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TABLE OF CONTENTS
Page

TABLE OF CONTENTS ..................................................................................................................

i

LIST OF TABLES ............................................................................................................................

ii

EXECUTIVE SUMMARY ................................................................................................................

1

ECONOMIC ASSUMPTIONS .........................................................................................................

7

RECEIPTS ........................................................................................................................................

11

SPENDING .......................................................................................................................................

13

SEQUESTRATION UPDATE REPORT .........................................................................................

17

SUMMARY TABLES........................................................................................................................

31

GENERAL NOTES
1. All years referred to are fiscal years unless otherwise
noted.
2. All totals in the text and tables display both on-budget
and off-budget spending and receipts unless otherwise
noted.
3. Details in the tables and text may not add to totals
because of rounding.

i

LIST OF TABLES
Page

Table 1.0 Bipartisan Budget Agreement: Change From Baseline..............................................

3

Table 2.0 Economic Assumptions ..................................................................................................

9

Table 3.0 Change in Receipts ........................................................................................................

11

Table 4.0 Change in Outlays .........................................................................................................

15

Table 5.0 Historical Summary of Changes to Discretionary Spending Limits..........................

18

Table 6.0 Update Report Adjustments to Discretionary Spending Limits.................................

20

Table 7.0 Status of 1997 Discretionary Appropriations...............................................................

22

Table 8.

Summary of 1998 Appropriations Action .....................................................................

23

Table 9.

Comparison of OMB and CBO Discretionary Spending Limits.................................

24

Table 10. Deficit Impact of Pay-As-You-Go Legislation Enacted as of August 15, 1997 ..........

27

Table 11. Revenue Increases and Spending Reductions Credited to the Deficit Reduction
Table 11. Fund .............................................................................................................................

30

Table 12. Status of the Deficit Reduction Fund ..........................................................................

30

Table 13. Estimated Spending From End of 1998 Balances of Budget Authority:
Table 13. Discretionary Programs..............................................................................................

31

Table 14. Outlays for Mandatory Programs Under Current Law..............................................

31

Table 15. The Balanced Budget Act and The Taxpayer Relief Acts of 1997 .............................

32

Table 16. Mandatory Outlay and Revenue Proposals Not Included In the Balanced Budget
and the Taxpayer Relief Acts of 1997 ........................................................................

35

Table 17. Budget by Category of Outlays and Receipts: Mid-Session Review Versus February
Table 17. Budget..........................................................................................................................

37

Table 18. Budget by Category of Outlays and Receipts: Mid-Session Review Versus
Pre-Reconciliation Baseline ........................................................................................
Table 17.

39

Table 19. Budget Aggregates: 1997 to 2007 .................................................................................

40

Table 20. Receipts by Source.........................................................................................................

41

Table 21. Outlays by Agency .........................................................................................................

42

Table 22. Outlays by Function ......................................................................................................

43

Table 23. Discretionary Budget Authority by Agency .................................................................

44

Table 24. Discretionary Budget Authority by Function ..............................................................

45

Table 25. Federal Government Financing and Debt ...................................................................

46

ii

EXECUTIVE SUMMARY
The Administration projects that the fiscal
1997 deficit will be just $37 billion and
that the budget will achieve a $63 billion
surplus in 2002—marking the Nation’s first
balanced budget in over a generation.
At $37 billion, the 1997 deficit would
be the smallest deficit since 1974, both in
dollar terms and as a share of Gross Domestic
Product (GDP) (see Chart 1). Already, the
Nation has one of the smallest deficits as
a share of GDP in the industrialized world.
The projected $63 billion surplus in 2002—
based largely on the balanced budget and
tax bills that the President signed into law
in early August—would represent the first

balanced budget since 1969, and only the
ninth since World War II (see Chart 2).
But, as this report shows, the budget
will not balance on its own. Without the
President’s historic balanced budget agreement
with Congress, the deficit would begin to
rise in 1998 and remain between $50 billion
and $100 billion for the next five years.
(See Table 1.) Simply put, the budget agreement will finish the job that the President
began in 1993 in restoring the Nation’s
fiscal health by bringing the era of exploding
deficits to an end.

Chart 1. THE SMALLEST DEFICIT SINCE 1974
DOLLARS IN BILLIONS

PERCENT OF GDP

300

7

250

6
Dollars

200

5

Percent

4

150

3
100

2
50

1
0

0
1974

1977

1980

1983

1986

1989

1992

1995 1997 est.

1

2

MID-SESSION REVIEW

Chart 2. THE NATION'S FIRST BALANCED BUDGET
IN OVER A GENERATION
DOLLARS IN BILLIONS

300

DEFICIT

250
200
Actual

150
100

SURPLUS

50

Projected

0
1969
$3.2B Surplus

-50

2002
$63.1B Surplus

-100
1940

1950

1960

1970

1980

1990

2000

BIPARTISAN BUDGET AGREEMENT: CHANGE FROM BASELINE
(In billions of dollars)
1999

2000

2001

2002

February baseline deficit ..............................................................
Revised economic and technical assumptions and policy
changes before August 1, 1997 .................................................
Revised baseline ............................................................................
Balanced Budget Act and Taxpayer Relief Act:
Discretionary savings:
Defense ...................................................................................
Nondefense .............................................................................

127.7

119.5

140.1

127.6

108.5

100.8

99.1

98.6

93.3

91.9

–91.7
36.0

–66.1
53.5

–53.9
86.2

–40.6
87.0

–36.1
72.3

–39.4
61.3

–43.2
55.8

–46.5
52.1

–51.2
42.1

–56.1
35.8

–66.4 –236.2
26.0

–499.5

—
—

1.0
–4.2

–10.3
–9.1

–13.3
–14.8

–19.9
–23.5

–24.0
–38.7

–28.9
–41.4

–29.8
–43.9

–31.9
–46.6

–34.1
–49.5

–36.4
–52.3

–66.5
–90.3

–227.5
–324.0

Subtotal, discretionary savings .............................................

—

–3.2

–19.4

–28.1

–43.4

–62.8

–70.3

–73.7

–78.5

–83.6

–88.7 –156.8

551.5

Mandatory savings ....................................................................
Debt service, net ............................................................................

—
*

–9.9
0.3

–23.8
–0.4

–43.3
–2.1

–44.8
–4.5

–74.8
–8.7

–61.5
–14.2

–69.3
–19.8

–77.6
–26.1

–86.6
–33.3

–95.8 –196.6
–41.5 –15.4

–587.5
–150.1

Subtotal, savings proposals ......................................................

*

–12.8

–43.5

–73.5

–92.7 –146.3 –146.0 –162.8 –182.1 –203.5 –225.9 –368.8 –1,289.1

Domestic initiatives ......................................................................
Net tax cut 1 ...................................................................................

—
1.3

8.5
10.5

9.3
6.9

9.0
20.7

Subtotal, reconciliation bills .........................................................

1.3

6.2

–27.3

–43.8

—
37.3

–1.3
58.3

–1.5
57.4

–1.8
41.4

proposals 2

................................................................
Other policy
Resulting deficit/surplus (–) .........................................................

9.2
27.7

9.2
28.6

2007
92.4

–61.8 –120.5 –114.3 –129.7 –145.2 –165.7 –186.8 –247.1

–988.8

–4.0
–62.4

7.9
25.2

2006

87.4
212.9

–4.0
–63.1

7.8
24.0

2005

43.3
78.4

–3.5
7.0

7.7
18.1

2004

1998–
2007

1998

8.8
22.2

2003

1998–
2002

1997

EXECUTIVE SUMMARY

Table 1.

10.1
29.0

–5.7
–5.5
–5.6
–6.1
–83.3 –108.7 –135.6 –166.8

–12.1

–39.1

* $50 million or less.
1 Includes outlay impact of tax credits in the Taxpayer Relief Act of 1997. Revenue changes relating to Federal employee retirement and the Universal Service Fund in
the Balanced Budget Act of 1997 are shown in mandatory savings.
2 Includes related debt service. Programmatic detail is provided in Table 16.

3

4
When the President took office in January
1993, he inherited a budget that was clearly
out of control. The deficit had hit a record
$290 billion in fiscal year 1992, the last
full year before he arrived. Both OMB and
the Congressional Budget Office (CBO) projected that, without action, it would go much
higher—with OMB projecting a budget deficit
of $347 billion in 1997, rising to $576 billion
in 2002.
The spiraling deficits of the previous 12
years had seriously hampered the Nation’s
economic performance. They had not only
quadrupled the national debt, but also had
reduced national savings, choked off private
investment, sent the trade deficit soaring,
pushed up interest rates, blocked job creation,
and hampered economic growth. Higher and
higher future deficits would make matters
worse.
The President took early, bold action to
address the deficit problem. Working with
the 103rd Congress, he put in place an
economic program with three components that
had never before been tried together.
First, the plan was designed to reduce
the deficit substantially by cutting unnecessary and lower-priority spending while reinventing the way Government works.
Second, it would invest in education and
training, the environment, science and technology, law enforcement, and other priorities
that will help raise living standards and
the quality of life for average Americans,
now and in the future.
Third, it would expand trade by opening
markets overseas to enable American businesses to sell their goods, thus creating
high-wage jobs at home.
Over the last four years, the plan has
worked well. It has brought down interest
rates, spurring strong growth with low inflation and low unemployment; boosted savings
and investment; and helped to create 13
million new jobs. It has helped cut poverty,
welfare, and crime. And, for the first time
in decades, it has helped to reduce income
inequality and raise living standards.
Because the economy has out-performed
expectations, bringing in much more revenue

MID-SESSION REVIEW

and limiting spending on unemployment and
other benefits, the deficit has fallen far
faster than anticipated. Upon enactment of
the 1993 plan, OMB projected that it would
cut the accumulated deficits from 1994 to
1998 by $505 billion. Now, OMB projects
the plan will cut the deficits in those years
by nearly $1.1 trillion.
The balanced budget legislation that the
President signed on August 5—the product
of strong bipartisan cooperation in Congress,
and supported by overwhelming majorities
in both parties—will finish the job. It achieves
a projected $247 billion in savings over
the next five years and $989 billion over
10 years—enough not only to generate a
surplus by 2002 that grows for several years
thereafter, but to invest in the education,
health care, and futures of Americans and
their families.
Among its highlights, the plan cuts taxes
to help middle-income Americans raise their
children, send them to college, and save
for the future. It provides the largest investment in higher education since the G.I.
Bill 50 years ago, and the largest expansion
in health care for children since the creation
of Medicaid in 1965. It extends the life
of the Medicare Part A Trust Fund for
a decade. And it helps our communities
to rebuild, and to move a million more
people from welfare to work.
As the President said in celebrating the
bipartisan cooperation that made the legislation possible:
Because we have acted, millions of children all
across this country will be able to get medicine,
and have their sight and hearing tested, and see
dentists and doctors for the first time. Millions
of young Americans will be able to go on to college. Millions of Americans not so young will be
able to go back to school to get the education
and training they need to succeed in life. Millions
of families will have more to spend on their own
children’s needs and upbringing. This budget is
an investment in their future and in America’s.

This historic legislation will help to prepare
America for the 21st Century. By finishing
the job of reaching balance, it will help
to keep interest rates low, spur growth,
create jobs, encourage savings and investment,
and boost productivity and living standards.
And by investing in education, health care,
and other priorities, it will continue the

5

EXECUTIVE SUMMARY

Administration’s commitment to give Americans the tools they need to acquire good
jobs and to live prosperous lives in the
next century.
But the legislation should do even more.
By reaching balance, it should help to restore
public confidence in Government and lessen
the cynicism that has gripped the Nation
for over a decade. It should help to assure
the American people that, in Washington
as elsewhere, people of good will can make
great progress when they put aside their
partisan differences for the common good.
By reaching balance and helping to restore
public confidence in Government, the budget
agreement lays the foundation for progress
on other important issues. The Administration
is committed to working on a bipartisan
basis with Congress on the issue of entitlement
reform—specifically, on making the tough
choices to strengthen and protect Medicare
and Social Security over the long run. The
balanced budget legislation that the President
signed in early August set up a bipartisan
commission to reform Medicare, and the President and Congress will appoint its members
this fall.
This report uses the Administration’s new
economic and technical assumptions. Based
on those assumptions, on the recent balanced
budget and tax legislation, on other enacted
laws, and on the President’s use of the
line-item veto, the report updates Administration estimates of the deficit, revenues, and
spending for fiscal years 1997–2002 that
it released in February in the President’s
1998 budget.

Among the highlights of this report:
• Economic Assumptions. With fasterthan-expected economic growth through
the first half of 1997, the Administration
has slightly eased its projection of growth
through 2000 to reflect its prudent approach to forecasting long-term growth.
But, because of improved measures that
lower the Administration’s estimates of inflation, we expect measures of real growth
to be slightly faster for the period from
mid-2000 through 2002.
• Receipts. The Administration has increased its estimates for receipts by sizable amounts for 1997 and 1998, and by
smaller amounts in subsequent years. The
increases are largely due to revised economic projections and unexpectedly high
collections of individual income taxes.
• Spending. The Administration has lowered its estimate for outlays in 1997 largely due to revised technical assumptions,
and in 1998 due to the balanced budget
legislation and revised technical assumptions that more than offset increases due
to revised economic assumptions.
• OMB Sequestration Update Report.
The Administration projects that, based on
congressional action to date, a very small
‘‘sequester’’ (an across-the-board reduction
of non-exempt spending) would occur for
the violent crime reduction discretionary
spending level. No sequester would occur,
however, for direct spending.

ECONOMIC ASSUMPTIONS
Introduction
The Nation’s overall economic performance
could hardly be better. Strong economic growth
has pulled the unemployment rate down
to its lowest level in nearly a quartercentury. Jobs abound, yet inflation shows
no signs of picking up.
Optimism about the future is widespread.
Consumer surveys reveal more confidence
in the economy than in a generation. Businesses seem to share the view, as they
continue to expand payrolls and invest heavily
in new plant and equipment. Investors have
been similarly sanguine, pushing the stock
market to record levels.
Our excellent economic health and the
widely held confidence that conditions will
remain healthy are largely the results of
sound fiscal and monetary policies. The deficit
has fallen from a record $290 billion in
1992 (4.7 percent of GDP) to a projected
$37 billion in 1997 (0.5 percent of GDP),
and the balanced budget legislation that
the President signed on August 5 will produce
a projected surplus of $63 billion in 2002.
During this expansion, monetary policy has
kept inflation under control without sacrificing
long-run growth. In 1994 and early 1995,
the Federal Reserve tightened monetary policy
to prevent a buildup of inflationary pressures.
Later in 1995 and early 1996, when growth
slowed and inflationary pressures subsided,
the Federal Reserve relaxed monetary policy.
Since January 1996, the Federal Reserve
has hardly changed its monetary policy stance
because inflation has remained subdued; it
has raised the Federal funds rate only once,
and by just one-quarter percentage point,
to 5.5 percent, in March 1997.
Recent Developments
In the first quarter of the year, the economy
grew at a rapid 4.9 percent annual rate.
If that pace had continued during the following
months, levels of resource utilization would
have been so stretched that inflation surely
would pick up. Temporary factors, however,

exaggerated underlying first quarter growth.
In the second quarter of 1997, real GDP
grew at a 3.6 percent annual rate.
In the second quarter, the unemployment
rate averaged 4.9 percent, edging down to
4.8 percent in July—its lowest level since
the end of 1973. Inflation, however, has
remained remarkably stable. The underlying
inflation rate, measured by the Consumer
Price Index (CPI) excluding food and energy,
was only 2.4 percent at an annual rate
in the first seven months of 1997—slightly
below the 1996 pace. Thanks to falling energy
prices this year, the total CPI has risen
at a mere 1.5 percent annual rate—nearly
two percentage points slower than during
1996, when oil prices pushed the index up.
Looking ahead, financial markets indicate
a decline in inflation expectations, as signaled
by the narrower spread since the spring
between yields on conventional 10-year Treasury bonds and on bonds indexed for inflation.
In the first eight months of 1997, shortterm interest rates remained stable. The
3-month Treasury bill rate remained close
to 5 percent, about the same level as in
1996. Long-term rates moved up during the
first four months of this year as the pace
of activity increased, but moved down sharply
thereafter as the economy decelerated and
the President and Congress reached their
bipartisan budget agreement in May. By
August, the 10-year Treasury bond rate was
6.2 percent, about the same as in November
1996.
Revised Economic Assumptions
The economic projections for this report
are based on the assumption that the budget
will reach balance by 2002. A gradual elimination of the deficit, combined with a monetary policy that supports noninflationary
growth, is expected to sustain the outstanding
economic performance of recent years.
For this report, the Administration revised
the economic assumptions underlying the
President’s 1998 budget to take into consider7

8
ation recent developments—including the higher-than-expected growth this year, the low
levels of unemployment and inflation, the
forthcoming changes in measuring the CPI,
and the unexpectedly small deficit this year.
The Administration finalized its economic
assumptions in early June.1 For the next
three years—from the second half of 1997
through the first half of 2000—projected real
economic growth will average 2 percent at
an annual rate, slightly below the Administration’s estimate of the sustainable noninflationary growth rate of the economy. This moderate
projection for economic growth reflects several
considerations. At this stage of the expansion,
pent-up demand for consumer durable goods
stemming from the last recession has largely
been exhausted and will not likely provide
a significant stimulus to consumer spending.
Residential investment also will likely grow
at a more moderate pace, as housing starts
return to levels consistent with long-run
demographic trends. Finally, the Administration expects the recent rise in the dollar
to restrain the growth of net exports for
some time to come.
Real GDP growth at a 2 percent annual
rate also would be consistent with a gradual
rise in the unemployment rate. The Administration expects unemployment to reach 5.5
percent by the year 2000, the middle of
its estimated range of the nonaccelerating
inflation rate of unemployment (NAIRU)—
the rate of unemployment at which there
is no tendency for inflation either to rise
or fall. Any estimate of NAIRU, however,
involves considerable uncertainty. Unemployment has been below 5.5 percent for over
a year, yet inflation shows no signs of
increasing. The Administration’s economic assumptions provide a conservative basis for
budget planning, and the Administration is
confident that, with continued sound fiscal
and monetary policies, the economy could
do even better.
1 The assumptions, therefore, did not incorporate information released at the end of July for second quarter GDP growth and the
benchmark revisions to the National Income and Product Accounts
from the first quarter of 1993 through the first quarter of 1997. An
adjusted set of assumptions for GDP and incomes that is consistent
with the NIPA benchmark revisions appears as an addendum to
Table 2.

MID-SESSION REVIEW

The Administration projects that from mid2000 through 2002, real economic growth
will average 2.4 percent a year—the Administration’s new estimate for the economy’s longrun potential rate of growth. The 1998 budget
assumed potential growth of 2.3 percent.
The small upward revision primarily reflects
the effects of better measurement of consumer
price inflation. (To determine real economic
growth, one adjusts changes in nominal spending for inflation. Thus, when nominal spending
is unchanged, reductions in measured inflation
raise measured real growth.)
The Bureau of Labor Statistics recently
announced that it will introduce several improved procedures, including the use of geometric aggregations of some components of
the CPI. The Administration estimates that
these improvements will slow the measured
growth of the CPI by 0.2 percentage point
per year, compared to the inflation assumptions of the 1998 budget. As a result, this
report projects that the CPI will rise 2.5
percent per year, rather than 2.7 percent.
The Administration expects some of this reduction to pass through to the measures of
inflation used to determine real GDP, thus
accounting for the upward revision in the
estimate of potential real growth.
The Administration has slightly increased
its interest rate assumptions to reflect two
unexpected developments. The first was the
surge in economic activity earlier this year,
which temporarily pushed long-term interest
rates above the levels assumed in the budget.
The second was the surprising drop in the
deficit for 1997—a projected $90 billion below
the $128 billion February baseline.
With a smaller deficit remaining to cut,
the Administration expects the ‘‘fiscal dividend’’ that comes from eliminating that deficit
to be correspondingly smaller. The fiscal
dividend, which both OMB and CBO assume,
is the decline in interest rates that comes
from declining Federal borrowing needs; simply put, with a smaller deficit to eliminate,
interest rates will fall less as a result of
reaching balance. As a result, the Administration now projects that the 90-day Treasury
bill rate will decline gradually to 4.4 percent,
compared with 4.0 percent projected in the
budget, and that the yield on the 10-year

9

ECONOMIC ASSUMPTIONS

Treasury note will fall to 5.4 percent, compared with 5.1 percent in the budget.
The Administration expects the projected
decline in interest rates to keep the share
of corporate profits in GDP near its recent
Table 2.

high level, while trimming the share of
interest income of households. Overall, the
share of taxable income in GDP is similar
to that projected in the budget.

ECONOMIC ASSUMPTIONS

(Calendar years; dollar amounts in billions)
Actual
1996

Gross Domestic Product (GDP): 1
Levels, dollar amounts in billions:
Current dollars .................................................................
Real, chained (1992) dollars ............................................
Chained price index (1992 = 100), annual average ........
Percent change, fourth quarter over fourth quarter:
Current dollars .................................................................
Real, chained (1992) dollars ............................................
Chained price index (1992 = 100) ....................................
Percent change, year over year:
Current dollars .................................................................
Real, chained (1992) dollars ............................................
Chained price index (1992 = 100) ....................................

Projections
1997

1998

1999

2000

2001

2002

7,576 7,996 8,354 8,733 9,133 9,578 10,046
6,907 7,149 7,292 7,438 7,595 7,775 7,961
109.9 112.4 115.2 118.0 120.9 123.9 126.9
5.0
3.1
2.1

5.2
3.0
2.4

4.6
2.0
2.5

4.5
2.0
2.4

4.7
2.2
2.4

4.9
2.4
2.4

4.9
2.4
2.4

4.4
2.4
2.1

5.5
3.5
2.3

4.5
2.0
2.5

4.5
2.0
2.5

4.6
2.1
2.4

4.9
2.4
2.4

4.9
2.4
2.4

Incomes, billions of current dollars: 1
Corporate profits before tax ............................................
Wages and salaries ...........................................................
Other taxable income 2 .....................................................

640
691
716
736
757
795
3,630 3,859 4,027 4,210 4,402 4,606
1,611 1,686 1,745 1,806 1,870 1,936

842
4,816
2,012

Consumer Price Index (all urban): 3
Level (1982–84 = 100), annual average ...........................
Percent change, fourth quarter over fourth quarter .....
Percent change, year over year .......................................

157.0 161.2 165.2 169.4 173.6 178.0
3.2
2.4
2.6
2.5
2.5
2.5
2.9
2.7
2.5
2.5
2.5
2.5

182.4
2.5
2.5

Unemployment rate, civilian, percent:
Fourth quarter level .........................................................
Annual average ................................................................

5.3
5.4

4.9
5.0

5.3
5.2

5.4
5.4

5.5
5.5

5.5
5.5

5.5
5.5

Federal pay raises, January, percent:
Military .............................................................................
Civilian 4 ............................................................................

2.6
2.4

3.0
3.0

2.8
2.8

3.0
N/A

3.0
N/A

3.0
N/A

3.0
N/A

Interest rates, percent:
91-day Treasury bills 5 .....................................................
10-year Treasury notes ....................................................

5.0
6.4

5.2
6.6

5.1
6.1

4.9
5.8

4.6
5.6

4.4
5.4

4.4
5.4

ADDENDUM: 6
Gross Domestic Product (GDP), revised:
Levels, dollar amounts in billions:
Current dollars ..............................................................
Real, chained (1992) dollars .........................................
Chained price index (1992 = 100), annual average .....
Percent change, fourth quarter over fourth quarter:
Current dollars ..............................................................
Real, chained (1992) dollars .........................................
Chained price index (1992 = 100) .................................
Percent change, year over year:
Current dollars ..............................................................

7,636 8,063 8,424 8,805 9,210 9,658 10,130
6,928 7,159 7,302 7,448 7,605 7,786 7,972
110.2 112.8 115.5 118.4 121.3 124.2 127.3
5.6
3.2
2.3

5.1
2.8
2.3

4.6
2.0
2.5

4.5
2.0
2.4

4.7
2.2
2.4

4.9
2.4
2.4

4.9
2.4
2.4

5.1

5.6

4.5

4.5

4.6

4.9

4.9

10

MID-SESSION REVIEW

Table 2.

ECONOMIC ASSUMPTIONS—Continued
(Calendar years; dollar amounts in billions)
Actual
1996

Real, chained (1992) dollars .........................................
Chained price index (1992 = 100) .................................
Incomes, billions of current dollars, revised:
Corporate profits before tax .........................................
Wages and salaries .......................................................
Other taxable income 2 .................................................

2.8
2.3

Projections
1997

3.3
2.3

1998

2.0
2.5

1999

2.0
2.5

2000

2.1
2.4

2001

2002

2.4
2.4

2.4
2.4

677
727
754
776
799
839
3,633 3,857 4,026 4,208 4,400 4,604
1,693 1,777 1,840 1,905 1,973 2,044

888
4,814
2,126

N/A = Not Available.
1 Based on information available as of June 1997. These assumptions, which are those used to prepare the Mid-Session
estimates, do not reflect July 1997 NIPA revisions to GDP and incomes. An adjusted forecast consistent with the July revisions is shown in the addendum.
2 Rent, interest, dividend and proprietor’s components of personal income.
3 CPI for all urban consumers. Two versions of the CPI are published. The index shown here is that currently used, as
required by law, in calculating automatic adjustments to individual income tax brackets. Projections reflect scheduled
changes in methodology.
4 Overall average increase, including locality pay adjustments. Percentages to be proposed for years after 1998 have
not yet been determined.
5 Average rate (bank discount basis) on new issues within period.
6 Assumptions adjusted to reflect revised historical series for GDP and incomes released by the Bureau of Economic
Analysis in July 1997.

RECEIPTS
The current estimates of receipts for 1997
and 1998 exceed the February budget baseline
estimates by $73.9 billion and $57.7 billion,
respectively. The Administration has revised
the estimates for subsequent years upward
by smaller amounts. These changes result
from revised economic projections, technical
reestimates, and enacted legislation.
Revised economic projections increase receipts by $11.7 billion in 1997, $16.1 billion
in 1998, $16.2 billion in 1999, and smaller
amounts in each subsequent year. Higher
levels of wages and salaries and other sources
of personal income increase collections of
individual income taxes and payroll taxes
throughout the forecast period. Higher levels
of corporate profits also contribute to the
increase in receipts in 1997 and 1998. But
for 1999–2002, lower shares of corporate
profits in GDP partially offset the increases
attributable to higher levels of personal income.
Higher-than-anticipated collections of individual income taxes account for most of
the $61.0 billion technical revision in 1997
Table 3.

receipts. About half of the increase in individual income taxes is higher-than-anticipated
net final payments of 1996 liability; most
of the rest represents higher-than-anticipated
withheld and estimated payments of 1997
tax liability, which the Administration believes
will lead to higher receipts throughout the
forecast period. Also contributing to the technical increase in 1997 receipts are higherthan-anticipated collections of net final settlements of 1996 income tax liability by corporations and higher-than-anticipated estimated
payments of 1997 liability by corporations.
Enacted legislation since February increases
receipts in 1997, but reduces receipts in
subsequent years. The temporary extension
of airport and airway trust fund taxes through
September 30, 1997, as provided in the
Airport and Airway Trust Fund Tax Reinstatement Act of 1997, more than accounts for
the $1.2 billion increase in 1997 receipts.
The subsequent reductions in receipts are
due to the Taxpayer Relief Act of 1997
and the Balanced Budget Act of 1997. The
reductions range from $4.5 billion to $22.2
billion a year.

CHANGE IN RECEIPTS
(In billions of dollars)
1998–
2002

1997

1998

1999

2000

2001

2002

February baseline estimate ...................
Change since February:
Revised economic assumptions ..........
Technical reestimates 1 ......................
Enacted legislation:
Prior to reconciliation bills .............
Reconciliation bills ** .....................

1,503.8

1,573.8

1,644.7

1,731.0

1,813.8

1,901.6

11.7
61.0

16.1
50.8

16.2
36.5

8.1
31.0

3.3
28.3

2.3
28.6

46.1
175.3

2.5
–1.3

*
–10.2

—
–4.5

—
–17.8

—
–22.2

—
–12.2

*
–66.8

Total enacted legislation .............
Proposed legislation 2 .............................

1.2
—

–10.2
0.9

–4.5
1.5

–17.8
1.5

–22.2
1.5

–12.2
1.6

–66.8
7.0

Total change ....................................
73.9
57.7
49.7
22.9
11.0
20.3
161.6
Mid-Session estimate ............................. 1,577.7 1,631.6 1,694.3 1,753.9 1,824.8 1,921.9
**Memorandum: CBO Estimates
CBO estimate of reconciliation bills ..
0.1
–9.1
–6.9
–23.0
–26.7
–14.6
–80.4
CBO estimated that the receipt effect of the enacted tax cut will cost $80.4 billion over five years,
compared to the Administration’s estimate of $66.8 billion. As the numbers above show, the difference
of $13.6 billion is due to estimating differences between the Administration and CBO, not to differences over policies.
* $50 million or less.
1 Data are not available to determine how much of these technical reestimates are actually due to stronger-thanexpected economic performance.
2 Includes impact of increased appropriations.

11

SPENDING
Outlays
The new estimate of total 1997 outlays
is $1,615.0 billion, $16.5 billion lower than
the February budget baseline estimate. The
reduction arises largely from revised technical
assumptions. The Administration now estimates total outlays for 1998 at $1,689.9
billion, $3.5 billion below the budget baseline
estimate. Increases from changed economic
assumptions are more than offset by reductions from implementation of the balanced
budget legislation and revised technical assumptions.

auction of electromagnetic spectrum ($24.7
billion) and $12.7 billion in other savings
over 5 years. These savings lead to a balanced
budget in 2002 while allowing for tax cuts
and important spending initiatives. Additional
spending to address the harsh, unnecessary
provisions of last year’s welfare law that
had nothing to do with the goal of moving
people from welfare to work totals $19.0
billion over 5 years. Spending to expand
health care for children totals $24.3 billion
over five years. Outlays also increase as
a result of the new child tax credit ($10.9
billion).

Policy changes
Policy changes in 1997 are largely due
to the Emergency Supplemental Appropriations and Rescissions Act of 1997. For 1998
and beyond, policy changes are largely driven
by the Balanced Budget Act. Due to policy
changes, estimated outlays for 1997 are $2.1
billion higher than in the 1998 budget baseline, while outlays for 1998 are $1.8 billion
lower.
The 1997 supplemental appropriations bill
provided discretionary funding for Bosnia
peacekeeping and disaster relief (largely for
floods in the Upper Midwest), and rescinded
funds for numerous other discretionary programs. The bill increased net discretionary
outlays for 1997 by $1.8 billion. The Administration also adjusted projected discretionary
outlays to reflect the new discretionary limits
in the Balanced Budget Act. Discretionary
outlays for 1998 are $3.2 billion below the
level required to continue programs at constant levels in real terms. For 1998 through
2002, the Balanced Budget Act requires reductions in discretionary programs of $156.8
billion below this current services level.
Policy changes have reduced mandatory
outlays by a net $1.5 billion in 1998 and
a net total of $144.3 billion for 1998 through
2002. The Balanced Budget Act included
cuts in Medicare spending ($149.8 billion
over 5 years), cuts in Medicaid spending
($8.8 billion), additional receipts from the

Economic changes
Revisions in economic assumptions, discussed earlier in this report, raise estimated
outlays by $0.9 billion in 1997, $3.4 billion
in 1998, and a total of $24.8 billion from
1998 to 2002. These increases largely result
from slight upward revisions in interest rate
assumptions.
Technical changes
For 1997, estimated outlays are $19.4 billion
lower than in the February budget baseline
for technical reasons. For 1998, they are
$5.1 billion lower. The following changes
in outlay projections all arise from technical
factors.
Discretionary programs.—Estimated outlays
for discretionary programs in 1997 are lower
than the budget estimates by $3.8 billion, reflecting lower-than-anticipated actual spending
for the year to date. Outlays for discretionary
programs are higher for 1998 through 2002
for technical reasons, primarily reflecting the
impact of the 1997 supplemental bill on baseline spending levels.
Postal Service.—Revised estimates of the
size and timing of the Postal Service’s capital
investment program and debt repayments
have lowered 1997 and 1998 outlays by $0.5
billion and $0.8 billion, respectively, and raised
outlays in 1999 through 2001.
13

14
Deposit insurance.—Estimated outlays for
1997 are $1.7 billion lower than projected in
the budget, reflecting lower projections of bank
and thrift failures along with faster sales of,
and higher recoveries from, assets held by the
deposit insurance funds.
Education loan programs.—Estimated outlays for 1997 are $2.8 billion higher than the
budget projected, reflecting re-estimates of the
length of time students stay in college and
of default rates mainly for 1992 and 1993
(with significantly smaller effects in succeeding
years). Estimated outlays for 1998 through
2002 are $2.9 billion higher, mainly because
the current projections assume that a larger
share of total student loans will come from
the guaranteed student loan program, and a
smaller share from the direct student loan program, than the budget assumed.
Medicaid.—Current estimates of Medicaid
outlays are lower than the budget estimates
by $1.0 billion in 1997 and $0.5 billion in 1998
for technical reasons. Spending to date in 1997
and States’ projections of near-term spending
on medical assistance payments both indicate
that the budget estimates were overstated. Although medical assistance payments have decreased, the projected growth over five years
is the same as in the budget. The reduction
in medical assistance payments is partially offset by an increase in estimated outlays for
State and local administration.
Medicare.—Relative to the budget, estimated
outlays for Medicare are now $2.8 billion lower
in 1997, $3.1 billion lower in 1998, and $4.9
billion lower in 2002. The decrease represents
a moderate slow-down in the anticipated
growth of outlays for Part B services, largely
based on 1997 performance to date. The Administration projects that Medicare benefit
outlays will grow at an 8.4 percent annual rate
from 1997 to 2002.

MID-SESSION REVIEW

Food stamps.—Estimated outlays for food
stamps are lower than in the budget by $1.0
billion in 1997 and $1.8 billion in 1998. Based
on actual outlays to date, the Administration
has revised downward its estimate of participation levels by one million persons per month,
and has reduced the projected average benefit
levels by over $1 per person per month.
Family support payments, temporary assistance for needy families (TANF), and child
care.—Estimated outlays for family support
payments, TANF, and child care programs are
now $3.2 billion lower in 1997 than in the
budget. Actual family support payments to
date have been lower than anticipated, and
States have been slower than anticipated in
drawing down TANF and child care funds as
they begin to implement welfare reform programs.
Social security.—The revised estimates of
Social Security are lower than the budget estimates by $3.5 billion in 1997, reflecting experience to date, including fewer applications than
anticipated. Estimates for 1998 and beyond are
also lower, reflecting a fall in the number of
projected beneficiaries.
FCC spectrum auctions.—Total receipts for
auctions of spectrum held to date have exceeded projections in the budget. In addition,
proceeds from D, E, and F block auctions—
which the Administration had assumed would
be received in 1998—are now expected in 1997.
On net, projected receipts are now higher by
$2.8 billion in 1997. Since these receipts are
recorded as negative outlays in the budget,
outlays are lower by that amount. Auction receipts for 1998 are lower than projected in the
budget—and, thus, outlays are higher—by $4.5
billion due to lower-than-expected bids in the
wireless communications services auction and
the shift into 1997 cited above.

15

SPENDING

Table 4.

CHANGE IN OUTLAYS
(In billions of dollars)
1998–
2002

1997

1998

1999

2000

2001

2002

February baseline estimate ................................................
Revisions due to:
Policy changes:
Balanced Budget and Taxpayer Relief Acts: *
Medicare ................................................................
Medicaid 1 ..............................................................
Immigration, nutrition assistance, and work .....
Children’s health ...................................................
Impact of child tax credit .....................................
Spectrum auction receipts ....................................
Other ......................................................................

1,631.5

1,693.4

1,784.8

1,858.6

1,922.3

2,002.3

—
—
—
—
—
—
—

–8.7
0.1
3.9
4.6
0.3
—
–1.3

–18.7
–0.8
4.5
4.8
2.3
–2.3
–1.9

–31.4
–1.9
3.9
5.1
2.7
–3.5
–6.2

–41.3
–2.8
3.4
5.4
2.8
–4.7
1.2

–49.6
–3.4
3.3
4.4
2.8
–14.2
–4.4

–149.8
–8.8
19.0
24.3
10.9
–24.7
–12.7

Subtotal, mandatory .........................................
Discretionary .........................................................
1997 Supplemental (discretionary) .........................
Other .........................................................................
Debt service ...............................................................

—
—
1.8
0.3
*

–1.1
–3.2
2.6
–0.4
0.3

–12.1
–19.4
1.7
0.6
–0.3

–31.4
–28.1
0.8
0.4
–2.0

–36.1
–43.4
0.1
–1.1
–4.5

–61.2
–62.8
*
–2.0
–8.8

–141.8
–156.8
5.2
–2.5
–15.3

Subtotal, policy changes .......................................
Economic assumptions:
Mandatory programs ............................................
Net interest:.
Interest rates .........................................................
Debt service ...........................................................

2.1

–1.8

–29.4

–60.3

–84.9

–134.8

–311.2

–0.3

–1.5

–1.0

–1.4

–3.8

–5.6

–13.4

1.2
–0.1

5.9
–1.0

8.5
–1.5

10.0
–1.7

10.0
–1.6

11.1
–1.5

45.5
–7.3

0.9

3.4

6.0

6.9

4.6

3.9

24.8

–3.8
–0.5
–1.7
2.8
–1.0
–2.8
–1.0

3.6
–0.8
–0.3
0.4
–0.5
–3.1
–1.8

4.8
0.7
0.3
0.5
–1.0
–3.2
–1.7

6.5
1.0
–0.2
0.6
–0.8
–3.7
–1.5

6.8
0.6
0.4
0.7
–0.7
–4.3
–1.4

7.0
–0.1
0.1
0.7
0.1
–4.9
–1.4

28.7
1.5
0.3
2.9
–2.9
–19.1
–7.9

–3.2
–3.5
–2.8
–2.9
0.9

0.4
–2.9
4.5
–6.8
2.1

0.8
–3.1
–0.4
–9.3
1.8

1.0
–3.9
–0.3
–11.0
2.5

1.1
–4.2
—
–12.2
3.0

0.2
–4.2
—
–14.0
3.8

3.5
–18.4
3.9
–53.3
13.2

Subtotal, technical reestimates ............................

–19.4

–5.1

–9.6

–9.9

–10.2

–12.7

–47.5

Total, changes ...........................................................
Mid-Session estimate ...............................................

–16.5
1,615.0

–3.5
1,689.9

–33.0
1,751.8

–63.3
1,795.3

–90.5
1,831.8

–143.6
1,858.7

–333.8

* Memorandum: CBO Estimates
Policy changes:
Balanced Budget and Taypayer Relief Acts:
Medicare ....................................................................
Medicaid 1 ..................................................................
All other mandatory .................................................

—
—
—

–6.1
–0.5
7.1

–15.7
–1.6
7.6

–29.1
–2.8
1.8

–20.2
–4.0
8.6

–41.0
–5.0
–6.2

–112.0
–13.9
19.0

Total, mandatory ...................................................

—

0.5

9.6

–30.0

–15.6

–52.2

–106.9

Subtotal, economic assumptions ..........................
Technical reestimates:
Discretionary programs ........................................
Postal Service ........................................................
Deposit insurance .................................................
Education loan programs .....................................
Medicaid ................................................................
Medicare ................................................................
Food stamps ..........................................................
Family support payments, temporary assistance
for needy families, and child care ....................
Social security .......................................................
FCC spectrum auction ..........................................
Net interest 2 .........................................................
Other ......................................................................

The Administration and CBO have longstanding technical differences in estimating the costs and savings of legislation.
Medicare estimates usually have been the largest source of the differences. The Administration has over the last several
years estimated that the same policies would produce greater savings than CBO has estimated. As the above numbers
show, the same was true this year when the Administration and CBO each estimated the costs of the balanced budget
legislation. The President and Congress agreed to $115 billion in net savings over five years in Medicare, as scored by
CBO. Under CBO scoring, the savings come to $112 billion. The differences between the Administration and CBO scoring
are due to estimating methods, not to differences over policies.
1 Excludes
2 Largely

children’s health, immigration, and the effects of veterans’ proposals on Medicaid.
debt service on technical changes in outlays and receipts.

OMB SEQUESTRATION UPDATE REPORT
Overview
The President and Congress enacted the
Budget Enforcement Act of 1997 (BEA) as
part of the Balanced Budget Act of 1997
(BBA) in order to extend expiring enforcement
requirements. The BEA includes separate
annual limits, or ‘‘caps,’’ on defense and
non-defense discretionary spending through
1999, and on violent crime reduction through
2000; for 2001 and 2002, the law sets a
single limit for all discretionary spending.
It also continues the pay-as-you-go requirement that legislation affecting direct spending
or receipts not increase the deficit. An acrossthe-board reduction of non-exempt spending,
known as ‘‘sequestration,’’ enforces compliance
with these constraints.
The BEA requires that, during the year,
OMB issue reports about whether legislative
action on discretionary spending and payas-you-go legislation would, at that point,
trigger a sequester. This report provides
OMB’s updated estimates, reflecting legislation
that the President signed as of August 15,
1997. As the BEA requires, the estimates
rely on the same economic and technical
assumptions as in the President’s 1998 budget,
which the Administration transmitted to Congress on February 6, 1997.
As explained later, action to date is as
follows:

• The latest House and Senate action indicate that a very small sequester would
occur for the violent crime reduction discretionary level.
• The Budget Enforcement Act of 1997 requires that the pay-as-you-go balances be
removed from the scorecard. Legislation
enacted after the Balanced Budget Act and
Taxpayer Relief Act has had a minor impact on the deficit. The Administration
does not project a sequester at this time.
Discretionary sequestration report
Discretionary programs are funded annually
through the appropriations process. The scorekeeping guidelines accompanying the Budget
Enforcement Act of 1990, as amended by
the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), and by the Budget Enforcement Act of 1997, identify accounts with
discretionary resources. The BEA of 1997
limits budget authority and outlays available
for discretionary programs each year through
2002. OMB monitors compliance with the
discretionary limits throughout the fiscal year.
Appropriations that cause a breach in the
budget authority or outlay caps trigger a
sequester to eliminate that breach. The law,
however, does not require that Congress appropriate the full amount available under the
discretionary limits. Table 5 summarizes
changes to the caps since 1990.

17

18

Table 5.

HISTORICAL SUMMARY OF CHANGES TO DISCRETIONARY SPENDING LIMITS
(In billions of dollars)
1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

BA
OL
BA
OL
BA
OL

491.7
514.4
..........
..........
..........
..........

503.4
524.9
7.7
1.0
–0.5
–0.3

511.5
534.0
8.2
2.4
–5.1
–2.5

510.8
534.8
8.2
2.3
–9.5
–5.8

517.7
540.8
8.8
3.0
–11.8
–8.8

519.1
547.3
–0.6
–0.5
3.0
1.8

528.1
547.3
–0.4
–2.6
2.6
2.3

530.6
547.9
3.1
–2.8
..........
0.9

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

BA
OL
BA
OL
BA
OL

0.2
0.3
0.9
1.1
..........
..........

0.2
0.3
8.3
1.8
..........
..........

13.0
0.8
4.6
5.4
..........
..........

0.6
0.8
12.2
9.0
..........
..........

0.7
0.9
7.7
10.1
–15.0
–1.1

0.1
0.1
5.1
6.4
–0.1
–3.5

0.2
0.3
1.6
5.4
–0.1
–2.4

0.1
0.1
..........
1.7
..........
–1.5

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

BA
OL
BA
OL

..........
..........
..........
2.6

3.5
1.4
..........
1.7

2.9
2.2
..........
0.5

2.9
2.6
..........
1.0

2.9
2.7
..........
..........

..........
1.1
..........
..........

..........
0.5
..........
..........

..........
0.1
..........
..........

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

Adjustments for Operation Desert Shield/Desert Storm ...................

BA
OL
BA
OL

1.1
3.9
44.2
33.3

19.2
5.9
14.0
14.9

23.6
8.8
0.6
7.6

14.3
10.0
*
2.8

–6.7
6.8
*
1.1

7.5
5.5
..........
..........

4.0
3.7
..........
..........

3.1
–1.5
..........
..........

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A

Total adjustments .................................................................................

BA
OL

45.4
37.2

33.2
20.8

24.2
16.4

14.3
12.8

–6.7
7.8

7.5
5.5

4.0
3.7

3.1
–1.5

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

Preview Report spending limits 3 .................................................

BA
OL

537.1
551.6

536.6
545.7

535.7
550.4

525.1
547.6

511.0
548.6

526.7
552.7

532.0
551.0

533.8
546.4

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

BA
OL
BA
OL
BA
OL

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
N/A
N/A

N/A
N/A
N/A
N/A
7.7
2.7

–6.9
6.9
526.9
553.3
0.3
2.6

N/A
N/A
533.0
559.3
..........
1.8

N/A
N/A
537.2
564.3
..........
0.8

N/A
N/A
542.0
564.4
..........
0.1

N/A
N/A
551.1
560.8
..........
*

BA
OL

537.1
551.6

536.6
545.7

535.7
550.4

525.1
547.6

511.0
548.6

526.7
552.7

539.7
553.7

527.1
555.9

533.0
561.1

537.2
565.0

542.0
564.5

551.1
560.8

TOTAL DISCRETIONARY
Statutory Caps as set in OBRA 1990 and OBRA 1993 1 ...........
Adjustments for changes in concepts and definitions .......................
Adjustments for changes in inflation ..................................................
Adjustments for credit reestimates, IRS funding, debt forgiveness,
IMF, and CDRs .................................................................................
Adjustments for emergency requirements ..........................................
Adjustment pursuant to Sec. 2003 of P.L. 104–19 2 ..........................
Adjustments for special allowances:
Discretionary new budget authority ................................................
Outlay allowance ...............................................................................
Subtotal, adjustments excluding Desert Shield/Desert Storm .....

Adjustment to Reach Discretionary Spending Limits Included in
the Balanced Budget Act of 1997 ....................................................
Statutory

Caps as set in the Balanced Budget Act of 1997 4

.......

Adjustments for emergency requirements ..........................................
Update Report spending limits 4 ...................................................

N/A = Not applicable.
* Less than $50 million.
1 The discretionary limit for 1990 was $496.5 billion in budget authority and $500.4 billion in outlays.
2 P.L. 104–19, Emergency Supplemental Appropriations for Additional Disaster Assistance, for Anti-Terrorism Initiatives, for Assistance in the Recovery from the
Tragedy that Occurred at Oklahoma City, and Rescissions Act, 1995, was signed into law on July 27, 1995. Section 2003 of that bill directed the Director of OMB to make
a downward adjustment in the discretionary spending limits for 1995-1998 by the aggregate amount of the estimated reductions in new budget authority and outlays for
discretionary programs resulting from the provisions of the bill, other than emergency appropriations.
3 Reflects combined General Purpose Discretionary and Violent Crime Reduction Discretionary spending limits.
4 Reflects combined Defense Discretionary, Non-Defense Discretionary (Excluding Crime), and Violent Crime Reduction Discretionary spending limits.

MID-SESSION REVIEW

1991

OMB SEQUESTRATION UPDATE REPORT

Adjustments to discretionary limits.—Table 6
shows how adjustments permitted under section 251(b) of the BEA affect the discretionary
limits.
Before enactment of the BBA of 1997,
section 251(b)(1) authorized adjustments for
changes in inflation estimates from those
in the House Conference Report on the 1994
Budget Resolution, and for changes in concepts
and definitions. The Administration made
both of these adjustments in the sequestration
preview report in the President’s budget,
and included them in the preview report
limits in Table 6. The BBA of 1997 no
longer requires that an adjustment for inflation be made in the sequestration preview
report, but the law retained the provision
for an adjustment for changes in concepts
and definitions.
Section 251(b)(2) authorizes certain adjustments after the enactment of appropriations.
Table 6 includes those adjustments that can
be made now due to legislation enacted
to date. Table 6 also includes adjustments
that would be made assuming enactment
of the President’s proposals. The Administration cannot determine the actual adjustments
to be included in the final sequestration
report at the end of this year’s session
of Congress until all appropriations are en-

19
acted. The section 251(b)(2) adjustments include:
Emergency Appropriations.—Funding for
amounts that the President designates as
‘‘emergency requirements’’ and that Congress
so designates in law. Since the President submitted the 1998 budget in February, Congress
has enacted emergency supplemental appropriations requested to help the hundreds of
thousands of people who have suffered terribly
from flooding and other natural disasters that
have ravaged the Midwest and other parts of
the country. Congress has also enacted emergency supplemental appropriations that the
President requested to replenish the Department of Defense accounts in connection with
U.S. peacekeeping efforts in Bosnia and Southwest Asia, and to assure that the Department
can maintain maximum readiness of the
troops. Further, the President has authorized
the release of additional emergency appropriations that were previously enacted, including
those for the Department of Health and
Human Services to support needs arising from
the cold weather during the winter; for the
Interior Department to address urgent needs
arising from damage caused by natural disasters; and for the Treasury Department for its
Atlanta bombing investigations and for antiterrorist protection for the June 1997 Summit
of Eight in Denver and the U.N. Environmental Summit in New York.

20
Table 6.

MID-SESSION REVIEW

UPDATE REPORT ADJUSTMENTS TO DISCRETIONARY SPENDING LIMITS
(In millions of dollars)
1997

1998

1999

2000

2001

2002

General Purpose Discretionary
Total General Purpose Discretionary Spending Limits,
February 6, 1997, Preview Report ....................................
Changes Required to Set Discretionary Limits Equal to
the Balanced Budget Act of 1997 .....................................
Total General Purpose Discretionary Spending Limits
Included in the Balanced Budget Act 1 ............................

BA
OL

527,036
547,060

528,280
541,501

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

BA
OL

N/A
N/A

–6,923
8,175

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

BA
OL

527,036
547,060

521,357 527,199 532,693
549,676 554,368 558,711

N/A
N/A

N/A
N/A

Violent Crime Reduction
Total Violent Crime Reduction Discretionary Spending
Limits, February 6, 1997, Preview Report ......................
Changes Required to Set Violent Crime Reduction Spending Limits Equal to the Balanced Budget Act of 1997 ...
Total Violent Crime Reduction Discretionary Spending
Limits Included in the Balanced Budget Act 1 ................

BA
OL
BA
OL
BA
OL

5,000
3,936

5,500
4,904

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

N/A ................
N/A
–1,312

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

5,800
4,953

4,500
5,554

N/A
N/A

N/A
N/A

5,000
3,936

5,500
3,592

Total Discretionary
Total Discretionary Spending Included in the
Balanced Budget Act of 1997 1 .....................................

BA
OL

532,036
550,996

526,857 532,999 537,193 542,032 551,074
553,268 559,321 564,265 564,396 560,799

Adjustments for the Update Report:
Defense Discretionary
Emergency Supplemental Appropriations (P.L. 105–18) ...

BA
OL

1,846 ................ .............. .............. .............. ..............
1,464
301
48
16
7 ..............

Non-Defense Discretionary, Excluding Violent Crime Reduction
Emergency Supplemental Appropriations (P.L. 105–18) ...
Contingent Emergency Appropriations Released ...............

Subtotal, Adjustments to Non-Defense Discretionary,
Excluding Violent Crime Reduction Limits for the
Update Report ................................................................

BA
OL
BA
OL

5,588
250 .............. .............. .............. ..............
1,000
2,284
1,701
743
99
13
265 ................ .............. .............. .............. ..............
235
21
9 .............. .............. ..............

BA
OL

5,853
1,235

Violent Crime Reduction
No Adjustments.
Subtotal, Adjustments for the Update Report ........ BA
7,699
OL
2,699

250 .............. .............. ..............
2,305
1,710
743
99

13

250 .............. .............. .............. ..............
2,606
1,758
759
106
13

Potential Further Adjustments for the End-Of-Session Sequestration Report:
Defense Discretionary
No further adjustments anticipated.
Non-Defense Discretionary, Excluding Violent Crime Reduction
Social Security Administration: Continuing Disability
Reviews (CDRs) ..................................................................

BA
OL

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

290
267

355
350

520
507

520
520

520
520

21

OMB SEQUESTRATION UPDATE REPORT

Table 6.

UPDATE REPORT ADJUSTMENTS TO DISCRETIONARY SPENDING
LIMITS—Continued
(In millions of dollars)
1997

International Monetary Fund: New Arrangements to
Borrow (NAB) .....................................................................
United Nations and Multilateral Development Bank
(MDB) Arrearage Payments .............................................
Earned Income Tax Credit (EITC) Compliance Initiative ..

Subtotal, Adjustments to Non-Defense Discretionary,
Excluding Violent Crime Reduction, Spending Limits
for the End-of-Session Report (Estimated) ..................

1998

1999

2000

2001

2002

BA
OL

..............
3,521 .............. .............. .............. ..............
.............. ................ .............. .............. .............. ..............

BA
OL
BA
OL

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

415
120
138
131

1,227
969
143
143

242 .............. ..............
98
117
139
144
145
146
144
145
146

BA
OL

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

4,364
518

1,725
1,462

906
749

665
782

666
805

Violent Crime Reduction
Special Outlay Allowance .....................................................

Subtotal, Adjustments to Violent Crime Reduction
Spending Limits for the End-of-Session Report
(Estimated) .....................................................................

BA
OL

.............. ................ .............. .............. ..............
..............
1,243 .............. .............. .............. ..............

BA
OL

.............. ................ .............. .............. ..............
..............
1,243 .............. .............. .............. ..............

Total Discretionary
Total Discretionary Spending Limits for the Update
Report ................................................................................
Total Discretionary Spending Limits for the End-ofSession Sequestration Report (Estimated) ......................

BA
OL

539,735
553,695

527,107 532,999 537,193 542,032 551,074
555,874 561,079 565,024 564,502 560,812

BA
OL

539,735
553,695

531,471 534,724 538,099 542,697 551,740
557,635 562,541 565,773 565,284 561,617

Note: Detail may not add to total due to rounding.
1 FY 1998 Discretionary Spending included in the Balanced Budget Act of 1997 (BBA) would be allocated as follows:
Non-Defense Discretionary, Excluding Violent Crime Reduction: $252,357 million in budget authority and $282,853 million
in outlays; Violent Crime Reduction: $5,500 million in budget authority and $3,592 million in outlays; and Defense Discretionary: $269,000 million in budget authority and $266,823 million in outlays. Consistent with the BBA, FY 1999 Discretionary Spending Limits would be divided into the following categories: Defense Discretionary; Non-Defense Discretionary;
Excluding Violent Crime Reduction; and Violent Crime Reduction. FY 2000 Discretionary Spending Limits would be
divided between Discretionary, Excluding Violent Crime Reduction, and Violent Crime Reduction. FYs 2001 and 2002
Discretionary Spending Limits would be for Total Discretionary Spending.

Continuing Disability Reviews.—Funding for
additional continuing disability reviews (CDRs)
under the heading, ‘‘Limitation on Administrative Expenses’’ for the Social Security Administration. The law limits adjustments to the
budget authority and outlay estimates authorized in P.L. 105–33, the Balanced Budget Act
of 1997. CDRs are conducted to verify that
recipients of Social Security disability insurance benefits and Supplemental Security Income benefits for persons with disabilities are
still disabled.

Allowance for International Monetary Fund
(IMF).—Funding for an increase in the United
States quota as part of the IMF Eleventh General Review of Quotas. This allowance also covers any increase in the maximum amount
available to the Secretary of the Treasury pursuant to section 17 of the Bretton Woods
Agreement Act, which provides for loans to the
IMF for emergency purposes under an international agreement, the New Arrangements to
Borrow (NAB).

22

MID-SESSION REVIEW

Allowance for International Arrearages funding.—Funding for arrearages for international
organizations, international peacekeeping, and
multilateral development banks. The amount
of the cap adjustment is limited to $1.884 billion for 1998 through 2000 in P.L. 105–33.

limits on outlays for that fiscal year. Based
on preliminary estimates, the use of about $1.2
billion of the $2.8 billion special outlay allowance available for 1998 would be necessary to
avoid a sequester in the Violent Crime Reduction category.

Earned Income Tax Credit (EITC) Compliance Initiative.—Funding for EITC compliance
initiatives, including the detection and enforcement of EITC eligibility in order to reduce
EITC overclaims. Adjustments are limited to
the budget authority and outlay estimates authorized in P.L. 105–33.

Status of 1997 discretionary appropriations.—Table 7 summarizes the status of enacted 1997 discretionary appropriations, relative to the discretionary caps. Enacted budget
authority and outlays are within the caps.

Special Outlay Allowance.—An allowance,
included in the BBA, to cover technical scoring
differences that result when OMB scoring exceeds CBO scoring. If, in any fiscal year, outlays for a discretionary spending category exceed the spending limit for the category, but
new budget authority does not exceed the limit
for that category, the special outlay allowance
may be used. The outlay adjustment is the
amount of the excess spending over the limit.
The adjustment cannot exceed 0.5 percent of
the sum of the adjusted discretionary spending

Table 7.

Status of 1998 discretionary appropriations.—Table 8 shows preliminary OMB scoring of the latest House and Senate action for
1998 appropriations bills. For both House and
Senate action to date, budget authority exceeds
the limit set for violent crime reduction spending by $1 million. If the bills containing violent
crime reduction funding were enacted as they
are now scored, they would trigger a sequester
of budget authority. Non-defense discretionary
spending is within the budget authority and
outlay limits set in the BBA for both House
and Senate action to date.

STATUS OF 1997 DISCRETIONARY
APPROPRIATIONS
(In millions of dollars)
BA

Outlays

GENERAL PURPOSE DISCRETIONARY
Adjusted discretionary spending limits .................
Total enacted ........................................................

534,735
498,447

549,759
537,081

VIOLENT CRIME REDUCTION
Adjusted discretionary spending limits .................
Total enacted ........................................................

5,000
4,683

3,936
3,697

Adjusted discretionary spending limits .................
Total enacted ........................................................

539,735
503,130

553,695
540,778

Appropriations over/under(–) spending limits ......

–36,605

–12,917

TOTAL DISCRETIONARY

23

OMB SEQUESTRATION UPDATE REPORT

Table 8.

SUMMARY OF 1998 APPROPRIATIONS ACTION
(In millions of dollars)
House
BA

Senate

Outlays

BA

Outlays

333
246,987
11,803
9,188
..................
128

349
240,979
11,242
9,591
59
127

DEFENSE DISCRETIONARY
Commerce, Justice, State and the Judiciary ......................................
Defense ..................................................................................................
Energy and Water Development .........................................................
Military Construction ...........................................................................
Transportation and Related Agencies .................................................
Veterans Affairs, HUD, Independent Agencies ..................................
1998 effects of 1997 emergency supplemental appropriations and
releases of contingent emergency funding 1 ....................................

272
248,102
10,993
9,183
300
128

290
241,207
10,871
9,523
299
127

C
F
F
F
F
F

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

301

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

301

Total Defense Discretionary ................................................................
Estimated End-of-Session Defense Discretionary Limits ..................

268,978
269,000

262,618
267,124

268,439
269,000

262,648
267,124

CONGRESSIONAL ACTION OVER/UNDER(–) LIMITS .................

–22

–4,506

–561

F
F
F
F
F
F

–4,476

NON-DEFENSE DISCRETIONARY, EXCLUDING VIOLENT CRIME REDUCTION
Agriculture, Rural Development .........................................................
Commerce, Justice, State and the Judiciary ......................................
Defense ..................................................................................................
District of Columbia .............................................................................
Energy and Water Development .........................................................
Foreign Operations ...............................................................................
Interior and Related Agencies .............................................................
Labor, HHS, Education ........................................................................
Legislative Branch ................................................................................
Transportation and Related Agencies .................................................
Treasury, Postal Service and General Government ..........................
Veterans Affairs, HUD, Independent Agencies ..................................
1998 effects of 1997 emergency supplemental appropriations and
releases of contingent emergency funding 1 ....................................
Total Non-Defense Discretionary, Excluding Violent Crime
Reduction ...........................................................................................
Estimated End-of-Session Non-Defense Discretionary, Excluding
Violent Crime Limits ........................................................................
CONGRESSIONAL ACTION OVER/UNDER(–) LIMITS .................

13,490
25,714
27
N/A
8,993
12,267
12,939
79,930
2,227
12,217
12,419
69,621

13,707
25,527
24
N/A
8,758
13,029
13,337
75,810
2,245
36,360
12,134
80,388

250

F
C2
F

13,643
25,577
..................
N/A
8,951
16,816
13,695
79,613
2,287
12,154
12,479
68,540

13,814
25,428
..............
N/A
8,860
13,083
13,643
75,765
2,297
36,363
12,222
79,312

2,305

250

2,305

250,094

283,624

254,005

283,092

256,971

285,676

256,971

285,676

–6,877

–2,052

–2,966

–2,584

5,226
144
131

4,648
78
109

F
C
F
C4
F
F
C
F

F
F2
F
F
F3
C
C4
F
F
F
F

VIOLENT CRIME REDUCTION
Commerce, Justice, State and the Judiciary ......................................
Labor, HHS, Education ........................................................................
Treasury, Postal Service and General Government ..........................

5,260
144
97

4,643
76
91

Total Violent Crime Reduction ............................................................
Estimated End-of-Session Violent Crime Reduction Limits
(Excluding Special Outlay Allowance) .............................................

5,501

4,810

5,501

4,835

5,500

3,592

5,500

3,592

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

1,218
1,218

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

1,243
1,243

CONGRESSIONAL ACTION OVER/UNDER(–) LIMITS (Excluding Special Outlay Allowance) .........................................................
Special Outlay Allowance Used ...........................................................

C
C
C

F
C
F

24

MID-SESSION REVIEW

Table 8.

SUMMARY OF 1998 APPROPRIATIONS ACTION—Continued
(In millions of dollars)
House
BA

Senate

Outlays

BA

Outlays

Estimated End-of-Session Violent Crime Reduction Limits
(Including Special Outlay Allowance) .............................................

5,500

4,835

5,500

4,835

CONGRESSIONAL ACTION OVER/UNDER(–) LIMITS (Including
Special Outlay Allowance) ................................................................

1

0

1

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

Key: N/A = No Action to Date; C = Bill Reported Out by Committee; F = Bill Passed by House or by Senate
1 Budget authority and outlays from emergency appropriations enacted or released since the February Budget would be included in
OMB’s final scoring of individual appropriations bills as follows:
BA
Defense Discretionary:
Defense ................................................................

Outlays

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

301

Total, Defense Discretionary ..........................
Non-Defense Discretionary:
Agriculture ...........................................................
Commerce, Justice, State and the Judiciary ....
Energy and Water Development ........................
Interior .................................................................
Transportation and Related Agencies ...............
Treasury, Postal Service .....................................
Veterans Affairs, HUD, Independent Agencies

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

301

............
............
............
............
............
............
250

130
32
229
152
349
1
1,412

Total, Non-Defense Discretionary ..................

250

2,305

Total Discretionary .................................................

250

2,606

2 Estimates

include funding of $100 million in BA and $100 million in outlays for international arrearage payments.
include funding of $315 million in BA and $20 million in outlays for international arrearage payments, and $3,521 million
in BA for International Monetary Fund New Arrangements to Borrow.
4 Estimates include funding of $245 million in BA and $232 million in outlays for funding for Continuing Disability Reviews (CDRs).
3 Estimates

Comparison of OMB and CBO discretionary
limits.—Section 254(d)(5) of the BEA requires
that this report explain the differences between OMB and CBO estimates for discretionary spending limits. Table 9 compares
Table 9.

OMB and CBO limits for 1997 through 2002.
CBO uses the discretionary limits from OMB’s
preview report as a starting point for adjustments in its sequestration update report.

COMPARISON OF OMB AND CBO DISCRETIONARY
SPENDING LIMITS
(In millions of dollars)
1997

1998

1999

2000

2001

2002

Defense Discretionary 1
CBO Update Report limits:
BA ......................................................
OL ......................................................
OMB Update Report limits:
BA ......................................................
OL ......................................................
OMB less CBO:
BA ......................................................
OL ......................................................

N/A
N/A

269,000
267,958

271,500
266,742

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

269,000
267,124

271,500
266,566

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

..............
–834

..............
–176

N/A
N/A

N/A
N/A

N/A
N/A

25

OMB SEQUESTRATION UPDATE REPORT

Table 9.

COMPARISON OF OMB AND CBO DISCRETIONARY
SPENDING LIMITS—Continued
(In millions of dollars)
1997

1998

1999

2000

2001

2002

Non-Defense Discretionary, Excluding Violent Crime Reduction 1
CBO Update Report limits:
BA ......................................................
OL ......................................................
OMB Update Report limits:
BA ......................................................
OL ......................................................
OMB less CBO:
BA ......................................................
OL ......................................................

N/A
N/A

252,623
284,038

255,699
289,365

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

252,607
285,158

255,699
289,560

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

–16
1,120

..............
195

N/A
N/A

N/A
N/A

N/A
N/A

Violent Crime Reduction Discretionary 2
CBO Update Report limits:
BA ......................................................
OL ......................................................
OMB Update Report limits:
BA ......................................................
OL ......................................................
OMB less CBO:
BA ......................................................
OL ......................................................

5,000
3,936

5,500
3,592

5,800
4,953

4,500
5,554

N/A
N/A

N/A
N/A

5,000
3,936

5,500
3,592

5,800
4,953

4,500
5,554

N/A
N/A

N/A
N/A

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

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

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

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

N/A
N/A

N/A
N/A

General Purpose Discretionary
CBO Update Report limits:
BA ......................................................
OL ......................................................
OMB Update Report limits:
BA ......................................................
OL ......................................................
OMB less CBO:
BA ......................................................
OL ......................................................

534,765
548,004

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

534,735
549,759

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

–30
1,755

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

N/A
N/A

Total Discretionary 1, 2
CBO Update Report limits:
BA ......................................................
OL ......................................................
OMB Update Report limits:
BA ......................................................
OL ......................................................
OMB less CBO:
BA ......................................................
OL ......................................................

N/A
N/A

N/A
N/A

N/A
N/A

532,693
560,018

542,032
565,339

551,074
561,326

N/A
N/A

N/A
N/A

N/A
N/A

532,693
559,470

542,032
564,502

551,074
560,812

N/A
N/A

N/A
N/A

N/A
N/A

..............
–548

..............
–837

..............
–514

Discretionary Spending Limits
CBO Update Report limits:
BA ......................................................
OL ......................................................
OMB Update Report limits:
BA ......................................................
OL ......................................................
OMB less CBO:
BA ......................................................
OL ......................................................

539,765
551,940

527,123
555,588

532,999
561,060

537,193
565,572

542,032
565,339

551,074
561,326

539,735
553,695

527,107
555,874

532,999
561,079

537,193
565,024

542,032
564,502

551,074
560,812

–30
1,755

–16
286

..............
19

..............
–548

..............
–837

..............
–514

1 Under the Balanced Budget Act of 1977 (BBA), Defense Discretionary Spending and Non-Defense Discretionary Spending (Excluding Violent Crime Reduction Spending) are incorporated into the Total Discretionary
category after FY 1999.
2 Under the BBA, Violent Crime Reduction Spending is incorporated into the Total Discretionary category after
FY 2000.

26
OMB and CBO have a slightly different
estimate of budget authority for emergency
funding enacted since February. For budget
authority in 1997, the difference reflects the
fact that CBO scores budget authority for
contingent emergency appropriations in the
fiscal year in which it is appropriated; OMB,
by contrast, scores budget authority only
for those contingent appropriations officially
released by the President and designated
by the President as emergency requirements.
P.L. 105–18, the FY 1997 Emergency Supplemental Appropriations and Rescissions Act,
included a $30 million contingent emergency
appropriation for the National Park Service.
In 1998, the budget authority difference
reflects the fact that CBO scored a reappropriation of funds for the U.S. Customs Service
that were appropriated as emergency spending
in fiscal 1997 in P.L. 105–18. OMB scored
the reappropriation as regular discretionary
spending because the discretionary spending
caps had already been adjusted upward in
the 1998 budget.
OMB and CBO also have different estimates
of how emergency funding enacted since February will affect outlays. The largest difference
is due to different assumptions about the
outlays associated with the additional resources that P.L. 105–18 provides for the
Federal Emergency Management Agency’s Disaster Relief Fund. CBO did not score any
outlays in 1998, while OMB scored $1.3
billion in 1998 for outlays associated with
the additional funding provided for 1997.
Another large difference is due to different
assumptions about the spend-out of Defense
Department (DOD) resources provided in P.L.
105–18. CBO scored $419 million and $1.135
billion in 1997 and 1998, respectively, for
emergency outlays for DOD-military activities,
while OMB scored $1.464 billion and $301
million for 1997 and 1998, respectively.
Pay-as-you-go sequestration report
Pay-as-you-go enforcement covers all direct
spending and receipts legislation. The BEA
defines direct spending as entitlement authority, the food stamp program, and budget
authority provided by law other than in

MID-SESSION REVIEW

appropriations acts. The following are exempt
from pay-as-you-go enforcement: Social Security, the Postal Service, legislation specifically
designated as an emergency requirement, and
legislation fully funding the Federal Government’s commitment to protect insured deposits.
The BEA requires that, in total, receipts
and direct spending legislation not increase
the deficit. If such legislation does increase
the deficit, and if the President and Congress
do not fully offset it by other legislative
savings, the law requires that a sequester
of direct spending programs offset the increase.
The BEA requires that, within seven days
of the enactment of direct spending or receipts
legislation, OMB submit a report to Congress
that estimates the resulting change in outlays
or receipts for the current year, the budget
year, and the following four fiscal years.
The estimates, which must rely on the economic and technical assumptions underlying
the most recent President’s budget, determine
whether the pay-as-you-go requirement is met.
The pay-as-you-go process requires that OMB
maintain a ‘‘scorecard’’ that shows the cumulative deficit impact of such legislation.
Table 10 presents OMB estimates of payas-you-go legislation enacted as of August
15, 1997. At the end of this session of
Congress, OMB will determine the need for
sequestration. Prior to enactment of the reconciliation legislation, this session’s enacted
pay-as-you-go legislation had, in total, lowered
the deficit by $2.4 billion. The BEA of
1997, however, requires that the balances
of the scorecard be reduced to zero. That
Act also prohibits including the direct spending and receipts estimates of the Balanced
Budget and Taxpayer Relief Acts on the
scorecard. Absent this restriction, OMB would
reflect these impacts in the scorecard balances,
and would include net savings from mandatory
programs and receipts of $74.9 billion from
the legislation from 1998 to 2002. Legislation
enacted subsequent to the reconciliation bills
has had a total deficit impact of less than
$500 thousand per year.

DEFICIT IMPACT OF PAY-AS-YOU-GO LEGISLATION ENACTED AS OF AUGUST 15, 1997
(In millions of dollars)
Change in the fiscal year baseline deficit

Report
Number

Act Number

Act Title
1997

1998

1999

2000

2001

2002

1997–2002

Legislation enacted prior to OBRA 1993:
1 to 158

Total impact of all bills:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

0
0

0
0

0
0

0
0

0
0

0
0

–357
591

–9
869

413
2,190

0
0

0
0

0
0

47
3,651

–5,878
–2,077

–3,458
–8,734

–6,862
–11,999

–8,470
–13,506

–9,266
–14,343

–11,078
–16,794

–45,012
–67,452

Legislation enacted following OBRA 1993 to end of 2nd session, 103rd Congress:
159 to 281

Total impact of post OBRA bills to end of 2nd session :
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

Legislation enacted in the 104th Congress:
282 to 391

Impact of bills enacted in 104th Congress:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

OMB SEQUESTRATION UPDATE REPORT

Table 10.

Legislation enacted in the 1st session of the 105th Congress:
392

393

394

395

396

397

P.L. 105–2
H.R. 668

Airport and Airway Trust Fund Tax Reinstatement Act of 1997:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

–2,406
–2,730

–9
54

0
0

0
0

0
0

0
0

–2,415
–2,676

P.L. 105–9
H.R. 412

The Oroville-Tonasket Claims Settlement and Conveyance Act:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

*
0

*
0

*
0

*
0

*
0

*
0

*
0

P.L. 105–14
S. 305

Congressional Gold Medal for Frank Sinatra:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

0
0

0
0

0
0

0
0

0
0

0
0

P.L. 105–16
H.R. 1650

Congressional Gold Medal for Mother Teresa of Calcutta:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

0
0

0
0

0
0

0
0

0
0

0
0

P.L. 105–27
H.R. 173

Donation of Surplus Federal Law Enforcement Canines:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

0
0

0
0

0
0

0
0

0
0

0
0

P.L. 105–30
H.R. 1901

Federal Tort Claims Act Coverage for National Gambling Impact Study
Commission:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

0
0

0
0

0
0

0
0

0
0

0
0

27

28

Table 10.

DEFICIT IMPACT OF PAY-AS-YOU-GO LEGISLATION ENACTED AS OF AUGUST 15, 1997—
Continued
(In millions of dollars)

Report
Number
398

Change in the fiscal year baseline deficit
Act Number

Act Title
1997

1999

2000

2001

2002

1997–2002

0
0

0
0

0
0

0
0

–2,406
–2,730

–9
54

0
0

0
0

0
0

0
0

–2,415
–2,676

–2,406
–2,730

–3,475
–7,811

–6,449
–9,808

–8,470
–13,506

–9,266
–14,343

–11,078
–16,794

–41,144
–64,992

2,406
2,730

3,475
7,811

6,449
9,808

8,470
13,506

9,266
14,343

11,078
16,794

41,144
64,992

0
0

0
0

0
0

0
0

0
0

0
0

0
0

P.L. 105–35
H.R. 1225

Taxpayer Browsing Protection Act:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

*
0

*
0

*
0

*
0

*
0

*
0

P.L. 105–38
S. 670

Elimination of Special Citizenship Transition Rules Applicable to Certain
Children Born Outside the United States:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

0
0

0
0

0
0

0
0

0
0

0
0

Pvt. L. 105–2
H.R. 584

Private Relief for John Wesley Davis:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

*
0

0
0

0
0

0
0

0
0

0
0

*
0

P.L. 105–40
H.R. 1944

Warner Canyon Ski Hill Land Exchange Act of 1997:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

0
0

0
0

0
0

0
0

0
0

0
0

P.L. 105–41
H.R. 1585

Stamp Out Breast Cancer Act:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

0
0

*
0

*
0

*
0

*
0

*
0

MID-SESSION REVIEW

403

0
0

New balances following enactment of Balanced Budget and Taxpayer Relief Acts: 1
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

402

0
0

Adjustment required by Budget Enforcement Act of 1997: 1
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

401

0
0

Balances prior to the Balanced Budget and Taxpayer Relief Acts:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

400

Medicaid Waiver for the Better Health Plan, Inc. of Amherst, New York:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................
Subtotal, enacted this session prior to the Balanced Budget and
Taxpayer Relief Acts:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

399

P.L. 105–31
H.R. 2018

1998

DEFICIT IMPACT OF PAY-AS-YOU-GO LEGISLATION ENACTED AS OF AUGUST 15, 1997—
Continued
(In millions of dollars)

Report
Number
404

Change in the fiscal year baseline deficit
Act Number

Act Title
1997

P.L. 105–42
H.R. 408

1998

1999

2000

2001

2002

1997–2002

International Dolphin Conservation Program Act:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

0
0

*
0

*
0

*
0

*
0

*
0

*
0

Total, current scorecard:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

*
0

*
0

*
0

*
0

*
0

*
0

*
0

Current pay-as-you-go balance:
OMB estimate ...................................................................................................
CBO estimate ...................................................................................................

*
0

*
0

*
0

*
0

*
0

*
0

*
0

OMB SEQUESTRATION UPDATE REPORT

Table 10.

* $500,000 or less.
1 Section 10213 of the Budget Enforcement Act of 1997 included in the Balanced Budget Act requires that OMB reduce the balances on the pay-as-you-go scorecard to zero. That section also directs that OMB not include the deficit impact of the reconciliation bills on the scorecard.

29

30

MID-SESSION REVIEW

Comparison with CBO estimates—The BEA
requires that OMB explain differences with
CBO estimates of enacted pay-as-you-go legislation. Before enactment of the reconciliation
bills, CBO estimated that this year’s pay-asyou-go legislation had reduced the combined
deficits for 1997 and 1998 by $2.6 billion,
about $200 million more than the OMB estimates. OMB and CBO have no significant differences in the estimates for legislation enacted subsequent to the reconciliation bills.
Additional detail on estimating differences is
available in the separate reports issued subsequent to enactment of each bill.
Deficit reduction fund
On August 4, 1993, the President issued
Executive Order 12858 to guarantee that

the net deficit reduction that OBRA 1993
achieves is dedicated exclusively to reducing
the deficit. The Order established the deficit
reduction fund and required that amounts
equal to the spending reductions and revenue
increases resulting from OBRA 1993 be credited to the fund. Table 11 presents the
amounts that will be credited to the fund
each year from 1994 through 1998.
Each year, amounts are credited to the
fund on a daily basis to meet the deficit
reduction achieved by OBRA 1993. The Order
requires that the fund balances be used
exclusively to redeem maturing debt obligations of the Treasury held by foreign governments. Table 12 shows the status of the
fund on June 30, 1997.

Table 11. REVENUE INCREASES AND SPENDING
REDUCTIONS
CREDITED
TO
THE
DEFICIT
REDUCTION FUND
(In millions of dollars)
Annual
Amount

Year
1994
1995
1996
1997
1998

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

Table 12.

Cumulative
Amount

46,752
82,713
100,554
128,898
145,846

46,752
129,465
230,019
358,917
504,763

STATUS OF THE DEFICIT REDUCTION
FUND
(In millions of dollars)
Description

Beginning balance ...........................................................................
Deposits made between October 1, 1993, and June 30, 1997 ......
Redemptions of Treasury debt held by foreign governments
between October 1, 1993, and June 30, 1997 ............................
Fund balance as of June 30, 1997 .................................................

Amount
0
326,435
325,404
1,031

SUMMARY TABLES
Table 13. ESTIMATED SPENDING FROM 1998
BALANCES OF BUDGET AUTHORITY: DISCRETIONARY PROGRAMS 1
(In billions of dollars)
Total
Total balances, end of 1998 .........................................................
Spending from 1998 balances in:
1999 ............................................................................................
2000 ............................................................................................
2001 ............................................................................................
2002 ............................................................................................
Expiring balances, 1999 through 2002 .......................................
Unexpended balances at the end of 2002 ...................................

536.2
230.0
120.3
75.5
52.2
............
58.3

1 This table is required by section 221(b) of the Legislative Reorganization Act of 1970.

Table 14.

OUTLAYS FOR MANDATORY PROGRAMS UNDER CURRENT LAW 1
(In billions of dollars)
1996
Actual

Estimate
1997

1998

1999

2000

2001

2002

Human resources programs:
Education, training, employment and social services ...
Health ...............................................................................
Medicare ...........................................................................
Income security ................................................................
Social security ..................................................................
Veterans’ benefits and services ......................................

13.9
96.8
171.3
188.0
347.1
19.4

13.6
102.5
188.7
192.1
362.7
21.6

13.9
114.2
196.7
202.8
379.7
22.7

14.9
121.1
206.0
214.8
396.6
23.3

14.7
128.9
213.0
224.0
414.3
23.5

14.4
138.1
224.5
231.3
433.4
24.2

13.9
147.1
239.2
237.9
454.3
24.5

Subtotal, human resources programs ............................

836.4

881.3

930.1

976.8

1,018.4

1,065.9

1,116.9

Other mandatory programs:
International affairs ........................................................
Energy ..............................................................................
Agriculture .......................................................................
Commerce and Housing Credit .......................................
Transportation .................................................................
Undistributed offsetting receipts ....................................
Other functions ................................................................

–4.8
–3.1
5.0
–13.8
2.5
–37.6
0.9

–5.3
–2.9
5.8
–13.5
2.5
–49.7
2.0

–4.6
–2.7
7.7
–0.7
2.4
–48.5
1.8

–4.2
–3.8
7.4
3.3
2.3
–44.0
1.4

–3.9
–2.9
7.0
7.5
2.1
–45.5
1.6

–3.8
–3.1
6.0
6.6
2.0
–47.9
1.5

–3.6
–3.9
5.8
6.8
1.4
–59.4
1.3

Subtotal, other mandatory functions .............................

–51.0

–61.1

–44.6

–37.6

–34.2

–38.8

–51.7

Total, outlays for mandatory programs under current
law .................................................................................

785.4

820.1

885.5

939.2

984.2

1,027.1

1,065.2

1 This

table is required by Section 221(b) of the Legislative Reorganization Act of 1970.

31

32

Table 15.

THE BALANCED BUDGET AND THE TAXPAYER RELIEF ACTS OF 1997
(Deficit impact, in billions of dollars)
1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

1998–
2002

1998–
2007

Outlay Changes:
Discretionary changes:
Defense ...................................................................................
Non-defense ............................................................................

—
—

1.0
–4.2

–10.3
–9.1

–13.3
–14.8

–19.9
–23.5

–24.0
–38.7

–28.9
–41.4

–29.8
–43.9

–31.9
–46.6

–34.1
–49.5

–36.4
–52.3

–66.5
–90.3

–227.5
–324.0

Subtotal, Discretionary changes ...........................................

—

–3.2

–19.4

–28.1

–43.4

–62.8

–70.3

–73.7

–78.5

–83.6

–88.7 –156.8

–551.5

—

–8.7

–18.7

–31.4

–41.3

–49.6

–56.5

–64.1

–72.0

–80.7

–90.0 –149.8

–513.0

—

0.1

–0.8

–1.9

–2.8

–3.4

–3.8

–4.1

–4.4

–4.7

–5.1

–8.8

–31.0

—

4.6

4.8

5.1

5.4

4.4

4.5

4.6

5.6

5.7

6.8

24.3

51.5

—

0.2

0.3

0.3

0.3

0.3

0.2

0.2

0.3

0.3

0.3

1.5

2.8

—

0.8

1.4

0.7

0.1

—

—

—

—

—

—

3.0

3.0

—

2.9

2.8

2.9

2.9

3.0

3.0

3.1

3.3

3.2

3.0

14.5

30.2

—
—
—

3.9
—
0.3

4.5
–2.3
2.3

3.9
–3.5
2.7

3.4
–4.7
2.8

3.3
–14.2
2.8

3.3
—
2.8

3.3
—
2.8

3.6
—
2.8

3.4
—
2.8

3.3
—
2.9

19.0
–24.7
10.9

36.0
–24.7
25.1

—

–0.6

–0.6

–0.6

–0.6

–0.6

–0.1

–*

–*

–*

–*

–3.1

–3.3

—

–0.3

–0.6

–0.6

–0.7

–0.7

–0.2

–0.2

–0.2

–0.2

–0.2

–2.9

–4.1

Entitlement changes in reconciliation:
Medicare 1 ...............................................................................
Net Medicaid (excludes children’s health and welfare reform) 2 ..................................................................................
Expand children’s health coverage, (includes Medicaid
and diabetes) .......................................................................
Immigration, nutrition assistance, and work:
Increased flexibility and creation of additional work
slots within the food stamp program ............................
Additional welfare to work grants to State and local governments Temporary Assistance to Needy Families program ....................................................................................
Amend welfare reform provisions to exempt elderly and
disabled immigrants from Supplemental Security
Income (SSI) restrictions and extend eligibility for
refugees and asylees (includes Medicaid). ....................
Subtotal, immigration, nutrition assistance and work ...
Spectrum auction receipts .....................................................
Provide $500 tax credit for children (outlay impact) ..........
Increase agency CSRS contributions and other federal
retirement ...........................................................................
Extend veterans medical cost recovery, income verification, and home loan fees, and revise other veterans benefits 3 ....................................................................................

MID-SESSION REVIEW

* $50 million or less.
1 The Administration and CBO have longstanding technical differences in estimating the costs and savings of legislation. Medicare estimates usually have been the largest source of the differences. The Administration has over the last several years estimated that the same policies would produce greater savings than CBO has estimated.
As the above numbers show, the same was true this year when the Administration and CBO each estimated the costs of the balanced budget legislation. The President
and Congress agreed to $115 billion in net savings over five years in Medicare, as scored by CBO. Under CBO scoring, the savings come to $112 billion. The differences
between the Administration and CBO scoring are due to estimating methods, not to differences over policies.
2 CBO scored these Medicaid provisions in the Balanced Budget Act with $14 billion in savings from 1998 to 2002 and $50 billion from 1998 to 2007 against its baseline.
3 Includes Medicaid interactions.

THE BALANCED BUDGET AND THE TAXPAYER RELIEF ACTS OF 1997—Continued
(Deficit impact, in billions of dollars)
1997

Extend FHA assignment alternative and reduce annual
adjustments for housing projects with rents higher than
market .................................................................................
Reduce student loan administrative funds and return
guaranty agency reserve funds to Treasury .....................
Increase earned income tax credit compliance and implement other changes ............................................................
Sale of Governor’s Island and Union Station ......................
SSI and Veterans payment timing shift ..............................
Federal payment to the District of Columbia ......................
Other entitlement changes ....................................................

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

1998–
2002

1998–
2007

–0.3

–0.3

–0.4

–0.5

–0.5

–0.5

–0.5

–0.5

–0.5

–0.5

–1.9

–4.2

—

–0.1

–0.1

–0.1

–0.1

–1.2

–0.3

–0.4

–0.4

–0.5

–0.5

–1.7

–3.9

—
—
—
—
—

–*
—
—
—
–*

–0.1
—
—
—
–0.1

–0.2
—
–3.9
—
–0.4

–0.4
—
3.9
—
–0.4

–0.5
–0.5
—
—
–0.4

–0.6
—
—
—
–*

–0.7
—
—
—
–*

–0.8
—
—
—
–*

–0.8
—
—
0.1
–*

–0.8
—
—
0.7
–0.1

–1.2
–0.5
—
—
–1.3

–4.9
–0.5
—
0.7
–1.5

Subtotal, entitlement changes in reconciliation ......................
Debt service ...................................................................................

—
*

–1.1
0.3

–12.1
–0.4

–31.4
–2.1

–36.1
–4.5

–61.2
–8.7

–51.4
–14.1

–59.3
–19.8

–66.3
–26.1

–75.4
–33.3

–83.6 –141.8
–41.5 –15.4

–477.8
–150.1

Total outlay changes .....................................................................

*

–4.0

–31.8

–61.5

–84.0 –132.7 –135.8 –152.7 –170.9 –192.3 –213.8 –314.0 –1,179.5

—

3.5

17.4

17.1

16.8

16.4

16.0

15.5

14.9

14.1

13.2

71.2

144.9

—
—

0.5
0.1

6.2
0.2

7.4
0.3

8.1
0.3

8.7
0.4

8.2
0.4

10.0
0.5

10.9
0.5

11.2
0.6

11.3
0.6

30.8
1.3

82.3
4.0

*
—

0.4
0.1

0.4
0.1

0.3
0.1

*
0.1

—
0.1

—
0.2

—
0.2

—
0.2

—
0.2

—
0.2

1.1
0.6

1.1
1.5

—
—
—

—
*
0.1

0.2
0.1
0.1

0.2
0.2
0.2

0.2
0.3
0.2

0.2
0.4
0.1

0.2
0.5
0.2

0.3
0.6
0.2

0.3
0.7
0.2

0.3
0.9
0.2

0.3
1.0
0.2

0.9
1.0
0.7

2.2
4.7
1.8

0.1
—

–1.1
–0.2

–4.9
–0.3

–1.0
0.2

0.4
0.5

0.4
1.2

0.5
2.4

0.5
2.8

0.5
3.3

0.5
3.7

0.7
4.2

–6.2
1.4

–3.5
17.8

—

—

0.7

1.6

2.0

2.0

2.0

2.1

2.1

2.1

2.0

6.3

16.5

—

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.1

0.5

0.9

—
—

—
*

0.7
0.1

1.0
0.1

1.4
0.2

1.6
0.2

2.1
0.2

2.3
0.2

4.5
0.3

5.9
0.3

6.9
0.3

4.6
0.7

26.3
1.9

0.2

1.1

0.6

0.3

0.1

*

*

—

—

—

—

2.1

2.1

Revenue changes:
Provide tax relief and extend expiring provisions:
Family tax relief:
Provide $500 tax credit for children .................................
Education tax incentives:
Create HOPE scholarship and lifetime learning tax
credit ................................................................................
Allow deductibility of student loan interest .....................
Extend exclusion for employer-provided educational assistance ............................................................................
Expand State pre-paid tuition plans ................................
Allow penalty-free IRA withdrawals for education expenses ..............................................................................
Establish education IRAs ..................................................
Other education tax incentives .........................................
Savings and investment incentives:
Reduce capital gains tax rate and provide capital gains
exclusion on the sale of a principal residence ..............
Expand Individual Retirement Accounts (IRAs) .............
Alternative minimum tax (AMT):
Conform AMT depreciation lives to regular tax ..............
Exempt small businesses from the corporate AMT and
other AMT relief .............................................................
Estate and gift tax relief:
Increase estate and gift tax unified credit .......................
Other estate and gift tax relief .........................................
Expiring tax provisions:
Extend research and experimentation tax credit ............

33

—

SUMMARY TABLES

Table 15.

34

Table 15.

THE BALANCED BUDGET AND THE TAXPAYER RELIEF ACTS OF 1997—Continued
(Deficit impact, in billions of dollars)
1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

1998–
2002

1998–
2007

—
—
*
—
—
—
—
—

*
0.1
*
0.5
0.1
*
0.3
5.1

—
0.1
*
—
0.2
*
0.3
–2.6

—
0.1
0.1
—
0.2
*
0.4
0.1

—
*
0.1
—
0.2
*
0.2
0.1

—
*
0.1
—
0.2
*
0.1
–3.9

—
*
0.1
—
0.1
*
0.1
1.2

—
—
0.1
—
0.1
*
0.1
—

—
—
0.1
—
0.1
*
0.1
—

—
—
0.1
—
0.2
*
0.1
—

—
—
0.1
—
0.2
*
0.1
—

*
0.4
0.3
0.5
0.9
0.1
1.4
–1.2

*
0.4
0.7
0.5
1.6
0.1
2.0
0.0

—
*

6.5
1.3

–6.5
1.6

—
0.5

—
0.6

—
0.7

—
1.1

—
1.5

—
1.3

—
1.2

—
1.3

—
4.7

—
11.1

Subtotal, provide tax relief and extend expiring provisions
Eliminate unwarranted benefits and adopt other revenue
measures:
Extend and modify airport and airway trust fund taxes 4
Extend and modify unemployment insurance (FUTA)
taxes 4 ..................................................................................
Reinstate LUST excise tax 4 ..................................................
Increase taxes on tobacco products 4 ....................................
Modify other excise taxes 4 ....................................................
Increase employee contributions to CSRS and FERS .........
Increase EITC compliance and implement other changes
Change treatment of certain financial products ..................
Revise treatment of corporate organizations and reorganizations ..............................................................................
Modify levy exemption and provide continuous levy ..........
Modify carryback and carryforward provisions for net operating losses and general business credits .....................
Provide for technical corrections and simplification 4 .........
Other revenue measures 4 .....................................................

0.3

18.6

14.9

29.4

32.0

29.0

35.5

37.1

40.1

41.6

42.6

124.0

320.9

1.0

–5.7

–7.3

–6.5

–7.0

–7.6

–8.1

–8.7

–9.2

–9.9

–10.5

–34.1

–80.6

—
—
—
—
—
—
—

—
–0.1
—
–0.1
–*
–*
–0.3

–0.9
–0.1
—
–0.2
–0.2
–*
–0.3

–1.3
–0.1
–1.4
–0.2
–0.4
–0.1
–0.4

–1.3
–0.1
–1.8
–0.2
–0.6
–0.1
–0.4

–1.4
–0.1
–2.1
–0.2
–0.6
–0.1
–0.3

–1.5
–0.1
–2.3
–0.2
–0.2
–0.2
–0.2

–1.3
–0.1
–2.4
–0.2
—
–0.2
–0.2

–1.1
–0.1
–2.4
–0.2
—
–0.2
–0.2

–0.9
–0.1
–2.3
–0.2
—
–0.2
–0.2

–0.7
–0.1
–2.3
–0.2
—
–0.2
–0.3

–4.9
–0.6
–5.3
–0.8
–1.9
–0.3
–1.8

–10.3
–1.4
–17.0
–1.8
–2.0
–1.3
–3.0

—
—

–1.3
–0.4

–0.2
–0.3

–0.2
–0.3

–0.2
–0.3

–0.2
–0.3

–0.3
–0.2

–0.3
–0.2

–0.3
–0.1

–0.4
–0.1

–0.4
–0.1

–2.2
–1.6

–3.9
–2.2

—
*
—

–0.2
0.2
–0.6

–0.4
0.2
–0.7

–0.4
0.3
–0.7

–0.3
0.3
–0.8

–0.2
0.3
–0.8

–0.2
0.4
–0.7

–0.2
0.4
–0.7

–0.2
0.4
–0.8

–0.2
0.4
–0.9

–0.2
0.5
–1.0

–1.5
1.3
–3.5

–2.5
3.4
–7.7

Subtotal, eliminate unwarranted benefits and adopt other
revenue measures ..................................................................
Shift timing of Universal Service Fund payments .................

1.0
—

–8.5
—

–10.4
—

–11.6
—

–12.8
3.0

–13.8
–3.0

–13.9
—

–14.1
—

–14.5
—

–15.0
—

–15.6
—

–57.1
—

–130.3
—

Total revenue changes ..............................................................

1.3

10.2

4.5

17.8

22.2

12.2

21.7

23.0

25.6

26.6

27.0

66.8

190.7

Total entitlement changes in reconciliation and revenue
changes ...................................................................................

1.3

9.1

–7.6

–13.6

–13.9

–49.0

–29.8

–36.2

–40.7

–48.9

–56.6

–74.9

–287.2

Total savings .................................................................................

1.3

6.2

–27.3

–43.8

–61.8 –120.5 –114.2 –129.7 –145.2 –165.7 –186.8 –247.1

–988.8

4 Net

of income offsets.

MID-SESSION REVIEW

Extend deduction for contributions of appreciated stock
Extend work opportunity tax credit ..................................
Extend orphan drug tax credit ..........................................
Extend Generalized System of Preferences (GSP) 4 ........
Establish District of Columbia (DC) tax incentive program
Provide targeted welfare-to-work tax credit ........................
Provide tax incentives for distressed areas .........................
Modify safe harbor provisions for upper income taxpayers
Modify deposit rules for gasoline and other fuel excise
taxes ....................................................................................
Other tax relief provisions 4 ..................................................

MANDATORY OUTLAY AND REVENUE PROPOSALS NOT INCLUDED IN THE BALANCED BUDGET AND THE
TAXPAYER RELIEF ACTS OF 1997
(Deficit impact, in millions of dollars)
1997

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

1999

25
–21

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

2000

2001

2002

2003

40 ..............
–30
–25
–2
–2 .............. ..............

2004

2005

2006

2007

1998–2002 1998–2007

–10 .............. .............. .............. ..............
1
1
1
1
1

10 ................
–25
–20

–10

2

2

2

2

2

2

2

2

–4

6

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

–457
431
–206

–98
687
–227

–195
696
–222

–192
–696
–220

–96
–924
–224

–3
–646
–227

68
–654
–231

74
–33
–235

74
268
–238

74
307
–242

–1,038
194
–1,099

–751
–564
–2,272

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

–52

–97

–137

–180

–228

–278

–332

–393

–455

–524

–694

–2,676

1
2
.............. ..............

3
41

3
53

3
58

5
60

6
62

6
65

6
67

5
69

4
72

16
212

43
547

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

1

–7

–14

–15

–11

–7

–2

–2

–1

–2

–46

–60

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

–118

–158

–160

–162

–165

–169

–174

–179

–184

–189

–763

–1,658

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

–5

1

7

13

19

19

19

18

18

16

109

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

11

12

13

13

13

13

13

13

13

13

62

127

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

15

56

35

–22

–82

–129

–161

–186

–209

–232

2

–915

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

15

35

50

55

55

55

55

55

55

55

210

485

..............
–120
–380
–496
–555
–610
–645
.............. .............. .............. .............. .............. .............. ..............

–677
–1,310

–678
–1,349

–681
–1,390

–702
–2,161
–1,432 ................

–5,544
–5,481

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

142

162

184

192

200

220

230

230

240

200

880

2,000

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

–2

–2

–2

–2

–2

–2

–2

–2

–2

–2

–10

–20

35

Mandatory outlays:
Agriculture:
Shift fund for Rural America from 2000
to 1998 to correct a drafting error .......
Enhance the farm income safety net ......
Energy:
Sell or lease naval petroleum and oil
and shale reserves ................................
Housing and Urban Development:
FHA Mark-to-Market:
Paygo ......................................................
Non-paygo ..............................................
Increase FHA loan limit .......................
FHA Mututal Mortgage Insurance
(non-paygo) ........................................
Labor:
Pension: increase guaranty level for
multiemployer plans .............................
Extension of NAFTA/TAA ........................
Special benefits: savings from increased
compliance .............................................
Unemployment benefits integrity (savings from increased appropriations) ....
Social Security Administration:
Disability insurance: return to work proposal .......................................................
Transportation:
Transfer St. Lawrence Seaway Development Corporation into Performance
Based Organization ..............................
Decrease Federal-aid highways minimum allocation ......................................
Convert Boat Safety grant program to
mandatory .............................................
Treasury:
Improved earned income tax credit compliance (savings from increased appropriations) ...............................................
Customs user fee extension .....................
Environmental Protection Agency:
Provide funding for Superfund orphan
shares 1 ...................................................
Morris K. Udall Foundation (impact of
appropriation) ........................................

1998

SUMMARY TABLES

Table 16.

MANDATORY OUTLAY AND REVENUE PROPOSALS NOT INCLUDED IN THE BALANCED BUDGET AND THE
TAXPAYER RELIEF ACTS OF 1997—Continued

36

Table 16.

(Deficit impact, in millions of dollars)
1997

1998

Railroad retirement board:
Conform railroad benefits with social security ...................................................... ..............

1999

2000

2001

2002

2003

2004

2005

2006

2007

1998–2002 1998–2007

32

49

49

49

50

50

51

51

52

52

229

485

–302

99

–142

–1,695

–1,969

–1,688

–3,033

–2,539

–2,363

–2,527

–4,009

–16,159

–908

–1,364

–1,376

–1,395

–1,432

–1,473

–1,517

–1,565

–1,608

–1,653

–6,475

–14,291

–30

–95

–124

–139

–152

–161

–169

–169

–170

–176

–540

–1,385

–938

–1,459

–1,500

–1,534

–1,584

–1,634

–1,686

–1,734

–1,778

–1,829

–7,015

–15,676

1

–1,240

–1,360

–1,642

–3,229

–3,553

–3,322

–4,719

–4,273

–4,141

–4,356

–11,024

–31,835

MEMORANDUM:
Paygo .............................................................
1
Non-paygo ..................................................... ..............

–1,350
110

–1,303
–57

–1,406
–236

–1,487
–1,742

–1,474
–2,079

–1,433
–1,889

–2,728
–1,991

–2,836
–1,437

–2,934
–1,207

–3,086
–1,270

–7,020
–4,004

–20,037
–11,798

Subtotal, mandatory outlays ................

1

Revenue changes:
Extend Superfund taxes .............................. ..............
Improved earned income tax credit compliance (savings from increased appropriations) .......................................................... ..............
Subtotal, revenue changes ....................... ..............
Total, proposals .....................................

1 Bipartisan

Budget Agreement provided $200 million per year for 1998–2002 and $2,028 million over 10 years.

MID-SESSION REVIEW

37

SUMMARY TABLES

Table 17.

BUDGET BY CATEGORY OF OUTLAYS AND RECEIPTS: MIDSESSION REVIEW VERSUS FEBRUARY BUDGET
(In billions of dollars)
1997

1998

1999

2000

1998 Budget Policy (February estimate)
Outlays:
Discretionary:
Defense ..................................................
268.0
260.1
262.1
267.7
Nondefense ...........................................
282.1
287.3
295.4
296.2

2001

2002

268.6
292.5

273.9
293.3

Subtotal, discretionary .........................
Mandatory:
Social security ......................................
Medicare ...............................................
Medicaid ................................................
Other .....................................................

550.0

547.5

557.5

563.9

561.0

567.2

364.2
191.6
98.5
179.3

380.9
204.3
105.9
199.0

398.6
216.8
111.6
224.3

417.7
226.6
118.2
239.8

438.0
243.3
125.2
232.0

459.7
260.5
133.4
220.2

Subtotal, mandatory ............................
Net interest ..............................................

833.6
247.4

890.2
249.9

951.3
251.8

1,002.3
248.2

1,038.5
245.0

1,073.8
238.8

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

1,631.0

1,687.5

1,760.7

1,814.4

1,844.5

1,879.7

Receipts ........................................................
Surplus/deficit (–) ........................................
(On-budget) ..............................................
(Off-budget) ..............................................

1,505.4
–125.6
–199.5
73.9

1,566.8
–120.6
–197.0
76.4

1,643.3
–117.4
–204.7
87.3

1,727.3
–87.1
–183.3
96.2

1,808.3
–36.1
–139.2
103.1

1,896.7
17.0
–92.5
109.5

Mid-Session Review Policy
Outlays:
Discretionary:
Defense ..................................................
269.2
267.1
266.6
Nondefense ...........................................
279.9
289.3
296.0

269.0
296.8

270.7
294.6

273.1
288.5

Subtotal, discretionary .........................
Mandatory:
Social security ......................................
Medicare ...............................................
Medicaid ................................................
Other .....................................................

549.1

556.4

562.5

565.8

565.3

561.6

362.7
188.7
97.5
171.4

379.7
196.7
104.8
203.9

396.6
206.0
111.5
225.2

414.3
213.0
119.0
237.7

433.4
224.5
127.9
239.6

454.3
239.2
137.6
232.2

Subtotal, mandatory ............................
Net interest ..............................................

820.3
245.7

885.2
248.4

939.3
249.9

984.0
245.5

1,025.4
241.1

1,063.3
233.9

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

1,615.0

1,689.9

1,751.8

1,795.3

1,831.8

1,858.7

Receipts ........................................................
Surplus/deficit (-) .........................................
(On-budget) ..............................................
(Off-budget) ..............................................

1,577.7
–37.3
–115.5
78.1

1,631.6
–58.3
–145.0
86.6

1,694.3
–57.4
–152.8
95.4

1,753.9
–41.4
–146.0
104.6

1,824.8
–7.0
–119.1
112.1

1,921.9
63.1
–57.0
120.1

1998–
2002

38

MID-SESSION REVIEW

Table 17. BUDGET BY CATEGORY OF OUTLAYS AND RECEIPTS: MIDSESSION REVIEW VERSUS FEBRUARY BUDGET—Continued
(In billions of dollars)
1997

1998

1999

2000

2001

2002

1998–
2002

Change
Outlays:
Discretionary:
Defense ..................................................
Nondefense ...........................................

1.2
–2.2

7.0
1.9

4.5
0.6

1.3
0.6

2.1
2.1

–0.8
–4.8

14.0
0.5

Subtotal, discretionary .........................
Mandatory:
Social security ......................................
Medicare ...............................................
Medicaid ................................................
Other .....................................................

–1.0

8.9

5.0

1.9

4.2

–5.6

14.5

–1.5
–2.8
–1.0
–7.9

–1.2
–7.6
–1.0
4.9

–2.0
–10.8
–0.2
0.9

–3.5
–13.6
0.9
–2.1

–4.6
–18.8
2.7
7.6

–5.4
–21.3
4.2
12.0

–16.6
–72.1
6.6
23.3

Subtotal, mandatory ............................
Net interest ..............................................

–13.3
–1.7

–5.0
–1.5

–12.0
–1.9

–18.3
–2.7

–13.1
–3.9

–10.5
–4.9

–58.9
–14.9

Total outlays ............................................
Receipts (deficit impact) .............................

–16.0
–72.3

2.4
–64.7

–8.9
–51.0

–19.2
–26.6

–12.7
–16.4

–21.0
–25.2

–59.3
–184.0

Total change ................................................
(On-budget) ..............................................
(Off-budget) ..............................................

–88.3
–84.0
–4.2

–62.3
–52.0
–10.3

–60.0
–51.9
–8.0

–45.8
–37.4
–8.4

–29.1
–20.1
–9.0

–46.2
–35.6
–10.6

–243.3
–197.0
–46.3

39

SUMMARY TABLES

Table 18.

BUDGET BY CATEGORY OF OUTLAYS AND RECEIPTS: MID-SESSION
REVIEW VERSUS PRE-RECONCILIATION BASELINE
(In billions of dollars)
1997

Mid-Session Pre-Reconciliation Baseline
Outlays:
Discretionary:
Defense ......................................................
Nondefense ................................................

1998

1999

2000

2001

2002

1998–2002

269.2
279.9

266.1
293.4

276.8
305.1

282.3
311.5

290.6
318.1

297.1
327.3

Subtotal, discretionary ................................
Mandatory:
Social security ...........................................
Medicare ....................................................
Medicaid ....................................................
Other .........................................................

549.1

559.6

581.9

593.8

608.7

624.4

362.7
188.7
97.5
171.2

379.7
205.4
103.8
197.7

396.6
224.7
110.7
219.2

414.3
244.5
119.2
237.6

433.4
265.8
128.6
235.4

454.3
288.8
138.6
244.7

Subtotal, mandatory ....................................
Net interest ..................................................

820.1
245.8

886.5
248.2

951.3
250.4

1,015.5
247.7

1,063.2
245.9

1,126.4
243.0

Total outlays ....................................................
Receipts ............................................................

1,615.0
1,579.0

1,694.3
1,640.8

1,783.6
1,697.4

1,857.1
1,770.2

1,917.8
1,845.4

1,993.9
1,932.5

Surplus/deficit (–) ............................................

–36.0

–53.5

–86.2

–87.0

–72.3

–61.3

Mid-Session Policy
Outlays:
Discretionary:
Defense ......................................................
Nondefense ................................................

269.2
279.9

267.1
289.3

266.6
296.0

269.0
296.8

270.7
294.6

273.1
288.5

Subtotal, discretionary ................................
Mandatory:
Social security ...........................................
Medicare ....................................................
Medicaid ....................................................
Other .........................................................

549.1

556.4

562.5

565.8

565.3

561.6

362.7
188.7
97.5
171.4

379.7
196.7
104.8
203.9

396.6
206.0
111.5
225.2

414.3
213.0
119.0
237.7

433.4
224.5
127.9
239.6

454.3
239.2
137.6
232.2

Subtotal, mandatory ....................................
Net interest ..................................................

820.3
245.7

885.2
248.4

939.3
249.9

984.0
245.5

1,025.4
241.1

1,063.3
233.9

Total outlays ....................................................
Receipts ............................................................
Surplus/deficit (–) ............................................

1,615.0
1,577.7
–37.3

1,689.9
1,631.6
–58.3

1,751.8
1,694.3
–57.4

1,795.3
1,753.9
–41.4

1,831.8
1,824.8
–7.0

1,858.7
1,921.9
63.1

Savings
Outlays:
Discretionary:
Defense ......................................................
Nondefense ................................................

—
—

1.0
–4.2

–10.3
–9.1

–13.3
–14.8

–19.9
–23.5

–24.0
–38.7

–66.5
–90.3

Subtotal, discretionary ................................
Mandatory:
Social security ...........................................
Medicare 1 .................................................
Medicaid 2 ..................................................
Other .........................................................

—

–3.2

–19.4

–28.1

–43.4

–62.8

156.8

—
—
—
0.2

—
–8.7
1.1
6.2

–*
–18.7
0.7
6.0

*
–31.4
–0.1
0.1

*
–41.3
–0.7
4.2

*
–49.6
–1.1
–12.5

*
–149.8
–*
4.0

Subtotal, mandatory ....................................
Net interest ..................................................

0.2
–0.1

–1.4
0.2

–12.0
–0.5

–31.5
–2.3

–37.8
–4.8

–63.2
–9.2

145.8
–16.5

Total outlays ....................................................
Receipts (deficit impact) ..................................

*
1.3

–4.3
9.2

–31.8
3.1

–61.9
16.3

–86.0
20.6

135.1
10.6

319.1
59.8

Total savings ....................................................

1.3

4.9

–28.8

–45.6

–65.3

124.5

259.3

1 CBO scored the Medicare provisions in the Balanced Budget Act with $112 billion in savings from 1998 to 2002 and $385 billion from
1998 to 2007 against its baseline.
2 CBO scored total Medicaid savings from the Balanced Budget Act with $7 billion in savings from 1998 to 2002 and $37 billion from
1998 to 2007 against its baseline.

40

MID-SESSION REVIEW

Table 19.

BUDGET AGGREGATES: 1997 TO 2007
(Dollar amounts in billions)

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Receipts .......................................
Outlays ........................................
Surplus/deficit (–) .......................

1,578
1,615
–37

1,632
1,690
–58

1,694
1,752
–57

1,754
1,795
–41

1,825
1,832
–7

1,922
1,859
63

2,005
1,943
62

2,100
2,016
83

2,206
2,098
109

2,310
2,174
136

2,427
2,260
167

As a percent of GDP:
Receipts ...............................
Outlays ................................
Surplus/deficit (–) ...............

20.0
20.5
–0.5

19.8
20.5
–0.7

19.6
20.3
–0.7

19.4
19.9
–0.5

19.3
19.4
–0.1

19.4
18.7
0.6

19.3
18.7
0.6

19.2
18.5
0.8

19.3
18.3
0.9

19.2
18.1
1.1

19.2
17.9
1.3

RECEIPTS BY SOURCE
(In billions of dollars)

1996
actual
Individual income taxes ..............
Corporation income taxes ...........
Social insurance and retirement
receipts .....................................
On-budget .............................
Off-budget .............................
Excise taxes .................................
Estate and gift taxes ...................
Customs duties ............................
Miscellaneous receipts ................

February policy estimates

Mid-Session policy estimates

1997

1998

1999

2000

2001

2002

1997

1998

1999

2000

2001

2002

656.4
171.8

672.7
176.2

691.2
189.7

721.6
199.6

755.6
212.0

795.2
220.5

839.8
227.8

732.9
187.1

748.6
192.6

761.5
196.3

782.9
204.1

816.9
212.6

862.3
222.9

509.4
(141.9)
(367.5)
54.0
17.2
18.7
25.5

535.8
(146.9)
(388.9)
57.2
17.6
17.3
28.6

557.8
(152.8)
(404.9)
61.2
18.8
18.3
29.8

585.2
(160.0)
(425.2)
64.5
20.0
18.5
34.0

614.4
(167.5)
(446.9)
64.9
21.4
19.6
39.4

642.2
(174.5)
(467.6)
66.2
22.9
20.5
40.8

673.1
(183.2)
(489.9)
67.4
24.6
22.0
42.0

538.5
(147.3)
(391.2)
55.9
19.3
18.0
25.9

564.8
(153.0)
(411.8)
55.3
19.7
18.7
31.8

590.4
(160.5)
(429.9)
71.4
20.3
19.1
35.5

618.2
(168.3)
(449.9)
66.6
21.3
20.3
40.5

644.1
(175.3)
(468.8)
68.7
22.4
21.3
38.7

SUMMARY TABLES

Table 20.

672.9
(182.7)
(490.2)
70.9
23.8
22.9
46.1

Total ..................................... 1,453.1
1,505.4
1,566.8
1,643.3
1,727.3
1,808.3
1,896.7
1,577.7
1,631.6
1,694.3
1,753.9
1,824.8
1,921.9
On-budget .......................... (1,085.6) (1,116.5) (1,161.9) (1,218.1) (1,280.4) (1,340.7) (1,406.8) (1,186.5) (1,219.8) (1,264.4) (1,304.0) (1,356.0) (1,431.6)
Off-budget .........................
(367.5)
(388.9)
(404.9)
(425.2)
(446.9)
(467.6)
(489.9)
(391.2)
(411.8)
(429.9)
(449.9)
(468.8)
(490.2)

41

42

Table 21.

OUTLAYS BY AGENCY
(In billions of dollars)

1996
actual

February policy estimates
1997

1998

1999

2000

Mid-Session policy estimates

2001

2002

1997

1998

1999

2000

2001

2002

Cabinet agencies:
Agriculture ....................................................................
Commerce ......................................................................
Defense—Military .........................................................
Education .......................................................................
Energy ............................................................................
Health and Human Services ........................................
Housing and Urban Development ...............................
Interior ...........................................................................
Justice ............................................................................
Labor ..............................................................................
State ...............................................................................
Transportation ..............................................................
Treasury ........................................................................
Veterans Affairs ............................................................

54.3
3.7
253.3
29.7
16.2
319.8
25.5
6.7
12.0
32.5
5.0
38.8
364.6
36.9

57.0
3.8
254.3
28.3
15.4
351.1
29.9
7.4
14.5
32.9
5.5
38.4
380.6
39.6

58.8
4.1
247.5
32.1
14.6
376.1
32.3
7.1
17.4
35.6
5.5
38.5
390.4
40.9

58.0
4.6
249.3
36.2
14.9
396.9
32.9
7.3
18.7
37.5
6.3
38.5
397.8
41.9

59.7
6.2
255.2
36.8
14.6
414.1
32.4
7.3
19.1
39.0
5.5
38.4
400.2
43.8

59.7
4.0
256.2
37.4
14.1
438.6
30.2
7.4
18.5
39.6
5.5
38.4
402.5
41.1

61.6
3.9
261.4
35.9
11.8
461.9
29.6
7.2
18.2
40.4
5.6
38.2
402.8
43.3

55.4
3.8
255.7
29.6
15.2
344.3
29.1
7.4
13.9
30.8
5.5
38.6
380.2
40.1

55.4
4.1
254.3
32.0
14.7
370.1
32.5
7.6
17.9
33.9
5.4
39.4
392.6
41.2

54.7
4.7
253.9
35.1
14.7
388.0
33.1
7.6
18.9
37.2
6.2
40.1
401.3
42.2

57.2
6.4
256.4
36.1
14.6
403.5
32.7
7.6
19.1
38.4
5.3
40.3
403.5
42.0

57.0
4.1
258.3
36.8
14.1
424.5
30.8
7.6
18.5
39.3
5.4
40.5
405.4
42.6

58.6
4.0
260.7
36.7
12.9
447.6
30.1
7.3
18.2
40.4
5.5
40.4
405.7
42.9

Major agencies:
Corps of Engineers, military retirement and other
defense .......................................................................
Environmental Protection Agency ...............................
Executive Office Of the President ...............................
Funds Appropriated to the President .........................
General Services Administration .................................
The Judiciary ................................................................
Legislative Branch ........................................................
National Aeronautics and Space Administration .......
Office of Personnel Management .................................
Small Business Administration ...................................
Social Security Administration ....................................

32.5
6.0
0.2
9.7
0.7
3.1
2.3
13.9
42.9
0.9
375.2

33.9
6.3
0.2
9.7
1.2
3.6
2.5
13.7
44.8
0.5
395.9

34.8
6.7
0.2
10.2
0.5
3.7
2.8
13.6
46.5
0.1
413.0

35.8
7.1
0.2
10.4
0.3
3.8
2.7
13.5
48.6
0.2
432.0

36.9
7.4
0.2
10.6
0.2
3.9
2.7
13.2
50.7
0.5
454.0

38.0
7.4
0.2
10.5
0.1
4.1
2.8
13.2
53.0
0.6
470.9

39.0
7.3
0.2
10.6
0.1
4.2
2.8
13.2
55.7
0.6
495.9

34.3
6.4
0.2
9.4
1.3
3.6
2.5
14.4
45.2
0.5
394.3

35.1
6.7
0.2
10.2
0.7
3.7
2.8
13.6
46.8
0.1
412.2

35.8
7.1
0.2
10.3
0.3
3.8
2.7
13.5
49.1
0.2
430.0

36.8
7.4
0.2
10.6
0.2
3.9
2.7
13.2
51.2
0.5
448.6

37.8
7.4
0.2
10.5
0.1
4.1
2.8
13.2
53.4
0.6
468.9

38.7
7.3
0.2
10.6
0.1
4.2
2.8
13.2
56.0
0.6
490.7

All other agencies .............................................................

8.9

10.4

20.2

22.5

26.2

24.1

25.1

7.6

19.6

24.0

26.6

25.0

25.1

Undistributed offsetting receipts ....................................

–135.0

–150.5

–165.7

–157.4

–164.6

–173.8

–197.0

–154.3

–161.6

–161.0

–167.7

–176.3

–194.3

Allowances ........................................................................ .............. .............. .............. .............. .............. .............. .............. ..............

–1.3

–2.1

–2.2

–0.8

–7.6

1,560.3 1,631.0 1,687.5 1,760.7 1,814.4 1,844.5 1,879.7 1,615.0 1,689.9 1,751.8 1,795.3 1,831.8 1,858.7

MID-SESSION REVIEW

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

OUTLAYS BY FUNCTION
(In billions of dollars)

1996
actual

February policy estimates
1997

1998

1999

2000

2001

Mid-Session policy estimates
2002

1997

National defense ...............................................................
265.7
267.2
259.4
261.4
267.2
268.0
273.2
268.4
International affairs .........................................................
13.5
14.8
14.9
15.9
15.2
15.3
15.5
14.0
General science, space, and technology ..........................
16.7
16.6
16.5
16.4
16.2
16.1
16.1
17.1
Energy ...............................................................................
2.8
2.1
2.3
1.3
2.0
1.6
–0.4
2.0
Natural resources and environment ...............................
21.6
22.8
22.3
22.6
23.1
23.2
23.0
23.2
Agriculture ........................................................................
9.2
10.3
12.3
11.8
11.2
10.0
9.8
10.0
Commerce and housing credit .........................................
–10.6
–8.8
3.4
6.3
12.6
7.3
8.1
–11.2
Transportation ..................................................................
39.6
39.3
39.3
39.4
39.3
39.4
39.2
39.7
Community and regional development ...........................
10.7
12.8
11.4
11.4
9.6
8.4
8.0
12.7
Education, training, employment, and social services
52.0
51.3
56.2
61.7
63.2
63.9
62.8
52.9
Health ................................................................................
119.4
127.6
138.2
145.1
152.0
159.6
165.3
126.4
Medicare ............................................................................
174.2
194.3
207.1
219.6
229.3
246.0
263.2
191.4
Income security .................................................................
226.0
238.9
247.5
256.4
266.2
269.3
280.0
232.8
Social Security ..................................................................
349.7
367.7
384.3
402.0
421.1
441.2
463.0
366.2
Veterans benefits and services ........................................
37.0
39.6
41.0
41.9
43.9
41.2
43.4
40.2
Administration of justice .................................................
17.5
20.8
24.2
25.9
26.4
26.0
26.0
20.1
General government .........................................................
11.9
13.1
12.9
13.2
13.6
13.0
13.0
13.2
Net interest .......................................................................
241.1
247.4
249.9
251.8
248.2
245.0
238.8
245.7
Allowances ........................................................................ .............. .............. .............. .............. .............. .............. .............. ..............
Undistributed offsetting receipts ....................................
–37.6
–46.5
–55.6
–43.5
–46.0
–50.1
–68.0
–49.7
Total ..........................................................................

1998
266.4
14.6
16.5
2.3
23.4
11.9
2.4
40.2
12.1
56.5
139.2
199.5
244.2
383.1
41.3
24.8
13.2
248.4
–1.3
–48.5

1999
265.9
15.5
16.4
1.2
22.7
11.6
7.4
41.0
12.1
61.3
146.2
208.7
256.3
400.0
42.3
26.1
13.3
249.9
–2.1
–44.0

2000
268.5
15.0
16.2
2.0
23.1
11.0
13.2
41.2
10.0
62.4
154.1
215.8
265.4
417.6
42.1
26.5
13.6
245.5
–2.2
–45.5

2001
270.1
15.0
16.1
1.6
23.1
10.0
8.8
41.5
8.6
63.3
163.3
227.2
272.8
436.7
42.7
26.0
12.9
241.1
–0.8
–47.9

2002
272.6
15.2
16.1
0.7
22.7
9.7
8.6
41.4
8.0
63.8
172.2
241.9
279.6
457.6
43.0
26.0
12.8
233.9
–7.6
–59.4

SUMMARY TABLES

Table 22.

1,560.3 1,631.0 1,687.5 1,760.7 1,814.4 1,844.5 1,879.7 1,615.0 1,689.9 1,751.8 1,795.3 1,831.8 1,858.7

43

44

Table 23.

DISCRETIONARY BUDGET AUTHORITY BY AGENCY
(In billions of dollars)

Agency

1996
Actual

February policy estimates
1997

1998

1999

2000

Mid-Session policy estimates

2001

2002

1997

1998

1999

2000

2001

2002

15.3
3.7
253.6
21.4
16.4
33.2
21.7
7.1
14.6
9.4
4.7
12.7
10.4
17.8

15.3
3.8
250.9
26.2
16.5
34.1
19.3
6.9
16.3
10.2
4.8
12.8
10.6
18.9

15.1
4.2
251.6
29.1
19.2
36.3
24.8
7.4
17.1
10.8
5.1
12.5
11.8
18.7

15.2
4.9
257.2
29.8
17.6
36.6
28.4
7.4
17.8
10.6
5.8
13.7
11.8
18.7

15.4
6.1
263.5
30.5
16.7
36.8
30.3
7.6
16.8
10.6
4.9
13.9
11.4
18.7

15.5
4.0
270.3
31.1
16.3
37.1
31.7
7.5
17.0
10.7
5.0
14.1
11.6
18.7

15.8
4.0
278.4
31.5
15.8
37.4
33.0
7.5
17.5
10.9
5.0
14.3
11.8
18.7

15.6
3.8
253.7
26.3
16.4
34.4
16.1
7.3
16.3
10.2
4.8
13.5
10.6
18.3

15.1
4.2
254.6
29.4
19.2
36.3
25.5
8.1
17.1
10.8
4.9
12.6
12.0
18.7

15.2
4.9
258.8
30.1
17.6
36.6
28.2
7.5
17.8
10.6
5.7
13.8
11.9
18.9

15.4
6.1
263.4
30.8
16.7
36.8
29.4
7.6
16.8
10.6
4.8
14.0
11.6
18.5

15.5
4.0
270.1
31.5
16.3
37.1
30.9
7.5
17.0
10.7
4.8
14.2
11.7
18.4

15.8
4.0
278.3
31.9
15.8
37.4
32.3
7.5
17.5
10.9
4.9
14.5
12.0
18.4

Major agencies:
Corps of Engineers, military retirement and other
defense .......................................................................
Environmental Protection Agency ...............................
Executive Office Of the President ...............................
Funds Appropriated to the President .........................
General Services Administration .................................
The Judiciary ................................................................
Legislative Branch ........................................................
National Aeronautics and Space Administration .......
Office of Personnel Management .................................
Small Business Administration ...................................
Social Security Administration ....................................

3.4
6.5
0.2
10.8
0.2
2.8
2.2
13.9
0.2
0.8
5.0

3.5
6.8
0.2
10.8
0.6
3.0
2.2
13.7
0.2
0.9
5.6

3.8
7.6
0.2
15.6
0.2
3.4
2.4
13.5
0.2
0.7
5.6

3.4
7.7
0.2
11.9
0.1
3.5
2.4
13.4
0.2
0.7
5.5

3.4
7.1
0.2
11.8
0.1
3.6
2.5
13.2
0.2
0.7
5.5

3.4
7.2
0.2
11.4
0.1
3.7
2.5
13.2
0.2
0.7
5.5

3.4
7.3
0.2
11.3
0.1
3.8
2.5
13.2
0.2
0.7
5.5

4.2
6.8
0.2
10.8
0.6
3.0
2.2
13.7
0.2
0.9
5.6

3.5
7.6
0.2
15.6
0.4
3.4
2.4
13.5
0.2
0.7
5.6

3.5
7.7
0.2
11.9
0.1
3.5
2.4
13.4
0.2
0.7
5.5

3.5
7.1
0.2
11.8
0.1
3.6
2.5
13.2
0.2
0.7
5.5

3.4
7.2
0.2
11.4
0.1
3.7
2.5
13.2
0.2
0.7
5.5

3.4
7.3
0.2
11.3
0.1
3.8
2.5
13.2
0.2
0.7
5.5

All other agencies .............................................................

14.0

11.7

13.6

10.8

10.9

10.7

10.7

15.0

11.2

10.8

10.9

10.7

10.7

Allowances ........................................................................ .............. .............. .............. .............. .............. .............. .............. ..............

–1.2

–2.8

–3.8

–6.1

–8.4

531.5

534.7

538.1

542.7

551.7

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

501.9

505.8

530.5

535.4

542.5

549.4

560.6

510.7

MID-SESSION REVIEW

Cabinet agencies:
Agriculture ....................................................................
Commerce ......................................................................
Defense—Military .........................................................
Education .......................................................................
Energy ............................................................................
Health and Human Services ........................................
Housing and Urban Development ...............................
Interior ...........................................................................
Justice ............................................................................
Labor ..............................................................................
State ...............................................................................
Transportation ..............................................................
Treasury ........................................................................
Veterans Affairs ............................................................

DISCRETIONARY BUDGET AUTHORITY BY FUNCTION
(In billions of dollars)
1996
actual

February policy estimates
1997

1998

1999

2000

2001

Mid-Session policy estimates
2002

1997

National defense ...............................................................
265.0
263.1
266.0
269.8
275.5
282.0
289.8
265.8
International affairs .........................................................
18.1
18.1
23.0
20.1
19.1
18.8
18.8
18.1
General science, space, and technology ..........................
16.7
16.6
16.4
16.4
16.2
16.2
16.2
16.6
Energy ...............................................................................
4.9
4.3
4.7
4.9
4.6
4.5
4.4
4.2
Natural resources and environment ...............................
20.7
21.1
22.4
22.4
21.8
21.7
21.8
22.3
Agriculture ........................................................................
4.2
4.1
4.1
4.0
3.9
3.9
3.9
4.2
Commerce and housing credit .........................................
3.7
2.4
3.3
3.8
5.2
3.2
3.2
2.4
Transportation ..................................................................
13.6
13.8
13.5
14.6
14.7
15.0
15.2
14.5
Community and regional development ...........................
11.6
9.3
10.9
8.3
7.7
7.8
7.9
13.1
Education, training, employment, and social services
36.1
42.4
46.4
47.4
48.5
49.5
50.3
42.5
Health ................................................................................
23.3
25.0
25.1
25.1
25.1
25.2
25.2
25.1
Medicare ............................................................................
2.9
2.6
2.8
2.8
2.7
2.7
2.7
2.6
Income security .................................................................
27.8
26.0
32.6
36.1
38.9
40.4
41.8
22.8
Social Security ..................................................................
3.1
3.5
3.3
3.3
3.2
3.2
3.3
3.5
Veterans benefits and services ........................................
17.8
18.9
18.8
18.7
18.7
18.7
18.7
18.4
Administration of justice .................................................
20.7
22.8
24.4
25.2
24.4
24.8
25.5
22.8
General government .........................................................
11.5
11.8
12.8
12.5
12.1
11.8
11.8
11.9
Allowances ........................................................................ .............. .............. .............. .............. .............. .............. .............. ..............
Total ..........................................................................

501.9

505.8

530.5

535.4

542.5

549.4

560.6

510.7

1998

1999

2000

2001

2002

269.0
22.8
16.4
4.7
22.8
4.1
3.3
13.6
8.8
46.7
25.1
2.8
33.1
3.3
18.8
24.4
13.1
–1.2

271.5
19.9
16.4
4.9
22.5
4.0
3.8
14.7
8.3
47.7
25.1
2.8
36.0
3.3
18.9
25.2
12.7
–2.8

275.4
19.0
16.2
4.6
22.0
3.9
5.2
14.8
7.7
48.8
25.1
2.7
38.0
3.2
18.5
24.4
12.2
–3.8

281.8
18.7
16.2
4.5
21.8
3.9
3.2
15.1
7.8
49.8
25.2
2.7
39.6
3.2
18.5
24.8
11.9
–6.1

289.6
18.6
16.2
4.4
21.8
3.9
3.2
15.4
7.9
50.8
25.2
2.7
41.1
3.3
18.4
25.5
12.0
–8.4

531.5

534.7

538.1

542.7

SUMMARY TABLES

Table 24.

551.7

45

46

MID-SESSION REVIEW

Table 25.

FEDERAL GOVERNMENT FINANCING AND DEBT 1
(In billions of dollars)
1996
Actual

Estimates
1997

1998

1999

2000

2001

–107.3
–174.3
67.0

–37.3
–115.5
78.1

–58.3
–145.0
86.6

–57.4
–152.8
95.4

–41.4
–146.0
104.6

–7.0
–119.1
112.1

63.1
–57.0
120.1

–6.3
–3.9
–1.0
0.6

4.2
–1.9
0.1
0.4

—
–0.7
–1.6
0.5

—
—
—
0.5

—
—
—
0.5

—
—
—
0.5

—
—
—
0.5

–13.0
1.3

–22.6
–0.2

–21.9
0.4

–21.9
0.6

–23.8
0.7

–24.4
0.9

–24.0
1.2

Total, means of financing other than borrowing from the public ..........................

–22.3

–20.0

–23.3

–20.8

–22.6

–23.0

–22.2

Total, requirement for borrowing from
the public ............................................
Change in debt held by the public ......................

–129.6
129.6

–57.3
57.3

–81.6
81.6

–78.2
78.2

–63.9
63.9

–30.0
30.0

40.9
–40.9

Debt Outstanding, End of Year:
Gross Federal debt:
Debt issued by Treasury ..................................
Debt issued by other agencies .........................

5,146.9
35.1

5,342.8
33.3

5,568.5
29.7

5,810.9
29.5

6,047.6
29.0

6,261.1
28.6

6,415.3
28.2

Financing:
Surplus or deficit (–) ............................................
(On-budget) .......................................................
(Off-budget) .......................................................
Means of financing other than borrowing from
the public:
Changes in: 2
Treasury operating cash balance .................
Checks outstanding, etc. 3 ............................
Deposit fund balances ..................................
Seigniorage on coins .........................................
Less: Net financing disbursements:
Direct loan financing accounts ....................
Guaranteed loan financing accounts ...........

2002

Total, gross Federal debt ..............................
Held by:
Government accounts .......................................
The public .........................................................
Federal Reserve Banks .................................
Other ..............................................................

5,181.9

5,376.1

5,598.2

5,840.3

6,076.6

6,289.7

6,443.4

1,449.0
3,733.0
390.9
3,342.0

1,585.8
3,790.3

1,726.3
3,871.9

1,890.2
3,950.1

2,062.5
4,014.0

2,245.7
4,044.0

2,440.3
4,003.1

Debt Subject to Statutory Limitation, End of
Year:
Debt issued by Treasury ......................................
Less: Treasury debt not subject to limitation 4
Agency debt subject to limitation .......................
Adjustment for discount and premium 5 ............

5,146.9
–15.5
0.1
5.8

5,342.8
–15.5
0.1
5.8

5,568.5
–15.5
0.1
5.8

5,810.9
–15.5
0.1
5.8

6,047.6
–15.5
0.1
5.8

6,261.1
–15.5
0.1
5.8

6,415.3
–15.5
0.1
5.8

Total, debt subject to statutory limitation 6 ...

5,137.2

5,333.1

5,558.8

5,801.2

6,037.9

6,251.4

6,405.6

1 Treasury securities held by the public and zero-coupon bonds held by Government accounts are almost entirely measured at sales price plus amortized discount or less amortized premium. Agency debt is almost entirely measured at face
value. Treasury securities in the Government account series are measured at face value less unrealized discount (if any).
2 A decrease in the Treasury operating cash balance (which is an asset) is a means of financing the deficit and therefore
has a positive sign. An increase in checks outstanding or deposit fund balances (which are liabilities) is also a means of financing the deficit and therefore also has a positive sign.
3 Besides checks outstanding, includes accrued interest payable on Treasury debt, miscellaneous liability accounts,
allocations of special drawing rights, and, as an offset, cash and monetary assets other than the Treasury operating cash
balance, miscellaneous asset accounts, and profit on sale of gold.
4 Consists primarily of Federal Financing Bank debt.
5 Consists of unamortized discount (less premium) on public issues of Treasury notes and bonds (other than zero-coupon
bonds) and unrealized discount on Government account series securities.
6 The statutory debt limit is $5,950 billion.