702
704
704
704
704
704
704
704
704
67.4
13.3
80.0
2.0
53.0
7.0
77.5
2.0
164.6
32.0
704
1.3
14.5
131.5
14.5
172.0
.2
26.1
3.1
35.0
3.4
.9
7.7
10.0
11.6
1.5
2.9
2.6
204.1
.5
51.1
4.6
15.0
2.9
1.0
7.7
142
THE BUDGET FOR FISCAL YEAR 196 7
Table J-5. FEDERAL AID TO STATE AND LOCAL GOVERNMENTS
(in millions of dollars) —Continued
Agency and program
Functional
code
1965
actual
1966
estimate
1967
estimate
1.0
2.0
2.0
1,025.2
2,033.0
BUDGET AND TRUST ACCOUNTS i— Continued
Grants-in-aid and shared revenue 2—Continued
Ed ucation—Continued
National Foundation on the Arts and Humanities:
Administrative budget
Other (trust fund)
704
704
610.3
Total, education.
(610.3) (1,024.2) (2,031.0)
(2.0)
(1.0)
Grants-in-aid, administrative budget,
Grants-in-aid, trust fund
Veterans benefits and services:
Veterans Administration:
Aid to State homes
Grants for construction of State nursing homes.
Administrative expenses
7.7
.....
8.7
.5
.2
7.7
.9
8.1
9.4
8.7
910
.5
4.6
910
13.4
26.0
32.4
910
908
8.3
10.4
4.4
8.0
10.0
910
42.9
43.0
45.0
904
17.2
18.6
19.1
905
908
1.9
.7
804
804
805
Total, veterans benefits and services.
General government:
Funds appropriated to the President: Transitional
grants to Alaska
Department of the Interior:
Grants to territories
Internal revenue collections, Virgin Islands {shared
revenue)
Department of Justice: Law enforcement assistance
Treasury Department:
Tax collections for Puerto Rico (shared revenue)
Bureau of Customs: Refunds, transfers and expenses
of operation, Puerto Rico and the Virgin Islands
(trust fund shared revenue)
General Services Administration: Hospital facilities in
the District of Columbia
President's Crime Commissions
Total, general government.
Grants-in-aid, administrative budget. Shared revenue, administrative budgetShared revenue, trust fund
.7
84.2
108.6
115.1
(15.8)
(51.3)
(17.2)
(36.6)
(43.0)
(53.0)
(19.1)
10,903.9
Total grants-in-aid and shared revenue-
(53.4)
(18.6)
13,087.0 14,752.5
Loans and repayable advances (net)
Agriculture and agricultural resources:
Department of Agriculture:
Rural renewal
Resource conservation and development
Total agriculture and agricultural resources.
See footnotes at end of table.
352
354
.7
1.0
1.6
2.6
2.6
SPECIAL
143
ANALYSES
Table J-5. FEDERAL AID TO STATE AND LOCAL GOVERNMENTS
(in millions of dollars) —Continued
Agency and program
• unc-
ional
code
1965
actual
1966
estimate
1967
estimate
BUDGET AND TRUST ACCOUNTS i—Continued
Loans and repayable advances (net)—Continued
Natural resources:
Department of Agriculture: Watershed protection and
flood prevention
Department of the Interior: Irrigation projects
401
401
9.6
4.4
12.0
14.7
5.6
13.9
16.5
24.3
19.4
507
7.9
15.4
15.5
551
552
553
553
553
553
555
4
11.3
38.1
7.9
46.7
-.2
20.5
-3.1
-.5
22.5
7.9
18.5
5.8
13.0
-.5
(4)
-52.5
9.9
22.5
2.8
46.1
64.1
28.3
9.4
.6
26.0
.7
68.7
93.1
-201.6
68.7
103.1
-176.7
3.3
2.4
.9
2.3
5.1
5.6
3.2
5.1
283.4
212.7
-105.8
6,346.4
4,372.8
8,520.3
4,374.6
10,020.1
167.5
17.2
223.4
173.5
18.6
212.7
183.0
19.1
-105.8
11,127.4
13,299.8
14,646.7
Total, natural resources.
Commerce and transportation:
Department of Commerce: Area redevelopment.
Housing and community development:
Department of Housing and Urban Development:
Liquidating programs: Community facilities loans. _
Low rent public housing program
Public facilities
Public works planning
Urban renewal fund
Urban transit fund
District of Columbia: Capital outlays and operations.
123.9
Total, housing and community development
Education:
Department of Health, Education, and Welfare:
Higher education facilities
Expansion and improvement of vocational education.
Department of Housing and Urban Development:
College housing
Government mortgage liquidation
702
704
702
702
Total, education.
General government:
Department of Defense—Civil: Corps of Engineers:
910
Construction of power systems, Ryukyu Islands
Department of the Interior: Administration of territories 9.0
Total, general government
Total, loans and repayable advances
Total
Total
Total
Total
Total
grants-in-aid, administrative budget
grants-in-aid, trust funds
shared revenue, administrative budgetshared revenue, trust funds
loans and repayable advances (net)
Total Federal
aid-
4,530.4
Note—Detail wiii not necessarily add to totals because of rounding.
"Less than $0.05 million.
1
Budget accounts unless otherwise specified, Many expenditures listed here are parts of larger
appropriation
accounts or trust accounts.
2
Grants-in-aid
unless otherwise specified
3
Reflects proposed transfer of forest and public lands highways and the highway beautincation
program
to
the
highway
trust fund.
4
Net repayments of less than $0.05 million.
SPECIAL ANALYSIS
K
PRINCIPAL FEDERAL STATISTICAL PROGRAMS
This analysis summarizes the principal statistical programs of the
Federal Government in the 1967 budget. The programs are presented in two categories: Current and periodic. Fiscal 1967 recommendations for current programs, reflecting continuing year-to-year
statistical activity in the various agencies, provide for a total of $121.6
million. Recommendations for periodic programs—the large-scale
census-type surveys characteristically taken once or twice a decade—
amount to $13.3 million in obligations for 1967.
Objectives of these programs are to provide accurate, comprehensive, and timely data that are required for operations and policy
decisions of the Government, and that furnish the public with information about the functioning of the economy and welfare of the people.
The functions of collecting, processing, and analyzing current generalpurpose statistical information are often closely related to other
agency objectives. To indicate the interrelationships of the statistical
programs carried out by different agencies and to aid in evaluating the
Government's overall statistical system, the significant components of
current Federal statistical activity are brought together and classified
by broad subject areas in this special analysis. These areas and the
amounts involved for the current program are summarized in table
K - l . Information by agencies for both the current and periodic
programs is shown in table K-2.
The current statistical programs represent the entire programs of
some agencies but only that portion of the programs of other agencies
constituting general-purpose statistical activity. This year's presentation reflects two important changes: The inclusion of funds for
the statistical work of the Office of Economic Opportunity and a
substantial increase in the research and statistical activities of the
National Center for Educational Statistics as a result of a reorganization and reassignment of functions not previously included.
A brief description of the major program changes is shown below
by broad subject areas. The agencies which contribute to each
subject area are shown in table K-l. Adjustments made for savings
resulting from increased productivity and for additional amounts
required for increased pay costs are not itemized in descriptive
statements but are reflected in the totals.
LABOR STATISTICS
Manpower and employment data.—Following several years of
planning and testing, the Bureau of Labor Statistics plans to initiate
surveys during 1967 which would provide current estimates of employment by occupation within industries. About 125 occupations have
been identified as those requiring substantial periods of training,
those subject to rapid change, or critical to defense or national welfare.
Information is already available on some half of these occupations
144
145
SPECIAL ANALYSES
Table K-1. OBLIGATIONS FOR PRINCIPAL CURRENT STATISTICAL
PROGRAMS, BY BROAD SUBJECT AREAS (in millions of dollars)
Program
Labor statistics (Departments of Agriculture, Interior, and
Labor; National Science Foundation)
Demographic and social statistics (Departments of Agriculture,
Commerce, and Health, Education, and Welfare; National
Science Foundation; Office of Economic Opportunity)
Prices and price indexes (Departments of Agriculture, Commerce, and Labor)
,
Production and distribution statistics (Departments of Agriculture, Commerce, Defense, and Interior; Civil Aeronautics
Board; Interstate Commerce Commission)
Construction and housing statistics (Departments of Commerce
and Housing and Urban Development; Federal Home Loan
Bank Board)
National income and business financial accounts (Departments
of Agriculture, Commerce, and Treasury; Securities and
Exchange Commission; Federal Trade Commission)
Total, principal current programs
1965
actual
1966
estimate
1967
estimate
23.6
26.2
29.8
18.3
24.9
34.7
5.7
5.7
5.9
35.0
37.1
37.6
3.1
3.9
3.9
9.9
9.2
9.7
95.6
107.0
121.6
from existing sources. In order to provide current annual estimates
of employment by occupation and to develop information on the
changing occupational composition of major industries, a series of
industry surveys ($190,000) would be undertakes for the remaining
occupations. It will be 3 years or more before the program is in full
operation and information available on the full list of 125 occupations.
Funds ($120,000) are recommended for the Bureau of Labor
Statistics to support a program of manpower research in depth which
would subject existing data to more fundamental analysis in order
to study and understand better the problems of accelerating economic
growth, reducing unemployment, and assuring a better balance of
manpower resources and requirements.
Funds are recommended ($500,000) for the Statistical Reporting
Service, Department of Agriculture, to strengthen the monthly estimates of employment of farmworkers—operators, hired workers, and
unpaid family workers—and quarterly estimates of the wage rates
paid hired farm labor. This program has been developed in response
to the recommendations of the President's Committee To Appraise
Employment and Unemployment Statistics (Gordon committee).
The Labor Department has been experimenting with a variety of
methods for obtaining job vacancy information from nonagricultural
employers. This experience indicates that collection of such data is
feasible, although the exact procedures to be used depend on the results of further testing during 1966. Information on job vacancies
would be used (1) for developing statistical series on current demand
for labor, and (2) for the guidance of employment service operations,
educational authorities, and others concerned with the training and
placement of the labor supply in localities. With the funds recommended ($2,500,000) quarterly estimates of job vacancies will be
developed for large standard metropolitan statistical areas, and possibly for the States and the United States, showing information by
occupation and the wage rates offered. This is a cooperative Bureau
789-740 0—66
146
THE
BUDGET FOR FISCAL YEAR
1967
of Employment Security, Bureau of Labor Statistics, and State employment security agency program.
Wages and industrial relations.—Funds are recommended ($267,000)
for an annual survey by the Bureau of Labor Statistics of salaries of a
representative sample of occupations in States, county, and municipal
governments. This survey will supplement the annual survey of
professional, technical, and clerical occupations in private industry.
BLS has planned a regular collection of information on employer
expenditures for fringe benefit payments to workers. Biennially,
estimates would be prepared for the manufacturing and nonmanufacturing segments of the private economy, with separate detail for
production and nonproduction workers. In alternate years, special
studies would be made of specific industries having significant national
interest. During 1966, a start was made on the specific industry
studies. The additional funds for 1967 ($308,000) would provide for
the biennial surveys. In addition, an annual report would be made
on the value of major collective bargaining settlements, including
both the cost of wage increases and of changes in fringe benefits.
The annual survey by the Bureau of Labor Statistics of occupational
wage rates in the machinery industries is being placed on a biennial
basis to conserve funds ($75,000) and reduce reporting burden.
Productivity measurement.—An amount of $100,000 is included for
the Bureau of Labor Statistics to increase the number of major
industries for which separate productivity estimates are prepared.
Bureau of Labor Statistics presently prepares estimates for 30 separate
industries. Possibly five to seven industries would be included the
first year of the expanded program, some in manufacturing and some
in nonmanufacturing. The manufacturing estimates would be prepared from information now available, but the nonmanufacturing
estimates may require the collection of additional data, for which
planning would be done with the funds requested for 1967.
DEMOGRAPHIC AND SOCIAL STATISTICS
Health and vital statistics.—The 1967 budget for the National Center
for Health Statistics includes a recommended increase of approximately
$900,000. This includes $800,000 about equally divided between (1)
a decennial revision in scope and design of the health interview survey
which would support development of health data for States, metropolitan areas and other smaller areas and population groups, and for
areas and people with particular health problems; and (2) surveys of
the medical manpower and health facilities of the Nation to provide
information needed in relation to the health insurance, medical assistance, and poverty programs. The recommendation also includes
$100,000 for printing and distributing standard birth, death, marriage,
and divorce certificates to the States, for revised printing of the physicians handbook, and for necessary work to adapt the World Health
Organization decennial revision of the international classification of
diseases for use in the United States in indexing of hospital records
and for classification of morbidity and mortality data.
Population statistics.—The Census Bureau is exploring the use of
administrative records to improve current estimates of family income
SPECIAL ANALYSES
147
and other population characteristics and to provide prompt, economical, and consistent estimates of population and family incomes for
small areas such as counties and standard metropolitan statistical
areas for intercensal years. Use of large-scale automatic data processing techniques is required. Funds ($350,000) are recommended
to extend this developmental program during 1967.
Educational statistics.—The reorganization of the Office of Education has provided for more centralization of both survey work and
data processing in the National Center for Educational Statistics.
The 1967 budget includes $750,000 for expanding and improving both
the regular statistical program and further development of the
analytical model of the educational systems of the United States.
The sum of $2.9 million is included for developing a new program of
collecting educational achievement data on a uniform nationwide
basis for the purpose of assessing the quality of education, for the
purchase of data to be collected as a supplement to the current population survey, and to initiate a survey of adult education and training
for employment. Additional funds of $500,000 are recommended to
cover administrative costs of greatly increased functions and for
machine tabulating and printing.
Social security statistics.—An increase of $1 million is recommended
for 1967 for an expansion of the research and statistics program.
A major part of this increase is a result of the 1965 amendments
to the Social Security Act which established a new program of hospital and supplementary medical insurance for the aged.
An additional increase of $260,000, for the program of economic
and social survey contracts, would provide funds for two major
studies: The retirement history study, a longitudinal study following
a sample of aged persons through a series of periodic interviews for
about 10 years; and the study of beneficiaries in nursing homes and
other long-stay institutions, a supplement to the national study of
the disabled.
Welfare statistics.—Primary emphasis in 1967 will be on reassessment of the series of statistical reports required by the Bureau of
Family Services from the State public welfare agencies, including
methods of obtaining and processing data. Particular attention will
be given to statistics related to new medical programs administered
by the Welfare Administration and to increased use of sampling and
computerized processing of data. The Welfare Administration will
also conduct a nationwide study of family living conditions from a
sample of open and closed AFDC (aid to families with dependent
children) cases and families who applied for but did not receive
assistance. This study will provide information on the demographic,
social, and economic characteristics of these families; on the effects
of specific eligibility requirements; and on living arrangements and
housing conditions. The total recommended increase is $900,000.
Economic opportunity.—In recognition of the substantial volume
of statistical data required to support the antipoverty program of the
Office of Economic Opportunity this activity appears for the first
time in this analysis. While the major part of the data is obtained
148
THE BUDGET FOR FISCAL YEAR
1967
from other agencies, there is need for statistics specifically directed
toward securing analytical detail with respect to the low-income
population and appraising the effectiveness of the program.
The increase in funds ($2 million) for 1967 is for the purpose of
planning, testing the feasibility, and for preparatory work in connection with prospective large-scale surveys which would both probe
poverty in depth and be integrated with the 1970 censuses so that
changes can be effectively measured.
PRICES AND PRICE INDEXES
An increase of $75,000 is requested to expand research by the
Bureau of Labor Statistics in the wholesale price area, principally for
commodities entering into foreign trade. Slight reductions will be
effected by elimination of the breakdown in the wholesale price index
by stage of processing and by discontinuance of the weekly wholesale price index. Although weekly data on the small samples which
had been used for the latter will no longer be collected weekly, data
will be collected for the week falling in the middle of the month as
an advance indicator of the monthly index.
An increase of $125,000 was appropriated for 1966 for work by the
Bureau of Labor Statistics on standard budgets for city workers'
families. A further increase of the same amount is requested for 1967.
This will provide for the compilation of current standard budgets for
selected types and sizes of families at two levels of living—"minimum
adequate" and "modest but adequate."
PRODUCTION AND DISTRIBUTION
The major program changes in this area are in activities of the
Department of Agriculture. An amount of $113,000 is requested to
complete the long-range program for improving crop and livestock
estimates by the Statistical Reporting Service. This repeats the
1966 budget request for this work. Recommended program increases
for the Economic Research Service include $650,000 for intensified
research on rural economic development, with principal emphasis on
depressed rural areas, and $150,000 for economic analysis of water
management and use problems in agriculture. These amounts are
partially offset by increased productivity and by a $200,000 decrease
for a one-time study in 1966 of the away-from-home market for food.
Changes are also planned in the content of present programs as a
result of completion or cutbacks in individual research and analytical
projects and the initiation or expansion of others.
The only change recommended in the program of the Bureau of the
Census in this area would provide approximately $70,000 to initiate
an annual series on retail trade by merchandise lines similar to those
on which data were obtained in the 1963 Census of Business.
CONSTRUCTION AND HOUSING
This area continues during 1967 at substantially the 1966 level.
There will, however, be some change in content of the program as
some projects are completed and others are initiated.
The Department of Housing and Urban Development will extend
its program of statistical data on housing markets and costs. It
SPECIAL ANALYSES
149
will also conduct studies of specific aspects of urban development,
markets for specialized types of housing, and financing and cash-flow
requirements of various types of construction enterprises.
The Bureau of the Census will continue during 1967 to institute
improvements in its value of construction-put-in-place statistics.
Extension of progress reporting on nonresidential construction to
the Western States will become fully operational. Development of
new construction patterns for 1-4 family residences, begun in 1966,
will be completed and made operational in 1967.
NATIONAL INCOME AND BUSINESS FINANCIAL ACCOUNTS
The major changes proposed for this area are for work by the
Office of Business Economics, as described below. In addition, a
small increase ($50,000) is recommended for the Economic Research
Service for basic statistics and related research on farm income parity.
National economic accounts.-—Program increases of $400,000 are
recommended for the Office of Business Economics to improve the
balance-of-payments statistics, to expand the work on input-output,
and to initiate a program for a comprehensive accounting of the
Nation's capital stock.
Extensive improvements on balance-of-payments work, including
those suggested by the Budget Bureau's Balance of Payments Review
Committee (Bernstein) and by the congressional Joint Economic
Committee, are required for adequate presentation of major types of
international transactions and for analyses of balance-of-payments developments. This work includes particularly the establishment of an
inventory of foreign investments. $200,000 is recommended for this
program.
The expansion of input-output work pertains mainly to the calculation of a 1963 table involving the expansion of industry detail to
more than double the number of industries in the previous (1958)
table. This is expected to provide a considerably more useful tool
for market analysis and add flexibility to the use of input-output for
general economic analysis. $100,000 is requested for this work.
In connection with the program for measurement of national
wealth, the Office of Business Economics will expand its work on the
measurement of fixed business capital, business inventories, and consumer assets; and initiate measures of Government real wealth. Part
of this program will involve construction of complete balance sheets for
the Nation and the major sectors of the economy. The Office of
Business Economics is also expected to provide guidance to the Census
Bureau and other agencies collecting primary data pertaining to
wealth. $100,000 is requested for these activities.
PERIODIC PROGRAMS
In 1967, work on the 1963 Economic Censuses and the 1964 Census
of Agriculture will be completed. The 1967 budget also provides for
continuation of work on the preparation for the economic censuses
and census of governments covering the calendar year 1967, for which
the main task of data collection will be reflected in the 1968 budget.
150
THE BUDGET FOR FISCAL YEAR 19 67
Table K-2. OBLIGATIONS FOR PRINCIPAL STATISTICAL PROGRAMS, BY
AGENCY (in millions of dollars)
Agency
1965
actual
1967
1966
CURRENT PROGRAMS
Department of Agriculture:
Economic Research Service
Statistical Reporting Service
Department of Commerce:
Bureau of the Census
Office of Business Economics
Department of Defense: Corps of Engineers: Domestic shipping
statistics
Department of Health, Education, and Welfare:
National Center for Educational Statistics
National Center for Health Statistics
Social Security Administration: Statistical and research
activities
Welfare Administration: Statistical and research activities...
Department of Housing and Urban Development: Urban studies
and housing research
Department of the Interior: Bureau of Mines: Mineral statisticsDepartment of Labor:
Bureau of Employment Security: Statistical activities
Bureau of Labor Statistics
Office of Manpower Policy, Evaluation, and Research: Statistical activities
Treasury Department: Internal Revenue Service: Statistical reporting
Civil Aeronautics Board: Statistical and research activities
Federal Home Loan Bank Board: Statistical activities
Federal Trade Commission: Financial statistics
Interstate Commerce Commission: Reports and statistics
National Science Foundation: Statistics and special analyses
Office of Economic Opportunity: Statistical and research activities.
Securities and Exchange Commission: Operational and business
statistics
Total, current programs
10.9
11.9
12.1
12.4
12.5
12.9
15.2
2.3
15.7
2.5
16.2
3.0
1.0
1.1
1.1
2.1
6.3
3.5
7.2
7.6
8.2
4.6
1.5
5.9
1.7
7.3
2.6
.4
2.4
2.7
2.6
2.5
18.5
3.1
20.0
5.2
20.8
3.7
4.0
4.1
6.1
.5
.7
.3
.9
3.5
5.0
5.0
.6
.8
.3
.6
.9
4.0
2.4
.9
.3
.9
4.2
4.4
.3
.3
.3
95.6
107.0
121.6
5.8
15.5
2.7
5.8
1.2
.2
2.3
1.2
1.8
3.2
1.4
3.2
PERIODIC PROGRAMS
Department of Commerce: Bureau of the Census:
1963 economic censuses
1964 Census of Agriculture
1967 economic censuses
1967 Census of Governments
Preparation for 19th Decennial Census
Registration and voting statistics
Modernization of computing equipment
Department of Agriculture: Statistical Reporting Service: Computer purchase and related costs
Department of Health, Education, and Welfare: National Center
for Health Statistics: Computer purchase and related costs
Total, periodic programs
Total, principal statistical programs.
.9
2.0
1.7
.5
1.1
22.2
15.1
13.3
117.8
122.1
134.9
SPECIAL ANALYSES
151
Preparation for 19th Decennial Census.—Work will continue on
establishing the basis for collecting a large part of the 19th Decennial
Censuses of Population and Housing by mail. A computer-based
geographic coding system will be developed to assign individual
addresses to the geographic areas which must be identified in the
census publications. Other planning work will include problems of
census taking in hard-to-enumerate areas, questionnaire design under
self-enumeration conditions, the development of statistical measures
relating to the condition of housing and pilot testing of proposals for
new or alternative census questions.
Computers.—All amounts recommended for the purchase of computer and related costs are contained in the periodic statistical
program. Although some of this equipment is used to process
current statistics their purchase is included under the periodic program
since the amounts represent long-term capital investment and for
analytical purposes the total cost should not be charged to the current
statistical program.
SPECIAL ANALYSIS
L
FOREIGN CURRENCY AVAILABILITIES AND USES
Many agencies of the Government are engaged in activities throughout the world which involve payments in foreign currencies. From
some governmental activities, particularly the sale on concessional
terms of surplus agricultural commodities, foreign currencies accrue
to the Government without purchase with dollars. This analysis
presents summary data on foreign currency availabilities and uses.
Most currencies accrue to the credit of the United States because
of past or current international agreements authorized under several
laws. These international agreements deal primarily with (1) sales of
commodities (usually surplus agricultural commodities) to foreign
purchasers for local currencies, or (2) loans of dollars or foreign
currencies which may be repaid in the currency of the borrower.
Currencies also become available in much smaller amounts under
other kinds of international agreements and from the normal operations of the U.S. Government abroad.
A large part of the foreign currencies owned by the United States
is committed by the terms of the international agreements under which
they are received to be used on a loan or grant basis for mutually
beneficial purposes in the country—these are called " country -use"
currencies. The currencies which are available for the purposes of
U.S. agencies are called "U.S. use" currencies.
The Federal Government has established a number of procedures to
insure the maximum use of the foreign currencies which are available
for U.S. purposes. Efficient use of these currencies is important not
only as a matter of sound financial management but because of the
need to improve the balance-of-payments position of the United States.
Payments of U.S. obligations abroad in foreign currencies rather than
in U.S. dollars decreases the balance-of-payments deficit.
It is useful for both administrative purposes and for analytical purposes to divide U.S. use foreign currencies into two categories:
Excess currencies are the currencies of countries for which the
Treasury Department determines (after reviewing the availabilities
and prospective uses) that the supply is great enough to more than
cover our requirements for the next 2 or 3 years. For 1966, the excess
currency countries are: Burma, Ceylon, Guinea, India, Israel, Pakistan, Poland, Tunisia, United Arab Republic (Egypt), and Yugoslavia.
They are expected to remain excess-currency countries in 1967.
Separate appropriations for "special foreign currency programs"
have been provided for several years. These appropriations finance
programs which can make good use of excess currencies, and may
include projects of lower priority than those financed through regular
appropriations. The use of these appropriations results in an expenditure being reported for the using agency and a receipt for the Commodity Credit Corporation or other appropriate fund.
In addition, because of the increasing balances of these currencies,
the 1967 budget proposes additional direct authorizations to spend
152
153
SPECIAL ANALYSES
foreign currencies for seven agencies. These authorizations would
permit more of the currencies excess to U.S. needs to be used to fund
activities advantageous to the United States, including acquisition of
physical assets. They differ from the special foreign currency program appropriations in two respects: first, they are stated in foreign
currency units, while the appropriations are in U.S. dollars; and
second, they do not affect expenditures or receipts.
Nonexcess currencies are those of all countries not designated as
"excess." In many of these countries, our supply of currencies is
far below our needs, and it is necessary to purchase currencies commercially to meet our requirements. In some of these countries, however, the supply of currencies available for U.S. programs is above our
immediate needs, but not by a great enough amount for the country to
be declared an excess currency country. Special efforts are made to
use these "near-excess" currencies, rather than U.S. dollars, wherever
possible, but it is not appropriate to seek additional uses for such
currencies, and they are not available for use under the special appropriations or authorizations. The "near-excess" countries currently
are: Brazil, Colombia, Congo (Leopoldville), Finland, Indonesia, Morocco, Sudan, Syria, Taiwan, Turkey, and Uruguay. No designation
of anticipated "near-excess" countries for 1967 has been made, and
the list is likely to change.
Total availabilities of foreign currencies owned by the United
States (excluding small amounts held in trust) are as follows:
Table L-l. CASH AVAILABILITY OF FOREIGN CURRENCIES
(In millions of dollar equivalents)
1965
actual
For U.S. uses:
Excess currencies
Nonexcess currencies
Subtotal, for U.S. uses
.
For country uses Amounts unfunded in Treasury accounts.
-
1967
estimate
1.422
1,626
1,841
371
294
272
1.794
2,508
1.920
2.311
-9
2,113
2.193
4,222
4.261
4.302
Total
1966
estimate
-44
Need for foreign currencies.—As indicated in table L-2, the need
for foreign currencies in U.S. operations often does not correspond to
their availability on a country-by-country basis. Although the
United States will have over $2 billion available for U.S. programs,
less than $300 million will be in nonexcess currencies and we must
purchase almost $1.9 billion of currencies to meet our total requirements. (These figures are based on projections of future collections
and requirements; foreign currency transactions are subject to more
fluctuation and are, in many cases, less predictable than U.S. dollar
transactions.) In nonexcess currency countries a strong effort is made
in the negotiation of commodity sales agreements to obtain the
maximum amount possible for U.S. uses. Despite this, in the normal
course of its worldwide operations, the Government must purchase
789-740 0—66
11
154
THE BUDGET FOR FISCAL YEAR 196 7
large amounts of many currencies while at the same time it is accumulating large inconvertible balances of others.
Table L-2. FOREIGN CURRENCY AVAILABLE TO MEET U.S.
REQUIREMENTS, 1967 (in millions of dollar equivalents)
Requirements
(expenditures)
Country
Supply
Excess currencies:
Burma
- Ceylon
Guinea
India
Israel
Pakistan
Poland
Tunisia
United Arab Republic (Egypt)
Yugoslavia,. .
_ .
Total, excess currencies...
SJonexcess currencies:
Brazil1
Canada..
China (Taiwan)1
Colombia l
Congo (L6opoldville)1 . .
Finland 1
France
Germany, Federal Republic of_.
Greece.
. ..
. __
Indonesia l
Italy
Japan
....
Korea
1
Morocco .
.. .
Philippines
Spain
Sudan 1
Syria *
..
....
Thailand
1
Turkey
...
United Kingdom .
Uruguay *
Vietnam
Other countries
Total, nonexcess currencies
Total .
.
Amounts
available
for use
after
1967
Other
than
special
programs
Special
programs
26
8
10
840
46
175
490
9
134
101
1
*
*
4
7
7
14
1
6
5
2
2
1
36
13
9
9
3
8
7
23
6
9
799
27
159
468
6
120
89
1.841
45
90
1,706
21
2
22
4
10
2
7
12
13
10
8
30
14
18
2
7
4
*
3
30
6
2
8
37
11
35
17
4
1
I
157
977
14
*
66
196
47
3
39
64
2
2
38
34
73
1
93
204
1
9
*
*
5
272
2,080
2.113
2,125
*
*
*
*
*
*
*
*
*
1
*
*
*
2
*
*
1
Requirements for
commercial
purchase
in 1967
33
9
1
*
150
964
1
9
25
58
191
34
15
37
58
2
2
35
5
70
1
7
85
175
6
84
1,898
96
1.790
1.898
*Less than $J£ million.
1
Currently designated as "near-excess" currency countries, but this designation may not be
effective in 1967.
U.S. uses of foreign currencies.—Table L-3 summarizes transactions
of U.S. use foreign currencies. Disbursing officers are required to use
currencies owned by the Government, if they are available, before
purchasing currencies commercially.
SPECIAL
155
ANALYSES
Table L-3. SUMMARY OF FOREIGN CURRENCY TRANSACTIONS, U.S. USES
(In millions of dollar equivalents)
1965
Cash balances brought forward:
Excess currencies
Nonexcess currencies
-
-
Subtotal, cash balances brought forward .
.
. ..
__
Collections:
Public Law 480 sales
Foreign assistance programs
Other nonloan collections:
Sale of military supplies and equipment - - . _.
. . .
Contributions for support of U.S. forces abroad . .
Surplus property and lend-lease .„ . . .
_
Informational media guarantees -..
Interest on public deposits
Miscellaneous
--.._Loan repayments (principal and interest):
Public Law 480 loans
- .
Foreign assistance loans (including Development Loan Fund) _
Subtotal, collections
Transfer of excess currencies to country use
Total availabilities
Expenditures (deduct):
Foreign currency expenditure authorizations:
Proposed additional authorization
Other
With dollar credits t o Miscellaneous receipts of the general fund. _
Commodity Credit Corporation, Agriculture
Informational media guarantee fund, USIA
Foreign buildings program, State.. .
Military assistance program, Defense
Deposits for replacement currencies..
Other
...
Subtotal, expenditures *
.
Adjustments due to changes in exchange rates
Cash balances carried forward
. .
.
__
. . .
.
.
.
.
.
1966
1967
1.164
137
1,345
91
1.539
77
1,301
1.436
1,616
169
8
140
7
116
7
12
13
13
3
28
20
9
9
2
27
43
9
9
2
27
38
94
132
109
153
129
176
493
501
-17
514
-18
1,794
1,920
2,113
12
13
31
12
106
193
3
1
15
5
9
140
146
2
6
138
141
2
1
-3
-2
344
-13
304
323
1,436
1,616
1,790
1 Excludes sales of country-use currencies, subject to later replacement, as follows: 1965, $9 million; 1966, $35 million; and 1967, $5 million.
Recommendations for special foreign currency program appropriations,
1967.—Most U.S. uses of foreign currencies are covered by unrestricted dollar appropriations. Table L-4 shows the separate appropriations for special foreign currency programs, which are limited to
the use of excess foreign currencies.
156
T H E BUDGET FOR FISCAL YEAR
1967
Table L-4. SPECIAL FOREIGN CURRENCY PROGRAM A P P R O P R I A T I O N S NEW OBLIGATIONAL AUTHORITY (in thousands of dollar equivalents)
1965
enacted
Library of Congress: Collection and distribution of library
materials
Department of Agriculture: Agricultural Research Service:
Salaries and expenses
Department of Commerce:
International activities: Salaries and expenses
National Bureau of Standards: Research and technical
services
Environmental Science Services Administration: Research and development
Department of Health, Education, and Welfare:
Office of Education: Educational research
Office of Vocational Rehabilitation: Research and training.
Public Health Service: Scientific activities overseas
Welfare Administration: Research and training
Department of Interior: Bureau of Commercial Fisheries:
Management and investigations of resources
Department of State: Acquisition, operation, and maintenance of buildings abroad
Smithsonian Institution: Museum programs and related
research
United States Information Agency:
Salaries and expenses
Special international exhibitions
TotaL
1966
estimate
1967
estimate
1,428
1,690
2,000
3,000
2,492
200
300
500
500
500
500
500
500
500
1,000
1,800
2,000
1,000
2,000
5,000
1,200
4,000
19,217
2,000
300
300
200
5,000
6,500
6,250
1,300
5,700
1,200
400
11,112
154
10,941
350
21.828
34,456
54,250
Foreign currency expenditure authorizations.—The budget contains
proposed new "Excess foreign currency authorizations," as set forth
in table L-5. These authorizations are subject to the appropriations
process and provide for the use of specified numbers of foreign currency units rather than an appropriation to cover the expenditure of
the currencies.
Table L-5. ADDITIONAL EXCESS FOREIGN CURRENCY AUTHORIZATIONS
(In millions of local currency units)
Country and foreign
currency unit
Department of
Agriculture
Department of
Defense
4.6
Burma (kyats)
1.0
Ceylon (rupees)
Guinea (francs)
49.3
4.1
India (rupees)
39.0
4.2
17.8
Israel (pounds) ___ .
6.3
7.2
Pakistan (rupees)
58.0
Poland (zlotys)
97.8
.1
Tunisia (dinars)
.1
United Arab Republic (Egypt)
.1
.6
(pounds)-- -_
Yugoslavia (dinars) - - 4.375.0 4,096.3
Department of
the
Interior
Department of
Labor
1.4
1.2
0.9
.4
98.6
National
Depart- Science
ment of FoundaState
tion
United
States
Information
Agency
2.0
3.6
.6
.4
1.6
.3
3.0
74.0
69.6
2.9
21.2
41.3
.4
.1
.9
100.0 1,508.5
0.7
5.1
13.1
3.4
14.4
33.6
4.7
Total
8.0
6.8
123.2
154.8
39.1
43.2
311.7
.9
.5
2.5
.3
487.6 1,125.0 11,817.4
157
SPECIAL ANALYSES
In addition to the proposed new authorizations, unexpended balances of prior foreign currency expenditure authorizations remain for
Defense family housing, and Indian rupees are made available under
a permanent authorization for use in Nepal by the Agency for International Development. Table L-6 summarizes all transactions under
foreign currency expenditure authorizations relating to U.S. uses.
Table L-6. SUMMARY OF FOREIGN CURRENCY AUTHORIZATIONS FOR
U.S. USES (in thousands of dollar equivalents)
1965
actual
New authorizations to spend foreign currency receipts:
Proposed additional authorization (see table L-5)
Funds appropriated to the President: Economic assistance
Department of State
.
.
..
87,069
8.550
9,000
8,550
96,069
156
156
Total authorizations
Expenditures:
Proposed additional authorization
Funds appropriated to the President: Economic assistance
Department of Defense
._
Department of State
.
. . . .
Total expenditures
1967
1966
30,525
-
9.691
1.921
277
10,000
3.000
10,000
2,030
11.889
13,000
42.555
Country uses.—A far larger amount of foreign currencies are used
outside of the appropriations process, as summarized in table L-7,
for loans and grants in the host country for common defense and
economic development.
Table L-7. SUMMARY OF FOREIGN CURRENCY TRANSACTIONSCOUNTRY USES (in millions of dollar equivalents)
1965
actual
Balances brought forward, Collections:
Public Law 480 sales
Foreign assistance program
._ ..
-
-
Subtotal, collections
Transfer of excess currencies from U.S. uses
Total availabilities
-
-.
Expenditures (deduct):
Public Law 480 country loans and grants
- Public Law 480 loans to private enterprise
Other foreign assistance programs.
. .
Subtotal, expenditures
Adjustments due to changes in exchange rates
Balances carried forward
- _- -- - - . .
1966
estimate
1967
estimate
1,488
1,384
1.386
1,020
1
910
789
1,020
910
17
789
18
2,508
2,311
2,193
1.032
47
15
859
50
16
835
54
11
1.094
-30
925
900
1.384
1,386
1.293
SPECIAL ANALYSIS M
INTERNATIONAL TRANSACTIONS OF THE FEDERAL GOVERNMENT
As part of a wide range of efforts to reduce the continuing deficits
in the U.S. balance of international payments, the Federal Government carries on a special program to minimize any adverse effects of
its activities on the balance of payments. Under this program, agencies with substantial receipts or payments abroad keep their international transactions under close scrutiny. They are required to
prepare statistical estimates of their transactions twice each year for
review by the Bureau of the Budget. These estimates are evaluated
to determine whether all possible actions are being taken to reduce
payments and increase receipts.
Since emphasis is placed on using this system as a management
tool, forward estimates do not merely project current trends or programs, but rather reflect all possible efforts, consistent with the national interest, to minimize payments and to maximize receipts from
activities in other countries.
This special analysis presents a summary of the international transactions of the Federal Government for fiscal years 1965-67 based on
estimates made in September 1965, revised where necessary for
comparability with the 1967 budget.
Major trends.— On the basis of current estimates, net Federal
payments abroad, excluding special transactions, will increase by
$679 million between 1965 and 1967.
Gross Federal payments abroad are expected to increase from $4.2
billion in 1965 to $4.8 billion in 1966 and $5.4 billion in 1967. Expenditures for defense purposes and to carry out prior commitments
for cash investment in international institutions account for almost
all of this increase. Otherwise Federal overseas expenditures in 1967
will not be significantly higher than in 1965.
Gross receipts excluding special transactions (such as prepayments
on loans, negotiated sales of special securities, and advances received
on military sales) are expected to rise from the 1965 level of almost
$2 billion to more than $2.4 billion in 1967.
Table M-1. SUMMARY OF INTERNATIONAL TRANSACTIONS OF THE
FEDERAL GOVERNMENT (in millions of dollars)
Payments
Receipts *
Excess of payments
1
Excluding special transactions.
158
1965
estimate
1966
stimate
1967
estimate
4,235
1,992
4.820
2.083
5.362
2.440
2.243
2.797
2.322
159
SPECIAL ANALYSES
Trends by agency.—Table M-2 provides a breakdown of total
current receipts and payments figures. Agencies which account for
the bulk of the Federal Government's international transactions are
separately identified.
Table M-2. INTERNATIONAL TRANSACTIONS OF THE FEDERAL
GOVERNMENT—BY MAJOR AGENCY (in millions of dollars)
Description
1965
estimate
1966
1967
Payments:
Department of Defense
Treasury Department
Agency for International Development
Department of State
Department of Health, Education, and Welfare
Atomic Energy Commission
Veterans Administration
Other
Subtotal
Deduct: Unfunding of previously reserved foreign currency
accounts
Total
,604
563
411
228
143
89
70
224
3,045
609
375
251
165
55
72
247
,488
715
400
244
176
28
72
239
4.332
4,820
5,362
4,235
4,820
5,362
991
477
166
158
158
141
1,062
438
157
170
237
171
1,144
558
282
186
280
152
2,092
100
2,235
152
2,602
162
1,992
2,083
2,440
323
535
47
-60
-71
173
625
-30
905
42
97
Receipts:
Department of Defense
Export-Import Bank
Treasury Department
Agency for International Development
Department of Agriculture
Other
Subtotal
Deduct: Transactions reported by more than one agency
Total
Receipts from special transactions (not included in receipts
above):
Advances received on military exports, net
Sales of medium-term, nonmarketable securities, net
Prepayment and sales of Export-Import Bank loans
Total, special transactions
1
Not available.
0)
Forward estimates are not made for receipts from these transactions.
Payments.—The estimated increase of $884 million in the level of
payments by the Department of Defense for the 2-year period dominates the prospective trend. Increased military operations in
Vietnam are largely responsible. The military pay raise and rises in
foreign national wage rates and in overseas price levels also contribute
to the increase. The Department of Defense will intensify efforts to
reduce its net balance-of-payments costs while maintaining all
necessary combat capabilities in 1966 and 1967.
The Treasury Department makes substantial payments not easily
subject to administrative controls. These include (1) interest on the
public debt held abroad and (2) U.S. contributions to international
financial institutions. (The balance of payments impact of these
160
THE BUDGET FOR FISCAL YEAR 1967
contributions occurs when the institutions convert their U.S. Government notes and letters of credit into cash to meet loan disbursement
requirements determined by the progress of individual development
projects.) Increased payments to the International Development
Association in 1966 and the Inter-American Development Bank in
1967 account for much of the increases in those years.
The Agency for International Development is making special
efforts to assure that, wherever possible, loans and grants abroad are
tied directly to procurement in the United States. Except for limited
procurement in some developing countries, its general policy is to
prohibit the purchase abroad of any goods with foreign economic
assistance funds. Despite increases in overseas procurement for
Vietnam emergency requirements, AID will continue to purchase
more than 92% of its commodity requirements in the United States.
The higher level of overseas payments by the Department of State
in 1966 and 1967 results from increased U.S. contributions to international organizations and purchases of U.N. bonds.
Overseas payments by the Department of Health, Education, and
Welfare will increase between 1965 and 1967. Annuities, pensions,
and other transfer payments not readily subject to administrative
controls account for more than 85% of these payments. The 7%
increase in social security benefits payments authorized in the 1965
Social Security Act amendments will substantially increase these
overseas expenditures. Veterans Administration payments abroad,
mostly for compensation and pensions, will also increase slightly
because of broader eligibility and higher benefits provided by recently
enacted legislation.
Payments by the Atomic Energy Commission will decline sharply
because of scheduled decreases in the procurement of uranium concentrates from foreign countries. Fiscal year 1967 will be the last
year in which the United States expects to procure foreign uranium.
Receipts.—The estimated increase of $448 million in receipts over
the 1965-67 period arises mainly from higher Department of Defense
sales of military equipment to friendly governments, increasing use of
barter for offshore procurement by other agencies through the Department of Agriculture and larger loan repayments to the ExportImport Bank, and the Agency for International Development.
Special transactions—which are not included in the totals just discussed—were the source of large additional receipts in 1965. These
receipts result from transactions involving advances or loans and are
generally negotiated with foreign governments or official monetary
authorities. They include: (1) advance payments by foreign governments for military exports, (2) sales of nonmarketable, medium-term
securities by the Treasury Department to foreign central banks,
(3) repayments by foreign borrowers of loans before they are due.
Geographical distribution.—Table M-3 shows a distribution of
receipts and payments by major geographic area.
Receipts from Western Europe (excluding special transactions,
most of which are with Western Europe) are estimated to increase
74% from 1965 to 1967 in contrast to a 6% increase in payments.
Payments to other countries are expected to rise by 53% during the
same period.
161
SPECIAL ANALYSES
Table M-3. DISTRIBUTION OF INTERNATIONAL TRANSACTIONS OF THE
FEDERAL GOVERNMENT, BY GEOGRAPHIC AREA (in millions of dollars)
1965
Payments:
Western Europe (including international organizations located there)
Other countries
_.
.
Other international and undistributed
Total
1966
1967
1.918
1.844
473
1.998
2.445
377
2.045
2.829
488
4.235
4.820
5.362
840
J.136
17
1.246
826
10
1.460
973
7
1.993
2,081
2.440
1
Receipts:
Western Europe (including international organizations located there)
Other countries
.
. _
. .
Other international and undistributed
Total
1
Excluding special transactions.
Payments by type of transaction.—Between 1965 and 1967, increases
in Federal payments abroad will occur primarily in purchases of goods
and services for use abroad, in U.S. payroll spent abroad, and in loans.
Increased Department of Defense expenditures for Vietnam largely
account for the first two.
Table M-4. DISTRIBUTION OF FEDERAL PAYMENTS ABROAD BY TYPE
OF TRANSACTION (in millions of dollars)
1967
estimate
1965
estimate
1966
estimate
997
1.949
158
450
268
177
474
1.178
2.235
152
395
301
281
446
1,349
2,521
112
422
312
321
498
Subtotal .
_
- .
Deduct:
3
Payments in excess and near-excess foreign currencies
Unfunding of previously reserved foreign currency accounts
4.474
4.987
5,535
142
97
167
172
Total, payments affecting the balance of payments... . .
4.235
4,820
5,362
Description
U.S. payroll—amount estimated to be spent abroad
._
Goods and services purchased abroad for use abroad 1 _ .
Other purchases of goods and services..
_ .
Grants (amounts for use abroad)2
Pensions and similar transfer payments . _ . . .
Loans (amounts for use abroad)2
Other
...
.
1
2
Includes Defense procurement, including military assistance.
Excludes funds tied to procurement in the United States or which are otherwise not currently
available
for use abroad.
3
See Special Analysis L for definitions of excess and near excess currencies. Since use of these
currencies does not increase the flow of dollars abroad, they are deducted in calculating the effect of
the'Federal Government on the balance of payments. These figures are estimated on a slightly
different basis in Special Analysis L, which reflects certain payments not covered in agency estimates
of international transactions.
Relation to the budget.—Reports on international transactions
do not, in all cases, flow directly from the accounting system used for
the administrative budget or trust funds. In some instances they are
estimated separately to show all Government receipts or payments
162
THE BUDGET FOR FISCAL YEAR 196 7
which enter the balance of payments. The major differences between
data on international transactions and administrative budget and trust
fund totals are:
1. Coverage.—Data on international transactions exclude all budget
and trust transactions that are within the United States. For example, the administrative budget includes all expenditures for foreign
assistance and Department of Defense procurement, while such payments are included as international transactions only to the extent
that the procurement is estimated to take place abroad. On the other
hand, budget and trust figures exclude all transactions in U.S. Government debt whether domestic or international. But, sales of special
Treasury securities overseas and other international debt operations
are included in reports on international transactions.
2. Estimated basis oj international transactions.—No separate detailed accounting system has been established for international transactions comparable to that which supports administrative budget
and trust fund totals. In many cases, it is necessary to estimate the
overseas components of transactions, since these components are not
shown directly by accounting data. For example, budget accounts
provide precise data on the gross amount of salaries paid in a given
overseas area, but do not identify the amount actually spent overseas
by employees—which is the relevant statistic for balance-of-payments
purposes. Thus, for past years, international transactions are a
combination of actual accounting reports and estimates.
3. Timing.—International transactions are recorded at the time
when they are known or estimated to affect the balance of payments.
The time at which a given international transaction is counted may,
therefore, vary considerably from the time at which it is shown in
the budget and trust fund accounts. For example, in some cases
the U.S. Government makes contributions to international organizations in the form of non-interest-bearing notes. These notes are
shown as administrative budget expenditures when issued, but as
international payments only when they are cashed.
Relationship to balance-of-payments
statistics.—Data on
Federal receipts and payments abroad are also reflected in the balanceof-payments statistics published by the Department of Commerce.
However, as with the administrative budget, the balance-of-payments
statistics are designed for pvirposes which are different from those for
which the Government agency reports on international transactions
have been established. Balance-of-payments data meet the needs
for economic analysis and for the measurement of international
flows of real resources and money, while agency reports on international transactions serve as both a means of estimating and a
management tool for decreasing the balance-of-payments impact of
Federal Government programs. Reflecting the different uses of these
two bodies of data, the balance-of-payments statistics and the reports
on Federal transactions covered in this analysis differ in the following
respects:
SPECIAL ANALYSES
163
1. Classification.—The reports use classifications by agency and by
types of expenditures which are quite different from the broad functional classifications used for the balance-of-payments statistics.
2. Attribution.—Transactions conducted by private businesses, in
which the Federal Government is involved, are treated as private in
the balance-of-payments statistics. In order to emphasize management decisions, however, Federal agency reports permit the attribution of some such transactions to the Federal Government. For
example, military goods may be sold to foreign governments directly
by private companies, although the sales are encouraged and sponsored by the Department of Defense. In the balance of payments,
such sales would be reported as private receipts from exports. However, for the purpose of measuring the Defense Department's impact
on international transactions, some of them are considered
Government receipts.
3. Other.—Further differences between the two sets of data involve the timing of certain transactions, the reporting of foreign
currencies, and minor differences in coverage of transactions which
are considered "foreign."
The balance-of-payments statistics do not include a separate identifiable category on total Federal receipts or payments. However,
because of the recent interest in the relationship between U.S. Government grants and loans abroad and the balance of payments,
the Department of Commerce has included estimates indicating the
amount of Government loans and grants which involve direct payments to foreign accounts, distinguished from those which involve
no direct dollar outflow from the United States. Agencies report
similar data for their estimates on international transactions. A
reconciliation between the two sets of data, shown in table M-5,
illustrates the kinds of differences which exist between the agency
reports and estimates on international transactions and the Department of Commerce balance-of-payments statistics.
164
THE BUDGET FOR FISCAL YEAR
1967
Table M-5. GOVERNMENT GRANTS AND LOANS—RECONCILIATION
BETWEEN BALANCE OF PAYMENTS AND AGENCY ESTIMATES OF
INTERNATIONAL TRANSACTIONS (in millions of dollars)
Description
1965
Government grants and loans, as shown in agency reports on international transactions
(lines 4 and 6, table M-4)
627
Difference in definitions of grants and loans:
Add:
Agency for International Development administrative expenses
Peace Corps expenditures
Other
Deduct:
Certain contributions to international organizations Netting of certain receipts
Other
Differences in coverage and reporting:
Add:
Inclusion of Trust Territory payments
Payments to foreign-flag carriers
Payments for expenditures in the United States but entering foreign dollar accounts
in U.S. banks
Differences in agency reporting estimates
Foreign currency transactions (net)
Other (net)
116
56
17
6
Transactions involving direct dollar payments to foreign accounts as shown in
balance-of-payments statistics
760
U S. GOVERNMENT PRINTING OFFICE : 1966 0—789-740
43
12
5
91
39
18
13
13
@FedFRASER