United States General Accounting Office

GAO Report to Congressional Requesters

June 1998 BUDGET TRENDS

Federal Investment

Outlays, Fiscal Years

1981-2003

GAO/AIMD-98-184

GAO United States

General Accounting Office

Washington, D.C. 20548

Accounting and Information

Management Division

B-279819 

June 15, 1998

The Honorable Frank R. Lautenberg

Ranking Democratic Member

Committee on the Budget

United States Senate

The Honorable George E. Brown, Jr.

Ranking Democratic Member

Committee on Science

House of Representatives

This report is in response to your request that we update our 1997 report1

on investment trends. It includes new estimates for 1998 through 2003

contained in the President’s 1999 budget and per conversation with your

staff recalculates the investment component for Department of Defense

research and development (R&D).

Concerns still abound about levels of federal and domestically-financed

investment and national saving. Reductions in the federal government’s

deficit or increases in the surplus help increase national saving and

expand domestic capital available for private investment. At the same

time, however, reducing the deficit places constraints on the government’s

discretionary spending which finances most federal investment. The

constraints on discretionary spending have again tightened with the

enactment of the Balanced Budget Act of 1997. Recent congressional

initiatives have sought to promote long-term private sector economic

growth by increasing federal investment. The National Research

Investment Act of 1998 (S. 1305), a bipartisan bill, would almost double

total R&D funding between 1999 and 2008 at 12 selected agencies. In

addition, the President’s budget for fiscal year 1999 proposed three new

investment funds: (1) the Research Fund for America, which includes a

broad range of investment in knowledge, (2) the Environmental Resources

Fund, which includes several environmental programs identified by the

President as investment programs, and (3) the Transportation Fund for

America, which includes highway and airport programs. You have both

expressed interest in the future of spending for investment and indicated

that better information on recent investment trends would help

decision-making.

1

Budget Trends: Federal Investment Outlays, Fiscal Years 1981-2002 (GAO/AIMD-97-88, May 21, 1997).

Page 1 GAO/AIMD-98-184 Federal Investment Trends
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Results in Brief The annual levels of investment spending for the period 1998 through 2002

in the President’s 1999 budget (in constant dollars)2

 is estimated to range

from slightly more than $2 billion to almost $11 billion higher each year

than the levels estimated in the President’s 1998 budget for the same

period. Only one budget function3

—energy—has lower estimates for 1998

through 2002 than in the 1998 budget.4

The share of total federal budget outlays and of gross domestic product

(GDP) devoted to investment5

 declined slightly from the early 1980s

through 1997. According to the administration’s policy estimates contained

in the President’s 1999 budget, investment’s share of both outlays and GDP

will increase slightly from 1998 through 2000 and then fall slightly through

2003. These new estimates represent a change from the 1998 budget

estimates which showed a continuing gradual decline from 1998 through

2002. When investment outlays are converted to constant 1992 dollars,

roughly the same picture emerges over this time period. Investment

spending in estimated constant dollar outlays generally increased from the

mid-1980s through 1995 before dropping in 1996 and 1997. In the 1999

budget, investment spending is projected to increase from 1998 through

2000 and then gradually decrease through 2003. The 1998 budget estimates

for 1998 through 2002 had shown a similar trend but at a slightly lower

level.

Investment by category (character class6

) in constant dollars shows

varying patterns. After dropping from 1981 to 1983, physical capital

remained relatively stable through 1995, with slight declines in 1996 and

1997. The 1999 budget estimates for fiscal years 1998 through 2003 show a

2

Constant dollars are dollar values adjusted for changes in the average price level. They represent the

values that would exist if prices had remained at the same average level as the base period.

3

The functional classification is a system of classifying budget resources to the national needs being

addressed, such as defense and health. Each budget account is generally placed in the budget function

that best reflects its major purpose. Functions may be divided into subfunctions depending on the

complexity of national need being addressed.

4

The total level of investment reported in this report is lower than that reported in our 1997 report.

This is because of a revision in the composition of investment, principally the substitution of Defense

applied R&D for developmental R&D. This substitution did not significantly alter the trend data

presented.

5

We define investment as federal spending, either direct or through grants, specifically intended to

enhance the private sector’s long-term productivity.

6

Character classification is used to report investment activities separately from noninvestment in the

President’s budget submission. Data are classified as investment by agencies when they finance

activities yielding benefits largely in the future, such as physical assets, research and development, and

education and training. Character classification also distinguishes between grants to state and local

governments and direct federal programs.

Page 2 GAO/AIMD-98-184 Federal Investment Trends
B-279819 

relatively stable level—around $33 billion to $34 billion each year. This is a

higher level than the 1998 budget estimates, which showed a steady

decline from 1998 through 2002. The R&D category had relatively steady

increases from the mid-1980s through 1997 and estimates for 1998 through

2003 continue to increase. This is a change from the estimates for 1998

through 2002 made in the 1998 budget which had shown modest decreases

after 1998. Likewise, after dropping from 1981 through 1984, education and

training has shown a relatively steady increase that is projected in the 1999

budget to continue through 2000 before dropping off slightly thereafter.

The 1998 budget estimates showed a similar pattern for 1998 through 2002

at a slightly lower level of outlays.

The pattern of investment from 1981 through 2003 in constant dollars

varies across budget functions. Seven functions contain about 95 percent

of investment outlays. Four of those functions, Education and Training

(500), Transportation (400), Health (550), and General Science, Space, and

Technology (250) show general increases over this period. The National

Defense (050) function shows several fluctuations but remains relatively

flat overall. Investment spending in the Natural Resources and

Environment (300) and Energy (270) functions shows a continued

downward trend from the 1980s through 2003.

Background We previously reported7

 that the current budget structure does not

highlight, for decision-making purposes, the differences between spending

for long-term investment and current consumption because it treats all

expenditures the same. Nor does the current budget process encourage

the Congress to make explicit decisions about how much spending overall

should be devoted to programs having a direct bearing on long-term

growth and productivity.

In our 1993 report, we suggested that establishing investment targets

within a framework similar to that contained in the Budget Enforcement

Act is the most promising way to incorporate an investment component

into budget decision-making. In that report we concluded that the most

appropriate definition of investment would include only that federal

spending, either direct or through grants, which is specifically intended to

enhance the private sector’s long-term productivity. This definition

includes spending on (1) some intangible activities, such as R&D, (2) human

capital designed to increase worker productivity, particularly education

7

GAO/AIMD-97-88, May 21, 1997, and Budget Issues: Incorporating an Investment Component in the

Federal Budget (GAO/AIMD-94-40, November 9, 1993).

Page 3 GAO/AIMD-98-184 Federal Investment Trends
B-279819 

and training, and (3) physical assets to improve infrastructure, such as

highways, bridges, and air traffic control systems.

This definition would not include spending for physical capital designed to

achieve federal agency programmatic goals or improve the government’s

operating efficiency—such as spending for federal land, office buildings,

and defense weapons systems—because such spending does not directly

enhance productivity in the private sector. Some budget functions and

subfunctions—such as international affairs, recreational resources, and

law enforcement and justice—have been excluded from this analysis

because we believe the bulk of spending in these subfunctions does not

directly enhance productivity. This definition of investment was also used

in our November 1993 report on incorporating an investment component

in the federal budget and in our 1997 report on trends in federal

investment outlays.8

Objective, Scope, and

Methodology

The objective of this assignment was to update the data we provided last

year on the trend in the federal budget’s actual and future estimated

investment outlays. This report includes actual investment outlays for

fiscal years 1981 through 1997 and estimates contained in the President’s

1999 budget for fiscal years 1998 through 2003. As agreed with your

offices, the analysis was done on a macro basis, using aggregate data by

investment category and budget function and subfunction. We did not

analyze data at either the agency or account level.

Also, as agreed with your offices, we reexamined the items to be included

in the definition of investment, specifically related to Defense R&D. We

discussed different categories of Defense R&D with Office of Management

and Budget (OMB) and Congressional Research Service staff. As a result,

we changed the categories of Defense R&D included as investment

spending from what was included in last year’s report to more accurately

reflect what we believe to promote private sector economic growth. We

now include the categories of basic and applied research rather than basic

and developmental research as in last year’s analysis. This adjustment

lowers the amount attributed to total investment, Defense investment, and

R&D, but does not significantly alter the overall trend data. In order to

make comparisons between the 1998 and 1999 budget estimates, we recast

the 1998 data using our revised categories for Defense R&D.

8

GAO/AIMD-94-40, November 9, 1993, and GAO/AIMD-97-88, May 21, 1997.

Page 4 GAO/AIMD-98-184 Federal Investment Trends
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Outlay data used for this analysis were extracted from the automated

information system that OMB used to prepare the President’s annual budget

request. We traced totals to published budget documents but did not

independently verify this information. Reported actual outlay data

(including offsetting collections but excluding offsetting receipts) for

fiscal years 1981 through 1997 were used for both investment and total

federal outlays; the President’s estimates for his policy as shown in the

1999 budget were used for fiscal years 1998 through 2003. Annual GDP

numbers and GDP implicit price deflators used in calculating constant

dollar values for investment for fiscal years 1981 through 2003 were

obtained from the Historical Tables accompanying the President’s 1999

budget.

Our work was done from March 1998 through May 1998 in accordance

with generally accepted government auditing standards.

Overall Investment

Trends

The President’s policy estimates of what we have categorized as

investment spending for fiscal year 1999 amount to $126.7 billion, which is

6.1 percent of total outlays and 1.5 percent of GDP. Actual total federal

outlays for investment as a share of total outlays decreased from a high of

8.8 percent in 1981 to 6 percent in 1997. While investment rose in some

years, the overall trend after 1982 was relatively flat, as shown in figure 1.

Investment outlays for fiscal years 1998 to 2003 are projected to rise from

6 percent to 6.2 percent in 2000 and then decline to 5.9 percent in 2003.

The estimates for 1998 through 2002 using the 1999 budget estimates are

higher than those for the corresponding period contained in the 1998

budget both in dollars and as a percent of total outlays.

Page 5 GAO/AIMD-98-184 Federal Investment Trends
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Figure 1: Investment as a Percent of

Total Outlays, Fiscal Years 1981

Through 2003

1981 1985 1990 1995 2000 2003

0

2

4

6

8

10

Fiscal year

Percent of outlays

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

The share of total outlays categorized as investment may be influenced as

much by increases in noninvestment outlays as by investment outlays

themselves. Accordingly, to offer assurance that the investment trend line

was not a function of the level of overall federal outlays, we analyzed the

outlays’ share of GDP. As shown in figure 2, we found that actual

investment outlays as a percent of GDP followed the same pattern as

investment outlays as a percent of total federal outlays. From a high of

2.3 percent of GDP in 1981, investment outlays fell to 1.5 percent of GDP in

1997. While the decline was not steady from year to year, the overall trend

was downward. Estimates in the President’s 1999 budget rise from

1.4 percent of GDP in 1998 to 1.5 percent in 2000 and then decline to

1.4 percent by 2003. As figure 2 shows, these estimates for the 1998

through 2002 period are higher in all years than the corresponding

estimates from the 1998 budget.

Page 6 GAO/AIMD-98-184 Federal Investment Trends
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Figure 2: Investment as a Percent of

Gross Domestic Product, Fiscal Years

1981 Through 2003

1981 1985 1990 1995 2000 2003

0

0.5

1

1.5

2

2.5

Fiscal year

Percent of GDP

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Figure 3 shows nondefense outlays9 for investment as a share of total

outlays. Nondefense outlays dropped from 8.5 percent of total outlays in

1981 to a low of 5.3 percent in 1990, then rose to 6.3 percent in 1995 and

fell to 5.8 percent in 1997. Estimates in the 1999 budget rise slightly to

5.9 percent in 2000 and decline to 5.6 percent in 2003.

9

Total federal investment outlays minus investment outlays in the Defense function.

Page 7 GAO/AIMD-98-184 Federal Investment Trends
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Figure 3: Nondefense Investment as a

Percent of Total Outlays, Fiscal Years

1981 Through 2003

1981 1985 1990 1995 2000 2003

0

2

4

6

8

10

Fiscal year

Percent of outlays

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

As shown in figure 4, nondefense outlays as a percent of GDP show a

similar pattern. As in the case of total outlays, the 1999 budget plans to

dedicate a higher percentage of total outlays to nondefense investment

from 1998 through 2002 than did the 1998 budget.

Page 8 GAO/AIMD-98-184 Federal Investment Trends
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Figure 4: Nondefense Investment as a

Percent of Gross Domestic Product,

Fiscal Years 1981 Through 2003

1981 1985 1990 1995 2000 2003

0

0.5

1

1.5

2

2.5

Fiscal year

Percent of GDP

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

The spending pattern is different when analyzed in terms of constant

dollars. As shown in figure 5, in constant dollars, investment spending

dropped from $105 billion in 1981 to $83 billion in 1984. However, it

increased somewhat steadily to $110 billion in 1995 before dropping to

$103 billion in 1997. Estimates in the 1999 budget increase from

$105 billion in 1998 to $111 billion in 2000 before dropping to $109 billion

in 2003. As shown in figure 5, the 1999 budget estimates for investment

from 1998 through 2002 range from slightly more than $2 billion to almost

$11 billion higher than the 1998 budget estimates.

Page 9 GAO/AIMD-98-184 Federal Investment Trends
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Figure 5: Investment for Fiscal Years

1981 Through 2003 in Constant 1992

Dollars

1981 1985 1990 1995 2000 2003

0

20

40

60

80

100

120

Fiscal year

Billions of 1992 dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Investment by

Category

Investment by category is a way of describing the three major types of

investment financed by the federal government—outlays for physical

assets, research and development, and education and training. These basic

categories are determined by character class designations federal agencies

report in the budget. They are subdivided into more detailed categories,

such as construction and rehabilitation or equipment (physical assets);

basic, applied, and development (research and development); or direct

federal programs or grants to others (physical assets, research and

development, and education and training).

Physical Assets This category includes federal spending on physical assets intended to

promote long-term private sector economic growth. It includes such major

items as federal-aid highways, airport facilities and equipment, and

Department of Energy and National Aeronautics and Space Administration

(NASA) research facilities. It excludes spending for physical assets whose

principal use is in agency missions, such as federal office buildings and

weapons systems. In constant dollars, actual investment in physical assets

has remained relatively stable over the term of our analyses—ranging from

highs of about $36 billion in 1981 and 1995 to a low of $30 billion for 1983.

(See figure 6.) Estimates in the 1999 budget for 1998 through 2003 are in

Page 10 GAO/AIMD-98-184 Federal Investment Trends
B-279819 

the $33 billion to $34 billion range and are higher than those contained in

the 1998 budget.

Figure 6: Investment in Physical

Assets for Fiscal Years 1981 Through

2003 in Constant 1992 Dollars

1981 1985 1990 1995 2000 2003

0

10

20

30

40

Fiscal year

Billions of dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Research and

Development

This category includes the R&D activities of the Department of Defense

(basic and applied research only), NASA, National Institutes of Health,

Department of Energy, and others. As shown in figure 7, outlays for R&D in

constant dollars decreased from $30 billion in 1981 to $23 billion in 1984,

then gradually increased to $32 billion in 1995 before declining to

$29 billion in 1996. R&D estimates in the 1999 budget for 1998 through 2003

increase from $31 billion to almost $35 billion. In contrast, the 1998 budget

projected a slight decline from $31 billion in 1998 to $30 billion in 2002.

Page 11 GAO/AIMD-98-184 Federal Investment Trends
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Figure 7: Investment in Research and

Development for Fiscal Years 1981

Through 2003 in Constant 1992 Dollars

1981 1985 1990 1995 2000 2003

0

5

10

15

20

25

30

35

40

Fiscal year

Billions of dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Education and Training This category includes items such as the Department of Labor’s training

and employment services, the Department of Veterans Affairs’

readjustment benefits, and the Department of Education’s student

financial assistance. As shown in figure 8, education and training constant

dollar outlays declined sharply from 1981, and remained relatively flat at

$29 billion to $31 billion through 1990 before beginning a rising trend,

estimated in the 1999 budget to reach a peak at $44 billion in 2000,

dropping to $42 billion by 2003. Compared to the 1998 budget estimates for

1998 through 2002, the 1999 budget estimates are lower for 1998 by less

than $1 billion and higher for 1999 through 2002 by amounts ranging from

less than $1 billion to $2 billion.

Page 12 GAO/AIMD-98-184 Federal Investment Trends
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Figure 8: Investment in Education and

Training for Fiscal Years 1981 Through

2003 in Constant 1992 Dollars

1981 1985 1990 1995 2000 2003

0

10

20

30

40

50

Fiscal year

Billions of dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Investment by Budget

Function

Budget functions are groupings of budgetary resources according to the

national needs being addressed without regard to agency or organizational

distinctions or the category (character class) of resources used.

Based on the average annual outlays from 1981 through 2003, investment

outlays in seven budget functions comprise about 95 percent of all

investment outlays, with the top four comprising 79 percent of total

investment. In descending order of constant dollar investment outlays, the

functions are (1) Education, Training, Employment, and Social Services,

(2) Transportation, (3) Health (principally R&D at the National Institutes of

Health), (4) General Science, Space, and Technology, (5) Natural

Resources and Environment, (6) National Defense, and (7) Energy. While

there may be year-to-year variations in investment outlays, these seven

functions can be placed into three groups based on their general

investment spending trends—increased, steady, and declining.

Increased Spending The Education, Training, Employment, and Social Services function

contains such investment items as the Department of Labor’s training and

employment services; the Department of Health and Human Services’

Page 13 GAO/AIMD-98-184 Federal Investment Trends
B-279819 

children and families services programs; and the Department of

Education’s student financial assistance, special education, family

education loans, and education for the disadvantaged programs. The

overall constant dollar outlay trend for this function10 (500) is upward, as

shown in figure 9. A sharp decline from $34 billion to $26 billion between

1981 and 1982 was followed by generally increasing outlays up to

$40 billion in 1995. Outlays declined in 1997 before climbing back to

$40 billion to $41 billion level for 1999 through 2003. Estimates for 2000

through 2002 are higher in the 1999 budget than they were in the 1998

budget.

Figure 9: Investment Outlays for the

Education, Training, Employment, and

Social Services Function in Constant

1992 Dollars, Fiscal Years 1981

Through 2003

1981 1985 1990 1995 2000 2003

0

10

20

30

40

50

Fiscal year

Billions of dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Outlays for Transportation (400) include federal-aid highways spending

from the transportation trust fund, federal transit formula grants, and

facilities and equipment outlays from the airport and airway trust fund. In

constant dollars, the trend for outlays has been generally upward. Outlays

10The functional totals for education and training are lower than the category (character class) of

investment called education and training. This is because some education and training in federal

agencies is classified in functional reporting as part of the agency mission (for example, the Defense

function) rather than the education and training function.

Page 14 GAO/AIMD-98-184 Federal Investment Trends
B-279819 

reached a high of about $28 billion in 1997. However, as illustrated in

figure 10, 1999 budget estimates for 1998 through 2003 remain in the

$27 billion to $28 billion range as compared to 1998 budget estimates

which had projected a steady decrease after 1997 to $23 billion in 2002.

Figure 10: Investment Outlays for the

Transportation Function in Constant

1992 Dollars, Fiscal Years 1981

Through 2003

1981 1985 1990 1995 2000 2003

0

5

10

15

20

25

30

Fiscal year

Billions of dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Constant dollar investment outlays in the Health function (550), which are

largely R&D carried out by the National Institutes of Health fell from about

$8 billion in 1981 to $6 billion in 1984. They rose fairly consistently to

$11 billion in 1995, dropping to $10 billion in 1996 and then rising again.

Estimates in the 1999 budget increase from $12 billion in 1998 to

$15 billion in 2003, in contrast to last year’s estimates which showed a

gradual decline to $11 billion in 2002. (See figure 11.)

Page 15 GAO/AIMD-98-184 Federal Investment Trends
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Figure 11: Investment Outlays for the

Health Function in Constant 1992

Dollars, Fiscal Years 1981 Through

2003

1981 1985 1990 1995 2000 2003

0

2

4

6

8

10

12

14

16

Fiscal year

Billions of dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

As shown in figure 12, the General Science, Space, and Technology

function (250), which includes National Science Foundation and NASA

research, dropped sharply in constant dollar outlays from $10 billion in

1981 to $5 billion in 1983. Outlays then continued a fairly steady increase

to $11 billion in 1995. In 1996 outlays dropped to $10 billion before

beginning a steady increase to $12 billion in estimated annual outlays from

2000 through 2003. In contrast, estimated future outlays in the 1998 budget

were $10 billion annually from 1998 through 2002.

Page 16 GAO/AIMD-98-184 Federal Investment Trends
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Figure 12: Investment Outlays for the

General Science, Space, and

Technology Function in Constant 1992

Dollars, Fiscal Years 1981 Through

2003

1981 1985 1990 1995 2000 2003

0

2

4

6

8

10

12

14

Fiscal year

Billions of dollars

Actuals/1998 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Stable Trends Investment outlays for the National Defense function (050), which

includes basic and applied military R&D,

11 have hovered around the

$4 billion mark in constant dollar investment outlays from 1981 through

1997. Estimates in the 1999 budget are at the $4 billion to $5 billion level

annually from 1998 through 2003. Estimates from the 1998 budget were

slightly higher than the current estimates for 1998 and 1999, but slightly

lower than the current estimates for 2000 through 2002. (See figure 13.)

Under our definition of investment, this function does not include military

construction, weapons procurement, defense developmental research, and

atomic energy defense activities. Basic and applied research are included

because of possible adaptation to civilian use, particularly in the aviation

industry. Others may have a different opinion on what defense items to

include as investment. For example, OMB includes only defense basic

research in its national capital12 presentation.

11In our 1997 report, GAO/AIMD-97-88, May 21, 1997, we included basic and developmental R&D for

Defense. Those numbers were considerably higher than the results for this analysis. References to

1998 budget estimates in this report are based on a revision of the numbers to be consistent with

contents in the current analysis.

12OMB’s national capital presentation is contained in table 6-10 of the Analytical Perspectives of the

President’s 1999 budget and is based upon the GAO definition of investment. That presentation

contains slightly different numbers because of differences in some items considered to be investment.

Page 17 GAO/AIMD-98-184 Federal Investment Trends
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Figure 13: Investment Outlays for the

National Defense Function in Constant

1992 Dollars, Fiscal Years 1981

Through 2003

1981 1985 1990 1995 2000 2003

0

1

2

3

4

5

Fiscal year

Billions of dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Downward Trends Investment outlays in the Natural Resources and Environment function

(300), which includes items such as Environmental Protection Agency

activities, show a continuous downward trend from 1981 through 2003. As

seen in figure 14, constant dollar outlays of $11 billion in 1981 decreased

to slightly over $5 billion in 1997 with a few intervening small upswings.

Estimates in the 1999 budget for 1998 through 2003 show a continuing

decline to less than $5 billion. Although the 1999 budget estimates were

slightly higher than those in the 1998 budget, the downward trend

continues.

Page 18 GAO/AIMD-98-184 Federal Investment Trends
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Figure 14: Investment Outlays for the

Natural Resources and Environment

Function in Constant 1992 Dollars,

Fiscal Years 1981 Through 2003

1981 1985 1990 1995 2000 2003

0

2

4

6

8

10

12

Fiscal year

Billions of dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

Investment outlays in the Energy function (270), which includes

Tennessee Valley Authority and Department of Energy activities, show a

downward trend similar to the natural resources function. As seen in

figure 15, constant dollar outlays were almost $10 billion in 1981 but

dropped to under $4 billion in 1997. Despite upward spikes in outlays in

1985, 1992, and 1995, the overall trend was still downward. Estimated

outlays for 1998 to 2003 show a continued decline to about $2 billion. This

year’s estimates for 1998 through 2002 are lower than those in last year’s

budget for each of the outyears, but the same downward trend is present.

Page 19 GAO/AIMD-98-184 Federal Investment Trends
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Figure 15: Investment Outlays for the

Energy Function in Constant 1992

Dollars, Fiscal Years 1981 Through

2003

1981 1985 1990 1995 2000 2003

0

2

4

6

8

10

12

Fiscal year

Billions of dollars

Actuals/1999 Budget Estimates 1998 Budget Estimates

Note: 1998 through 2003 are estimates.

We are sending copies of this report to the Chairman of the Senate Budget

Committee, the Chairman of the House Science Committee, and the

Chairman and Ranking Minority Member of the House Budget Committee.

Copies will also be sent to others on request.

Please contact me at (202) 512-9142 if you or your staffs have any

questions concerning this letter. Christine Bonham, Assistant Director, and

Robert Sexton and John Mingus, Senior Evaluators, were the major

contributors to this report.

Susan J. Irving

Associate Director, Budget Issues

(935265) Page 20 GAO/AIMD-98-184 Federal Investment Trends
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