budget 2009 tab

BUDGET OF THE UNITED STATES GOVERNMENT

Fiscal Year 2009

HISTORICAL TABLES

THE BUDGET DOCUMENTS

Budget of the United States Government, Fiscal Year 2009 contains the Budget Message of the President, information on the Presidents priorities, and budget overviews organized by agency.

Analytical Perspectives, Budget of the United States Govern-ment, Fiscal Year 2009 contains analyses that are designed to high-light specified subject areas or provide other significant presentations of budget data that place the budget in perspective. This volume includes economic and accounting analyses; information on Federal receipts and collections; analyses of Federal spending; information on Federal borrowing and debt; baseline or current services estimates; and other technical presentations.

The Analytical Perspectives volume also contains supplemental ma-terial with several detailed tables, including tables showing the budg-et by agency and account and by function, subfunction, and program, that is available on the Internet and as a CD-ROM in the printed document.

Historical Tables, Budget of the United States Government, Fiscal Year 2009 provides data on budget receipts, outlays, sur-pluses or deficits, Federal debt, and Federal employment over an extended time period, generally from 1940 or earlier to 2009 or 2013. To the extent feasible, the data have been adjusted to provide consist-ency with the 2009 Budget and to provide comparability over time.

Appendix, Budget of the United States Government, Fiscal Year 2009 contains detailed information on the various appropria-tions and funds that constitute the budget and is designed primarily for the use of the Appropriations Committees. The Appendix contains more detailed financial information on individual programs and ap-propriation accounts than any of the other budget documents. It

includes for each agency: the proposed text of appropriations lan-guage; budget schedules for each account; legislative proposals; expla-nations of the work to be performed and the funds needed; and proposed general provisions applicable to the appropriations of entire agencies or group of agencies. Information is also provided on certain activities whose transactions are not part of the budget totals.

AUTOMATED SOURCES OF BUDGET INFORMATION

The information contained in these documents is available in electronic format from the following sources:

Internet. All budget documents, including documents that are re-leased at a future date, spreadsheets of many of the budget tables, and a public use budget database are available for downloading in several formats from the Internet. Links to documents and materials from budgets of prior years are also provided. To access these docu-ments use the following address:

www.budget.gov/budget

Budget CD-ROM. The CD-ROM contains all of the budget docu-ments in fully indexed PDF format along with the software required for viewing the documents. The CD-ROM has many of the budget tables in spreadsheet format and also contains the materials that are included on the separate Analytical Perspectives CD-ROM.

For more information on access to electronic versions of the budget documents (except CD-ROMs), call (202) 5121530 in the D.C. area or toll-free (888) 2936498. To purchase the budget CD-ROM or print-ed documents call (202) 5121800.

GENERAL NOTES

1. All years referred to are fiscal years, unless otherwise noted.

2. Detail in this document may not add to the totals due to rounding.

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i

Contents of the Historical Tables

Page

Introduction:Structure, Coverage and Concepts ....................................................................................................................................... 1

Historical Trends .................................................................................................................................................................... 5

Section Notes .......................................................................................................................................................................... 11

Section 1Overview of Federal Government Finances ............................................................................................................. 21Table 1.1Summary of Receipts, Outlays, and Surpluses or Deficits (): 17892013 ................................................... 21Table 1.2Summary of Receipts, Outlays, and Surpluses or Deficits () as Percentages of GDP: 19302013 ........... 24Table 1.3Summary of Receipts, Outlays, and Surpluses or Deficits () in Current Dollars, Constant (FY 2000)

Dollars, and as Percentages of GDP: 19402013 ............................................................................................................. 26Table 1.4Receipts, Outlays, and Surpluses or Deficits () by Fund Group: 19342013 .............................................. 28

Section 2Composition of Federal Government Receipts ......................................................................................................... 30Table 2.1Receipts by Source: 19342013 ......................................................................................................................... 30Table 2.2Percentage Composition of Receipts by Source: 19342013 ........................................................................... 32Table 2.3Receipts by Source as Percentages of GDP: 19342013 ................................................................................. 34Table 2.4Composition of Social Insurance and Retirement Receipts and of Excise Taxes: 19402013 ..................... 36Table 2.5Composition of Other Receipts: 19402013 .................................................................................................. 45

Section 3Federal Government Outlays by Function ............................................................................................................... 47Table 3.1Outlays by Superfunction and Function: 19402013 ...................................................................................... 47Table 3.2Outlays by Function and Subfunction: 19622013 ......................................................................................... 56

Section 4Federal Government Outlays by Agency .................................................................................................................. 74Table 4.1Outlays by Agency: 19622013 ......................................................................................................................... 74Table 4.2Percentage Distribution of Outlays by Agency: 19622013 ........................................................................... 80

Section 5Budget Authority (On-and Off-Budget) .................................................................................................................... 86Table 5.1Budget Authority by Function and Subfunction: 19762013 ......................................................................... 86Table 5.2Budget Authority by Agency: 19762013 ......................................................................................................... 101Table 5.3Percentage Distribution of Budget Authority by Agency: 19762013 ........................................................... 106Table 5.4Discretionary Budget Authority by Agency: 19762009 ................................................................................. 111Table 5.5Percentage Distribution of Discretionary Budget Authority by Agency: 19762009 ................................... 115

Section 6Composition of Federal Government Outlays .......................................................................................................... 119Table 6.1Composition of Outlays: 19402013 ................................................................................................................. 119

Section 7Federal Debt ............................................................................................................................................................... 127Table 7.1Federal Debt at the End of Year: 19402013 .................................................................................................. 127Table 7.2Debt Subject to Statutory Limit: 19402013 ................................................................................................... 129Table 7.3Statutory Limits on Federal Debt: 1940Current ........................................................................................... 130

Section 8Outlays by Budget Enforcement Act Category ........................................................................................................ 134Table 8.1Outlays by Budget Enforcement Act Category: 19622013 ........................................................................... 134Table 8.2Outlays by Budget Enforcement Act Category in Constant (FY 2000) Dollars: 19622013 ....................... 135Table 8.3Percentage Distribution of Outlays by Budget Enforcement Act Category: 19622013 .............................. 136Table 8.4Outlays by Budget Enforcement Act Category as Percentages of GDP: 19622013 .................................... 137Table 8.5Outlays for Mandatory and Related Programs: 19622013 ........................................................................... 138Table 8.6Outlays for Mandatory and Related Programs in Constant (FY 2000) Dollars: 19622013 ....................... 144Table 8.7Outlays for Discretionary Programs: 19622009 ............................................................................................ 150Table 8.8Outlays for Discretionary Programs in Constant (FY 2000) Dollars: 19622009 ........................................ 156Table 8.9Budget Authority for Discretionary Programs: 19762009 ............................................................................ 162

Section 9Federal Government Outlays for Major Public Physical Capital, Research and Development, and Educationand Training .............................................................................................................................................................................. 166

Table 9.1Total Investment Outlays for Major Public Physical Capital, Research and Development, and Edu-cation and Training: 19622009 ........................................................................................................................................ 166

Table 9.2Major Public Physical Capital Investment Outlays in Current and Constant (FY 2000) Dollars:19402009 ........................................................................................................................................................................... 167

Table 9.3Major Public Physical Capital Investment Outlays in Percentage Terms: 19402009 ............................... 169Table 9.4National Defense Outlays for Major Public Direct Physical Capital Investment: 19402009 .................... 171

ii THE BUDGET FOR FISCAL YEAR 2009, HISTORICAL TABLES

Contents of the Historical TablesContinued

Page

Section 9 (Continued).Table 9.5Nondefense Outlays for Major Public Direct Physical Capital Investment: 19402009 .............................. 173Table 9.6Composition of Outlays for Grants for Major Public Physical Capital Investment: 19412009 ................. 175Table 9.7Summary of Outlays for the Conduct of Research and Development: 19492009 (In Current Dollars, in

Constant (FY 2000) Dollars, as Percentages of Total Outlays, and as Percentages of GDP) ...................................... 182Table 9.8Composition of Outlays for the Conduct of Research and Development: 19492009 .................................. 184Table 9.9Composition of Outlays for the Conduct of Education and Training: 19622009 ........................................ 191

Section 10Gross Domestic Product and Implicit Outlay Deflators ........................................................................................ 194Table 10.1Gross Domestic Product and Deflators Used in the Historical Tables: 19402013 ................................... 194

Section 11Federal Government Payments for Individuals ..................................................................................................... 196Table 11.1Summary Comparison of Outlays for Payments for Individuals: 19402013 (In Current Dollars, as

Percentages of Total Outlays, as Percentages of GDP, and in Constant (FY 2000) Dollars) ...................................... 196Table 11.2Functional Composition of Outlays for Payments for Individuals: 19402013 .......................................... 198Table 11.3Outlays for Payments for Individuals by Category and Major Program: 19402013 ................................ 207

Section 12Federal Grants To State and Local Governments ................................................................................................. 232Table 12.1Summary Comparison of Total Outlays for Grants to State and Local Governments: 19402013 (in

Current Dollars, in Constant (FY 2000) Dollars, as Percentages of Federal Outlays, and as Percentages of GDP) 232Table 12.2Total Outlays for Grants to State and Local Governments by Function and Fund Group: 19402013 ... 234Table 12.3Total Outlays for Grants to State and Local Governments by Function, Agency, and Program:

19402009 ........................................................................................................................................................................... 241

Section 13Social Security and Medicare .................................................................................................................................. 289Table 13.1Cash Income, Outgo, and Balances of the Social Security and Medicare Trust Funds: 19362013 ........ 289

Section 14Federal Sector Transactions in the National Income and Product Accounts ...................................................... 302Table 14.1Federal Transactions in the National Income and Product Accounts for Federal Fiscal Years:

19482009 ........................................................................................................................................................................... 302Table 14.2Federal Transactions in the National Income and Product Accounts as Percentages of GDP for Fed-

eral Fiscal Years: 19482009 ............................................................................................................................................. 309

Section 15Total (Federal and State and Local) Government Finances ................................................................................. 316Table 15.1Total Government Receipts in Absolute Amounts and as Percentages of GDP: 19482007 ..................... 316Table 15.2Total Government Expenditures: 19482007 ................................................................................................ 318Table 15.3Total Government Expenditures as Percentages of GDP: 19482007 ........................................................ 320Table 15.4Total Government Expenditures by Major Category of Expenditure: 19482007 ..................................... 322Table 15.5Total Government Expenditures by Major Category of Expenditure as Percentages of GDP:

19482007 ........................................................................................................................................................................... 324Table 15.6Total Government Surpluses or Deficits () in Absolute Amounts and as Percentages of GDP:

19482007 ........................................................................................................................................................................... 326

Section 16Federal Health Spending ......................................................................................................................................... 328Table 16.1Outlays for Health Programs: 19622013 ..................................................................................................... 328

Section 17Government Employment ........................................................................................................................................ 329Table 17.1Total Executive Branch Civilian Employees: 19402007 ............................................................................. 329Table 17.2Total Executive Branch Civilian Employees: 19402007 (as percentage of total) ..................................... 331Table 17.3Total Executive Branch Civilian Full-Time Equivalent (FTE) Employees: 19812009 ............................. 333Table 17.4Total Executive Branch Civilian Full-Time Equivalent (FTE) Employees: 19812009 (as percentage of

total) .................................................................................................................................................................................... 334Table 17.5Government Employment and Population: 19622007 ................................................................................ 335

1

INTRODUCTION

STRUCTURE, COVERAGE AND CONCEPTS

Historical Tables provides a wide rangeof data on Federal Government finances.Many of the data series begin in 1940and include estimates of the Presidents budgetfor 20072013. Additionally, Table 1.1 providesdata on receipts, outlays, and surpluses ordeficits for 19011939 and for earlier multi-year periods.

Structure

This document is composed of 17 sections,each of which has one or more tables.Each section covers a common theme. Section1, for example, provides an overview ofthe budget and off-budget totals; Section2 provides tables on receipts by source;and Section 3 shows outlays by function.When a section contains several tables, thegeneral rule is to start with tables showingthe broadest overview data and then workdown to more detailed tables. The purposeof these tables is to present a broad rangeof historical budgetary data in one convenientreference source and to provide relevant com-parisons likely to be most useful. The mostcommon comparisons are in terms of propor-tions (e.g., each major receipt category asa percentage of total receipts and of thegross domestic product).

Section notes explain the nature of theactivities covered by the tables in each section.Additional descriptive information is also in-cluded where appropriate. Explanations aregenerally not repeated, but there are occa-sional cross-references to related materials.

Because of the numerous changes in theway budget data have been presented overtime, there are inevitable difficulties in tryingto produce comparable data to cover manyyears. The general rule is to provide datain as meaningful and comparable a fashionas possible. To the extent feasible, the dataare presented on a basis consistent withcurrent budget concepts. When a structural

change is made, insofar as possible the dataare adjusted for all years.

One significant change made in the early1990s concerns the budgetary treatment ofFederal credit programs, which was changedby the Federal Credit Reform Act of 1990.Previously the budget recorded the cost ofdirect and guaranteed loans on a cash basis.Under credit reform, the budget only recordsbudget authority and outlays for the subsidycost of direct and guaranteed loans madein 1992 and subsequent years. The subsidyis defined as the net estimated cash flowsto and from the Government over the lifeof the loan, discounted to the present. Thecash transactions are recorded as a meansof financing item. Because it was impossibleto convert the pre-1992 loans to a creditreform basis, the data are on a cash basisfor pre-1992 loans and on a credit reformbasis for loans made in 1992 and subsequentyears.

Coverage

The Federal Government has used theunified or consolidated budget concept asthe foundation for its budgetary analysisand presentation since the 1969 budget. Thebasic guidelines for the unified budget werepresented in the Report of the PresidentsCommission on Budget Concepts (October1967). The Commission recommended thebudget include all Federal fiscal activitiesunless there were exceptionally persuasivereasons for exclusion. Nevertheless, from thevery beginning some programs were perceivedas warranting special treatment. Indeed, theCommission itself recommended a bifurcatedpresentation: a unified budget composedof an expenditure account and a loanaccount. The distinction between the expendi-ture account and the loan account provedto be confusing and caused considerable com-plication in the budget for little benefit.As a result, this distinction was eliminated

2 THE BUDGET FOR FISCAL YEAR 2009, HISTORICAL TABLES

starting with the 1974 budget. However,even prior to the 1974 budget, the Export-Import Bank had been excluded by lawfrom the budget totals, and other exclusionsfollowed. The structure of the budget wasgradually revised to show the off-budget trans-actions in many locations along with theon-budget transactions, and the off-budgetamounts were added to the on-budget amountsin order to show total Federal spending.

The Balanced Budget and Emergency DeficitControl Act of 1985 (Public Law 99177)repealed the off-budget status of all thenexisting off-budget entities, but it also includeda provision moving the Federal old-age, sur-vivors, and disability insurance funds (collec-tively known as Social Security) off-budget.To provide a consistent time series, thebudget historical data show Social Securityoff-budget for all years since its inception,and show all formerly off-budget entitieson-budget for all years. The Omnibus BudgetReconciliation Act of 1989 (OBRA 1989) movedthe Postal Service fund off-budget, startingin fiscal year 1989. Again to provide aconsistent time series, transactions of thePostal Service fund are shown off-budgetbeginning with its inception in 1972. Thetransactions of its predecessor, the Post OfficeDepartment, remain on-budget.

Though Social Security and the PostalService are now off-budget, they continueto be Federal programs. Indeed, Social Secu-rity currently accounts for about one-fourthof all Federal receipts and over one-fifthof all Federal spending. Hence, the budgetdocuments include these funds and focuson the Federal totals that combine the on-budget and off-budget amounts. Various budg-et tables and charts show total Federalreceipts, outlays, and surpluses and deficits,and divide these totals between the portionsthat are on-budget and off-budget.

Changes in Historical Budget Authority,Outlays, Receipts and Deficits

This years annual consultations with theCongress resulted in no reclassification ofaccounts or activities as to function or subfunc-tion. Very minor (and, generally, offsetting)adjustments have been made to reflect correc-

tions in agency reporting provided to theTreasury Department.

Note on the Fiscal Year

The Federal fiscal year begins on October1 and ends on the subsequent September30. It is designated by the year in whichit ends; for example, fiscal year 2007 beganon October 1, 2006, and ended on September30, 2007. Prior to fiscal year 1977 theFederal fiscal years began on July 1 andended on June 30. In calendar year 1976the July-September period was a separateaccounting period (known as the transitionquarter or TQ) to bridge the period requiredto shift to the new fiscal year.

Concepts Relevant to the HistoricalTables

Budget receipts constitute the income sideof the budget; they are composed almostentirely of taxes or other compulsory paymentsto the Government. Any income from business-type activities (e.g., interest income or saleof electric power), and any income by Govern-ment accounts arising from payments byother Government accounts is offset againstoutlays, so that total budget outlays arereported net of offsetting collections. Thismethod of accounting permits users to easilyidentify the size and trends in Federal taxesand other compulsory income, and in Federalspending financed from taxes, other compul-sory income, or borrowing. Budget surplusrefers to any excess of budget receipts overbudget outlays, while budget deficit refersto any excess of budget outlays over budgetreceipts.

The terms off-budget receipts, off-budgetoutlays, off-budget surpluses, and off-budgetdeficits refer to similar categories for off-budget activities. The sum of the on-budgetand off-budget transactions constitute theconsolidated or total Federal Governmenttransactions.

The budget is divided between two fundgroups, Federal funds and trust funds. TheFederal funds grouping includes all receiptsand outlays not specified by law as beingtrust funds. All Federal funds are on-budgetexcept for the Postal Service fund, which

3THE BUDGET FOR FISCAL YEAR 2009, HISTORICAL TABLES

is shown as off-budget starting with fiscalyear 1972. All trust funds are on-budget,except the two Social Security retirementtrust funds, which are shown off-budget forall years.

The term trust fund as used in Federalbudget accounting is frequently misunderstood.In the private sector, trust refers to fundsof one party held by a second party (thetrustee) in a fiduciary capacity. In the Federalbudget, the term trust fund means onlythat the law requires the funds be accountedfor separately and used only for specifiedpurposes and that the account in whichthe funds are deposited is designated asa trust fund. A change in law may changethe future receipts and the terms underwhich the funds resources are spent. Thedetermining factor as to whether a particularfund is designated as a Federal fund ortrust fund is the law governing the fund.

The largest trust funds are for retirementand social insurance (e.g., civil service andmilitary retirement, Social Security, Medicare,and unemployment benefits). They are fi-nanced largely by social insurance taxes andcontributions and payments from the generalfund (the main component of Federal funds).However, there are also major trust fundsfor transportation (highway and airport andairways) and for other programs financedin whole or in part by beneficiary-based,earmarked taxes.

Sometimes there is confusion between budg-et receipts and offsetting receipts and offset-ting collections. Receipts are income thatresults from the Governments exercise ofits sovereign power to tax, or otherwise

compel payment, or from gifts of moneyto the Government. They are also calledgovernmental receipts or budget receipts. Off-setting collections and offsetting receipts resultfrom either of two kinds of transactions:business-like or market-oriented activities withthe public and intragovernmental transactions,the receipt by one Government account ofa payment from another account.

For example, the budget records the pro-ceeds from the sale of postage stamps, thefees charged for admittance to recreationareas, and the proceeds from the sale ofGovernment-owned land, as offsetting collec-tions or offsetting receipts. An example ofan intragovernmental transaction is the pay-ments received by the General Services Ad-ministration from other Government agenciesfor the rent of office space. These are creditedas offsetting collections in the Federal Build-ings Fund. Offsetting collections and offsettingreceipts are deducted from gross budget au-thority and outlays, rather than added toreceipts. This treatment produces budget totalsfor receipts, budget authority, and outlaysthat represent governmental transactions withthe public rather than market activity.

When funds are earmarked, it means thereceipts or collections are separately identifiedand used for a specified purposethey arenot commingled (in an accounting sense)with any other money. This does not meanthe money is actually kept in a separatebank account. All money in the Treasuryis merged for efficient cash management.However, any earmarked funds are accountedfor in such a way that the balances arealways identifiable and available for the stipu-lated purposes.

5

HISTORICAL TRENDS

Because the Historical Tables publicationprovides a large volume and wide arrayof data on Federal Government finances,it is sometimes difficult to perceive the longerterm patterns in various budget aggregatesand components. To assist the reader inunderstanding some of these longer termpatterns, this section provides a short sum-mary of the trends in Federal deficits andsurpluses, debt, receipts, outlays and employ-ment.

Deficits and Debt.As shown in Table1.1, except for periods of war (when spendingfor defense increased sharply), depressionsor other economic downturns (when receiptsfell precipitously), the Federal budget wasgenerally in surplus throughout most of theNations first 200 years. For our first 60years as a Nation (through 1849), cumulativebudget surpluses and deficits yielded a netsurplus of $70 million. The Civil War, alongwith the Spanish-American War and thedepression of the 1890s, resulted in a cumu-lative deficit totaling just under $1 billionduring the 18501900 period. Between 1901and 1916, the budget hovered very closeto balance every year. World War I broughtlarge deficits that totaled $23 billion overthe 19171919 period. The budget was thenin surplus throughout the 1920s. However,the combination of the Great Depressionfollowed by World War II resulted in along, unbroken string of deficits that werehistorically unprecedented in magnitude. Asa result, Federal debt held by the publicmushroomed from less than $3 billion in1917 to $16 billion in 1930 and then to$242 billion by 1946. In relation to thesize of the economy, debt held by the publicgrew from 16% of GDP in 1930 to 109%in 1946.

During much of the postwar period, thissame pattern persistedlarge deficits wereincurred only in time of war (e.g., Koreaand Vietnam) or as a result of recessions.As shown in Table 1.2, prior to the 1980s,postwar deficits as a percent of GDP reachedtheir highest during the 197576 recession

at 4.2% in 1976. Debt held by the publichad grown to $477 billion by 1976, but,because the economy had grown faster, debtas a percent of GDP had declined throughoutthe postwar period to a low of 23.9% in1974, climbing back to 27.5% in 1976. Fol-lowing five years of deficits averaging 2.5%of GDP between 19771981, debt held bythe public stood at 25.8% of GDP by 1981,only two percentage points higher than itspostwar low.

The traditional pattern of running largedeficits only in times of war or economicdownturns was broken during much of the1980s. In 1982, partly in response to arecession, large tax cuts were enacted. How-ever, these were accompanied by substantialincreases in defense spending. Although reduc-tions were made to nondefense spending,they were not sufficient to offset the impacton the deficit. As a result, deficits averaging$206 billion were incurred between 1983and 1992. These unprecedented peacetimedeficits increased debt held by the publicfrom $789 billion in 1981 to $3.0 trillion(48.1% of GDP) in 1992.

After peaking at $290 billion in 1992,deficits declined each year, dropping to alevel of $22 billion in 1997. In 1998, theNation recorded its first budget surplus ($69.3billion) since 1969. As a percent of GDP,the budget bottom line went from a deficitof 4.7% in 1992 to a surplus of 0.8% in1998, increasing to a 2.4% surplus in 2000.An economic slowdown began in 2001 andwas exacerbated by the terrorists attacksof September 11, 2001. The deteriorationin the performance of the economy togetherwith income tax relief provided to help offsetthe economic slowdown and additional spend-ing in response to the terrorist attacks pro-duced a drop in the surplus to $128 billion(1.3% of GDP) in 2001 and a return todeficits ($158 billion, 1.5% of GDP) in 2002.These factors also contributed to the increasein the deficit in the following two years,reaching $413 billion (3.6% of GDP) in 2004.Strong economic growth in 2005 and 2006


produced a sharp increase in revenues, helpingto reduce the deficit to $248 billion (1.9%of GDP) in 2006 and even further to $162billion (1.2% of GDP) in 2007. Debt heldby the public, which had peaked at 49.4%of GDP in 1993, fell to 33.0% by 2001and increased thereafter, reaching 37.5% by2005. The recent declines in the deficit havehelped to reduce debt held by the publicto 36.8% of GDP in 2007.

Receipts.From the beginning of the Repub-lic until the start of the Civil War, ourNation relied on customs duties to financethe activities of the Federal Government.During the 19th Century, sales of publiclands supplemented customs duties. Whilelarge amounts were occasionally obtained fromthe sale of lands, customs duties accountedfor over 90% of Federal receipts in mostyears prior to the Civil War. Excise taxesbecame an important and growing sourceof Federal receipts starting in the 1860s.Estate and gift taxes were levied and collectedsporadically from the 1860s through WorldWar I, although never amounting to a signifi-cant source of receipts during that time.Prior to 1913, income taxes did not existor were inconsequential, other than for abrief time during the Civil War period, whenspecial tax legislation raised the income taxshare of Federal receipts to as much as13% in 1866. Subsequent to the enactmentof income tax legislation in 1913, thesetaxes grew in importance as a Federal receiptssource during the following decade. By 1930,the Federal Government was relying on in-come taxes for 60% of its receipts, whilecustoms duties and excise taxes each ac-counted for 15% of the receipts total.

During the 1930s, total Federal receiptsaveraged about 5% of GDP. World WarII brought a dramatic increase in receipts,with the Federal receipts share of GDPpeaking at 20.9% in 1944. The share declinedsomewhat after the war and has remainedbetween 16%20% of GDP during most ofthis time. In recent years, receipts haveincreased as a share of GDPfrom 17.5%in 1992 to 20.9% in 2000, dropping backto 16.4% in 2004 before increasing to 18.5%in 2006 and 18.8% in 2007. There havebeen some significant shifts during the post-

war period in the underlying sources orcomposition of receipts.

The increase in taxes needed to supportthe war effort in the 1940s saw total (corporateand individual) income taxes rise to promi-nence as a source of Federal receipts, reachingnearly 80% of total receipts in 1944. Afterthe war, the total income tax share ofreceipts fell from a postwar high of 74%in 1952 to an average of 64% in the late1960s. The growth in social insurance taxes(such as Social Security and Medicare) morethan offset a postwar secular decline inexcise and other non-income tax shares. Thecombination of substantial reductions in in-come taxes enacted in the early 1980s andthe continued growth in social insurancetaxes resulted in a continued decline inthe total income tax share of receipts. By1983 the total income tax share had droppedto 54% of receipts, where it remained untilthe mid-1990s. Since 1994, the total incometax share of receipts has increased, reaching60% in 2000, before dropping back to 53%by 2004 and then increasing to 58% in2006 and 60% in 2007.

Corporation income taxes accounted for alarge part of this postwar decline in totalincome tax share, falling from over 30%of total Federal receipts in the early 1950sto 20% in 1969. During the same period,pretax corporate profits fell from about 12%of GDP in the early 1950s to 10% in 1968.By 1980 the corporation income tax shareof total receipts had dropped to 12.5%. Duringthe 1980s, pretax corporate profits declinedas a percent of GDP and, thus, the corporationincome tax share dropped to a low of 6.2%in 1983. By 1996, the share had climbedback to 11.8%. By 2003, it had droppedback to 7.4%, which was well below the1980 share, before climbing back to 10.1%in 2004 and increasing further to 14.7%in 2006, but dropping slightly to 14.4%in 2007. This postwar drop in corporationincome tax share of total receipts was morethan offset by the growth in social insurancetaxes and retirement receipts, as both taxrates and percentage of the workforce coveredby payroll taxes increased. This categoryof receipts increased from only 8% of totalreceipts during the mid-1940s to 38% by1992, but declined to 32% by 2000 before


rising to back a 40% share in 2003 andfalling off to 35% in 2006 and 34% in2007. Excise taxes have also declined inrelative importance during the postwar period,falling from a 19% share in 1950 to 10%by 1965 and 5% by 1985. Excise taxesaccounted for only 3% of total receipts in2006 and dropped further to 2.5% in 2007,due, in part, to the end of the Federaltelephone excise tax on long distance calls.

Outlays and Federal employment.Through-out most of the Nations history prior tothe 1930s, the bulk of Federal spendingwent towards national defense, veterans bene-fits and interest on the public debt. In1929, for example, 71% of Federal outlayswere in these three categories. The 1930sbegan with Federal outlays comprising just3.4% of GDP. As shown in Table 1.2, theefforts to fight the Great Depression withpublic works and other nondefense Federalspending, when combined with the depressedGDP levels, caused outlays and their shareof GDP to increase steadily during mostof that decade, with outlays rising to 10.3%of GDP by 1939 and to 12.0% by 1941on the eve of U.S. involvement in WorldWar II. Defense spending during World WarII resulted in outlays as a percent of GDPrising sharply, to a peak of 43.6% in 1944.The end of the war brought total spendingdown to 14.3% of GDP by 1949. Then theKorean War increased spending to an average19.5% of GDP for a few years in the early1950s, but outlays as a percent of GDPthen stabilized at around 1719% until U.S.involvement in the Vietnam war escalatedsharply in the middle 1960s and early 1970s.From 1967 through 1971, Federal outlaysaveraged 19.6% of GDP. The decline indefense spending as a percent of GDP thatbegan in 1971, as the Vietnam War beganto wind down, was more than offset byincreased spending on human resources pro-grams during the 1970sdue to the matura-tion of the Social Security program andother longstanding income support programs,as well as a takeoff in spending on therecently enacted Great Society programs, suchas Medicare and Medicaidso that totalspending increased as a percent of GDP,averaging 20% during the 1970s (reflecting,in part, the substantial increase in grants

to State and local governments during the1970s). Since receipts were averaging 18%of GDP during that decade, the result waschronic deficits averaging 2% of GDP (contrib-uting to this was the recession of 197576,which saw deficits increase to 4.2% in 1976).

The 1980s began with substantial momen-tum in the growth of Federal nondefensespending in the areas of human resources,grants to State and local governments, and,as a result of the deficits incurred throughoutthe 1970s, interest on the public debt. Inthe early 1980s, a combination of substantiallyincreased defense spending, continued growthin human resource spending, a tax cut anda recession caused the deficits to soar, which,in turn, sharply increased spending for inter-est on the public debt. Federal spendingclimbed to an average of 22.8% of GDPduring 19811985. An end to the rapid defensebuildup and a partial reversal of the taxcuts, along with a strong economy duringthe second half of the decade, brought Federalspending back down to 21.2% of GDP by1989. In the early 1990s, another recession,in the face of continued rapid growth inFederal health care spending and additionalspending resulting from the savings andloan crisis, caused the outlay share of GDPto average over 22.2% in 1991 and 1992.Since then, this outlay growth trend wasreversed. Outlays as a percent of GDP fellto 18.4% by 2000, but have gradually risensince then, exceeding 20% in both 2005and 2006, due, in part, to increased spendingrelated to the global war on terrorism andthe Iraq war, exacerbated by further spendingincreases in response to the devastating hurri-canes that struck States along the GulfCoast in late summer 2005. However, in2007, the deficit has dropped just below20% of GDP.

Despite the growth in total Federal spendingas a percent of GDP in the postwar period,Federal Executive Branch employment, asshown in Table 17.1, has remained roughlyconstant, ranging from 1.6 to 2.3 millioncivilian employees (excluding the Postal Serv-ice) throughout this period. The compositionof employment has shifted dramatically be-tween defense and civilian agencies overthe last 35 years. In 1951, for example,of the 2.0 million employees, 1.2 million


worked for the Department of Defense and0.7 million worked for civilian agencies. By1974, Federal employment was split equallybetween defense and civilian agencies, witheach accounting for 1.1 million employees.After a buildup in defense civilian employmentin the 1980s, the shift away from defenseto civilian agency employment resumed inthe 1990s, so that by 1999 civilian agencyemployment was 1.2 million and Departmentof Defense employment was 0.7 million, nearlythe reverse of the proportions in 1951. Since1990, when there were over 2.2 millioncivilians employed by the Executive Branchof the Federal Government, employment hasbeen reduced by over 300 thousand, totalingless than 1.9 million in 2007.

Although total spending has increased sub-stantially as a percent of GDP since the1950s, the growth in the various componentsof spending has not been even and, thus,the composition of spending has changedsignificantly during the same period:

Discretionary spending totaled 12.7% ofGDP in 1962, with three-fourths going todefense. Defense spending increased duringthe Vietnam War buildup in the late 1960scausing total discretionary outlays to riseto 13.6% of GDP by 1968, after whicha secular decline began. By the middle 1970s,this category had dropped to 10% of GDP,where it hovered until the late 1980s, whenthe defense buildup that started early inthat decade ended. As a percent of GDP,discretionary spending fell substantially overthe 1990s, from 9.0% in 1991 to 6.3% in1999. Since then, discretionary spending hasincreased, standing at 7.6% of GDP in 2007,down from 7.8% in 2006. While discretionaryspending has followed a path of seculardecline over the past 25 years, its majorcomponentsdefense and nondefensehavecontrasting histories.

Defense discretionary spending was at 9.3%of GDP in 1962. As shown in Table 8.4,spending in this category had declined to7.4% of GDP by 1965, then increased asa result of the Vietnam War. After peakingat 9.5% of GDP in 1968, it returned tothe 1965 level by 1971. The decline continuedthroughout the 1970s, hitting a low pointin this decade of 4.7% of GDP in 1979.

The defense buildup starting in the early1980s boosted its percentage of GDP backto 6.2% by 1986, after which it again begana gradual decline throughout the rest ofthat decade. By 2000, defense discretionaryspending stood at 3.0% of GDP, reflectingthe impact of the end of the Cold Waron our Nations defense requirements andthe significant economic growth during muchof the 1990s. Spending on the current waragainst terrorism has partially reversed thisdecline, with defense discretionary spendinggrowing to 4.0% of GDP in 2005, 2006and 2007.

Nondefense discretionary spending as apercent of GDP has followed a much differentpath. In 1962, it stood at 3.4% of GDP.During the next few years it quickly increased,reaching 4.2% of GDP by 1967. It droppedslightly after that year, but still averagedabout 4.0% of GDP until 1975, when itsurged to 4.5% of GDP due to the recessionand partly due to growth in spending onenergy, the environment, housing and otherincome support programs. Much of this growthwas in the form of Federal grants to Stateand local governments. Additional grantspending arose from the creation of GeneralRevenue Sharing in 1972 and various anti-recession grants at the end of the decade.Nondefense discretionary outlays peaked asa percent of GDP during the recession in1980 at 5.2%. This category declined sharplyas a percent of GDP starting in 1982, fallingto 3.9% by 1985 and to 3.5% during the19871991 period. Spending for these pro-grams then increased slightly as a percentof GDP, climbing to 3.8% by 1993 beforereceding in subsequent years, reaching alow of 3.2% in 1999. Growth in recentyears has increased, with nondefense discre-tionary spending reaching 3.8% of GDP in2006, dropping slightly to 3.6% in 2007.

Programmatic mandatory spending (whichexcludes net interest and undistributed offset-ting receipts) accounts for a large part ofthe growth in total Federal spending asa percent of GDP since the 1950s. Majorprograms in this category include Social Secu-rity, Medicare, deposit insurance and means-tested entitlements (Medicaid, aid to depend-ent children, food stamps and other programssubject to an income test). Prior to the


start of Medicare and Medicaid in 1966,this category averaged 5.7% of GDP between1962 and 1965 (less than half the sizeof total discretionary spending), with SocialSecurity accounting for nearly half. Withina decade, this category was comparable insize to total discretionary spending, nearlydoubling as a percent of GDP to 10.6%by 1976 (1.1% of which was for unemploymentcompensation that year).

Although part of this growth representedthe impact of the 197576 recession on GDPlevels and outlays for unemployment com-pensation, the largest part was due to growthin Social Security, Medicare and Medicaid.These three programs totaled 3.4% of GDPin 1968 and grew rapidly to 5.5% of GDPby 1976. While Social Security stabilizedas a percent of GDP during 19851997,ranging from 4.3% to 4.6%, the growth inother programmatic mandatory spending hascontinued to outpace the growth in GDPsince the mid-1970s (apart from recessionrecovery periods) due largely to Medicareand Medicaid. These two programs, whichwere 1.2% of GDP in 1975, have morethan doubled as a percent of GDP sincethen, reaching 3.5% in 1997, dropping slightly

to 3.2% in 1999 and 2000, before risingto 3.4% in 2001, 3.9% in 2005 and 4.1%by 2007. Excluding Medicaid, spending formeans-tested entitlements in 2006 and 2007was at 1.3% percent of GDP, nearly thesame as it was over twenty-five years agoin 1975. By way of contrast, the remainingprogrammatic mandatory spendingi.e., ex-cluding Medicare, unemployment compensa-tion, Social Security, deposit insurance andmeans-tested entitlementshas been morethan halved as a percent of GDP, fallingfrom 3.2% in 1975 to no more than 1.5%during the past ten years. (Major programsin this grouping include Federal employeeand railroad retirement, farm price supportsand veterans compensation and readjustmentbenefits.) Nevertheless, total programmaticmandatory spending in 2007 was 11.2% ofGDP compared to 7.6% for total discretionaryspending.

Additional perspectives on spending trendsavailable in this document include spendingby agency, by function and subfunction andby composition of outlays categories, whichinclude payments for individuals and grantsto State and local governments.

11

SECTION NOTES

Notes on Section 1 (Overview of FederalGovernment Finances)

This section provides an overall perspectiveon total receipts, outlays (spending), andsurpluses or deficits. Off-budget transactions,which consist of the Social Security trustfunds and the Postal Service fund, and on-budget transactions, which equal the totalminus the off-budget transactions, are shownseparately. Tables 1.1 and 1.2 have similarstructures; 1.1 shows the data in millionsof dollars, while 1.2 shows the same dataas percentages of the gross domestic product(GDP). For all the tables using GDP, fiscalyear GDP is used to calculate percentagesof GDP. The fiscal year GDP data areshown in Table 1.2. Additionally, Table 1.1shows budget totals annually back to 1901and for multi-year periods back to 1789.

Table 1.3 shows total Federal receipts,outlays, and surpluses or deficits in currentand constant (Fiscal Year 2000=100) dollars,and as percentages of GDP. Section 6 providesa disaggregation of the constant dollar outlays.

Table 1.4 shows receipts, outlays and sur-pluses or deficits for the consolidated budgetby fund group. The budget is composedof two principal fund groupsFederal fundsand trust funds. Normally, whenever dataare shown by fund group, any paymentsfrom programs in one fund group to accountsof the other are shown as outlays of thepaying fund and receipts of the collectingfund. When the two fund groups are aggre-gated to arrive at budget totals these interfundtransactions are deducted from both receiptsand outlays in order to arrive at transactionswith the public. Table 1.4 displays receiptsand outlays on a gross basis. That is, incontrast to normal budget practice, collectionsof interfund payments are included in thereceipts totals rather than as offsets to outlays.These interfund collections are grossed-upto more closely approximate cash incomeand outgo of the fund groups.

Notes on Section 2 (Composition ofFederal Government Receipts)

Section 2 provides historical informationon on-budget and off-budget receipts. Table2.1 shows total receipts divided into fivemajor categories; it also shows the splitbetween on-budget and off-budget receipts.Table 2.2 shows the receipts by major categoryas percentages of total receipts, while Table2.3 shows the same categories of receiptsas percentages of GDP. Table 2.4disaggregates two of the major receipts cat-egories, social insurance taxes and contribu-tions and excise taxes, and Table 2.5disaggregates the other receipts category.While the focus of the section is on totalFederal receipts, auxiliary data show theamounts of trust fund receipts in each cat-egory, so it is possible to readily distinguishthe Federal fund and trust fund portions.

Notes on Section 3 (Federal GovernmentOutlays by Function)

Section 3 displays Federal Government out-lays (on-budget and off-budget) according totheir functional classification. The functionalstructure is divided into 18 broad areas(functions) that provide a coherent and com-prehensive basis for analyzing the budget.Each function, in turn, is divided into basicgroupings of programs entitled subfunctions.The structure has two categoriesallowancesand undistributed offsetting receiptsthat arenot truly functions but are required in orderto cover the entire budget. At times a moresummary presentation of functional data isneeded; the data by superfunction is pro-duced to satisfy this need. Table 3.1 providesoutlays by superfunction and function whileTable 3.2 shows outlays by function andsubfunction.

In arraying data on a functional basis,budget authority and outlays are classifiedaccording to the primary purpose of theactivity. To the extent feasible, this classifica-tion is made without regard to agency or


organizational distinctions. Classifying eachactivity solely in the function defining itsmost important purposeeven though manyactivities serve more than one purposepermits adding the budget authority andoutlays of each function to obtain the budgettotals. For example, Federal spending forMedicaid constitutes a health care program,but it also constitutes a form of incomesecurity benefits. However, the spending can-not be counted in both functions; since themain purpose of Medicaid is to finance thehealth care of the beneficiaries, this programis classified in the health function. Section3 provides data on budget outlays by function,while Section 5 provides comparable dataon budget authority.

Notes on Section 4 (Federal GovernmentOutlays by Agency)

Section 4 displays Federal Government out-lays (on- and off-budget) by agency. Table4.1 shows the dollar amounts of such outlays,and Table 4.2 shows the percentage distribu-tion. The outlays by agency are based onthe agency structure currently in effect. Forexample, the Department of Homeland Secu-rity was established by legislation enactedin 2002. However, these data show spendingby the Department of Homeland Securityin previous years that consists of spendingattributable to predecessor agencies in earlieryears, but now attributable to the Departmentof Homeland Security.

Notes on Section 5 (Budget AuthorityOn- and Off-Budget)

Section 5 provides data on budget authority(BA). BA is the authority provided by lawfor agencies to obligate the Government tospend. Table 5.1 shows BA by function andsubfunction, starting with 1976. Table 5.2provides the same information by agency,and Table 5.3 provides a percentage distribu-tion of BA by agency. Tables 5.4 and 5.5provide the same displays as Tables 5.2and 5.3, but for discretionary budget authorityrather than total budget authority. (Discre-tionary refers to the Budget EnforcementAct category that includes programs subjectto the annual appropriations process.)

The data in these tables were compiledusing the same methods used for the historicaltables for receipts and outlays (e.g., to theextent feasible, changes in classification arereflected retroactively so the data show thesame stream of transactions in the samelocation for all years). However, BA is hetero-geneous in nature, varying significantly fromone program to another. As a result, itis not additiveeither across programs oragencies for a year or, in many cases, foran agency or program across a series ofyearsin the same sense that budget receiptsand budget outlays are additive. The followingare examples of different kinds of BA andthe manner in which BA results in outlays:

BA and outlays for each year may be ex-actly the same (e.g., interest on the publicdebt).

For each year the Congress may appro-priate a large quantity of BA that willbe spent over a subsequent period of years(e.g., many defense procurement contractsand major construction programs).

Some BA (e.g., the salaries and expensesof an operating agency) is made availableonly for a year and any portion not obli-gated during that year lapses (i.e., itceases to be available to be obligated).

Revolving funds may operate spendingprograms indefinitely with no new infu-sion of BA, other than the authority tospend offsetting collections.

BA may be enacted with the expectationit is unlikely ever to be used (e.g., standbyborrowing authority).

All income to a fund (e.g., certain revolv-ing, special, and trust funds) may be per-manently appropriated as BA; as long asthe fund has adequate resources, there isno further relationship between the BAand outlays.

As a result of the Budget Enforcement Actof 1990, the measurement of BA changedin most special and trust funds with legis-latively imposed limitations or benefit for-mulas that constrain the use of BA. Wherepreviously budget authority was the totalincome to the fund, BA in these funds for1990 and subsequent years is now an esti-


mate of the obligations to be incurred dur-ing the fiscal year for benefit payments,administration and other expenses of thefund. In some, but not all, cases it waspossible to adjust BA figures for thesefunds for years prior to 1990 to conformto the current concepts.

Although major changes in the way BAis measured for credit programs (begin-ning in 1992) result from the Budget En-forcement Act, these tables could not bereconstructed to show revised BA figuresfor 1991 and prior years on the new basis.

In its earliest years, the Federal FinancingBank (FFB) was conducted as a revolvingfund, making direct loans to the public orpurchasing loan assets from other fundsor accounts. Each new loan by the FFBrequired new BA. In many cases, if thesame loan were made by the account beingserviced by the FFB, the loan could befinanced from offsetting collections and nonew BA would be recorded. Under termsof the 1985 legislation moving the FFBon-budget, the FFB ceased to make directloans to the public. Instead, it makes loansto the accounts it services, and these ac-counts, in turn, make the loans to the pub-lic. Such loans could be made from newBA or other obligational authority avail-able to the parent account. These tableshave not been reconstructed to shift BApreviously scored in the FFB to the parentaccounts, because there is no technicalway to reconfigure the data.

Despite these qualifications there is a desirefor historical data on BA, and this sectionhas been developed to meet that desire.Budget authority data are also provided byfunction in Table 8.9 for various discretionaryprogram groupings.

Notes on Section 6 (Composition ofFederal Government Outlays)

The composition categories in this sectiondivide total outlays (including Social Security)into national defense and nondefense compo-nents, and then disaggregate the nondefensespending into several parts:

Payments for individuals: These are Fed-eral Government spending programs de-

signed to transfer income (in cash or inkind) to individuals or families. To the ex-tent feasible, this category does not in-clude reimbursements for current servicesrendered to the Government (e.g., salariesand interest). The payments may be in theform of cash paid directly to individualsor they may take the form of the provisionof services or the payment of bills for ac-tivities largely financed from personal in-come. They include outlays for the provi-sion of medical care (in veterans hospitals,for example) and for the payment of med-ical bills (e.g., Medicare). They also includesubsidies to reduce the cost of housingbelow market rates, and food and nutritionassistance (such as food stamps). The database, while not precise, provides a reason-able perspective of the size and composi-tion of income support transfers withinany particular year and trends over time.Section 11 disaggregates the componentsof this category. The data in Section 6show a significant amount of payments forindividuals takes the form of grants toState and local governments to financebenefits for the ultimate recipients. Thesegrants include Medicaid, some food andnutrition assistance, and a significant por-tion of the housing assistance payments.Sections 11 and 12 provide a more detaileddisaggregation of this spending.

All other grants to State and local govern-ments: This category consists of the Fed-eral nondefense grants to State and localgovernments other than grants defined aspayments for individuals. Section 12disaggregates this spending.

Net interest: This category consists of allspending (including offsetting receipts) in-cluded in the functional category net in-terest. Most spending for net interest ispaid to the public as interest on the Fed-eral debt. As shown in Table 3.2, net inter-est includes, as an offset, significantamounts of interest income.

All other: This category consists of all re-maining Federal spending and offsettingreceipts except for those included in thecategory undistributed offsetting re-ceipts. It includes most Federal loan ac-tivities and most Federal spending for for-


eign assistance, farm price supports, med-ical and other scientific research, and, ingeneral, Federal direct program oper-ations.

Undistributed offsetting receipts: These areoffsetting receipts that are not offsetagainst any specific agency or pro-grammatic function. They are classified asfunction 950 in the functional tables. Addi-tional details on their composition can befound at the end of Table 3.2.

Table 6.1 shows these outlays in currentand constant dollars, the percentage distribu-tion of current dollar outlays, and the currentdollar outlays as percentages of GDP. Theterm constant dollars means the amountsof money that would have had to be spentin each year if, on average, the unit costof everything purchased within that categoryeach year (including purchases financed byincome transfers, interest, etc.) were thesame as in the base year (fiscal year 2000).The adjustments to constant dollars are madeby applying a series of chain-weighted priceindexes to the current dollar data base.The composite total outlays deflator is usedto deflate current dollar receipts to producethe constant dollar receipts in Table 1.3.The separate composite deflators used forthe various outlay categories are shown inTable 10.1.

Notes on Section 7 (Federal Debt)

This section provides information aboutFederal debt. Table 7.1 contains data ongross Federal debt and its major componentsin terms of both the amount of debt out-standing at the end of each year and thatamount as a percentage of fiscal year GDP.

Gross Federal debt is composed both ofFederal debt held (owned) by the publicand Federal debt held by Federal Governmentaccounts, which is mostly held by trustfunds. Federal debt held by the public consistsof all Federal debt held outside the FederalGovernment accounts. For example, it includesdebt held by individuals, private banks andinsurance companies, the Federal ReserveBanks, and foreign central banks. The sale(or repayment) of Federal debt to the publicis the principal means of financing a Federal

budget deficit (or disposing of a Federalbudget surplus).

The Federal Government accounts holdingthe largest amount of Federal debt securitiesare the civil service and military retirement,Social Security, and Medicare trust funds.However, significant amounts are also heldby some other Government accounts, suchas the unemployment and highway trustfunds.

Table 7.1 divides debt held by the publicbetween the amount held by the FederalReserve Banks and the remainder. The Fed-eral Reserve System is the central bankfor the Nation. Their holdings of Federaldebt are shown separately because they donot have the same impact on private creditmarkets as does other debt held by thepublic. They accumulate Federal debt asa result of their role as the countrys centralbank, and the size of these holdings hasa major impact on the Nations money supply.Since the Federal budget does not forecastFederal Reserve monetary policy, it doesnot project future changes in the amountsof Federal debt that will be held by theFederal Reserve Banks. Hence, the split ofdebt held by the public into that portionheld by the Federal Reserve Banks andthe remainder is provided only for pastyears. Table 2.5 shows deposits of earningsby the Federal Reserve System. Most interestpaid by Treasury on debt held by the FederalReserve Banks is returned to the Treasuryas deposits of earnings, which are recordedas budget receipts.

As a result of a conceptual revision inthe quantification of Federal debt, the dataon debt held by the public and gross Federaldebtbut only a small part of debt heldby Government accountswere revised backto 1956 in the 1990 budget. The total revisionwas relatively smalla change of under onepercent of the recorded value of the debtbut the revised basis is more consistentwith the quantification of interest outlays,and provides a more meaningful measureof Federal debt. The change converted mostdebt held by the public from the par valueto the sales price plus amortized discount.

Most debt held by Government accountsis issued at par, and securities issued at


a premium or discount were formerly recordedat par. However, zero-coupon bonds are re-corded at estimated market or redemptionprice. Starting in 1989, other debt heldby Government accounts is adjusted for anyinitial discount.

Table 7.2 shows the end-of-year amountsof Federal debt subject to the general statutorylimitation. It is recorded at par value (exceptfor savings bonds) through 1988, but bylaw the basis was changed, in part, toaccrual value for later years. Before WorldWar I, each debt issue by the Governmentrequired specific authorization by the Con-gress. Starting in 1917, the nature of thislimitation was modified in several steps untilit developed into a limit on the total amountof Federal debt outstanding. The Treasuryis free to borrow whatever amounts areneeded up to the debt limit, which is changedfrom time to time to meet new requirements.Table 7.3 shows the ceiling at each pointin time since 1940. It provides the specificlegal citation, a short description of thechange, and the amount of the limit specifiedby each Act. Most, but not all, of grossFederal debt is subject to the statutorylimit.

Notes on Section 8 (Outlays by BudgetEnforcement Act Category)

Section 8 is composed of nine tables, eightof which present outlays by the major cat-egories used under the Budget EnforcementAct (BEA) and under previous budget agree-ments between Congress and the currentand previous Administrations. The final tablepresents discretionary budget authority. (Dis-cretionary budget authority is shown on anagency basis in Section 5, Table 5.4 andTable 5.5.) Table 8.1 shows Federal outlayswithin each of the categories and subcat-egories. The principal categories are outlaysfor mandatory and related programs andoutlays for discretionary programs. Mandatoryand related programs include direct spendingand offsetting receipts whose budget authorityis provided by law other than appropriationsacts. These include appropriated entitlementsand the food stamp program, which receivepro forma appropriations. Discretionary pro-grams are those whose budgetary resources

(other than entitlement authority) are pro-vided in appropriations acts. The table showstwo major categories of discretionary pro-grams: Defense (Function 050) and Nondefense(all other discretionary programs). Table 8.2has the same structure, but shows the datain constant (FY 2000) dollars. Table 8.3shows the percentage distribution of outlaysby BEA category and Table 8.4 shows outlaysby BEA category as a percentage of GDP.

Table 8.5 provides additional detail byfunction and/or subfunction for mandatoryand related programs. Table 8.6 shows thesame data in constant dollars.

Table 8.7 provides additional detail byfunction and/or subfunction on outlays fordiscretionary programs. Table 8.8 providesthe same data in constant dollars. Table8.9 provides function and/or subfunction detailon budget authority for discretionary pro-grams.

Notes on Section 9 (Federal GovernmentOutlays for Major Physical Capital,Research and Development, and Edu-cation and Training)

Tables in this section provide a broadperspective on Federal Government outlaysfor public physical capital, the conduct ofresearch and development (R&D), and edu-cation and training. These data measurenew Federal spending for major public physicalassets, but they exclude major commodityinventories. In some cases it was necessaryto use supplementary data sources to estimatemissing data in order to develop a consistenthistorical data series. The data for the conductof research and development exclude outlaysfor construction and major equipment becausesuch spending is included in outlays forphysical capital.

Table 9.1 shows total investment outlaysfor major public physical capital, R&D, andeducation and training in current and constant(FY 2000) dollars, and shows the percentagedistribution of outlays and outlays as apercentage of GDP. Table 9.2 focuses ondirect Federal outlays and grants for majorpublic physical capital investment in currentand constant (FY 2000) dollars, disaggregatingdirect Federal outlays into national defense


and nondefense capital investment. Table 9.3retains the same structure as 9.2, but showsdirect Federal outlay totals for physical capitalinvestment as percentages of total outlaysand as percentages of GDP. Table 9.4disaggregates national defense direct outlays,while Table 9.5 disaggregates nondefense out-lays for major public physical capital invest-ment. Table 9.6 shows the composition ofgrant outlays for major public physical capitalinvestment.

Table 9.7 provides an overall perspectiveon Federal Government outlays for the conductof R&D. It shows total R&D spending andthe split between national defense and non-defense spending in four forms: in currentdollars, in constant dollars, as percentagesof total outlays, and as percentages of GDP.Table 9.8 shows outlays in current dollarsby major function and program.

Table 9.9 shows outlays for the conductof education and training in current dollarsfor direct Federal programs and for grantsto State and local governments. Total outlaysfor the conduct of education and trainingas a percentage of Federal outlays and inconstant (FY 2000) dollars are also shown.As with the series on physical capital, severalbudget data sources have been used to developa consistent data series extending back to1962. A discontinuity occurs between 1991and 1992 and affects primarily direct Federalhigher education outlays. For 1991 and earlier,these data include net loan outlays. Beginningin 1992, pursuant to changes in the treatmentof loans as specified in the Credit ReformAct of 1990, this series includes outlaysfor loan repayments and defaults for loansoriginated in 1991 and earlier and creditsubsidy outlays for loans originated in 1992and later years.

Table 9.9 also excludes education and train-ing outlays for physical capital (which areincluded in Table 9.7) and education andtraining outlays for the conduct of researchand development (which are in Table 9.8).Also excluded are education and trainingprograms for Federal civilian and militarypersonnel.

Notes on Section 10 (Implicit OutlayDeflators)

Section 10 consists of Table 10.1, GrossDomestic Product and Deflators Used in theHistorical Tables, which shows the variousimplicit deflators used to convert currentdollar outlays to constant dollars. The constantdollar deflators are based on chain-weighted(FY 2000 chained-dollars) price indexes de-rived from the National Income and ProductAccounts data.

Notes on Section 11 (FederalGovernment Payments for Individuals)

This section provides detail on outlaysfor Federal Government payments for individ-uals, which are also described in the noteson Section 6. The basic purpose of thepayments for individuals aggregation is toprovide a broad perspective on Federal cashor in-kind payments for which no currentservice is rendered yet which constitutesincome transfers to individuals and families.Table 11.1 provides an overview display ofthese data in four different forms. All fourof these displays show the total paymentsfor individuals, and the split of this totalbetween grants to State and local governmentsfor payments for individuals (such as Medicaidand grants for housing assistance) and allother (direct) payments for individuals.

Table 11.2 shows the functional compositionof payments for individuals (see notes onSection 3 for a description of the functionalclassification), and includes the same grantsversus nongrants (direct) split provided inTable 11.1. The off-budget Social Securityprogram finances a significant portion ofthe Federal payments for individuals. Thesetables do not distinguish between the on-budget and off-budget payments for individ-uals. However, all payments for individualsshown in Table 11.2 in function 650 (SocialSecurity) are off-budget outlays, and all otherpayments for individuals are on-budget. Table11.3 displays the payments for individualsby major program category.


Notes on Section 12 (Federal Grants ToState and Local Governments)

For several decades the Federal budgetdocuments have provided data on Federalgrants to State and local governments. Thepurpose of these data is to identify FederalGovernment outlays that constitute incometo State and local governments to help financetheir services and their income transfers(payments for individuals) to the public.Grants generally exclude Federal Governmentpayments for services rendered directly tothe Federal Government; for example, theyexclude most Federal Government paymentsfor research and development, and they ex-clude payments to State social service agenciesfor screening disability insurance beneficiariesfor the Federal disability insurance trustfund.

Table 12.1 provides an overall perspectiveon grants; its structure is similar to thestructure of Table 11.1.

Table 12.2 displays Federal grants by func-tion (see notes on Section 3 for a descriptionof the functional classification). The bulkof Federal grants are included in the Federalfunds group; however, since the creationof the highway trust fund in 1957, significantamounts of grants have been financed fromtrust funds (see notes to Section 1 for adescription of the difference between Federalfunds and trust funds). All Federal grantsare on-budget. Wherever trust fund outlaysare included in those data, Table 12.2 notonly identifies the total grants by functionbut also shows the split between Federalfunds and trust funds.

Table 12.3 provides data on grants atthe account or program level, with an identi-fication of the function, agency, and fundgroup of the payment.

Notes on Section 13 (Social Security andMedicare)

Over the past several decades the SocialSecurity programs (the Federal old-age andsurvivors insurance (OASI) and the Federaldisability insurance (DI) trust funds) andthe Medicare programs (the Federal hospitalinsurance (HI) and the Federal supplementary

medical insurance (SMI) trust funds) havegrown to be among the largest parts ofthe Federal budget. Because of the size,the rates of growth, and the specializedfinancing of these programs, policy analystsfrequently wish to identify these activitiesseparately from all other Federal taxes andspending. As discussed in the introductorynotes, the two Social Security funds areoff-budget, while the Medicare funds areon-budget. As Table 13.1 shows, the firstof these funds (OASI) began in 1937. Thetable shows the annual transactions of thatfund and of the other funds beginning withtheir points of origin.

The table provides detailed informationabout Social Security and Medicare by fund.It shows total cash income (including offsettingreceipts, but excluding any offsetting collec-tions, which are offset within the expenditureaccounts) by fund, separately identifying socialinsurance taxes and contributions,intragovernmental income, and proprietaryreceipts from the public. Virtually all ofthe proprietary receipts from the public, espe-cially those for the supplementary medicalinsurance trust fund, are Medicare insurancepremiums. The table shows the income, outgo,and surplus or deficit of each fund foreach year, and also shows the balancesof the funds available for future requirements.Most of these fund balances are investedin public debt securities and constitute asignificant portion of the debt held by Govern-ment accounts (see Table 7.1).

The SMI fund, which was established in1967, is financed primarily by payments fromFederal funds and secondarily by medicalinsurance premiums (proprietary receipts fromthe public). The other three trust fundsare financed primarily by social insurancetaxes. The law establishing the rate andbase of these taxes allocates the tax receiptsamong the three funds.

The table shows significant transfers byOASI and DI to the railroad retirementSocial Security equivalent account. Thesetransfers are equal to the additional amountsof money Social Security would have hadto pay, less additional receipts it wouldhave collected, if the rail labor force hadbeen included directly under Social Security


since the inception of the Social Securityprogram.

In 1983, when the OASI fund ran shortof money, Congress passed legislation that(a) provided for a one-time acceleration ofmilitary service credit payments to thesetrust funds, (b) provided for a Federal fundpayment to OASDI for the estimated valueof checks issued in prior years and chargedto the trust funds but never cashed, (c)required that the Treasury make paymentsto OASDHI on the first day of the monthfor the estimated amounts of their socialinsurance taxes to be collected over thecourse of each month (thereby increasingeach affected trust funds balances at thebeginning of the month), and (d) subjectedsome Social Security benefits to Federal in-come or other taxes and provided for paymentsby Federal funds to Social Security of amountsequal to these additional taxes. Additionally,in 1983 the OASI fund borrowed from theDI and HI funds (the tables show the amountsof such borrowing and repayments of bor-rowing). The large intragovernmental collec-tions by OASDHI in 1983 are a resultof the transactions described under (a) and(b) above. Also starting in 1983, OASI beganpaying interest to DI and HI to reimbursethem for the balances OASI borrowed fromthem; OASDHI paid interest to Treasuryto compensate it for the balances transferredto these funds on the first day of eachmonth. The legal requirement for Treasuryto make payments on the first day of themonth, and the associated interest payment,ended in 1985 for HI and in 1991 forOASI and DI.

Notes on Section 14 (Federal SectorTransactions in the National Incomeand Product Accounts)

The principal system used in the UnitedStates for measuring total economic activityis the system of national income and productaccounts (NIPA), which provide calculationsof the GDP and related data series. Thesedata are produced by the Bureau of EconomicAnalysis (BEA) of the Department of Com-merce. As part of this work the BEA staffanalyze the budget data base and estimate

transactions consistent with this measurementsystem. The NIPA data are normally producedfor calendar years and quarters. Section 14provides Federal Sector NIPA data on afiscal year basis. The main body of thetable shows the components of Current Re-ceipts and Expenditures. An addendum showsTotal Receipts and Expenditures starting infiscal year 1960.

Notes on Section 15 (Total (Federal andState and Local) Government Finances)

Section 15 provides a perspective on thesize and composition of total Government(Federal, State, and local) receipts and spend-ing. Both the Bureau of the Census andthe Bureau of Economic Analysis in theCommerce Department provide information(in the national income and product accounts(NIPA) data) on income and spending forall levels of government in the United States.The tables in this section include the NIPAState and local transactions with the FederalGovernment (deducting the amount of overlapdue to Federal grants to State and localgovernments) to measure total Governmentreceipts and spending on a fiscal year basis.The NIPA State and local government receiptsand expenditures have been adjusted to bemore comparable to the Federal unified budgetreceipts and outlays by using State andlocal government Total Expenditures, by in-cluding NIPA Capital Receipts from Estateand Gift taxes, and by displaying Stateand local interest receipts as an offset toState and local interest expenditures.

Notes on Section 16 (Federal HealthSpending)

Section 16 consists of Table 16.1, TotalOutlays for Health Programs. This tableshows a broad definition of total Federalhealth spending by type of health program,including defense and veterans health pro-grams, Medicare, Medicaid, Federal employeeshealth benefits and other health spending.It also shows Federal health spending aspercentages of total outlays and of GDP.


Notes on Section 17 (FederalEmployment)

Section 17 provides an overview of thesize and scope of the Federal work force.The measures of Federal employment cur-rently in use are end-strength and full-time equivalents (FTEs). End-strength is themeasure of total positions filled at the endof the fiscal year, representing a head countof all paid employees.

Federal employment in the ExecutiveBranch, however, is controlled on the basisof FTEs. Full-time equivalent (FTE) employ-ment is the measure of the total numberof regular (non-overtime) hours worked byan employee divided by the number of compen-sable hours applicable to each fiscal year.A typical FTE workyear is equal to 2,080hours. Put simply, one full-time employeecounts as one FTE, and two employees who

work half-time count as one FTE. FTE datahave been collected for Executive Branchagencies since 1981.

The tables included in this section illustratethe size of the governmental work forcesutilizing these measures. Table 17.1 showsthe end-strength of the Executive Branchand selected agencies starting in 1940. Table17.2 shows the end-strength of the ExecutiveBranch and selected agencies as a percentageof total Executive Branch employment startingin 1940. Table 17.3 shows FTEs for theExecutive Branch and selected agencies for1981 and subsequent years; Table 17.4 showsthese FTEs as a percentage of total ExecutiveBranch FTEs. Table 17.5 shows a comparisonof the end-strengths of Federal employmentand State and local government employment,and the total of the two as a percentageof the U.S. population in each year.


Table 1.1SUMMARY OF RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS (): 17892013(in millions of dollars)

Year

Total On-Budget Off-Budget

Receipts Outlays Surplus orDeficit () Receipts OutlaysSurplus orDeficit () Receipts Outlays

Surplus orDeficit ()

17891849 ..................................................................... 1,160 1,090 70 1,160 1,090 70 .................. .................. ..................18501900 ..................................................................... 14,462 15,453 991 14,462 15,453 991 .................. .................. ..................

1901 ............................................................................... 588 525 63 588 525 63 .................. .................. ..................1902 ............................................................................... 562 485 77 562 485 77 .................. .................. ..................1903 ............................................................................... 562 517 45 562 517 45 .................. .................. ..................1904 ............................................................................... 541 584 43 541 584 43 .................. .................. ..................

1905 ............................................................................... 544 567 23 544 567 23 .................. .................. ..................1906 ............................................................................... 595 570 25 595 570 25 .................. .................. ..................1907 ............................................................................... 666 579 87 666 579 87 .................. .................. ..................1908 ............................................................................... 602 659 57 602 659 57 .................. .................. ..................1909 ............................................................................... 604 694 89 604 694 89 .................. .................. ..................

1910 ............................................................................... 676 694 18 676 694 18 .................. .................. ..................1911 ............................................................................... 702 691 11 702 691 11 .................. .................. ..................1912 ............................................................................... 693 690 3 693 690 3 .................. .................. ..................1913 ............................................................................... 714 715 * 714 715 * .................. .................. ..................1914 ............................................................................... 725 726 * 725 726 * .................. .................. ..................

1915 ............................................................................... 683 746 63 683 746 63 .................. .................. ..................1916 ............................................................................... 761 713 48 761 713 48 .................. .................. ..................1917 ............................................................................... 1,101 1,954 853 1,101 1,954 853 .................. .................. ..................1918 ............................................................................... 3,645 12,677 9,032 3,645 12,677 9,032 .................. .................. ..................1919 ............................................................................... 5,130 18,493 13,363 5,130 18,493 13,363 .................. .................. ..................

1920 ............................................................................... 6,649 6,358 291 6,649 6,358 291 .................. .................. ..................1921 ............................................................................... 5,571 5,062 509 5,571 5,062 509 .................. .................. ..................1922 ............................................................................... 4,026 3,289 736 4,026 3,289 736 .................. .................. ..................1923 ............................................................................... 3,853 3,140 713 3,853 3,140 713 .................. .................. ..................1924 ............................................................................... 3,871 2,908 963 3,871 2,908 963 .................. .................. ..................

1925 ............................................................................... 3,641 2,924 717 3,641 2,924 717 .................. .................. ..................1926 ............................................................................... 3,795 2,930 865 3,795 2,930 865 .................. .................. ..................1927 ............................................................................... 4,013 2,857 1,155 4,013 2,857 1,155 .................. .................. ..................1928 ............................................................................... 3,900 2,961 939 3,900 2,961 939 .................. .................. ..................1929 ............................................................................... 3,862 3,127 734 3,862 3,127 734 .................. .................. ..................

1930 ............................................................................... 4,058 3,320 738 4,058 3,320 738 .................. .................. ..................1931 ............................................................................... 3,116 3,577 462 3,116 3,577 462 .................. .................. ..................1932 ............................................................................... 1,924 4,659 2,735 1,924 4,659 2,735 .................. .................. ..................1933 ............................................................................... 1,997 4,598 2,602 1,997 4,598 2,602 .................. .................. ..................1934 ............................................................................... 2,955 6,541 3,586 2,955 6,541 3,586 .................. .................. ..................

1935 ............................................................................... 3,609 6,412 2,803 3,609 6,412 2,803 .................. .................. ..................1936 ............................................................................... 3,923 8,228 4,304 3,923 8,228 4,304 .................. .................. ..................1937 ............................................................................... 5,387 7,580 2,193 5,122 7,582 2,460 265 2 2671938 ............................................................................... 6,751 6,840 89 6,364 6,850 486 387 10 3971939 ............................................................................... 6,295 9,141 2,846 5,792 9,154 3,362 503 13 516

1940 ....................