    [Analytical Perspectives]
    [Other Technical Presentations]
    [18. Comparison of Actual to Estimated Totals for 1995]
    [From the U.S. Government Printing Office, www.gpo.gov]

      The following three parts of this chapter compare the actual total
    receipts, outlays and deficit for 1995 with the baseline estimates shown
    in the 1995 Budget published in February 1994. The fourth part of this
    chapter shows additional details for a comparison of mandatory and
    related programs, and the final part reconciles actual receipts,
    outlays, and deficit totals for 1995 previously published by the
    Department of the Treasury with those in the budget.
      In this chapter the initial estimates of both receipts and outlays for
    1995 have been adjusted upward by $4.3 billion as a result of the
    reclassification of the Federal Communications universal service fund as
    budgetary. The initial estimates shown here are therefore higher than
    originally published in February 1994.
                                    Receipts
      Receipts in 1995 were $1,355.2 billion, which is $9.3 billion greater
    than the baseline estimate of $1,345.9 billion. As shown in Table 18-1,
    this increase was the net effect of legislative, administrative and
    regulatory changes; economic conditions that differed from what had been
    expected; and different collection patterns and effective tax rates than
    had been assumed.

                   Table 18-1.  COMPARISON OF ACTUAL 1995 RECEIPTS WITH THE INITIAL BASELINE ESTIMATES
                                                (In billions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                          Legislative,
                                               Baseline  regulatory and   Different  Technical     Net
                                               estimate  administrative   economic    factors     change     Actual
                                                             changes     conditions
    ----------------------------------------------------------------------------------------------------------------
    Individual income taxes.................     597.1          -0.4           3.6      -10.1       -6.9      590.2
    Corporation income taxes................     141.0           1.4           5.2        9.4       16.0      157.0
    Social insurance taxes and contributions     492.1          -0.2           0.3       -7.7       -7.7      484.5
    Excise taxes............................      55.8           0.8           0.5        0.5        1.7       57.5
    Estate and gift taxes...................      13.9   ..............          *        0.9        0.9       14.8
    Customs duties..........................      20.9          -1.9           2.1       -1.7       -1.6       19.3
    Miscellaneous receipts..................      25.1   ..............        3.9        2.9        6.8       31.9
                                             -----------------------------------------------------------------------
      Total.................................   1,345.9          -0.3          15.5       -5.9        9.3    1,355.2
    ----------------------------------------------------------------------------------------------------------------
    *$50 million or less.

      Policy differences.--Four major laws enacted after February 1994
    affected 1995 receipts: Uruguay Round Agreements Act of 1994, Social
    Security Independence and Program Improvements Act, Social Security
    Domestic Employment Reform Act of 1994 and Self-Employed Health
    Insurance Act. Tariff reductions provided under the Agreements were
    offset by timing, compliance and withholding changes in certain Federal
    tax laws, resulting in a net increase in 1995 receipts of $25 million.
    The Social Security Independence and Program Improvements Act and the
    Social Security Domestic Employment Reform Act of 1994 provided for
    changes in the Social Security and Supplemental Security Income programs
    that reduced 1995 receipts by $0.2 billion. The provisions of the Self-
    Employed Health Insurance Act restored and permanently increased the
    deduction of health insurance costs for the self-employed and repealed
    the Federal Communication Commission's certificate of deferral program,
    reducing 1995 receipts by a net $0.2 billion. In total, legislative,
    administrative and regulatory changes decreased 1995 receipts by a net
    $0.3 billion.
      Economic differences.--Differences between the economic assumptions
    upon which the baseline estimates were made and actual economic
    performance accounted for a net increase in 1995 receipts of $15.5
    billion. One-third of this increase ($5.2 billion) was attributable to
    increases in corporation income taxes resulting from higher than
    expected corporate profits. Individual income taxes were higher than
    expected by $3.6 billion, in large part due to increases in non-wage
    sources of personal income relative to the budget forecast. Higher than
    anticipated interest rates, which affect deposits of earnings by the
    Federal Reserve, increased miscellaneous receipts by $3.9 billion and
    higher than expected imports increased customs duties by $2.1 billion.
      Technical reestimates.--Different collection patterns and effective
    tax rates than had been assumed in February 1994 were primarily
    responsible for the reductions in individual income taxes and social
    insurance taxes and contributions of $10.1 billion and $7.7 billion,
    respectively, and the increase in corporation income taxes of $9.4
    billion. Increased deposits of earnings by the Federal Reserve,
    attributable to higher-than-expected asset values on securities
    denominated
    [[Page 276]]
    in foreign currencies, accounted for most of the $2.9
    billion increase in miscellaneous receipts.
                                     Outlays
      Outlays for 1995 were $1,519.1 billion. This was $4.1 billion less
    than the $1,523.2 billion baseline estimates in the initial 1995 Budget
    (February 1994).\1\
      \1\The initial baseline estimate includes current law estimates for
    mandatory outlays. Discretionary outlays are the estimated caps
    including adjustments for fees as published in the Analytical
    Perspectives volume of the 1995 Budget.
    ---------------------------------------------------------------------------
      Table 18-2 distributes the $4.1 billion net decrease in outlays among
    discretionary and mandatory programs and net interest. The table also
    makes rough estimates according to four reasons for the changes: (1)
    policy changes; (2) changes to the discretionary caps or limits; (3)
    economic conditions; and (4) technical estimating differences, a
    residual.
      Policy changes are the result of actions by the Congress or the
    Administration that change spending levels, primarily through higher or
    lower appropriations or changes in authorizing legislation. For 1995,
    policy changes decreased outlays an estimated $0.8 billion relative to
    the initial baseline estimates.
      Policy changes reduced discretionary outlays $0.5 billion because
    final appropriations were below the caps. Policy changes reduced
    mandatory outlays $0.3 billion below current law. Most of this decrease
    was the result of $0.2 billion for agriculture reforms and $0.2 billion
    for the Uruguay Round Agreements Act of 1994 (GATT). (Mandatory programs
    are mostly formula benefit or entitlement programs not normally
    controlled by annual appropriations.)
      Increases in the discretionary caps allowed outlays to increase $6.3
    billion. This included $7.9 billion for emergencies, largely for the
    Northridge, California earthquake and expenses for military actions in
    the Persian Gulf. These increases were partially offset by $1.6 billion
    in decreases in the caps. The caps, or discretionary limits, are
    established in the Budget Enforcement Act of 1990 as amended, and can be
    adjusted for officially declared emergencies and other reasons. The caps
    are described in Chapter 12: ``Preview Report,'' found elsewhere in this
    volume.
      Economic conditions that differed from those forecast in February 1994
    resulted in a net outlay increase of $14.2 billion. Outlays for
    mandatory programs decreased an estimated $5.8 billion. Lower than
    expected unemployment rates decreased outlays $4.7 billion, primarily
    due to the effects on unemployment benefits. Lower than expected
    inflation decreased outlays $1.5 billion, largely due to the effect on
    Medicare and Medicaid and other inflation-sensitive benefits. These
    decreases were more than offset by increases for net interest, which
    increased $20.0 billion due to higher than expected interest rates.
      Technical estimating differences and other changes result from changes
    in such factors as the number of beneficiaries for entitlement programs,
    crop conditions, bank failures, or other factors not associated with
    policy changes or economic conditions. Technical changes accounted for a
    net decrease of $23.9 billion. The largest decrease was for deposit
    insurance. Collections were initially estimated to exceed disbursements
    by $11.1 billion. Actual collections exceeded disbursements by $17.9
    billion, a decrease in outlays of $6.7 billion from the initial
    estimate. This decrease was primarily because favorable economic
    conditions resulted in fewer bank and thrift failures than originally
    assumed, and improved economic conditions increased collections from
    asset sales. The other largest decreases were for Medicaid and the
    Postal Service.

                   Table 18-2.  COMPARISON OF ACTUAL 1995 OUTLAYS WITH THE INITIAL BASELINE ESTIMATES
                                                  (Outlays in billions)
    ----------------------------------------------------------------------------------------------------------------
                                                 1995                         Changes
                                                Budget  ---------------------------------------------------
                                               baseline                                                      Actual
                                                (Feb.     Policy      Cap    Economic  Technical    Total
                                               1994)\1\             changes                        changes
    ----------------------------------------------------------------------------------------------------------------
    Discretionary:
       Defense..............................      271.1      -1.1       2.1  ........        1.4       2.4     273.5
       Nondefense...........................      271.3       0.5       4.1  ........       -3.8       0.8     272.1
                                             -----------------------------------------------------------------------
       Subtotal, discretionary..............      542.4      -0.5       6.3  ........       -2.5       3.3     545.7

    Mandatory:
       Deposit insurance....................      -11.1  ........  ........  ........       -6.7      -6.7     -17.9
       Other programs.......................      779.0      -0.3  ........      -5.8      -13.8     -19.8     759.2
                                             -----------------------------------------------------------------------
       Subtotal, mandatory..................      767.9      -0.3  ........      -5.8      -20.5     -26.6     741.3

    Net interest............................      213.0        -*       0.2      20.0       -1.0      19.2     232.2
                                             -----------------------------------------------------------------------
      Total outlays.........................    1,523.2      -0.8       6.5      14.2      -23.9      -4.1   1,519.1
    ----------------------------------------------------------------------------------------------------------------
    *$50 million or less.
    \1\Total discretionary outlays are the estimated discretionary caps. Because the caps were not separated by
      defense and nondefense, discretionary defense outlays are proposed amounts.
    [[Page 277]]
                                     Deficit
      The preceding two sections discussed the differences between the
    initial baseline estimates and the actual amounts of Federal Government
    receipts and outlays for 1995. This section combines these effects to
    show the net impact of these differences on the deficit.
      As shown in Table 18-3, the 1995 baseline deficit was initially
    estimated to be $177.3 billion. The actual deficit was $163.9 billion,
    which was $13.4 billion less than the initial estimate. Receipts were
    $9.3 billion more than the initial estimate, and outlays were $4.1
    billion less. The table shows the distribution of the changes according
    to the categories in the preceding two sections.

                 Table 18-3.  COMPARISON OF THE ACTUAL 1995 DEFICIT WITH THE INITIAL BASELINE ESTIMATES
                                                      (In billions)
    ----------------------------------------------------------------------------------------------------------------
                                                 1995                         Changes
                                                Budget  ---------------------------------------------------
                                               baseline                                                      Actual
                                                 (Feb.    Policy      Cap    Economic  Technical    Total
                                                 1994)              changes                        changes
    ----------------------------------------------------------------------------------------------------------------
    Receipts.................................   1,345.9      -0.3  ........      15.5       -5.9       9.3   1,355.2
    Outlays..................................   1,523.2      -0.8       6.5      14.2      -23.9      -4.1   1,519.1
                                              ----------------------------------------------------------------------
      Deficit................................    -177.3       0.5      -6.5       1.3       18.0      13.4    -163.9
    ----------------------------------------------------------------------------------------------------------------
    Note: Deficit changes are receipts minus outlays. For these changes, a plus indicates a decrease in the deficit.

      The net effect of policy decreases in receipts and outlays combined to
    decrease the deficit $0.5 billion. Cap changes increased the deficit
    $6.5 billion.
      Economic conditions that differed from the initial assumptions in
    February 1994 accounted for an estimated $1.3 billion decrease in the
    deficit--the combined effect of an increase in receipts of $15.5
    billion, almost offset by an increase in outlays of $14.2 billion.
    Technical estimating and other differences decreased the deficit by an
    estimated $18.0 billion. This was due to a decrease in outlays of $23.9
    billion, partially offset by a decrease in receipts of $5.9 billion.
    Comparison of the Actual and Estimated Outlays for Mandatory and Related
                                Programs for 1995
      This section compares the original 1995 outlay estimates for mandatory
    and related programs under current law in the 1995 Budget (February
    1994) with the actual outlays. Mandatory and related programs are
    programs with spending generally controlled by authorizing legislation
    rather than by annual appropriations. Outlays for these programs depend
    primarily on eligibility criteria and benefit levels established in law,
    such as social security and Medicare benefits for the elderly,
    agricultural price support payments to farmers, or deposit insurance for
    banks and thrift institutions. This category also includes net interest
    outlays and undistributed offsetting receipts.
      A number of factors may cause differences between the amounts
    estimated in the budget and the actual outlays. For example, legislation
    may change benefit rates or coverage; the actual number of beneficiaries
    may differ from the number estimated; or economic conditions (such as
    inflation or interest rates) may differ from what was assumed in making
    the original estimates.
      Table 18-4 shows the differences between the actual outlays for these
    programs in 1995 and the amounts originally estimated in the 1995
    Budget, based on laws in effect at that time. (The list of programs is
    similar to the list in Table 13-3 in Chapter 13, ``Review of Direct
    Spending and Receipts,'' in this volume. This table provides the
    estimates through 2002.) Actual outlays for mandatory and related
    programs in 1995 were $973.5 billion, which was $7.4 billion less than
    the initial estimate of $980.9 billion, based on existing law in
    February 1994. Of this, actual outlays for mandatory programs were
    $785.8 billion in 1995, $24.9 billion less than estimated in February
    1994.

      Table 18-4.  COMPARISON OF ACTUAL AND ESTIMATED OUTLAYS FOR MANDATORY AND RELATED PROGRAMS UNDER CURRENT LAW
                                                 (In billion of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                              1995
                                                                           -----------------------------------------
                                                                              February
                                                                                1994         Actual        Change
                                                                              estimate
    ----------------------------------------------------------------------------------------------------------------
    Mandatory programs:
       Human resources programs:
         Education, training, employment, and social services.............        13.6          15.7           2.0
         Health:
           Medicaid.......................................................        96.4          89.1          -7.3
           Other..........................................................         4.1           4.3           0.2
                                                                           -----------------------------------------
           Total health...................................................       100.5          93.4          -7.1
         Medicare.........................................................       155.4         156.9           1.5
         Income security:
           Retirement and disability......................................        69.2          70.4           1.2
           Unemployment compensation......................................        23.0          21.3          -1.7
           Food and nutrition assistance..................................        34.4          33.5          -0.9
           Other..........................................................        63.0          56.0          -6.9
                                                                           -----------------------------------------
           Total, income security.........................................       189.7         181.3          -8.3
         Social security..................................................       334.6         333.3          -1.3
         Veterans benefits and services:
           Income security for veterans...................................        19.0          19.0           *
           Other..........................................................         1.2           0.9          -0.2
                                                                           -----------------------------------------
           Total veterans benefits and services...........................        20.1          19.9          -0.2
                                                                           -----------------------------------------
         Total mandatory human resources programs.........................       813.9         800.4         -13.5
       Other mandatory programs:
         Agriculture......................................................         9.0           5.8          -3.2
         Deposit insurance................................................       -11.1         -17.9          -6.7
         Other functions..................................................        -1.2          -2.6          -1.4
                                                                           -----------------------------------------
         Total other mandatory programs...................................        -3.3         -14.7         -11.3
                                                                           -----------------------------------------
       Total mandatory programs...........................................       810.6         785.8         -24.9

    Undistributed offsetting receipts:
       Employer share, employee retirement................................       -39.8         -42.0          -2.3
       Rents and royalties on the outer continental shelf.................        -3.0          -2.4           0.6
                                                                           -----------------------------------------
       Total undistributed offsetting receipts............................       -42.8         -44.5          -1.7
                                                                           -----------------------------------------
    Net interest:
       Interest on the public debt........................................       311.0         332.4          21.4
       Interest received by trust funds...................................       -88.8         -93.2          -4.3
       Other interest.....................................................        -9.2          -7.1           2.1
                                                                           -----------------------------------------
       Total net interest\1\..............................................       213.0         232.2          19.2
                                                                           -----------------------------------------
    Total outlays for mandatory and related programs under current law....       980.9         973.5          -7.4
    ----------------------------------------------------------------------------------------------------------------
    *$50 million or less.
    \1\Assumes baseline deficit of $177.3 billion, as shown in Table 18-3.

      Actual outlays for mandatory human resources programs were $800.4
    billion, $13.5 billion less than originally estimated. This decrease was
    the net effect of legislative action, differences between actual and
    assumed economic conditions, differences between the anticipated and
    actual number of beneficiaries, and other technical differences. The
    largest decrease was for Medicaid ($7.3 billion), due primarily to
    technical reestimates.
      Outlays for other mandatory programs were $11.3 billion less than
    originally estimated. The largest decrease was for deposit insurance.
    Collections were initially expected to exceed disbursements by $11.1
    billion. Actual collections exceeded disbursements by $17.9 billion, a
    net decrease of $6.7 billion from the initial estimate. This was in part
    due to favorable economic conditions, which resulted in fewer bank and
    thrift failures than originally assumed and increased proceeds from the
    sale of assets. The decrease in outlays for mandatory agricultural
    programs ($3.2 billion) resulted largely from higher than expected crop
    prices that reduced Federal income subsidies and international affairs.
      Outlays for net interest were $232.2 billion or $19.2 billion more
    than the original estimate. This increase was largely the effect of
    higher than expected interest rates partially offset by lower borrowing
    requirements due to a lower than originally estimated deficit.
    [[Page 278]]
      Reconciliation of Differences with Amounts Published by Treasury for
                                      1995
      Table 18-5 provides a reconciliation of the receipts, outlays, and the
    deficit totals published by the Department of the Treasury in the U.S.
    Government Annual Report (February 1996) and those published in this
    budget. Receipts are $4.6 billion higher than previously reported by the
    Department of the Treasury and outlays are $4.7 billion higher,
    resulting in a net increase in the deficit of $0.1 billion more than
    previously reported. Most of the receipt and outlay difference is the
    result of the reclassification of the Federal Communications universal
    service fund as budgetary.
    [[Page 279]]

                                  Table 18-5.  RECONCILIATION OF FINAL AMOUNTS FOR 1995
                                                (In millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                      Receipts   Outlays    Deficit
    ----------------------------------------------------------------------------------------------------------------
    Totals published in the Monthly Treasury Statement for September 1995\1\.......  1,350,576  1,514,389    163,813
     Miscellaneous Treasury adjustments............................................  .........         39         39
                                                                                    --------------------------------
      Totals published by Treasury in the U.S. Government Annual Report\2\.........  1,350,576  1,514,428    163,852

    Adjustments, net:
       Federal Communications Commission (universal service fund)..................      4,300      4,300  .........
       Farm Credit System Financial Assistance Corporation.........................  .........         75         75
       United Mine Workers of America benefit funds................................        336        336  .........
       Miscellaneous adjustments...................................................          1         -6         -7
                                                                                    --------------------------------
      Total adjustments, net.......................................................      4,637      4,705         68
                                                                                    --------------------------------
    Totals in the 1997 Budget......................................................  1,355,213  1,519,133    163,920
    ----------------------------------------------------------------------------------------------------------------
    \1\Published on October 27th, 1995.
    \2\Published in February 1996.