    [A Citizen's Guide to the Federal Budget]
    [Glossary]
    [From the U.S. Government Printing Office, www.gpo.gov]

    Appropriation
    An appropriation is an act of Congress that enables Federal agencies
    to spend money for specific purposes.

    Authorization
    An authorization is an act of Congress that establishes or continues a
    Federal program or agency, and sets forth the guidelines to which it
    must adhere.

    Balanced Budget
    A balanced budget occurs when total revenues equal total outlays for a
    fiscal year.

    Budget Authority (BA)
    Budget authority is what the law authorizes, or allows, the Federal
    Government to spend for programs, projects, or activities.

    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. 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.'')

    Balanced Budget and Emergency Deficit Control Act of 1985
    (Gramm-Rudman-Hollings, or GRH)
    The Balanced Budget and Emergency Deficit Control Act of 1985 was
    designed to end deficit spending. It set annual deficit targets for
    five years, declining to a balanced budget in 1991. If necessary, it
    required across-the-board cuts in programs to comply with the deficit
    targets. It was never fully implemented.

    Budget Resolution
    The budget resolution is the annual framework within which Congress
    makes its decisions about spending and taxes. This framework includes
    targets for total spending, total revenues, and the deficit, as well
    as allocations, within the spending target, for discretionary and
    mandatory spending.

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    ``Cap''
    A ``cap'' is a legal limit on total annual discretionary spending.

    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. Examples include money for such activities as the FBI and the
    Coast Guard, housing and education, space exploration and highway
    construction, and defense and foreign aid.

    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. Examples include Social Security, Medicare, and Medicaid.

    Excise Taxes
    Excise taxes apply to various products, including alcohol, tobacco,
    transportation fuels, and telephone service.

    Federal Debt
    The gross Federal debt is divided into two categories: debt held by
    the public, and debt the Government owes itself. Another category is
    debt subject to legal limit.

    Debt Held by the Public
    Debt held by the public is the total of all Federal deficits, minus
    surpluses, over the years. This is the cumulative amount of money the
    Federal Government has borrowed from the public, through the sale of
    notes and bonds of varying sizes and time periods.

    Debt the Government Owes Itself
    Debt the Government owes itself is the total of all trust fund
    surpluses over the years, like the Social Security surpluses, that the
    law says must be invested in Federal securities.

    Debt Subject to Legal Limit
    Debt subject to legal limit, which is roughly the same as gross
    Federal debt, is the maximum amount of Federal securities that may
    be legally

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    outstanding at any time. When the limit is reached, the President and
    Congress must enact a law to increase it.

    Fiscal Year
    The fiscal year is the Government's accounting period. It begins
    October 1 and ends on September 30. For example, fiscal 1998 ends
    September 30, 1998.

    Gramm-Rudman-Hollings
    See Balanced Budget and Emergency Deficit Control Act of 1985.

    Gross Domestic Product (GDP)
    GDP is the standard measurement of the size of the economy. It is the
    total production of goods and services within the United States.

    Mandatory Spending
    Mandatory spending is authorized by permanent law. An example is
    Social Security. The President and Congress can change the law to
    change the level of spending on mandatory programs--but they don't have to.

    ``Off-Budget''
    By law, the Government must distinguish ``off-budget'' programs separate
    from the budget totals. Social Security and the Postal Service are
    ``off-budget.''

    Outlays
    Outlays are the amount of money the Government actually spends in a
    given fiscal year.

    ``Pay-As-You-Go''
    Set forth by the BEA, ``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, to ensure that the
    deficit does not rise. (See BEA.)

    Revenue
    Revenue is money collected by the Government.

    Social Insurance Payroll Taxes
    This tax category includes Social Security taxes, Medicare taxes,
    unemployment insurance taxes, and Federal employee retirement payments.

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    Surplus
    A surplus is the amount by which revenues exceed outlays.

    Trust Funds
    Trust funds are Government accounts, set forth by law as trust funds,
    for revenues and spending designated for specific purposes.

    Unified Federal Budget
    The unified budget, the most useful display of the Government's
    finances, is the presentation of the Federal budget in which revenues
    from all sources and outlays to all activities are consolidated.