[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.