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Guide | Paygo | Government Budget Balance
FISCAL YEAR 2002 A CITIZEN’S GUIDE TO THE FEDERAL BUDGET
A Note to the Reader . . . . . . . . . . . . . . . . . . . . 1. What Is the Budget? . . . . . . . . . . . . . . . . . . . 2. Where the Money Comes From —and Where It Goes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . “On” and “Off” Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3. How Does the Government Create a Budget? . .
The President’s Budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Action in Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monitoring the Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. The Budget Surplus and Fiscal Discipline . . . . .
Why a Budget Surplus is Important . . . . . . . . . . . . . . . . . . . . . . Surplus and Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. The President’s 2002 Budget . . . . . . . . . . . . .
Thematic Highlights of President Bush's 2002 Budget . . . . . . . . . The President's Policy Priorities . . . . . . . . . . . . . . . . . . . . . . . . Additional Budget Highlights . . . . . . . . . . . . . . . . . . . . . . . . . .
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . List of Charts and Tables . . . . . . . . . . . . . . . . . .
Details in this document may not add to totals due to rounding.
Next year, your Federal Government will spend nearly $2.0 trillion. Needless to say, that’s a lot of money. In fact, that’s almost $7,000 for every man, woman, and child in the country; nearly $5.4 billion per day; and about $3.7 million per minute. And most of that money comes from taxes on the American people. The Government spends it on lots of things—on programs as large as Social Security, and on activities as small and unknown as repairs to the National Zoo. Together, these programs are what make up the Federal budget. How much do you know about the budget? If your answer is “not much,” you’re not alone. In fact, hardly anybody knows everything that’s in the thousands of pages, and several books, that make up the budget each year. But we know you care a lot about how the Government spends your money. That’s why A Citizen’s Guide to the Federal Budget was created. With this seventh edition, we hope to make the budget more accessible and understandable. The Guide is designed to give you a walking tour of the budget. In these pages, we will outline for you how the Government raises revenues and spends money, how the President and Congress enact the budget, how the Nation has been able to move from deficit to surplus, and what the President hopes to accomplish with his 2002 Budget. After you read these pages, we hope that you will think the tour was worth your time.
This Citizen’s Guide and other more detailed and technical 2002 Budget documents are available on the Internet. To access documents through the World Wide Web, use the following address: http://www.whitehouse.gov/omb/budget iii
When the economy is doing well. The budget reports on how the Government has spent money in the past. What Is the Budget? The Federal budget is: • a plan for how the Government spends your money. on the other hand. How much revenue does it raise through different kinds of taxes— income taxes. Some types of spending on things like education and support for science and technology are done in the hope they will increase productivity and raise incomes in the future. When there is a surplus. It reflects the President’s priorities and proposes that the entire Social Security surplus be saved and set aside for Social Security and debt 1 . Medicare. • something that affects the Nation’s economy. the Government can reduce the national debt—money it owes to American and foreign investors. the FBI. people earn more and unemployment is low. What activities are funded? How much does it spend for defense. national parks. and meat and fish inspection? • a plan for how the Government pays for its activities. The 2002 Budget is a document that embodies the President’s budget proposal to Congress for fiscal 2002.1. revenues increase and the surplus grows. • something that is affected by the Nation’s economy. In this atmosphere. leaving people with less money to spend. • a historical record. If revenues are greater than spending. Taxes. and social insurance payroll taxes? • a plan for Government borrowing or repayment of borrowing. 2001. the fiscal year that begins on October 1. excise taxes. reduce incomes. the Government runs a surplus. and how that spending was financed.
Government Spending as a Share of GDP. $242 billion came from Federal grants. reduction. or about 18 percent of GDP. is not the only budget that affects the economy or the American people. which measures the size of the economy) in 2000. But the Federal Government supplements State and local revenues by making grants to them. 2 . While Federal Government spending was 18 percent of the Gross Domestic Product (or GDP. while funding national priorities and providing tax relief. Of the $1. Federal spending is about two-thirds of this amount. of course. State and local governments are independent of the Federal Government. The President’s budget also moderates the recent extremely rapid growth in discretionary spending.S. and they have their own sources of revenue (taxes and borrowing). (28%) 100 90 Pie 1 Total State 80 and 70 Local Spending (12%) 60 Private 72% Government 28% 50 40 30 20 10 Spending from State and Local Revenues (9%) Federal Grants to State and Local Governments (2%) Spending for Direct Federal Programs (16%) Total Federal Spending (18%) Total Government spending accounts for less than one-third of the national economy.Chart 1–1. 2000 Total Government Spending in the U. State and local government spending was about another nine percent (see Chart 1–1). The budgets of State and local governments have an impact as well.152 billion that State and local governments spent in 2000. The Federal budget.
Family Budgeting Household Appliances Transportation Clothing ABCDEFGHIJKLMNOPQRSTUVWXYZ Housing Food Education Restaurants/ Entertainment ? ? ? ? ? ? ? ? Sources: Cash and Credit 3 . They might discuss how much they expect to earn each year. and perhaps a vacation. If they expect their shortfall to be temporary. shelter. Chart 2–1. such as by cutting back on restaurants. how much they can spend on food. movies. If they do not have enough money to make ends meet.2. and how much they might be able to save for their future needs. they might try to borrow. Where the Money Comes From— and Where it Goes In a typical American household. a father and mother might sit around the kitchen table to review the family budget. They also might consider whether to try to earn more by working more hours or taking another job. they might discuss how they can spend less. or other entertainment. clothing. transportation.
Also.On the other hand. they might use some of the extra money to improve their situation in critical areas. unlike a family. When the Federal budget is in surplus. the Government must keep in mind that it gets its revenue from you. foreign affairs. the taxpayer. such as buying better health insurance. and others. In some ways. and how much to spend to reach their goals—goals for national defense. transportation. social insurance for the elderly. Unlike the Government though. and to pay off the debts they built up in earlier years. a family can’t just decide to take money from its neighbors when it wants to spend more than it takes in. The President and Congress determine how much money they expect the Government to receive in each of the next several years. health insurance for the elderly and poor. National Budgeting Crime Prevention Environmental Cleanup Child Nutrition Health Care Education Military Research ? ? ? ? ? ? ? ? Sources: Taxes and Borrowing 4 . the Federal Government plans its budget much like families do. where it will come from. the Government debates not only how much of the surplus to invest in new Chart 2–2. if they find themselves with more income than needed to meet their usual needs. education. law enforcement. science and technology.
The Federal Government Dollar— Where It Comes From Receipts $2. but also how much to return to the taxpayers in the form of tax relief. spending. Revenues The money that the Federal Government uses to pay its bills—its revenues or receipts—comes mostly from taxes. the surplus. revenues were greater than spending. we will discuss these decisions in some detail—that is. The Government also debates how its spending and revenue decisions will help the economy grow. In this chapter. or to pay down past debt.192 billion Social Insurance Receipts 33% Corporate Income Taxes 10% Other 4% Excise Taxes 3% Individual Income Taxes 49% Over 90 percent of revenues come from three major categories of taxes: individual and corporate income taxes and payroll-type taxes. 5 . how the Government raises revenues and where it spends money. In the past three years. and the Government was able to reduce the national debt with the difference between revenues and spending—that is.Chart 2–3.
. Payroll taxes. . This produces totals for revenues and spending that show the level of Government activity without the business-like activity. . .9 percent of GDP. Customs duties . and telephone services. . . . .025 2001 1.073 213 690 71 31 21 38 2. . . . fines.004 207 653 69 29 20 43 2.529 Note: The revenues listed in this table do not include revenues from the Government’s business-like activities— such as entrance fees at national parks. . . . . after reaching an all-time high in 2001. . . . . .192 2003 1. Instead of counting these collections as revenues. and miscellaneous revenues—for example. . . . Excise taxes . . . Estate and gift taxes . . . equal to about 9. Total revenues . . . . . . . . . . . .258 2. .079 219 726 74 29 23 43 2. . .079 billion in 2002. . as a percent of GDP. Corporate income taxes . . which will raise an estimated $219 billion. tobacco. . . transportation fuels.137 2002 1.339 2. . . . . unemployment insurance taxes. . . . from 4. Revenues come from these sources: • Individual income taxes will raise an estimated $1. . also reached a peace-time high in 2001. . This category has grown from two percent of GDP in 1955 to an estimated 6. . .7 percent in 2002. . . Miscellaneous revenues . . . customs duties. . . . . . . . .438 2. the Government subtracts them from spending. . . . . . Federal Reserve earnings. . . • The Government also collects estate and gift taxes. • Corporate income taxes. .Table 2–1. . . . . penalties. . . . . . . . The Government earmarks some of these taxes to support certain activities—including highways and airports—and deposits others in the general fund. . 6 .118 235 806 78 28 25 48 2005 2006 1. . including alcohol. . and Federal employee retirement payments. . . . . Medicare taxes. . . Revenues By Source—Summary (In billions of dollars) Estimate Source 2000 Actual 1. . . . .157 244 856 81 25 26 49 1. . . . . . . . . Total taxes. . • Excise taxes apply to various products. . . . . . 2. .092 227 766 76 27 24 45 2004 1. . . .5 percent in 1955 to an estimated two percent in 2002. . . . and forfeitures.197 252 896 82 22 28 51 Individual income taxes . . . . . . . . • Social insurance payroll taxes include Social Security taxes. . . . . . . . . . . have shrunk steadily as a percent of GDP.
Constant Dollar Revenue Growth Constant FY 1996 dollars in billions 2.750 1.000 Total Receipts.Chart 2–4.250 1. Adjusted for Inflation Total Revenues. Adjusted for Inflation 750 500 7 .000 1.500 1. Percent of GDP Individual Income Taxes as a Share of GDP at Record High 11 New Record High 10 9 8 7 6 0 5 World War II Peak Chart 2–5.
” the Government subtracts collections from its business-like activities. from spending instead of adding them to revenues. the Federal Government will collect around $2. but the individual income tax share remained roughly constant. leaving a surplus of $231 billion in 2002. such as entrance fees at national parks.0 trillion. This amount does not include all of the Government’s spending. and corporate income taxes declined. As explained under “Revenues.0 trillion.2 trillion in 2002. 1 8 . spending would total an estimated $2.Chart 2–6.2 trillion in 2002. If they were not subtracted from spending. and survivors. OTHER Spending As noted. payroll taxes increased substantially as a percent of total revenues. These collections are estimated to be $0. Percent Composition of Revenues 100 Social Insurance Taxes 80 Excise Taxes 60 Corporation Income Taxes 40 Individual Income Taxes 20 0 1956 1962 1968 Other 1974 1980 1986 1992 1998 2004 Between 1956 and 2000.1 which is divided into several categories as shown in Chart 2–7. It accounts for 23 percent of all Federal spending. their dependents. which will provide monthly benefits to more than 46 million retired and disabled workers. not $2.2 trillion and spend nearly $2. • The largest Federal program is Social Security.
Since its creation in 1965. the Federal Government shares the costs of Medicaid with the States. and senior citizens in nursing homes. it will comprise 12 percent of all Federal spending. although the rate of growth has fallen from the double-digit pace of the late 1980s and early 1990s.2 trillion Tax Cut Debt Reduction or Contingency Reserve Social Security 23% Medicare 12% Medicaid Net 7% Interest 10% National Defense 16% Non-Defense Discretionary 19% Surplus $2.0 trillion Receipts $2. • Other means-tested entitlements provide benefits to people and families with incomes below certain minimum levels that vary from program to program. including the poor. • Medicaid will provide health care services to a little more than 34 million Americans. people with disabilities. Chart 2–7.• Medicare will provide health care coverage for more than 40 million elderly Americans and people with disabilities. How Your Tax Dollar Is Used Outlays $2. Medicaid will account for seven percent of the budget. 9 .0 trillion to be spent on Other Means-Tested Entitlements 6% Other Mandatory 7% *Means-tested entitlements are those for which eligibility is based on income. Medicare has accounted for an ever-growing share of spending. and veterans’ pensions. Federal and State costs are growing rapidly. This category will account for an estimated six percent of the budget. In 2002. Supplemental Security Income. Unlike Medicare. The major means-tested entitlements are Food Stamps. The Medicaid program is also a means-tested entitlement. In 2002. paying between 50 and 83 percent of the total (depending on each State’s requirements). the Earned Income Tax Credit. Child Nutrition.
housing. 10 .” which refers to the budget excluding certain programs that are legally designated as “off-budget. interest payments are estimated to drop to less than 10 percent of the budget in 2002. the budget has been in surplus. primarily the result of previous budget deficits. and foreign aid—will total an estimated $373 billion in 2002. or how much past borrowing can be repaid (in the case of a surplus). science. As a result. transportation. averaged seven percent of Federal spending in the 1960s and 1970s and rose to a high of 15 percent in 1996. the on-budget surplus has received increasing attention. This means that the on-budget surplus is the budget surplus excluding 2 the Social Security surplus. • Non-defense discretionary spending—a wide array of programs that include education. comprising 16 percent of the budget. • Slightly less than 11 percent of your Federal dollar (the budget surplus) will be reserved for contingencies or used to reduce the Federal debt to ensure the continued solvency of Social Security. “On” and “Off” Budget From time to time. unemployment insurance.” Traditionally. you may hear the term “on-budget. 2 The Postal Service is also designated as off-budget. makes up seven percent of the budget. Since 1998. technology. which is why the off-budget surplus and the Social Security surplus are not exactly the same. the off-budget surplus is the surplus in the Social Security program. More recently.• The remaining mandatory spending. training. For all practical purposes. and payments to farmers. • National defense discretionary spending will total an estimated $319 billion in 2002. which mainly consists of Federal retirement and insurance programs. and the unified budget surplus or deficit is the measure that determines how much the Government has to borrow from the public (in the case of a deficit). or 19 percent of the budget. the President’s budget has focused on the totals for the unified budget. • Interest payments. The unified budget encompasses all of the budgetary activities of the Government.
. . . . . . . . .326 127 2. . . . . . . . . . Net interest .750 Total Outlays. . . . . . . . . . . . . . . . . . . . . . . . . Other mandatory .438 269 32 237 553 292 196 285 1. . . . . . .250 1. . .077 2. . . Total. On-budget surplus/contingency . . Subtotal. . . . . . . . . . . . Adjusted for Inflation 1.258 242 49 193 498 252 166 268 1. . . . . . . . .001 206 1. . . . . . .081 188 1. . . . .224 2. . . . .500 1. . . . . . . . . .129 175 2. . . . . .339 262 52 211 524 279 181 286 1. . . . . . . . . . . . . . . . . . . . . . . . .000 Table 2–2. Receipts . . . . . . . .184 161 2. . . . . Mandatory: Social Security . . .000 1. . . . . . . . . . . . . Off-budget surplus . . . . . . . Constant FY 1996 dollars in billions Constant Dollar Spending Growth 2. . . . . . . . . . . . . . . .192 231 59 172 474 239 153 264 1. . .529 305 52 252 649 692 712 731 754 770 2002 2003 2004 2005 2006 11 . . Medicaid . . .016 2. . . . . .270 145 2. . . .961 2. . . . . . . outlays . .Chart 2–8. . . . . . . . . . . . . . . .856 2. . . . . . . . . . mandatory . . Medicare . . . . . . . . . . . . . . . . . Unified surplus . . . . . . . . . . . . . . . . . . . . .169 2. . . . . . . . . . . . . . . . . . . . . . . . . . . Spending Summary (In billions of dollars) Estimate 2001 Outlays: Discretionary . . . . . . . . . . . . . 430 216 129 226 1. . . . . . . . . . . .137 281 125 156 452 226 142 260 1. . . .
Total Spending by Function (Outlays. . . . . . . . . . . . . . .Table 2–3. . . in billions of dollars) Function 1998 National defense . . −43 65 175 219 263 434 45 29 17 206 . 42 23 16 Net interest . . . . . . . . .. . . . . . . 379 Veterans benefits and services . .. . . .. .077 2. .856 1. . Energy . . .. . . Medicare 55 56 141 190 238 390 43 26 16 230 . . 233 Social security . Undistributed offsetting receipts . . . . . .. . . Natural resources and environment . . Commerce and housing credit . . . General government . . . . and social services .. . . . .703 59 155 197 248 409 47 28 13 223 . . . .016 2. . . . . . . . . . . . . 1.. . . . .961 2. .. . employment. . . . .. . . . . . . . Note: 12 . . . . . . . . . . . . . . −4 8 77 202 230 276 455 52 32 16 188 2 −49 81 224 242 286 477 54 35 17 175 4 −60 83 243 256 296 502 56 35 18 161 5 −7 1 85 251 283 309 528 60 35 17 145 5 −5 9 87 265 296 317 557 60 36 18 127 6 − 62 Health . . Transportation . . . −47 Total . . . training. .. . . .169 2. . . . . .789 1. . . . . . . . General science. . . . . . . . . . 241 Allowances .. . .. and technology . . . . . . 268 13 18 1 22 12 1 40 10 Actual 1999 274 15 18 1 24 23 3 43 12 2000 294 17 19 −1 25 37 3 47 11 2001 299 17 20 −1 27 26 −1 51 11 2002 319 21 21 −* 27 19 7 55 12 Estimate 2003 322 21 21 −* 28 15 5 57 11 2004 333 21 22 −1 28 14 4 60 11 2005 347 22 23 −* 28 14 4 62 10 2006 354 22 23 −* 29 14 2 64 10 Agriculture . space. . . . . . Administration of justice . . . Education. . . . . . . . . . . . . . . . . . . . . Community and regional development . . . 131 . . . . . . . . . .224 Note: Spending that is shown as a minus means that receipts exceed outlays. . . . International affairs . . . . . −4 0 1. . 193 Income security . . . . . * $500 million or less. . . .653 1.
. . . . . . . . . General Services Administration . . . Total . . . . . . . . . . . . . . .. . * $500 million or less. . . . .. Note 13 . . Other Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . Environmental Protection Agency. which is automatic under permanent law. . . . 635 2002 3 5 18 5 310 45 19 57 30 10 20 11 9 16 15 23 4 * 7 * 2 1 13 15 4 * 1 6 6 5 661 Estimate 2003 2004 3 5 19 5 319 46 20 62 32 10 22 12 9 17 15 24 4 * 7 * 2 1 13 15 5 * 1 7 6 5 685 3 5 19 5 328 47 20 63 33 10 22 12 9 18 15 24 4 * 8 * 2 1 13 15 5 * 1 7 6 6 703 2005 3 5 19 5 337 48 21 65 35 10 22 12 10 18 16 25 4 * 7 * 2 1 14 16 5 * 1 7 6 6 720 2006 3 5 20 6 347 49 21 67 36 11 23 13 10 18 16 26 4 * 7 * 2 1 14 16 5 * 1 7 6 6 738 Allowances . . . . Treasury . . . . .. . . . . Labor . National Aeronautics and Space Administration . . Other Defense Civil Programs .. . . . . . . . . . . . . . . . . . . . . . . . . . see ``Action in Congress’’ in Chapter 3. . .. . . . . . . .. Agriculture . . . . . . . Office of Personnel Management . . . . . . . . . . . . . . . . in contrast to mandatory authority. . . . . . . . . . . . Energy . .. . . . . Commerce . . Veterans Affairs . . . . . . . . National Science Foundation . . . Corps of Engineers . . . International Assistance Programs ... . . . Judicial Branch . . . Small Business Administration . . . . .. . . . .. . . Budget authority that is shown as a minus means that receipts exceed budget authority.. . . . . Justice . . . Education . . . . . . . Federal Emergency Management Agency . . . .. . . . . 14 3 * 1 5 6 530 2 3 16 4 260 30 17 37 20 8 18 11 6 13 11 19 4 * 7 * 3 * 11 Actual 1999 3 3 16 5 275 29 18 42 22 8 18 11 8 14 13 19 4 * 8 * 3 1 31 14 4 * 1 5 6 . . . . . . . . .. . . 584 2001 3 4 19 5 296 40 20 54 28 10 21 12 8 18 14 22 5 * 8 * 2 * 13 14 4 * * 6 6 . . .. . . . . . . . . . . . Defense-Military . . Social Security Administration . . . For a more complete discussion of discretionary appropriations. . .Table 2–4. . . . . .. . Notes: Discretionary budget authority is appropriated by Congress each year. . . . . . . Transportation . . . . . . . . . . . . . . . Discretionary Budget Authority by Agency (In billions of dollars) Agency 1998 Legislative Branch .. . . Executive Office of the President .... . . . . . . . . . . . . . . . . . . . . . . State . .. . 582 2000 3 4 17 9 287 29 18 45 21 8 19 9 8 14 13 21 4 * 8 * 4 −* 14 14 4 * 1 6 6 . .. Housing and Urban Development Interior . . .. . . . . . . . . . . . . Health and Human Services .. . . . .
the on-budget accounts were still in deficit by $30 billion. because payroll taxes were raised dramatically in the early 1980s and because the relatively large “baby-boom” generation is big enough to provide the Social Security benefits provided to the relatively small generation of current retirees. Under the President’s proposals. The President’s overall budgetary framework is discussed in Chapter 5. These surpluses have held down the unified deficit by offsetting part of the deficit in the on-budget accounts.Social Security is running large surpluses right now. and the unified budget. For 2002.and off-budget items. nearly all of which was the result of the Social Security surplus. The on-budget accounts were almost exactly in balance. When the unified budget first booked a surplus of $69 billion in 1998. In 1999. Chart 2–9 illustrates the relationship between on. On. the entire Social Security surplus would be saved and set aside for Social Security and debt reduction. $59 billion of the estimated $231 billion surplus comes from the on-budget accounts. the unified budget ran a $125 billion surplus. Chart 2–9.and Off-Budget Surplus Projections Dollars in billions 500 400 Unified Budget Surplus 300 200 Off-Budget Surplus (Reserved for Social Security) 100 On-Budget Surplus 0 14 .
The law does not require an outgoing President to transmit a budget. to Congress on February 28. and A Citizen’s Guide to the Federal Budget. Appendix. by the first Monday in February. allow people from all walks of life to examine the budget from many different perspectives. How Does the Government Create a Budget? The President and Congress both play major roles in developing the Federal budget. A Blueprint for New Beginnings—A Responsible Budget for America's Priorities. and allocations within the spending target for the two types of spending— discretionary and mandatory—explained below. In some years. Action in Congress Congress first passes a “budget resolution”—a framework within which the Members will make their decisions about spending and taxes. is what the President and Congress must decide to spend for the next year through the 13 annual appropriations bills. and the surplus or deficit. It includes money for 1 They are the main budget book. It includes targets for total spending.3. entitled Budget of the United States Government: Fiscal Year 2002. 2001. it is not possible for the President to adhere to the normal schedule. 15 . • Discretionary spending. Historical Tables. These books. and it is impractical for an incoming President to complete a budget within a few days of taking office. which were submitted in April 2001. The President’s Budget The law specifies that. which you are now reading. Bush submitted a summary budget plan. the President submit to Congress his proposed Federal budget for the next fiscal year. President George W. President Bush’s detailed budget—which includes a main book and several accompanying books1—covers thousands of pages and provides an abundance of information. total revenues. as well as Analytical Perspectives. which accounts for one-third of all Federal spending. which begins October 1.
Scores of committees and subcommittees hold hearings on proposals under their jurisdiction. change the spending levels from year to year for the thousands of individual Federal spending programs. Congress and the President must act each year to provide spending authority. “authorizing” bills to change the laws governing mandatory spending and revenues. Within the cap. The President and Congress can change the law in order to change the spending on entitlements and other mandatory programs—but they don’t have to. is designed to prevent new legislation from reducing the surplus or increasing the deficit. and for defense and foreign aid. Cabinet officers. for instance. Think of it this way: For discretionary programs. however.” or PAYGO. is authorized by permanent laws. It includes entitlements—such as Social Security. • Mandatory spending. it turns its attention to passing the 13 annual appropriations bills and. The budget proposes to revise these caps beginning in 2001 to recognize changing fiscal conditions. The budget also proposes extending the PAYGO system. This requirement. Congress begins by examining the President’s budget in detail. and 16 . and often do. the House Ways and Means and the Senate Finance Committees will hold hearings. veterans’ benefits. and other Administration officials work with Congress as it accepts some of the President’s proposals. the law imposes limits. Once Congress passes the budget resolution. they may act to change the spending that current laws require. Medicare. To consider the budget’s proposed changes in taxes. hold hearings on the President’s defense plan. rejects others. the President and Congress can. not by the 13 annual appropriations bills. for space exploration and highway construction. Currently. The House and Senate Armed Services Authorizing Committees. In addition. and the Defense and Military Construction Subcommittees of the Appropriations Committees. which the Government pays to individuals and institutions that hold Treasury bonds and other Government securities. and extend the caps at appropriate levels through 2006.” through 2002 on annual discretionary spending. or “caps. income. called “pay-as-you-go.such activities as the FBI and the Coast Guard. for housing and education. which accounts for two-thirds of all spending. if it chooses. For mandatory programs. the law requires that legislation that would raise mandatory spending or lower revenues—compared to existing law—be offset by spending cuts or revenue increases. The Budget Director. and Food Stamps—through which individuals receive benefits because they are eligible based on their age. or other criteria. It also includes interest on the national debt.
the Government may spend $100 million in outlays in the first year to begin construction and the remaining $900 million over the next nine years as construction continues. however. Congressional rules require that these committees and subcommittees take actions that are consistent with the budget resolution. or IGs.changes still others. and • ensure that programs are well managed and achieving the intended results. or activities. This oversight is designed to: • ensure that agencies comply with legal limits on spending. • see that programs are operating consistently with legal requirements and existing policy. What the Government actually spends in a particular year. To see the difference. If you read through the President’s budget. Congress appropriates $1 billion in BA. and • the General Accounting Office. consider what happens when the Government decides to build a space exploration system. the Government monitors the budget through: • agency program managers and budget officials. Monitoring the Budget Once the President and Congress approve spending. an auditing arm of Congress. Thus. • congressional committees. including the Inspectors General. the budget resolution. 17 . is an outlay. projects. or the appropriations or authorizing bills that Congress drafts. • the Office of Management and Budget.” Budget authority (or BA) is what the law authorizes the Federal Government to spend for certain programs. But the system may take 10 years to build. The President and Congress may agree to spend $1 billion for the space system. you will notice that the Government measures spending in two ways—”budget authority” and “outlays. and that they use budget authority only for the purposes intended.
This law is designed to improve Government programs by using better measurements of their results in order to evaluate their effectiveness. the Executive Branch has begun to pay more attention to good management of late.Prodded by Congress. starting with the 1993 Government Performance and Results Act. 18 .
Since then—with Democratic and Republican Presidents. with which it paid down the debt. The Budget Surplus and Fiscal Discipline In 1998. The Government generated deficits during the War of 1812. Once the war ended or the economy began to grow. Deficits returned in 1931 and remained for the rest of the decade—due to the Great Depression and the spending associated with President Roosevelt's New Deal. the Government followed its deficits with budget surpluses. Wars necessitated major increases in military spending. With certain exceptions. Federal debt held by the public has been reduced from $3. For most of the Nation's history. Under the President's budget proposals.4 trillion at the end of 2000 and to an estimated $3. minus our surpluses. $2. deficits were the result of either wars or recessions. most recently last year.0 trillion in Federal debt held by the public will be retired over the next 10 years—all of the debt that can responsibly be retired.8 trillion at the end of 1997 to $3. 19 . the surplus nearly doubled to $125 billion. and World War I. to finance past deficits. over the years. As a result of these surpluses.4. a surplus occurs when receipts exceed spending in any year—just as a deficit occurs when spending exceeds receipts. while recessions reduced Federal tax receipts from businesses and individuals. the Treasury has borrowed money. the Civil War. World War II forced the Nation to spend unprecedented amounts on defense and to incur corresponding unprecedented deficits. With continued prudent fiscal policies. the Federal budget reported its first surplus ($69 billion) since 1969. In 1999. Democratic and Republican Congresses—the Government has balanced its books only 11 times. Generally. Then. the depression of the 1890s.2 trillion in 2001. the budget can remain in surplus for many years. the recession of 1837. and it generated 70 annual deficits between 1900 and 1997. and then again in 2000 to $236 billion. The Government incurred its first deficit in 1792. the debt is the sum total of our deficits. Put simply. Chart 4–1 provides the history of budget surpluses and deficits since 1940.
but have now been reversed. the highest level since World War II. In 2000. During the 1970s. this trend increased. Until recently. Why have we been able to move from deficit to balance? The main reason is because strong economic growth has increased tax receipts faster than the growth in Federal spending. since the 1960s. the end of the Cold War allowed the growth in defense spending to slow.Chart 4–1. Budget deficits have gradually declined since that high point. Also. In that same time. large budget deficits emerged as the economy was disrupted by oil shocks and inflation. Returning the Budget to Surplus Surplus (+)/deficit (-) in billions of dollars 300 200 100 0 -100 -200 -300 Deficits began increasing dramatically in the late 1970s and 1980s. However. receipts have stayed relatively constant. the deficit reached $290 billion. strong economic growth since the mid-1990s has increased receipts to nearly 21 percent of GDP. outlays grew from about 20 . at around 17 to 20 percent of GDP. By 1992. returning to balance in 1998. the budget surplus was $236 billion. In the 1980s.
combined. (Note: all numbers adjusted for inflation). spending has grown dramatically across a wide variety of programs. while spending on defense fell. Medicare and Medicaid. But non-defense discretionary spending is 30 percent higher while national defense discretionary spending is 11 percent lower than in 1983. Medicare and Medicaid. especially since 1997. are 175 percent higher and Social Security is 48 percent higher. with non-defense discretionary spending increasing more than eight percent during this threeyear period.500 Net Interest 1. 17 percent of GDP in 1965 to nearly 24 percent in 1983 before falling to 18 percent in 2000.) 21 . spending on Social Security.Chart 4–2. spending for net interest is 60 percent higher in 2000 than in 1983.000 Medicare/Medicaid 750 Other Mandatory 500 National Defense 250 Non-Defense Discretionary 0 Between 1966 and 2000. Between 1997 and 2000. and interest grew. (See Chart 4–2. Total spending in 2000 is 37 percent higher than in 1983 in constant dollars. since 1983.250 Social Security 1. Similarly. In recent years the growth in discretionary spending has accelerated. Nevertheless. Constant Dollar Outlays by Category Constant FY 1996 dollars in billions 1. discretionary spending is six percent higher.750 1. total discretionary spending has increased five percent. In total.
and the United Kingdom eliminated their total government budget deficits in recent years. defense.S. Of the five nations shown above. 22 . the Government's obligation to pay interest. this Nation has a good record when compared to the recent history of four other major developed economies.Chart 4–3. with it. the U. Should we worry about the possibility of a return to budget deficits? Deficits increase the Federal debt and. data include the activities of State and local governments. Why a Budget Surplus is Important As Chart 4–3 illustrates. Total Government Surplus or Deficit as a Percent of GDP Surplus (+)/deficit (-) in billions of dollars -10% Canada United States -5% Germany 0% Japan United Kingdom 5% 1983 1985 1987 1989 1991 1993 1995 1997 1999 Source: Organization for Economic Cooperation and Development (OECD). (To make accurate comparisons with the governments of other nations. only the United States. the less it has available to spend on education.) The 2002 Budget forecasts surpluses for decades to come if we maintain a policy of fiscal discipline. and other important services. law enforcement. Canada. calendar year data. The more it must pay in interest.
. 5. . if any. it generally repays debt held by the public.822 5. 23 . .717 2.219 305 52 252 −14 291 5. 5. . .410 1 The actual amount of annual debt retirement will vary depending upon the availability of eligible redeemable debt. . In the end. . . . Federal borrowing involves the sale. .588 5. .174 231 59 172 −4 227 5. . . . . . of notes and bonds of varying sizes and time periods until maturity. . . . . . . the Government spent more than 15 percent of its budget to pay interest. the surplus is a decision about our future. . . . and it determines how much the Government pays in interest to the public. . . . of the contingency reserve. . Table 4–1. . . The cumulative amount of borrowing from the public—i.or the more it must collect in taxes.627 5. . just as parents try to do within a family.219 Debt held by the public . On-budget surplus/reserve for contingencies 1 . . .592 Gross Federal debt . . . . . .856 3. . 236 87 150 −1 3 223 281 125 156 −45 236 5. . . . the debt held by the public—is the most important measure of Federal debt because it is what the Government has borrowed in the private markets over the years.473 269 32 237 −15 254 5. . . .629 Debt held by Government accounts.947 242 49 193 −1 5 227 5. Alternatively. We can provide a solid foundation for future generations. . . . .928 Estimate 2001 2002 2003 2004 2005 2006 Federal Government debt: Debt subject to legal limit . .784 3. Table 4–1 summarizes the relationship between the budget surplus and the repayment of Federal debt. and the use. .881 5.451 3.749 5. . . . Financing other than the change in debt held by the public . .636 2. . . 2.913 3. . .688 5. . . For a Nation. . . . . . . .e. .310 2. . . . . . The President’s budget will reduce these interest payments dramatically in the next 10 years. in contrast to less than 10 percent projected for 2002. .985 1. . .724 3. . . .664 2. . Amount available to repay debt held by the public.625 2. to the public. . Surplus and Debt If the Government incurs a surplus. . we can generate large deficits and debt for those who come after us. .004 2. Federal Government Financing and Debt (In billions of dollars) 2000 Actual Federal Government financing: Unified budget surplus . . .720 262 52 211 −16 246 5. . . 3. . . As recently as 1997. . . . . Off-budget surplus .. . this means a strong economy and low interest rates and debt. .
6 trillion. from 109 to 24 percent. it totaled $5. The rest is held in foreign countries. Debt held by the public was 35 percent of GDP at the end of 2000. which is similar to Gross Federal Debt. At the end of 2000. like the Social Security surplus. When the Government reaches the limit. then fell to 24 percent in 1974 before gradually rising to a peak of 49 percent in the middle 1990s.Debt held by the public was $3. The sum of debt held by the public and debt the Government owes itself is called Gross Federal Debt. Individuals and institutions in the United States hold about two-thirds of debt held by the public. there will be no need to increase the statutory limit in 2002. As a percentage of GDP. debt held by the public was highest at the end of World War II. then the President and Congress must either reduce the debt by raising receipts or reducing spending. for the first time since 1947–1949. Because the large budget deficit has been turned into a surplus. the debt held by the public was reduced for three years in a row. That decline. at 109 percent. Because the budget has returned to surplus and publicly held debt is being reduced. but the economy grew faster.4 trillion at the end of 2000—roughly the net effect of deficits and surpluses over the last 200 years. debt held by the public rose from $242 billion to $344 billion in those years. occurred because the economy grew faster than the debt accumulated. 24 . or GDP. which the law says must be invested in Federal securities. or enact a law to increase the limit. it loses its authority to borrow more to finance its spending. The Government's ability to finance its debt is tied to the size and strength of the economy. Another measure of Federal debt is debt subject to legal limit. Debt held by the public does not include debt the Government owes itself—the total of all trust fund surpluses and deficits over the years.
retiring the maximum amount of debt possible over 10 years ($2 trillion). and promise. At the same time. Thematic Highlights of President Bush’s 2002 Budget • Funds the Nation’s spending priorities. environment. 25 . the budget strengthens and reforms education.—President George W.0 percent growth in 2002. In the midst of this budget’s heft and detail. but it can create the conditions that permit a free citizenry to do so. Bush President George W.5. Government must also learn from the private sector. Government cannot create a strong economy. there is a vision for a better and more prosperous America. The President’s Budget moderates the rapid growth of discretionary spending that began with the arrival of budget surpluses in 1998 while funding key Federal priorities in education.6 trillion surplus over 10 years. needs. • Moderates recent explosive growth in discretionary spending to 4.6 trillion) for Social Security and commits to reforming the program.6 trillion over 10 years). • Achieves historic levels of debt reduction. an increase of $26 billion over 2001. For example. granting the Education Department the largest percentage spending increase of any department (11.5 percent increase in 2002). Bush’s 2002 Budget is shaped around a clearly defined goal —the belief that Government should be activist but limited. and other programs. health. A budget is a reflection of a nation’s priorities. THE PRESIDENT’S 2002 BUDGET A budget is much more than a collection of numbers. finding ways to increase efficiency and customer satisfaction. —Lets taxpayers keep roughly one-fourth of the surplus they produced ($1. With this budget I am confident that we can make a great Nation even better. surplus: Breakdown of —Saves all of Social Security surplus ($2. • Allocates projected $5.
• Restores commitment to military personnel and begins transition to a 21stCentury force structure. family. and establishes a first-ever $1 trillion contingency fund for unexpected needs. • The President’s Budget proposes a bold and fair tax relief plan that will reduce the inequities of the current tax code and help ensure that America remains prosperous. duplicative programs. equal opportunity. which is balanced for 10 consecutive years. It commits to an unprecedented amount of debt retirement—$2 trillion in debt over the next 10 years and reduces Federal debt as a share of the economy to the lowest level in a century. 26 . unjustified programs. revitalizes education. This plan will reduce taxes for everyone who pays income taxes.—Creates an unprecedented $1. brings defense strategy and spending in line with the challenges of the next half-century. The President’s Policy Priorities The President’s Budget. reforms and modernizes Social Security and Medicare. moderates Government spending growth to a reasonable four percent. and programs that have completed their mission in 2002. and it will encourage enterprise by lowering marginal tax rates. and spends every penny of Medicare tax and premium collections over the next 10 years only on Medicare. • Saves taxpayers billions of dollars by making reductions in one-time spending.0 trillion reserve for additional needs and contingencies. • The President’s Budget commits to using today’s surpluses to reduce the Federal Government’s publicly held debt so that future generations are not shackled with the responsibility of paying for the current generation’s overspending. and the entrepreneurial spirit. • Champions compassionate conservatism by supporting the critical role that faith-based and community organizations play in helping people at the local level. supports faith-based and community outreach efforts. provides needed tax relief for everyone who pays income taxes. funds America’s priorities. • Modernizes and reforms Medicare. retires an unprecedented $2 trillion in debt. This tax relief plan promotes the values that make the American economy second to none—access to the middle class.
The President’s Budget declares that the Federal Government must not spend for spending’s sake. Members of both parties and both Houses of Congress agree that Federal education dollars should be spent in ways that restore local control. Federal spending is a small part of America’s total education spending. That will grow to $216 billion (constant dollars) by 2020. encourages States to set high standards. The antiquated division of the program into hospital and non-hospital pieces does not encourage 27 . After 2038. many young people of following generations might not get back from Social Security what they put in. Social Security could be a losing proposition for them. Some education initiatives in this budget originated on one side of the political aisle. Unless Social Security is reformed. All stress results over promises and accountability over process. America’s public schools serve some children well. beyond the Government’s 10-year planning horizon. including by measuring achievement through frequent assessment. The cost of saving Social Security goes up with every passing year. and. and our ability to improve returns on total contributions goes down. improve the quality of classroom instruction and school safety. Medicare is already spending more than it takes in. assist parents in finding better options. But some schools clearly do not teach adequately. • The President is committed to shoring up Medicare’s finances as well. Reform must make Social Security a sound program for tomorrow’s retirees. hold schools accountable for improving student achievement. This budget puts together an education program and budget that ensures that “no child is left behind. Today.” • The President’s Budget shores up Social Security’s finances so that this program can continue to provide retirement security for all future retirees. or offer a fair start in life. the program will begin to run a cash deficit. while providing better.• The Administration believes that every young American should have the opportunity to go to a good school and acquire the skills that will be needed to advance in today’s high technology society. Returns have declined to such a point that future retirees would do two or three times better if they invested their Social Security taxes in low risk securities. Medicare spending already exceeds taxes and premiums by $66 billion this year. With this budget. the Social Security program is in surplus. nurture consistently. some on the other. Beginning around 2016. the trust fund will be depleted and payroll taxes at that time will cover only 73 percent of promised benefits. Today. the Administration commits itself to working with both parties and Houses of Congress to fix Social Security now. where a school persistently fails. more efficient coverage for our seniors.
Medicare has not adapted to 21st Century medicine. This budget begins the process of force re-examination. As in virtually all fields. Today our Nation faces no major foreign adversary. strengthen families. And yet our forces are deployed around the world maintaining peace and keeping a watchful eye on our national interests with increasing frequency. and building a national missile defense as fast as possible. although medical care increasingly relies on pharmaceuticals. conquer addiction. Reform that works for patients must make room for such innovation. • The President’s plan will support community and faith-based efforts to help needy Americans. the United States must develop a strategic vision for the 21st Century national security agenda that will inform research. insisting on success and steering resources to the effective and to the inspired. spurring billions more annually in charitable giving to neighborhood-serving groups. and procurement decisions for the next generation of defense systems. • The Administration is committed to enhancing our national security. the President’s budget will. Today. both sacred and secular.efficient medical care. in addition to the well-deserved pay raises earned each year. include an additional $1. This budget initiates the process of Medicare modernization and delivers immediate relief on prescription drugs for our neediest seniors. designing. Our military is unquestionably the strongest on earth. Federal policy should become outcome-based. Federal tax policy must spark an outpouring of private philanthropy in America. To boost the morale of these dedicated men and women. Furthermore. The Government must heed the growing consensus across America that successful Government programs can work in fruitful partnership with community-serving and faith-based 28 . Reform should expand patients’ choices—not restrict them. it lacks prescription drug coverage. technological and entrepreneurial innovation are among the keys to creating more value for the dollar in health care. and overcome poverty. Federal funds are denied to many faithbased and other community-based programs that have succeeded in helping people curb criminal behavior. development. In addition. The budget also includes $3 billion in additional funding to improve military housing and increase research and development. And it commits America to developing. These deployments have created some stress on our military.4 billion to ensure better compensation for our troops. Medicare is often slow to incorporate new technologies and methods of delivering health care.
25 million individuals a month. will have the fullest opportunity permitted by law to compete on a level playing field for Federal funds. • Energy Assistance.8 billion increase.9 billion in 2002 over 2001 funding. • Provides tax relief to all Americans who pay income tax.organizations. Sets aside $153 billion over the next 10 years for the Immediate Helping Hand initiative and Medicare modernization. With this budget. Mormons. by providing a $2. • Reduces the marriage penalty. Continues commitment to double NIH. Provides the highest ever request for the Land and Water Conservation Fund—fully funding the program at $900 million. more than tripling funding for reading. including Early Reading First. 29 . private and charitable groups. Launches a doubling of the number of people served by Community Health Centers by adding 1. so long as they achieve valid public purposes. Additional Budget Highlights • K-12 Education. maintaining current program level. Provides other tax incentives for education. Increases funding for elementary and secondary education by $1. • Tax incentives. nondiscrimination. or good people of no faith at all. Muslims. With this budget. Funds the Special Supplemental Nutrition Program for Women. whether run by Methodists. and neutrality. including religious ones.200 sites. and charitable purposes. • National Institutes of Health (NIH). Nearly doubles the existing Weatherization Assistance Program providing an increase of $1. farmers. • Community Health Centers. • WIC.4 billion over 10 years. The United States must observe the bedrock principles of pluralism. evenhandedness. • Medicare. Fully funds the President’s Reading First initiative. Infants. and Children (WIC) at 7. • Conservation. at $975 million in 2002. • Reading. • Ends the death tax. the Federal Government rallied and supports these armies of compassion across America. the environment. the disabled. the largest annual funding increase in NIH’s history. health care.
and $400 million to improve housing for our military members and their families. reform critical programs.2 billion.—President George W. We have the unprecedented opportunity to fund our national priorities. and provide needed tax relief.• National Defense. Bush 30 . pay off all of the Federal debt that makes sense to.1 billion to fully implement legislation that will assist in the processing of veterans’ disability claims. • Veterans’ Assistance: Increases funding to $1.4 billion for military compensation to improve quality of life and reenlistment and retention of military personnel. I present this budget in the spirit of cooperation and with the great expec tation that the will of the people and the needs of the Nation will guide our deliberations and lead us to success. $2.6 billion for research and development for new technologies (including missile defense alternatives). including $1. Improves embassy security overseas. • International Security. adding $1. Provides a $14 billion increase in Department of Defense spending in 2002 to begin to arrest the decline in national security. The time for bold action is now.
If necessary. It set annual limits on total discretionary spending and created “pay-as-you-go’’ rules for any changes in entitlements and taxes (see “pay-as-you-go’’). declining to a balanced budget in 1991. It set annual deficit targets for five years. projects. or allows. and sets forth the guidelines to which it must adhere. the Federal Government to spend for programs.Glossary Appropriation An appropriation is an act of Congress that enables Federal agencies to spend money for specific purposes. Balanced Budget A balanced budget occurs when total revenues equal total outlays for a fiscal year. Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings. This framework includes targets for total spending. Budget Resolution The budget resolution is the annual framework within which Congress makes its decisions about spending and taxes. It was never fully implemented. as well as 31 . total revenues. it required across-the-board cuts in programs to comply with the deficit targets. Budget Enforcement Act (BEA) of 1990 The BEA is the law that was designed to limit discretionary spending while ensuring that any new entitlement program or tax cuts did not make the deficit worse. or activities. Budget Authority (BA) Budget authority is what the law authorizes. or GRH) The Balanced Budget and Emergency Deficit Control Act of 1985 was designed to end deficit spending. and the deficit. Authorization An authorization is an act of Congress that establishes or continues a Federal program or agency.
space exploration and highway construction. within the spending target. housing and education. Deficit The deficit is the difference produced when spending exceeds revenues in a fiscal year. Discretionary Spending Discretionary spending is what the President and Congress must decide to spend for the next fiscal year through 13 annual appropriations bills. Entitlement An entitlement is a program that legally obligates the Federal Government to make payments to any person who meets the legal criteria for eligibility. Medicare. and telephone service. minus surplus. This is the cumulative amount of money the Federal Government has borrowed from the public. like the Social Security surplus. “Cap’’ A “cap’’ is a legal limit on annual discretionary spending. and Medicaid. that the law says must be invested in Federal securities. Excise Taxes Excise taxes apply to various products. Federal Debt The gross Federal debt is divided into two categories: debt held by the public.allocations. including alcohol. Debt Held by the Public Debt held by the public is the total of all Federal deficits. 32 . over the years. Examples include money for such activities as the FBI and the Coast Guard. Examples include Social Security. and defense and foreign aid. and debt the Government owes itself. tobacco. transportation fuels. through the sale of notes and bonds of varying sizes and time periods until maturity. Debt the Government Owes Itself Debt the Government owes itself is the total of all trust fund surpluses over the years. Another category is debt subject to legal limit. for discretionary and mandatory spending.
It begins October 1 and ends on September 30. “Pay-As-You-Go’’ Set forth by the BEA. Outlays Outlays are the amount of money the Government actually spends in a given fiscal year. The President and Congress can change the law to change the level of spending on mandatory programs—but they don’t have to. which is roughly the same as gross Federal debt. 2002. Gross Domestic Product (GDP) GDP is the standard measurement of the size of the economy. For example. fiscal 2002 ends September 30.Debt Subject to Legal Limit Debt subject to legal limit. Fiscal Year The fiscal year is the Government’s accounting period. “pay-as-you-go’’ refers to requirements that new spending proposals on entitlements or tax cuts must be offset by cuts in other entitlements or by other tax increases.’’ “On-Budget’’ Those programs not legally designated as off-budget. Mandatory Spending Mandatory spending is authorized by permanent law. “Off-Budget’’ By law. is the maximum amount of Federal securities that may be legally outstanding at any time. the Government must distinguish “off-budget’’ programs separate from the budget totals. 33 . It is the total production of goods and services within the United States. Social Security and the Postal Service are “off-budget. to ensure that the deficit does not rise (see BEA). An example is Social Security. When the limit is reached. Gramm-Rudman-Hollings See Balanced Budget and Emergency Deficit Control Act of 1985. the President and Congress must enact a law to increase it.
Surplus A surplus is the amount by which revenues exceed outlays.Receipt This is another word for revenue. Trust Funds Trust funds are Government accounts. Medicare taxes. for revenues and spending designated for specific purposes. Unified Federal Budget The unified budget. such as the entrance fees at national parks. unemployment insurance taxes. and Federal employee retirement payments. set forth by law as trust funds. Business-like collections are subtracted from total spending to calculate outlays for the year. is the presentation of the Federal budget in which revenues from all sources and outlays to all activities are consolidated. They do not include collections that result from the Government’s business-like activities. 34 . Revenues include the collections that result from Government activity. such as taxes. Revenue This is another word for receipt. the most comprehensive display of the Government’s finances. Social Insurance Payroll Taxes This tax category includes Social Security taxes.
. . . . . . . . . . . . . . . . . . . . . . . . . . 2–7 How Your Tax Dollar is Used . . . . . . . . . . . . . . . . . . . . 2–9 On. . . . . . 2–3 Total Spending by Function . . . . . . . 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2–4 Individual Income Taxes as a Share of GDP at Record High . . . . . . . 2–6 Composition of Revenues . . . 35 . 2–2 National Budgeting. . . . . 2 Page Where the Money Comes From—and Where It Goes 2–1 Family Budgeting . . . . . . . . . . . . . . . . . . . . . . 4–2 Constant Dollar Outlays by Category .List of Charts and Tables List of Charts What Is the Budget? 1–1 Government Spending as a Share of GDP. . . . . . . . . . . . . . . . . . . . . 2–2 Spending Summary . . . . . . . . . . . . . . List of Tables Where the Money Comes From—and Where It Goes 2–1 Revenues by Source—Summary . . . . . . . . . . . . . . . . . . . . . . 2–3 The Federal Government Dollar—Where It Comes From . . . . . . . . . . . . . . . .and Off-Budget Surplus Projections . . . . . 2–8 Constant Dollar Spending Growth . . . . . . . . . . . . . . . . . . . . . Page 6 11 12 13 23 The Budget Surplus and Fiscal Discipline 4–1 Federal Government Financing and Debt. . . . . . . . . . . . . . . . 4–3 Total Government Surplus or Deficit as a Percent of GDP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 5 7 7 8 9 11 14 20 21 22 The Budget Surplus and Fiscal Discipline 4–1 Returning the Budget to Surplus . . . . 2–4 Discretionary Budget Authority by Agency. . . . . . . . . . . . . . . . . . . . . 2–5 Constant Dollar Revenue Growth . . . . . . . . . . . . . . . . . . . . . . .
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