legislative actions and the cost - containment efforts in the medical sector. but because they grew about 25 percent per year, on average, between 1995 and 2000, they accounted for more than one - third of the increase in total individual receipts over that period. receipts that are more directly related to production in the broader economy - - that is, those associated with wages and salaries, business and professional incomes, dividends, and interest income - - rose 8 - 1 / 2 percent per year, on average, between 1995 and 2000, one - third the pace of receipts on stock - market - related taxable incomes. had equity asset values risen only as fast as nominal gdp between 1995 and 2000 - - that is, about 6 percent per year - - taxes related to stock - price levels would have been approximately $ 130 billion less in fiscal 2000, even without taking account of the reduced receipts that would have resulted from a presumably less buoyant economy. recent developments, of course, have reversed part of this fiscal bonanza. tax cuts, the weakening in economic activity, and the sharp decline in stock prices have reduced individual tax receipts. in addition, taxes on capital gains realizations have become an increasingly important component of corporate receipts in recent years - - perhaps as much as one - fourth. consequently, declines in stock prices have exerted additional downward pressure on corporate receipts, which had already taken a large hit from declining profit margins. increased funding for defense and homeland security and the higher expenditures on unemployment benefits and other cyclically sensitive programs are also pressing on our current - policy fiscal balances. such calculations, of course, do not include the additional expenditures that doubtless will be authorized as the year progresses. the current - policy budget outlook prepared by the congressional budget office for the coming decade, though less favorable than a year ago, is still quite positive. cbo remains reasonably sanguine about the economy's growth prospects for the next ten years, and this is reflected in the re - emergence in its current - policy projections of moderate unified budget surpluses by the middle of the decade. if realized, such surpluses, by lowering the publicly held federal debt and freeing up private saving to be channeled into capital investment, would help us prepare for the considerable demographic changes that we face over the longer run. this will clearly be no simple task. as dr. crippen emphasized yesterday, the fiscal pressures that will almost surely arise after 2010 will be formidable. achieving a satisfactory budget posture will depend

, in contrast to the usual pattern, the household sector was a major stabilizing force. as a consequence, although household spending should continue to trend up, the potential for significant acceleration in activity in this sector is more limited. in fact, there are a number of pluses and minuses in the outlook for household spending. low mortgage interest rates and favorable weather have provided considerable support to homebuilding in recent months. moreover, attractive mortgage rates have bolstered both the sales of existing homes and the realized capital gains that those sales engender. they have also spurred refinancing of existing homes and the associated liquification of increases in house values. these gains have been important to the ongoing extraction of home equity for consumption and home modernization. the pace of such extractions likely dropped in response to the decline in refinancing activity that followed the backup in mortgage rates that began in early november. but mortgage rates remain at low levels and should continue to provide support to activity in this sector. consumer spending received a considerable lift from the sales of new motor vehicles, which were remarkably strong in october and november owing to major financing incentives. sales have receded some as incentives were scaled back, but they have remained surprisingly resilient. other consumer spending appears to have advanced at a moderate pace in recent months. the substantial declines in the prices of natural gas, fuel oil, and gasoline have clearly provided some support to real disposable income and spending. to have a more persistent effect on the ongoing growth of total personal consumption expenditures, energy prices would need to continue declining. futures prices do not suggest that such a decline is in the immediate offing, but the forecast record of these markets is less than sterling. although the quantitative magnitude and the precise timing of the wealth effect remain uncertain, the steep decline in stock prices since march 2000 has, no doubt, curbed the growth of household spending. although stock prices recently have retraced a portion of their earlier losses, the restraining effects from the net decline in equity values presumably have not, as yet, fully played out. future wealth effects will depend importantly on whether corporate earnings improve to the extent currently embedded in share prices. perhaps most central to the outlook for consumer spending will be developments in the labor market. the pace of layoffs quickened last fall, especially after september 11, and the unemployment rate rose sharply. over the past month or so, however, initial claims for unemployment insurance have decreased markedly, on balance