FISCAL YEAR 

Budget Revisions 

MARC H 1981 

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The Congressional Budget Act of 1974 requires 

that the President submit to the Congress 

revisions of the 1982 budget by April 10. 

This document meets that requirement. 

GENERAL NOTES 

1. All years referred to are fiscal years 

unless otherwise noted. 

2. Detail may not add to totals due to 

rounding. 

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-iiiTABLE OF CONTENTS 

Page 

MESSAGE OF THE PRESIDENT ON THE BUDGET.... M-l 

Part 1. ECONOMIC AND BUDGET POLICY 1 

The Economic Plan 1 

Lessons of Past Economic Events 4 

Budget Restraint 5 

Budget Reduction Plans 7 

Part 2. THE CURRENT BUDGET OUTLOOK 11 

Introduction 11 

Economic Assumptions 12 

Budget Receipts 14 

The Credit Budget and Off-Budget Outlays 17 

Debt 28 

Federal Civilian Employment 30 

Part 3. BUDGET AUTHORITY AND OUTLAYS BY FUNCTION, 

1980-1982 33 

Part 4. BUDGET AUTHORITY AND OUTLAYS BY FUNCTION, 

1983-1986 95 

Part 5. SUMMARY TABLES 121 

Appendix A. FEDERAL AID TO STATE AND LOCAL GOVERNMENTS.... 135 

Appendix B. SUMMARY OF PROGRAMMATIC INCREASES TO THE 

JANUARY BUDGET 140 

Appendix C. SUMMARY TABLE OF PROGRAMMATIC DECREASES TO 

THE JANUARY BUDGET 144 

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-ivLIST OF TABLES 

Page 

Part 1. ECONOMIC AND BUDGET POLICY 

1. Budget Savings 2 

2. Change from Current Policy Base Outlays to 

Target Outlay Ceiling 3 

3. January Versus Revised Budget Totals 6 

4. Fiscal Trends 7 

Part 2. THE CURRENT BUDGET OUTLOOK 

5. Budget Totals 11 

6. Economic Assumptions 13 

7. Change in Budget Receipts 15 

8. Summary of Credit Budget Totals 18 

9. Changes in Direct Loan Obligations, 1981-1982 24 

10. Changes in Loan Guarantee Commitments/ 1981-1982 25 

11. Changes in Off-Budget Outlays 27 

12. Budget Financing and Debt 28 

13. Total Federal Civilian Employment — Executive Branch. 31 

Part 3. BUDGET AUTHORITY AND OUTLAYS BY FUNCTION, 

1980-1982 33-94 

Part 4. BUDGET AUTHORITY AND OUTLAYS BY FUNCTION, 

1983-1986 95-119 

14. Changes from January Budget to Revised Budget, 

1983-1986 97 

15. Budget Outlay Target Shares, 1981 and 1986 98 

Part 5. SUMMARY TABLES 

16. Budget Receipts by Major Source 122 

17. Estimated Effect of Administrative Actions and 

Proposed Legislation on Receipts, 1981-1986 123 

18. Composition of Budget Outlays, 1980-1986 124 

19. Budget Authority by Function 126 

20. Budget Outlays by Function 127 

21. Budget Authority by Agency 128 

22. Budget Outlays by Agency 129 

23. New Direct Loan Obligations by Agency 130 

24. New Loan Guarantee Commitments by Agency 131 

25. Budget Financing and Outstanding Debt 132 

26. Summary of the Full-Time Equivalent of Full-Time 

Permanent Civilian Employment in the Executive Branch 133 

APPENDIX TABLES 

A-l. Grants to State and Local Governments 135 

A-2. Grants to State and Local Governments 

by Function: Budget Authority 138 

A-3. Grants to State and Local Governments 

by Function: Outlays 139 

B. Summary of Programmatic Increases to the January 

Budget 140 

C. Summary of Programmatic Decreases to the January 

Budget 144 

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TO THE CONGRESS OF THE UNITED STATES: 

On February 18, I spoke to a Joint Session of Congress 

about the economic crisis facing America. I pledged then to 

take the action necessary to alleviate the grievous economic 

plight of our people. The plan I outlined will stop runaway 

inflation and revitalize our economy if given a chance. 

There is nothing but politics-as-usual standing in the way 

of lower inflation, increased productivity, and a return to 

prosperity. 

Our program for economic recovery does not rely upon 

complex theories or elaborate Government programs. Instead, 

it recognizes basic economic facts of life and, as humanely 

as possible, it will move America back toward economic 

sanity. The principles are easily understood, but it will 

take determination to apply them. Nevertheless, if inflation 

and unemployment are to be curtailed, we must act. 

First, we must cut the growth of Government spending. 

Second, we must cut tax rates so that once again work 

will be rewarded and savings encouraged. 

Third, we must carefully remove the tentacles of 

excessive Government regulation which are strangling our 

economy. 

Fourth, while recognizing the independence of the 

Institution, we must work with the Federal Reserve Board to 

develop a monetary policy that will rationally control the 

money supply. 

Fifth, we must move, surely and predictably, toward a 

balanced budget. 

The budget reform plan announced on February 18 includes 

83 major cuts resulting in $34.8 billion outlay savings for 

1982, with greater future savings. With this message, over 

200 additional reductions are proposed. An additional $13.8 

billion in savings are now planned. Further, I am proposing 

changes in user charges and off-budget payments that will 

bring total fiscal savings to $55.9 billion. This compares 

with $49.1 billion in fiscal savings announced on February 18. 

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In terms of appropriations and other budget authority 

that will affect future spendingf we are proposing elimination 

of $67 billion in 1982 and over $475 billion in the period 

1981 to 1986. 

These cuts sound like enormous suras — and they are — 

until one considers the overwhelming size of the total 

budget. Even with these cuts, the 1982 budget will total 

$6 95.3 billion, an increase of 6.1 percent over 1981. 

The budget reductions we are proposing will, undoubtedly, 

face stiff opposition from those who are tied to maintaining 

the status quo. But today's status quo is nothing more than 

economic stagnation coupled with high inflation. Dramatic 

change is needed or the situation will simply get worse, 

resulting in even more suffering and misery, and possibly 

the destruction of traditional American values. 

While recognizing the need for bold action, we have 

ensured that the impact of spending reductions will be 

shared widely and fairly by different groups and the various 

regions of the country. Also, we have, as pledged, maintained 

this society's basic social safety net, protecting programs 

for the elderly and others who rely on Government for their 

very existence. 

Budget cuts alone, however, will not turn this economy 

around. Our package includes a proposal to reduce substantially the personal income tax rates levied on our 

people and to accelerate the recovery of business with 

capital investment. These rate reductions are essential to 

restoring strength and growth to the economy by reducing the 

existing tax barriers that discourage work, saving, and 

investment. Individuals are the ultimate source of all 

savings and investment. Lasting economic progress, which is 

our goal, depends on our success in encouraging people to 

involve themselves in this kind of productive behavior. 

Our tax proposal will, if enacted, have an immediate 

impact on the economic vitality of the Nation, where even a 

slight improvement can produce dramatic results. For example, 

a 2 percent increase in economic growth will add $60 billion 

to our gross national product in one year alone. That $60 

billion adds to the State and local tax base, to the purchasing 

power of the American family, and to the resources available 

for investment. 

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When considering the economic recovery package, I urge 

the Members of Congress to remember that last November the 

American people's message was loud and clear. The mandate 

for change, expressed by the American people, was not my 

mandate; it was our mandate. Together we must remember that 

our primary responsibility is to the Nation as a whole and 

that there is nothing more important than putting America1 s 

economic house in order. 

The next steps are up to Congress. It has not been 

easy for my Administration to prepare this revised budget. 

1 am aware that it will not be easy for the Congress to act 

upon it. I pledge my full cooperation. It is essential 

that, together, we succeed in again making this Nation a 

land whose expanding economy offers an opportunity for all 

to better themselves, a land where productive behavior is 

rewarded, a land where one need not fear that economic 

forces beyond one's control will, through inflation, destroy 

a lifetime of savings. 

RONALD REAGAN 

THE WHITE HOUSE, 

March 10, 1981 

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Part 1 

ECONOMIC AND BUDGET POLICY 

On February 5, President Reagan spoke to the American people 

about the economic problems that we face: 

runaway inflation? 

— excessive regulation; 

tax burdens that have diminished incentives to work, 

produce, save, and invest; 

— large and increasing budget deficits; and 

— uncontrolled growth of the Federal budget. 

The Economic Plan 

The President then outlined his plan to deal with these problems. 

It consists of four broad parts: (1) an immediate, substantial, 

and sustained reduction in the growth of Federal expenditures; 

(2) a significant reduction in Federal tax rates over the next 3 

years; (3) elimination of unnecessary Federal regulations; and 

(4) a slower, steady, and predictable growth of the money supply 

set by the independent Federal Reserve System. These four 

complementary policies form an integrated and comprehensive 

program. 

This plan reflects faith in the private sector, rather than the 

Federal Government, as the fundamental source of economic 

motivation and growth. It is based on the belief that Government 

economic policy must again become reliable and consistent. The 

approach embodied in the Administration's plan is a major 

departure from past policies, which consisted of rapid growth of 

Federal spending, excessive increases in the money supply, 

frequent changes of direction, historically high and continually 

rising tax burdens, and unwarranted regulation. The plan 

proposes to restore State and local government responsibilities 

in areas of public services in which the Federal Government has, 

in recent years, become excessively or improperly involved. 

The major features of the President's economic plan were 

described in his address to a joint session of the Congress and 

in the February 18 report, A Program for Economic Recovery. The 

present document updates that report and contains further 

information on the budget revisions the President is proposing, 

including additional changes now proposed by the Administration 

to achieve the 1981 and 1982 outlay targets announced on 

February 18. This is summarized in the following tables. 

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Table 1.—BUDGE T SAVINGS 

(in billions of dollars) 

1981 

Outlays 

Savings listed on February 18 a/ 4.8 

Additional savings now listed b/ 1.6 

Subtotal, Outlay savings 6.4 

Savings included above that were also 

included in the January budget (0.3) 

Receipts 

Proposed user charges and other proposals... 0.3 

Proposals included above that were also 

included in the January budget.. (0.2) 

Total budget savings 6.6 

a/ Measured from a current policy base, 

b/ Measured from the January budget. 

1982 

34.8 

13.8 

48.6 

(8.2) 

2.6 

(1.8) 

1983 

50.1 

17.1 

67.2 

(9.1) 

2.9 

(2.0) 

1984 

61.4 

19.9 

81.2 

(9.7) 

3.3 

(2.2 ) 

1985 

70.2 

22.6 

92.8 

(11.1) 

3.6 

(2.4) 

1986 

77.3 

25.4 

102.7 

(11.5) 

4.0 

(2.6) 

51.2 70.2 84.5 96.4 106.8 

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Table 2.—CHANG E FROM CURRENT POLICY BASE OUTLAYS TO TARGET OUTLAY CEILING 

(in billions of dollars) 

1981 1982 1983 1984 1985 1986 

February 18 current poli cy base 657 .8 729 .7 792 .1 849 .0 911 .4 972 .8 

Added defense funds.. .0 6 .2 20 .7 27 .0 50 .2 63 .1 

Reestimates and other adjustments 0 .2 6 .8 14 .4 17 .7 17 . 1 19 .8 

Current policy base with adequate defense. 660 .0 742 .7 827 .2 893 .7 978 .7 1055 .7 

Outlay savings (from Table 1) -6 .4 -48 .6 -67 .2 -81 .2 -92 .8 -102 .7 

Nondefense increases a/ .6 1 .2 1 .8 1 .9 1 .8 1 .7 

Additional savings to be proposed — — . — -29 .8 -44 .2 -43 .7 -42 .7 

Target outlay ceiling... 655 .2 695 .3 732 .0 770 .2 844 .0 912 .0 

a/ Measured from the January budget. 

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Lessons of Past Economic Events 

The experience of the past decade has taught workers and 

businessmen alike that frequent Government tinkering with 

economic policy results in increased uncertainty, unpredictable 

interest rates, rapid price increases, steep increases in Federal 

budget outlays, and uncertain real returns to savings and 

investment. In contrast, the President's economic plan moves 

toward dependable stability. 

For the future, budget control is essential. The excessive past 

rates of increase in Federal outlays have inhibited economic 

growth, raised the Nationf s real tax burden, diverted resources 

from more productive private uses, and discouraged production and 

investment. 

Borrowing to finance growing deficits has brought about a 

substantial reallocation of national savings from the private 

sector to the Federal Government. More than three-fourths of the 

nondefense portion of the Federal budget is for current 

expenditure rather than investment. The growing public sector 

demands on available savings, to finance current expenditures by 

the Government, has impeded the private sector capital formation 

necessary for sustained economic growth. 

Sluggish growth and rising unemployment led, in a vicious circle, 

to additional budget spending, higher budget deficits, and still 

less growth. The budget became a captive of deteriorating 

economic forces rather than a catalyst for economic improvement. 

A year ago, for example, the Congress and the executive branch 

reached a consensus as to the need to balance the budget, and 

made an effort to do so. An economic recession, however, along 

with the explosive increase in interest rates, overwhelmed these 

efforts. This volatility and deterioration in the performance of 

the national economy increased estimated 1981 spending by $47 

billion while receipts increased by less than $8 billion. The 

plan to balance the budget fell apart. Once again, external 

economic forces reversed planned policy. 

This Administration's budget control plan explicitly recognizes 

the interaction between external economic forces and internal 

Federal policy changes. The surest path to a balanced budget is 

a coordinated program to rejuvenate economic growth and restore 

the value of money. If this is done, external economic forces 

will act to enhance the Government's internal fiscal policies 

rather than to undermine them. 

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Budget Restraint 

Restraining the growth of Federal spending lies at the center of 

the program for economic recovery. In recent years, deeply 

embedded inflationary fears have been reinforced by numerous 

upward budget revisions and growing Federal deficits. During the 

past 2 years, Federal spending has increased from the original 

budget estimates by amounts totaling nearly $100 billion, and the 

rate of increase in Government spending has averaged 16%. The 

President's budget control plan is designed to create a much 

better economic environment. Compared to the current policy 

base, the plan will save $40 billion in outlays in 1982. 

Reduction targets of $97.0 billion in 1983 and more than $125 

billion annually during 1984-1986 have been established. 

During the 1981-84 period, the budget plan would reduce the rate 

of growth of Federal expenditures to 5.5% annually. Together 

with a stable monetary policy, this abrupt downward shift in 

spending growth is the only credible way to reduce inflationary 

expectations and remove the historically large inflation premium 

that is currently embedded in interest rates. 

As indicated in the following tables, this Administration's 

proposals substantially alter the previous administration's tax 

and spending policies. Sharp reductions in spending growth would 

occur under the budget reform plan. Spending in 1982 would grow 

by 6.1% under the Administration's revised budget, only about 

half as fast as the 11.6% growth in spending proposed by the 

previous administration. The substantial reduction in the 

Government tax burden is illustrated by: 

a much slower growth rate in budget receipts during 

1982 — 8.3% for the revised budget in comparison to 

17.2% in the January budget; and 

— almost a 2 percentage point reduction in the receipts 

share of GNP in 1982 — from 22.1% under the January 

budget to 20.4% under the Administration proposals. 

In addition to budget spending reductions, off-budget outlay 

savings of $4.7 billion are proposed in 1982, and significantly 

larger reductions are proposed for later years. Some of these 

budget and off-budget reductions, which are partially offset by 

upward revisions to the base, occur in Federal lending or loan 

guarantee programs. Under the revised budget, direct loan 

obligations would be $2.6 billion lower for 1982 than under the 

January budget proposals, and new loan guarantee commitments 

would be $18.4 billion lower. 

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Table 3.—JANUARY VERSUS REVISED BUDGET TOTALS 

(in billions of dollars) 

Actual 

1980 

Estimate 

1981 1982 

Budget Authority 

January budget 658.8 

Change 

Revised budget 658.8 

Outlays 

January budget 579.6 

Change 

Revised budget 579.6 

Receipts 

January budget 520.0 

Change 

Revised budget 520.0 

Deficit (-) 

January budget -59.6 

Change 

Revised budget -59.6 

726.5 

-16.3 

710.1 

662.7 

-7.6 

607.5 

-7.2 

600.3 

-55.2 

0.3 

-54.9 

809.8 

-37.5 

772.4 

739.3 

-44.0 

655.2 695.3 

711.8 

-61.4 

650.3 

-27.5 

-17.4 

-45.0 

The combination of incentive-strengthening tax rate reductions 

and firm expenditure control will lead to a balanced budget by 

1984. The President's proposals project a 1984 spending target 

of $770 billion, which is $120 billion below the January budget 

projection for that year. The 1984 outlay target share of GNP is 

estimated at 19.3%, 2.7 percentage points below the January 

budget estimate. The receipt share of GNP under President 

Reagan's proposals also stands at 19.3% in 1984, with the Federal 

tax burden reduced by $152 billion from the January budget 

estimate. 

As a result of the President's tax proposals, Federal receipts 

are estimated to rise by 28% between 1981 and 1984, when budget 

balance is first attained, and by 57% over the entire 1981-1986 

period. Under the previous administration's proposals, Federal 

receipts would have risen by 96% over this 5-year period. But 

this extraordinary tax burden would inhibit investment and output 

growth, and thus would have triggered additional outlays for 

unemployment benefits and the like, resulting in higher budget 

deficits. However, the new policy of tax rate reduction is 

expected to expand the economy's productive base, lower 

unemployment, and reduce budget outlays. As a result, the 

decline in tax rates is likely to generate both strong economic 

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improvement and impressive gains in receipts, paving the way for 

a balanced budget. 

Table 4.—FISCA L TRENDS 

1981 Estimate 1982 Estimate 

January Revised January Revised 

Percentage Growth 

Receipts 16.8 15.4 17.2 8.3 

Outlays 14.3 13.0 11.6 6.1 

Percent of GNP 

Receipts 21.4 21.1 22.1 20.4 

Outlays 23.3 23.0 23.0 21.8 

By "holding the growth of Federal spending below the rate of 

growth of gross national product, the new policy achieves serious 

and reliable budget control. The tax share will be equal to the 

outlay share by 1984, at significantly lower levels than under 

previous policy. The reduced size of the public sector will free 

up the resources for a strong, rapidly growing private sector. 

The reduced Federal share of GNP under the new budget plan, 

reinforced by monetary stability, will signal a sharp reduction 

in future rates of inflation, and will thus have beneficial 

effects on financial, labor, product, commodity, and foreign 

exchange markets. As inflationary expectations moderate, 

interest rates will decline and business confidence will improve. 

Long-term capital markets will recover, making possible the 

refinancing of corporate balance sheets. Wage and price demands 

will become less aggressive. Commodity prices will stop rising, 

and the dollar will strengthen in foreign exchange markets. Tax 

burdens will ease. Better fiscal policies will become the basis 

for economic revival. 

Budget Reduction Plan 

The expenditure plan proposed in this document is complete for 

1981 and 1982. Projections of 1983 and future-year spending 

consistent with the specific budget reductions included in this 

program are also shown. However, is shown in Table 2 above, 

further spending reductions affecting 1983 and subsequent years 

are also planned. These further reductions will be identified in 

later messages and budgets. 

Because of the long lags in the Federal spending process, large 

reductions in spending authority do not result in corresponding 

immediate reductions in outlays. For example, the proposed 

reductions in budget authority amount to $21 billion in 1981. 

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The resulting outlay reductions in 1981 are estimated to total 

less than a third of this amount. 

Spending has achieved runaway momentum because criteria on which 

to judge the merits of spending programs have been largely 

absent. As a result, virtually any demand for Federal 

assistance, from any sector of the economy or region, has been 

considered valid. 

The President's budget revisions represent a sharp departure from 

the policies of the past two decades. The January budget 

estimates showed Federal spending increasing at an annual rate of 

13.3% over the period from 1977 to 1981. This Administration's 

program will reduce the rate of growth of Federal spending to 

only 5.5% a year over the 1981-1984 period. Restrained and 

steady fiscal policy will replace the excessively expansionary 

and erratic policies of the past and will permit sound monetary 

policies. 

This change will benefit Americans of all income classes, 

regions, and ages. Similarly, as is fitting in our democracy, 

the impact of budget restraint will be widely shared. No group 

except the truly needy should be exempt. No one should expect to 

share the benefits of budget restraint without also sharing its 

costs. 

Despite the limited time that this Administration has had to 

review the budget, the proposed revisions are extensive and 

detailed. This detail demonstrates clearly that the costs of the 

budget restraint program are shared equitably. 

The proposed budget reductions were developed on the basis of a 

set of clear, consistent, and economically sound criteria. The 

Administration has applied the following nine criteria for 

evaluating claims for Federal support. 

The first criterion is the preservation of the social safety net. 

The social safety net consists of those programs, mostly begun in 

the 1930's, that now constitute an agreed-upon core of protection 

for the elderly, the unemployed, and the poor, and those programs 

that fulfill our basic commitment to the people who fought for 

this country in times of war. Under the President's plan, 

expenditures for these programs will increase as a percentage of 

total Federal outlays, from 36.8% in 1981 to 40.1% in 1984. 

The second criterion is the revision of entitlements to eliminate 

unintended benefits. This criterion applies primarily to newer 

Federal entitlement programs and related income security programs 

that have undergone rapid growth during the last 20 years. The 

criterion also applies to certain aspects of social safety net 

programs that have been added unnecessarily or have grown 

excessively. Outlays for new or expanded entitlements have grown 

from $5.6 billion in 1970 to a January budget estimate of $56.9 

billion for 1982. 

The third criterion is the reduction of benefits for people with 

middle to upper incomes. Given the current economic climate and 

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the proposed major reductions in income taxes, these spending 

reductions are a matter of simple equity and common sense. This 

criterion directly challenges the drift toward the 

universalization of social benefit programs. 

The fourth criterion is the recovery of allocable costs by means 

of user fees. The user fee principle is applicable to activities 

that provide direct economic benefits to a specific and known 

group of individuals or enterprises and where there is no need or 

reason for these beneficiaries to be subsidized by all taxpayers. 

The Administration proposes applying this criterion to certain 

Coast Guard expenses, inland waterways, and the air traffic 

control system. The scope for application of this principle 

extends to other areas as well. 

The fifth criterion is the application of rigorous standards to 

economic subsidy programs. The budget reform plan proposes to 

eliminate grants and subsidies that were designed to alleviate 

specific problems of economic deterioration, but have instead 

made our economic problems worse by interfering with the workings 

of the marketplace. Significant reductions are proposed for 

nonproductive jobs programs, unnecessary subsidies to develop 

energy technologies, and a host of other subsidy programs that 

contribute to, rather than help solve, our national economic 

problems. 

The sixth criterion is a stretch-out of public sector capital 

investment programs. Many of these projects are desirable and 

should be completed expeditiously under normal economic 

conditions. However, the present economic crisis argues for 

stretching out and delaying these investments in the short run. 

The seventh criterion is the imposition of fiscal restraint on 

other programs of national interest. These programs have some 

merit, but given current constraints on available resources they 

must be curtailed or eliminated. 

The eighth criterion is consolidation of many categorical grants 

to State and local governments into block grants. The Federal 

Government in Washington has no special wisdom in dealing with 

many of the social and educational issues faced at the State and 

local level. By consolidating many of the 550 categorical grant 

programs, it will be possible to achieve numerous efficiencies. 

The health, education, and social services programs proposed for 

consolidations encompass 616 pages of law, 1,400 pages of 

regulations, over 10,000 separate grants, and approximately 

88,000 grant sites. It takes over 7 million hours to fill out 

the reports that are required each year, and several thousand 

Federal employees to administer these programs. 

The ninth and final criterion is the reduction of Federal 

overhead, personnel costs, and program waste and inefficiency. 

As a start, President Reagan placed a complete freeze on Federal 

hiring and ordered limits on the procurement of office equipment, 

consulting services, and travel. This is a beginning. Federal 

management, personnel levels, and administration are being 

further evaluated and tightened. 

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Many people will find some of the individual, specific budget 

reductions described in these pages difficult to accept. This is 

because every dollar now paid in Federal taxes or borrowed by the 

Federal Government in private financial markets is paid out to a 

recipient who has an interest in seeing this payment continued, 

whether the Federal Government and its taxpayers can truly afford 

it or not. People who plead for special treatment or exemption 

from the criteria outlined above threaten the rationale and 

validity of the entire budget reform plan. The plan is designed 

to share the temporary economic burden of constraining the 

Federal Government to its proper role, based on stated 

principles. One exception logically leads to many other 

exceptions and to erosion of the plan and of its long-term 

benefits for the economy and for all Americans. 

The application of these criteria makes it possible to continue 

to finance programs that comprise the social safety net and aid 

the truly needy, and those — like a strengthened national 

defense — that are essential Federal Government 

responsibilities. 

The benefits of the President's economic plan to the average 

American will be substantial. Inflation, now at double-digit 

rates, can be cut in half by 1986. Reduced tax burdens and 

increased private saving will provide funds for productive 

investment. As a result, the American economy should be able to 

produce some 13 million new jobs by 1986. 

The creativity and ambition of the American people are the vital 

forces of economic growth. The motivation and incentive of our 

people — to supply new goods and services and earn additional 

income for their families — are the mainspring of our Nation's 

economy. The U.S. economy faces no insurmountable barriers to 

sustained growth. It confronts no permanently disabling 

tradeoffs between inflation and unemployment or between high 

interest rates and high taxes. New economic policy can revive 

the incentives to work and save. It can restore the willingness 

to invest in the private capital required to achieve a steadily 

rising standard of living. Most important, it can help the 

American people regain their faith in the future. 

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Part 2 

THE CURRENT BUDGET OUTLOOK 

Introduction 

This part presents information on the revised budget totals. It 

includes sections on the budget economic assumptions, budget 

receipts, the credit budget and off-budget outlays, the Federal 

debt, and Federal civilian employment. The revised estimates in 

this document supersede the budget estimates and recommendations 

transmitted to the Congress in January. They reflect: 

— tax and spending reductions proposed as part of the 

President's program for economic recovery; 

proposed increases for defense programs; and 

reestimates of receipts and outlays resulting from 

revised economic assumptions and from technical 

reestimates. 

Table 5.—BUDGET TOTALS 

(in billions of dollars) 

Actual 

1980 1981 

Estimate 

1982 1983 1984 1985 1986 

Receipts 520.0 600.3 650.3 709.1 770.7 849.9 940.2 

Target outlay 

ceiling 579.6 655.2 695.3 732.0 770.2 844.0 912.0 

Target surplus 

or deficit (-). -59.6 -54.9 -45.0 -22.8 0.5 5.8 28.2 

Addendum: 

Percent of GNP 

Receipts 20.3 21.1 20.4 19.7 19.3 19.3 19.5 

Target outlay 

ceiling 22.6 23.0 21.8 20.3 19.3 19.2 19.0 

Under the President's Budget reform plan, budget outlays are 

estimated to total $695.3 billion in 1982 with outlay targets of 

$732.0 billion in 1983 and $912.0 billion by 1986. Budget 

receipts are estimated at $650.3 billion in 1982, growing to 

$709.1 billion in 1983 and $940.2 billion by 1986. Under the 

target outlay ceilings the outlay share of GNP is projected to 

fall from 23.0% in 1981 to 19.0% in 1986. The receipts share of 

GNP is projected to decline from 21.1% in 1981 to 19.5% in 1986. 

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Economic Assumptions 

The economy and the budget are interrelated. Economic conditions 

significantly affect the budget, and the budget, in turn, 

influences economic conditions. Because of the complex 

interrelationships between the budget and the economy, budget 

estimates depend to a very significant extent upon economic 

assumptions. 

The economic assumptions presented here reflect the President's 

program for economic recovery. This plan is designed to bring to 

all aspects of Government policy a greater sense of purpose and 

consistency. Permanent personal tax rate reductions will allow 

people to keep more of the additional income they earn, thereby 

providing increased incentives for work and saving. Business tax 

reductions will increase incentives for capital expansion, 

resulting in higher productivity. Spending reductions and 

elimination of unneeded regulation will give greater control over 

resources to the private sector, where incentives to economize 

are strongest. Stable monetary policy and slower growth of the 

money supply, combined with expanding productive capacity, will 

bring about a reduction of the inflation rate. 

The economic assumptions used for developing the budget estimates 

are presented in the following table to assist in understanding 

the budget estimates. These economic assumptions are on a 

calendar year basis, whereas the budget estimates are for fiscal 

years. These economic assumptions set goals that may seem 

difficult to attain to some. Compared to the January budget, 

projected inflation, unemployment and interest rates are all 

generally lower. The projections do represent a decisive 

departure from the trends of recent years — but so do the 

proposed policies. In fact, if each portion of this 

comprehensive economic program is put in place — quickly and 

completely — the economic environment could improve even more 

rapidly than envisioned in these assumptions. 

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Table 6. —ECONOMIC ASSUMPTIONS 

(Calendar years; dollar amounts in billions) 

Major economic indicators! 

Gross national "product (percent change, fourth quarter over 

fourth quarter)t 

Current dollars. 

Constant (1972) dollars 

QNP deflator (percent change, fourth quarter over fourth quarter). 

Consumer Price Index (percent change, fourth quarter over fourth 

quarter) 1 / 

Unemployment rate (percent, fourth quarter)• . . 

Annual economic assumptions! 

Gross national product! 

Current dollars! 

Amount 

Percent change, year over year 

Constant (1972) dollars! 

Amount 

Percent change, year over year. 

Income! 

Personal income/** 

Wages and salaries ••••••••• 

Corporate profits 2/ . 

Price level! 

GNP deflator! 

Level (1972«100), annual average 

Percent change, year over year... 

Consumer Price Index l/i 

Level (1967-100), annual average 

Percent change, year over year 

Unemployment rate! 

Total, annual average 

Insured, annual average 3/. 

Federal pay raise, October Tpcrcent) 4/t 

Civilian 

Military 

Interest rate, 91-day Treasury bills (percent) 6/ 

Actual 

1980 

9.8 

0.0 

9.9 

1981 

11.0 

1.4 

9.5 

1982 

13.3 

5.2 

7.7 

Estimate 

1983 195? 1985" 

11.8 

4.9 

6.6 

10.1 

4.2 

5.7 

9.6 

4.2 

5.2 

T55S 

9.1 

4.2 

4.7 

12.6 10.5 7.2 6.0 5.1 4.6 4.0 

7.5 7.7 7.0 6.5 6.3 5.8 5.6 

2629 2920 3293 3700 4098 4500 4918 

8.9 11.1 12.8 12.4 10.8 9.8 9.3 

1482 1497 1560 1638 1711 1783 1858 

-0.1 1.1 4.2 5.0 4.5 4.2 4.2 

2161 2399 2675 2982 3276 3580 3910 

1344 1488 1667 1853 2035 2221 2417 

243 242 281 326 367 408 455 

177.4 195.0 211.1 225.9 239.5 252.4 264.7 

9.0 « 9.9 8.3 7.0 6.0 5.4 4.9 

247.0 274.3 297.0 315.5 332.7 348.3 363.0 

13.5 11.1 8.3 6.2 5.5 4.7 4.2 

7.2 7.8 7.2 6.6 6.4 6.0 5.6 

3.9 4.4 3.8 3.4 3.2 2.9 2.7 

9.1 4.8 7.0 7.0 7.0 6.4 6.0 

11.7 9.1 5/ 8.9 7.9 7.0 6.4 6.0 

11.5 11.1 8.9 7.8 7.0 6.0 5.6 

1/ CPI for urban wage earners and clerical workers. Two versions of the CPI are now published. The index shown here is 

that currently used, as required by law, in calculating automatic cost-of-living increases for indexed Federal programs. 

2/ Excludes the direct accounting effect of the Administration's depreciation proposal on business income, although all 

categories of economic assumptions do reflect the economic impact of this proposal. 

3/ This indicator measures unemployment under State regular unemployment insurance as a percentage of covered employment 

under that program. It does not include recipients of extended benefits under that program. 

4/ General schedule pay raises become effective in October — the first month of the fiscal year. Thus, the October 1981 

pay raise will set new pay scales that will be in effect during fiscal year 1982. 

5/ An additional pay raise of 5.3% is proposed to be effective in July 1981. 

6/ Average rate on new issues within period. The projections assume that interest rates decline with the rate of 

inflation and inflationary expectations. The projections do not represent a forecast of interest rates. 

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Budget Receipts 

Under the Administration's budget reform plan, receipts would be 

substantially lower than the January estimates. These reductions 

are the net effect of policy changes, administrative actions, the 

revised economic forecast, and technical reestimates. The 

revised estimate of 1981 receipts is $600.3 billion, $7.2 billion 

below the January budget estimate. Receipts in 1982 are 

estimated at $650.3 billion, $61.4 billion less than the January 

estimate of $711.8 billion. Estimates of receipts are $100 to 

$248 billion lower in 1983-1986. 

Substitution of the Administration's proposals for those 

presented in the January budget reduces receipts by $11.1 billion 

in 1981, $56.6 billion in 1982, and $195.9 billion by 1986. 

Administrative actions, which include the immediate decontrol of 

crude oil prices and the electronic funds transfer of payments of 

alcohol and tobacco excise taxes, increase receipts by $3.7 

billion in 1981 and $0.5 billion in 1982. The revised economic 

forecast, primarily lower inflation, reduces receipts by $4.3 

billion in 1982 and by increasing amounts in each subsequent 

year. 

Receipt Proposals 

Proposed reductions in individual income tax rates and business 

taxes are an integral part of the Administration's economic 

recovery program. These reductions are designed to encourage 

work, saving, and investment, which will strengthen the growth 

and productivity of the economy and result in higher incomes and 

balanced budgets in later years. The proposed changes are 

described briefly below. 

Individual income tax reductions.—The Administration is 

proposing that marginal tax rates for individuals be reduced by 

10% each year for the next three years, beginning July 1, 1981. 

Compared with present law, tax rates would be reduced by 5% for 

calendar year 1981, 15% for calendar year 1982, 25% for calendar 

year 1983, and 30% for calendar year 1984. As a result, marginal 

tax rates would be reduced from their present range of 14 to 70% 

to a range of 10 to 50% effective January 1, 1984. Withholding 

rates would be reduced by 10% on July 1, 1981. For all years 

after 1981, the percentage reduction in withholding rates and tax 

schedule rates would be the same. These proposed reductions in 

individual income tax rates are estimated to reduce receipts by 

$6.4 billion in 1981, $44.2 billion in 1982, and $162.4 billion 

by 1986. As a result, individual income taxes rise at a 10.2% 

annual rate from 1981-1986, compared with an annual increase of 

16.6% under current law. 

Depreciation reform.—The proposed Accelerated Cost Recovery 

System would provide for faster write-off of capital expenditures 

under simplified and standardized rules. Under this proposal, 

the following classes of plant and equipment are identified, each 

with a standard schedule of deductions to be taken over a fixed 

recovery period: 

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Table 7.—CHANGE IN BUDGET RECEIPTS 

(in billions of dollars) 

Actual Estimate 

1980 1981 1982 1983 1984 1985 1986 

January budget 520 .0 607.5 711.8 809.2 922 .3 1052.6 1188.5 

Pol icy changes: 

Removal of Carter administration 

proposals -2.5 -5.3 7.9 15.0 15.1 17.8 

Individual income tax reductions.. -6.4 -44.2 -81.4 -118.1 -141.5 -162.4 

Depreciation reform -2.5 -9.7 -18.6 -30.0 -44.2 -59.3 

Reform of Federal employee 

injury compensation * 0.1 0.1 0.1 0.1 0.1 

User charges 0.2 2.1 2.4 2.7 3.1 3.4 

Other proposals 1/ * 0.4 0.5 0.5 4.4 4.5 

Subtotal, policy changes -11 .1 -56.6 -89.2 -129.8 -163.2 -195.9 

Administrative actions 2/ 3.7 0.5 * * * * 

Revised economic assumptions 0.4 -4.3 -10.3 -21.8 -40.2 -54.9 

Technical reestimates -0.4 -1.0 -0.5 0.1 0.7 2.5 

Revised budget 520.0 600.3 650.3 709 .1 770.7 849.9 940.2 

l/ These proposals include extension of highway trust fund taxes scheduled to expire 

September 30, 1984, an increase in railroad retirement payroll taxes, and increases in 

passport and visa fees. 

2/ These estimates include gross windfall profit tax receipts resulting from immediate 

decontrol of crude oil prices and a speed up in collections of tobacco and alcohol excise 

taxes resulting from the electronic funds transfer of payments. 

* $50 million or less. 

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— 3-year property.—This class consists of autos and light 

trucks plus machinery and equipment used in research and 

development. Expenditures for these assets would be 

written-off in 3 years according to an accelerated 

schedule. An investment credit of 6% would be allowed, 

which is an increase of 2-1/2 percentage points over the 

credit allowed under present law. 

— 5-year property.—This class consists of other machinery 

and equipment, except for certain long-lived utility 

property. After a phase-in period, property in this 

class would be written-off according to an accelerated 

5-year schedule. The full 10% investment tax credit 

would apply for property in this class. 

— 10-year property.—This class consists of factory 

buildings, retail stores, and warehouses, and public 

utility property for which present guidelines exceed 10 

years. After a phase-in period, property in this class 

would be written-off according to an accelerated 10-year 

schedule. As under present law, the 10% investment 

credit would apply to the public utility property in 

this class but not to the structures. 

Standard lives and depreciation methods also are established for 

other classes of depreciable real estate: 

— 15-year property.—This class consists of 

non-residential structures not included in the 10-year 

class described above, and low-income rental housing. 

After an initial phase-in period, these structures would 

be written-off in 15 years on a straight-line basis. 

— 18-year property.—Other residential structures would be 

written-off on a straight-line basis over 18 years. 

This system of accelerated depreciation, proposed to be effective 

for new and used property acquired or placed in service after 

December 31, 1980, is estimated to reduce receipts by $2.5 

billion in 1981, $9.7 billion in 1982, and increasing amounts in 

subsequent years. 

As part of its effort to reform the Federal employees injury 

compensation program, the Administration proposes to make the 

entire amount of benefits received under this program subject to 

the Federal income tax. This proposal is estimated to increase 

receipts by $18 million in 1981 and $0.1 billion in 1982 and each 

year thereafter. 

The Administration is proposing an increase in aviation user 

taxes and an increase in user fees for barge operators beginning 

July 1, 1981. These charges are proposed to recover through 

governmental receipts most of the Federal costs associated with 

the safe and efficient movement of air traffic, the operation of 

waterways, and the construction of new facilities on these 

waterways. A proposal to levy user charges on yacht and boat 

owners and a proposed increase in fees paid by users of deepwater 

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ports are classified as proprietary receipts and are offset 

against outlays in the transportation and natural resources and 

environment functions. 

The revised estimates also reflect the following proposals, which 

were included in the January budget: extension of highway trust 

fund taxes that are scheduled to expire September 30, 1984; an 

increase in railroad retirement payroll taxes to alleviate 

funding problems of the Railroad Retirement trust fund; and 

increases in passport and visa fees. 

The Credit Budget and Off-Budget Outlays 

In the last decade, rapid growth of Federal credit activity 

both direct loans and loan guarantees — has had serious effects 

on the Nation's economy and on financial markets. For this 

reason, rigorous control over Federal credit programs, including 

loans financed off-budget, is an important part of the 

President's budget reform plan. The criteria used in developing 

proposed reductions in credit and off-budget activity are 

identical to those used for on-budget expenditure reductions. 

For example, special scrutiny has been applied to certain credit 

programs, such as the guaranteed student loan program and certain 

housing programs, that provide benefits to those with middle and 

upper incomes. Attention has also been given to credit programs 

that were designed to promote economic development, but have had 

either little or no measurable results or have exacerbated 

existing problems by interfering with the efficiency of private 

financial markets. 

The Credit Budget 

The application of the economic criteria of the President's 

reform plan to Federal credit programs has led the Administration 

to propose substantial reductions in the size and scope of the 

Federal credit budget. The Administration will work with the 

Congress to control credit programs in two ways: 

— by proposing annual appropriation bill limitations on 

new obligations for direct loans and on new commitments 

for loan guarantees; and 

by proposing changes to the basic authorizing 

legislation for programs that are not acted on in annual 

appropriations bills. Without fundamental changes to 

authorizing legislation, certain entitlements to Federal 

credit will remain relatively uncontrollable. 

Revised totals for direct loan obligations and loan guarantee 

commitments are $13.6 billion below the adjusted January budget 

for 1981 and $21.0 billion below for 1982. The revised totals 

for direct loan obligations are $2.6 billion below January in 

1981 and 1982. Total loan guarantee commitments are $11.0 

billion below the adjusted January total in 1981 and $18.4 

billion lower in 1982. 

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Table 8.—SUMMAR Y OF CREDIT BUDGET TOTALS 

(in billions of dollars) 

1981 Estimate 1982 Estimate 

January Revised Change January Revised Change 

New direct loan obligations: 

On-budget 42.1 38.6 -3.5 34.1 32.9 -1.2 

Off-budget 32.2 32.6 0.4 26.1 22.7 -3.4 

Total new direct loan 

obligations, gross 74.2 71.2 -3.0 60.2 55.6 -4.6 

Less new FFB purchases of 

loan assets -16.6 a/ -16.2 0.4 -8.2 a/ -6.2 2.0 

Total direct loan obligations, 

net 57.6 a/ 55.0 -2.6 52.0 a/ 49.4 -2.6 

New loan guarantee commitments: 

Commitments, gross 202.1 b/ 184.7 -17.4 196.4 b/ 168.7 -27.7 

Less secondary guarantees and 

guaranteed loans held as direct 

loans -105.9 -99.5 6.4 -99.5 -90.2 9.3 

Total primary guarantee 

commitments 96 . 2 b/ 85 .2 -11.0 96 .9 b/ 78 . 5 -18 .4 

Total credit budget 153.8 140.2 -13.6 148.9 127.9 -21.0 

a/ The direct loan obligation totals published in the January budget have been 

adjusted downward by $16.6 billion in 1981 and $8.2 billion in 1982 to eliminate double 

counting of purchases of loan assets by the Federal Financing Bank. 

b/ The loan guarantee commitment totals published in the January budget have been 

increased by $5.1 billion in 1981 and $4.5 billion in 1982 to correct technical errors. 

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Proposed reductions *—Federal credit programs would be reduced 

primarily as a result of applying three of the criteria used in 

shaping the President's economic plan. First, proposed changes 

resulting from the application of sound economic criteria to 

subsidy programs reduce direct loan obligations by $2.7 billion 

in 1981 and $5.1 billion in 1982. Guaranteed loan commitments 

would be reduced by $4.6 billion in 1981 and $5.4 billion in 1982 

below the January budget levels. The following subsidy programs 

would be affected: 

Rural and agricultural development programs would be 

reduced by: 

$89 million in 1981 and $2,650 million 1/ in 1982 in 

direct loan obligations for the agricultural credit 

insurance fund in the Farmers Home Administration 

(FmHA). Decreases are primarily for farm ownership 

and emergency disaster loans. Loan guarantee 

commitments for this program would be increased by 

$100 million. The reductions in direct loans result 

in decreases in loan guarantee commitments of $76 

million in 1981 and $1,139 million in 1982 for sales 

of certificates of beneficial ownership to the 

Federal Financing Bank (FFB). 

$316 million in 1981 and $649 million in 1982 in 

direct loan obligations and $274 million in 1981 and 

$517 million in 1982 for loan guarantee commitments 

for the rural housing insurance fund. The latter 

are due to decreases in sales of certificates of 

beneficial ownership to the Federal Financing Bank. 

These reductions will not significantly affect the 

poorest households and communities. FmHA would 

narrow its focus to serve borrowers who lack access 

to other credit sources, rather than serve as a 

source of below-market interest rate loans to a wide 

variety of private, credit-worthy borrowers. Under 

this approach, housing programs serving the very 

poor would receive smaller reductions than those 

that provide homeownership loans to moderate income 

families. 

$187 million in 1981 and $400 million in 1982 for 

Rural Electrification Administration (REA) direct 

loan obligations and a $100 million increase in 1982 

for REA loan guarantee commitments to replace REA 

direct 5% loans to generation and transmission 

cooperatives. The FFB will no longer provide direct 

lending with REA guarantees to electric generation 

1/ Subsequent to the revision of the credit budget data base 

and calculation of final credit budget totals, it was 

learned that the correct figure for the reduction in 1982 

direct loan obligations for the agricultural credit 

insurance fund is $1.3 billion. 

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and transmission cooperatives and to telephone 

companies and cooperatives. The REA has 

substantially accomplished its purpose of providing 

concessional financing to make available electric 

and telephone service to rural areas. These changes 

shift most of the financing for rural electric and 

telephone facilities currently assisted by REA and 

the FFB from direct Federal lending to privately 

originated loans with REA guarantees. 

$160 million in 1981 and $130 million in 1982 in 

direct loan obligations and $500 million in 1982 in 

loan guarantee commitments in rural development 

programs in FmHA as a result of the proposed 

elimination of the business and industry loan 

program in FmHA. This does not include further cuts 

of $275 million that would result from proposed 

legislation. 

$25 million in 1981 and $100 million in 1982 in the 

storage facility loan program of the Department of 

Agriculture. 

— Other proposed reductions in the commerce and economic 

development subsidy programs are: 

$50 million in 1981 and $116 million in 1982 in 

direct loan obligations and $262 million in 1981 and 

$425 million in 1982 in loan guarantee commitments 

by eliminating the Economic Development 

Administration (EDA). There is a lack of convincing 

evidence that EDA programs have been effective in 

creating new jobs and attracting capital investment 

to distressed areas. 

$126 million in 1981 and $133 million in 1982 in 

direct loan obligations by eliminating the National 

Consumer Cooperative Bank. Successful cooperatives 

can obtain adequate private credit, and the use of 

scarce budgetary resources to subsidize inefficient 

cooperatives cannot be justified. 

$45 million in 1981 and $116 million in 1982 by 

reducing direct lending of the Small Business 

Administration. Guarantee commitments for SBA would 

be reduced by $990 million in 1981 and $1.5 billion 

in 1982. The decrease for SBA direct loan 

obligations for disasters is $780 million in 1981 

and $50 million in 1982. 

— Proposed reductions in energy subsidy programs will 

allow normal market forces to achieve rapid development 

of the most efficient new energy technology and to 

promote energy conservation. Direct loan obligations 

would be reduced by $90 million in 1981 and $94 million 

in 1982. Loan guarantee commitments would be reduced by 

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$1.9 billion in 1981 and $233 million in 1982 in biomass 

and geothermal energy development programs. 

— Direct loan obligations for programs that subsidize 

exports would be reduced by: 

$752 million in 1981 and $600 million in 1982 by 

program changes in the Export-Import Bank. Loan 

guarantee commitments would be reduced by $1.0 

billion in 1981 and $1.2 billion in 1982. These 

reductions are proposed because restoration of 

general economic health in the U.S. economy will be 

a more powerful stimulant to export expansion than 

costly subsidized loans. 

$76 million in 1981 and $70 million in 1982 in 

direct loan obligations as a result of reductions in 

very low interest loans for exports of food under 

Public Law-480. In light of the current rising 

trend in commercial agricultural exports and the 

need to target foreign aid on the highest priority 

objectives, this substantial subsidy is no longer 

justified. 

Second, the effort to reduce subsidies to middle and upper income 

families reduces primary loan guarantee commitments by $4.8 

billion in 1981 and $9.0 billion in 1982. Secondary loan 

guarantee commitments would be reduced by $7 billion in 1981 and 

$9.6 billion in 1982. 

Loan guarantee commitments for the Federal Housing Administration 

(FHA) mortgage insurance program would be reduced by $4.8 billion 

in 1981 and $9 billion in 1982. Government National Mortgage 

Association (GNMA) guarantees of mortgage-backed securities would 

be reduced by $8 billion in both 1981 and 1982. While the GNMA 

tandem mortgage assistance program is proposed to be terminated, 

an increase in mortgage purchase commitments of $3.3 billion over 

the January totals will be made in 1982 to provide subsidized 

mortgages for projects processed before February 13, 1981 that 

satisfy tandem program criteria. These overall lower levels of 

activity for Federal housing credit reflect downward reestimates 

in the number of newly constructed HUD subsidized housing units 

for 1981 and 1982, and a slower expected rate of increase in 

single family Federal mortgage insurance activity. The estimates 

also reflect the effort to focus Federal housing credit 

assistance only on those segments of the housing market that are 

not served by the private market. 

The Administration proposes that the Department of Education 

guarantees of obligations of the Student Loan Marketing 

Association (SLMA) be increased by $1.0 billion in 1981 and 

decreased by $1.4 billion in 1982. The Department of Education's 

authorization to guarantee the obligations of SLMA would be 

terminated in 1982 to curtail further use of off-budget financing 

through the Federal Financing Bank (FFB). Access to the FFB was 

intended to enable SLMA to expand its loan purchasing and attract 

adequate private capital into the guaranteed student loan 

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program. However, SLMA is not prepared to begin raising funds in 

private credit markets during 1982. Its current financial 

condition is sufficiently strong to allow SLMA to go wholly 

private thereafter. The Administration's budgetary proposal 

provides sufficient interim capital to SLMA to ensure this 

transition without interruption of SLMA's scheduled financing. 

Other proposed reductions in education are $30 million in 1981 

and $45 million in 1982 in direct loan obligations for college 

housing. Collections of principal on past loans, which have been 

used to make new loans, will help provide adequate funding for 

future lending. 

Third, the President's budget reform plan imposes fiscal 

restraint on a number of credit assistance programs that are in 

the national interest but cannot be accorded an urgent priority 

in light of the need to curtail the effects of large Federal 

demands upon the Nation's financial markets. Direct loan 

obligations would be reduced by $0.8 billion in 1981. 

Commitments for loan guarantees would be reduced by $1.0 billion 

in 1981 and $3.6 billion in 1982. 

— Loan guarantee commitments for less essential credit 

programs would be reduced by: 

$100 million in 1981 and $250 million in 1982 for 

aircraft purchase loan guarantees. In addition, 

beginning in 1982 eligibility for loan guarantees 

will be limited to commuter airlines^ which 

traditionally have the most difficulty getting 

financing from private institutions. 

$300 million in 1981 and $350 million in 1982 for 

loan guarantee commitments for assistance to 

merchant shipbuilding. 

$0.6 billion in 1981 and $2.6 billion in 1982 for 

loan guarantee commitments for public housing and 

construction. This reduction is part of the general 

effort to reduce the growth in the number of units 

of federally subsidized housing. This action will 

substantially decrease Federal investment in future 

years while maintaining essential housing benefits 

to the most needy. 

Direct loan obligations would be reduced by: 

$40 million in 1981 for the coastal energy impact 

program in the National Oceanic and Atmospheric 

Administration. Activities under this program can 

be undertaken by States and localities on their own 

or deferred. 

$152 million in 1981 and $215 million in 1982 by 

eliminating the rehabilitation loan fund in the 

Department of Housing and Urban Development because 

it unnecessarily duplicates the much larger 

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rehabilitation efforts of the community development 

block grant program. 

A net reduction of $358 million in 1982 is proposed for 

foreign military sales credit guarantees of Federal 

Financing Bank direct lending. This action will 

decrease FFB off-budget direct loans. An increase of 

$632 million in direct loan obligations in 1982 is due 

to increased assistance to governments critical to the 

security of the United States. 

Other reductions in direct loan obligations are: 

$91 million in 1981 and $96 million in 1982 for 

several veterans insurance funds. 

$75 million in 1982 to the District of Columbia for 

capital investment. 

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Table 9.—CHANGES IN NEW DIRECT LOAN OBLIGATIONS, 1981-1982 

(in billions of dollars) 

1981 1982 

January budget totals 74.2 60.2 

Less FFB purchases of loan assets -16 .6a -8 . 2a 

Adjusted January totals 57.6 52.0 

Policy reductions: 

Security assistance -0.5 0.6 

Export-Import Bank -0.8 -0.6 

Foreign assistance - P.L. 480 -0.1 -0.1 

Biomass and geothermal energy development.... -0.1 0.1 

Rural Electrification Administration -0.2 -0.4 

Price support and commodity loans -* -0.1 

Agricultural credit -0.1 -2.6^ 

Mortgage purchase activity (GNMA) 3.3 

Rural housing -0.3 -0.6 

National Consumer Cooperative Bank -0.1 -0.1 

Housing rehabilitation programs -0.2 -0.2 

Rural development -0.2 -0.1 

Economic development assistance -* -0.1 

Small business -0.8 -0.2 

Student assistance -* -0.1 

Veterans programs -0.2 -0.1 

District of Columbia -0.1 

Federal Financing Bank 1.0 -1.0 

Other -* -* 

Subtotal, policy reductions -2.6 -2.6 

Revised total, direct loan obligations 55.0 49.3 

a/ The totals published in the January budget have been 

adjusted downward by $16.6 billion in 1981 and $8.2 billion in 

1982 to eliminate double counting of purchases of loan assets by 

the Federal Financing Bank. 

b/ Subsequent to the revision of the credit budget data 

base and calculation of final credit budget totals, it was 

learned that the correct figure for the reduction in 1982 direct 

loan obligations for the agricultural credit insurance fund is 

$1.3 billion. 

* $50 million or less. 

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Table 10.—CHANGES IN NEW LOAN GUARANTEE COMMITMENTS, 1981-1982 

(in billions of dollars) 

1981 1982 

January budget totals 91.1 92.4 

Reestimates and corrections: 

TVA 3.4 4.5 

Biomass energy development 1. 7 

Adjusted January totals 96.2a/ 96.9a/ 

Policy reductions: 

Security assistance -0.4 

International development -* -0.2 

Export-Import Bank -1.0 -1.2 

Biomass and geothermal energy development.... -1.9 -0.2 

Rural Electrification Administration -* 0.1 

Agricultural credit -0.1 -1.0 

Mortgage purchase activity (GNMA) -8.0 -8.0 

Mortgage credit (FHA) -4.8 -9.0 

Rural housing -0.3 -0.5 

Small business -1.0 -1.5 

Aircraft programs -0.1 -0.2 

Rural development -* -0.5 

Assistance to merchant shipbuilding -0.3 -0.4 

Student assistance 1.0 -1.4 

Public housing -0.6 -2.6 

Economic development -0.3 -0.4 

Other -* -0.2 

Subtotal, changes in gross loan guarantee 

commitments -17.4 -27.7 

Changes in deductions for secondary 

guarantees and guarantees held as 

direct loans 6.4 9.3 

Subtotal, policy reductions -11. 0 -18.4 

Revised total, loan guarantee commitments 85.2 78.5 

a/ The loan guarantee commitment totals published in the 

January budget have been increased by $5.1 billion in 1981 and 

$4.5 billion in 1982 to correct technical errors. 

* $50 million or less. 

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Changes in Off-Budget Outlays Due to Credit Activities 

The Federal Financing Bank (FFB) accounts for almost all of 

off-budget net outlays. The FFB was designed in 1974 primarily 

to provide an efficient method for financing certain Federal 

agency borrowing. However, the operations of the FFB have 

weakened budgetary control over Federal credit programs. The 

Administration is proposing broad reform of Federal Financing 

Bank operations and substantial decreases in Federal Financing 

Bank loan outlays. 

Proposed reductions in total FFB lending are estimated to be $0.2 

billion in 1981 and $3.2 billion in 1982. Major reductions are 

discussed above under the credit budget. They include lending to 

or on behalf of the Farmers Home Administration, Student Loan 

Marketing Association, and Rural Electrification Administration. 

Changes in off-budget outlays are shown on Table 11. 

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Table 11.—CHANGES IN OFF-BUDGET OUTLAYS 

(in billions of dollars) 

1981 1982 1983 1984 1985 1986 

January budget estimates 23.2 18.3 15.3 14.7 15.3 16.9 

Reestimates and revisions: 

Federal Financing Bank: 

Low-rent public housing -0.4 1. 6 1 .7 2.6 2 .5 2 .5 

Other * 0. 1 0 .1 0.2 -1 .1 -1 .7 

Postal Service 0.4 1. 5 0 .4 0.5 0 .5 0 .5 

Subtotal, reestimates * 3. 1 2 .2 3.2 1 .8 1 .2 

Proposed policy changes: 

Federal Financing Bank: 

Rural Electrification Administration.. -1. 2 -2 .4 -3.7 -5 .1 -6 .6 

Farmers Home Administration -0.4 -1. 7 -1 .7 -1.6 -1 .6 -1 .9 

Student Loan Marketing Association.... 1.0 -1. 4 -2 .2 -2.5 -2 .5 -2 .5 

Other. -0.2 -0. 5 -0 .6 -0.7 -0 .6 -0 .6 

Subtotal, proposed policy changes 0.4 -4. 7 -6 .9 -8.5 -9 .8 -11 .6 

Revised budget estimates 23.6 16. 7 10 .7 9.5 7 .4 6 .5 

* $50 million or less. 

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Debt 

The budget deficits now estimated for 1981 and 1982, together 

with the deficits of the off-budget Federal entities and the 

other factors involved in budget financing, require that the 

Federal Government borrow $71.0 billion from the public in 1981 

and $60.0 billion in 1982. By the end of 1982, debt held by the 

public is estimated to be $846.1 billion and gross Federal debt 

to be $1,075.4 billion. The total borrowing from the public 

during 1981 and 1982 is estimated to be $14.0 billion more than 

in the January budget. This is primarily because the tax 

reductions needed in 1982 to provide economic stimulus are 

greater than the cuts in budget outlays and off-budget Federal 

spending. 

The following table shows the relationship between the Federal 

deficits, the change in debt held by the public, and the change 

in gross Federal debt. 

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Table 12.—BUDGET FINANCING AND DEBT 

(in billions of dollars) 

Budget surplus or deficit (-) 

Deficit(-), off-budget Federal entities 

Means of financing other than borrowing from 

the public 

Change in debt held by the public 

Change in Federal agency investments in 

Federal debt 

Change in gross Federal debt 

1981 Estimate 1982 Estimate 

Actual January Revised January Revised 

1980 Budget Budget Budget Budget 

-59.6 

-14.2 

-55.2 

-23 .2 

-54.9 

-23 .6 

-27.5 

-18.3 

-45.0 

-16.7 

3.3 6.4 7.5 0.8 1.7 

70.5 72.0 71.0 45.0 60.0 

10.1 6.1 7.3 20.3 22.8 

80.6 78.1 78.3 65.2 82.8 

Outstanding debt, end of year: 

Gross Federal debt 914.3 992.4 992.6 1057.7 1075.4 

Held by: 

Government agencies 199.2 205.3 206.5 225.6 229.3 

The public 715.1 787.1 786.1 832.1 846.1 

Debt subject to statutory limit 908.7 987.3 987.4 1053.6 1071.2 

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Federal Civilian Employment 

The President demonstrated his commitment to reducing the level 

of Federal civilian employment when he signed an order freezing 

Federal civilian hiring as his first official act following his 

inauguration. 

As part of the preparation of the revised budget, new civilian 

personnel ceilings for 1981 and 1982 were developed for each 

agency. These personnel ceilings are significantly lower than 

those planned in the January budget. As the heads of agencies 

adopt specific plans to meet the revised ceilings, they may be 

able to modify or lift the hiring freeze. These actions will 

complete one phase of the Administration's effort to reduce the 

size and cost of the Federal work force and to increase its 

efficiency. The new, lower personnel levels should increase 

productivity by encouraging a more efficient use of personnel. 

The following table compares, by major agency, the end-of-year 

employment estimates in the January budget to the revised 

estimates. 

Employment in nondefense agencies would be reduced by 32,900 

positions in 1981 and by 63,100 positions in 1982 from the 

January budget estimates. 

As part of the Administration's proposed increases in budget 

resources devoted to national defense, civilian employment for 

the Department of Defense would be 14,000 positions higher in 

1981 and 20,000 higher in 1982 than the levels proposed in the 

January budget. 

A table showing full-time permanent employment estimates on a 

full-time equivalent (workyear) basis is provided in Part 5. 

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Table 13.—TOTAL FEDERAL CIVILIAN EMPLOYMENT — EXECUTIVE BRANCH 

(Excluding the Postal Service; End-of-Year) 

1981 1982 

January Revised January Revised 

Budget Budget Change Budget Budget Change 

Agriculture 129,200 125,000 -4,200 132,300 126,000 -6,300 

Commerce 39,200 37,300 -1,900 43,100 39,600 -3,500 

Defense-Military 916,000 930,000 14,000 916,000 936,000 20,000 

Defense-Civil 31,900 31,900 34,700 32,100 -2,600 

Education 7,200 6,800 -400 6,900 6,400 -500 

Energy 21,500 20,300 -1,200 21,700 18,400 -3,300 

Health and Human Services 154,500 160,100 5,600 155,300 155,500 200 

Housing and Urban Development 16,400 15,500 -900 16,800 15,300 -1,500 

Interior 77,000 75,000 -2,000 78,700 74,300 -4,400 

55,900 54,700 -1,200 56,500 54,100 -2,400 

Labor 23,500 21,900 -1,600 23,500 21,800 -1,700 

State 23,400 23,400 23,700 23,200 -500 

Transportation 71,800 68,800 -3,000 72,200 67,500 -4,700 

Treasury 125,000 120,900 -4,100 128,300 121,200 -7,100 

Environmental Protection Agency... 14,800 14,100 -700 15,500 13,800 -1,700 

National Aeronautics and Space 

Administration 23,800 23,300 -500 23,800 23,200 -600 

Veterans Administration 216,700 212,000 -4,700 217,200 208,000 -9,200 

Other: 

General Services Administration 35,500 33,700 -1,800 36,200 33,300 -2,900 

International Communication 

Agency 8,100 7,700 -400 8,100 7,700 -400 

International Development 

Cooperation Agency 6,100 5,900 -200 6,100 5,800 -300 

Nuclear Regulatory Commission.. 3,500 3,400 -100 3,600 3,500 -100 

Office of Personnel Management. 7,400 7,400 8,000 7,400 -600 

Panama Canal Commission 8,700 8,600 -100 8,600 8,500 -100 

Small Business Administration.. 5,000 4,700 -300 5,000 4,500 -500 

Tennessee Valley Authority 49,000 45,500 -3,500 48,000 44,000 -4,000 

45,900 43,200 -2,700 47,700 44,300 -3,400 

Subtotal 2,117,000 2,101,000 -15,900 2,137,500 2,095,400 -42,100 

Contingencies 2,000 1,000 -1,000 2,000 1,000 -1,000 

Expected lapse -8,000 -10,000 -2,000 -8,000 -8,000 

Total 2,111,000 2,092,100 -18,900 2,131,500 2,088,400 -43,100 

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Part 3 

BUDGET AUTHORITY AND OUTLAYS BY FUNCTION, 1980-1982 

The budget resources devoted to meeting national needs are 

classified by functions so that budget authority and outlays can 

be grouped together according to purpose. To the extent 

feasible, these groupings are made without regard to agency or 

other organizational di stinctions. These categories are used by 

the Congress in developing the concurrent resolutions on the 

budget. This part contains separate sections for each of the 

budget functions on 1981 and 1982 estimates. Part 4 discusses 

the projections for 1983 through 1986 for each function. 

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050: NATIONAL DEFENSE 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 145.8 17 3.9 200.3 

Department of Defense-Military: 

Reestimates and revised economic 

assumptions: 

Military retired pay -* -0.2 

All other -0.8 -2.1 

Policy reductions: 

Civilian pay -0.1 

All other -0.5 -1.9 

Policy increases: 

Military pay 0.4 1.9 

All other 7.7 28.6 

Atomic energy defense activities 0.3 

Defense-related activities * -0.5 

Revised budget 145.8 180.7 226.3 

Outlays 

January budget 135.9 161.1 184.4 

Department of Defense-Military: 

Reestimates and revised economic 

assumptions: 

Military retired pay -* -0.2 

All other -2.6 -3.4 

Policy reductions: 

Civilian pay -0.2 

All other -0.3 -0.9 

Policy increases: 

Military pay 0.4 1.9 

All other 3.5 7.6 

Atomic energy defense activities * 0.1 

Defense-related activities * -0,5 

Revised budget 135.9 162.1 188.8 

* $50 million or less. 

The budget authority now requested for the national defense 

function for 1982 is $25.8 billion higher than that requested in 

the January budget. Outlays for 1982 are estimated to be $4.3 

billion higher. This is due to program increases totaling $9.6 

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billion in outlays, partly offset by $3.6 billion in downward 

reestimates and planned reductions of $1.6 billion. 

Department of Defense-Military 

Reestimates.—Defense outlays and budget authority have been 

reestimated to reflect the economic assumptions contained in this 

document. Lower projected inflation has reduced projected costs 

of defense purchases and military retired pay cost-of-living 

adjustments. In addition, prior to any policy modifications to 

the January budget, outlays under existing contracts were 

reestimated downward by $2.3 billion for 1981 and $2.2 billion 

for 1982 on the basis of recent spending patterns. 

Proposed reductions.—Savings of $0.2 billion in 1982 in civilian 

employment payroll costs, and larger amounts in subsequent years, 

are estimated for the Administration's proposed changes in the 

method used to calculate Federal pay raises. Under this 

proposal, a pay raise of 4.8% is estimated for civilian personnel 

for 1982, rather than the 5.5% assumed in the January budget. 

Savings of $0.7 billion a year beginning in 1983 are expected 

from the withdrawal of most of the previous administration's 

proposals to alter the military retired pay system. The January 

budget proposal to shift from semi-annual to annual indexation of 

retired pay benefits is retained, however, and this proposal is 

now estimated to save $0.4 billion in 1982 compared to current 

law. 

The Administration proposes other reductions estimated at $1.9 

billion in budget authority and $0.9 billion in outlays in 1982, 

and larger amounts in subsequent years. These reductions involve 

realignment of the defense installation and logistics structure 

that would reduce its over-all size, and, where appropriate, make 

greater use of contractual services instead of in-house 

Government activities. Travel costs and the use of consultants 

will also be reduced, and a variety of management improvements 

will be undertaken to improve acquisition procedures. The latter 

include multi-year procurements permitting substantial economies 

due to early assurance of longer production runs; ordering in 

more economic quantities, and increased competition in the 

awarding of contracts; termination of weapon systems that are 

excessively costly in relation to mission requirements or 

peripheral to our defense requirements; and emphasis on 

investments that improve productivity both in the defense 

industrial base and in Government-operated facilities. 

Proposed increases.—The Administration proposes a 5.3% pay raise 

for military personnel in July 1981, in addition to the 9.1% 

October 1981 pay raise assumed in the January budget. This 

higher military pay will reduce the outflow of experienced 

personnel from the armed services. This adds $1.9 billion to 

military pay in 1982, compared to the amount provided in the 

January budget. 

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Increased funding in other areas amounting to $28.6 billion in 

budget authority and $7.6 billion in outlays in 1982 will 

strengthen strategic forces, improve military readiness, and 

accelerate modernization of combat forces. 

The major program initiatives for strategic forces include a new 

manned bomber, improvements in tanker aircraft, additional cruise 

missiles, and improvements in command and control systems. 

The readiness of U.S. forces will be improved by providing funds 

for additional spare parts needed to sustain higher operating 

rates and fill war reserve needs, and for additional ammunition 

for training and war reserve requirements. Higher military pay 

rates will also contribute to readiness by attracting and 

retaining skilled military manpower. 

Our ability to deploy forces in remote areas, such as the Indian 

Ocean and Persian Gulf, will be improved by increases in naval 

surface forces, including reactivation of battleships and an 

aircraft carrier. Special equipment would be acquired to enable 

combat forces to operate in hostile environments, such as desert 

warfare. 

Modernization of conventional forces would be accelerated by more 

rapid procurement of new Army equipment, including new tanks, air 

defense systems, helicopters, and ammunition; naval aircraft and 

air-defense and missile-launching systems for surface ships; and 

Air Force aircraft, missiles, and ammunition. 

Intelligence capabilities will be strengthened by providing 

increased funding for personnel, processing, and information 

collection capabilities. 

Other National Defense 

Proposed increases.—Estimates for atomic energy defense 

activities have increased by $0.3 billion in budget authority and 

$0.1 billion in outlays for 1982, primarily for necessary 

improvements to the Nation's nuclear weapon's production 

facilities. 

Proposed reductions.—The General Services Administration 

maintains a stockpile of strategic and critical materials for 

potential defense production requirements. In addition to 

currently required materials, the stockpile now contains about $6 

billion worth of materials that have been declared excess by 

defense agencies. The Administration proposes acceleration of 

the sales of these excess materials to provide funds for future 

acquisitions of required materials and to reduce security, 

rotation, and other storage costs of the excess materials. The 

acceleration of sales would increase receipts by $0.5 billion 

over the estimate in the January budget for 1982. 

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150: INTERNATIONAL AFFAIRS 

(S 'billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 15.5 25.2 19.6 

Reestimates: 

Export-Import Bank -0.1 -* 

Policy reductions: 

Development aid -0.6 -1.7 

International organization 

assessments -0.2 

Export-Import Bank -0.7 -0.6 

All other * -0.1 

Policy increases: 

Security assistance 0.9 

Other * * 

Revised budget 15.5 23.7 17.9 

Outlays 

January budget 10.7 11.3 12.2 

Reestimates: 

Export-Import Bank 0.1 -0.4 

Other (net) 0.1 0.1 

Policy reductions: 

Development aid -0.1 -0.3 

International organization 

assessments -0.2 

Export-Import Bank -0.1 -0.2 

All other * -0.1 

Policy increases: 

Security assistance 0.1 

Other * * 

Revised budget 10.7 11.3 11.2 

$50 million or less. 

The revised budget proposals for international affairs include a 

policy increase to meet critical security assistance objectives, 

but because of offsetting policy reductions and downward 

reestimates, the function totals for 1982 are well below the 

January budget request. The Administration's budget authority 

request is $1.5 billion lower in 1981 and $1.7 billion lower in 

1982 than the January budget levels. Outlays are estimated to be 

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approximately the same as the January budget for 1981 and §1.0 

billion lower in 1982. 

Reestimates.—Reestimates of spending rates reduce 1982 outlays 

on net by $0.3 billion below the January budget. Of this amount, 

$0.4 billion is a downward reestimate of Export-Import Bank 

outlays due to lower interest rates and slower disbursements on 

aircraft loans. Subscriptions to the multilateral development 

banks have also been reestimated down ($-0.1 billion) since 

January and partially offset an upward reestimate of exchange 

stabilization fund outlays ($0.2 billion). 

Proposed reductions.—The Administration proposals reduce budget 

authority for international affairs by $1.4 billion in 1981 and 

$2.6 billion in 1982 below the January budget request. Outlays 

are estimated to be $0.2 billion lower in 1981 and $0.8 billion 

lower in 1982 as a result. 

Reductions are proposed in development programs to eliminate 

lower priority activities. Contributions to internationally 

agreed replenishments of the funds of some multilaterial 

development banks will be stretched out in a manner consistent 

with those agreements. Voluntary contributions to some United 

Nations and other international organization programs and funding 

for the Agency for International Development (AID), P.L. 480 food 

aid, and the Peace Corps would be reduced from the levels in the 

January budget. Humanitarian programs, such as those providing 

emergency disaster relief and food, would be maintained at their 

recent levels. The AID programs would be reoriented to assure 

that they clearly contribute to the ability of Third World 

countries to improve their economic performance. 

Starting in 1982 there will be a delay each year in the payment 

of U.S. assessed contributions to international organizations. 

This change will permit savings in the budget requests for 1982-

85. For 1982, this shift would reduce the January budget request 

by $0.2 billion in budget authority and outlays. 

The Administration proposal to reduce the long-term lending 

authority of the Export-Import Bank is part of the overall effort 

to control the expansion of Federal credit programs, particularly 

those with an unneeded subsidy element. The lower lending level 

would still permit the Bank to offer substantial levels of credit 

to exporters. In addition to benefiting from regular, long-term 

direct loans, smaller U.S. exporters would continue to be 

assisted by the Bank's medium-term discount loan program. The 

revised budget proposes an authorization level of $0.4 billion 

for the medium-term loan program, while the January budget 

proposed termination of this program. The net effect of these 

changes would reduce 1982 budget authority for the Export-Import 

Bank by $0.6 billion and outlays by $0.2 billion below the 

January budget request. 

Other proposed reductions include cutbacks in International 

Communication Agency activities and in the U.S. contribution to 

the Sixth International Tin Agreement. In addition, the 

proposals would reduce the Overseas Private Investment 

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Corporation1s loan guarantee program and terminate its direct 

lending. 

Proposed increases.—The Administration is proposing to increase 

security assistance programs to several countries as well as 

contingency accounts. Th^ e initiatives would increase 1982 

budget authority by $0.9 billion above the January budget 

request. In addition, the Administration plans to establish a 

new revolving fund for procuring military equipment for eventual 

transfer to other countries that would shorten lead times for 

delivery of critical weapons systems. Because the fund would 

receive payments well before they are paid out against military 

equipment orders, the effect of the fund is to reduce outlays in 

the international affairs function. As a result, the net 

increase in security assistance outlays above the January budget 

is $0.1 billion in 1982. 

The Administration also proposes to increase funding for Radio 

Free Europe/Radio Liberty through the appropriation to the Board 

for International Broadcasting to improve broadcasting to Eastern 

European countries. 

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250: GENERAL SCIENCE, SPACE, AND TECHNOLOGY 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 6.1 6.6 8.1 

Policy reductions: 

NASA -* -0.5 

National Science Foundation -0.1 -0.3 

Department of Energy general 

science -* -* 

Revised budget 6.1 6.5 7.2 

Outlays 

January budget. 5.7 6.3 7.6 

Policy reductions: 

NASA -* -0.4 

National Science Foundation -* -0.2 

Department of Energy general 

science - — 

Revised budget 5.7 6.2 6.9 

$50 million or less. 

The Administration believes that Federal support for science and 

space technology is an important investment in the Nation's 

future. The policy changes proposed in this function for 1981 

and 1982 permit continuation of the highest priority programs, 

but reduce those that cannot be sustained under current 

circumstances. In 1982, the revised budget proposes $7.2 billion, 

in budget authority, an increase of 10% from the level 

appropriated for 1981, but a reduction of 11% from the level 

proposed by the previous administration. Estimated outlays are 

$6.9 billion in 1982, a 9% reduction from the level estimated in 

January. 

Proposed reductions.—The sharp increase proposed for the space 

programs of the National Aeronautics and Space Administration in 

the January budget is incompatible with a program of overall, 

restraint. The revised budget authority request for 1982, $5.6 

billion, still provides the significant increase over 1981 needed 

in the space shuttle program to meet civilian and critical 

defense needs. The development and procurement of the fleet of 

four space shuttle orbiters and the option to buy a fifth 

orbiter, if needed, will be maintained. Slower development of 

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spacelab and elimination of funding for the solar electric 

propulsion system are also proposed. 

For space science programs, the revised budget defers new flight 

projects and projects initiated only recently, such as the gamma 

ray observatory spacecraft, the Venus orbiting imaging radar 

project, and spacelab experiments, while the solar polar mission 

is continued at a reduced level. Most new space applications 

programs previously proposed would be deleted and reductions are 

proposed for some ongoing activities. The reduced level would 

provide support for research on space remote-sensing techniques 

and satellite missions, research related to understanding weather 

and climate, and research on advanced space communications 

technology. 

Budget authority for space programs of the National Aeronautics 

and Space Administration is reduced by $521 million in 1982 from 

the January request. Outlay reductions are estimated to be $428 

million in 1982. 

The Administration proposes to reduce or eliminate some National 

Science Foundation (NSF) programs while preserving support for 

the advancement of science through basic research. The programs 

that are proposed for reduction or elimination include those in 

science and engineering education and the behavioral, social, and 

economic sciences that are less critical to meeting the principal 

goals and objectives of the Foundation. All new NSF programs 

proposed in the January budget request — such as university 

laboratory modernization grants and a planned 25-meter radio 

telescope — are being deferred for future consideration. The 

budget authority request for NSF is reduced by $83 million in 

1981 and $320 million in 1982 from the January budget, while 

estimated outlays are reduced $36 million and $209 million 

respectively. 

The Administration proposes a budget authority reduction of $40 

million from the January budget in the Department of Energy's 

general science programs in life sciences and nuclear medicine, 

high-energy physics, and nuclear physics. This will result in a 

stretchout of construction projects, and deferral of new 

accelerator construction at several universities. The revised 

budget authority request of $567 million in 1982 still allows for 

improvements in experimental facilities and support of continuing 

research. Outlays would be reduced by $24 million in 1982 from 

the January budget estimate. 

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270: ENERGY 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 36.4 8.3 12.1 

Reestimates 0.1 

Policy reductions: 

Fossil and synthetic fuels -0.6 -1.1 

Alcohol fuels and biomass -1.2 

Solar -0.1 -0.4 

Other supply -0.2 -0.3 

Uranium enrichment -0.8 -0.4 

Spent fuel storage -0.3 

Solar Energy and Energy Conservation 

Bank -0.1 -0.1 

Conservation -0.2 -0.7 

Regulation and information -0.1 -0.3 

Policy increases: 

Nuclear energy 0.1 0.3 

Strategic petroleum reserve 1.3 0.2 

Petroleum reserve and other receipts. -0.3 -0.3 

Revised budget 36.4 5.8 9.0 

Outlays 

January budget 6.3 8.7 12.0 

Policy reductions: 

Fossil and synthetic fuels -0.3 -1.2 

Alcohol fuels and biomass -0.1 -0.1 

Solar -0.1 -0.4 

Other supply * -0.3 

Uranium enrichment -0.4 

Spent fuel storage 0.1 -0.2 

Solar Energy and Energy Conservation 

Bank -* -0.1 

Conservation -* -0.4 

Regulation and information -0.1 -0.3 

Policy increases: 

Nuclear energy 0.1 0.2 

Strategic petroleum reserve 1.3 0.3 

Petroleum reserve and other receipts. -0 * 3 -0.3 

Revised budget 6.3 9.2 8.7 

* $50 million or less. 

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Most of the changes in the energy function reflect the 

Administration's conviction that the Nation's energy problems 

will be solved by the people and industries of this country in 

response to realistic Federal policies, not by Government 

spending. In the past, the Federal Government has postponed hard 

decisions on energy policy and created numerous programs that 

have added to the burden of the budget and have provided the 

illusion of progress without the reality. The President's 

decision to decontrol oil markets and proposed changes in the 

budget are key steps in carrying out the policies of this 

Administration. The budget authority proposed for the energy 

function is $2.5 billion lower in 1981 and $3.1 billion lower in 

1982 than the levels requested in the January budget. Estimated 

outlays are increased by $0.5 billion in 1981 (due to the net 

effect of reductions and increased costs for the strategic 

petroleum reserve) and reduced by $3.3 billion in 1982. 

Reestimates.—Correction of an error in the January budget 

increases budget authority for the Clinch River breeder reactor 

by $0.1 billion in 1981. 

Policy reductions.—The Administration supports the development 

of a commercial synthetic fuels industry. By shifting the 

Department of Energy's synthetic fuels commercialization 

activities to the newly-created Synthetic Fuels Corporation, 

development of our synthetic fuels potential can be achieved 

without needless use of tax dollars to subsidize private business 

ventures. 

Using the forms of assistance provided by the Corporation, rather 

than those provided by the Department of Energy, private 

companies will manage construction with more of their own money 

at risk. The likelihood of successful project outcomes will, 

therefore, increase, while potential Government costs will 

decrease. 

The Department of Energy would end its program of major technical 

demonstrations, transfer the interim alternative fuels funding 

program to the Synthetic Fuels Corporation, and focus on 

supporting long-range research and development. The 

Administration will propose a rescission of $300 million in 1981 

for feasibility studies and cooperative agreements and a transfer 

of the unobligated portion of the remaining $5.0 billion of 

budget authority in the Department of Energy program to the 

Synthetic Fuels Corporation on June 30, 1981. 

In keeping with this strategy, major reductions are also planned 

in fossil energy research, development, and demonstration 

programs. Funding for design and operation of major fossil 

energy pilot and demonstration plants is reduced or eliminated. 

Budget authority for all fossil and synthetic fuels programs will 

be reduced below the January level by $0.6 billion in 1981 and 

$1.1 billion in 1982. Estimated outlays would be reduced by $0.3 

billion in 1981 and $1.2 billion in 1982. 

The Administration supports continuation of existing tax credits 

and the excise tax exemption for gasohol, but proposes the 

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termination of the alcohol fuels and biomass programs 

administered by the Departments of Agriculture and Energy and 

funded through the energy security reserve. The combination of 

tax incentives and removal of price controls from domestic crude 

oil will make alcohol fuels more competitive and eliminate the 

need for additional subsidies through the loan guarantees, 

feasibility studies, and cooperative agreements that have been 

supported by these agencies. Budget authority not yet obligated 

under either program, estimated to be $1.2 billion, is proposed 

for rescission in 1981. This would result in reductions in 

estimated outlays of $0.1 billion in 1981 and 1982. 

The Department of Energy conducts a variety of research, 

development, and demonstration programs that are intended to 

develop or improve energy technologies and to subsidize the 

adoption of these technologies by private industry. Rising 

energy prices, new tax incentives for investment, regulatory 

relief and economic recovery make many of these programs 

unnecessary. 

The Administration, therefore, plans to restructure the 

technology programs of the Department of Energy to emphasize 

longer-term, high risk, but potentially high-payoff research and 

development while terminating larger technical demonstrations. 

The Administration believes that Federal support for energy 

research is appropriate, but that large demonstrations and the 

development of commercial applications should be left to the 

private sector. 

— The focus of Department of Energy programs for solar 

energy will be shifted from near-term development, 

demonstration, and commercialization activities toward 

longer-term research and development. Budget authority 

and outlays would be reduced by $0.1 billion in 1981 and 

by $0.4 billion in 1982 below the January budget. 

Federal tax credits, including incentives for biomass 

and alcohol fuels, estimated to be $0.6 billion in 1982, 

will continue unchanged. 

— Other energy supply programs, including geothermal loan 

guarantee and commercialization programs, the uranium 

resource assessments program, subsidies for small 

hydropower projects, near-term development of energy 

storage and electric transmission systems and 

duplicative environmental studies, would be eliminated. 

These proposals reduce budget authority by $0.2 billion 

in 1981 and $0.3 billion in 1982, while outlays are 

decreased $0.3 billion in 1983. 

In addition, improved efficiency of operations and increased 

prices that recover a greater part of the costs associated with 

the uranium enrichment program of the Department of Energy result 

in a $0.8 billion reduction in budget authority in 1981 and $0.4 

billion reductions in budget authority and outlays in 1982. 

The Administration does not support Federal funding for an awayfrom-reactor spent nuclear fuel storage facility. Withdrawal of 

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th e previous administration's proposal reduces budget authority 

by $0.3 billion and increases outlays by $0.1 billion in 1981, 

while 1982 outlays are reduced by $0.2 billion. 

Under the Administration proposals, the Solar Energy and Energy 

Conservation Bank program in the Department of Housing and Urban 

Development would not be started up. Existing Federal tax 

credits and rising oil prices already provide substantial 

incentives for investment in solar energy and conservation. 

Preliminary regulations have been withdrawn and no loan subsidies 

will be disbursed. 

The Administration proposes that $121 million appropriated for 

this program in 1981 be rescinded and that the 1982 budget be 

amended to withdraw the $125 million appropriation requested by 

the previous administration. Outlays would be reduced by $0.1 

billion in 1982. 

Rising energy prices have led to substantial improvements in the 

efficiency with which the Nation uses energy. Decontrol of oil 

prices and existing tax credits will encourage continuing energy 

conservation efforts by individuals and businesses. As a result, 

many of the energy conservation spending and regulatory programs 

conducted by the Federal Government are no longer necessary. 

The Administration proposes reductions in Department of Energy 

programs for conservation technology development, regulation, 

information, and financial assistance to State and local 

governments. Grants for conservation improvements in public and 

non-profit schools and hospitals will continue at a rate of about 

$100 million per year. The Department of Energy's weatherization 

assistance program is proposed for termination. State and local 

governments can continue to fund weatherization programs using 

the Department of Housing and Urban Development's community 

development block grant program, which is discussed in the 

community and regional development function. 

The Administration will propose a rescission of $207 million in 

1981 and amendments to the budget request submitted by the 

previous administration, as well as withdrawing regulations and 

proposed legislation that are no longer called for. These 

changes reduce budget authority by $0.2 billion in 1981 and $0.7 

billion in 1982 from the January budget level. Outlays would be 

reduced by $0.4 billion in 1982. 

Since greater reliance will be placed on energy markets to meet 

energy needs, there will be less need for energy regulation and 

information programs. The price and allocation functions of the 

Economic Regulatory Administration, mandatory fuel use 

restrictions, and coupon gasoline rationing are proposed for 

elimination. This will result in reductions of $0.2 billion in 

both budget authority and estimated outlays from the January 

budget levels for 1982. 

As a result of the reductions in the activities of the Department 

of Energy, budget authority for departmental administration and 

overhead is being reduced by 32% below the January budget request 

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for 1982. In addition, planning for the regional strategic 

petroleum reserve program proposed by the previous administration 

will be terminated, since prompt development of centralized 

storage facilities is more effective and less costly. 

The Administration proposes a major change in the financing of 

the Rural Electrification Administration, termination of the 

biomass and alcohol fuels loan guarantee program, and reductions 

in geothermal and other credit programs, which are discussed in 

Part 2. 

Policy increases.—The Administration believes that nuclear 

energy must play an important role in the Nation's energy future. 

The revised budget includes budget authority and outlay increases 

in 1981 and 1982 to build the Clinch River breeder reactor and to 

start design studies for a large, commercial size breeder 

reactor. Increases are also proposed for commercial waste 

management programs and for continuing research by the Department 

of Energy at the Three Mile Island nuclear plant. These 

proposals result in an increase over the January budget levels of 

$0.1 billion in budget authority in 1981 and of $0.3 billion in 

budget authority and $0.2 billion in outlays in 1982. 

As a result of decontrol of domestic oil prices and the 

termination of the crude oil entitlements program, the strategic 

petroleum reserve program will lose offsetting receipts of 

approximately $1.3 billion in 1981 and $0.2 billion in 1982. The 

Administration proposes to increase budget authority and outlays 

by the amounts needed to maintain strategic petroleum reserve oil 

fill schedules. 

Estimated receipts from the sale of oil at the Government-owned 

petroleum reserves and from power marketing activities are 

expected to increase $0.3 billion in 1981 and $0.3 billion in 

1982 as a result of changes in oil prices, taxes and sales 

practices. 

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300: NATURAL RESOURCES AND ENVIRONMENT 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 13.1 12.7 13.6 

Reestimates: 

Mineral leasing receipts -0.1 -0.1 

Policy reductions: 

Water resource construction * -0.2 

Improved targeting of conservation 

expenditures -0.3 -0.6 

Youth conservation corps -* -0.1 

Waste treatment grants -1.7 -3.7 

National Oceanic and Atmospheric 

Administration (NOAA) -* -0.2 

Mineral leasing receipts -0.2 

All other. -0.1 -0.7 

Policy increases: 

National Park Service * 0.1 

All other 0.1 * 

Revised budget 13.1 10.4 7.9 

Outlays 

January budget 13.8 14.1 14.0 

Reestimates: 

National Oceanic and Atmospheric 

Administration (NOAA) . -* 

Mineral leasing receipts -0.1 -0.1 

Waste treatment grants -0.1 

All other -0.1 -0.2 

Policy reductions: 

Water resource construction -0.2 

Improved targeting of conservation 

expenditures -0.1 -0.3 

Youth conservation corps -* -0.1 

Waste treatment grants -* -0.3 

National Oceanic and Atmospheric 

Administration (NOAA) * -0.2 

Mineral leasing receipts... 0.2 

All other -0.1 -0.5 

Policy increases: 

National Park Service * 0.1 

All other 0.1 * 

Revised budget 13.8 13.7 12.0 

$50 million or less. 

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Administration proposals and technical reestimates reduce outlays 

for the natural resources and environment function by $0.4 

billion in 1981 and by $2.1 billion in 1982 below the January 

budget. The budget authority request is $2.3 billion less in 

1981 and $5.7 billion less in 1982 than the January budget. The 

proposed reductions include stretching out and retargeting public 

sector capital improvement programs, imposing fiscal restraint on 

other programs, delaying purchase of additional land for park and 

recreation purposes, while at the same time augmenting resources 

for the protection of existing national parks, and increasing 

offsetting receipts by accelerating mineral leasing. 

Proposed reductions.—The Administration proposes a 15% reduction 

in planned construction for water resources programs. This 

proposal does not include funding for three Corps of Engineers 

projects that are incompatible with the current austere budget 

environment. 

About 75 of the more than 300 remaining projects would be delayed 

slightly. However, these delays would not affect the completion 

dates for hydro-power, municipal and industrial water supply, 

urban flood control or navigation projects. 

The Administration proposes to eliminate funding for the Water 

Resources Council (including State planning grants and the River 

Basin Commissions) and the Office of Water Research and 

Technology. A small Office of Water Policy will be established 

within the Department of the Interior to advise the Secretary on 

water resources policies. The Administration will continue to 

examine water resource planning and development programs for 

additional improvements. 

The expenditures for recreation land conservation will be 

substantially refocused through: a moratorium on Federal land 

purchases; the elimination of three major grant programs for 

recreation land acquisition and development and historic 

preservation; and significant resource increases for existing 

national parks. Postponing Federal acquisition will allow for a 

thoughtful policy review of existing park and recreation 

legislation. Legislation is being proposed to amend the land and 

water conservation fund to allow the fund to be used for 

improvements in our National Park system. The requested budget 

authority will be reduced by $0.2 billion in 1981 and $0.5 

billion in 1982. Estimated outlays for conservation purposes 

will decline $0.1 billion in 1981 and $0.3 billion in 1982. 

While outlays for non-timber activities in national forests will 

decrease slightly in 1982 from the January budget estimates. 

Some of the Bureau of Indian Affairs grant programs located in 

the natural resources and environment function will be 

consolidated with other Indian programs. This proposal is 

discussed in the community and regional development function. 

The Administration proposes to phase out the Youth Conservation 

Corps (YCC) by the end of 1981. This will be accomplished by 

rescinding 1981 funds currently available for YCC. The January 

budget also proposed to eliminate the Young Adult Conservation 

Corps, a similar program that is classified in the employment and 

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training subfunction. The phaseout of these programs is proposed 

because they are costly and are not well directed to needy youth. 

In addition, these programs carry out public lands activities 

that are similar, but often lower priority, than those that are 

accomplished through other budgeted programs. Budget authority 

savings from the YCC phaseout are proposed at $38 million in 1981 

and $60 million in 1982. Outlays will be reduced by $33 million 

in 1981 and $60 million in 1982. 

The Administration proposes to reduce appropriations for the 

municipal waste treatment grant program and to direct future 

funding only to high-priority projects that directly improve the 

quality of receiving waters in the near term. This will be 

achieved by (1) a rescission of $585 million in 1980 

appropriations carried forward to 1981, (2) a rescission of 

approximately $115 million in funds appropriated under the Public 

Works Employment Appropriation Act of 1977, (3) a rescission of 

$1.0 billion in appropriations for 1981, (4) substantive 

legislative changes that limit Federal funding to those projects 

that directly enhance the quality of receiving waters, and 

(5) the withdrawal of the appropriation request for $3.7 billion 

in 1982 until this legislation has been enacted. Upon enactment 

by Congress, $2.4 billion will be requested for 1982. 

The Administration proposes to reduce budget authority and 

outlays for the Department of Commerce's National Oceanic and 

Atmospheric Administration (NOAA) programs in this function by 

$0.2 billion below the January budget in 1982. Funding for the 

State coastal zone management and sea grant colleges grant 

programs would be terminated because they have largely achieved 

their original purpose to develop State and local capability for 

addressing marine and coastal issues. In addition, the funding 

for the national oceanic satellite system (NOSS) would be 

eliminated because the intended NOSS data currently is collected 

through other means. No additional LANDSAT satellite 

procurements or ground system upgrade to provide land remote 

satellite sensing data continuity through the 1980's would be 

undertaken by NOAA. The two LANDSAT satellites already funded by 

NASA will provide sufficient data to assess the market potential 

for future land remote satellite sensing data. 

Proposed receipts increases.--The Administration is seeking to 

accelerate the leasing of mineral resources on Federal lands. 

The Outer Continental Shelf leasing program will be revised with 

the objectives of shortening the time needed to start exploratory 

drilling in all OCS areas and of streamlining the OCS sale 

preparation process while protecting the environment and the 

public's financial interest. Oil and gas leasing in the national 

petroleum reserve in Alaska (NRPA), coal leasing, and oil shale 

leasing will be accelerated. Excluding Outer Continental Shelf 

receipts which are accounted for in the undistributed offsetting 

receipts function, this would increase the proprietary receipts 

of the Government, and therefore reduce budget outlays an 

estimated $0.2 billion in 1982, as well as increase future shared 

revenue payments to States . 

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Th e Administration will propose user fee legislation for inland 

waterways and for harbors and channels. The inland waterway 

proposal accounted for in the receipts section, Part 2, will 

increase the present 4-cents per gallon tax on commercial barge 

fuel to recover the cost of operating and maintaining the 

waterways through increased receipts beginning in 1982, and will 

provide for recovering the cost of new waterways to be opened in 

the future. This proposal will recoup Federal subsidies of $248 

million in 1982. The channel and harbor proposal will begin to 

recover the full cost of dredging and maintaining harbors and 

channels, exclusive of costs allocated to naval traffic, 

beginning in 1983. The proprietary receipts from this proposal 

are included in the natural resources and environment function in 

Part 4. 

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350: AGRICULTURE 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 4.9 5.6 5.6 

Policy reductions -* -* 

Revised budget 4.9 5.6 5.5 

Outlays 

January budget 4.8 1.1 4.8 

Reestimates: 

Federal crop insurance 0.1 

Policy reductions: 

Price support and related programs 

(CCC): 

Storage facility loans -* -0.1 

Loan interest rates -* -* 

Grain reserve interest waivers.... -0.1 -0.2 

Agricultural credit insurance (FmHA). -* -* 

Research and services -* -* 

Grain inspection and weighing user 

charges -* 

Policy increases: 

Debt rescheduling (Poland) 0.1 

Revised budget 4.8 1.2 4.4 

* $50 million or less. 

The Administration request for agriculture programs would reduce 

budget authority by $22 million in 1981 and in 1982. Outlays are 

estimated to be $48 million higher in 1981 and $0.4 billion lower 

in 1982 than the January budget as a net result of reestimates 

and policy reductions. A reestimate of crop insurance indemnity 

payments increases outlays by $0.1 billion in 1982. 

Proposed reductions.—Since 1978 there have been large surpluses 

of milk products, which the Federal Government must purchase 

under the dairy price support program. As a result, Federal 

stocks have increased (along with the Federal subsidy) at the 

same time that prices paid by the consumer have increased. To 

help eliminate excess dairy production, the Administration 

proposes to decrease the Federal subsidy for these products. As 

a result, dairy prices in the future would depend more on supply 

and demand in the market than on artificially high demand created 

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by this subsidy program. Annual estimated outlays would be no 

greater than $0.6 billion. 

To achieve these objectives, the Administration submitted 

legislation to eliminate the mandatory April 1, 1981 increase in 

dairy price support currently required by law. In addition, the 

Administration will submit long-term reforms as part of its 

comprehensive farm program. 

The Federal Government provides loans — not to exceed 

$100,000 — to farmers for 75% or more of the cost to build or 

renovate storage and drying facilities, usually for grain, rice 

or soybeans. The Administration proposes to curtail the current 

storage facility loan program in 1981 and to phase it out by 1986 

since there is currently more than adequate storage capacity for 

current and future crop years. This will reduce outlays by $25 

million in 1981 and $0.1 billion in 1982. 

The Administration intends to reduce costs in price support 

operations by charging interest on all loans at least equal to 

the Treasury cost of borrowing. Legislation will be submitted to 

eliminate the mandated first-year interest waiver for farmer-held 

reserve loans. These two actions would reduce outlays by $0.1 

billion in 1981 and by $0.2 billion in 1982. However, because 

the debt service payments on CCC export credits to Poland that 

were due March through June 1981 have been rescheduled, 1981 

outlays will be increased by $88 million. As a result, total net 

outlays for price support programs will decrease by $21 million 

in 1981 and $0.3 billion in 1982. 

In order to reduce dependence on the Federal Government as a 

supplier of credit, the Administration plans to reduce direct 

lending by the Farmers Home Administration, as is discussed in 

detail in the credit section of Part 2. In addition, interest 

subsidies will be terminated through administrative action for 

the farm operating loan program, and through proposed legislation 

for farm ownership and emergency disaster loans. 

Policy increases.—Agricultural research and extension activities 

will be increased $13 million in both budget authority and 

outlays for 1982. The Administration believes that increasing 

farm productivity should be an important part of the Federal 

Government's agriculture policies. 

Proposed receipts increase.—In addition to the January budget 

user charge proposal for cotton, tobacco, and warehouse grading 

and inspection, user charge legislation is being proposed to 

recover the full Federal cost associated with the supervision of 

grain inspection and weighing activities. This new proposal will 

result in annual outlay savings, starting in 1982, of 

approximately $25 million. 

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370: COMMERCE AND HOUSING CREDIT 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 10.5 7.0 10.7 

Reestimates and revised economic 

assumptions -* -0.5 

Policy reductions: 

Government National Mortgage 

Association (GNMA) -0.2 2.1 

Rural housing insurance (FmHA) -0.1 

Postal Service subsidies -0.2 

Withdrawal of proposed payments in 

excess of corporate tax liability... -0.2 -3.5 

Small Business Administration -* -0.2 

National Consumer Cooperative Bank... -0.1 -0.1 

Other -* -0.1 

Proposed increases: 

National Credit Union Administration. 0.1 

Functional change l/z Trade adjustment 

assistance 0.1 

Revised budget 10.5 6.4 8.2 

Outlays 

January budget 7.8 3.5 8.1 

Reestimates and revised economic 

assumptions 0.2 -0.7 

Policy reductions: 

Government National Mortgage 

Association (GNMA) * -* 

Rural housing insurance (FmHA) -* -0.1 

Postal Service subsidies -0.2 

Withdrawal of proposed payments in 

excess of corporate tax liability... -0.2 -3.5 

Small Business Administration -0.1 -0.1 

National Consumer Cooperative Bank... -0.1 -0.1 

Other -* -0.3 

Function change 1/: Trade adjustment 

assistance * 

Revised budget 7.8 3.2 3.1 

* $50 million or less. 

1/ The trade adjustment assistance program for firms and 

communities will be transferred from the community and regional 

development function. 

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The Administration proposes to reduce budget authority by $0.6 

billion in 1981 and $2.5 billion in 1982, and to reduce outlays 

by $0.2 billion in 1981 and $5.0 billion in 1982 below the 

January budget request. The budget reductions identified in the 

Government National Mortgage Association (GNMA), the Federal 

Housing Administration (FHA), the Farmers Home Administration 

(FmHA), the Small Business Administration (SBA), and the National 

Consumer Cooperative Bank have significant implications for 

Federal credit activity, which is discussed in more detail in 

Part 2. 

Reestimates and revised economic assumptions.—Outlays have been 

reestimated for the Government National Mortgage Association 

tandem programs to reflect new interest rate projections and 

recent mortgage sales experience. Outlays have also been 

reestimated for the Federal Housing Administration and the 

National Credit Union Administration to reflect recent program 

experience and other technical factors. These reestimates 

increase outlays $0.2 billion in 1981 and reduce outlays $0.7 

billion in 1982. 

Proposed reductions.—The tandem mortgage purchase program of 

GNMA, which provides subsidized mortgage financing for the 

Department of Housing and Urban Development's subsidized housing 

(section 8) and other rental apartment projects, will be 

discontinued after 1982. Under Administration proposals, GNMA 

will make $3.6 billion in mortgage purchase commitments in 1982 

to provide subsidized financing for projects already under 

development and meeting current tandem program guidelines. 

Similarly, the Administration will not propose that any 

alternative mortgage subsidy program, such as the mortgage 

assistance grant program, be created to replace the tandem 

program. These policy changes will have a negligible effect on 

outlays in 1981 and 1982, but will result in substantial savings 

in the outyears after current commitments are issued. In 1986 

this policy change reduces estimated outlays by $1.1 billion. 

The Administration proposes to reduce the limitation for the FHA 

mortgage insurance program, as discussed in the credit section of 

Part 2, to increase sales of property owned by FHA and to 

increase gradually, over a 5-year period, the rent contribution 

percentage for tenants in FHA-owned property from 25% to 30% of 

renters' income. These policy changes reduce estimated outlays 

by $14 million in 1981 and $8 million in 1982. 

The Administration proposes to reduce direct loan obligations for 

the rural housing insurance fund by $0.3 billion in 1981 and $0.6 

billion in subsequent years below the January budget level. This 

reduction is also discussed in the credit section of Part 2. The 

proposed reduction in lending reduces estimated outlays by $20 

million in 1981 and $86 million in 1982. 

The U.S. Postal Service currently receives a subsidy equivalent 

to about 7% of its total operating budget. This Federal payment 

subsidizes certain mail users and services and increases the 

financial burden for all taxpayers. The Administration believes 

that the costs of mail service should be borne by users, not 

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taxpayers. It therefore proposes to reduce the public service 

subsidy, which offsets the cost of maintaining services that are 

not self-sustaining, by $0.3 billion. It also proposes to reduce 

from $0.8 billion to $0.5 billion the revenue forgone subsidy, 

which provides funds for free and reduced rates for certain 

classes of mail. Further, the Administration is also proposing 

to rescind $0.3 billion from the public service subsidy in 1981. 

These actions would reduce outlays by $0.3 billion in 1981 and 

$0.6 billion in 1982 compared with the current services base. 

Compared with the January budget, which proposed a smaller cut in 

the Postal Service subsidy, estimated outlays are reduced by $0.3 

billion in 1982. 

The Administration does not support the previous administration's 

proposal to make 30% of the investment tax credit refundable. 

Withdrawal of this proposal reduces estimated outlays by $0.2 

billion in 1981 and $3.5 billion in 1982. 

As discussed in the credit section of Part 2, the Administration 

proposes to reduce direct and guaranteed loans by the Small 

Business Administration and to raise the interest rate on direct 

loans. In addition, the Administration proposes to reduce 

technical assistance to special small business groups. These 

measures will reduce estimated outlays $0.1 billion in 1981 and 

1982 below the January budget. 

Because of the need to eliminate desirable but unnecessary 

programs, the Administration proposes to end the National 

Consumer Cooperative Bank. Cooperatives already enjoy special 

tax treatment. Those that have good management, provide services 

to their members economically and have expectations of continued 

good earnings should be able to obtain adequate credit privately. 

Loans currently held by the Bank will be shifted to other Federal 

agencies. Capital stock held in the Bank by cooperatives will be 

redeemed. Termination of the Bank will reduce estimates outlays 

by $0.1 billion in 1981 and 1982. 

The Administration is proposing a 40% staff reduction in the 

Federal Trade Commission by 1986 by phasing out the regional 

offices and decreasing the Washington headquarters' office. 

State and local governments have significantly increased their 

resources devoted to consumer protection and antitrust 

activities. Additionally, the Justice Department's antitrust 

division has resources to focus on related antitrust problems and 

many antitrust issues can best be addressed directly by 

litigation by the aggrieved private sector interests. The 

proposal contained in the revised 1982 budget would have the 

Commission focus more on problems of nationwide scope, reduce 

multi-governmental regulatory burdens on business and eliminate 

artificial restrictions on commerce that ultimately result in 

higher costs to consumers. The proposed reduction would 

eliminate about 665 full-time staff in the FTC by 1986. 

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400: TRANSPORTATION 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 20.2 26.3 25.5 

Function change 1/ 0.2 

Policy reductions: 

Federal highway construction -* -2.0 

Mass transit capital grants -0.3 -1.3 

Amtrak -* -0.4 

Other railroads... -0.1 -0.4 

Airport construction grants -0.3 -0.3 

Maritime ship construction -* -0.1 

Boat and yacht fees -0.1 

All other -* -0.6 

Revised budget 20.2 25.5 20.5 

Outlays 

January budget 21.1 24.1 21.6 

Reestimates: 

Mass transit 0.4 0.2 

Maritime ship construction -* -* 

Function change 1/ * 

Policy reductions: 

Federal highway construction -* -0.4 

Mass transit capital grants -0.1 -0.4 

Amtrak -* -0.3 

Other railroads -0.2 -0.1 

Airport construction grants -* -* 

Maritime ship construction -* -* 

Boat and yacht fees -0.1 

All other -0.1 -0.4 

Revised budget 21.1 24.0 19.9 

* $50 million or less. 

1/ Transfer of the Appalachian highway program from the 

community and regional development function. 

The Administration's proposals reduce budget authority and 

outlays for transportation programs in both 1981 and 1982 below 

the levels proposed in the January budget, despite increases for 

both years in mass transit outlays due to higher than anticipated 

obligations in 1980 and early 1981. 

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Proposed reductions.—As with other major federally supported 

public sector investment programs, the Administration's highway 

proposal would stretch-out and slow down construction of lowerpriority highway projects, with proposed savings of $2.0 billion 

in budget authority and $0.4 billion in estimated outlays in 

1982. 

Capital grants for building new urban rail transit systems and 

extending existing systems would be reduced in 1981 and 1982. 

Remaining construction resources would be used to finish only 

operable rail segments currently under construction and, in the 

future, no new transit rail system construction would be 

federally financed. The reduction in mass transit capital grants 

in 1982 would result in decreases of $1.3 billion in budget 

authority and $0.4 billion in outlays below the January budget 

request. Funding for bus and rail modernization projects would 

be continued in recognition of the need to improve transit 

services. 

Legislation will be proposed to require Amtrak to discontinue 

service on its least efficient routes. Total Federal subsidy 

amounts will be lowered to $613 million in budget authority in 

1982, with progressively lower amounts authorized in future 

years. These changes result in 1982 savings of $0.4 billion in 

budget authority and $0.3 billion in outlays. 

To promote economy and efficiency, the Administration plans to 

reduce Federal subsidy levels for low-traffic rail lines and for 

upgrading track on other freight rail lines. These changes 

result in savings in 1982 of $120 million in budget authority and 

$37 million in outlays. As a result of greater economic 

vitalization and less regulation, it may be possible to phase out 

all low interest loans and other subsidies to the Nation's 

railroads within the next 4 years. 

The Administration intends to decrease the amount of funds for 

Conrail in 1981-1982, with plans to cease Federal aid by 1983. 

Additionally, the Administration will propose the sale or 

transfer of the Alaska railroad in 1982. 

Legislation to reauthorize the airport grant program during 

1981-1986 will be proposed. The annual funding levels will be 

held constant at $450 million, resulting in estimated savings of 

$0.3 billion in budget authority in 1981 and 1982. The savings 

will be achieved through cuts in grant categories and phased-in 

defederalization of large commercial airports. 

Alternatives to existing maritime subsidy policies are currently 

under consideration. Meanwhile, a stable but somewhat reduced 

level of subsidy for the construction of new privately-owned 

commercial vessels for use in ocean foreign commerce is proposed. 

Budget authority savings related to policy actions in 1982 would 

be $107 million below the January budget, with outlay savings 

estimated at $21 million and $40 million in 1981 and 1982, 

respectively. 

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The Administration is also withdrawing support of the cooperative 

automotive research program proposed by the previous 

administration. The level of support will be reduced for 

aeronautics research and development in the National Aeronautics 

and Space Administration (NASA) budget, primarily for new 

initiatives proposed in the January budget and technology 

development and demonstration efforts that may be more 

appropriately undertaken by the private sector. 

Proposed receipts change.—Starting in 1982, the Administration 

proposes that boat and yacht owners and other members of the 

maritime industry be charged for all direct administrative 

services provided by the U.S. Coast Guard (USCG) and that a range 

of annual fees be assessed to pay for indirect USCG services. 

This will ensure that the small portion of the population that 

benefits from these activities will bear the costs of operation. 

The resulting increase in proprietary receipts, which offset 

budget outlays, would be $0.1 billion in 1982. An aviation user 

tax proposal that would increase governmental receipts is 

discussed in the section in Part 2 on receipts. 

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450: COMMUNITY AND REGIONAL DEVELOPMENT 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 10.1 10.2 9.2 

Reestimates: 

Federal emergency management 

activities -0.5 

Functional changes 1/ -0.3 

Policy reductions: 

Urban development and community 

development block grants -0.5 

Rehabilitation loans -0.1 -0.1 

Farmers Home Administration -* -* 

Rural Electrification Administration. -* -* 

Economic Development Administration.. -0.3 -0.6 

Regional commissions -0.1 -0.1 

Coastal and inland energy impact 

programs -0.1 -0.1 

Indian programs -* -0.1 

SBA disaster loans -0.8 

Federal emergency management 

activities -0.1 

All other -* -0.1 

Revised budget 10.1 8.2 7.3 

Outlays 

January budget 10.1 11.1 9.1 

Functional changes 1/ -0.1 

Policy reductions: 

Urban development and community 

development block grants * 

Rehabilitation loans -* -0.2 

Farmers Home Administration -* -* 

Rural Electrification Administration. -* -* 

Economic Development Administration.. -* -0.3 

Regional commissions -* -0.1 

Coastal and inland energy impact 

programs -* -0.1 

Indian programs -* -* 

SBA disaster loans -0.8 * 

Federal emergency management 

activities -* -0.1 

All other -* -0.1 

Revised budget 10.1 10.3 8.1 

* §50 million or less. 

1/ Transfer of the trade adjustment assistance program for 

firms and communities to the commerce and housing credit function 

and the Appalachian highway program to the transportation 

function. 

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Proposed budget authority for the community and regional 

development function is below the January budget by $2.0 billion 

in 1981 and $1.9 billion in 1982. The current estimates of 

outlays are below the January budget in 1981 and 1982 by $0.9 

billion and $1.0 billion, respectively. These reductions are 

primarily the result of applying sound criteria to economic 

subsidy programs and imposing fiscal restraint on other programs. 

Reestimates.—A technical reestimate relating to new requirements 

for recording indefinite borrowing authority reduces 1981 budget 

authority for Federal emergency management activites by $0.5 

billion. 

Proposed reductions.—The Department of Housing and Urban 

Development currently provides financial support directly to 

local governments to help finance general community development 

activities and specific economic development projects through the 

community development block grant (CDBG) and the urban 

development action grant (UDAG) programs. While communities can 

use their CDBG funds for a broad range of community and economic 

development purposes, not all of the economic development 

activities eligible for UDAG funding can be supported under CDBG. 

The UDAG program, on the other hand, currently requires an 

excessive amount of Federal intervention in developing, 

selecting, and monitoring local economic development projects. 

The Administration will propose new policies to integrate these 

programs into a more efficient and flexible grant mechanism. 

This effort will build on the best features of both programs and 

will reduce the 1982 budget authority request by $0.5 billion 

below the January budget. 

The Administration also proposes to terminate the rehabilitation 

loan fund of the Department of Housing and Urban Development. 

This fund unnecessarily duplicates the rehabilitation efforts of 

the community development block grant program. Furthermore, 

block grant-funded rehabilitation is more flexible than 

rehabilitation through the loan fund since block grant-funded 

rehabilitation can make use of direct grants, interest subsidies, 

or loans. By contrast, the rehabilitation loan fund provides 

only subsidized loans. This change, which will replace Federal 

control with local decision-making, reduces budget authority in 

both 1981 and 1982 by $0.1 billion. Outlay savings are estimated 

at $39 million in 1981 and $0.2 billion in 1982. 

As part of a general effort to reduce dependence on the Federal 

government as a supplier of credit, the Administration proposes 

to reduce by $0.2 billion the 1981 direct loan obligations of the 

Farmers Home Adminstration for water and waste disposal systems. 

In 1982, the Administration proposes to reduce the $0.6 billion 

loan level provided in the January budget for water and waste to 

$0.3 billion. Similarly, a $0.1 billion reduction in the $0.3 

billion community facility loan program is proposed in 1982. The 

Farmers Home Administration will therefore narrow its focus and 

give priority to those communities least able to afford 

alternative financing. In addition to the reductions in loan 

level, the Administration will propose legislation to increase 

the rate on water, waste and community facility loans from 5% to 

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the average municipal bond rate charged on similar types of 

projects. The Administration also proposes to phase-out the 

business and industry loan guarantee program. A reduction of 

$0.1 billion in loan guarantee commitments is proposed in 1981 

and the program is scheduled to be terminated in 1982. 

Termination of the rural communications development fund of the 

Rural Electrification Administration, which is used to make or 

guarantee loans to finance and administer community antenna and 

cable television services in rural areas, is also proposed. 

The Administration proposes to eliminate funding for the Economic 

Development Administration (EDA) and the Regional Development 

Commissions of the Department of Commerce, and the non-highway 

programs of the Appalachian Regional Commission (ARC) 1/ . There 

is no convincing evidence that these programs have been effective 

in creating new jobs or capital investment, or are actually 

needed to promote local and regional economic development. As a 

result of this proposal, budget authority is reduced by $0.5 

billion in 1981 and $0.7 billion in 1982. Outlay savings are 

estimated at $0.4 billion in 1982. 

Termination of both the coastal and inland energy impact programs 

is proposed. The local impacts from oil and gas development have 

proven to be far less than originally anticipated and well within 

the capability of States and localities to handle. These 

proposed changes reduce 1982 outlays by $0.1 billion below the 

January budget. 

The Administration proposes to consolidate 10 operating programs 

currently administered by the Bureau of Indian Affairs in order 

to move toward an Indian block grant program. This initiative 

will result in net savings of $40 million in budget authority in 

1982. These savings are spread among the natural resources; 

education, training, employment, and social services; and 

community and regional development functions. 

Given existing fiscal constraints, the Administration believes 

that Federal disaster assistance should be provided only to those 

who are most in need. The Administration therefore proposes to 

terminate funding for the Small Business Administration's (SBA's) 

non-physical disaster loan program and to increase interest rates 

on physical disaster loans to the cost of Treasury borrowing. In 

addition, the pending 1981 supplemental for physical disaster 

assistance is being withdrawn. These actions reduce budget 

authority and outlays by $0.8 billion in 1981. 

The Federal Emergency Management Agency (FEMA) administers the 

Federal disaster assistance and National flood insurance 

1/ The trade adjustment assistance program for firms and 

communities now located in EDA will be transferred to the 

Department of Commerce's International Trade Administration, 

which is in the commerce and housing credit function. The 

Appalachian highway program will be transferred to the 

Federal Highway Administration and funded from the highway 

trust fund, which is in the transportation function. 

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programs. The Administration proposes to tighten the 

administration of FEMA's disaster relief program. An increase in 

insurance rates for the subsidized portions of the National flood 

insurance program is also proposed. Together, these changes 

reduce budget authority and outlays by $0.1 billion in 1982. 

The Administration also supports termination of the HUD planning 

assistance and neighborhood self-help development programs. 

Local communities can use their CDBG funds to support both 

planning activities and specific neighborhood development 

projects. Commensurate with the proposed reductions in the Arts 

and Humanities Endowment programs, the Administration proposes to 

reduce Federal support for the Commission of Fine Arts by 50% in 

1982. 

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500: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 30.6 31.9 36.3 

Implicit functional change 1/ 0.3 

Reestimates and revised economic 

assumptions: 

Loan guarantees to students -0.4 -0.5 

Policy reductions: 

Elementary and secondary education 

grant consolidation -1.4 -1.5 

Youth initiative _2/ -1.2 

Vocational education -0.2 -0.2 

Pell grants (BEOGs) -0.2 -0.3 

Educational research and improvement. -* -0.2 

National Endowments for the Arts and 

Humanities -* -0.2 

Public service employment (CETA) -0.2 -4.6 

CETA grant consolidation -0.9 

Welfare reform demonstrations -0.2 

Federal-State employment service -0.2 

Social services block grant -1.4 

Tax credit for non-profit institutions -0.2 

All other -0.2 -0.6 

Revised budget 30.6 29.4 24.6 

1/ In the January budget, foster care and adoption 

assistance were classified in the income security function. They 

have now been incorporated into the social services block grant 

in this function. 

2/ Includes reductions for the Departments of Education 

($-0.9 billion) and Labor ($-0.2 billion). 

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($ billions) 

Actual Estimate 

1980 1981 1982 

Outlays 

January budget 30.8 31.8 34.5 

Implicit functional change 1/. . . 0.3 

Reestimates and revised economic 

assumptions: 

Loan guarantees to students.. -0.3 -0.5 

Other adjustments -0.2 

Policy reductions: 

Elementary and secondary education 

grant consolidation -0.1 -1.1 

Youth initiative 2/ -0.1 

Vocational education -0.1 -0.2 

Pell grants (BEOGs) -* -0.2 

Educational research and improvement. -* -0.1 

National Endowments for the Arts and 

Humanities -0.1 

Public service employment (CETA) -0.6 -3.6 

CETA grant consolidation -0.7 

Welfare reform demonstrations -* -0.2 

Federal-State employment service -0.2 

Social services block grant -1.2 

Tax credit for non-profit institutions -0.2 

All other -0.1 -0.6 

Revised budget 30.8 30.6 25.8 

1/ In the January budget, foster care and adoption 

assistance were classified in the income security function. They 

have now been incorporated into the social services block grant 

in this function. 

2/ Includes reductions for the Departments of Education 

($-50 million) and Labor ($-80 million). 

* $50 million or less. 

The revised budget reduces budget authority and outlays for 

education, training, employment, and social services for 1981 and 

1982 below the levels proposed in the January budget. The 

differences are due to reestimates and revised economic 

assumptions as well as to policy reductions. In total, the 

revised budget proposals reduce 1982 budget authority by $11.7 

billion and outlays by $8.7 billion below the January budget 

request. 

Reestimates and revised economic assumptions.—Under the revised 

interest rate assumptions, the interest subsidy provided to 

students through the guaranteed student loan program is expected 

to be lower than was assumed in the January budget. As a result, 

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th e outlay estimates have been revised downward by $0.3 billion 

in 1981 and $0.5 billion in 1982. 

Proposed reductions.—Several policy reductions below the January 

budget request are proposed for programs in this function 

totaling $11.5 billion in 1982 budget authority and $8.4 billion 

in outlays. 

Education policy has historically been the prerogative of State 

and local authorities. In recent years, the Federal Government 

has become increasingly involved in this non-Federal 

responsibility. The Administration proposes to shift control 

over education policy from the Federal Government to State and 

local authorities through the consolidation of 44 elementary and 

secondary education grant programs into 2 block grants. 

Substantial reductions in regulatory and paperwork burdens, 

resulting in significantly lower administrative costs, would be 

achieved by this consolidation. The Administration proposal 

would reduce 1982 budget authority by $1.5 billion and outlays by 

$1.1 billion below the January budget request to reflect these 

economies. The revised budget also reduces 1981 budget authority 

for the programs to be consolidated by 25% or $1.4 billion. 

In recent years, State and local expenditures for vocational 

education have been increasing rapidly and now provide more than 

$10 for every Federal dollar spent for vocational education. The 

Administration proposes to cut budget authority for Federal 

vocational education programs by 25% in 1981 and 20% in 1982 

below the January budget request. This proposal would save $0.2 

billion in 1982 budget authority and outlays. 

Although the original purpose of the Pell grant program was to 

assist low income students, changes have been made in this 

program that allow grants to be provided to students from 

families with incomes in excess of $30,000 per year. The 

Administration proposes to target Pell grants more specifically 

on the truly needy, to increase the amount of discretionary 

income that families must contribute to the support of a student, 

and to require a $750 self-help contribution from students, 

except where extreme financial need is demonstrated. The 

Administration proposal would result in outlay savings of $0.2 

billion in 1982 from the January budget request. (The 

Administration proposal to eliminate the Student Loan Marketing 

Association's access to Federal borrowing starting in 1982 is 

discussed in Part 2.) 

Historically, cultural activities and the arts have been 

maintained by State and local support and by the philanthropy of 

private individuals and corporations. In recent years, however, 

the Federal Government has been relied upon increasingly as the 

financial patron of first resort for both individuals and 

institutions engaged in artistic and literary pursuits. The 

Administration is proposing to restore the historical reliance on 

the role of private philanthropy and State and local support for 

cultural activities by reducing 1982 budget authority for the 

Arts and Humanities Endowments by 50% or $0.2 billion below the 

January budget request. 

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Th e revised budget proposes to eliminate the public service 

employment programs by the end of fiscal year 1981 to return the 

Comprehensive Employment and Training Act (CETA) to its original 

prupose — improving the employability of the disadvantaged and 

structurally unemployed by training them in skills that are 

marketable in the private sector. People who currently hold 

public service jobs could be absorbed into the regular State or 

local government payroll, be placed by the prime sponsor in an 

unsubsidized job in the private sector, or enroll in a CETA or 

other education or training program. Individuals who lose their 

jobs would be eligible for unemployment compensation. The 

phase-out of public service employment reduces outlays by $0.6 

billion in 1981 and $3.6 billion in 1982. 

The January budget proposed a youth education, training, and 

employment program (the youth initiative) — a joint effort of 

the Departments of Labor and Education. This Administration is 

withdrawing that proposal, reducing 1982 outlays by $130 million. 

Instead the Administration is proposing a more comprehensive 

consolidation of youth programs into the general purpose CETA 

training grants (Title II Parts B and C). The authorization of 

appropriations for two of CETA's Title IV youth programs (the 

youth community conservation and improvement projects and the 

youth employment and training programs) expired at the end of 

1980, and the two programs currently are authorized by the 1981 

Continuing Resolution. Rather than seek reauthorization of these 

programs for 1982, the Administration proposes to consolidate 

them with the training and employment programs authorized under 

Title II Parts B and C. The revised budget requests a modest 

increase in budget authority above the January budget for Title 

II Parts B and C to reflect this consolidation, although total 

budget authority requested is $0.9 billion less than the January 

request for the three separate programs. However, the decrease 

in resources available for training under these programs is 

expected to be significantly mitigated by administrative savings 

achieved by consolidating several grants into one. Beginning in 

1983, the summer youth employment program would become part of 

the consolidated grant, providing prime sponsors with increased 

flexibility to design training and employment strategies that 

serve the disadvantaged and meet local needs for skilled 

employees. The consolidation proposal reduces outlays by $0.7 

billion in 1982 relative to the January budget request. 

The Administration is also proposing to fund numerous social and 

community service activities in a block grant to States. This 

reform will permit better coordination at the State and local 

levels and deliver publicly-financed services more effectively. 

It will lower costs by eliminating the problems and associated 

costs of administering Federal categorical programs with 

different matching rates, procurement requirements, reporting 

standards, and accounting practices. Grant applications from 

local service providers could be reviewed in the context of 

overall State funding priority decisions. Improved coordination 

will make it easier for clients to receive comprehensive followup services from a single service agency rather than from several 

different grantees. The proposal reduces 1982 outlays for the 

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categorical programs to be consolidated by $1.2 billion below the 

January budget request. 

In addition, the Administration is withdrawing support for the 

previous administration's proposed tax credit for non-profit 

institutions, which reduces 1982 budget authority and outlays by 

$0.2 billion. Several other changes are proposed, including: 

termination of the Institute for Museum Services and the 

Architectural and Transportation Barriers Compliance Board, and 

reductions in bilingual education, higher and continuing 

education, the Corporation for Public Broadcasting, and national 

employment and training programs (including withdrawal of 1982 

proposals to test positive adjustment assistance concepts). 

In addition to the proposed reductions from the January budget, 

the Administration endorses the following proposals recommended 

in the January budget: 

— Limiting impact aid to those districts whose tax base is 

most adversely affected by Federal activities. Starting 

in 1982, payments would be made only to those districts 

in which children whose parents both live and work on 

Federal property comprise 20% or more of the district's 

enrollment. 

— Reforming the guaranteed student loan program by: (1) 

limiting loans to a student's remaining financial need 

after all other financial assistance and expected family 

contribution have been counted; (2) eliminating the 9% 

interest subsidy now provided to students while they are 

in school; and (3) removing the special allowance 

lenders receive on loans they make to parents of 

students. 

— Phas ing out the Young Adult Conservation Corps — one of 

the most costly and least targeted of Federal training 

and employment programs — by the end of 1982. (The 

Administration is also proposing the elimination of the 

Youth Conservation Corps, which is discussed in the 

natural resources and environment function.) 

The following information fulfills the requirement of Section 602 

of the Comprehensive Employment and Training Act (Public Law 

95-524), and revises information supplied in the Budget Appendix 

for 1982 in the temporary employment assistance account. 

The unemployment rate for fiscal year 1982 is now 

projected to be 7.4%. 

The number of unemployed in excess of 4% of the labor 

force is estimated to be 3.6 million in 1982. 

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— The average cost per year of a Title VI public service 

employment opportunity is estimated to be $11,294. 

— The amount that would need to be appropriated to provide 

public service jobs for 25% of the number of unemployed 

in excess of 4% is $10,291 million. Because the 

Administration is proposing a rescission of 1981 

appropriations not needed to phase out Title VI in 1981, 

this estimate includes no allowance for carry-forward 

balances. 

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550: HEALTH 

($ billions) 

Actual 

1980 

Estimate 

1981 1982 

Budget Authority 

January budget 

Reestimates and revised economic 

assumptions: 

Medicare and medicaid 

Policy reductions: 

Medicaid grants 

Medicare 

Health services grant consolidation.. 

Other health care services 

Research 

Training 

All other 

Revised budget 

59.8 

59.8 

71.9 

0.3 

-0. 6 * 

-0. 1 

-0.1 

-0.1 

71.3 

86.1 

-0.1 

-1.2 

-0.1 

-0.5 

-0.5 

-0.1 

-0. 1 

-0.1 

83.5 

Outlays 

January budget 58.2 66.0 74.6 

Reestimates and revised economic 

assumptions: 

Medicare and medicaid 0.7 1.3 

Policy reductions: 

Medicaid grants -0.3 -0.9 

Medicare 0.5 -0.8 

Health services grant consolidation.. -0.2 

Other health care services -* -0.3 

Research -* -* 

Training -* -0.1 

All other -* -0.1 

Revised budget 58.2 66.7 73.4 

* $50 million or less. 

The revised budget totals for the health function reflect the 

effects of upward reestimates for medicare offset by the effects 

of revised economic assumptions and proposed policy reductions. 

On net, these changes increase outlays by $0.7 billion in 1981 

and decrease outlays by $1.2 billion in 1982 in comparison to the 

January budget estimates. Budget authority is reduced by $0.6 

billion in 1981 and $2.6 billion in 1982. 

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Reestimates and revised economic assumptions.—Program 

reestimates and revised economic assumptions raise outlays for 

medicare under current law above the January estimates in both 

years. For 1982, the increase is $1.2 billion in outlays. A 

major source of this 1982 increase is the deletion of the 

previous administration's assumption that issuance of voluntary 

cost increase guidelines for hospitals would significantly lower 

the rate of hospital cost inflation. Removing these "savings" 

from the revised budget raises 1982 outlays $0.8 billion. 

Proposed reductions.—The revised budget proposes policy changes 

to restructure and restrain growth in Federal health spending. 

The Administration is proposing an interim limit on unconstrained 

growth in medicaid and elimination of medicaid expansions 

included in the January budget while fundamental health care 

financing reforms are developed. For 1981, outlays for medicaid 

grants would be reduced a total of $0.3 billion below the January 

budget through imposition of the interim limit and by accelerated 

Federal collection of prior year funds erroneously spent by 

States. Federal spending for medicaid would be limited to an 

increase of 5% in 1982, and to the rate of inflation thereafter. 

Increased flexibility in administering medicaid would allow 

States to reorganize their programs to deliver care more 

effectively and at lower cost. The budget authority request for 

1982 would be reduced by $1.2 billion and outlays for medicaid 

grants would be an estimated $0.9 billion lower as a result of 

the Administration proposals. 

The proposed medicare changes include elimination of a one-time 

shift in hospital reimbursement from the last three weeks in 1981 

to the first week of 1982, which was enacted last year, as well 

as changes in utilization review requirements and withdrawal of 

program expansions proposed in the January budget. The shift in 

hospital reimbursement to a normal payment schedule adds $0.5 

billion to 1981 outlays and reduces 1982 outlays by $0.5 billion. 

Several changes in discretionary health programs are proposed. 

The Administration proposes to replace the present collection of 

26 Federal categorical grants for health services and prevention 

programs with two block grants to States as part of the effort to 

return decisionmaking authority, where appropriate, to States and 

localities. This proposal would reduce 1982 budget authority by 

$0.5 billion and outlays by about $0.2 billion below the January 

budget request, primarily as a result of reduced administrative 

costs for both States and the Federal Government. 

Several other changes in discretionary health care services 

programs are proposed including: elimination of free medical care 

for merchant seamen and closure of the remaining 8 Public Health 

Service (PHS) hospitals and 29 clinics now providing these 

services; reductions in Indian Health Service facilities 

construction; phase-out of Federal subsidies for health 

maintenance organizations and of the health planning and 

professional standards review organizations programs; and 

restrained growth in the National Health Service Corps (NHSC) 

service delivery program. Finally, adjustments are proposed for 

the bonuses paid to PHS Commissioned Corps physicians consistent 

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with current PHS physician needs and with similar adjustments 

proposed for Veterans Administration physicians. These proposals 

reduce the 1982 budget authority request by over $0.5 billion 

below the January budget. 

The Administration proposes reducing the increase in research 

funding proposed in the January budget to cover only partially 

the effects of projected inflation. These proposals reduce 

budget authority for research by $57 million in 1981 and $92 

million in 1982 below the January budget. Outlay savings are 

estimated at $35 million and $21 million, respectively. 

The revised budget proposes better targeting of Federal subsidies 

for health professions education to ensure that Federal dollars 

subsidize the education of health professionals only in medical 

specialities where they are most needed. General institutional 

subsidies for training health professionals would be eliminated, 

training of mental health professionals would be phased out by 

the end of 1982, and there would be no new scholarships in the 

remainder of 1981 or in 1982 for the NHSC. The Administration 

also proposes to end the current practice of paying more to 

educational institutions for a Federally supported research 

trainee under the national research service awards program than 

is charged in tuition and fees to non-Federally supported 

students at the same institutions. These reforms would reduce 

1982 budget authority by $140 million and outlays by $133 million 

below the January request. 

Proposed reforms of consumer and occupational health and safety 

programs would reduce 1982 budget authority by $81 million and 

outlays by $68 million below the January budget request. 

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600: INCOME SECURITY 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 224.2 255.2 279.6 

Implicit functional change _l/ -0.3 

Reestimates and revised economic 

assumptions: 

Retirement and disability programs: 

Social security 1.4 0.8 

Other -0.1 -0.1 

Unemployment compensation -0.6 -1.6 

Food and nutrition assistance 

Other income security -0.1 -0.3 

Policy reductions: 

Retirement and disability programs: 

Social security -0.1 

Other -* -0.1 

Unemployment compensation: 

Extended benefits -0.4 

Trade adjustment -1.2 

Ex-Servicemen -0.1 -0.2 

Other * 0.2 

Housing assistance: 

Program level -4.6 -8.7 

Rent contribution -0.1 

Modernization -0.3 -0.5 

Indian housing -0.2 -0.7 

Other -0.1 

Food and nutrition assistance: 

Food stamps -0.2 -2.3 

Food assistance to Puerto Rico-... 0.9 

Child nutrition -1.3 

Other -0.6 

Other income security: 

Aid to families with 

dependent children -0.7 

Hardship assistance block grant... -0.4 

Supplemental security income * 0.2 

Other -* -0.1 

Revised budget 224.2 249.9 261.8 

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($ billions) 

Actual Estimate 

1980 1981 1982 

Outlays 

January budget 193.1 231.6 255.0 

Implicit functional change 1/ -0.3 

Reestimates and revised economic 

assumptions: 

Retirement and disability programs: 

Social security -0.4 -2.0 

Other -0.1 -0.3 

Unemployment compensation -0.7 -1.4 

Food and nutrition assistance -0.3 

Other income security * -0.4 

Policy reductions: 

Retirement and disability programs: 

Social security: 

Minimum benefits -* -1.3 

Student benefits -* -1.0 

Disability insurance -0.1 -0.4 

Death benefits -0.2 

Other -* -0.1 

Unemployment compensation: 

Extended benefits -0.5 -* 

Trade adjustment -1.2 

Ex-Servicemen -0.1 -0.2 

Other 0.1 -0.1 

Housing assistance: 

Program level -* -* 

Rent contribution -0.1 

Other -* -0.1 

Food and nutrition assistance: 

Food stamps -0.1 -2.3 

Food assistance to Puerto Rico.... 0.9 

Child nutrition -1.2 

Other * -0.5 

Other income security: 

Aid to families with 

dependent children -0.7 

Hardship assistance block grant... -0.4 

Supplemental security income * 0.2 

Other * -0.1 

Revised budget 193.1 229.7 241.4 

1/ In the January budget, foster care and adoption 

assistance were classified in the income security function. 

Starting in 1982 they are incorporated into the social services 

block grant proposal in the education, training, employment, and 

social services function. 

* $50 million or less. 

338-780 0 - 81 -1+ 

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Reestimates and revised economic assumptions*—The anticipated 

improvement in the economy and other factors have resulted in 

downward reestimates for most income security benefits under 

existing law. Estimated outlays for social security and other 

retirement benefits under existing law have been revised downward 

by $0.5 billion in 1981 and $2.3 billion in 1982. The estimates 

of outlays for unemployment compensation under existing law have 

been reduced by $0.7 billion in 1981 and $1.4 billion in 1982. 

The revised estimates for other income security outlays under 

existing law are below the January estimates by $0.4 billion for 

1982. 

Under current economic assumptions, the proposed change in 

extended unemployment benefits is estimated to reduce 1982 

outlays by $1.2 billion, compared to a savings of $2.2 billion in 

the January budget estimates for a similar change. The savings 

associated with annual indexation of Federal employee retirement 

are currently estimated to be $515 million in 1982, $140 million 

less than the January budget estimate. 

Proposed reductions.—Proposed policy reductions from the January 

budget in budget authority and outlays for 1982 are estimated to 

be $15.8 billion, and $8.8 billion, respectively. Retirement and 

disability programs are reduced in 1982 from the January budget 

by $0.2 billion in budget authority and $3.0 billion in outlays. 

Unemployment compensation is reduced by $1.2 billion in budget 

authority and $1.5 billion in outlays, while housing assistance 

is reduced by $10.1 billion in budget authority and $0.2 billion 

in outlays. The food and nutrition assistance programs are 

reduced by $3.4 billion in budget authority and $3.2 billion in 

outlays. 

Retirement and disability programs.—While the Administration is 

committed to protecting basic retirement and disability benefits, 

the budget includes a number of legislative proposals to 

eliminate unintended benefits. 

Since the enactment of social security, a number of unearned 

benefits have been added to the basic old-age and survivors 

insurance program. In recent years, these non-basic benefits 

have threatened the continued solvency of the basic social 

security program. The Administration is proposing the following 

changes in social security benefits: 

— Minimum benefit.—Under current law, everyone eligible 

for social security benefits receives at least a minimum 

payment of $122 a month, regardless of their employment 

history. The main beneficiaries of the minimum payment 

provision are those with a modest work history in 

employment covered by social security. Many of the 

recipients had long periods of Federal civilian 

employment and therefore also receive generous Federal 

pensions. Because these recipients receive social 

security payments far in excess of the level to which 

their taxes entitle them, they represent a serious drain 

on the social security trust funds. Eliminating the 

"minimum benefit" would stop this drain, without 

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reducing benefits for truly needy retirees at all; their 

benefits would be replaced, dollar for dollar, by 

increased payments from the supplemental security income 

program. The net outlay savings associated with this 

proposal are estimated to be $1.3 billion in 1982. 

— Student benefits.—Another unearned benefit that was 

added to the social security system in 1965 is the 

payment to adult students whose parents are social 

security beneficiaries. These payments are unrelated to 

the educational costs incurred, are often inversely 

related to family needs, and duplicate benefits 

available under other Federal student assistance 

programs. Adult student payments have grown from $165 

million in 1965 to over $2.0 billion in 1981. Under the 

Administration's proposal, no new recipients would be 

eligible, and current student payments would be reduced 

by 25% annually. The outlay savings associated with 

this proposal are estimated to be $1.0 billion in 1982. 

— Disability benefits.—The Administration also proposes 

to reduce mounting disability insurance costs by 

tightening administration and ending misdirected 

benefits. In addition, an overall limit will be 

established on disability benefits so that the benefits 

a recipient receives from all public sources never 

exceeds the worker's prior earnings, adjusted for 

inflation. This proposal will prevent recipients with 

multiple sources of disability payments from receiving 

overly-generous benefits. The Administration will 

propose legislation to require disability insurance 

beneficiaries to have worked 6 out of the last 13 

calendar quarters. The proposals are estimated to 

reduce outlays by $0.1 billion in 1981 and $0.4 billion 

in 1982. 

— Payments upon the death of a worker.—Under current law, 

a payment of $255 is made upon the death of an insured 

worker regardless of whether there is a surviving family 

member. About half of current payments are made to 

estates with no surviving spouse or surviving minor 

children and many of these payments go directly to 

funeral home operators. The costs of administering 

these payments is five times as high as for earned 

social security benefits. The Administration will 

propose eliminating this payment where there is neither 

a spouse nor a child to receive survivors benefits. 

Payments to widows and orphans would be continued as 

under current law. The outlay savings associated with 

this proposal are estimated to be $0.2 billion in 1982. 

The black lung disability trust fund is rapidly sinking into 

insolvency, producing massive deficits that are presently 

financed from general,revenues. To put the trust fund on a sound 

financial footing, the Administration will propose legislation to 

restrict benefits to those who are truly medically disabled by 

black lung and to ensure that the program is financed entirely by 

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a reasonable levy on the coal industry. The objective of the 

proposal is to eliminate questionable claims and reduce trust 

fund outlays to a level where the coal industry could finance the 

program without drawing on the Treasury. The legislation is 

expected to eliminate the current deficit in this program by 

1983. Since the precise distribution between outlay reductions 

and revenue increases depends upon legislation that is still 

being developed, the savings resulting from these changes are 

reflected in the allowance for contingencies. 

The Railroad Retirement Board pension system is substantially 

underfunded and could be unable to pay benefits on a timely basis 

by April 1982. The Congress directed the rail sector to 

negotiate and report, by March 1, 1981, a solution to fund 

soundly the rail industry pension system. On assurance from 

labor and management that they would recommend sound financing 

for their industry pension, the Congress enacted an ad hoc 

increase to take effect in June 1981. Since the parties neither 

agreed to nor recommended a solution to the pension system's 

imminent insolvency, the Administration proposes to defer the ad 

hoc increase until after current benefit payments are soundly 

funded. The Administration will support the Rail Pension 

Assurance Amendments, originally proposed in the 96th Congress, 

as a way of solving the rail industry pension system's long-term 

actuarial deficit on an evenhanded basis without added Federal 

subsidies. 

Under present policy, virtually every Federal benefit payment 

that has automatic adjustments for the impact of inflation is 

adjusted once a year. Federal employee retirement and disability 

benefits, however, are currently adjusted twice a year. To 

assure equitable treatment for all beneficiaries, the 

Administration supports legislation to replace biannual cost-ofliving adjustments with a single annual adjustment for civil 

service and other Federal retirees. This proposal, which was 

also included in the January budget, is now estimated to reduce 

1982 outlays in this function by $0.5 billion. The savings in 

retired pay for military personnel is estimated to be $0.4 

billion in 1982, are classified in the national defense function. 

The Administration intends to continue exploring the 

appropriateness of the existing inflation adjustment mechanism 

for federal retirees and their survivors. An attempt will be 

made to identify and correct inequities in that adjustment 

mechanism. 

The Administration also supports the tightening of criteria for 

granting Federal employees disability and early retirement 

benefits. Changes in the administrative guidelines governing 

these programs will reduce the number of beneficiaries and is 

expected to lower outlays in 1982 by $180 million. 

As part of the general effort to improve entitlement programs, 

the Administration will propose legislation to reform the Federal 

employees injury compensation program. These changes are 

intended to remove (1) incentives to file questionable claims; 

(2) disincentives for injured workers to return to work when they 

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are medically able to do so; and (3) inequities in compensation 

rates, which now permit higher-paid workers to receive more in 

compensation benefits than they received in take-home pay when 

working. The proposed reforms would ensure the efficient 

compensation of justifiable claims, while eliminating the 

overcompensation and other inequities that currently plague the 

Federal employees compensation program. Outlay savings of $50 

million are expected in 1982. 

Unemployment compensation.—Under current law, during periods of 

high unemployment, the Federal Government assists the States in 

providing an additional 13 weeks of unemployment insurance 

benefits ("extended benefits") beyond the 26 weeks of coverage 

provided by basic State programs. As announced on February 18, 

the Administration will propose legislation to focus extended 

benefit payments only on those areas where high unemployment 

provides a real barrier to employment for unemployed workers. 

The legislation would: (1) eliminate the national extended 

benefits program, which now requires payment of extended benefits 

in all States — including those with low unemployment — when 

the national insured unemployment rate reaches the level set by 

law; (2) remove claimants of extended benefits from the 

calculation of the insured unemployment rate, which determines 

when extended benefits are paid in each State; (3) require 

recipients of extended benefits to have worked 20 weeks in the 

one-year base period; and (4) require a higher level of 

unemployment in individual States before extended benefits are 

paid. State trigger rates would be increased to 5% insured 

unemployment (and 120% of the rate in the comparable period of 

the prior 2 years) or, at State option, to 6% (without regard to 

prior years). In addition, the requirement in the Omnibus 

Reconciliation Act of 1980 that extended benefits claimants must 

accept offers of jobs that pay an amount equal to their 

unemployment benefits or the minimum wage, whichever is higher, 

will be strictly enforced. The Administration will propose 

legislation to apply this same provision to claimants who have 

collected at least 13 weeks of regular benefits. 

The Administration proposal would eliminate the national trigger 

on July 1, 1981 and change the method of calculating the insured 

unemployment rate the week following enactment. To permit 

necessary changes in State law, the increase in State trigger 

rates, the requirement of 20 weeks of work in the base period, 

and the requirement that claimants under the regular program 

accept jobs paying at least their weekly benefit amount or the 

minimum wage after 13 weeks of benefits, would take effect 

October 1, 1982. 

In comparison to current law, proposed reforms to extended 

benefits are now estimated to reduce outlays by $0.5 billion in 

1981 and $1.2 billion in 1982. The January budget also included 

legislation to change the method of calculating extended 

benefits. Under the economic assumptions used in January, the 

proposal was estimated to reduce 1982 outlays by $2.2 billion. 

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The Administration will propose legislation to make ex-military 

personnel who voluntarily leave the service, who are released or 

separated for cause, or who fail to reenlist when they could have 

done so, ineligible for unemployment benefits. This change would 

be effective July 1, 1981, and would reduce 1981 outlays by an 

estimated $60 million and 1982 outlays by an estimated $225 

million. 

The Administration will also propose legislation to reform the 

trade adjustment assistance (TAA) program. This legislation will 

direct benefits to those workers who have not been called back to 

work by their former employers and who have been unable to find 

other work by the time their eligibility for unemployment 

insurance has ended. 

Weekly TAA benefit amounts will be the same as the worker's 

weekly unemployment insurance benefit amount and will be paid 

only to workers who have used up all their weeks of unemployment 

insurance. This change would become effective for all claimants 

October 1, 1981. This proposal is estimated to reduce outlays by 

$1.2 billion in 1982. 

Housing assistance.—As part of the general effort to control 

long-term Federal government spending, the Administration is 

proposing several reductions in housing assistance provided by 

the Department of Housing and Urban Development (HUD): 

— The Administration is requesting funds for 175,000 

additional subsidized housing units in 1982, compared to 

260,000 units in the January budget. The 1981 

subsidized housing program will also be reduced from the 

254,550 unit level proposed in the January budget to 

210,000 units. This is a more realistic estimate of the 

program level likely to be achieved in 1981. In 

addition, the Administration proposes shifting the 

percentage mix between new and existing units from 50/50 

to 45/55 in 1982 to take greater advantage of the lower 

subsidy costs for existing housing. To achieve this 

policy change, the President will propose to rescind 

$4.6 billion in 1981 budget authority for the Department 

of Housing and Urban Development's subsidized housing 

program. The Administration will also propose a 

reduction in 1982 budget authority for subsidized 

housing of $8.7 billion. 

— The Administration proposes to increase gradually over 

the next 5 years the maximum allowable rent contribution 

paid by tenants living in federally subsidized housing 

from 25% to 30% of their adjusted income. Currently, 

very needy households pay less than 25% of their income 

for rent in HUD subsidized housing projects. Since this 

proposal provides for the same rate of increase for all 

tenants, the differential for the very needy will be 

maintained. This change will be achieved through 

administrative action and proposed legislation. 

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Th e proposal will decrease budget authority by $60 million in 

1982. The reduction will decrease budget authority by over $400 

million in 1986. Outlays are estimated to decline by $0.3 

billion in 1982. However, by 1986, outlays are estimated to be 

almost $1.1 billion less than the outlays for subsidized housing 

and public housing operating subsidies estimated in the January 

budget. 

— The Administration also proposes to stretch out 

construction and renovation activity for the public 

housing modernization program. This will be achieved by 

rescinding $300 million of the 1981 appropriation of 

$2.0 billion and reducing the 1982 appropriation request 

by $500 million to $1.5 billion. 

— In addition, the Administration proposes to terminate 

HUD's Indian housing program in 1982 and rescind $0.2 

billion in budget authority for the program in 1981. 

The current backlog of 22,000 funded but unfinished 

Indian housing units represents a 5 1/2 year supply at 

the 4,000 unit program level proposed in the January 

budget. With an average budget authority cost of over 

$175,000 per unit there is no reason to continue this 

very expensive and substantially backlogged program. 

Food and nutrition assistance.—In accord with the 

Administration's efforts to target assistance to the most needy 

families, major changes will be proposed in the food stamp and 

child nutrition programs. The changes in the food stamp program 

are designed to eliminate anomalies found in the present program 

under which families with high annual incomes are nevertheless 

eligible for food stamps. The Administration's program would 

remove about 400,000 such households from the rolls. The January 

budget for food stamps included legislative savings of $0.5 

billion in 1982 outlays. The revised budget reflects gross food 

stamp changes of $3.1 billion in 1982 outlays. Funds totaling 

$1.1 billion for food stamps to Puerto Rico will be converted 

into a proposed block grant for Puerto Rico at the reduced amount 

of 0.9 billion in outlays for 1982. 

Food stamps account for more than 10% of the personal income of 

residents of the Commonwealth of Puerto Rico. To improve the 

administration of these activities and to make them more 

responsive to the Commonwealth's culture, economy, and food 

preferences, a consolidation of funds amounting to $0.9 billion 

is proposed. This block grant would eliminate the detailed 

nutritional prescriptions, financial reporting and accounting of 

current Federal programs, and would permit the Puerto Rican 

government to target nutrition assistance in accord with its 

priorities and to stimulate local agricultural production. The 

proposed amount is about 75% of the 1981 level of USDA nutrition 

assistance for Puerto Rico. 

Under the Administration's proposal for the child nutrition 

programs, Federal subsidies will be eliminated for students from 

families of four with incomes above $15,630. Students from 

families of four with incomes between $11,640 and $15,630 will 

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continue to have their school meals partially subsidized. For 

students from families of four with incomes below $11,640, the 

present policy of full subsidization of meals will continue. The 

proposal would also terminate funding to purchase new food 

service equipment, and to finance nutrition education and 

training grants to States, subsidized snacks, and all meal 

subsidies to schools with high tuitions. The base and special 

subsidies for both free and reduced price meals would be annually 

indexed in future years from 1982 levels for price changes in the 

current indices. These proposals would reduce 1982 outlays for 

child nutrition by $1.6 billion below current law. The January 

budget included legislative outlay savings of $0.4 billion in 

1982. The supplemental feeding program for women, infants, and 

children (WIC) will be focused on low-income pregnant and 

lactating women, and infants under established priorities for 

participation. Applicants with relatively high incomes or 

without measurable nutrition deficiencies may not receive WIC 

benefits at the 1982 funding level, which is $0.2 billion below 

the 1981 level. 

The Administration is proposing several reforms to the aid to 

families with dependent children (AFDC) and child support 

enforcement programs. These changes are designed to determine 

welfare needs more accurately, improve program administration, 

reduce fraud and abuse, and decrease Federal and State costs. 

Anomalies in the present system often result in the payment of 

cash welfare grants to high-income families. Changes are needed 

to assure that the resources available to a family are fully 

taken into account in determining the family's need for public 

assistance cash payments, to improve incentives to work, to 

standardize and simplify program requirements and administration 

(which will help reduce errors, waste, and abuse), to increase 

child support collections (which will reduce the amount of 

welfare payments needed), and to provide a more equitable balance 

between the State and Federal shares of enforcement costs and 

collections. 

These proposals are expected to reduce 1982 outlays by $0.7 

billion. The January budget also included outlay savings of $0.5 

billion in 1982. 

The Administration is also preparing several management 

improvements in the supplemental security income program to 

reduce errors and waste. 

Other income security.—The Administration is proposing 

reductions in the refugee assistance program reflecting lower 

refugee flow to the United States, earlier phaseout of the old 

Cuban refugee program (1962 to 1978 arrivals), reduced Federal 

administration, and elimination of funds for non-State 

administered, low-priority social service programs. This will 

produce outlay savings of $31 million for 1981. 

Increased reliance on the sponsors of immigrants to meet their 

obligations with respect to an immigrants' first 3 years in the 

United States will reduce AFDC outlays by $15 million in 1982. 

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An expansion of the earned income tax credit, proposed in the 

January budget, has not been included as part of the economic 

recovery plan. 

The Administration will propose legislation to consolidate 

authorities for energy and related assistance into a hardship 

assistance block grant to States. The Administration's proposal 

will enable States to assist low-income households to meet the 

rising cost of home heating and assist households facing other 

hardship situations that may not be energy related. This 

consolidation will result in outlay savings of $0.4 billion in 

1982. 

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700: VETERANS BENEFITS AND SERVICES 

($ billions) 

Actual 

1980 

Estimate 

1981 1982 

Budget Authority 

January budget 21.2 

Revised economic assumptions: 

Service-connected compensation 

Non-service-connected pensions 

All other 

Policy reductions: 

Readjustment benefits 

Medical care 

Hospital construction 

All other 

Revised budget 21.2 

23.2 

-0.1 

-0. 2 

22.9 

25.0 

-0.1 

-0. 1 

-0.4 

-0.1 

-0.1 

24.2 

Outlays 

January budget 21.2 22.6 24.5 

Revised economic assumptions: 

Service-connected compensation -0.1 

Non-service connected pensions -* 

All other -* 

Policy reductions: 

Insurance policy loans -0.1 -0.1 

Readjustment benefits -* -0.1 

Medical care -0.1 -0.4 

Hospital construction -* -0.1 

All other ^ -0.1 

Revised budget 21.2 22.4 23.6 

* $50 million or less. 

The Administration proposes to reduce budget authority for 

veterans benefits and services from the January budget request by 

$0.3 billion in 1981 and $0.7 billion in 1982. Estimated outlays 

in 1981 and 1982 are below the January budget by $0.2 billion and 

$0.8 billion, respectively. These reductions are in large part 

the result of lower projected inflation, revisions in 

entitlements to eliminate unintended benefits, the application of 

sound criteria to economic subsidy programs, and a stretch-out of 

capital investment programs. 

Revised economic assumptions.—A decline in budget authority and 

outlays for service-connected compensation of $0.1 billion in 

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1982 reflects lower estimates of proposed cost-of-living 

adjustments than the January budget. Lower automatic cost-ofliving adjustments reduce budget authority and outlays for nonservice-connected pensions by $11 million in 1982. 

Policy reductions.—At present, VA insurance policy loans are 

made at 5% interest rates, a fraction of the interest rates 

charged on secured loans in private markets. This has had the 

effect of encouraging veterans to borrow on their policies, often 

diminishing the future security of veterans' families as the 

value of the policy is reduced. The Administration proposes to 

decrease the interest subsidy now given to veterans receiving 

insurance loans. This proposal reduces outlays by $0.1 billion 

in both 1981 and 1982. 

A 2-year extension of the period of eligibility for certain 

readjustment benefits for needy and educationally disadvantaged 

Vietnam-era veterans, which was proposed in the January budget, 

is not supported by this Administration. The current 10-year 

period of eligibility is sufficient and the same as that provided 

for veterans of previous wars. Elimination of this proposal 

reduces 1982 budget authority and outlays below the level 

proposed in January by $0.1 billion. 

The Administration proposes a ceiling on the funding available 

for VA physicians' and dentists' bonuses. Under this proposal 

funds available for bonuses will be limited to 12% of the total 

annual appropriations for physicians and dentists pay. This will 

reduce the annual costs of bonuses for VA physicians and dentists 

by approximately $40 million, to the level estimated by the 

Congressional Budget Office at the time the Congress was 

considering passage of PL 96-330, the legislation that authorized 

the additional bonuses. In addition, moderate staffing 

reductions in non-clinical personnel will be imposed on the 

Department of Medicine and Surgery (DM&S), which would return 

DM&S to its 1979 staffing level. These actions and the 

withdrawal of several new initiatives that were included in the 

January budget will save $0.3 billion in outlays in 1982. 

Some cancellations and delays in the Veterans Administration (VA) 

hospital construction program are proposed. These changes, which 

can be accomplished without significant short-run detriment to 

the VA medical system, reduce proposed budget authority by $0.2 

billion in 1981 and $0.1 billion in 1982. Outlays in 1981 and 

1982 are estimated to be reduced by $28 million and $0.1 billion, 

respectively. 

Proposals in the January budget to end payments for general 

flight training and correspondence courses and to terminate 

outpatient dental benefits for certain non-service-related dental 

problems are included in the revised budget. The Administration 

also proposes to reduce travel reimbursements for veterans being 

treated for non-service-connected disabilities by requiring a $5 

deductible payment. 

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750: ADMINISTRATION OF JUSTICE 

($ billions) 

Actual 

1980 

Estimate 

1981 1982 

Budget Authority 

January budget 4.4 4.5 

Policy reductions: 

Legal Services Corporation 

Office of Juvenile Justice and 

Delinquency Prevention 

Personnel and other reductions -0.1 

Revised budget 4.4 4.4 

4.8 

-0.3 

-0.1 

-0.2 

4.2 

Outlays 

January budget 4.6 4.8 4.9 

Policy reductions: 

Legal Services Corporation -0.3 

Office of Juvenile Justice and 

Delinquency Prevention -* 

Personnel and other reductions -0.1 -0.2 

Revised budget 4.6 4.7 4.4 

$50 million or less. 

The Administration proposes to reduce budget authority by $0.1 

billion in 1981 and $0.6 billion in 1982, and to reduce outlays 

by $0.1 billion in 1981 and $0.5 billion in 1982 compared with 

the January budget request. 

Policy reductions.—The authorization for the Legal Services 

Corporation has expired. In lieu of proposing funding for this 

program in 1982, the President has proposed a consolidated block 

grant to States for social services. Legal services would be 

authorized activities within the programs encompassed by the 

block grant. Increased pro bono efforts by private attorneys, as 

part of their professional responsibility, are a major way of 

augmenting legal services activities financed by the block grant. 

The Administration believes that services currently authorized in 

programs of the Office of Juvenile Justice and Delinquency 

Prevention can be provided under the broader authorities of 

programs proposed for consolidation into a social services block 

grant. The Administration therefore proposes that these 

activities be carried out by the States in the context of the 

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block grant, which is discussed in the education, training, 

employment, and social services function. 

The Administration is proposing significant travel, procurement, 

and personnel reductions in this function. These measures will 

reduce estimated outlays by $0.1 billion in 1981 and $0.2 billion 

in 1982. 

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800: GENERAL GOVERNMENT 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 4.6 5.4 5.4 

Policy reductions: 

Central fiscal operations -* -0.1 

Federal buildings fund -0.1 

Other -0.1 

Revised budget 4.6 5.4 5.1 

Outlays 

January budget 4.5 5.2 5.2 

Policy reductions: 

Central fiscal operations -* -0.1 

Other -0.1 

Revised budget 4.5 5.1 5.0 

$50 million or less. 

Several small proposed policy reductions would reduce budget 

authority and outlays for the general government function by $0.1 

billion in 1981 and by $0.3 billion in 1982 from the January 

budget levels. 

Policy reductions.—The President has signed an Executive Order 

terminating the Council on Wage and Price Stability's wage and 

price standards program. Outlays for the Council on Wage and 

Price Stability are estimated to be $5.2 million lower in 1981 

than the January estimates and $4.4 million lower in 1982. 

Proposed budget authority for central fiscal operations is lower 

than the January levels by $32 million in 1981 and $116 in 1982. 

Outlays are estimated to be $47 million lower in 1981 and $126 

million lower in 1982. Because the Administration's proposed 

reduction in marginal rax rates is expected to enhance voluntary 

compliance, the level of increase in Internal Revenue Service 

enforcement staff proposed in the January budget will not be 

necessary. The Administration does, however, support the January 

budget request to increase IRS personnel for the collection of 

unpaid taxes. 

The Administration is also proposing a broad reform of Federal 

Financing Bank operations that will affect its major users, such 

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as the Rural Electrification Administration and the Tennessee 

Valley Authority, and will affect other, non-Federal entities 

that borrow from the FFB under Federal guarantees. This is 

discussed in more detail in Part 2 of this document. 

Reductions in the amount of new construction of Federal buildings 

and in the amount of space leased by the Federal Government are 

proposed in conjunction with expected decreases in Federal 

personnel levels. New obligational authority for construction 

would decrease from the $196 million previously proposed for 1982 

to $28 million. This would decrease budget authority for the 

Federal buildings fund by $121 million in 1982. The two new 

projects that the Administration proposes to fund are border 

stations in California and Maine. The amount of leased office 

space would also be reduced by 1% from levels budgeted in 

January, and may decrease further as the need for office space is 

reassessed. 

The Administration supports the proposal included in the January 

budget to increase funds for the purchase of new vehicles in 1981 

by $100 million. The original proposal, which would have 

replaced all motor pool vehicles over five years of age, will be 

changed to include replacing some leased vehicles with new 

vehicles. This will reduce Federal Government costs over the 

life of the vehicles. These purchases of new vehicles will 

assist the automobile industry during a particularly difficult 

period of high unemployment and will contribute to energy 

conservation and cleaner air by replacing older vehicles with 

cleaner, more fuel-efficient vehicles. 

Consistent with its overall effort to reduce the number of 

categorical grant programs, the Administration will not request 

funding for the Intergovernmental Personnel Act grant program. 

This would reduce 1982 outlays by $13 million from the January 

level. 

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850: GENERAL PURPOSE FISCAL ASSISTANCE 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 8.7 6.2 6.9 

Reestimates 0.1 

Policy reductions: 

Withdrawal of proposed tax credit for 

State and local governments -0.5 

Loans to the District of Columbia for 

capital improvements 

Policy increases: 

Withdrawal of the proposal to 

eliminate payments in lieu of taxes. • 

Revised budget 8.7 6.2 6.5 

Outlays 

January budget 8.6 6.9 6.9 

Reestimates -* 0.1 

Policy reductions: 

Withdrawal of proposed tax credit for 

State and local governments -0.5 

Loans to the District of Columbia for 

capital improvements -0.1 

Policy increases: 

Withdrawal of the proposal to 

eliminate payments in lieu of taxes. * 

Revised budget 8.6 6.8 6.4 

§50 million or less 

The Administration's budget revisions for general purpose fiscal 

assistance result in a net decrease in budget authority and 

outlays of $0.5 billion for 1982 from the January budget. 

Reestimates.—Outlays are expected to increase by $70 million in 

1982 for Federal land management receipt sharing programs due to 

higher estimates for receipts. Repayments for advances to the 

District of Columbia general fund are estimated to increase by 

$60 million in 1981, thus reducing outlays by that amount. 

Proposed reductions.—The Administration proposes reductions of 

$570 million in outlays in 1982 for two programs. Withdrawing 

the proposal made in the January budget for tax credit payments 

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to State and local governments accounts for $495 million of this 

reduction. Another $75 million will be saved by limiting Federal 

loans to the District of Columbia for its capital improvements 

program. It is proposed that outlays for this program be capped 

at $145 million in 1982 and that it be phased out by 1984. It is 

anticipated that the District of Columbia government will enter 

the municipal bond market and, thus, will have no further need to 

borrow from the U.S. Treasury after 1983. 

Proposed increases.—The Administration is withdrawing the 

January budget proposal to eliminate the payments in lieu of 

taxes program to State and local governments. Restoring funds 

for this program will increase outlays by $45 million in 1982 

over the January budget level. Funds for resumption of this 

program are contingent upon the passage of new legislation that 

will revise the payment formula. 

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900: INTEREST 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 64.5 80.4 89.9 

Reestimates and revised economic 

assumptions: 

Interest on the public debt -3.5 -8.4 

Other interest 0.3 1.0 

Revised budget 64.5 77.2 82.5 

Outlays 

January budget 64.5 80.4 89.9 

Reestimates and revised economic 

assumptions: 

Interest on the public debt -3.5 -8.4 

Other interest 0.3 1.0 

Revised budget 64.5 77.2 82.5 

Budget authority and outlay estimates for the interest function 

have decreased since January due to lower projected interest 

rates, partially offset in 1982 by higher borrowing requirements. 

These changes have decreased estimated budget authority and 

outlays for interest on the public debt by $3.5 billion to a 

level of $90.6 billion in 1981, and $8.4 billion to $98.1 billion 

in 1982. These large decreases in interest on the public debt 

are partially offset by decreases in interest received on loans 

made to the Federal Financing Bank. 

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920: ALLOWANCES 

($ billions) 

Actual Estimate 

1980 1981 1982 

Budget Authority 

January budget 3.0 

Policy reductions: 

Civilian agency pay raises -0.2 

Contingency allowance -0.5 

Revised budget 2.3 

Outlays 

January budget 1.9 

Policy reductions: 

Civilian agency pay raises -0.1 

Revised budget 1.8 

The allowance function includes amounts for Federal civilian 

agency employee pay raises, future initiatives, and unforeseen 

requirements. The Administration proposes to reduce 1982 budget 

authority and outlays for allowances from the January budget 

levels by $0.7 billion and $0.1 billion, respectively. 

Proposed reductions.—As part of its general effort to reduce 

Federal overhead, personnel, and regulatory costs, the 

Administration will recommend comprehensive legislative changes 

in the way that Federal civilian pay rates are set. When 

enacted, these proposals will reduce outlays from the current 

services base by $2.5 billion in 1982. 

The Administration supports the principle of comparability as the 

best basis for adjusting Federal civilian pay, but will propose 

major changes in the way comparability is calculated. The 

following major components are among those being considered for 

inclusion in proposed legislative changes: 

1. Broadening the principle of comparability by: 

establishing total compensation comparability—including 

both pay and benefits, rather than just pay—a s the 

basis for calculating comparability; and 

— including State and local government pay and benefits, 

rather than only those of private industry, in the data 

on which compensation scales will be based. 

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2. Bringing Federal compensation rates and practices more 

closely in line with those of the non-Federal sector by: 

— setting white-collar pay on a locality basis? 

— changing certain features of the Federal wage system for 

blue-collar workers to provide much more accurate 

comparability with locally prevailing rates? 

— changing Federal premium pay laws to make them more 

consistent with the Fair Labor Standards Act and private 

sector practices; and 

— providing the executive branch with additional pay 

flexibility to recruit and manage a high-quality work 

force. 

The above components are included in legislation proposed by the 

previous administration. In addition, this Administration will 

propose establishing the Federal compensation comparability 

standard at 94% of average non-Federal compensation (including 

benefits), thereby recognizing those aspects of Federal 

employment that make it more attractive than many comparably-paid 

jobs in the private sector. 

Enactment of these proposals is expected to result in a whitecollar pay increase in October 1981 of approximately 4.8%. A 

final decision on the level of the October 1981 pay increase is 

made in the late summer after Presidential review of the 

recommendations of the President's Compensation Agent and the 

Federal Employees Compensation Council and after a review of the 

prevailing economic conditions. 

The President has concluded that the increases in Federal 

executive salaries proposed in the January budget should be 

deferred because current economic conditions require that 

substantial budget reductions be achieved. However, the 

President is deeply concerned about the diminishing ability of 

the Federal Government to attract and retain high caliber 

executives. The Administration will, therefore, work with the 

Congress in developing other ways to address this issue before 

the next report of the quadrennial Commission on Executive, 

Legislative, and Judical Salaries, which is due in 1984. 

The allowance for civilian agency pay raises was estimated in 

January with the assumption that agencies would absorb 30% of the 

cost of these raises. The absorption rate has been increased to 

40%. These changes would reduce 1982 allowances by $0.2 billion 

in budget authority and $0.1 billion in outlays from the January 

levels. 

The contingency allowance for unforeseen requirements has been 

reduced to $1.5 billion in budget authority and $1.0 billion in 

outlays for 1982 through 1986. It is expected that these levels, 

in addition to the anticipated savings discussed below, will be 

adequate to fund any unforeseen requirements. 

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The Administration is committed to improving the management of 

Federal Government activities. This is already underway. The 

President has placed a complete freeze on Federal hiring and has 

ordered limits on procurement of office equipment, consulting 

services, and Government travel. For 1982 and beyond, every 

aspect of Federal management and administrative practice will be 

evaluated. In particular, the Administration expects substantial 

savings from improvements in administrative practices designed to 

increase the level of competition in the procurement process and 

to collect money owed to the Federal Government on a more timely 

basis. 

It is the general policy of the Administration to rely, whenever 

possible, on the competitive private sector to supply the 

products and services the Federal Government needs. The Office 

of Federal Procurement Policy is, therefore, working with 

agencies to: 

— increase competition in the procurement of goods and 

services and in the acquisition of major systems? 

— increase agency compliance with OMB circular A-76, which 

requires agencies to determine which commercial and 

industrial type activities could be performed more 

efficiently through contracts with private firms? 

— curtail the use of consulting services? and 

improve other acquisition programs such as the use of 

commercial distribution systems. 

The Administration is developing ways to improve the collection 

of tax and loan payments owed to the Government and overpayment 

of benefits. The accounting and servicing, collection, and 

liquidation functions related to debt management can be handled 

more efficiently through private contractors who have the 

necessary training and expertise than through hiring or training 

additional Federal personnel. The use of contractors for these 

services would increase collections and decrease the number of 

Federal employees needed for debt management and collection. 

The Administration also plans to review administrative practices 

under the Davis-Bacon and Service Contract Acts. The principal 

objective is to ensure that prevailing wage determinations made 

by the Department of Labor under these Acts reflect actual wages 

paid in the localities where Federal contracts are performed. 

Previous studies have indicated that substantial savings could be 

achieved by revising current administrative practices. These 

savings and the anticipated savings due to changes in the black 

lung disability trust fund, which are discussed in the income 

security function, are estimated to reduce the contingency for 

other requirements by $30 million in 1981 and by $528 million in 

1982. 

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950: UNDISTRIBUTED OFFSETTING RECEIPTS 

($ billions) 

Actual 

1980 

Estimate 

1981 1982 

Budget Authority and Outlays 

January budget -

Reestimates and revised economic 

assumptions: 

Employer share, employee retirement. 

Interest received by trust funds 1/, 

Rents and royalities on the Outer 

Continental Shelf 

Policy reductions: 

Rents and royalities on the Outer 

Continental Shelf 

Revised budget 

-21.9 -27.8 -31.9 

* 

0.3 

-1.6 

0.1 

0.8 

-0.4 

-0.2 -0.7 

-21.9 -29.3 -32.0 

1/ Includes decreases due to lower interest rate 

assumptions offset by increases due to higher trust fund 

balances. 

*50 million or less 

The estimates of undistributed offsetting receipts for 1981 and 

1982 have increased since January. These increases reduce budget 

authority and outlays by $1.5 billion in 1981 and $0.2 billion in 

1982. 

Interest received by trust funds.—Revised interest rate 

assumptions have lowered the estimates of interest received by 

trust funds in both 1981 and 1982. These decreases are partially 

offset by the effects of higher trust fund balances, resulting 

from the Administration's policy reductions for certain trust 

fund outlays. These outlay reductions increase trust fund 

balances and thereby increase trust fund investment in Treasury 

securities. 

Rents and royalties on the Outer Continental Shelf.—The Outer 

Continental Shelf oil and gas leasing schedule will be revised as 

quickly as is possible in accordance with the requirements of the 

OCS Lands Act. A major objective is to shorten the time needed 

to start exploratory drilling in all OCS areas. Efforts will be 

made to streamline and shorten the OCS sale preparation process 

while preserving adequate protection of environmental values and 

the public's proprietary interest. The schedule revision is 

expected to increase OCS receipts by $0.2 billion in 1981 and 

$0.7 billion in•1982. In addition, rents and royalities on the 

Outer Continental Shelf are expected to increase by $1.6 billion 

in 1981 and $0.4 billion in 1982 due to technical reestimates and 

revised oil price projections. 

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Part 4 

BUDGET AUTHORITY AND OUTLAYS BY FUNCTION: 1983-1986 

The longer-range budget outlook is the result of past and present 

budget decisions as well as projected economic and demographic 

trends. The longer-range numbers are by their nature preliminary 

because they include substantial budget authority and outlays for 

existing programs that the Administration intends to reduce or 

eliminate in order to meet its spending and deficit/surplus 

targets. 

The economic assumptions that are used for the budget projections 

are presented in Part 2. They project downward trends for 

inflation, interest rates, and unemployment, which will all help 

restrain the growth in budget outlays. However, the demographic 

trends — especially the aging of the population in the next 10 

years — will help increase budget costs, especially for 

retirement and health programs. Moreover, essential tax 

reductions are planned for three consecutive years. The net 

result of these trends is that excess outlays of $30 billion for 

1983, $44 billion for 1984, $44 billion for 1985, and $43 billion 

for 1986 are being temporarily carried in the out-year budget 

projections pending the presentation of specific policy measures 

to eliminate them. 

These savings measures are now being developed and planned, and 

will be transmitted to the Congress at the earliest possible date 

and on a continual basis. Illustrative options under 

consideration include: 

— development of fundamental and comprehensive health care 

financing reforms, which would reduce health care 

inflation; 

— more efficient delivery of veterans health services; 

— development of alternative ways of financing strategic 

petroleum reserves; 

— improved efficiency in the many Defense Department 

programs; 

— reduction in error rates in income transfer programs; 

reevaluation of the housing subsidy programs; 

better coordination of programs that benefit specific 

groups of people such as Indians and miqrant workers; 

reform of military and civilian retired pay so that 

people who have been retired for a while would not 

receive substantially more than people at their same 

grade level who have just retired; 

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— reconsideration of how Federal annuities are determined 

in order not to reward disproportionately people who 

worked for a few years at high salary levels? 

— review of the Federal credit and loan guarantee programs 

with particular attention on improved debt collection 

and forebearance policies; 

— change in the structure of the Northeast rail system to 

ensure a private sector solution; 

— imposition of further user charges where a restricted 

group of people benefit disproportionately from the 

Government service, such as specialized weather 

services; 

— examination of the present Federal stockpiles to see if 

further disposals of non-critical commodities can be 

made; 

— elimination of overlapping or redundant subsidies and 

benefits; 

— deletion of programs that have objectives which the 

private sector can meet if disincentives caused by 

Government regulations or actions are removed; 

— termination of programs which the private sector or 

State or local governments can perform better or at 

lower cost; 

— exploration of ways to reduce or minimize certain 

interest subsidies by recovering their value from the 

beneficiaries; and 

— examination of the relative changes in the size of the 

Federal and State and local sectors, and how growth in 

the public sector in general can be efficiently shared 

among the three levels of government. 

The combined effects of the revised economic outlook, substantial 

upward technical reestimates, and the President's budget reform 

plan are shown in Table 14. In comparison to the January budget 

estimates, the revised budget outlay estimates are lower by $55.5 

billion in 1983 and $95.6 billion by 1986. Despite the 

substantial reductions underlying the revised long-range 

estimates, the Administration will propose additional savings in 

future budgets. When combined with the projected receipts and 

spending levels resulting from the proposals in this document, 

these further proposals would produce a balanced budget by 1984. 

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Table 14.—CHANGES FROM JANUARY BUDGET 

TO REVISED BUDGET, 1983-1986 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 892.0 962.7 1047.2 1139.1 

Change -51.3 -62.2 -72.0 -78.9 

Revised budget 840.7 900.5 975.2 1060.2 

Outlays 

January budget 817.3 890.3 967.9 1050.3 

Change -55.5 -75.8 -80.2 -95.6 

Revised budget 761.8 814.4 887.7 954.7 

Additional savings to be 

proposed -29.8 -44.2 -43.7 -42.7 

Target outlay ceiling 732.0 770.2 844.0 912.0 

Receipts 

January budget 809.2 922.3 1052.6 1188.5 

Change -100.1 -151.6 -202.7 -248.3 

Revised budget 709.1 770.7 849.9 940.2 

Memorandum 

Surplus or deficit under target 

outlay ceiling -22.9 0.5 5.9 28.2 

The spending targets provide sufficient funds to continue support 

for the well established programs developed over the years that 

provide an essential social safety net. Under the Administration 

targets, the share of budget resources devoted to the social 

safety net would increase from an estimated 37% in 1981 to 39% by 

1986. At the same time, our Nation's defenses would be 

modernized and fortified. The budget share devoted to national 

defense would increase from 25% in 1981 to 38% by 1986. 

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Table 15.—BUDGET OUTLAY TARGET SHARES, 1981 AND 1986 

(percent) 

1981 1986 

National defense 24.7 37.6 

Nondefense: 

Social safety net 36.8 39.0 

Net interest 9.8 6.9 

All other 28.6 16.6 

Subtotal, Nondef ense 75 . 3 62 . 4 

Target outlay ceiling 100.0% 100.0% 

The projections also include the Administration's initiatives to 

redefine the role of the Federal Government in relation to States 

and localities. The major proposals in this area are the several 

grant consolidations, described in Part 3. Additional 

information on grants to State and local governments is provided 

in Appendix A. 

In addition to the savings resulting from specific program 

reductions described in Part 3, the revised budget projections 

for discretionary nondefense programs provide no funds during 

1983-1986 to cover future inflation. This results in across-theboard reductions in real resources for these programs, and will 

provide an incentive to increase efficiency and costconsciousness . 

Summary tables of long-range projections by various categories 

appear in Part 5. Appendix B and Appendix C provide projections 

of proposed increases and decreases in budget authority and 

outlays for 1981-1986. 

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050: NATIONAL DEFENSE 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 228.6 258.0 289.7 324.1 

Change 31.0 36.9 43.3 50.2 

Revised budget 259.6 294.9 333.0 374.3 

Outlays 

January budget 210.4 237.8 267.8 299.5 Change 15.7 17.8 36.1 43.2 

Revised budget 226.0 255.6 303.9 342.7 

In comparison to the January budget projections, budget authority 

for national defense is now projected to be $31.0 billion higher 

in 1983 and $50.2 billion higher by 1986. Outlays are projected 

to be higher by $15.7 billion in 1983 and $43.2 billion by 1986. 

These increases are the net differences between substantial 

increases in funding necessary to improve our defense 

capabilities, lower costs due to lower projected rates of 

inflation, and reductions and economies in civilian pay and other 

areas noted in Part 3. 

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150: INTERNATIONAL AFFAIRS 

(in billions of dollars) 

Budget Authority 

January budget 

Change 

Revised budget 

Outlays 

January budget Change 

1983 1984 1985 1986 

18.4 

-0.7 

20.1 

-3.8 

21.3 

-5.2 

22.4 

-6.3 

17.7 16.3 16.1 16.1 

12.9 

-1.1 

13.6 

-1.4 

14.5 

-2.3 

15.3 

-3.1 

Revised budget 11.8 12.2 12.2 12.3 

In comparison to the January budget projections, budget authority 

for international affairs is now projected to be $0.7 billion 

lower in 1983 and $6.3 billion lower by 1986. Outlays are 

projected to be $1.1 billion lower in 1983 and $3.1 billion lower 

by 1986. These reductions are the net result of reestimates, 

proposed reductions, and a policy increase for international 

security assistance discussed above in Part 3. 

The decisions to reduce foreign development assistance programs, 

payments of international organization assessments, and ExportImport Bank lending authority result in significant reductions 

from the January projections, and make room for critical 

increases for security assistance. 

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250: GENERAL SCIENCE, SPACE, AND TECHNOLOGY 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 8.8 8.4 8.0 7.7 

Change -1.1 -1.3 -1.1 -1.0 

Revised budget 7.7 7.1 6.9 6.8 

Outlays 

January budget 8.3 8.3 8.0 7.8 Change -1. 0 -1. 2 -1. 2 -1.1 

Revised budget 7.3 7.2 6.8 6.7 

In comparison to the January budget projections, budget authority 

for general science, space and technology is now projected to be 

$1.1 billion lower in 1983 and $1.0 billion lower by 1986. 

Outlays are projected to be $1.0 billion lower in 1983 and $1.1 

billion lower by 1986. These reductions are the result of 

reestimates and proposed reductions and deferrals discussed above 

in Part 3. 

Proposed changes in the scope of National Science Foundation 

activities reduce outlays by $324 million in 1983 and by $462 

million in 1986. Deferral of construction in the Department of 

Energy's general science programs results in outlays savings of 

$42 million in 1982, rising to $83 million by 1986. Deferral of 

previously planned National Aeronautics and Space Administration 

space and general support activities reduces estimated outlays by 

$631 million in 1983, and $592 million by 1986. 

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270: ENERGY 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 12.7 10.8 11.5 15.7 

Change -3.6 -2.9 -2.9 -3.2 

Revised budget 9.1 8.0 8.6 12.5 

Outlays 

January budget 12.4 11.1 10.9 13.0 Change -3 . 2 -3 .4 -2 . 9 -3 .0 

Revised budget 9.2 7.7 8.0 10.0 

In comparison to the January budget projections, budget authority 

for energy is now projected to be $3.6 billion lower in 1983 and 

$3.2 billion lower by 1986. Outlays are projected to be $3.2 

billion lower in 1983 and $3.0 billion lower by 1986. These 

reductions are the net result of reestimates and proposed 

reductions discussed above in Part 3. These include reduced 

subsidies for synthetic and alcohol fuels and demonstration and 

development programs for fossil and solar energy, termination of 

the Solar Energy and Energy Conservation Bank, and elimination of 

many information and regulatory programs of the Department of 

Energy. 

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300: NATURAL RESOURCES AND ENVIRONMENT 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January estimate 

Change 

15.3 16.2 16.4 16.4 

-4.7 -5.9 -6.6 -6.9 

Revised budget 10.6 10.3 9.8 9.5 

Outlays 

January estimate 

Change 

15.0 15.5 15.4 15.3 

-4.0 -5.7 -6.2 -6.1 

Revised budget 11.0 9.7 9.2 9.1 

In contrast to the January budget projections, budget authority 

for the natural resources and environment function is now 

projected to be $4.7 billion lower in 1983 and $6.9 billion lower 

by 1986. Outlays are projected to be $4.0 billion lower in 1983 

and $6.1 billion lower by 1986. These reductions are the net 

result of reestimates and proposed reductions discussed above in 

Part 3. The major reductions in 1983-1986 include continuation 

of the moratorium on Federal recreation and conservation land 

acquisition begun in 1981 and termination of funding for State 

and urban recreation and historic preservation grants. Changes 

also include increased receipts and increased resources for 

existing national parks to provide necessary facilities to 

protect the health and safety of visitors and to preserve park 

areas from damage. 

The Administration will propose legislation for two major user 

charge programs in the water resources area. The first will 

sufficiently increase inland waterways fees to provide recovery, 

starting in 1982, of the entire cost of operating and maintaining 

existing waterways (discussed in Parts 2 and 3). This 

legislation will also provide for new waterway cost recovery in 

the future. The second user charge will recover, through 

proprietary receipts, the cost of dredging and maintaining deep 

water channels leading to our seaports, except for that portion 

allocated to Government use. Together, these proposals will 

increase revenues by $2.1 billion over the 1983-86 period, 

offsetting costs otherwise borne by the general taxpayer. 

Increased shared revenue payments to States, as a result of 

mineral leasing acceleration, are included in the general purpose 

fiscal assistance function. 

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350: AGRICULTURE 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January estimate 

Change 

5.6 4.9 

-0.3 

5.3 

-0.4 

5.6 

-0.6 

Revised budget 5.7 4.6 4.9 5.1 

Outlays 

January estimate 

Change 

4.8 

-0.8 

5.2 

-1.0 

5.5 

-1.1 

Revised budget 3.9 4.0 4.2 4.4 

In comparison to the January budget projections, budget authority 

for the agriculture function is now projected to be $0.2 billion 

higher in 1983 and $0.6 billion lower by 1986. Outlays are 

projected to be $0.5 billion lower in 1983 and $1.1 billion lower 

by 1986. These reductions are the result of proposed reductions 

in the dairy price support and other commodity price support 

programs discussed above in Part 3. 

The reductions in price support programs in 1983-1986 reflect the 

continued impact of the 1981-1982 proposed reductions as well as 

anticipated revisions to price support operations as part of the 

Administration's 4-year farm program to be transmitted to the 

Congress later this year. 

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370: COMMERCE AND HOUSING CREDIT 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 12.3 13.4 14.1 15.1 

Change -6.9 -7.6 -7.8 -8.7 

Revised budget 5.4 5.8 6.3 6.4 

Outlays 

January budget 7.9 9.2 9.8 10.5 Change -4.5 -6.1 -7.6 -8.4 

Revised budget 3.4 3.1 2.2 2.1 

In comparison with the January budget projections, budget 

authority for commerce and housing credit is now projected to be 

$6.9 billion lower in 1983 and $8.7 billion lower by 1986. 

Outlays are projected to be $4.5 billion lower in 1983 and $8.4 

billion lower in 1986. These reductions are the net result of 

reestimates, revised economic assumptions, and proposed 

reductions discussed above in Part 3. 

The major reductions include: 

— discontinuation of the tandem mortgage purchase program 

of GNMA; 

a reduction in the limitation for FHA mortgage insurance 

and loan guarantee commitments; 

— a reduction in direct loan obligations for the rural 

housing insurance fund; 

— a reduction in subsidies to the U.S. Postal Service; 

— withdrawal of the previous administration's proposal to 

make 30% of the investment tax credit refundable; 

elimination of funding for the National Consumer 

Cooperative Bank; and 

substantial reductions in funding and staff in the 

Federal Trade Commission's Bureaus of Consumer 

Protection and Competition. 

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400: TRANSPORTATION 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January estimate 27.2 28.3 29.4 30.5 

Change -6.0 -7.0 -8.0 -8.1 

Revised budget 21.2 21.3 21.4 22.4 

Outlays 

January estimate 24.9 26.6 27.7 29.1 

Change -4.5 -5.6 -6.9 -7.5 

Revised budget 20.4 21.0 20.9 21.7 

In comparison to the January budget projections, budget authority 

for the transportation function is now projected to be $6.0 

billion lower in 1983 and $8.1 billion lower by 1986. Outlays 

are projected to be $4.5 billion lower in 1983 and $7.5 billion 

lower by 1986. These reductions are the net result of 

reestimates and proposed reductions discussed above in Part 3 as 

well as additional policy changes occurring in 1983-1986. 

The major reductions in 1983-1986 would eliminate or stretch out 

lower priority Federal highway projects and would refocus Federal 

highway program resources on the interstate and primary systems. 

A reduction in mass transit capital grants, starting in 1982, 

reflects a moratorium on new Federal commitments for building 

transit rail lines or systems, whereas the phaseout of mass 

transit operating subsidies by 1985 is part of a general effort 

to reduce dependency on government subsidy. 

While Coast Guard funding continues at real rates of growth 

comparable to those projected in the Carter budget, a major study 

of Coast Guard roles and missions being conducted in 1981 may 

reveal ways to achieve future savings in the methods used to 

provide the types of services and defense preparedness now 

furnished by the Coast Guard. 

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450: COMMUNITY AND REGIONAL DEVELOPMENT 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 9.3 9.4 9.7 10.0 

Change -1. 9 -2 . 0 -2 .1 -2 .1 

Revised budget 7.4 7.4 7.6 7.8 

Outlays 

January budget 8.9 9.2 9.5 9.6 Change -1.3 -1.8 -2.4 -2.5 

Revised budget 7.6 7.3 7.2 7.1 

In comparison to the January budget projections, budget authority 

for the community and regional development function is now 

projected to be $1.9 billion lower in 1983 and $2.1 billion lower 

by 1986. Outlays are projected to be $1.3 billion lower in 1983 

and $2.5 billion lower by 1986. These reductions are the result 

of reestimates and proposed reductions discussed in Part 3. The 

major reductions include: 

integration of the community development block grant and 

the urban development action grant programs into a more 

efficient and flexible grant mechanism; 

— termination of the rehabilitation loan fund; 

— a reduction in direct loan obligations of the Farmers 

Home Administration; 

— termination of the Economic Development Administration 

and the Regional Development Commissions of the 

Department of Commerce, and the non-highway programs of 

the Appalachian Regional Commission; 

termination of the coastal and inland energy impact 

programs; and 

— reductions in funding for disaster assistance. 

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500: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 38.0 39.7 41.3 42.7 

Change -13.3 -14.9 -16.6 -17.9 

Revised budget 24.8 24.8 24.7 24.8 

Outlays 

January budget 36.5 38.6 40.3 41.7 Change -11.7 -14.6 -16.2 -17.6 

Revised budget 24.7 24.0 24.0 24.1 

In comparison to the January budget projections, budget authority 

for education, training, employment, and social services is now 

projected to be $13.3 billion lower in 1983 and $17.9 billion 

lower by 1986. Outlays are projected to be $11.7 billion lower 

in 1983 and $17.6 billion lower by 1986. These reductions are 

the net result of reestimates, revised economic assumptions, and 

proposed reductions discussed in Part 3. 

The major reductions involve: elimination of the two CETA public 

service employment programs by the end of fiscal year 1981; 

consolidation of 44 categorical education grant programs into two 

block grants; consolidation of CETA youth programs with general 

purpose CETA training grants; and funding of numerous social and 

community services activities under one block grant. In 

addition, the Administration proposes improved targeting of 

student financial assistance provided by the Pell grant program 

on the truly needy. 

For education programs, the current long-range estimates are 

significantly below the January estimates. In 1983, budget 

authority for education programs is estimated to be $4.5 billion 

below the January estimates, and $3.6 billion lower in outlays. 

By 1986, the differences from the January estimates are $6.2 

billion and $5.9 billion, respectively. 

For training and employment programs, the Administration 

proposals reduce 1983 budget authority by $6.1 billion and 

outlays by $5.8 billion below the January estimates. By 1986, 

the savings from these proposals are $8.3 billion and $7.9 

billion, respectively. 

For social and community services programs, the Administration's 

block grant proposal would reduce 1983 budget authority by $1.7 

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billion and outlays by $2.0 billion below the January estimates 

for programs in this function. By 1986, the savings from this 

proposal are $2.2 billion in budget authority and $2.5 billion in 

outlays. Additional savings result from consolidating Federal 

management, research and demonstration, and administrative 

activities previously undertaken along categorical lines. 

Withdrawal of support for the previous administration's proposed 

tax credit for non-profit institutions reduces budget authority 

and outlays by $0.3 billion in 1983 and by $0.5 billion in 1986. 

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550: HEALTH 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 96.1 107.5 121.7 139.0 

Change -5.2 -8.5 -12.4 -17.0 

Revised budget 90.9 99.0 109.3 122.0 

Outlays 

January budget 84.5 95.4 107.1 119.9 Change -2.9 -5.1 -8.4 -13.2 

Revised budget 81.6 90.3 98.7 106.7 

In comparison to the January budget projections, budget authority 

for the health function is now projected to be $5.2 billion lower 

in 1983 and $17.0 billion lower by 1986. Outlays are projected 

to be $2.9 billion lower in 1983 and $13.2 billion lower by 1986. 

These changes are the net result of reestimates, revised economic 

assumptions, proposed reduction, and reforms that the 

Administration expects to institute to establish a more 

competitive market in the health care industry. The interim 

reform of medicaid achieves sizeable outlay savings in all years, 

rising from $2 billion in 1983 to $5 billion in 1986. 

The health service and prevention grant consolidations are 

described in Part 3. By allowing States the flexibility to 

design comprehensive services programs according to their own 

priorities, publicly funded services would become more effective 

and less costly. 

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600: INCOME SECURITY 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 310.4 332.4 362.8 389.8 

Change -26.3 -28.9 -32.6 -33.5 

Revised budget 285.2 303.5 330.2 356.3 

Outlays 1/ 

January budget 284.0 309.1 337.5 364.8 

Change -23.7 -32.0 -41.7 -51.5 

Revised budget 260.2 277.1 295.7 313.3 

1/ Estimated OASI benefit outlays for 1983 through 1986 are 

contained in these amounts although under current law and 

economic assumptions, the OASI trust fund will be unable to make 

timely benefit payments. The Administration is currently 

developing a plan for this and longer-range social security 

financing issues, which will be submitted to Congress in the near 

future. The benefit outlays are displayed here under the 

assumption firmly held by this Administration that neither the 

Congress nor the Administration will allow any interruption in 

the timely payment of social security benefits. 

Budget authority and outlays for income security programs are 

estimated to be substantially lower during 1983-1986 than 

estimated in January. The net effect of revised economic 

assumptions, reestimates and proposed reductions reduce budget 

authority by $26.3 billion in 1983 and $33.5 billion by 1986. 

Outlay estimates are reduced by $23.7 billion in 1983 and $51.5 

billion by 1986. As discussed in Part 3, the Administration has 

proposed reductions in the following program areas: general 

retirement and disability insurance, Federal employee retirement 

and disability, unemployment compensation, housing assistance, 

food and nutrition assistance, and other income security 

programs. 

However, the proposed reductions in income security do not affect 

the programs that comprise an essential social safety net of 

income support. For example, the basic retirement and disability 

benefits under the social security program are not affected but 

many of the ancilliary benefits that have been added in recent 

years are either eliminated or reduced. 

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Th e Administration is also proposing a hardship assistance block 

grant, consolidating energy and related assistance, to aid 

families experiencing emergencies. 

In addition, changes in the areas of Federal employee retirement 

and disability, housing assistance, and food and nutrition 

assistance have rather small changes in 1981 and 1982 compared 

with the substantial changes through 1983-86. 

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700: VETERANS BENEFITS AND SERVICES 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 27.0 29.2 30.7 31.7 

Change -1.2 -1.9 -2.6 -3.4 

Revised budget 25.7 27.3 28.1 28.3 

Outlays 

January budget 26.2 28.0 30.3 31.2 Change -1.4 -2.0 -2.6 -3.3 

Revised budget 24.8 26.0 27.6 27.9 

In comparison to the January budget projections, budget authority 

for veterans benefits and services is now projected to be $1.2 

billion lower in 1983 and $3.4 billion lower by 1986. Outlays 

are projected to be $1.4 billion lower in 1983 and $3.3 billion 

lower by 1986. These reductions are the result of revised 

economic assumptions and proposed reductions discussed in Part 3. 

Lower proposed cost of living adjustments for service-connected 

compensation, reflecting lower projected inflation, reduce budget 

authority and outlays by $0.3 billion in 1983 and $1.2 billion by 

1986. Proposed restrictions on the growth of the VA medical care 

program reduce budget authority and outlays by an additional $0.6 

billion in 1983 and $1.3 billion by 1986. Other major reductions 

include a decrease in the interest subsidy now given to veterans 

receiving insurance loans, the withdrawal of a proposal by the 

previous administration to extend for 2 years the period of 

eligibility for certain readjustment benefits for needy and 

educationally disadvantaged Vietnam-era veterans, and some 

cancellations and delays in the VA hospital construction 

programs. 

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750: ADMINISTRATION OF JUSTICE 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January estimate 4.9 5.1 5.3 5.5 

Change -0.8 -1.0 -1.2 -1.4 

Current estimate 4.1 4.1 4.1 4.0 

Outlays 

January estimate 4.9 5.1 5.2 5.4 Change -0.8 -1. 0 -1. 2 -1. 5 

Current estimate 4.1 4.0 4.0 3.9 

In comparison with the January budget projections, budget 

authority for the administration of justice function is now 

projected to be $0.8 billion lower in 1983 and $1.4 billion lower 

by 1986. Outlays are projected to be $0.8 billion lower in 1983 

and $1.5 billion lower in 1986. These reductions are the net 

result of reestimates and proposed reductions discussed above in 

Part 3. 

The Administration will propose to make services currently 

provided by the Legal Services Corporation and the Office of 

Juvenile Justice and Delinquency Prevention eligible activities 

under a social services block grant. This is discussed in the 

education, training, employment, and social services section of 

Part 3. The Administration also proposes to make significant 

personnel reductions in the agencies in this function. 

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800: GENERAL GOVERNMENT 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 

Change 

5.6 5.5 

-0.5 

5.6 

-0.6 

5.6 

-0.8 

Revised budget 5.3 5.0 5.0 4.8 

Outlays 

January budget 

Change 

5.2 5.4 

-0.6 

5.3 

-0.8 

5.2 

-0.8 

Revised budget 4.9 4.8 4.5 4.3 

Budget authority and outlays for the general government function 

are $0.3 billion lower than the levels in the January budget for 

1983 and $0.8 billion lower by 1986. These reductions are 

primarily due to the reductions in Internal Revenue Service 

personnel discussed in Part 3. 

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850: GENERAL PURPOSE FISCAL ASSISTANCE 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January estimate 7.4 7.6 7.8 8.0 

Change ; -0.7 -0.8 -0.8 -0.9 

Current estimate 6.8 6.9 7.0 7.1 

Outlays 

January estimate 7.5 7.6 7.8 8.0 

Change -0.7 -0.9 -1.0 -1.1 

Current estimate 6.8 6.7 6.8 6.9 

In comparison to the January budget projections, budget authority 

for general purpose fiscal assistance is now projected to be $0.7 

billion lower in 1983 and $0.9 billion lower by 1986. Outlays 

are projected to be $0.7 billion lower in 1983 and $1.1 billion 

lower by 1986. These reductions are the net result of 

reestimates, proposed reductions, and a policy increase discussed 

above in Part 3. 

The major reductions are the withdrawal of the proposed tax 

credit payments to State and local governments and the proposed 

phasing out by 1984 of capital improvement loans to the District 

of Columbia. 

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900: INTEREST 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January budget 91.7 89.0 87.5 88.2 

Change -7.0 -4.2 -4.1 -4.5 

Revised budget 84.7 84.9 83.4 83.7 

Outlays 

January budget 91.7 89.1 87.5 88.2 Change -7.0 -4.2 -4.1 -4.5 

Revised budget 84.7 84.9 83.4 83.7 

Budget authority and outlays for the interest function are 

estimated to be $7.0 billion lower in 1983 and $4.5 billion lower 

in 1986 than estimated in the January budget. These lower budget 

authority and outlay levels for the interest function in 1983-86 

are due to lower projected interest rates and lower borrowing 

requirements. The large decreases in interest on the public debt 

are partially offset by decreases in interest received on loans 

made to the Federal Financing Bank. 

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920: ALLOWANCES 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority 

January estimate 6.8 10.3 12.8 15.4 

Change -2.1 -3.6 -4.0 -4.5 

Current estimate 4.6 6.6 8.7 10.8 

Outlays 

January estimate 5.7 9.2 11.7 14.3 Change -1.6 -3.2 -3.6 -4.1 

Current estimate 4.0 6.0 8.1 10.1 

Budget authority and outlays for the allowance function are lower 

than the January budget levels by $2.1 billion and $1.6 billion 

respectively in 1983. By 1986 budget authority is $4.5 billion 

lower than the January budget projections and outlays are $4.1 

bi11ion lower. 

The changes in Federal employee compensation discussed in Part 3 

would decrease the allowance for civilian agency pay raises 

included in this function. The contingency for other 

requirements has been reduced to $1.5 billion in budget authority 

and $1.0 billion in outlays in 1983-1986 to reflect anticipated 

savings due to the improvements in contracting and procurement 

practices and in debt collection discussed in Part 3. 

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950: UNDISTRIBUTED OFFSETTING RECEIPTS 

(in billions of dollars) 

1983 1984 1985 1986 

Budget Authority and Outlays 

January estimate 

Change 

Current estimate 

-34.1 -33.2 -33.5 -34.1 

-0.8 -4.2 -6.2 -8.2 

-34.8 -37.4 -39.7 -42.3 

Undistributed offsetting receipts are $0.8 billion higher in 1983 

than the January estimates and $8.2 billion higher by 1986. 

These increases in receipts reduce budget authority and outlays. 

The revision of offshore oil and gas leasing schedules that the 

President is seeking would increase rents and royalities on the 

Outer Continental Shelf and therefore reduce budget authority and 

outlays. Lower projected interest rates reduce interest received 

by trust funds. This decrease is offset by increased investment 

in Treasury securities resulting from higher trust fund balances. 

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Part 5 

SUMMARY TABLES 

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Table 16.—BUDGET RECEIPTS BY MAJOR SOURCE 

(in billions of dollars) 

Actual Revised Budget Estimates 

1980 1981 1982 1983 1984 1985 

Individual income taxes .1 277 .4 288 .2 311 .0 339 .6 383 .4 

Corporation income taxes 64 .6 64 .7 62 .4 68 .5 71 .4 71 .4 

Social insurance taxes and 

.7 186 .4 214 .5 239 .9 263 .7 295 .9 

.3 43 .6 55 .7 56 .9 58 .4 59 .9 

Estate and gift taxes .4 6 .9 7 .6 8 .5 9 .4 10 .4 

Customs duties .2 7 .4 7 .8 8 .2 8 .7 9 .0 

Miscellaneous receipts 12 .7 13 .8 14 .2 16 . 1 19 .6 19 .8 

Total budget receipts 520 .0 600 .3 650 .3 709 .1 770 .7 849 .9 

1986 

439.5 

72.8 

327.4 

60.0 

11.3 

9.2 

20.0 

940.2 

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Table 17.—ESTIMATED EFFECT OF ADMINISTRATIVE ACTIONS AND 

PROPOSED LEGISLATION ON RECEIPTS, 1981-1986 

(in billions of dollars) 

Revised Budget Estimates 

1981 1982 1983 1984 1985 1986 

Receipts under current law 608.8 701.6 806.2 915.5 1028.1 1153.9 

Extension of highway trust fund taxes 

schedule to expire September 30, 1984 — — — — — — 3.9 4.0 

Receipts on a current services basis 608.8 701.6 806.2 915.5 1032.0 1157 .9 

Proposed legislation and administrative 

actions other than extensions: 

Individual income tax reductions -6.4 -44.2 -81.4 -118.1 -141.5 -162.4 

Depreciation reform -2.5 -9.7 -18.6 -30.0 -44.2 -59.3 

Taxation of Federal employee injury 

compensation * 0.1 0.1 0.1 0.1 0.1 

User charges 0.2 2.1 2.4 2.7 3.1 3.4 

Other proposals 1/ * 0.4 0.5 0.5 0.5 0.5 

Total, Proposed legislation and 

administrative actions other than 

extensions -8.6 -51.3 -97.1 -144.8 -182.1 -217.7 

Total budget receipts 600.3 650.3 709.1 770.7 849.9 940.2 

1/ These proposals include an increase in railroad retirement payroll taxes and 

increases in passport and visa fees. 

* $50 million or less. 

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Federal Reserve Bank of St. Louis
Table 18.--COMPOSITION OF BUDGET OUTLAYS, 1980-1986 

(dollar amounts in billions) 

Actual Revised Budget Estimates 

1980 1981 1982 1983 1984 1985 1986 

National defenses 

Direct Federal payments 

for individuals 11.9 

Grants to States and localities 0.1 

Other 123.8 

Subtotal, National defense 135.9 

Nondefense: 

Direct Federal payments 

for individuals 237.0 

Payments for individuals through 

States and localities 34.2 

All other grants to States 

and localities 57.2 

Net interest 52.5 

Other 63.0 

13.8 15 .3 17 .1 18.7 20. 2 21 .6 

0.1 0 .1 0 .1 0.1 0. 1 0 .1 

148.3 173 .4 208 .9 236.9 283. 7 321 .1 

162.1 188 .8 226 .0 255.6 303. 9 342 .7 

278.0 298 .2 323 .8 348.3 374. 6 398 .4 

39.4 39 .1 41 .5 43.5 45. 5 47 .3 

54.9 47 • 2 45 .7 44.3 44. 2 45 .1 

64.1 68 .2 68 .9 67.8 64. 9 62 .8 

56.6 53 .7 55 .8 54.9 54. 8 58 .4 

Subtotal, Nondef ense 443.8 493.1 506.5 535.7 558.8 583.9 612.0 

Total, Revised budget 579.6 655.2 695.3 761.8 814.4 887.7 954.7 

Additional savings to be proposed... -29.8 -44.2 -43.7 -42.7 

Target outlay ceiling 579.6 655.2 695.3 732.0 770.2 844.0 912.0 

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Table 18 (continued) 

Actual 

1980 1981 

Percent of Total Outlays 

National defense: 

Direct Federal payments 

for individuals 2.1 2.1 

Grants to States and localities * * 

Other 21.4 22.6 

Subtotal, National defense 23.4 24.7 

Nondefense: 

Direct Federal payments 

for individuals 40.9 42.4 

Payments for individuals through 

States and localities 5.9 6.0 

All other grants to States 

and localities 9.9 8.4 

Net interest 9.1 9.8 

Other 10.9 8.6 

Subtotal, Nondef ense 76.6 75.3 

Total, Revised budget 100.0 100.0 

Additional savings to be proposed... 

Target outlay ceiling 100.0 100.0 

* 0.05% or less. 

Revised Budget Estimates 

1982 1983 1984 1985 1986 

2.2 * 

24.9 

2.3 * 

28.5 

2.4 * 

30.8 

2.4 

33.6 

2.4 * 

35.2 

27.2 30.9 33 .2 36.0 37.6 

to 

ui 

l 

42.9 44.2 45 .2 44.4 43.7 

5.6 5.7 5 .6 5.4 5.2 

6.8 6.2 5 .7 5.2 4.9 

9.8 9.4 8 .8 7.7 6.9 

7.7 7.6 7 .1 6.5 6.4 

72.8 73.2 72 .6 69.2 67.1 

100.0 104.1 105 .7 105 .2 104.7 

-4.1 -5 .7 -5.2 -4.7 

100.0 100.0 100 .0 100.0 100.0 

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Table 19.---BUDGET AUTHORITY BY FUNCTION 

(in billions of dollars) 

Actual Revised Budget Estimates 

Function 1980 1981 1982 1983 1984 1985 1986 

National defense 145 .8 180 .7 226 .3 259.6 294 .9 333 .0 374.3 

International affairs 15 .5 23 .7 17 .9 17.7 16 .3 16 .1 16.1 

General science, space, and technology.. 6 .1 6 .5 7 .2 7.7 7 .1 6 .9 6.8 

Energy 36 .4 5 .8 9 .0 9.1 8 .0 8 .6 12.5 

Natural resources and environment 13 .1 10 .4 7 .9 10.6 10 .3 9 .8 9.5 

4 .9 5 .6 5 .5 5.7 4 .6 4 .9 5.1 

Commerce and housing credit 10 .5 6 .4 8 .2 5.4 5 .8 6 .3 6.4 

Transportation 20 .2 25 .5 20 .5 21.2 21 .3 21 .4 22.4 

Community and regional development 10 .1 8 .2 7 .3 7.4 7 .4 7 .6 7.8 

Education, training, employment, and 

and social services 30 .6 29 .4 24 .6 24.8 24 .8 24 .7 24.8 

Health 59 .8 71 .3 83 .5 90.9 99 .0 109 .3 122.0 

Income security 224 .2 249 .9 261 .8 284.2 303 .5 330 .2 356.3 

Social security (OASDI) (116 .0)(132 .4)(151 .0) (168.2)(185 .0)(210 .6)(234.2 

Other (108 .2)(117 .5)(110 • 8) (116.0)(118 .5)(119 .6)(122.0 

Veterans benefits and services 21 .2 22 .9 24 .2 25.7 27 .3 28 .1 28.3 

Administration of justice 4 .4 4 .4 4 .2 4.1 4 .1 4 .1 4.0 

General government 4 .6 5 .4 5 .1 5.3 5 .0 5 .0 4.8 

General purpose fiscal assistance 8 .7 6 .2 6 .5 6.8 6 .9 7 .0 7.1 

Interest 64 .5 77 .2 82 .5 84.7 84 .9 83 .4 83.7 

Allowances — — — — 2 .3 4.6 6 .6 8 .7 10.8 

Undistributed offsetting receipts -21 .9 -29 .3 -32 .0 -34.8 -37 .4 -39 .7 -42.3 

Total budget authority 658.8 710.1 772.4 840.7 900.5 975.2 1060.2 

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Table 20.—BUDGET OUTLAYS BY FUNCTION 

(in billions of dollars) 

Actual Revised Budget Estimates 

Function 1980 1981 1982 1983 1984 1985 1986 

National defense 135 .9 162 .1 188 .8 226 .0 255 .6 303 .9 342 .7 

International affairs 10 .7 11 .3 11 .2 11 .8 12 .2 12 .2 12 .3 

General science, space, and technology.. 5 .7 6 .2 6 .9 7 .3 7 .2 6 .8 6 .7 

Energy 6 .3 9 .3 8 .7 9 .2 7 .7 8 .0 10 .0 

Natural resources and environment 13 .8 13 .7 11 .9 11 .0 9 .7 9 .2 9 .1 

Agriculture 4 .8 1 .2 4 .4 3 .9 4 .0 4 • 2 4 .4 

Commerce and housing credit 7 .8 3 .2 3 .1 3 .4 3 .1 2 .2 2 .1 

Transportation 21 .1 24 .0 19 .9 20 .4 21 .0 20 .9 21 .7 

Community and regional development 10 .0 10 .3 8 .1 7 .6 7 .3 7 .2 7 .1 

Education, training, employment, and 

social services 30 .8 30 .6 25 .8 24 .7 24 .0 24 .0 24 .1 

Health 58 .2 66 .7 73 .4 81 .6 90 .3 98 .7 106 .7 

Income security 193 .1 229 .7 241 .4 260 .2 277 .1 295 .7 313 .3 

Social security (OASDI) (117 .1) (137 .8) (154 • 8) (170 .1) (184 .4) (198 .8) (212 .9) 

Other (76 • 0) (91 • 9) (86 .6) (90 • 2) (92 .8) (97 .0) (100 .4) 

Veterans benefits and services 21 .2 22 .4 23 .6 24 .8 26 .0 27 .6 27 .9 

Administration of justice 4 .6 4 .7 4 .4 4 .1 4 .0 4 .0 3 .9 

General government 4 .5 5 .1 5 .0 4 .9 4 .8 4 .5 4 .3 

General purpose fiscal assistance 8 .6 6 .8 6 .4 6 .8 6 .7 6 .8 6 .9 

Interest 64 .5 77 .2 82 .5 84 .7 84 .9 83 .4 83 .7 

Allowances — — - — 1 .8 4 .0 6 .0 8 .1 10 .1 

Undistributed offsetting receipts -21 .9 -29 .3 -32 .0 -34 .8 -37 .4 -39 . 7 -42 .3 

Total revised budget outlays 579 .6 655 .2 695 .3 761 .8 814 .4 887 .7 954 .7 

Additional savings to be proposed - — - — -

— -29 .8 -44 . 2 -43 . 7 -42 . 7 

Target outlay ceiling 579 .6 655 .2 695 .3 732 .0 770 .2 844 • 0 912 .0 

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Table 21.—BUDGET AUTHORITY BY AGENCY 

(in billions of dollars) 

Actual Revised Budget Estimates 

Agency 1980 1981 1982 1983 1984 1985 1986 

Legislative branch 1.3 1.3 1.5 1.6 1.5 1.5 1.5 

The Judiciary 0.6 0.7 0.7 0.7 0.8 0.8 0.8 

Executive Office of the President 0.1 0.1 0.1 0.1 0.1 0.1 0.1 

Funds appropriated to the President.... 12.5 14.0 9.8 10.2 8.6 8.2 7.8 

Agriculture 24.9 26.3 25.9 25.9 25.3 26.0 26.3 

Commerce 3.1 2.4 2.1 2.3 2.3 2.2 2.4 

Defense—Military 142.6 177.1 221.8 254.5 288.9 326.2 367.2 

Defense—Civil 3.3 3.1 3.1 3.1 3.0 2.8 2.9 

13.8 13.5 12 .3 12.1 12.3 12.3 12.6 

10.0 10.5 11.9 12.7 12.0 13 .1 17.6 

Health and Human Services 195.9 226.2 255.3 283.0 307.6 344.1 380.8 

Housing and Urban Development 35.7 32.8 29.0 25.7 25.7 25.1 25.0 

Interior 4.6 3.9 3.4 4.0 4.0 4.1 3.9 

Justice 2.5 2.3 2.3 2.3 2.3 2.2 2.2 

Labor 28.8 32.2 27.9 28.5 28.9 27.6 27.8 

State 2.1 2.3 2.8 2.6 2.6 2.6 2.8 

Transportation 18.2 23.4 19.2 19.8 19.9 19.9 20.8 

Treasury 90.6 86.2 92.9 95.0 95.0 93.3 93.5 

Environmental Protection Agency 4.7 3.0 1.4 3.9 4.0 4.0 3.8 

National Aeronautics and Space 

Administration 5.2 5.5 6.1 6.5 5.9 5.6 5.4 

Veterans Administration 21.2 22.9 24.2 25.7 27.3 28.0 28.2 

Office of Personnel Management 24.9 28.5 30.4 32.9 34.9 36.8 38.4 

Other agencies 34.3 21.1 17.9 17.8 18.5 19.4 19.8 

Allowances 2.3 4.6 6.6 8.7 10.8 

Undistributed offsetting receipts -21.9 -29.3 -32.0 -34.8 -37.4 -39.7 -42.3 

Total budget authority 658.8 710.1 772.4 840.7 900.5 975.2 1060.2 

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Table 22.—BUDGET OUTLAYS BY AGENCY 

(in billions of dollars) 

Actual Revised Budget Estimates 

Agency 1980 1981 1982 1983 1984 1985 1986 

Legislative branch 1.2 1.5 1.4 1.5 1.5 1 .5 1.6 

0.6 0.7 0.7 0.7 0.7 0 .8 0.8 

Executive Office of the President 0.1 0.1 0.1 0.1 0.1 0 .1 0.1 

Funds appropriated to the President.... 7.5 6.1 6.1 6.8 7.1 7 .1 6.9 

Agriculture 24.6 20.7 23 .7 24.0 24.2 24 .8 25 .0 

Commerce 3.8 2.9 2.5 2.4 2.3 2 .2 2.2 

Defense—Military 132.8 158.6 184.8 221.1 249.8 297 .3 336.0 

Defense—Civil 3.2 3.3 3.2 2.9 2.8 2 .6 2.8 

Education 13.1 14.3 12 .4 12.2 11 .7 12 .0 12 .2 

Energy 6.5 10.5 11.1 12.5 11 .6 12 .4 14.7 

Health and Human Services 194.7 227.6 250.7 275 .4 297 .6 321 .6 344.1 

Housing and Urban Development 12 .6 13 .5 14.3 15.7 16.5 16 .4 17.4 

Interior 4.4 4.4 3.3 3.9 3.9 3 .9 3.7 

Justice 2.6 2.6 2.5 2.3 2.2 2 .2 2.1 

Labor 29 .7 35.5 26.7 23 .8 23 .4 22 .7 22.4 

State 1.9 2.2 2.4 2.4 2.4 2 .6 2.7 

Transportation 19.0 22 .0 18.3 19.1 19.7 19 .5 20.2 

Treasury 76.7 87.7 92.6 94.7 94.8 93 .0 93.2 

Environmental Protection Agency 5.6 5.5 5.2 4.4 3.7 3 .6 3.6 

National Aeronautics and Space 

Administration 4.8 5.3 5.9 6.3 6.0 5 .5 5.3 

Veterans Administration 21.1 22.3 23.6 24.8 26 .0 27 .6 27.9 

Office of Personnel Management 15 .1 17.9 19.9 22.3 24.5 26 .6 28.5 

Other agencies 20.0 19.4 14.1 13 .4 13.4 13 .6 13.7 

Allowances 1.8 4.0 6.0 8 .1 10.1 

Undistributed offsetting receipts -21.9 -29.3 -32.0 -34.8 -37.4 -39 .7 -42.3 

Total revised budget outlays 579.6 655.2 695.3 761.8 814.4 887 .7 954.7 

Additional savings to be proposed -29.8 -44.2 -43 .7 -42.7 

Target outlay ceiling 579.6 655.2 695.3 732.0 770.2 844.0 912.0 

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Table 23.—NEW DIRECT LOAN OBLIGATIONS BY AGENCY 

(in billions of dollars) 

On-budget agencies s 

Funds appropriated to the President: 

International security assistance 

International development assistance.... 

Agriculture 

Commerce 

Education 

Energy 

Health and Human Services 

Housing and Urban Development 

Interior 

Labor 

State 

Transportation 

Treasury 

Veterans Administration 

Other independent agencies: 

Export-Import Bank 

National Credit Union Administration.... 

Small Business Administration 

All other independent agencies 

1980 1981 Estimate 1982 Estimate 

Actual January Revised January Revised 

1.3 1.4 0.9 2.0 2.7 

0.4 0.4 0.4 0.5 0.4 

21.5 21.8 21 .0 16.9 13 .3 

0.2 0.2 0.1 0.1 * 

0.7 0.6 0.6 0.8 0.9 

* * * * * 

0.1 0.1 0.1 0.1 0.1 

5.0 3.5 3.4 2.0 5.0 

* * * * * 

* * * * 

* * * * * 

0.2 0.1 0.1 0.2 0.1 

0.1 * 0.1 * 

0.6 0.7 0.6 0.7 0.6 

4.4 5.9 5.1 5.0 ' 4.4 

0.3 2.2 2.1 3.7 3.7 

2.0 3.6 2.8 1.4 1.2 

1.1 1.4 1.3 0.6 0.4 

Subtotal, On-budget agencies 37 .8 42 .1 38 .6 34 .1 32 .9 

Off-budget entities: 

Rural Electrification Administration 1 .2 1 .1 0 .9 1 .1 0 .7 

Federal Financing Bank 22 .2 30 .9 31 .5 24 .8 21 .8 

All other off-budget entities 0 .2 0 . 2 0 . 2 0 . 2 0 .2 

Subtotal, Off-budget entities 23 .6 32 . 2 32 .6 26 . 1 22 . 7 

Total 61 .4 74 .2 71 .2 60 .2 55 .6 

Less loan assets acquired by 

the Federal Financing Bank -12 .1 -16 .6 -16 .2 -8 . 2 -6 .2 

Grand total 49 .3 57 .6 55 .0 52 .0 49 .4 

§50 million or less. 

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Table 24.—NEW LOAN GUARANTEE COMMITMENTS BY AGENCY 

(in billions of dollars) 

1980 1981 Estimate 1982 Estimate 

Actual January Revised January Revised 

Funds appropriated to the President: 

International security assistance 

International development assistance 

Agriculture 1/ 

Commerce 

Defense 

Education 

Energy 

Health and Human Services 

Housing and Urban Development 

Interior 

Transportation 

Treasury 

Veterans Administration 

Other independent agencies: 

Export-Import Bank 

Small Business Administration 

Synthetic Fuels Corporation 2/ 

Tennessee Valley Authority 

All other independent agencies 

Less: Secondary guarantees of loans that 

are already guaranteed 

Less: Guaranteed loans held as direct loans.. 

Total 

1.4 2.5 2.5 2.9 2.6 

0.4 0.3 0.3 0.4 0.2 

19.2 24.4 24.0 15.6 13 .6 

1.3 1.7 1.2 1.9 1.1 

* * * * * 

5.8 8.3 9.3 7.6 6.2 

0.1 6.4 4.5 0.2 

0.1 0.1 0.1 0.2 0.2 

109.4 129 .7 116.2 136.7 116.9 

* * * 0.1 0.1 

0.5 0.7 0.7 0.7 0.5 

1.1 1.1 1.0 0.8 0.8 

6.3 7.4 7.4 7.4 7.4 

8.0 8.6 7.6 9.4 8.2 

4.8 5.9 4.9 5.9 4.4 

1.5 1.5 2.0 2.0 

3.4 3.4 4.5 4.5 

0.1 0.1 * * * 

-64.4 -73.2 -66.2 -74.3 -64.7 

-24.4 -32. 7 -33.3 -25.2 -25.4 

69.8 96.2 3/ 85.2 96.9 3/ 78.5 

1/ Includes Rural Electrification Administration off-budget activities as follows: 

1980, $5.7 billion; 1981, $5.1 billion in the January estimate and $5.1 billion in the 

revised estimate; and 1982, $5.1 billion in the January estimate and $5.2 billion in the 

revised estimate. 

2/ This is an off-budget Federal entity. 

3/ The January estimates include a correction of $1.7 billion in 1981 for biomass 

energy development and $3.4 billion in 1981 and $4.5 billion in 1982 for Tennessee Valley 

Authority fund. 

* $50 million or less. 

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Federal Reserve Bank of St. Louis
Table 25.—BUDGET FINANCING AND OUTSTANDING DEBT 

(in billions of dollars) 

Actual 1981 Estimate 1982 Estimate 

1980 January Revised January Revised 

Budget Financing 

Budget surplus or deficit (-) -59.6 -55.2 -54.9 -27.5 -45.0 

Deficit (-), off-budget Federal entities -14.2 -23.2 -23.6 -18.3 -16.7 

Total deficit (-) -73.8 -78.4 -78.5 -45.8 -61.7 

Means of financing other than borrowing from the 

publics 

Decrease or increase (-) in cash and other 

monetary assets 0.6 5.1 6.0 

Increase or decrease (-) in liabilities for: 

Checks outstanding, etc -0.5 0.2 1.0 0.9 

Deposit fund balances 2.5 0.6 0.1 0.2 0.2 

Seigniorage on coins 0.7 0.4 0.4 0.6 0.6 

Total, means of financing other than 

borrowing from the public 3.3 6.4 7.5 0.8 1.7 

Total requirements for borrowing from 

the public -70.5 -72.0 -71.0 -45.0 -60.0 

Change in debt held by the public 70.5 72.0 71.0 45.0 60.0 

Outstanding Debt, End of Year 

Gross Federal debt: 

Debt issued by Treasury 907.7 986.3 986.4 1052.7 1070.2 

Debt issued by other agencies 6 . 6 6 .1 6 . 2 5 . 0 5 . 2 

Total gross Federal debt 914.3 992.4 992.6 1057.7 1075.4 

Held by: 

Government agencies 199.2 205.3 206.5 225.6 229.3 

The public 715.1 787.1 786.1 832.1 846.1 

Debt Subject to Limit, End of Year 

Debt issued by Treasury 907.7 986.3 986.4 1052.7 1070.2 

Treasury debt not subject to limit -0.6 -0.6 -0.6 -0.6 -0.6 

Agency debt subject to limit 1. 7 1. 6 1. 6 1. 5 1. 5 

Total debt subject to limit 1/ 908.7 987.3 987.4 1053.6 1071.2 

1/ The statutory debt limit Is permanently established at $400 billion. Public Law 97-2 

temporarily increased the statutory debt limit to $985 billion through September 30, 1981. 

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Table 26.—SUMMARY OF THE FULL-TIME EQUIVALENT OF FULL-TIME 

PERMANENT CIVILIAN EMPLOYMENT IN THE EXECUTIVE BRANCH 1/ 

(Excluding the Postal Service. Full-Time Equivalent Basis) 

Actual 1981 Estimate 1982 Estimate 

1980 January Revised January Revised 

85,400 86,500 83,800 87,000 84,800 

29,300 32,300 32,100 32,700 30,900 

Defense-military functions 2/ 880,000 865,000 869,600 865,000 878,700 

Defense-civil functions 27,700 27,800 27,800 27,600 25,400 

6,400 6,100 6,000 6,100 5,800 

Energy 19,600 19,700 19,100 20,200 17,400 

Health and Human Services 136,400 135,700 134,900 136,100 129,800 

Housing and Urban Development 15,600 16,000 15,700 16,300 15,200 

53,800 53,600 53,100 55,000 52,800 

Justice 53,400 54,200 53,600 54,400 52,800 

Labor 22,100 22,300 21,800 22,600 21,000 

State 21,800 22,000 22,000 22,000 21,900 

Transportation 68,800 68,800 68,000 69,100 65,800 

Treasury 109,400 110,400 107,900 113,600 108,000 

Environmental Protection Agency 10,700 11,200 10,600 11,700 10,400 

National Aeronautics and Space 

Administration 22,600 22,300 22,000 22,300 21,600 

Veterans Administration 193,100 195,600 194,000 195,800 188,900 

Other: 

General Services Administration.... 32,300 32,200 31,600 32,200 30,100 

International Communication Agency. 8,000 7,900 7,900 7,900 7,500 

International Development 

Cooperation Agency 5,700 5,700 5,600 5,700 5,400 

Nuclear Regulatory Commission 2,800 3,200 3,200 3,400 3,300 

Office of Personnel Management 6,400 6,200 5,900 6,200 5,700 

Panama Canal Commission 7,700 8,300 8,300 8,400 8,300 

Small Business Administration 4,400 4,700 4,500 4,700 4,300 

Tennessee Valley Authority 16,500 16,600 16,200 16,600 15,500 

Miscellaneous 42,400 43,300 42,100 44,000 41,800 

Subtotal 1,882,300 1,877,600 1,867,300 1,886,600 1,853,100 

Contingencies 3/ 2, 000 1,000 2,000 1,000 

Total 1,882,300 1,879,600 1,868,300 1,888,600 1,854,100 

1/ Excludes developmental positions under the worker-trainee opportunity program (WTOP) 

as well as certain statutory exemptions. 

2/ Entries for Department of Defense, military functions reflect a technical change in 

conversion to the FTE system that results in a decrease of 25,000. 

3/ Subject to later distribution. 

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APPENDIX A 

FEDERAL AID TO STATE AND LOCAL GOVERNMENTS 

The Federal Government's greatest influence on States and 

localities is through its management — or mismanagement — of 

the overall economy. In recent years the relatively minimal 

benefits of increased grants have been more than offset by high 

unemployment, high interest rates, high inflation, and low 

productivity in the economy. The major responsibility of the 

Federal Government as a partner in federalism is to promote a 

stable and growing economy so that States and localities can plan 

and use their own resources effectively. The Administration's 

economic program — described in more detail in the February 18 

report: A Program for Economic Recovery — provides for this 

stability and growth. 

In the regulatory reform area, the Administration's proposals and 

actions already taken will significantly ease the burden on State 

and local governments and relieve them of thousands of hours of 

administrative requirements. 

In addition, a substantial portion of the budget changes under 

the President's economic recovery program would affect both the 

form and the structure of Federal aid to State and local 

governments. 

The table below shows current estimates of grants to States and 

localities. Budget authority for grants is estimated to be $86.2 

billion in 1982, $14.8 billion below the 1981 estimate. Grant 

outlays for 1982 are estimated to be $86.4 billion, $8.0 billion 

below the 1981 estimate. 

Table A-l.—GRANT S TO STATE AND LOCAL GOVERNMENTS 

(in billions of dollars) 

Estimates 

1981 1982 

Actual January Revised 

1980 Budget Budget 

January Revised 

Budget Budget 

Budget authority 

Outlays 

105.0 110.6 101.1 116.9 

91.5 95.3 94.4 99.8 

86.2 

86.4 

The distribution of Federal grants by budget function is shown in 

two tables at the end of this Appendix. 

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The revised budget focuses on the usefulness of the dollars sent 

to States and localities. Not so surprisingly, all Federal 

dollars are not equal. Those provided through broad-based 

grants, such as the social services program, are far more useful 

than the small categorical grants that are highly regulated and 

require excessive administrative attention. 

The Administration also believes that too much authority now 

rests with the Federal Government, and that more decisions on the 

usefulness and funding of domestic programs should be made by 

State and local governments. The Federal Government does not 

know more than our partners in the federal system about State and 

local needs, and should not be regulating and controlling State 

and local activities. 

Consistent with delegating more authority and making grant 

dollars more useful, the Administration is proposing several 

major grant consolidations that would return more authority to 

States and localities. The block grants would also generally 

eliminate requirements that recipients maintain a level of 

expenditures from their own funds, or that they match the Federal 

funds with their own. Burdensome planning, reporting, and 

recordkeeping requirements under various categorical programs 

would also be eliminated. 

The Administration proposes to consolidate all or part of about 

44 separate elementary and secondary education programs into two 

block grant programs — one to the States and one to local 

education agencies (LEA's). These block grants will shift 

control over education policy away from the Federal Government 

and back to State and local authorities — where it 

constitutionally and historically belongs. 

The LEA block grant will include about 10 programs that are now 

targeted on students judged to have special educational needs: 

the economically disadvantaged, the physically or mentally 

handicapped, children in school districts undergoing racial 

desegregation, and illiterate adults. 

The education block grant to the States combines about 34 

separate programs that provide direct educational services for 

handicapped, neglected, and delinquent children? improve the 

staffing and services of the State educational agencies? and 

support improved school services in a variety of ways including 

assistance to school libraries, curriculum development, and 

technical assistance. 

In the areas of health and social services the Administration 

proposes to consolidate the authorities for about 40 Federal 

categorical grants into four block grants to States. Currently, 

an uncoordinated array of programs provides services based on 

varying criteria including age, income, health status, disease, 

occupation, and residence. Most of the programs duplicate others 

serving the same type of beneficiary. Each program generally has 

its own separate planning process and other administrative 

requirements. The four block grants will be in the areas of 

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health services, preventive health services, social services, and 

hardship assistance. 

The Administration's proposal will enable States to plan and 

coordinate their own service programs, establish their own 

priorities, and exercise effective program control over resources 

provided to localities and non-profit organizations. States 

would thus have greater flexibility in — as well as greater 

responsibility for the results of — providing needed services to 

their populations. The overall effect would be to strengthen 

State governments and provide publicly-financed services more 

effectively and at lower cost to those who need them. 

In addition to these major block grants, the Administration 

supports smaller consolidations of Indian programs, environmental 

grants, employment and training programs, nutrition assistance 

for Puerto Rico, and airport programs. 

Because the new block grants and grant consolidations will allow 

for significant savings in administration and result in more 

efficient management, the reductions in funding need not cause a 

comparable reduction in services to the public. 

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Table A-2.—GRANT S TO STATE AND LOCAL GOVERNMENTS BY FUNCTION: BUDGET AUTHORITY 

(in billions of dollars) 

1981 1982 

Actual January Revised January Revised 

1980 Budget Budget Budget Budget 

National defense 0.1 0.1 0.1 0.1 

Energy 0.5 0.5 0.4 0.6 0.1 

Natural resources and environment 4.6 4.3 2.4 4.8 0.6 

Agriculture 0.8 0.8 0.6 0.6 

Commerce and housing credit * * * * * 

Transportation 14.9 14.3 16.4 12.7 

Community and regional development 5.8 5.2 5.8 4.5 

Education, training, employment, and 

social services 21.5 21.4 19.6 25.0 15.2 

Health 16.5 19.2 18.5 20.9 19.2 

Income security 37.3 1/ 33.4 35.6 26.7 

Veterans benefits and services * 0.1 0.1 0.2 0.1 

Administration of justice 0.1 0.1 0.2 * 

General government 0.2 0.2 0.2 0.1 

General purpose fiscal assistance 8.5 6.1 6.1 6.7 6.3 

Total 110.6 1/ 101.1 116.9 86.2 

1/ Excludes $9.4 billion for housing programs erroneously classified as grants to 

State and local governments. 

$50 million or less. 

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Table A-3.—GRANTS TO STATE AND LOCAL GOVERNMENTS BY FUNCTION: OUTLAYS 

(in billions of dollars) 

1981 1982 

Actual January Revised January Revised 

1980 Budget Budget Budget Budget 

National defense 0.1 0.1 0.1 0.1 

Energy 0.5 0.6 0.6 0.8 0.4 

Natural resources and environment 5.4 5.3 5.2 5.3 4.7 

Agriculture 0.6 0.8 0.8 0.6 0.6 

Commerce and housing credit * * * * * 

Transportation 12.9 13 .2 12.8 12.0 

Community and regional development 6.5 6.2 6.2 6.4 6.0 

Education, training, employment, and 

social services 21.7 21.0 23.5 16.4 

Health 15.8 18.6 18.2 20.2 18.9 

Income security 18.5 21.8 21.7 22.9 20.5 

Veterans benefits and services 0.1 0.1 0.1 0.1 0.1 

Administration of justice 0.4 0.4 0.3 0.2 

General government 0.2 0.2 0.2 0.2 0.2 

General purpose fiscal assistance 8.5 6.7 6.8 6.7 6.3 

Total 95.3 94.4 99.8 86.4 

$50 million or less. 

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APPENDIX B 

SUMMARY OF PROGRAMMATIC INCREASES TO THE JANUARY BUDGET 

(in millions of dollars) 

1981 1982 1983 1984 1985 1986 

BAOBAOBAOBAOBA O BA 0 

Funds Appropriated 

to the President 

International 

Security 

Assistance 

Military 

Assistance 105 40 100 65 100 95 100 100 100 100 

International 

Military 

Education and 

Training 12 6 12 11 12 11 12 12 12 12 

Foreign Military 

Sales Credit 632 309 632 551 632 713 632 713 632 713 

Economic Support 

Fund 150 52 150 150 150 150 150 150 150 150 

Subtotal 899 407 894 777 894 969 894 975 894 975 

Department of 

Agriculture 

Agricultural 

Research 

and Extension... 20 20 20 20 20 20 20 20 20 20 

Commodity Credit 

Corporation: 

Polish debt 

rescheduling.... 88 — — _ 

Subtotal 88 20 20 20 20 20 20 20 20 20 20 

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Department of 

Energy 

Clinch River 

Breeder 

Reactor 

Strategic 

Petroleum 

Reserve 

Defense 

activities 

Three mile island 

activities 

Commercial waste. 

Subtotal 

Department of 

the Interior 

Payment in Lieu 

of Taxes 

Mineral Leasing 

Acceleration.... 

Park Restoration 

and Improvement 

Office of Water 

Policy 

Subtotal 

1981 

BA 

1982 1983 

BA 0 BA 

50 50 269 222 271 

1,305 1,334 24 8 269 -114 

15 296 148 391 

27 

42 

27 

42 

1,355 1,399 882 708 

42 

590 

45 45 45 

-7 -7 138 

105 60 105 

3 2 2 

146 100 290 

0 

1984 

BA 0 

1985 

BA 

1986 

BA 

277 304 306 332 239 387 389 

10 -126 -42 -194 -114 -662 -279 

366 473 398 488 391 445 288 

42 42 

695 693 

42 

704 

42 

668 

42 

558 

42 

212 

42 

440 

45 45 45 45 45 45 45 

138 86 86 110 110 106 106 

114 105 114 105 111 105 108 

2 2 2 

299 238 247 

2 2 2 2 

262 268 258 261 

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Federal Reserve Bank of St. Louis
Department of 

Commerce 

Tourism 

program 

Secretary's 

Special Initiatives Fund 

Subtotal 

Department of 

Defense-Military 

Military pay 

Other programs... 

Subtotal 

Corps of Engineers-Civil 

Emergency 

supplemental 

for Mt. St. 

Helens and 

Hurricane 

Allen 

Department of 

Education 

School Assistance in 

Federally 

affected 

Areas 

1981 1982 1983 1984 1985 1986 

BA 0 BA 0 BA 0 BA 0 BA 0 BA 0 

4 4 4 4 4 4 4 4 4 4 

1 1 1 1 1 1 1 1 1 1 

5 5 5 5 5 5 5 5 5 5 

420 420 1,857 1,857 1,988 1,988 1,924 1,924 1,658 1,658 1,287 1,287 

7,731 3,518 28,644 7,620 37,007 19,743 47,100 25,271 58,552 48,041 71,650 60,703 

8,151 3,938 30,501 9,477 38,995 21,731 49,024 27,195 60,210 49,699 72,937 61,990 

i 

M 

ro 

I 

64 64 

82 73 7 1 

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1981 1982 1983 1984 1985 1986 

BAOBAOBAOBAOBA O BA 

Board for International Broadcasting 

Increased grants 

to Radio Free 

Europe/Radio 

Liberty, Inc.... 

Total 9,653 5,563 32,464 10,721 40,798 23,531 50,878 29,144 62,063 51,529 74,330 63,695 

Memorandum 

Department of 

Defense 8,151 3,938 30,501 9,477 38,995 21 ,731 49,024 27,195 60,210 49,699 72,937 61 ,990 

Other 1 ,502 1 ,625 1,963 1 ,244 1 ,803 1 ,800 1 ,854 1 ,949 1 ,853 1 ,830 1 ,393 1 ,705 

u> 

I 

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Federal Reserve Bank of St. Louis
APPENDIX C 

SUMMARY TABLE OF PROGRAMMATIC DECREASES TO THE JANUARY BUDGET 

FY 1981 - 1986 

(In millions of dollars) 

Budget Authority and Outlay Savings 

1981 1982 1983 1984 1985 1986 

BA 0 BA 0 BA 0 BA 0 BA 0 BA 0 

Executive Office of the President 

Staffing levels 6 7 6 7 5 7 8 9 11 9 13 12 

Funds Appropriated to the President 

Appalachian Regional 

• Development programs. 110 6 125 100 129 77 134 99 144 102 157 162 

International development assistance 

(including Peace 

Corps and InterAmerican Foundation). 542 10 1,511 147 -7 383 2,070 713 2,433 1,095 2,810 1,569 

International commodity agreements.... 119 20 -39 -15 -15 -20 

Special Defense 

Acquisition Fund*.... 321 254 213 252 203 

Administrative reductions not included 

above 6 6 7 7 

Subtotal 658 22 1,762 595 83 699 2,189 1,025 2,557 1,449 2,967 1,934 

Department of Agriculture 

P.L. 480 Food aid 76 76 100 100 110 110 266 266 358 358 369 369 

Conservation costsharing 56 16 56 30 56 39 56 47 56 55 

Commodity Credit 

Corporation 

-Storage Facility 

loans* 25 100 110 120 130 150 

-CCC loan Interest 

rates 4 45 49 54 59 66 

-Grain Reserve 

Interest waivers*... 80 167 180 200 225 250 

-Target prices* 58 108 119 

Rural Electrlcation 

Administration 16 6 10 

Farmers Home Admin.... 

-Direct Loan Programs 30 105 30 179 105 255 179 331 255 407 

(Direct loan 

obligations) (565) (2,354) (2,354) (2,354) (2,354) (2,354) 

-Grant and Homeownership Assistance 5 111 10 112 14 112 15 114 18 144 20 

I 

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Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

1981 1982 1983 1984 1985 1986 

BA 0 BA 0 BA 0 BA 0 BA 0 BA 0 

-Alcohol Fuels/ 

Biomass Loans 1/ 

(non-add) (505) (46) (94) 

Soil Conservation 

10 5 16 13 17 16 19 18 16 18 

Food Program 

4 4 5 5 5 5 5 5 5 5 5 5 

Food Stamps* 2/ 150 148 2,328 2 ,304 2,179 2 ,167 2,810 2 ,795 3,175 3,157 3,391 3 ,373 

Special Milk* 95 90 98 92 102 96 108 101 113 107 

Child Nutrition* 2/... 35 1,336 1 ,243 1,475 1 ,394 1,637 1 ,547 1,760 1,663 1,898 1 ,793 

Special supplemental 

Food Program* (WIC)2/ 343 287 344 270 344 270 344 270 344 270 

Increased user charges 

for grain inspection.* 25 25 25 25 25 25 25 25 25 25 

Forest Service 60 50 60 60 60 60 60 60 60 60 

Employment freezes 

travel, equipment, 

consultant and other 

administrative 

61 67 66 66 66 66 66 66 66 66 66 66 

Subtotal 347 440 4,535 4 ,628 4,576 4 ,764 5,605 5 ,887 6,269 6,641 6,742 7 ,153 

Department of Commerce 

Economic Development 

Administration 345 11 624 374 694 532 759 621 823 754 889 844 

Regional Development 

Programs............. 21 8 7 4 1 1 

National Oceanic and 

Atmospheric Admin.... 60 16 236 208 303 292 334 339 334 338 302 300 

(Regulatory reduction) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) 

National Telecommunications and 

Information Admin.... 22 2 22 10 23 14 23 23 23 23 23 23 

Maritime Admin 21 107 40 29 53 55 44 86 54 124 59 

Administrative/program 

reductions not 

18 18 12 25 24 27 37 38 49 49 59 59 

466 76 1,001 664 1,073 922 1,208 1, ,066 1,315 1,219 1,397 1 ,285 

CJ1 

I 

Department of Defense-Military 

Civilian pay and 

withdrawal of retired 

pay legislation* 131 154 1,214 1 ,214 1,653 1,653 2,010 2,010 2,384 2,384 

Program redactions.... 319 60 1,735 792 1,646 1,336 2,498 2,018 3,209 2,749 3,939 3,379 

Administrative 

reductions not 

included above 220 220 120 120 120 120 120 120 120 120 120 120 

Subtotal 539 280 1 ,986 1,066 2,980 2,670 4,271 3,791 5,339 4,879 6,443 5,883 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

1981 1982 1983 198 4 1985 1986 

BA 0 BA 0 BA 0 BA 0 BA 0 BA 0 

epartment of Defense-Civil 

Corps of Engineers**** - — 230 230 1,017 782 1,28 4 1,039 1,488 1,283 1,380 1,290 

Cemeterlal Expenses, 

* * * * 2 2 1 * * 1 1 1 1 1 1 

epartment of Education 

Local education block 

grants*........«...«•. -3,647 -255 -3,829 -2,815 -4,021 -3,589 -4,222 -3,927 -4,433 -4,163 

Title I basic local 

concentration, 

migrant*•••••••••••• 814 57 3,562 824 3,858 3,241 4,139 3,519 4,404 3,787 4,686 4,030 

Education for the 

handicapped 237 5 1,060 238 1,161 715 1,247 1,182 1,326 1,266 1,410 1,349 

Adult education 30 14 122 28 132 126 142 134 150 143 160 153 

Emergency school aid* 53 5 224 55 242 174 260 228 277 254 294 272 

Basic skills Improve9 9 18 14 20 15 21 17 23 18 24 19 

Subtotal, savings.. 1 • 143 90 1,339 904 1,584 1,456 1,788 1,491 1,958 1,541 2,141 1,660 

State education block 

-715 -50 -750 -551 -788 -703 -827 -769 -869 -816 

Title I Handicapped, 

neglected and 

delinquent 66 5 268 66 290 241 311 262 331 285 352 306 

Special programs 

and populat ions•••• 11 2 120 31 130 126 139 131 148 139 156 147 

Education for the 

handicapped 31 117 12 122 107 131 122 138 131 148 137 

Emergency school 

aid 25 2 81 22 88 64 94 83 100 93 107 100 

School Improvement•• 78 6 123 89 134 107 143 116 156 124 166 132 

School libraries*••• 43 8 171 47 186 152 202 198 216 214 230 228 

Other •••• 1 * * 23 1 23 24 24 24 24 24 24 24 

Subtotal, savings•• 255 23 188 218 223 270 256 233 286 241 i U 258 

Rehabilitation 

services and handicapped, research 3/** 23 4 (1,011) (842) (1,102) (1,031) (1,192) (1,174) (1,279) (1,262) (1,361) (1,344) 

Student financial 

150 50 296 205 323 224 350 242 376 260 400 277 

Student loan insurance (savings) 25 24 25 25 27 27 30 30 32 32 34 34 

Vocational and adult 

education * 195 59 156 174 164 188 172 164 174 234 185 302 

National Institute of 

Education* *•.••«*.••• 5 3 23 22 22 20 23 20 25 21 27 22 

Institute of Museum 

12 17 8 18 16 20 17 21 19 22 20 

Indian Education.••••* * * * * 21 7 22 17 24 18 26 22 20 24 

Higher and continuing 

education* 8 3 49 15 46 43 50 47 53 50 57 54 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

1981 1982 1983 

BA 0 BA 0 BA 0 

College housing loans 15 18 13 4 12 30 

Fund for improvement 

of postsecondary 

education 3 2 7 4 8 4 

Libraries and learning technologies 31 3 33 10 

Office of Civil 

1 1 2 1 2 2 

Youth education and 

900 50 900 900 

Bilingual and minority 

language education... 54 5 65 3 70 64 

Other program 

4 13 3 14 10 

Administrative 

reductions (not 

3 1 11 10 11 11 

1,896 283 3,156 1 ,656 3,479 3 ,292 

Department of Energy 

Uranium enrichment.... 

Synthetic Fuels 

Fossil Energy 

Solar Energy 

Other Energy Supply.•• 

Energy Conservation... 

Regional Storage. 

Energy Information.... 

Energy Regulation 

Alcohol Fuels 

Subsidy \J (non-add). 

General Science 

Department Admin.••••• 

Administrative 

reductions not 

included above 

Naval Petroleum 

Reserve Receipts 

Energy Sciences.•••••. 

Magnetic Fusion 

Subtotal 

843 405 

547 263 772 

50 121 360 

99 79 390 

147 69 223 

207 42 677 

15 

14 12 47 

111 68 159 

(741) (103) ( —: 

40 

20 2 129 

269 -239 -59 

245 245 264 

2 1 54 

11 8 46 

2,565 671 3,522 

393 -69 15 

789 1,060 840 

321 498 404 

380 457 443 

196 211 215 

442 631 645 

10 5 

49 61 61 

179 143 145 

(28) ( ) ( —: 

24 44 42 

107 118 85 

390 222 208 

264 182 182 

54 60 60 

84 86 65 

3,682 3,704 3,415 

Department of Health and Human Services 

Health and Social 

Services grant 

consolidation* V.... 2,315 1,836 2,619 3,129 

National Health Service 

Corps Scholarships... 23 6 56 38 87 100 

Health Professions 

Education 41 8 44 20 44 50 

198 4 

BA 0 

12 75 

8 5 

40 33 

2 2 

900 900 

75 69 

16 13 

13 11 

"37779 3,370 

1985 

BA 0 

12 86 

9 5 

48 43 

2 2 

900 900 

80 72 

17 15 

13 13 

47032 3,556 

1986 

BA 0 

12 85 

9 6 

50 52 

2 2 

900 900 

85 76 

18 18 

13 13 

4728? 3,803 

9 

356 

661 

403 

209 

461 

67 

136 

( ) 

60 

127 

51 

730 

503 

437 

206 

623 

67 

138 

( ) 

60 

122 

75 

128 

614 

362 

197 

408 

73 

133 

( ) 

76 

139 

46 

214 

595 

362 

198 

467 

73 

129 

( ) 

72 

134 

-1 

5 

517 

309 

194 

407 

78 

123 

( ) 

83 

142 

35 

241 

519 

309 

204 

407 

78 

123 

( ) 

83 

145 

197 353 456 415 663 1,321 

137 137 113 113 80 80 

64 64 68 68 71 71 

155 105 216 136 253 168 

3,042 3,596 3,058 3,022 2,924 3,78 4 

2,847 

121 

44 

3,330 

110 

50 

3,031 

158 

44 

3,316 

130 

50 

3,112 

198 

44 

3,397 

150 

48 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

Merchant Seamen 

(PUS)* 5/ 

PHS Commissioned Corps 

Physician Bonuses*... 

Centers for Disease 

Control (excluding 

grant consolidation)• 

National Institutes of 

Health 6/ 

National Research 

Service Awards* 

(ADAMHA) 6/ 

Regulation of Health 

Care Industry 

-Health Planning..... 

— PSRO' s* .....«••..«•• 

(PSRO obligations).. 

Health Maintenance 

Organizations* 

Indian health programs 

Alcohol, Drug Abuse 

and Mental Health 

programs (excluding 

grant consolidation)• 

Office of the 

Assistant Secretary 

for Health (excluding 

grant consolidation)• 

Food and Drug 

Administration 

Medicaid* 

Health Care Financing 

Administration program 

management* 

Medicare payments 

timing*•••••••••••••• 

Medicare reimbursements 

changes*••••••••••••• 

Supplemental Security 

Income* 

Aid to Families with 

Dependent Children 

and Child Support 

Enforcement* 

Refugee Assistance.... 

Cuban/Haitians 

education assistance. 

Immigrants Welfare 

Eligibility* 

Social Security 7/.... 

-Minimum benefits*.•• 

-Disability insurance* 

-Student benefits*.•• 

1981 

BA 0 

39 39 

29 10 

81 36 

4 1 

24 9 

6 38 

(38) 

28 10 

33 3 

77 21 

5 3 

589 339 

2 3 

-518 

20 

50 31 

50 

60 

35 

1982 

BA 0 

82 82 

3 3 

76 62 

86 73 

5 4 

89 . 45 

13 102 

(104) 

40 22 

137 53 

48 65 

13 5 

32 19 

1,185 944 

16 16 

522 

105 

110 110 

636 636 

69 54 

15 

15 15 

1,000 

370 

1,000 

1983 

BA 0 

150 150 

3 3 

76 66 

91 83 

4 

145 107 

15 106 

(107) 

48 32 

166 68 

167 116 

23 10 

17 17 

2,608 2,365 

16 16 

130 

110 110 

802 802 

57 53 

15 

15 15 

1,100 

925 

1,625 

1984 

BA 0 

160 160 

3 3 

76 70 

97 92 

145 120 

22 171 

(174) 

48 42 

196 165 

187 148 

23 20 

17 18 

3,969 3,682 

16 16 

155 

110 110 

884 884 

24 39 

15 15 

1,100 

1,430 

2,000 

1985 1986 

BA 0 BA 0 

160 160 160 160 

3 3 3 3 

76 76 76 76 

102 98 107 103 

145 145 145 145 

22 171 22 171 

(174) (174) 

48 48 48 48 

228 196 262 229 

208 142 230 164 

23 23 23 23 

17 18 17 20 

5,164 4, ,898 6,535 6,206 

16 16 16 16 

180 205 

110 110 110 110 

975 975 1,003 1,003 

14 22 14 15 

15 15 15 15 

1, ,100 1 ,100 

1, ,975 2,470 

2, , 125 2,250 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

1981 1982 1983 

BA 0 BA 0 BA 0 

-OASDI Lump Sum Death 

Payment* 150 175 

Administration on 

Aging 55 52 72 70 

Administration for 

Native Americans 6 3 6 3 

Administrative reductions not included 

above 17 17 42 18 45 41 

Subtotal 1,046 221 5,188 7,424 7,382 11,486 

apartment of Housing anc Urban Development 

Subsidized Housing: 

-program level 4,632 3 8,688 19 9,421 76 

-rent contribution... 60 119 132 304 

-rental assistance 

payments 149 5 163 10 

-Indian housing 161 703 744 

-eliminate outyear 

inflation 2,235 2 

Payments for the 

operation of low 

income housing 

projects (public 

housing operating 

subsidies) 100 43 57 258 142 

Public Housing 

Modernization 300 500 800 7 

FHA-Credit Limita-

(4,845)8/ 5 (9,000)8/ -15 -36 

Cash sales•••••••• 8 20 18 

Rent contributions 2 3 

GNMA Mortgage-Backed 

Securities ••••• (8,000)8/ -1 (8,000)8/ -2 N/A -3 

GNMA Special Assist-

(8,000)8/ (8,000)8/ 

ance Functions 196 -3 -2,627 4 0 -258 

GNMA Mortgage Assistance Grants.*...««••• 490 490 

Solar Energy and 

Conservation Bank...,. 121 47 125 134 125 125 

Community Development 

Support Assistance... 469 -5 339 -16 

Planning Assistance... 35 3 35 24 35 35 

Rehabilitation Loan 

111 39 134 199 138 214 

Neighborhood Self-Help 

Development 8 4 9 6 9 9 

Research and 

Technology 2 15 5 17 15 

Administrative reductions not Included 

4 4 18 18 18 18 

1984 

BA 0 

200 

92 90 

6 3 

48 44 

9,150 14,267 

10,143 215 

213 530 

180 15 

784 3 

3,755 16 

305 285 

800 27 

-63 

16 

3 

N/A -5 

0 -20 1 

490 490 

125 125 

359 118 

35 35 

142 215 

9 9 

17 17 

18 18 

1985 

BA 0 

200 

113 111 

6 3 

51 47 

10,729 16,353 

10,838 483 

302 792 

198 21 

824 19 

5,233 62 

175 234 

800 60 

-10 0 

15 

4 

N/A -6 

360 400 

490 490 

125 125 

257 369 

35 35 

144 217 

9 9 

17 17 

18 18 

1986 

BA 0 

200 

135 132 

6 3 

53 50 

12,334 18,512 

11,510 825 

402 1,088 

217 28 

865 45 

6,620 143 

239 211 

800 100 

-149 

14 

6 

N/A -7 

514 654 

490 490 

125 125 

92 317 

35 35 

146 218 

9 9 

17 17 

18 18 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
1981 

BA 0 

Housing Counseling 

Assistance 6 3 

Subtotal 5,674 1*57 

Department of the Interior 

Water and Power 

Resources Service..... 

Office of Water Research 

and Technology 35 7 

Fish and Wildlife 

Service 6 3 

Improved targeting of 

conservation expenditures 309 98 

Surface mining 

Youth Conservation 

Corps 38 3 3 

Indian Affairs 

Territorial Affairs*... 

Bureau of Land 

Management•..»••••.••• 1 1 

Geological Survey 

Other program reductions 

On-shore mineral 

leasing 

Other offsetting 

receipts 

Administrative 

reductions not 

included above 30 30 

Subtotal Jl? 171 

Department of Justice 

Legal Division*........ 1 

FBI 6 ** 

Drug Enforcement Admin. 9 8 

Federal Prison System.. 5^ 9 

Juvenile Justice and 

Dellquency 

Prevention 9/ 

Administrative reductions not included 

above 25 17 

Subtotal 45 35 

SUMMARY TABLE (con't) 

(In millions of dollars) 

1982 1983 

BA 0 BA 0 

6 5 6 6 

8,775 595 14,930 671 

64 60 43 41 

32 26 37 43 

60 53 60 60 

577 270 512 239 

64 21 57 25 

60 60 60 60 

56 49 56 49 

46 46 22 4 

48 48 48 48 

34 34 34 34 

7 7 8 8 

200 200 80 80 

154 154 90 90 

37 37 56 57 

1,439 1,065 1,163 838 

6 6 8 8 

4 4 6 6 

8 8 10 10 

8 7 6 6 

138 19 133 98 

67 77 57 57 

231 121 220 185 

1984 1985 1986 

BA 0 BA 0 BA 0 

6 6 6 6 6 6 

17,381 1,874 19,831 3,270 22,16$ 4,1*4 

204 202 201 201 111 111 

38 40 41 40 42 40 

60 60 60 60 60 60 

454 428 468 496 624 564 

76 45 97 41 118 66 

60 60 60 60 60 60 

56 49 56 49 56 49 

28 27 28 28 28 28 

48 48 48 48 48 48 

34 34 34 34 34 34 

8 8 8 8 8 8 

150 150 135 135 145 145 

163 163 150 150 162 162 

76 80 95 99 115 119 

1,455 1,394 1,481 1,449 1,611 1,494 

13 13 19 19 24 24 

17 17 28 28 39 39 

18 18 28 27 37 36 

10 10 15 15 19 19 

146 187 156 186 167 198 

87 87 138 137 150 149 

291 332 384 412 436 465 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

Department of Labor 

CETA: 

Eliminate Public 

Service Employment 

programs••••••••••• 

Withdraw Youth 

Legislation 

Consolidate youth 

programs into 

general employment 

and training 

grants••••••*•*•••» 

Reduce Job Corps 

capital improvements .»*«..«....... 

Reduce CETA National 

Programs ... 

Eliminate Welfare 

Reform Demos. 

Eliminate Positive 

Adjustment Initiative ...».*.«..*•«.. 

All Other CETA 

Reductions 

Reduce WIN to current 

services ••..•»•••.... 

Trade Adjustment 

Legislation* 

Unemployment Benefits 

to Ex-Servicemen 

Unemployment Insurance:* 

Eliminate National 

EB Trigger/State 

Rate Change 

Enforce EB work test 

strictly 

Strengthen regular 

work test 

Extended benefits 20-

week work base 

Reduction in State 

UI administrative 

expenses 

-increase productivity. 

-related to UTF 

legislation.•••••• 

Reform Federal 

Employees Injury 

Compensation* • 

Reduce Employment 

Service state 

personnel 

1981 

BA 0 

149 535 

38 

1 

60 60 

400 505 

18 

1982 

BA 0 

4,558 3,545 

250 80 

856 670 

15 15 

108 100 

216 155 

50 31 

16 12 

20 20 

1,150 1,150 

225 225 

13 

46 

68 

50 50 

4 150 

1983 

BA 0 

4,222 4,073 

250 232 

1,074 892 

48 48 

110 110 

61 

19 

15 15 

20 20 

760 760 

237 237 

200 92 

5 

285 

11 

43 

39 

54 54 

4 150 

1984 

BA 0 

4,561 4,408 

250 250 

1,263 1,094 

48 48 

110 110 

16 16 

20 20 

380 380 

245 245 

72 

4 

285 

10 

43 

22 

59 59 

4 150 

1985 

BA 0 

4,931 4,762 

250 250 

1,452 1,290 

48 48 

110 110 

16 16 

20 20 

380 380 

247 247 

100 270 

4 

272 

4 

42 

22 

63 63 

4 150 

1986 

BA 0 

5,341 5,143 

250 250 

1,640 1,487 

48 48 

110 110 

16 16 

20 20 

380 380 

248 248 

200 284 

3 

264 

2 

42 

20 

69 69 

4 150 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(In millions of dollars) 

1981 1982 1983 

BA 0 BA 0 BA 0 

Other policy changes 

in salaries and 

1 1 13 13 4 4 

Travel reductions 

(not included above). 4 4 9 9 

Consulting services 

(not Included above). 3 2 7 7 

Procurement reductions 

(not Included above). 2 2 2 2 

Personnel compensation 

(not included above). 15 16 42 45 105 104 

634 1,192 7,591 6,406 7,103 7,254 

Department of State 

Assessed contributions 

to international 

organizations — 160 160 138 137 

22 18 42 38 19 24 

4 4 5 5 

Foreign buildings and 

narcotics assistance.. 3 2 17 8 15 17 

Administrative reductions, Including 

employment, travel, 

etc................... 3 3 15 14 17 17 

Subtotal 28 23 238 224 194 200 

Department of Transportation 

Airport Construction*•• 272 49 

Other FAA reductions.•• TM 6 

FAA regulatory 

reductions•••••••••• — 

Federal Highway 

Construction* 

-Non-Interstate 

Highways..... 

-Interstate Transfers 

-Other, Federal 

Highway Admin 

Highway Safety Grants* 

NHTSA regulatory 

reduction. • •••• (**) (**) 

Cooperative Automotive 

Research program....•. 12 6 

Railroad Restructuring 

Assistance.•••••••••• 

300 50 350 215 

99 67 40 66 

(2) (2) (2) (2) 

1,900 388 2,100 1,344 

100 16 200 154 

7 17 7 22 

167 47 125 112 

(1) (1) (1) (1) 

17 12 34 17 

40 5 54 30 

1981 1984 

BA 

1985 

BA 

1986 

BA 

133 135 162 167 190 197 

7,093 7,355 7,787 8,121 8,520 8,737 

187 182 200 34 

14 15 15 15 15 15 

5 5 5 5 6 6 

3 9 3 3 3 3 

17 17 17 17 19 19 

226 228 240 74 43 43 

400 381 

40 25 

(2) (2) 

100 1,732 

165 187 

7 22 

138 138 

(1) (1) 

50 25 

68 55 

450 458 

40 32 

(2) (2) 

2,100 1,837 

285 158 

7 15 

162 150 

(1) (1) 

50 35 

81 70 

525 363 

46 42 

(2) (2) 

1,800 1,945 

405 185 

7 6 

178 163 

(1) (1) 

50 45 

204 90 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

1981 1982 1983 

BA 0 BA 0 BA 0 

Low Volume Railroad 

Branch Lines 80 8 80 32 87 57 

Federal Railroad 

Admin, regulatory 

reduction.••••..•••. (** ) (**) (1) (1) (1) (I! 

Northeast Corridor 

Improvement Program*.. 25 288 155 -13 114 

AMTRAK. subsidies 25 25 380 304 550 497 

Urban Mass Transportation -

Capital Grants* 250 54 1,340 420 1,635 805 

Operating Subsidies*. 370 208 

Other UMTA programs.. 25 3 35 5 45 26 

Administrative 

reductions not 

included above. 25 27 124 105 144 134 

Boat and Yacht Fees 

(Increases to 

proprietary receipts) 100 100 200 200 

Subtotal 689 210 4,977 1,723 5,928 4,001 

Department of the Treasury 

Biomass Energy 

Development 1,246 148 122 

Payment in excess of 

business tax 

liabilities 227 227 3,493 3,493 4,704 4,704 

Payment to non-profit 

institutions related 

to the 8X social 

security tax credit.. 237 237 349 349 

Payments to State and 

local governments 

related to the 8X 

social security tax 

credit 495 495 812 812 

Payments where credit 

exceeds liability.... 572 572 

Internal Revenue 

Service 

-Personnel 23 39 84 94 148 163 

Administrative 

reductions not 

Included above 25 26 79 78 134 141 

Subtotal 1,521 4*0 4,51$ 6,719 4,74l 

1984 1985 1986 

BA 0 BA 0 BA 0 

94 75 101 98 108 106 

(1) (1) (1) (1) (1) (1) 

20 

700 

1 

689 

15 

900 

15 

858 987 1,037 

1,795 

740 

55 

1,153 

512 

46 

1,845 

1,105 

60 

1,535 

899 

41 

1,860 

1,105 

70 

1,649 

1,088 

55 

158 155 173 167 184 185 

300 300 400 400 500 500 

6,830 5,496 7,774 6,>68 8,029 >,459 

5,390 5,390 6,030 6,030 6,657 6,657 

389 389 446 446 500 500 

897 897 1,020 1,020 1,146 1,146 

526 526 484 484 446 446 

240 288 329 373 414 457 

200 205 261 265 318 322 

7,642 7,6*5 4,570 6,616 9,526 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

BA 0 BA 0 BA 0 

Environmental Protection Agency 

Wastewater Treatment 

Grants 1,700 20 3,700 290 1,600 1,450 

Superfund 10 5 50 30 49 50 

Other Programmatic 

Reudctions 181 102 210 157 

(Reductions related to 

Regulatory Programs).. (21) (21) (150) (90) (194) (142) 

Administrative 

reductions not 

Included above 21 21 4 4 9 9 

Subtotal 1,731 46 3,935 426 1,868 1,666 

National Aeronautics and Space Administration 

Program reductions 5 2 580 447 765 686 

Administrative 

reductions 10 10 24 22 20 20 

Subtotal 15 12 60? 569 785 706 

Veterans Administration 

Interest rates on 

insurance loans 91 96 65 

GI bill extension 63 63 67 67 

GI bill flight and 

correspondence*....... 14 14 

Consolidation of 

Benefit Processing 

Functions.... 36 36 73 73 

Major construction 

projects 154 28 71 91 -52 74 

Minor construction 

projects 32 8 34 25 

Physician and Dentist 

Bonuses* 10 10 40 40 40 40 

Personnel adjustments 

excluding regional 

offices 41 41 146 146 253 253 

Administrative reductions not included 

above 40 34 208 211 373 376 

Subtotal 259 218 596 691 788 973 

Other Independent Agencies 

ACTION 9 3 40 36 56 55 

Administrative Conference of the United 

state 8 — ** ** 

Architectural and 

Transportation Barriers 

Compliance Board 2 2 3 2 

1984 1985 1986 

BA 0 BA 0 BA 0 

2,000 2,270 2,300 2,270 2,600 2,275 

28 38 -42 -7 -277 -69 

236 195 262 230 285 251 

(228) (184) (263) (230) (294) (259) 

17 17 26 26 34 34 

2,281 2,520 2,546 2,519 2,642 2,491 

913 795 645 804 419 664 

20 20 20 20 20 20 

933 815 665 824 439 684 

41 13 

16 16 14 14 13 13 

74 74 75 75 78 78 

-11 55 3 -36 

36 36 39 39 40 40 

40 40 40 40 40 40 

329 329 408 408 501 501 

573 573 759 768 939 939 

1,057 1,164 1,335 1,360 1,611 1,575 

73 69 80 76 86 82 

* * * * * * * * 1 1 

3 3 3 3 3 3 

Ln 

I 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

1981 1982 1983 

BA 0 BA 0 BA 0 

Arms Control and 

Disarmament Agency.... 2 1 3 2 3 3 

Civil Aeronautics 

Board 

56 51 64 64 

Administrative 

reduction.•••••••••• 1 1 1 1 2 2 

CAB regulatory 

reduction (1) (1) (1) (1) (2) (2) 

Commission of Fine Arts * * * * * * * * 

Commission on Civil 

Rights * * * * 1 1 1 1 

Committee for Purchase 

from the Blind and 

Other Severely 

Handicapped........... * * * * * * * * * * * * 

Commodity Futures 

Trading Commission.... 

— 1 1 2 2 

Community Services 

Administration 3J ••••• — (542) (299) (542) (542) 

Consumer Product Safety 

Commission...••••..••• 2 2 12 14 12 12 

Corporation for Public 

Broadcasting 43 43 52 52 

Federal loans to the 

District of Columbia.. 39 74 84 99 

Equal Employment 

Opportunity Commission 4 4 20 20 32 32 

Export-Import Bank of 

the United States 748 70 571 236 891 523 

Federal Communications 

1 1 5 5 15 11 

Federal Election 

* * * * 1 1 1 1 

Federal Emergency 

Management Agency 

8 8 31 31 31 31 

-Flood Insurance 99 97 111 115 

1 1 4 4 5 5 

Federal Home Loan 

Bank Board....».....•« 186 130 

Federal Labor Relations 

1 1 1 1 1 1 

Federal Maritime Commission (Regulatory 

restraint) * * 1 1 1 1 

Federal Mediation and 

Conciliation Service*. 1 1 4 4 5 5 

Federal Mine Safety 

and Health Review 

Commission * * * * * * * * * * * * 

Federal Trade Commission 4 4 8 8 15 16 

1984 198 5 1986 

BA 0 BA 0 BA 0 

3 3 3 3 4 4 

54 54 34 34 2 2 

2 2 2 2 3 3 

(2) (2) (2) (2) (3) (3) 

* * * * * * * * * * * * 

2 1 2 2 3 3 

* * * * * * * * * * * * 

2 2 2 2 3 3 

(542) (542) (542) (542) (542) (542) 

12 12 12 12 12 12 

73 73 98 98 110 110 

-14 141 -71 84 -85 70 

44 44 52 52 59 59 

1,266 782 1,690 1 ,026 2,117 1 ,248 

22 18 30 27 39 35 

1 1 1 1 1 1 

31 31 31 31 31 31 

121 125 129 132 135 137 

7 7 8 8 9 9 

130 130 130 

2 2 2 2 2 2 

1 1 1 1 2 2 

6 6 7 7 7 7 

* * * * * * * * * * * * 

20 20 22 22 25 24 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

1981 1982 1983 

BA 0 BA 0 BA 0 

General Services 

Administration 

-Federal Buildings 

Construction 121 12 7 

-Grants to the National 

Historical Publication 

and Records Commission 3 3 3 3 

-National Defense 

Stockpile* 507 507 507 507 

-Administrative reductions not included 

9 16 28 A2 38 5A 

Intelligence Community 

Staff * * * * * * 

Advisory Commission on 

Intergovernmental 

Relations*•••••••••••• * * * * * * * * * * * * 

Appalachian Regional 

Commission*••••••••••• * * * * A A A A 

International Communication Agency A A 29 2A 39 AO 

Interstate Commerce 

Commission* *•••••••••• 3 3 6 6 11 11 

ICC regulatory reduction (3) (3) (6) (6) (11) (11) 

Legal Services 

Corporation 9/ 3A7 312 36 A 36 A 

Marine Mammal~ 

Commission * * * * * * * * * * * * 

Merit Systems 

* * * * 1 1 1 1 

National Consumer 

Cooperative Bank* 89 86 136 136 160 159 

National Foundation on 

the Arts and the 

Humanities * * — — - 172 87 183 1A6 

National Labor Relations 

3 3 A A 9 8 

National Mediation 

* * * * * * * * * * * * 

National Science 

Foundation* *••••••••••• 83 36 320 209 360 32A 

National Transportation 

Safety Board * * * * 1 1 1 1 

Nuclear Regulatory 

Commission* *•«••••••••• 2 2 

Occupational Safety and 

Health Review Commission * * * * * * * * 1 1 

Office of the Federal 

Inspector for the 

Alaska Natural Gas 

Transportation System. 1 1 

198 A 1985 1986 

BA 0 BA 0 BA 0 

27 — 79 — 26 

3 3 3 3 3 3 

75 75 -206 -206 -206 -206 

A7 70 55 86 63 96 

* * * * * * * * * * * * 

A A A A A A 

AA AA A9 A9 A9 A9 

12 

(12) 

12 

(12) 

13 

(13) 

13 

(13) 

1A 

(1A) 

1A 

(1A) 

382 382 A01 A01 A21 A21 

* * * * * * * * * * * * 

2 2 2 2 2 2 

185 180 185 177 200 192 

199 187 216 207 232 221 

16 15 2A 22 32 30 

* * * * * * * * 1 * * 

AO 6 369 A5A A17 A96 A62 

1 1 1 1 2 2 

1 1 1 1 1 1 

Digitized for FRASER 

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Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

Office of Personnel 

Management 

-Administrative early 

retirement 

-Disability criteria*. 

-Intergovernmental 

Personnel Act*.. 

-Administrative reductions not included 

above 

Panama Canal Commission 

Pennsylvania Avenue 

Development Corporation 

Postal Service (payment 

to the Postal Service 

Fund) 

Railroad Retirement 

Board 

-Ad hoc June 1981 

Rail Pension Increase* 

-Admlnls t ra t ive 

reductions 

Renegotiation Board.... 

Securities and Exchange 

Commission.••••••••••• 

Selective Service 

System 

Small Business Admin,. 

-Business loans 

-Disaster relief 

-Technical assistance. 

-Administrative reductions not included 

above 

Smithsonian Institution 

(includes National 

Gallery and Wilson 

Center) 

President's Commission 

for the Study of 

Ethical Problems in 

Medicine..•*.•........ 

Tennessee Valley 

Authority. 

United States Metric 

Board.... 

United States Railway 

Association* 

Water Resources Council 

1981 

BA 0 

30 

150 

1 ** 

2 2 

1 1 

** ** 

10 

1 1 

3 3 

49 

780 780 

4 8 

3 3 

1 1 

1 I 

* * * * 

25 125 

5 

1982 

BA 0 

30 30 

150 150 

20 13 

10 10 

4 4 

12 14 

250 250 

40 

2 

6 6 

2 2 

149 81 

- 8 

20 16 

9 9 

26 5 

. ** _** 

10 10 

1 1 

5 -95 

39 33 

1983 

BA 0 

30 30 

150 150 

20 20 

14 14 

5 5 

25 6 

150 150 

40 

3 

15 15 

1 1 

22 197 

2 

16 16 

12 12 

-22 11 

_** 

1 1 

102 102 

42 43 

Subtotal, Other 

Independent Agencies. 1,803 1,272 3,365 2,740 3,651 3,611 

1984 

BA 

198 5 

BA 

1986 

BA 

30 30 30 30 30 30 

150 150 150 150 150 150 

20 20 20 20 20 20 

18 18 22 22 25 25 

6 6 6 6 7 7 

17 13 10 22 17 26 

237 237 226 226 258 258 

40 

4 

40 

5 

40 

6 

19 19 21 21 25 25 

1 1 1 1 1 1 

60 226 75 240 82 248 

-11 -24 -36 

16 16 16 16 16 16 

15 15 16 16 18 18 

2 -1 2 -6 3 3 

1 1 1 1 1 1 

43 43 44 45 45 47 

»743 3,726 3,980 3,842 4,581 4,180 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(In millions of dollars) 

1981 1982 1983 1984 1985 1986 

BA 

Allowance for effect of 

changes In Davis-Bacon 

Act and Service Contract 

Act administrative 

procedures and Black 

iung Trust fund 

Reform 30 

Effects on civilian 

agency pay coats of 

revising the Federal 

Pay Comparability 

Standard* «.«••.••..... ——— 

Mineral Leasing on 

Outer Continental 

Shelf 250 

BA BA BA BA BA 

30 

250 

528 528 624 624 753 753 932 932 1,119 1,119 

159 149 635 616 1,132 1,161 1,540 1,597 2,022 2,131 

700 700 2,000 2,000 3,000 3,000 3,500 3,500 3,500 3,500 

TOTAL, On-Budget, 

Budget Authority 

and Outlay Savings 20,621 6,057 58,914 40,310 70,908 58,123 84,354 71,564 95,363 81,698 104,627 91,256 

Off-budget Items 

Federal Financing Bank 

-Foreign Military 

Sales Credit 

(Loan guarantee 

commitments) 

-Rural Electrification 

and Telephone* 

(Loan guarantee 

commitments) 

-Farmers Home Admin... 

(Direct loan obligations) 

-Small Business 

Administration 10/... 

(Loan guarantee 

commitments) • 

-HUD Community Development loans 11/• • • •• 

(Loan guarantee 

commitments)•••• 

-Student Loan Marketing 

Association. 

(Loan guarantee 

commitments)•••••• 

38 

(187) 

361 

(565) 

67 

(67) 

143 

(250) 

38 

360 

64 

133 

300 

(300) 

1,152 

(5,545) 

1,699 

(2,354) 

65 

(65) 

90 

(250) 

1,423 

(1,423) 

300 

1,152 

1,698 

59 

90 

1,423 

350 

(350) 

2,360 

(6,045) 

1,505 

(2,354) 

65 

(65) 

182 

(250) 

2,211 

(2,211) 

350 

2,360 

1,705 

35 

183 

2,211 

350 350 

(350) 

3,670 3,670 

(6,580) 

1,572 1,571 

(2,354) 

65 

(65) 

250 

(250) 

2,543 2,543 

(2,543) 

15 

286 

350 

(350) 

5,091 

(7,170) 

4,773 

(2,354) 

65 

(65) 

350 

5,091 

1,585 

20 

107 

350 350 

(350) 

6,630 6,630 

(250) 

2,543 2,543 

(2,543) 

(7,800) 

2,707 

(2,354) 

65 

(65) 

(250) 

2,543 

(2,543) 

1,910 

20 

77 

2,543 

I 

M 

Ln 

CO 

I 

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
SUMMARY TABLE (con't) 

(in millions of dollars) 

1981 1982 1983 198 4 198 5 1986 

BA 0 BA 0 BA 0 BA 0 BA 0 BA 0 

-Health Maintenance 

Organizations 10 10 15 15 90 90 90 90 

(Loan guarantee 

commitments) ( ) ( ) (10) (15) (90) (90) 

Subtotal, FFB 

reductions 609 595 4,729 4,722 6,683 6,854 8,465 8,450 12,912 9,786 12,385 11,620 

Other off-budget 

entitles: 

Rural Telephone Bank. — 23 23 23 23 

Subtotal, off-budget 

savings 609 59 5 4,7 5 2 4,7 2 2 6,7 0 6 6,8 5 4 8 , 488 8 , 450 12,9 3 5 9,786 12 , 385 11,620 

Total, Budget 

Authority and 

Outlay Savings 21,230 6,652 63,666 45,032 77,614 64,977 92,842 80,014 108,298 91,484 117,012 102,876 

* Involves proposed legislation to be submitted h-4 

** Less than $500 thousand. Oi 

\J The appropriations for the Alcohol Fuels and Biomass programs are in the Department of the Treasury. ^ 

7/ Savings partially offset by Nutrition Block Grant for Puerto Rico funded at $.9 billion in each year 1982-86. 

3/ Funding will be available beginning in 1982 for the purposes served by this program from the Health and Human Services, 

Social Services Block Grant. Displayed as a non-add entry because these savings are reflected in the HHS Social 

F Services Block grant entry. 

^ *J Inclusive of savings derived from agencies other than the Department of Health and Human Services, including 

6 the Rehabilitation Services Administration (Department of Education) and the Community Services Administration. 

| 5/ These savings to the Public Health Service will be partially offset by additional costs to the U.S. Coast Guard, the Merchant 

| Marine and several other agencies. 

^ 6/ Elimination of National Research Service Awards is also Included in National Institutes of Health reduction. 

$ 7/ The outlay savings would increase trust fund interest receipts (BA) by $100 million in 1982, $400 million in 1983, 

% ~ $800 million in 1984, $1,100 million in 19&5 and $1,400 million in 1986. Increased trust fund receipts decrease the 

| deficit. 

o 8/ Represents reduction In limitation on commitments. 

3 ?/ Authorized activities in programs encompassed In the proposed Social Services Block Grant. 

§ 10/ Includes Small Business Investment Companies and Development Company debentures. 

TT/ While loan guarantee commitments financed through FFB will be reduced by these amounts, losn guarantees will 

g still be made, though not financed by the FFB. 

0 

1 

w NOTE: Administrative reductions Involve decreases in personnel costs, consultants, travel, etc. 

Digitized for FRASER 

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Federal Reserve Bank of St. Louis