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F I S CAL YEA R 2009

Mid-Session
Review

Budget of the U.S. Government

OFFICE OF MANAGEMENT AND BUDGET

MID-SESSION
REVIEW

A

G E ME

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TA

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TES
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UNITED

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BUDGET

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OFFICE O

IVE OFFICE
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PRESIDEN

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EXE
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BUDGET OF THE UNITED STATES GOVERNMENT

FISCAL YEAR 2009

i

Table of Contents

Page

Summary.............................................................................................................................

1

Economic Assumptions.......................................................................................................

9

Receipts.............................................................................................................................

13

Spending............................................................................................................................

15

Summary Tables...............................................................................................................

19

Glossary.............................................................................................................................

41

iii

List of Charts

Page

Chart 1.

Balancing the Budget.................................................................................

1

Chart 2.

Americans are Not Under-Taxed...............................................................

4

Chart 3.

Federal Outlays in 2008.............................................................................

5

Chart 4.

Declining Federal Debt...............................................................................

6

Chart 5.

Unsustainable Growth in Entitlements....................................................

7

List of Tables

Page

Table 1.

Changes from the February Budget...........................................................

8

Table 2.

Economic Assumptions ...........................................................................

10

Table 3.

Comparison of Economic Assumptions....................................................

11

Table 4.

Change in Receipts...................................................................................

13

Table 5.

Change in Outlays....................................................................................

16

Table S–1.

Budget Totals............................................................................................

21

Table S–2.

Discretionary Funding by Category.........................................................

22

Table S–3.

Discretionary Funding by Major Agency.................................................

23

Table S–4.

Homeland Security Funding by Agency .................................................

24

Table S–5.

Mandatory Proposals ...............................................................................

25

Table S–6

Receipts Proposals....................................................................................

30

Table S–7.

Budget Summary by Category.................................................................

34

Table S–8.

Receipts by Source....................................................................................

35

Table S–9.

Outlays by Agency....................................................................................

36

Table S–10.

Outlays by Function.................................................................................

37

Table S–11.

Current Services Baseline Category Totals.............................................

38

Table S–12.

Outlays for Mandatory Programs under Current Law...........................

39

Table S–13.

Federal Government Financing and Debt...............................................

40

v

Summary
The Mid-Session Review updates the Administration’s estimates of Government receipts, outlays, and deficits or surpluses to reflect economic, legislative, and other changes
since the President’s Budget was released in
February. For 2008, the budget deficit is now
estimated to be $389 billion, $21 billion lower
than estimated in February. At 2.7 percent of
gross domestic product (GDP), the 2008 deficit is projected to be only slightly above the
average of the past 40 years, 2.4 percent of
GDP. Excluding the tax rebates and other
provisions in the enacted bipartisan economic
stimulus package, the 2008 deficit would be
only 1.9 percent of GDP. Although projected
to rise to $482 billion or 3.3 percent of GDP in
2009, the deficit is still projected to be below
the recent peak of 3.6 percent of GDP in 2004.
The deficit is projected to fall sharply after
2009, with the deficits in 2010 and 2011 only
slightly higher than projected in February.
These projected deficits are both manageable
and temporary if spending is kept in check,
the tax burden remains low, and the economy
continues to grow. Last year, the President
announced a goal of balancing the budget by
2012; and, with the President’s pro-growth
economic policies and commitment to fiscal

restraint, the budget remains on track to attain balance by 2012.
promoting economic growth
Since he took office, the President has
worked to promote economic growth and provide opportunity to all Americans. Beginning
with his first tax relief package enacted in
2001 and continuing through six additional
significant tax relief packages enacted during
his terms in office, the President has successfully promoted low-tax, pro-growth economic
policies. Recently, the President worked with
Congress to enact legislation that provides
one-time tax rebate payments to households
and temporary investment tax incentives to
businesses in an effort to help ensure the
recent economic slowdown is both mild and
short-lived. This bipartisan legislation, the
Economic Stimulus Act of 2008, provides an
immediate stimulus to the Nation’s economy
of over $150 billion, or more than one percent
of GDP.
Despite the recent slower economic growth
associated with the declines in housing markets, disruptions in credit markets, and in-

Chart 1. Balancing the Budget
Deficit as a percent of GDP
4.0%
3.6%

Actuals

3.3%

3.0%

2.0%

Projections

2.7%

2.6%
1.9%
1.2%

1.0%

1.1%
0.6%
-0.3% -0.2%

0.0%

-1.0%
2004 2005 2006 2007

2008 2009 2010 2011 2012

2013

1

2

Mid-Session Review

creases in food and energy prices, the Nation’s economy has continued to expand and
remains fundamentally resilient. The U.S.
economy is the largest and most diverse national economy in the world and has been
bolstered by a low-tax environment, liberalized international trade and growing exports,
a relatively low rate of underlying inflation,
and sustained growth in labor productivity.

by recent challenges. Nonetheless, the tax rebate payments and business investment tax
incentives of the stimulus legislation are expected to help support economic performance
this year, and the economy is expected to return to stronger growth in coming years.

Exports of goods and services have accounted for more than 40 percent of the Nation’s
economic growth over the past year, growing more than 9 percent in real, inflationadjusted terms over the four quarters ending in March of this year. Representing over
12.5 percent of GDP, exports now account for
a greater share of the Nation’s output than
at any time in history. The contribution from
the improving U.S. international trade position has offset much of the negative effects
on growth from declines in residential investment.

The President’s major tax relief proposals
enacted during his terms in office reflect a
commitment to rewarding hard work and
prudent risk-taking. These provisions have
allowed Americans to keep more of their
hard-earned money and encouraged businesses to make additional investments. Because of the President’s efforts, workers and
businesses saved $1.3 trillion in taxes by the
end of calendar year 2007. The enacted tax
relief has led to reductions in every marginal
income tax rate, the marriage tax penalty,
and the capital gains and dividend tax rates;
the creation of a new low ten percent income
tax bracket; a doubling of the child tax credit; reductions in and the eventual elimination of the death tax; and increases in small
business investment incentives. More than
six million individuals and families will see
their income tax liabilities completely eliminated this year.

Although food and energy prices have increased significantly over the past year, the
underlying rate of inflation has been relatively low by historical standards. Excluding
volatile food and energy prices, the consumer
price index increased a modest 2.4 percent
over the 12-month period ending in June.
Including food and energy, the overall price
index rose 5.0 percent. Although higher for
this year than anticipated in February, the
overall rate of inflation is expected to return
to lower rates in later years as projected in
the February Budget.

providing tax relief for all
americans

The Nation’s labor productivity growth
remains relatively strong by historical standards despite the recent economic slowdown
and the changes in the near-term economic
outlook. Ongoing improvements in labor productivity, which reflect efficiency gains of the
labor force, are fundamental to long-term
economic growth and sustained increases
in the Nation’s standard of living. Since the
President took office, productivity growth
has averaged 2.6 percent per year, which is
greater than the averages for each of the
past three decades.

The President’s tax relief has been good
for individual Americans and good for the
economy. However, it is set to expire at the
end of 2010. If Congress does not extend
these tax relief provisions, Americans can
expect to pay an additional $280 billion per
year in taxes. One hundred sixteen million
taxpayers will face an increase in their taxes
if Congress does not act, with the average increase expected to be $1,800. Nearly 50 million married couples will see a tax increase
of more than $3,000, on average, if the marriage penalty is reinstated. Forty-three million families with children will face tax increases averaging $2,300. Seniors and single
women will also be forced to pay higher taxes,
with 18 million seniors and 12 million single
women facing increases averaging $2,200
and $1,100, respectively.

Even with its fundamental flexibility and
resilience, the Nation’s economy is not immune to adverse shocks; economic performance clearly has been negatively affected

The President’s tax relief has benefitted
businesses as well as individuals. If the tax
relief provisions are not extended, approximately 27 million small business owners will

Summary

face an average $4,000 tax increase. Lower
capital gains and dividend tax rates and incentives for small business investment are
necessary to strengthen the economy. The
President urges the Congress to extend permanently all of his tax relief proposals. The
sooner these provisions are extended, the
sooner the uncertainty will be eliminated for
financial markets and the sooner small businesses and families will be able to plan with
confidence for the future.
In passing the Economic Stimulus Act
of 2008, the Administration and Congress
worked together in a bipartisan manner
to achieve results for the American people.
The bipartisan growth package delivered
stimulus payments directly to individuals,
averaging more than $800 per payment and
providing Americans with additional money
for their families. In addition, the growth
package provides temporary tax incentives
for investment, reducing the cost for businesses to increase their production capacity.
This package should bolster the economy in
the short run, helping to reduce the adverse
effects of the recent economic slowdown.
Ensuring fiscal discipline
The President’s fiscal policy approach has
focused on pro-growth economic policies and
fiscal restraint. As noted above, the President’s tax relief policies have promoted economic growth and rewarded hard-working
Americans. The President’s policies of spending restraint have held down the growth in
spending in the face of significant fiscal pressures on the Government over the past seven
and a half years as a result of the September
11th terrorist attacks, the ensuing Global
War on Terror, Hurricane Katrina, and increasing entitlement costs. These challenges
came on top of significant underfunding in
national security, an inherited recession, and
an economy built on a high-tech bubble. The
President’s tax relief and other pro-growth
policies worked to strengthen the economy,
and the resulting revenue growth helped
drive down the deficit substantially over
the last three years. Yet, as a result of the
recent slowdown in economic activity and
the subsequent bipartisan economic growth
package, deficits for this year and next year
are projected to increase. Despite myriad fiscal pressures, the President is committed to

3
policies that restrain Federal spending and
balance the budget by 2012.
In February, the President proposed to impose strict constraints on non-security discretionary spending and address the rapid
rate of growth in entitlement spending. Specifically, the President proposed to eliminate
or reduce 151 unnecessary or duplicative
programs totaling $18 billion and to hold the
growth in non-security spending to below
one percent for 2009. This reduction in nonsecurity discretionary spending is especially
dramatic given that this category of spending was growing at an annual rate of 16.6
percent during the final year of the Clinton
Administration. In addition, the President
proposed reasonable reforms to entitlement
spending, including Medicare, Medicaid, the
Pension Benefit Guaranty Corporation, Social Services Block Grants, the Perkins loan
program, and the Disability Insurance program. During his tenure, the President has
repeatedly offered sensible proposals to reduce growth in the automatic spending that
now accounts for almost two-thirds of the
budget and continues to grow faster than the
economy and faster than the Nation’s ability
to pay for it.
The 2008 Supplemental Appropriations Act,
signed by the President on June 30, provides
U.S. troops in Iraq and Afghanistan with the
resources they need to fight the Global War
on Terror. In addition, it enhances the educational benefits available to service members
by permitting members to transfer unused
benefits to spouses and children, as proposed
by the President. The Supplemental Appropriations Act also provides funding to replenish disaster relief accounts that were used
to fund relief from flooding in the Midwest.
Most importantly, the supplemental appropriations stayed within the President’s discretionary spending thresholds.
While the Congress has successfully completed action on an economic growth package
and supplemental appropriations, its action
in other areas of fiscal policy is discouraging. The Congressional Budget Resolution
adopted by the Congress for the next fiscal
year would increase appropriations made in
2009 by $25 billion and allow an increase of
$209 billion over five years above the President’s Budget. In addition, the Resolution

4

Mid-Session Review

fails to address the unsustainable growth in
entitlement programs. The President urges
Congress to adopt the proposals he made in
February that begin to address the large and
growing entitlement challenge.
mid-session update
The most significant changes to the Government receipt, outlay, and deficit estimates
for this Mid-Session Review are the result of
the recent economic slowdown and changes
in the economic outlook since the Budget was
released. The estimates have been revised
to reflect, among other things, the economic
stimulus package and other legislation enacted since February, higher inflation, and
more modest expectations regarding economic growth.
Changes in Receipts
Receipts for 2008 are now projected to be
$2.553 trillion, $32 billion higher than projected in February and close to the strong receipt
showing witnessed in 2007. At 18.8 percent
of GDP, 2007 receipts were above the 40-year
historical average of 18.3 percent. Last fiscal
year marked the third year in a row in which
receipts grew faster than GDP. It followed
two years of double-digit growth in receipts in

2005 and 2006: 14.5 percent in 2005 and 11.8
percent in 2006.
For the first nine months of the current
fiscal year, receipts were about the same as
they were during the first nine months of
last fiscal year. Individual income tax receipts came in slightly lower than last year,
including the effect of the refunds provided
in the stimulus act, and corporate income tax
receipts came in lower as well. For the fiscal
year as a whole, receipts are now estimated
to be slightly lower than last year. As a result, 2008 receipts are projected to be 17.9
percent of GDP, slightly less than the 40-year
historical average.
Receipts for 2008 are projected to exceed
the February estimate primarily because
of the budgetary treatment of the economic
stimulus package. The President’s Budget
contained an allowance for the stimulus
package, which was shown as a reduction in
receipts of $125 billion in 2008 and $20 billion in 2009. The stimulus legislation that
was enacted in February affects both receipts
and outlays, reducing receipts by $83 billion
in 2008 and $32 billion in 2009, and increasing outlays by $33 billion in 2008 and $6
billion in 2009. The enacted stimulus package has almost the same effect on the deficit

Chart 2. Americans are Not Under-Taxed
Receipts Near Historical Average

Percent of GDP
25

20

40-Year Historical Average 18.3%

15

10
1980

1984

1988

1992

1996

2000

2004

2008

2012

5

Summary

as the President’s allowance, but the effect
on receipts in 2008 is lower than what was
shown in the Budget, resulting in an upward
revision in the 2008 receipts projection.
Receipts for 2009 are projected to be $49
billion lower than estimated in February because of the stimulus package and because
of revised economic assumptions. The MidSession Review assumes more modest nearterm economic growth than was assumed in
the President’s Budget. The effect of more
modest growth also appears in 2010, when
receipts are projected to be $16 billion lower
than projected in February. Even though the
annual levels of nominal GDP are projected to
remain lower in 2011 through 2013 than the
levels assumed in February, reducing growth
in receipts, these reductions are expected to
be more than offset by projected increases
in receipts resulting from other factors. As a
result, receipts for the 2011-2013 period are
projected to be slightly higher than projected
in February.
On average over the five-year budget window of 2009 through 2013, receipts are now
projected to be 18.6 percent of GDP, slightly
above the 40-year historical average of 18.3
percent.

Changes in Outlays
Outlays for 2008 are projected to be $2.942
trillion, $11 billion higher than projected in
February. Legislative action increases outlays by $39 billion, due to the outlay effect
of the rebate payments from the stimulus
act, as discussed above, and to the cost of the
extended unemployment insurance benefits
enacted in the Supplemental Appropriations
Act. Revisions in estimates for economic and
technical factors reduce 2008 outlays by $28
billion. The largest reductions are for interest
outlays on debt held by the public, reflecting
lower-than-expected interest rates, and slower rates of spending from discretionary appropriations. Equal to 20.7 percent of GDP, 2008
outlays are projected to be close to the 40-year
historical average of 20.6 percent.
Outlays for 2009 are projected to be $26
billion higher than projected in February.
Outlays for 2010 are projected to be about
the same as projected in February, but outlays in 2011 through 2013 are projected to be
from $8 billion to $16 billion higher in each
year than projected in February. The outlay
increases in the outyears result primarily
from the enhanced veterans’ education benefits in the 2008 Supplemental Appropriations Act and higher-than-expected annual

Chart 3. Federal Outlays in 2008

Medicare/Medicaid
20.1%

Other
Mandatory
12.8%

Social Security
20.8%

Interest
7.9%
Defense
Discretionary
20.5%

Nondefense
Discretionary
17.9%

6

Mid-Session Review

Chart 4. Declining Federal Debt
Debt held by the public as a percent of GDP
120
110
100
90
80
70
60
50
40
30
20
10
1940

1950

1960

1970

cost-of-living adjustments for Social Security and other benefit programs.
The Deficit Outlook
For 2008, the deficit is projected to be
$389 billion, $21 billion lower than projected in February. The revised deficit estimate
results primarily from changes in economic
and technical assumptions. This estimate
includes $117 billion from individual rebates and other effects of the enacted economic stimulus legislation, without which
the deficit would have been $272 billion. As
a percent of GDP, the 2008 deficit is projected to be 2.7 percent, slightly above the
40-year historical average of 2.4 percent of
GDP. Without the effects of the economic
stimulus package, the deficit for 2008 would
have been lower than the historical average, at 1.9 percent of GDP.
For 2009 through 2011, the deficits are
projected to be higher than projected in
February—$74 billion higher in 2009, $18
billion higher in 2010, and $9 billion higher
in 2011. These increases are due largely to
revised economic and technical assumptions, and, in particular, more modest economic growth and higher cost-of-living
adjustments. In addition to revised as-

1980

1990

2000

2010

sumptions, the economic stimulus package
and the Supplemental Appropriations Act
are projected to have a negative impact on
the 2009 deficit estimate.
As a percent of GDP, the 2009 deficit is
projected to be 3.3 percent. The deficit is
projected to fall to 1.1 percent of GDP in
2010, to continue falling to 0.6 percent of
GDP in 2011, and to reach balance in 2012.
With the adoption of the President’s proposed policies and assuming the economic
slowdown is both mild and temporary, the
budget is projected to generate surpluses
equal to 0.3 and 0.2 percent of GDP in 2012
and 2013, respectively.
Over the past 20 years, debt held by the
public has ranged from 33 to 49 percent
of GDP, and over the past 40 years, it has
averaged 35.6 percent. At the end of 2007,
debt held by the public was $5.0 trillion, or
36.8 percent of GDP, down from 37.1 percent in 2006. The deficits for 2008 and 2009
are expected to increase the debt, as a share
of GDP, to 38.0 percent and 40.2 percent,
respectively. After 2009, falling deficits and
a return to surplus will reduce the debt as
a share of GDP, with the debt in 2013 projected to be 34.0 percent of GDP.

7

Summary

Chart 5. Unsustainable Growth in Entitlements
Percent of GDP

40

Entitlements
Net Interest

Discretionary Spending
Total Revenues

30

20

10

0
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080

addressing future fiscal
challenges
While the projected near-term budget deficits are temporary and manageable, longerterm projections of the budget under current
law show rising Federal budget deficits that
are not sustainable. This year, the first of the
Nation’s 78 million baby boomers became eligible for early retirement benefits under Social Security. In three years, these same individuals will become eligible for Medicare. As
the baby boomers begin to retire en masse,
the cost of Social Security, Medicare, and
Medicaid will increase sharply. In addition,
today’s retired Americans are living longer
than previous generations of retirees, putting additional cost pressures on these three
programs. Furthermore, if health care costs
continue to grow at a rate that exceeds the
rate of growth in the economy, as they have
since 1960, the costs for Medicare and Medicaid will become unsustainable.
As the share of the population that is
working declines relative to the share of the
population that is retired, these increased
entitlement costs will have to be borne by
a relatively smaller working population.
Without meaningful changes to Social Security, Medicare, and Medicaid, these three

programs are likely to exert unsustainable
pressure on Federal spending over the next
several decades and leave policymakers with
bad choices: higher taxes, benefit cuts, or increased debt.
Long-term projections of spending on all
Government programs and interest on Government debt show that by 2080, the budget
deficit could reach 22 percent of GDP if taxes
are assumed to remain at their 40-year historical average of 18.3 percent of GDP and
entitlement spending remains as specified
under current law. In addition, such deficits
could lead to unsustainable levels of Government borrowing with debt held by the public
projected to reach nearly 300 percent of GDP
by 2080. This would be greater than any level
of borrowing on record in the Nation’s history, even after World War II, when borrowing
reached nearly 110 percent of GDP. Before
any such unprecedented level of borrowing
were to occur, there would likely be a crisis
of confidence among potential U.S. creditors
and a significant reduction in the amount
of credit available to the Government. The
President urges Congress to act on the reasonable proposals he made in February to
begin the much-needed process of reforming
these important entitlement programs.

8

Mid-Session Review

Table 1. CHANGES FROM THE FEBRUARY BUDGET
(In billions of dollars)
2008

2009

2010

2011

2009 February Budget deficit ��������������������������������������������������������� –410 –407 –160
–95
Percent of GDP ���������������������������������������������������������������������������� –2.9% –2.7% –1.0% –0.6%
Enacted legislation and policy changes:
Economic Stimulus Act ���������������������������������������������������������
2008 Supplemental Appropriations Act �������������������������������
Farm bill ���������������������������������������������������������������������������������
Other legislation and policy changes 1 ����������������������������������
Subtotal, policy changes �������������������������������������������������������������

2012

2013

48
0.3%

29
0.2%

20092013

8
–7
*
1
2

–18
–18
*
–*
–36

3
2
–2
–*
3

–*
–7
–2
–1
–9

–1
–8
6
–2
–4

–*
–8
–9
–3
–19

–15
–37
–6
–6
–65

–10
9

–38
–6

–20
1

6
–3

13
–1

16
–2

–22
–11

–*
3
–5
–4
7
7
7
12
19

–13
1
–8
–12
5
–1
–28
33
–39

–17
2
–6
–5
7
–5
–23
21
–21

–17
5
–3
1
8
–6
–12
10
1

–17
3
–2
5
7
–2
–6
8
14

–17
5
–1
6
7
–1
–1
6
19

–80
16
–21
–5
34
–15
–71
78
–26

Total, changes ����������������������������������������������������������������������������������

21

–74

–18

–9

10

–*

–91

Mid-Session Review deficit �������������������������������������������������������������

–389

–482

–178

–103

58

29

Percent of GDP ���������������������������������������������������������������������������� –2.7% –3.3% –1.1% –0.6%

0.3%

0.2%

Economic and technical reestimates:
Receipts ����������������������������������������������������������������������������������
Discretionary programs ���������������������������������������������������������
Mandatory:
Social Security and other indexed benefit programs ������
Medicare and Medicaid ����������������������������������������������������
Unemployment compensation �����������������������������������������
Deposit insurance �������������������������������������������������������������
OCS receipts ���������������������������������������������������������������������
Other ���������������������������������������������������������������������������������
Total mandatory ������������������������������������������������������������
Net interest 2 ���������������������������������������������������������������������������
Subtotal, economic and technical reestimates ���������������������������

* $500 million or less.
1
Includes debt service on all policy changes.
2
Includes debt service on all reestimates.

Economic Assumptions
At mid-year 2008 the U.S. economy has continued to expand, but growth has slowed as a
result of the sharp housing decline, disruptions
in financial markets, and high energy prices. 1
Nonetheless, the ongoing growth in the face of
these shocks continues to testify to the fundamental resilience of the U.S. economy. In addition, Federal Reserve monetary policy actions and the timely passage of the Economic
Stimulus Act of 2008 are helping to give the
economy a needed boost. The Administration’s
pro-growth policies—including maintained tax
relief, the promotion of innovative technologies, and pursuit of liberalized international
trade—help to establish a sound foundation
for a return to faster growth in the future.
The Administration expects that the rebound to stronger growth over the next five
years will provide a basis for sustained increases in tax receipts. In recent years, the expansion of the economy helped generate dramatic increases in Federal receipts and lower
Federal budget deficits. Estimates for 2008
suggest, however, that receipts are likely to
decline slightly this year because of the combined effects of the slowdown in the economy
and the income tax rebates provided by the
Economic Stimulus Act. Returning the budget
to a sustainable path toward balance by 2012
will require solid economic growth and continued spending restraint.
Economic Projections
The Administration’s economic projections
are based on information available as of early
June 2008. The projections are summarized in
Table 2, and a comparison with the Blue Chip
consensus (an average of about 50 private sector forecasts) is shown in Table 3. For 2008, the
projected 1.6 percent rate of real GDP growth
matches that of Blue Chip, but the Administration envisions a stronger rebound in 2009–
2011 than the Blue Chip shows.
Real Gross Domestic Product (GDP) and the
Unemployment Rate: Because of the slower
1

Economic performance is discussed in terms of calendar years.
Budget figures are in terms of fiscal years.

rate of growth in recent quarters, real GDP is
expected to increase only 1.6 percent this year,
but it is projected to rise by 2.2 percent in 2009
and to reach a strong 3.4 percent growth rate
in 2010–2011. Beyond the next three years,
real GDP growth is projected to moderate, declining gradually to a 3.1 percent rate in 2012
and 2.9 percent in 2013 as labor force growth
slows with the aging of the work force.
Because of the recent slower economic
growth, the labor market is likely to remain
sluggish for a period of time before returning
to better performance. The unemployment rate
is projected to average 5.6 percent in 2009, up
from 5.3 percent in 2008 and 4.6 percent in
2007. With a return to stronger growth, the
unemployment rate is expected to decline to
an annual average of 4.8 percent by 2012.
Inflation: Inflation has increased in recent
years, in large part because of surging food and
energy prices, and continued rapid increases
in these prices contributed to 5 percent inflation in the first half of 2008. If food and energy prices stabilize as expected, the inflation
rate should decline. Core inflation, excluding
food and energy prices, has remained relatively stable at around 2.3 percent per year,
and higher unemployment will put downward
pressure on inflation in 2009. On a year-overyear basis, the consumer price index (CPI)
is projected to increase 3.8 percent this year
and then to rise by 2.3 percent in 2009 and 2.2
percent in 2010 before settling in on a 2.3 percent growth rate in 2011–2013. Growth in the
GDP price index is projected to be 2.2 percent
in 2008 and 2009, 2.1 percent in 2010, and 2.0
percent in 2011 and beyond. These projections
are consistent with well-contained inflation
expectations and the Federal Reserve’s stated
intention to keep inflation under control.
Interest Rates: The Administration’s projections for interest rates are based largely on
financial market data and private market expectations at the time that the forecast was
developed in early June. The 3-month Treasury bill rate is expected to average 1.9 percent in 2008 and then to rise to 4.1 percent by
2011. The yield on the 10-year Treasury note
is projected to average 4.0 percent in 2008
9

10

Mid-Session Review

and then to rise to 5.3 percent by 2012. At
that point, projected real interest rates would
be close to their historical averages given the
projected rate of inflation.

Incomes and Income Shares: Labor compensation—consisting of wages and salaries and
employee fringe benefits such as employerprovided insurance and pensions—is projected to rise relative to the size of the economy,

Table 2. ECONOMIC ASSUMPTIONS 1
(Calendar years; dollar amounts in billions)
2007
Actual
Gross Domestic Product (GDP):
Levels, dollar amounts in billions:
Current dollars ���������������������������������������������������������
Real, chained (2000) dollars �������������������������������������
Chained price index (2000 = 100), annual average �
Percent change, fourth quarter over fourth quarter:
Current dollars ���������������������������������������������������������
Real, chained (2000) dollars �������������������������������������
Chained price index (2000 = 100) ����������������������������
Percent change, year over year:
Current dollars ���������������������������������������������������������
Real, chained (2000) dollars �������������������������������������
Chained price index (2000 = 100) ����������������������������

Projections
2008

2009

2010

2011

2012

2013

13,841 14,370 15,007 15,850 16,730 17,585 18,457
11,567 11,751 12,010 12,423 12,849 13,241 13,624
119.7
122.3
125.0
127.6
130.2
132.8
135.5
5.1
2.5
2.6

3.5
1.2
2.3

5.1
2.9
2.1

5.7
3.5
2.1

5.4
3.3
2.0

5.1
3.0
2.0

4.9
2.8
2.0

4.9
2.2
2.7

3.8
1.6
2.2

4.4
2.2
2.2

5.6
3.4
2.1

5.5
3.4
2.0

5.1
3.1
2.0

5.0
2.9
2.0

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

1,877
6,366
3,055

1,694
6,643
3,199

1,890
6,979
3,329

1,950
7,369
3,499

1,958
7,791
3,636

1,971
8,187
3,766

2,019
8,585
3,937

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

207.3
4.0
2.9

215.2
3.1
3.8

220.2
2.2
2.3

225.0
2.2
2.2

230.1
2.3
2.3

235.4
2.3
2.3

240.8
2.3
2.3

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

4.8
4.6

5.5
5.3

5.5
5.6

5.1
5.3

4.9
5.0

4.8
4.8

4.8
4.8

Federal pay raises, January, percent:
Military 4 ��������������������������������������������������������������������
Civilian 5 ��������������������������������������������������������������������

2.7
2.2

3.5
3.5

3.4
2.9

NA
NA

NA
NA

NA
NA

NA
NA

Interest rates, percent:
91-day Treasury bills 6 ����������������������������������������������
10-year Treasury notes ���������������������������������������������

4.4
4.6

1.9
4.0

2.8
4.6

3.9
4.9

4.1
5.2

4.1
5.3

4.1
5.3

NA = Not Available
1
Based on information available as of early June 2008.
2
Rent, interest, dividend, and proprietors’ income components of personal income.
3
Seasonally adjusted CPI for all urban consumers.
4
Percentages apply to basic pay only; percentages to be proposed for years after 2009 have not yet been determined.
5
Overall average increase, including locality pay adjustments. Percentages to be proposed for years after 2009 have
not yet been determined.
6
Average rate, secondary market (bank discount basis).

11

Economic Assumptions

while the share of corporate profits declines.
Profits have been unusually high in recent
years, and the share of compensation has been
below its long-run average. During the projection period, labor compensation is expected
to catch up with the rising productivity trend
and return to its historical average relative to
GDP. The wage share in GDP is also expected
to rise from its recent low level, but less than
for total compensation because the share of
employee benefits in total compensation is expected to increase further, holding down the
expected rise in wages and salaries.

Forecast Comparisons
Table 3 compares the Mid-Session Review
(MSR) economic assumptions with those from
the 2009 Budget and from the July Blue Chip
consensus. While the Administration forecast
generally assumes that the President’s budget policies will be enacted as proposed, private forecasters use their own assumptions
about fiscal policy.
In the medium term, the Administration’s
economic forecast for the MSR is similar to the
forecast in the 2009 Budget published in Feb-

Table 3. COMPARISON OF ECONOMIC ASSUMPTIONS
(Calendar Years)
Projections
2008

2009

2010

2011

2012

2013

Nominal GDP (in billions of dollars):
MSR �������������������������������������������������������������������������������������
2009 Budget ������������������������������������������������������������������������
Blue Chip Consensus ����������������������������������������������������������

14,370
14,480
14,391

15,007
15,215
14,979

15,850
15,987
15,742

16,730
16,782
16,545

17,585
17,603
17,371

18,457
18,462
18,222

Real GDP:1
MSR �������������������������������������������������������������������������������������
2009 Budget ������������������������������������������������������������������������
Blue Chip Consensus ����������������������������������������������������������

1.6
2.7
1.6

2.2
3.0
1.7

3.4
3.0
2.9

3.4
2.9
2.9

3.1
2.8
2.8

2.9
2.8
2.7

Consumer Price Index:1
MSR �������������������������������������������������������������������������������������
2009 Budget ������������������������������������������������������������������������
Blue Chip Consensus ����������������������������������������������������������

3.8
2.7
4.2

2.3
2.1
2.9

2.2
2.3
2.3

2.3
2.3
2.3

2.3
2.3
2.3

2.3
2.3
2.3

Unemployment Rate:2
MSR �������������������������������������������������������������������������������������
2009 Budget ������������������������������������������������������������������������
Blue Chip Consensus ����������������������������������������������������������

5.3
4.9
5.4

5.6
4.9
5.9

5.3
4.8
5.1

5.0
4.8
5.0

4.8
4.8
4.9

4.8
4.8
4.8

1.9
3.7
1.9

2.8
3.8
2.5

3.9
4.0
4.3

4.1
4.1
4.3

4.1
4.1
4.4

4.1
4.1
4.4

4.0
4.6
3.9

4.6
4.9
4.4

4.9
5.1
5.1

5.2
5.2
5.1

5.3
5.3
5.2

5.3
5.3
5.2

Interest Rates:2
91-Day Treasury Bills:
MSR ��������������������������������������������������������������������������������
2009 Budget �������������������������������������������������������������������
Blue Chip Consensus ����������������������������������������������������
10-Year Treasury Notes:
MSR ��������������������������������������������������������������������������������
2009 Budget �������������������������������������������������������������������
Blue Chip Consensus �����������������������������������������������������

MSR = Mid-Session Review
Sources: Chapter 12, “Economic Assumptions” of Analytical Perspectives, FY 2009 Budget; July 2008 Blue Chip Economic Indicators, Aspen Publishers, Inc. for 2008 and 2009; March 2008 Blue Chip Economic Indicators for 2010–2013.
1
 Year-over-year percent change.
2
Annual averages, percent.

12
ruary. The most significant difference is that
real GDP growth for 2008 is now expected
to be 1.6 percent on a year-over-year basis
compared to 2.7 percent in the Budget. In
2009, real growth is also lowered to 2.2 percent compared with 3.0 percent in the 2009
Budget. The lower growth forecast results in
higher unemployment than previously projected. Following this period of slow growth,
a catch-up is projected for 2010–2011 which
exceeds the growth rates for those years in
the 2009 Budget. The unemployment rate is
higher in the current projections compared
with the Budget for the next few years, but
it returns to the same 4.8 percent average in
the long run. Also of note, inflation is higher
for 2008, but the long-run projections are the
same. The interest rate projections are lower
in the near term but also return to the same
long-run levels as in the Budget.

Mid-Session Review

SUMMARY
The economic news since the Budget was
issued has been mixed. Economic growth
slowed late last year and remains subdued
so far in 2008. The housing slump, tighter
conditions in credit markets, and continuing energy price shocks have cut into the
expected growth rate. Even though inflation
has been boosted by higher energy prices,
the long-run inflation outlook remains favorable if energy prices stabilize. The MidSession Review economic forecast projects a
return to stronger economic growth and to
low and stable inflation in 2009 and subsequent years. With these changes, interest
rates on Treasury securities are likely to rise
somewhat, and healthy job creation and real
wage growth are expected to resume.

Receipts
The current estimate of receipts for 2008
exceeds the February Budget estimate by $32
billion. The current estimates for 2009 and
2010 are below the February Budget estimates
by $49 billion and $16 billion, respectively,
and the current estimates for 2011 through
2013 exceed the February Budget estimates,
resulting in receipts that are $28 billion lower
than the February Budget estimates over the
five-year period, 2009 through 2013. These
changes are the net effect of revised economic
assumptions, technical reestimates, enacted
legislation, and revisions in the Administration’s proposals.
Revised economic assumptions and technical reestimates reduce receipts by $21 to $25
billion in 2008 through 2010, reduce receipts
modestly in 2011, and increase receipts in

2012 and 2013. Lower-than-expected collections of corporation income taxes are primarily responsible for the net decrease in
2008 receipts. This reduction in corporation
income taxes is in large part attributable to
lower-than-expected corporation income tax
liability in 2007 and 2008, as reflected in collection experience since February. The downward revisions for 2009 through 2011 reflect
increases in individual income taxes that are
more than offset by reductions in all other
sources of receipts, primarily corporation income taxes and social insurance and retirement receipts. For 2012 and 2013, increases in
both individual income taxes and corporation
income taxes more than offset the reductions
in all other sources of receipts, resulting in an
upward revision in receipts. The increases in
individual income taxes in each year are pri-

Table 4. CHANGE IN RECEIPTS
(in billions of dollars)
2008

2009

2010

2011

2012

2009–
2013

2013

February estimate ���������������������������������������������������������������� 2,521.2 2,699.9 2,931.3 3,076.4 3,269.9 3,428.2
Changes due to:
Economic assumptions and technical reestimates:
Individual income taxes ���������������������������������������������

9.0

21.5

7.3

15.0

16.0

16.0

75.8

Corporation income taxes �������������������������������������������

–27.0

–19.8

–10.8

–5.3

0.6

4.5

–30.8

Social insurance and retirement receipts ������������������

–9.0

–16.8

–10.3

–6.5

–6.3

–6.7

–46.6

Other sources of receipts ��������������������������������������������
Subtotal, economic assumptions and technical
reestimates ��������������������������������������������������������

2.4

–7.8

–7.3

–6.2

–5.9

–5.8

–32.9

–24.6

–22.9

–21.1

–3.0

4.3

8.1

–34.5

Economic Stimulus Act �����������������������������������������
Less February allowance for economic growth
package ��������������������������������������������������������������

–83.4

–32.0

13.0

7.9

5.4

4.0

–1.6

125.0

20.0

–10.0

–8.0

–6.0

–4.0

–8.0

Net effect of Economic Stimulus Act �����������������

41.7

–12.0

3.0

–0.1

–0.6

–0.0

–9.6

Other enacted legislation �������������������������������������������

–0.3

1.0

1.7

1.3

5.1

–4.7

4.4

Economic and technical revisions in proposals ���������

15.0

–14.7

0.8

9.4

9.1

7.4

12.0

Subtotal, policy ���������������������������������������������������

56.3

–25.7

5.6

10.7

13.6

2.7

6.9

Total change ��������������������������������������������������������

31.8

–48.6

–15.5

7.7

17.9

10.8

–27.7

Policy:
Economic stimulus:

Mid-session estimate ����������������������������������������������������������� 2,552.9 2,651.4 2,915.8 3,084.1 3,287.8 3,439.0

13

14
marily the net effect of increases attributable
to revisions in estimating models to reflect
current collection experience that are partially offset by downward revisions in wages and
salaries and proprietors’ income. Downward
revisions in wages and salaries and proprietors’ income—the tax base for Social Security and Medicare payroll taxes­—are in large
part responsible for the reductions in social
insurance and retirement receipts in each
year. The reductions in corporation income
taxes in 2009 through 2011 are the combined
effect of downward revisions in taxable profits
and downward revisions attributable to new
tax and collections data used in the estimating models that were not available at the time
the budget estimates were made. In 2012 and
2013, upward revisions in taxable profits more
than offset the reductions attributable to revisions in the estimating models, resulting in a
net increase in corporation income taxes.
Policy changes since February, which include
legislated tax changes and revisions in the
Administration’s proposals, increase receipts
by $56 billion in 2008, reduce receipts by $26
billion in 2009, and increase receipts by $3 to
$14 billion in 2010 through 2013. The February Budget included an allowance for a proposed economic growth package that provided
$125 billion in tax relief in 2008, $20 billion
in tax relief in 2009, and tax increases of $4
to $10 billion in 2010 through 2013. Congress
acted quickly in a bipartisan manner, and the
Economic Stimulus Act of 2008 was signed
by President Bush on February 13, 2008. The
stimulus provided by the enacted legislation
was similar in size to the President’s proposal, but a portion of the stimulus—payments
to U.S. territories and payments in excess of
tax liability—was provided as outlays rather

Mid-Session Review

than refunds of receipts. The tax rebates to
certain individuals and incentives for business investment in this act reduce receipts
by $83 billion in 2008, reduce receipts by $32
billion in 2009, and increase receipts by $4
to $13 billion in 2010 through 2013. Relative
to the economic growth package proposed in
the February Budget, this act increases receipts by $42 billion in 2008, reduces receipts
by $12 billion in 2009, and reduces receipts
by a net $10 billion over the five-year period,
2009 through 2013. Other legislation enacted
since February that affects receipts includes
the Andean Trade Preference Extension Act
of 2008, the Heroes Earnings Assistance and
Relief Tax Act of 2008, the 2008 Supplemental
Appropriations Act, and the Food, Conservation, and Energy Act of 2008. Together, these
legislated tax changes reduce receipts by less
than $1 billion in 2008 and increase receipts
by a net $4 billion over the five years, 2009
through 2013, relative to similar proposals in
the February Budget.
Revisions in the estimates of the February
Budget proposals that have not been enacted increase receipts by $15 billion in 2008,
reduce receipts by $15 billion in 2009, and
increase receipts by $12 billion over the five
years, 2009 through 2013. The changes in
2008 and 2009 are in large part attributable
to delay in enactment of the Administration’s
proposal to prevent the number of Alternative
Minimum Tax (AMT) taxpayers for tax year
2008 from increasing sharply, which reduces
the receipt loss in 2008 and increases the loss
in 2009. The increases in 2010 through 2013
are in large part attributable to changes in
the estimated cost of extending the 2001 and
2003 tax cuts.

Spending
Total outlays for 2008 are now estimated
to be $2,942 billion, an increase of $11 billion
from the February estimate. For 2009, the estimate of total outlays has increased by $26
billion relative to February, to $3,133 billion.
These increases are largely due to legislation
enacted since February.
Policy changes
In total, policy changes increase outlays by
$39 billion in 2008 and $25 billion in 2009.
Over the five-year period 2009 through 2013,
policy changes increase outlays by $60 billion.
Since the transmittal of the Budget, the Congress has enacted the Economic Stimulus Act
of 2008, the Food, Conservation, and Energy
Act of 2008 (the “Farm Bill”), and the 2008
Supplemental Appropriations Act.
Economic Stimulus Act.—The recovery rebates provided to individuals by the stimulus
act are recorded as outlays in cases where the
rebates exceed an individual’s income tax liability. (The estimates for stimulus in the
February Budget were entirely receipts.)  In
addition, the act provided stimulus payments
to U.S. territories in lieu of individual rebates.
These provisions increase outlays relative to
the February Budget by $33 billion in 2008
and $6 billion in 2009.
2008 Supplemental Appropriations Act.—
The Supplemental Appropriations Act provided discretionary appropriations for the
Global War on Terror, largely as proposed in
the February Budget, along with additional
emergency funding related to the Midwest
floods, Hurricane Katrina recovery, and other
items. It also included a 13-week extension of
unemployment benefits and enhancements
to educational benefits for service members,
including transferability to spouses and dependents. Relative to the February Budget,
the act increases outlays by $7 billion in 2008,
$18 billion in 2009, and $38 billion over 2009
through 2013.
2008 Farm Bill.—The Farm Bill decreased
outlays relative to the February Budget by $1
billion in 2008 and had a minimal effect on

2009. Over the five-year period 2009 through
2013, the bill increases outlays by $7 billion.
Estimating changes
Estimating changes arise from non-policy
related factors including changes in economic
assumptions, discussed earlier in this Review,
and changes in technical factors. For 2008 and
2009, estimated outlays are $28 billion lower
and $1 billion higher, respectively, than in
February for non-policy related reasons. Over
the period 2009 through 2013, outlays are $4
billion above February for non-policy related
reasons.
Discretionary appropriations.—Outlays for
discretionary appropriations decrease by $9
billion in 2008 and increase by $6 billion in
2009 relative to the February Budget as a result of estimating changes. These changes reflect slower spending of regular and emergency
appropriations in the Department of Homeland Security, the Department of Housing and
Urban Development, the Corps of Engineers,
and other agencies. Outlays for the highway
trust fund for 2008 are now estimated at $1.6
billion less than originally projected. In addition, receipts for the highway account portion
of the trust fund are now projected to decline
by $1.5 billion for the remainder of the authorization period. As a result of these adjustments, the 2009 end-of-year balance for the
highway account is estimated to be –$3.1 billion as of the Mid-Session Review, compared
with –$3.2 billion in the 2009 Budget.
Social Security.—Estimating changes increase outlays for Social Security by $47 billion over the next five years. The increase
largely results from higher projections for
Cost of Living Adjustments (COLA) as well as
recent program experience and updated demographic assumptions in the 2008 Trustees’
Report resulting in higher average benefit
amounts.
Outer Continental Shelf (OCS) receipts.—
OCS receipts, which are recorded as offsets
to outlays, are estimated to increase by $7
billion in 2008 and $34 billion over the next
15

16

Mid-Session Review

five years. The increase results from higher
forecasts for oil and natural gas prices and
changes in estimates of OCS oil and natural
gas production.

benefits by $21 billion over five years, independent of the extension of benefits enacted
in the Supplemental Appropriations Act. This
increase largely results from technical changes that adjusted current insured employee
rate levels and average weekly benefits, and
economic changes from higher-than-expected
current and projected unemployment rates.

Medicare.—Estimates of Medicare outlays
are approximately $4 billion lower for 2008
and $22 billion lower over the 2009 through
2013 period. The lower outlays are driven by
reduced estimated Hospital Insurance outlays, which mainly result from revised estimates of an accounting error.

Food Stamps.—Outlays for Food Stamps
are estimated to increase by $20 billion over
the next five years due to economic and technical factors. The increase is largely due to
changes in the latest Thrifty Food Plan, which
is used to index Food Stamp benefit levels,

Unemployment compensation.—Estimating
changes increase outlays for unemployment

Table 5. CHANGE IN OUTLAYS
(In billions of dollars)

February estimate �������������������������������������

2008

2009

2010

2011

2012

2013

2,931.2

3,107.4

3,091.3

3,171.2

3,221.8

3,398.9

33.3

5.6

*

*

*

–*

5.6

Changes due to policy:
Economic Stimulus Act �������������������
2008 Supplemental Appropriations
Act ������������������������������������������������

2009-13

7.3

17.8

–2.2

6.9

7.8

8.0

38.2

Farm Bill ������������������������������������������
Other legislation and policy
changes 1 ��������������������������������������

–0.8

0.2

2.5

2.0

–1.6

3.8

6.8

–0.6

0.9

1.3

1.8

2.2

2.8

9.0

Subtotal, policy ��������������������������������������

39.3

24.5

1.5

10.7

8.4

14.6

59.7

Changes due to reestimates:
Discretionary appropriations ����������

–8.6

6.0

–0.5

3.2

1.0

1.5

11.2

Social Security ���������������������������������

0.6

6.8

9.6

9.6

10.0

11.0

46.9

OCS receipts ������������������������������������

–7.0

–5.2

–6.9

–7.8

–7.2

–7.1

–34.2

Medicare �������������������������������������������

–3.8

–1.5

–3.6

–6.4

–4.0

–6.3

–21.8

Unemployment compensation ���������

4.5

8.0

6.1

3.4

1.9

1.5

20.8

Food Stamps �������������������������������������

0.5

3.6

4.2

4.1

3.7

3.8

19.5

Federal retirement ���������������������������

0.2

1.6

2.0

1.9

1.9

2.0

9.4

Foreign Military Sales trust fund ���

–3.3

–0.7

2.3

1.9

1.5

1.1

6.1

Medicaid �������������������������������������������

0.9

0.8

1.1

1.2

1.4

1.0

5.4

Deposit insurance ����������������������������

4.3

12.1

4.7

–0.8

–4.6

–6.1

5.3

Digital television auction receipts ��

–5.1

.........

.........

.........

.........

.........

.........

Other programs �������������������������������

0.9

2.4

3.2

5.2

1.9

0.5

13.3

Net interest 2 �������������������������������������

–12.2

–32.7

–21.5

–10.0

–7.6

–6.2

–78.0

Subtotal, reestimates ����������������������������

–28.1

1.3

0.7

5.5

–0.2

–3.3

3.9

Total, changes ��������������������������������������������

11.2

25.8

2.2

16.2

8.1

11.2

63.6

Mid-Session estimate ��������������������������������

2,942.4

3,133.2

3,093.5

3,187.5

3,229.9

3,410.1

* $50 million or less
1
 Includes debt service on all policy changes.
2
 Includes debt service on all reestimates.

Spending

and changes in participation rates due to increases in actual unemployment.
Federal retirement.—Over the next five years,
estimating changes increase outlays by $9 billion. These increases are almost entirely due to
the effect of revised COLA projections for the
civilian and military retirement programs.
Foreign Military sales.—Outlays in the Foreign Military Sales trust fund net of advance
payments on new orders are expected to fall
by $3 billion in 2008 and $1 billion in 2009,
due to higher projections of new supply orders
supporting Afghan and Iraqi security forces as
well as increasing military sales to the Middle
East. Over the next five years, net outlays increase by $6 billion due to the fulfillment of
these new orders along with revised projections for the delivery of new orders.
Medicaid.—The projection of Federal Medicaid outlays has increased slightly, with a total increase of about $5 billion over the next
five years, primarily due to revised State estimates of program spending.

17
Deposit insurance.—Over the next five
years, net outlays for the Federal Deposit In­
surance Corporation are expected to increase
by $5 billion. Net outlays increase by $4 billion
in 2008 and $12 billion in 2009 due to higher
projections of net payments for deposit insurance losses over the next few years. Starting
in 2011, net outlays are lower than in the February estimate because of higher projected
premiums necessary to restore funding ratios
in the Deposit Insurance Fund.
Digital television auction receipts—Receipts
in the Digital Television Transition and Public Safety Fund are expected to increase by $5
billion in 2008 due to higher-than-anticipated
bids in the recently completed spectrum auction.
Net interest.—Excluding the debt service
associated with policy changes, outlays for
net interest are projected to decrease by $78
billion over five years. This reduction largely
reflects lower interest rates and lower debt
service costs related to estimating changes in
receipts and outlays.

Summary Tables

19

21

Summary Tables

Table S–1. BUDGET TOTALS
(In billions of dollars)
2007

2008

2009

2010

2011

2012

2013

Budget Totals:
Receipts ����������������������������������������������������������

2,568

2,553

2,651

2,916

3,084

3,288

3,439

Outlays �����������������������������������������������������������

2,730

2,942

3,133

3,094

3,187

3,230

3,410

Deficit(–)/Surplus ����������������������������������

–162

–389

–482

–178

–103

58

29

Gross Domestic Product (GDP) �������������������������

13,671

14,248

14,822

15,632

16,513

17,369

18,239

Receipts ����������������������������������������������������������

18.8%

17.9%

17.9%

18.7%

18.7%

18.9%

18.9%

Outlays �����������������������������������������������������������

20.0%

20.7%

21.1%

19.8%

19.3%

18.6%

18.7%

0.3%

0.2%

Budget Totals as a Percent of GDP:

Deficit(–)/Surplus ��������������������������������

–1.2%

–2.7%

–3.3%

–1.1%

–0.6%

22

Mid-Session Review

Table S–2. DISCRETIONARY FUNDING BY CATEGORY
(Net budget authority; in billions of dollars)
2007
Actual

2008
Enacted

2009
Request

Change from 2008
Amount

Percent

Base Discretionary:
Security Funding 1 ��������������������������������������������������������������������
Non-Security Funding �������������������������������������������������������������

498.0
382.0

549.6
391.3

594.5
393.3

+44.9
+2.0

+8.2%
+0.5%

Total, Discretionary �����������������������������������������������������������������

880.0

940.9

987.8

+46.9

+5.0%

Enacted Supplemental and Emergency Funding:
Global War on Terror ���������������������������������������������������������������
Gulf Coast/Hurricane Recovery �����������������������������������������������
Veterans Affairs �����������������������������������������������������������������������
Border Security and Other ������������������������������������������������������

173.6
7.7
1.8
9.3

192.5
5.9
4.2
12.8

68.4
5.8
.........
1.7

Total, Enacted ����������������������������������������������������������������������������

192.3

215.3

75.8

Project BioShield ����������������������������������������������������������������������

.........

.........

2.2

Discretionary Outyears

Base Discretionary:
Security Funding  2 ����������������������������������������������
Non-Security Funding 3����������������������������������������
Total, Discretionary ������������������������������������������������

2010

605.0
393.3
998.2

2011

2012

2013

613.5
393.3
1,006.7

624.5
393.3
1,017.7

636.1
393.3
1,029.3

This category is comprised of funding for the Department of Defense, Homeland Security activities Governmentwide (see Table S-4), and funding for International Affairs (Function 150).
2
Department of Defense levels are consistent with the Future Years Defense Plan and the Homeland Security levels
are consistent with the Future Years Homeland Security Plan.
3
These amounts exclude the budgetary effects of the Administration’s reauthorization proposal of the Federal Aviation Administration (FAA). The proposal would transform the current tax-financing system for FAA to a cost-based
user-fee system. For more information, see the Transportation chapter in the main volume of the 2009 Budget and other
related sections in the Appendix and Analytical Perspectives volumes. If this proposal were enacted, the Administration
would adjust its discretionary cap proposal downward in these years to reflect the offsetting collections that would result
from this user-based fee system.
1

23

Summary Tables

Table S–3. DISCRETIONARY FUNDING BY MAJOR AGENCY
(Net budget authority; in billions of dollars)
Change:
Agency

2001
Actual

2008
2009
Enacted Request

2008-2009
Dollar

Percent

2001-2009
Average

Cumulative

Agriculture ���������������������������������������������������
Commerce ����������������������������������������������������
Defense ���������������������������������������������������������
Education �����������������������������������������������������
Energy ����������������������������������������������������������
Health and Human Services �����������������������
Homeland Security ��������������������������������������
Housing and Urban Development ��������������
Interior ���������������������������������������������������������
Justice ����������������������������������������������������������
Labor ������������������������������������������������������������

19.2
5.1
302.5
40.1
20.0
54.0
14.0
28.4
10.3
18.4
11.9

22.1
7.1
479.5
57.2
23.9
71.9
34.9
37.1
11.2
22.7
11.5

20.7
8.6
515.4
59.2
25.0
70.4
37.6
38.5
10.4
20.3
10.6

–1.4
+1.5
+35.9
+2.0
+1.1
–1.5
+2.7
+1.4
–0.8
–2.4
–0.8

–6.5%
+21.7%
+7.5%
+3.5%
+4.7%
–2.1%
+7.7%
+3.8%
–6.8%
–10.7%
–7.4%

+0.9%
+6.8%
+6.9%
+5.0%
+2.8%
+3.4%
+13.2%
+3.9%
+0.2%
+1.2%
–1.4%

+7.4%
+69.0%
+70.4%
+47.6%
+24.9%
+30.3%
+168.7%
+35.7%
+1.8%
+10.4%
–10.9%

State and Other International Programs ���
Transportation ���������������������������������������������
Treasury �������������������������������������������������������
Veterans Affairs �������������������������������������������
Corps of Engineers ��������������������������������������
Environmental Protection Agency ��������������
Executive Office of the President ����������������
Judicial Branch ��������������������������������������������

21.7
14.6
10.3
22.4
4.7
7.8
0.3
4.0

32.9
15.5
12.0
39.4
4.8
7.5
0.3
5.8

38.3
11.5
12.4
44.8
4.7
7.1
0.4
6.3

+5.4
–4.0
+0.4
+5.3
–0.1
–0.3
+0.0
+0.5

+16.5%
–25.7%
+3.6%
+13.5%
–1.9%
–4.4%
+5.6%
+8.1%

+7.3%
–2.9%
+2.3%
+9.1%
+0.1%
–1.2%
+3.9%
+5.9%

+76.2%
–20.9%
+20.3%
+100.1%
+1.2%
–8.8%
+35.9%
+58.6%

Legislative Branch ���������������������������������������
National Aeronautics and Space
Administration ����������������������������������������
National Science Foundation ����������������������
Small Business Administration ������������������
Social Security Administration �������������������
Other Agencies ���������������������������������������������

2.8

4.0

4.7

+0.7

+17.7%

+7.0%

+71.6%

14.3
4.4
0.9
6.0
5.8

17.1
6.0
0.6
8.0
8.0

17.6
6.9
0.7
8.4
7.2

+0.5
+0.8
+0.1
+0.4
–0.7

+2.9%
+13.6%
+15.5%
+4.9%
–9.0%

+2.7%
+5.6%
–3.9%
+4.3%
+2.8%

+23.6%
+54.7%
–27.0%
+40.0%
+25.0%

Total, Discretionary Funding ����������������

643.8

940.9

987.8

+46.9

+5.0%

+5.5%

+53.4%

Note: Supplemental and emergency funding is excluded.

24

Mid-Session Review

Table S–4. HOMELAND SECURITY FUNDING BY AGENCY
(Budget authority in millions of dollars)
2007
Agency 1

2008

2009

Actual

Supplemental/
Emergency

Agriculture �������������������������������������

541

........

571

........

691

........

Commerce ���������������������������������������

1,204

........

207

........

264

........

Defense (DOD) �������������������������������

16,538

........

17,375

........

17,647

........

Energy ��������������������������������������������

1,719

........

1,830

........

1,944

........

Health and Human Services ���������

4,328

........

4,300

........

4,458

........

Homeland Security ������������������������

26,856

2,695

30,093

2,641

35,017

112

Justice ���������������������������������������������

3,309

210

3,273

174

3,794

........

State ������������������������������������������������

1,241

........

1,720

........

2,465

........

Transportation �������������������������������

206

........

206

........

221

........

Treasury �����������������������������������������

128

........

117

........

126

........

Veterans Affairs �����������������������������

260

........

271

........

348

........

Environmental Protection Agency 

167

........

138

........

171

........

General Services Administration ��
National Aeronautics and Space
Administration ���������������������������

168

........

143

225

119

........

199

........

205

........

204

........

National Science Foundation ���������

386

........

374

........

379

........

Social Security Administration �����
Intelligence Community
Management �������������������������������

194

........

212

........

221

........

56

........

122

........

13

........

Nuclear Regulatory Commission ���

72

........

72

........

73

........

Smithsonian Institution ����������������

81

........

93

........

97

........

Other Agencies �������������������������������

266

........

236

........

253

........

Total, Homeland Security Funding  57,919

2,905

61,558

3,040

68,505

112

Less, Defense (DOD) ���������������������� –16,538
Less, Mandatory Homeland
Security Funding 2 ���������������������� –3,436

........

–17,375

........

–17,647

........

........

–2,871

........

–3,225

........

Less, Funding for Project BioShield ���
Less, Discretionary Fee-Funded
Activities �������������������������������������

........

........

........

........

–2,175

........

–4,519

........

–5,096

........

–5,368

........

Net Non-DOD Discretionary
Homeland Security ��������������������

33,426

2,905

36,216

3,040

40,090

112

Enacted

Supplemental/
Request
Emergency

Supplemental/
Emergency

For more detail on Homeland Security funding, consult the Homeland Security Funding Analysis Chapter in the
Analytical Perspectives volume of the 2009 Budget. Dollar amounts in this table are rounded to the nearest million at
the account level, which accounts for any discrepancies with the Analytical Perspectives chapter.
2
2007 mandatory homeland security programs include $1 billion from anticipated spectrum auction receipts appropriated in the Deficit Reduction Act of 2005 for the Department of Commerce to make grants to public safety agencies for communications interoperability purposes.
1

25

Summary Tables

Table S–5. MANDATORY PROPOSALS
(In millions of dollars)
2008

2009

2010

2011

2012

2013

2009–13 2009–18

Mandatory Proposals, including Savings
and Augmentations:
Agriculture:
Improve program integrity within Food
and Nutrition Programs �������������������
Charge Food Safety and Inspection
Service user fees 1 �������������������������������
Charge Grain Inspection, Packers and
Stockyards Administration user fees 1����

.........

–73

–152

–186

–189

–194

–794

–1,832

.........

–96

–98

–100

–102

–104

–500

–1,053

.........

–27

–30

–30

–31

–32

–150

–318

Charge crop insurance user fees 1 ����������

.........

.........

–15

–15

–15

–15

–60

–135

Charge Animal Welfare Act user fees �����
Implement country of origin labeling
audit program:
Receipts ���������������������������������������������

.........

–20

–27

–27

–28

–29

–131

–290

.........

–10

–10

–10

–10

–10

–50

–100

Spending ��������������������������������������������

.........

10

10

10

10

10

50

100

Net effect ����������������������������������������
Extend Forest County Safety Net
Payments ��������������������������������������������

.........

.........

.........

.........

.........

.........

.........

.........

.........

.........

100

60

40

.........

200

200

Total, Agriculture ������������������������������

.........

–216

–222

–298

–325

–374

–1,435

–3,428

.........

–1,387

–29

–21

–16

–11

–1,464

–1,485

1

Education:
Reform the Federal student aid
programs: ��������������������������������������������
Restrict loans eligible for public
sector loan forgiveness �����������������
Eliminate the interest subsidy on
loans eligible for income-based
repayment �������������������������������������

.........

–260

–47

–45

–48

–56

–457

–788

Recall Perkins Loan balances ����������

.........

–1,116

–698

–735

–821

–792

–4,162

–7,220

Total, Education �����������������������������

.........

–2,763

–775

–801

–885

–859

–6,083

–9,493

Energy:
Repeal oil and gas research and
development program ������������������������

.........

–20

–40

–50

–50

–50

–210

–300

Health and Human Services:
Reform Medicare ������������������������������������

......... –11,084 –26,677 –40,197 –46,163 –53,579 –177,700 –557,403

Reform Medicaid ������������������������������������
Reauthorize State Children’s Health
Insurance Program (SCHIP) 2 ������������

140

–1,695

–2,740

–3,515

–3,915

–4,260 –16,125 –42,125

.........

2,335

2,865

3,825

4,680

5,280

18,985

49,955

Fund high-risk health insurance pools �
Eliminate Social Services Block Grant
(SSBG) ������������������������������������������������
Provide Temporary Assistance
for Needy Families (TANF)
supplemental grants and
contingency fund for child welfare
option ��������������������������������������������������
Improve child support enforcement
collection tools ������������������������������������

.........

50

75

25

.........

.........

150

150

.........

.........

–1,445

–1,683

–1,700

–1,700

.........

236

299

317

323

326

.........

6

9

6

1

–1

21

4

Extend Abstinence Education program 
Introduce Foster Care child welfare
program option �����������������������������������

5

25

43

48

49

50

215

465

.........

8

6

21

–8

–25

2

–1

–6,528 –15,028

1,501

3,102

26

Mid-Session Review

Table S–5. MANDATORY PROPOSALS—Continued
(In millions of dollars)
2008
Modify Foster Care District of
Columbia Federal Medical
Assistance Percentage (FMAP) rate �
Charge Food and Drug Administration
re-inspection and export certification
fees 1 �����������������������������������������������������
Total, Health and Human Services ��

2009

2010

2011

2012

2013

2009–13 2009–18

.........

6

6

7

6

7

32

69

.........

–27

–28

–28

–29

–30

–142

–302

145 –10,140 –27,587 –41,174 –46,756 –53,932 –179,589 –561,114

Homeland Security:
Propose a surcharge on the passenger
security fee to fund baggage
screening systems ������������������������������

.........

–106

–21

–8

1

107

–29

.........

Housing and Urban Development:
Charge Government-Sponsored
Enterprises oversight fee �������������������

.........

–6

–6

–6

–6

–6

–30

–60

.........

20

55

80

100

100

355

855

Receipts ������������������������������������������

.........

.........

–3,502

–2

–503

–3

–4,010

–4,025

Expenditures ����������������������������������

.........

.........

3,502

2

503

3

4,010

4,025

Receipts ������������������������������������������
Require up-front payment of coal bonus
bids ������������������������������������������������������
Return to net receipts sharing for
energy minerals ����������������������������������
Repeal Energy Policy Act fee
prohibition and mandatory permit
funds ���������������������������������������������������
Amend Bureau of Land Management
(BLM) Federal land sale authority ����
Terminate BLM Range Improvement
Fund ����������������������������������������������������
Increase fees for Migratory Bird
Hunting and Conservation Stamps 3 ���

.........

.........

–3,502

–2

–503

–3

–4,010

–4,025

.........

–385

–676

48

506

225

–282

–8

.........

–65

–72

–56

–52

–57

–302

–618

.........

–35

–36

–30

–30

–30

–161

–239

.........

–2

–20

–61

–41

–37

–161

–322

.........

–6

–9

–10

–10

–10

–45

–95

.........

10

14

14

14

14

66

136

Recover Pick-Sloan project costs �����������
Implement a settlement to restore the
San Joaquin River �����������������������������

.........

–23

–23

–23

–23

–23

–115

–230

.........

14

–177

19

19

29

–96

17

Total, Interior ������������������������������������

.........

–472

–4,446

–21

–20

208

–4,751

–4,529

.........

–381

–1,615

–1,542

–1,572

–1,530

.........

.........

–612

–553

–375

–376

–1,916

–3,904

.........

–95

–95

–95

–95

–95

–475

–950

Interior:
Match National Park Centennial
Challenge Fund gift receipts �������������
Authorize Arctic National Wildlife
Refuge leasing:
State of Alaska’s share:

Federal share:

Labor:
Reform Pension Benefit Guaranty
Corporation premiums �����������������������
Recover Unemployment Insurance
overpayment ���������������������������������������
Implement foreign labor certification
user fees:
Receipts ���������������������������������������������

–6,640 –14,024

Spending ��������������������������������������������

.........

95

95

95

95

95

475

950

Net effect ����������������������������������������

.........

.........

.........

.........

.........

.........

.........

.........

27

Summary Tables

Table S–5. MANDATORY PROPOSALS—Continued
(In millions of dollars)
2008
Reform Federal Employees
Compensation Act �����������������������������
Refinance the Black Lung Disability
Trust Fund:
Black Lung Disability Trust Fund ���
Interest payments on repayable
advances ����������������������������������������

2009

2010

2011

2012

2013

2009–13 2009–18

.........

–10

–14

–21

–15

–12

–72

–288

.........

2,156

–410

–395

–386

–387

578

–1,322

.........

–2,156

410

395

386

387

–578

1,322

Net effect ����������������������������������������

.........

.........

.........

.........

.........

.........

.........

.........

Reform Trade Adjustment Assistance ���

.........

6

3

8

1

–3

15

–81

Total, Labor ���������������������������������������

.........

–385

–2,238

–2,108

–1,961

–1,921

Transportation:
Modify financing of the Airport and
Airway Trust Fund �����������������������������

.........

.........

.........

.........

.........

.........

.........

–608

.........

–10

–10

–10

–10

–10

–50

–100

75

102

25

.........

.........

.........

127

127

75

92

15

–10

–10

–10

77

27

.........

–44

–44

–44

–43

–43

–218

–420

.........

–335

–421

–414

–464

–483

–2,117

–4,796

.........

–379

–465

–458

–507

–526

–2,335

–5,216

Receipts ������������������������������������������

.........

–9

–17

–17

–17

–17

–77

–162

Spending �����������������������������������������

.........

.........

8

17

17

17

59

144

Net effect �����������������������������������

.........

–9

–9

.........

.........

.........

–18

–18

Commodity Futures Trading Commission:
Charge user fees 1 �����������������������������������

.........

–96

–100

–103

–107

–111

–517

–1,130

.........

–52

–56

–55

–55

–45

–263

–502

–50

–150

–300

–300

–400

–450

–1,600

–4,081

Treasury:
Modernize cash investment practices ���
Extend the rum carryover for Puerto
Rico �����������������������������������������������������
Total, Treasury ����������������������������������
Veterans Affairs:
Eliminate third-party insurance copayment offset 1 �����������������������������������
Charge medical care enrollment fees
for non-disabled higher-income
veterans and increase pharmacy copayments to align with other health
care plans 1 ������������������������������������������
Total, Veterans Affairs ����������������������

–8,613 –18,297

Army Corps of Engineers:
Collect additional recreation user fees,
lease receipts, and contributions:

Environmental Protection Agency:
Increase or reinstate pesticide user
fees and lift cap on pre-manufacture
notice fee 1 ��������������������������������������������
Federal Communications Commission
(FCC):
Provide spectrum license fee authority �
Charge Ancillary Terrestrial
Component spectrum fee �������������������

–30

–60

–100

–125

–125

–125

–535

–1,160

Extend spectrum auction authority ������

.........

.........

.........

.........

–200

–200

–400

–1,400

Auction domestic satellite spectrum �����
Eliminate Telecommunications
Development Fund �����������������������������

.........

–350

–100

–75

–20

–15

–560

–593

–5

–6

–7

–7

–7

–7

–34

–69

Total, FCC �����������������������������������������

–85

–566

–507

–507

–752

–797

–3,129

–7,303

28

Mid-Session Review

Table S–5. MANDATORY PROPOSALS—Continued
(In millions of dollars)
2008
Office of Personnel Management (OPM):
Amend Federal Employee Health
Benefits Program statute �������������������
Improve equity and administration of
the Federal retirement system ����������
Replace non-foreign cost of living
adjustment with locality pay 3 ������������
Total, OPM ����������������������������������������
Social Security Administration (SSA):
Extend temporarily length of timelimited Supplemental Security
Income eligibility for refugees and
asylees �������������������������������������������������
Total, Mandatory Proposals
including Savings and
Augmentations ���������������������������
Establish Social Security Personal
Accounts (Off-Budget) �����������������������������

2009

2010

2011

2012

2013

2009–13 2009–18

.........

–40

–147

–248

–327

–403

–1,165

–3,675

.........

2

3

4

6

7

22

74

.........

.........

.........

.........

.........

.........

.........

.........

.........

–38

–144

–244

–321

–396

–1,143

–3,601

.........

53

47

49

.........

.........

149

149

135

–15,103 –36,553 –45,795 –51,755 –58,712 –207,919 –615,423

.........

.........

.........

.........

......... 30,479

30,479 644,635

.........

6

–182

–168

–168

–183

–695

–1,838

.........

.........

30

26

24

23

103

218

.........

160

3,168

2,494

1,817

1,073

8,712

1,934

.........

3

–78

–72

–72

–78

–297

–787

.........

.........

–388

–396

–401

–404

–1,589

–3,681

.........

169

2,550

1,884

1,200

431

6,234

–4,154

.........

–71

–530

–828

–936

–1,046

–3,411

–9,732

.........

–850

–29

–51

–62

–69

–1,061

–1,357

.........

–10

–88

–161

–167

–172

–598

–1,566

.........

–4

–35

–84

–152

–240

–515

–1,100

.........

.........

.........

.........

–144

–316

–460

–2,533

Outlay Effects of Tax Proposals 3:
Earned Income Tax Credit (EITC):
Clarify uniform definition of a child ������
Simplify EITC eligibility requirement
regarding filing status, presence of
children, and work and immigration
status ��������������������������������������������������
Provide a new standard deduction for
health insurance ($15,000 for family
coverage and $7,500 for individual
coverage) ���������������������������������������������
Child Tax Credit:
Clarify uniform definition of a child ������
Reduce computational complexity of
refundable child tax credit �����������������
Total, Outlay Effects of Tax
Proposals ������������������������������������
Other Proposals and Indirect Effects:
Provide six months of retroactivity for
disability applications (off-budget) ���������
Combine retroactive Old-Age, Survivors,
and Disability Insurance benefits with
monthly benefit payment (off-budget) ����
Require full-time school attendance for
child’s Social Security benefits at age 16
(off-budget) �����������������������������������������������
Simplify the benefit offset for combined
beneficiaries of Disability Insurance and
Workers Compensation (off-budget) �������
Improve enforcement of Windfall
Elimination Provision/Government
Pension Offset (off-budget) ����������������������

29

Summary Tables

Table S–5. MANDATORY PROPOSALS—Continued
(In millions of dollars)
2008
Eliminate Commodity Supplemental Food
Program:
Food Stamp impact (third scorecard) ����
Reduce SSBG in 2009: TANF impact (third
scorecard) �������������������������������������������������
Eliminate SSBG as of 2010: TANF, Child
Care, and Foster Care impact (third
scorecard) �������������������������������������������������
Increase program integrity efforts:
Supplemental Security Income impact
(third scorecard) ���������������������������������
Disability Insurance impact (third
scorecard) ��������������������������������������������
Recover Unemployment Insurance
overpayments ������������������������������������������
Match National Park Centennial
Challenge Fund gift receipts (third
scorecard) �������������������������������������������������
Transfer royalty oil to the Strategic
Petroleum Reserve (third scorecard) ������
Amend Federal Employee Health Benefits
Program statute (third scorecard) ����������
Replace non-foreign cost of living
adjustment with locality pay (third
scorecard) �������������������������������������������������
Morris K. Udall Scholarship Fund (third
scorecard) �������������������������������������������������
Total, Other Proposals and Indirect
Effects ��������������������������������������������
Grand Total ����������������������������������������������������

2009

2010

2011

2012

2013

2009–13 2009–18

.........

54

65

57

52

48

276

471

.........

28

5

–28

–5

.........

.........

.........

.........

.........

–49

120

147

181

399

804

.........

–119

–892

–1,627

–1,525

–750

–4,913

–6,480

.........

–4

–58

–242

–457

–517

–1,278

–3,527

.........

.........

–73

–148

–151

–156

–528

–1,405

.........

20

55

80

100

100

355

855

.........

.........

.........

.........

1,235

.........

1,235

28,370

.........

81

173

239

289

333

1,115

3,214

.........

–2

–8

–15

–23

–31

–79

–361

.........

4

4

4

4

4

20

45

.........

–873

–1,460

–2,684

–1,795

–2,631

–9,443

5,698

135 –15,810 –35,465 –46,589 –52,346 –30,431 –180,641

30,768

Memorandum:
Outlay Effects of Tax Extensions Assumed in
Baseline 3:
Child Tax Credit extension �������������������������
Earned Income Tax Credit: marriage
penalty relief ��������������������������������������������

.........

.........

.........

34

.........

.........

.........

–108

–19

–24

–151

–270

Total ��������������������������������������������������������

.........

.........

.........

–74

13,760

13,761

27,447

97,413

13,779

13,785

27,598

97,683

 If enacted, the Administration would work to classify the receipts as discretionary offsets beginning in 2010.
Represents total cost of SCHIP reauthorization, including SCHIP and Medicaid costs as well as spending resulting from outreach grants.
3
Affects both receipts and outlays. Only the outlay effect is shown here. For receipt effects, see Table S–6.
1
2

30

Mid-Session Review

Table S–6. RECEIPTS PROPOSALS
(In millions of dollars)
2008
Make Permanent Certain Tax Relief Enacted
in 2001 and 2003 (assumed in the baseline):
Dividends tax rate structure ��������������������������
Capital gains tax rate structure ���������������������
Expensing for small businesses ����������������������
Marginal individual income tax rate
reductions ������������������������������������������������������
Child tax credit 1 ����������������������������������������������
Marriage penalty relief 1 ����������������������������������
Education incentives ���������������������������������������
Repeal of estate and generation-skipping
transfer taxes, and modification of gift
taxes �������������������������������������������������������������
Other incentives for families and children ����
Total, make permanent certain tax
relief enacted in 2001 and 2003 ���������

2009

2010

2011

2012

2013 2009–13 2009–18

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

425 –4,903 –21,647 –4,064 –12,675 –42,864 –185,999
......... –4,402 –17,748 –3,118 –8,520 –33,788 –100,897
......... ......... –3,431 –4,839 –3,728 –11,998 –24,364

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

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

......... –72,274 –114,578 –118,642 –305,494
......... –5,028 –20,241 –20,732 –46,001
......... –4,514 –9,587 –9,218 –23,319
......... –738 –1,339 –1,414 –3,491

–968,854
–155,465
–62,348
–11,547

–422 –3,025 –4,202 –25,666 –56,053 –58,152 –147,098 –510,922
......... .........
6 –353 –650 –652 –1,649 –4,980
–422 –2,600 –13,501 –151,399 –214,469 –233,733 –615,702 –2,025,376

Tax Incentives:
Simplify and encourage saving:
Expand tax-free savings opportunities ����������
Consolidate employer-based savings
accounts �������������������������������������������������������
Total, simplify and encourage saving �����
Encourage entrepreneurship and
investment:
Increase expensing for small businesses �������
Invest in health care:
Provide a new standard deduction for health
insurance ($15,000 for family coverage
and $7,500 for individual coverage) 1 ����������
Expand and make health savings accounts
(HSAs) more flexible �����������������������������������
Allow the orphan drug tax credit for certain
pre-designation expenses 2 ��������������������������
Total, invest in health care ���������������������
Provide incentives for charitable giving:
Permanently extend tax-free withdrawals
from IRAs for charitable contributions ������
Permanently extend the enhanced
charitable deduction for contributions of
food inventory ����������������������������������������������
Permanently extend the deduction for
corporate donations of computer
equipment for educational purposes ����������
Permanently extend increased limits on
contributions of partial interests in real
property for conservation purposes ������������
Permanently extend basis adjustment
to stock of S corporations contributing
appreciated property ����������������������������������

.........

1,527

3,545

3,023

1,075 –1,314

7,856

–592

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

–80
1,447

–120
3,425

–132
2,891

–141 –150
934 –1,464

–623
7,233

–1,484
–2,076

–5,025

–7,550

......... –22,155 –27,790 –20,968 –13,233 –3,692 –87,838

37,444

......... –1,085 –1,501 –1,035

.........

–420

–779

–770

–634

–931 –1,031 –1,123

–4,284 –11,511

......... ......... ......... ......... ......... .........
.........
......... –22,575 –28,569 –21,899 –14,264 –4,815 –92,122

.........
25,933

.........

–300

–551

–434

–284

–211

–1,780

–3,321

.........

–66

–115

–124

–134

–144

–583

–1,495

.........

–116

–147

–154

–162

–170

–749

–1,736

.........

–17

–41

–28

–21

–21

–128

–250

.........

–12

–21

–25

–28

–32

–118

–351

31

Summary Tables

Table S–6. RECEIPTS PROPOSALS—Continued
(In millions of dollars)
2008
Reform excise tax based on investment
income of private foundations ��������������������
Total, provide incentives for charitable
giving ���������������������������������������������������
Strengthen education:
Permanently extend the above-the-line
deduction for qualified out-of-pocket
classroom expenses �������������������������������������
Allow the saver’s credit for contributions to
qualified tuition programs ��������������������������
Total, strengthen education ��������������������
Strengthen housing:
Expand tax-exempt qualified mortgage bond
program to assist subprime borrowers ������
Protect the environment:
Permanently extend expensing of
brownfields remediation costs ��������������������
Eliminate the volume cap for private
activity bonds for water infrastructure ������
Total, protect the environment ���������������
Restructure assistance to New York City
for continued recovery from the attacks
of September 11th:
Provide tax incentives for transportation
infrastructure ����������������������������������������������
Total, tax incentives ���������������������������
Simplify the Tax Laws for Families:
Clarify uniform definition of a child 1 �������������������
Simplify EITC eligibility requirement regarding
filing status, presence of children, and work
and immigrant status 1 �������������������������������������
Reduce computational complexity of refundable
child tax credit 1 �������������������������������������������������
Total, simplify the tax laws for families ���������
Improve Tax Compliance: 3
Expand information reporting �����������������������������
Improve compliance by businesses ����������������������
Strengthen tax administration ����������������������������
Expand penalties ��������������������������������������������������
Total, improve tax compliance ������������������������
Improve Tax Administration and Other
Miscellaneous Proposals:
Implement IRS administrative reforms and
extend IRS authority to fund undercover
operations 2 ��������������������������������������������������������
Increase transparancy of the cost of employerprovided health insurance 2 ������������������������������
Equalize penalty standards between preparers
and taxpayers ���������������������������������������������������

2009

2010

2011

2012

2013 2009–13 2009–18

.........

–113

–163

–164

–165

–165

–770

–1,617

.........

–624 –1,038

–929

–794

–743

–4,128

–8,770

.........

–198

–183

–185

–188

–191

–945

–1,945

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

–88
–286

–183
–366

–198
–383

–213
–401

–227
–418

–909
–1,854

–2,259
–4,204

.........

–86

–191

–280

–303

–304

–1,164

–2,433

–38

–649

–359

–346

–330

–287

–1,971

–3,037

.........
–38

.........
–649

–2
–361

–6
–352

–10
–340

–15
–302

–33
–2,004

–205
–3,242

......... –200 –200 –200 –200 –200 –1,000
–38 –24,058 –28,801 –22,187 –16,138 –8,880 –100,064

–2,000
–4,342

.........

6

30

38

17

23

114

275

.........

.........

–42

–17

–15

–13

–87

–99

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

.........
6

.........
–12

.........
21

.........
2

.........
10

.........
27

.........
176

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

302
3
.........
.........
305

1,333
5
.........
.........
1,338

2,227
5
3
.........
2,235

2,961
5
6
.........
2,972

3,654
6
8
1
3,669

10,477
24
17
1
10,519

35,763
57
72
6
35,898

........

........

........

.........

........

........

........

........

.........

.........

.........

.........

.........

.........

.........

.........

.........

.........

–1

–2

–2

–2

–7

–17

32

Mid-Session Review

Table S–6. RECEIPTS PROPOSALS—Continued
(In millions of dollars)
2008
Eliminate the special exclusion from unrelated
business taxable income for gain or loss on
the sale or exchange of certain brownfields ����
Limit related party interest deductions ��������������
Repeal excise tax on local telephone service 4 ������
Modify financing of the Airport and Airway
Trust Fund 4 ������������������������������������������������������
Improve financing of the Inland Waterways
Trust Fund 4 ������������������������������������������������������
Anticipated receipt of donations to the National
Park Service through the National Park
Centennial Challenge Fund �����������������������������
Increase fees for Migratory Bird Hunting and
Conservation Stamps ���������������������������������������
Transition from the non-foreign cost-of-living
adjustment (COLA) to locality pay for
employees in non-foreign areas �����������������������
Total, improve tax administration and
other miscellaneous proposals 4 �������������
Improve Unemployment Insurance:
Strengthen the financial integrity of the
unemployment insurance system by
reducing improper benefit payments and tax
avoidance 4 ���������������������������������������������������������
Extend unemployment insurance surtax 4 ����������
Total, improve unemployment insurance 4 �����
Modify Energy Provisions:
Repeal reduced recovery period for natural gas
distribution lines ����������������������������������������������
Modify amortization for certain geological and
geophysical expenditures ���������������������������������
Total, modify energy provisions ����������������
Promote Trade:
Implement free trade agreements and modify
other trade-related provisions 4 ������������������������
Extend Expiring Provisions:
Minimum tax relief for individuals ���������������������
Research and experimentation (R&E) tax credit 
First-time homebuyer credit for the District of
Columbia �����������������������������������������������������������
Deferral of gains from sales of electric
transmission property ��������������������������������������
New Markets tax credit ����������������������������������������
Subpart F “active financing” exception ����������������
Subpart F “look-through” exception ��������������������
Disclosure of tax return information related to
terrorist activity 2 ����������������������������������������������
Excise tax on coal 4 ������������������������������������������������
Total, extend expiring provisions 4 ������������

2009

2010

2011

13
109
–172

2012

16
115
–122

2013 2009–13 2009–18

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

2
64
–156

13
120
–86

11
126
–81

55
534
–617

66
1,267
–1,017

.........

......... –6,566 –6,962 –7,373 –7,715 –28,616 –73,207

.........

110

116

128

152

127

633

1,011

.........

100

100

100

100

100

500

1,000

.........

14

14

14

14

14

70

140

.........

1

2

3

4

5

15

50

.........

135 –6,385 –6,710 –7,058 –7,415 –27,433 –70,707

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

.........
1,065
1,065

37
442
479

25
.........
25

–293
.........
–293

–573
.........
–573

–804
1,507
703

–3,754
499
–3,255

.........

42

72

77

70

57

318

580

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

24
66

86
158

134
211

129
199

100
157

473
791

630
1,210

.........

–930 –1,489 –1,773 –2,034 –2,269

–8,495 –16,172

......... –73,072 14,503 ......... ......... ......... –58,569 –58,569
–322 –9,970 –9,145 –10,601 –11,799 –12,833 –54,348 –135,949
.........

–21

–19

.........

.........

.........

–40

–40

–10
–86
–61
......... –132 –194
......... –1,598 –1,065
......... –347 –231

–10
–191
.........
.........

31
–217
.........
.........

40
–231
.........
.........

–86
–965
–2,663
–578

10
–1,287
–2,663
–578

......... .........
......... .........
–332 –85,226

......... ......... ......... .........
.........
.........
......... ......... ......... .........
.........
1,348
3,788 –10,802 –11,985 –13,024 –117,249 –197,728

33

Summary Tables

Table S–6. RECEIPTS PROPOSALS—Continued
(In millions of dollars)
2008
Total budget proposals, including
proposals assumed in the baseline 4 ����������
Total budget proposals, excluding
proposals assumed in the baseline 4 ����������
1
2
3
4

2009

2010

2011

2012

2013 2009–13 2009–18

–792 –111,237 –44,425 –190,379 –248,804 –262,058 –856,903 –2,280,296
–370 –108,637 –30,924 –38,980 –34,335 –28,325 –241,201

Affects both receipts and outlays. Only the receipt effect is shown here. For the outlay effect, see Table S-5.
No net budgetary impact.
“Tax gap”-related proposals.
Net of income offsets.

–254,920

34

Mid-Session Review

Table S–7. BUDGET SUMMARY BY CATEGORY
(In billions of dollars)
2007

2008

2009

2010

2011

2012

2013

Outlays:
Discretionary:
Security ����������������������������������������������������������������������������������
Non-security ���������������������������������������������������������������������������
Total, discretionary ����������������������������������������������������������

594

654

738

636

620

624

632

448

476

488

456

442

433

431

1,042 1,130 1,226 1,092 1,062 1,057 1,064

Mandatory:
Social Security:
Current program ��������������������������������������������������������������
Personal accounts �������������������������������������������������������������

581

611

651

691

730

773

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

823
30

Medicare ���������������������������������������������������������������������������������

371

387

406

419

449

445

493

Medicaid & SCHIP ����������������������������������������������������������������

197

212

226

240

258

277

298

Other ��������������������������������������������������������������������������������������

302

370

396

392

404

383

403

Total, mandatory ��������������������������������������������������������������
Net interest ���������������������������������������������������������������������������������

1,451 1,580 1,679 1,742 1,840 1,879 2,048
237

232

228

260

285

294

299

Total outlays ������������������������������������������������������������������������������������

2,730 2,942 3,133 3,094 3,187 3,230 3,410

Receipts �������������������������������������������������������������������������������������������

2,568 2,553 2,651 2,916 3,084 3,288 3,439

Deficit(–)/surplus �������������������������������������������������������������������������

–162

–389

–482

–178

–103

58

29

On-budget deficit �������������������������������������������������������������������������

–343

–574

–663

–378

–321

–168

–172

Off-budget surplus ����������������������������������������������������������������������

181

184

181

201

218

226

201

35

Summary Tables

Table S–8. RECEIPTS BY SOURCE
(In billions of dollars)
2007
Actual

Estimate
2008

2009

2010

2011

2012

2013

1,259.0
339.2
949.4
68.9
26.3
29.1
47.9
–20.0
2,699.9

1,417.3
338.9
1,004.0
60.7
19.5
30.8
50.0
10.0
2,931.3

1,499.0
356.8
1,059.7
65.9
1.5
32.5
53.2
8.0
3,076.4

1,599.9
391.3
1,111.4
68.5
0.4
35.0
57.4
6.0
3,269.9

1,709.1
379.8
1,168.5
69.7
0.5
37.0
59.5
4.0
3,428.2

February estimates:
Individual income taxes ��������������������������������������
Corporation income taxes ������������������������������������
Social insurance and retirement receipts ����������
Excise taxes ���������������������������������������������������������
Estate and gift taxes �������������������������������������������
Customs duties ����������������������������������������������������
Miscellaneous receipts ����������������������������������������
Allowance for economic growth package ������������
Total ���������������������������������������������������������������

1,163.5 1,219.7
370.2
345.3
869.6
910.1
65.1
68.8
26.0
26.8
26.0
29.2
47.8
46.3
......... –125.0
2,568.2 2,521.2

Mid-Session estimates:
Individual income taxes ��������������������������������������
Corporation income taxes ������������������������������������
Social insurance and retirement receipts ����������
Excise taxes ���������������������������������������������������������
Estate and gift taxes �������������������������������������������
Customs duties ����������������������������������������������������
Miscellaneous receipts ����������������������������������������
Allowance for economic growth package ������������
Total ���������������������������������������������������������������

1,163.5 1,169.0 1,250.4 1,432.5 1,526.7 1,626.8 1,734.4
370.2
309.3
304.1
335.3
355.8
399.9
381.8
869.6
901.2
931.5
991.9 1,051.9 1,103.5 1,159.9
65.1
68.1
67.8
59.7
63.9
65.5
66.2
26.0
28.4
26.1
18.8
1.4
0.4
0.5
26.0
27.7
28.3
30.7
33.3
35.7
37.7
47.8
49.3
43.3
46.8
51.0
56.0
58.6
.........
.........
.........
.........
.........
.........
.........
2,568.2 2,552.9 2,651.4 2,915.8 3,084.1 3,287.8 3,439.0

Difference:
Individual income taxes ��������������������������������������
Corporation income taxes ������������������������������������
Social insurance and retirement receipts ����������
Excise taxes ���������������������������������������������������������
Estate and gift taxes �������������������������������������������
Customs duties ����������������������������������������������������
Miscellaneous receipts ����������������������������������������
Allowance for economic growth package ������������
Total ���������������������������������������������������������������

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

–50.7
–36.1
–9.0
–0.7
1.7
–1.5
3.1
125.0
31.8

–8.7
–35.2
–17.9
–1.1
–0.2
–0.8
–4.6
20.0
–48.6

15.2
–3.6
–12.1
–1.0
–0.8
–0.1
–3.1
–10.0
–15.5

27.7
–1.0
–7.8
–2.0
–0.0
0.8
–2.1
–8.0
7.7

27.0
8.6
–7.9
–3.1
0.0
0.7
–1.3
–6.0
17.9

25.3
2.0
–8.6
–3.6
0.0
0.7
–1.0
–4.0
10.8

36

Mid-Session Review

Table S–9. OUTLAYS BY AGENCY
(In billions of dollars)
2007
Actual
Legislative Branch ����������������������������������������������������������������������������

February estimates
2008

4.3

4.6

2009
5.0

Mid-Session
estimates
2008
4.6

2009
5.0

Judicial Branch ���������������������������������������������������������������������������������

6.0

6.2

7.0

6.2

7.0

Agriculture ����������������������������������������������������������������������������������������

84.4

94.8

94.8

93.4

100.5

Commerce ������������������������������������������������������������������������������������������

6.5

8.2

9.2

8.3

9.8

Defense—Military �����������������������������������������������������������������������������

529.9

583.1

651.2

582.2

656.7

Education �������������������������������������������������������������������������������������������

66.4

68.0

63.5

67.6

64.6

Energy �����������������������������������������������������������������������������������������������

20.1

23.2

23.3

21.5

24.4

Health and Human Services ������������������������������������������������������������

672.0

709.4

738.6

706.4

739.2

Homeland Security ���������������������������������������������������������������������������

39.2

42.3

44.3

39.5

46.1

Housing and Urban Development ����������������������������������������������������

45.6

52.3

45.6

50.5

45.5

Interior �����������������������������������������������������������������������������������������������

10.5

11.1

10.2

10.9

9.8

Justice ������������������������������������������������������������������������������������������������

23.3

25.0

26.5

25.9

26.8

Labor ��������������������������������������������������������������������������������������������������

47.5

49.7

54.2

61.3

69.0

State ���������������������������������������������������������������������������������������������������

13.7

18.9

22.1

19.1

22.9

Transportation ����������������������������������������������������������������������������������

61.7

68.7

71.1

67.7

70.5

Treasury ��������������������������������������������������������������������������������������������

490.6

520.2

547.8

536.6

515.1

Veterans Affairs ��������������������������������������������������������������������������������

72.8

86.6

91.8

85.8

94.1

Corps of Engineers-Civil Works �������������������������������������������������������

3.9

7.2

8.8

6.6

10.3

Other Defense Civil Programs ���������������������������������������������������������

47.1

49.1

51.2

49.0

52.2

Environmental Protection Agency ���������������������������������������������������

8.3

7.5

8.0

7.5

8.0

Executive Office of the President �����������������������������������������������������

3.0

2.1

0.5

1.8

0.7

General Services Administration �����������������������������������������������������

*

0.4

0.7

0.4

0.7

International Assistance Programs �������������������������������������������������

12.8

15.2

16.5

12.4

16.8

National Aeronautics and Space Administration ����������������������������

15.9

17.3

18.1

17.3

18.2

National Science Foundation ������������������������������������������������������������

5.5

6.3

6.4

6.3

6.4

Office of Personnel Management ������������������������������������������������������

58.4

64.2

67.2

64.6

68.5

Small Business Administration �������������������������������������������������������

1.2

0.5

0.8

0.7

0.9

Social Security Administration ��������������������������������������������������������

621.8

656.6

692.8

657.1

700.0

Other Independent Agencies ������������������������������������������������������������

18.0

18.4

19.9

25.7

31.9

Allowances �����������������������������������������������������������������������������������������

......

......

– 0.5

......

– 0.5

Undistributed Offsetting Receipts ���������������������������������������������������

– 260.2

– 285.6

– 289.4

– 294.6

– 287.9

Total ����������������������������������������������������������������������������������������������

2,730.2

2,931.2

3,107.4

2,942.4

3,133.2

* $50 million or less.

37

Summary Tables

Table S–10. OUTLAYS BY FUNCTION
(In billions of dollars)
2007
Actual

February estimates
2008

2009

Mid–Session
estimates
2008

2009

National defense ������������������������������������������������������������������������������

552.6

607.3

675.1

605.7

682.1

International affairs ������������������������������������������������������������������������

28.5

34.8

38.0

32.4

39.9

General science, space, and technology �������������������������������������������

25.6

27.6

29.2

27.6

29.1

Energy ����������������������������������������������������������������������������������������������

–0.9

3.0

3.1

1.3

3.4

Natural resources and environment �����������������������������������������������

31.8

35.5

35.5

34.3

35.8

Agriculture ���������������������������������������������������������������������������������������

17.7

21.0

19.1

19.4

20.9

Commerce and housing credit ���������������������������������������������������������

0.5

7.4

4.2

12.0

16.0

Transportation ���������������������������������������������������������������������������������

72.9

80.3

83.9

78.9

83.6

Community and regional development �������������������������������������������

29.6

27.6

23.3

25.5

23.9

Education, training, employment, and social services �������������������

91.7

93.4

88.3

93.2

89.3

Health �����������������������������������������������������������������������������������������������

266.4

284.5

299.4

284.9

301.4

Medicare �������������������������������������������������������������������������������������������

375.4

396.3

413.3

392.5

411.9

Income security ��������������������������������������������������������������������������������

366.0

388.4

401.7

435.7

431.3

Social Security ����������������������������������������������������������������������������������

586.2

615.3

649.3

615.8

656.1

Veterans benefits and services ��������������������������������������������������������

72.8

86.6

91.9

85.8

94.1

Administration of justice �����������������������������������������������������������������

41.2

46.2

51.1

45.8

51.2

General government ������������������������������������������������������������������������

17.5

19.8

21.5

20.0

22.0

Net interest ��������������������������������������������������������������������������������������

237.1

243.9

260.2

231.8

228.0

Allowances ����������������������������������������������������������������������������������������

.........

.........

–0.5

.........

–0.5

Undistributed offsetting receipts ����������������������������������������������������

–82.2

–87.7

–80.4

–100.2

–86.2

Total �������������������������������������������������������������������������������������������

2,730.2

2,931.2

3,107.4

2,942.4

3,133.2

38

Mid-Session Review

Table S–11. CURRENT SERVICES BASELINE CATEGORY TOTALS
(In billions of dollars)
2007
Outlays:
Discretionary:
Security �����������������������������������������������������������������������������������
Non-security ����������������������������������������������������������������������������
Total, discretionary �����������������������������������������������������������
Mandatory:
Social Security ������������������������������������������������������������������������
Medicare ����������������������������������������������������������������������������������
Medicaid & SCHIP �����������������������������������������������������������������
Other ���������������������������������������������������������������������������������������
Total, mandatory ���������������������������������������������������������������
Net interest ����������������������������������������������������������������������������������
Total outlays �������������������������������������������������������������������������������������
Receipts ��������������������������������������������������������������������������������������������
Deficit(–)/surplus ��������������������������������������������������������������������������
On-budget deficit ��������������������������������������������������������������������������
Off-budget surplus �����������������������������������������������������������������������

2008

2009

2010

2011

2012

2013

594
654
718
612
597
605
617
448
476
486
480
485
489
500
1,042 1,130 1,203 1,092 1,082 1,094 1,117
581
611
652
692
731
775
825
371
387
417
445
489
491
547
197
212
225
240
258
277
297
302
370
401
400
409
389
410
1,451 1,580 1,695 1,777 1,887 1,932 2,079
237
232
226
255
280
291
297
2,730 2,942 3,125 3,125 3,249 3,316 3,493
2,568 2,553 2,760 2,947 3,123 3,322 3,467
–162 –389 –365 –178 –126
6
–26
–343
181

–573
184

–547
182

–378
201

–343
217

–218
223

–255
229

39

Summary Tables

Table S–12. OUTLAYS FOR MANDATORY
PROGRAMS UNDER CURRENT LAW 1
(In billions of dollars)
2007
Actual
Human resources programs:
Education, training, employment and social services ��������������
Health �����������������������������������������������������������������������������������������
Medicare �������������������������������������������������������������������������������������
Income security ��������������������������������������������������������������������������
Social Security ����������������������������������������������������������������������������
Veterans’ benefits and services �������������������������������������������������
Subtotal, human resources programs ����������������������������������

12
214
371
310
581
38

Estimate
2008
11
231
387
376
611
44

2009
9
245
417
372
652
50

2010
11
262
445
373
692
57

2011
12
280
489
385
731
65

2012
12
301
491
380
775
62

2013
12
323
547
393
825
70

1,525 1,660 1,746 1,840 1,963 2,021 2,171

Other mandatory programs:
National defense ������������������������������������������������������������������������
International affairs ������������������������������������������������������������������
Energy ����������������������������������������������������������������������������������������
Agriculture ���������������������������������������������������������������������������������
Commerce and housing credit ���������������������������������������������������
Transportation ���������������������������������������������������������������������������
Community and regional development �������������������������������������
Justice �����������������������������������������������������������������������������������������
General government ������������������������������������������������������������������
Undistributed offsetting receipts ����������������������������������������������
Other functions ��������������������������������������������������������������������������

3
–6
–4
12
–1
2
–*
1
2
–82
1

4
–7
–3
11
9
2
–*
3
2
–100
*

4
–3
–2
15
12
3
–*
3
3
–86
–*

4
*
–2
16
3
2
*
3
3
–91
*

5
–*
–2
15
–3
2
*
2
3
–97
–*

5
–1
–2
10
–7
2
*
1
4
–102
*

5
–1
–3
15
–9
3
*
1
4
–107
1

Subtotal, other mandatory programs ����������������������������������

–74

–80

–51

–63

–76

–89

–92

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

1,451 1,580 1,695 1,777 1,887 1,932 2,079

* $500 million or less.
1
This table meets the requirements of Section 221(b) of the Legislative Reorganization Act of 1970.

40

Mid-Session Review

Table S–13. FEDERAL GOVERNMENT FINANCING AND DEBT
(In billions of dollars)
2007
Actual
Financing:
Unified budget deficit (–)/surplus (+) �����������������������������������
Financing other than borrowing from the public:
Changes in: 1
Treasury operating cash balance (–) ������������������������
Checks outstanding, etc. 2 ������������������������������������������
Seigniorage on coins �������������������������������������������������������
Credit net financing disbursements (–):
Direct loan financing accounts ����������������������������������
Guaranteed loan financing accounts ������������������������
Net purchases of non-Federal securities by the
National Railroad Retirement Investment Trust (–) �����
Total, financing other than borrowing from the public.��
Total, requirement to borrow from the public ���������
Change in debt held by the public ���������������������������������������
Changes in Debt Subject to Statutory Limitation:
Change in debt held by the public ���������������������������������������
Change in debt held by Government accounts �������������������
Less: change in debt not subject to limit and other
adjustments ����������������������������������������������������������������������
Total, change in debt subject to statutory limitation ����
Debt Subject to Statutory Limitation, End of Year:
Debt issued by Treasury ������������������������������������������������������
Adjustment for discount, premium, and coverage 3 �������������
Total, debt subject to statutory limitation 4 �������������������
Debt Outstanding, End of Year:
Gross Federal debt: 5
Debt issued by Treasury �������������������������������������������������
Debt issued by other agencies ����������������������������������������
Total, gross Federal debt �������������������������������������������
Held by:
Debt held by Government accounts �������������������������������
Debt held by the public ��������������������������������������������������
As a percent of GDP ��������������������������������������������������

Estimate
2008

2009

2010

2011

2012

2013

–162

–389

–482

–178

–103

58

29

–23
–2
1

25
.........
1

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

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

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

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

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

–8
–9

–22
–1

–54
–3

–3
1

–15
2

–15
–2

–15
–2

–3
–44
–206

1
4
–385

*
–56
–538

*
–1
–178

1
–11
–114

*
–15
43

1
–15
14

206

385

538

178

114

–43

–14

206
293

385
287

538
277

178
326

114
368

–43
417

–14
394

2
501

*
673

2
817

1
506

2
484

2
376

2
382

8,926
–4
8,921

9,598 10,413 10,917 11,400 11,774
–4
–2
–*
1
3
9,594 10,411 10,917 11,401 11,777

12,155
4
12,159

8,926
25
8,951

9,598 10,413 10,917 11,400 11,774
25
25
26
26
25
9,623 10,438 10,943 11,425 11,800

12,155
25
12,180

3,916 4,203 4,480 4,806 5,175
5,035 5,421 5,958 6,137 6,251
36.8% 38.0% 40.2% 39.3% 37.9%

5,592
6,208
35.7%

5,986
6,194
34.0%

* $500 million or less.
1
A decrease in the Treasury operating cash balance (which is an asset) is a means of financing a deficit and therefore
has a positive sign. An increase in checks outstanding (which is a liability) is also a means of financing a deficit and therefore also has a positive sign.
2
Besides checks outstanding, includes accrued interest payable on Treasury debt, uninvested deposit fund balances,
allocations of special drawing rights, and other liability accounts; and, as an offset, cash and monetary assets (other than
the Treasury operating cash balance), other asset accounts, and profit on sale of gold.
3
Consists mainly of Federal Financing Bank debt (which is not subject to limit), the unamortized discount (less premium) on public issues of Treasury notes and bonds (other than zero-coupon bonds), and the unrealized discount on Government account series securities.
4
The statutory debt limit is $9,815 billion, enacted on September 29, 2007.
5
Treasury securities held by the public and zero-coupon bonds held by Government accounts are almost all measured at
sales price plus amortized discount or less amortized premium. Agency debt securities are almost all measured at face value.
Treasury securities in the Government account series are otherwise measured at face value less unrealized discount (if any).

Glossary
Appropriation.—An appropriation provides legal authority for Federal agencies to incur obligations and to make payments out of the Treasury
for specified purposes. Appropriations bills, such
as the Department of Homeland Security or the
Departments of Labor, Health and Human Services, and Education bills, are considered every
year by the Congress and supplemental appropriations bills are considered from time to time.
Authorization.—An authorization is an act of
the Congress that establishes or continues a Federal program or agency and sets forth the guidelines to which it must adhere.
Budget Authority.—Budget authority is the authority provided by law to incur financial obligations that will result in outlays.
Budget Resolution.—The budget resolution is
the Congress’ annual framework that sets targets for total budget authority, total outlays, total
revenues, and the deficit (on-budget), as well as
discretionary and mandatory allocations within
the spending targets. These targets guide the
committees’ deliberations. A budget resolution
does not become law and is not binding on the
Executive Branch.
Cap.—A ‘‘cap’’ is a legal limit on annual discretionary spending.
Deficit.—A deficit is the amount by which outlays exceed receipts in a fiscal year.
Discretionary Spending.—Discretionary
spending is spending that the President and
the Congress control through annual appropriations bills. Examples include spending for such activities as the FBI, the Coast
Guard, education, space exploration, highway construction, defense, and foreign aid.
Entitlement.—An entitlement program is one
in which the Federal Government is legally obligated to make payments or provide aid to any
person who meets the legal criteria for eligibility. Examples include Social Security, Medicare,
Medicaid, and Food Stamps.
Fiscal Year.—The fiscal year is the Federal Government’s accounting period. It begins on October

1st and ends on September 30th. For example,
fiscal year 2009 begins on October 1, 2008, and
ends on September 30, 2009.
Gross Domestic Product (GDP).—GDP is a
measure of the market value of goods and services produced within the United States. It is the
standard measure of the size of the economy.
Mandatory Spending.—Mandatory spending
is controlled by permanent law rather than annual appropriations. Examples are Social Security and the Student Loan Program. The President and the Congress can change the law with
respect to the eligibility criteria or the payment
formula, and thus change the level of spending
on mandatory programs, but annual action is not
necessary to ensure the continuation of spending. In addition, budget authority provided in
annual appropriations acts for certain programs
is treated as mandatory because the authorizing
legislation entitles beneficiaries to receive payment or otherwise obligates the Government to
make payment.
Obligations.—Obligations are binding agreements that result in outlays, immediately or in
the future.
Outlays.—Outlays are the primary measure of
Government spending. Outlays are payments to
liquidate obligations, largely measured on a cash
basis. Total Federal outlays are a net figure, consisting of gross payments minus the amount of
business-like collections and intragovernmental
transactions, in a given fiscal year.
Receipts.—Governmental receipts (sometimes
called receipts or revenues) are the collections of
money that primarily result from taxes and similar Government powers to compel payment. Examples of governmental receipts include income
taxes, payroll taxes, excise taxes, and customs
duties. They do not include offsetting receipts or
collections from the Federal Government’s business-like activities, such as the entrance fees at
national parks, or collections by one Government
account from another.
Surplus.—A surplus is the amount by which receipts exceed outlays in a fiscal year.

41

executiv e office of t h e p resident
office of management and budget

wash ington , d . c . 20503