[Analytical Perspectives]
[Other Technical Presentations]
[17. Trust Funds and Federal Funds]
[From the U.S. Government Publishing Office, www.gpo.gov]
[[Page 319]]
========================================================================
OTHER TECHNICAL PRESENTATIONS
========================================================================
[[Page 321]]
17. TRUST FUNDS AND FEDERAL FUNDS
The budget consists of two major groups of funds: Federal funds and
trust funds. This section presents summary information about the
transactions of each fund group and of the major trust funds. It also
discusses the relationship between the trust funds surplus and the
unified budget surplus or deficit, and the meaning of the large and
growing trust funds balance. Information about the income and outgo of
four Federal funds that are financed by earmarked collections similar to
trust funds is also provided.
Federal Funds Group
The Federal funds group comprises the larger part of the budget. It
includes all transactions not classified by law as being in trust funds.
The main financing component of the Federal funds group is the general
fund, which is used to carry out the general purposes of Government
rather than being restricted by law to a specific program. It consists
of all collections not earmarked by law to finance other funds,
including virtually all income taxes and many excise taxes, and all
expenditures financed by these collections and by general Treasury
borrowing.
The Federal funds group also includes special funds and revolving
funds, which are similar to trust funds in that their spending is
financed by earmarked collections. Where the law requires that Federal
fund collections from a specified source be earmarked to finance a
particular program, such as the Outer Continental Shelf mineral leasing
revenues deposited into the land and water conservation fund, the
collections and associated disbursements are recorded in special fund
receipt and expenditure accounts. The majority of special fund
collections are derived from the Government's power to impose taxes,
fines, and other compulsory payments, and they must be appropriated
before they can be obligated and spent.
Revolving funds conduct continuing cycles of business-like activity.
They charge for the sale of products or services and use the proceeds to
finance their spending. Instead of being deposited in receipt accounts,
their proceeds are recorded as offsets to outlays within the funds'
expenditure accounts, so that outlays are reported net of collections.
These collections generally are available automatically for obligation
and making payments. There are two classes of revolving funds. Public
enterprise funds, such as the Postal Service Fund, conduct business-like
operations mainly with the public. Intragovernmental funds, such as the
Federal Buildings Fund, conduct business-like operations mainly within
and between Government agencies.
Trust Funds Group
The trust funds group consists of funds that are designated by law as
trust funds. They are usually financed by earmarked collections. Many of
the larger trust funds finance social insurance payments for
individuals, such as Social Security, Medicare, and unemployment
compensation. Other major trust funds finance military and Federal
civilian employees' retirement, highway and transit construction, and
airport and airway development. Trust funds also include a few small
funds established to carry out the terms of a conditional gift, bequest,
or court settlement.
Whether a particular fund is designated in law as a trust fund is, in
many cases, arbitrary. For example, the National Service Life Insurance
Fund is a trust fund, but the Servicemen's Group Life Insurance Fund is
a Federal fund, even though both are financed by earmarked fees paid by
veterans and both provide life insurance payments to veterans'
beneficiaries. \1\
---------------------------------------------------------------------------
\1\ Another example is the Violent Crime Reduction Trust Fund,
established pursuant to the Violent Crime Control and Law Enforcement
Act of 1994. Because the Fund is substantively a means of accounting for
general fund appropriations, and does not consist of dedicated receipts,
it is classified as a Federal fund rather than a trust fund.
---------------------------------------------------------------------------
The Federal budget meaning of the term ``trust'' differs significantly
from the private sector usage. The beneficiary of a private trust owns
the trust's income and often its assets. A custodian manages the assets
on behalf of the beneficiary according to the stipulations of the trust,
which he cannot change unilaterally. In contrast, the Federal Government
owns the assets and earnings of most Federal trust funds, and it can
unilaterally raise or lower future trust fund collections and payments,
or change the purpose for which the collections are used, by changing
existing law. Only a few small Federal trust funds are managed pursuant
to a trust agreement where the Government is the trustee, and the
Government generally has some ability to determine the amount deposited
into or paid out of these funds. Other amounts are held in deposit funds
by the Government as a custodian on behalf of some entity outside the
Government. The Government makes no decisions about the amount of these
deposits or how they are spent. Therefore, they are considered to be
non-budgetary instead of Federal trust funds and are excluded from the
Federal budget.
A trust fund must use its income for the purposes designated by law.
Some, such as the Federal Employees Health Benefits fund, spend their
income almost as quickly as it is collected. Others, such as the Social
Security and the Federal civilian employees retirement trust funds,
currently spend considerably less than they collect each year. A surplus
of income over outgo adds to the trust fund's balance, which is
available to finance future expenditures. The balances are generally in
[[Page 322]]
vested, by law, in Treasury debt securities. Any net cash inflow from
the public to the trust funds decreases the Treasury's need to borrow
from the public in order to finance a Federal funds deficit.
A trust fund normally consists of one or more receipt accounts (to
record income) and an expenditure account (to record outgo). However, a
few trust funds, such as the Veterans Special Life Insurance fund, are
established by law as revolving funds. These funds are similar to
revolving funds in the Federal funds group. They conduct a cycle of
business-type operations, and their outlays are displayed net of
collections in a single expenditure account.
Income and Outgo by Fund Group
Table 17-1 shows income, outgo, and surplus or deficit by fund group
and adds them to derive the total unified budget receipts, outlays, and
surplus or deficit. The estimates assume enactment of the President's
budget proposals. Income consists mostly of governmental receipts
(primarily income, payroll, and excise taxes). It also includes
proprietary receipts (derived from business-like transactions with the
public) and interfund collections (receipts by one fund of payments from
a fund in the other fund group) that are deposited in receipt accounts.
Outgo consists of payments made to the public and/or to a fund in the
other fund group.
Two types of transactions are treated specially. First, income and
outgo for a fund group exclude transactions between funds within the
same fund group. \2\ These intrafund transactions constitute outgo and
income for the individual funds that make and collect the payments.
However, because the totals for each fund group measure its transactions
with the public and the other fund group, intrafund transactions must be
subtracted from the sum of the income and outgo of all individual funds
within the fund group to calculate the consolidated income and outgo for
the fund group as a whole. Second, income excludes collections that, by
law, are offset against outgo in expenditure accounts instead of being
deposited in receipt accounts. \3\ It would be conceptually appropriate
to classify these collections as income, but at present the data are not
tabulated centrally for both fund groups. Consequently, they are offset
against outgo in Table 17-1 and are not shown separately.
---------------------------------------------------------------------------
\2\ For example, the railroad retirement trust funds pay the
equivalent of social security benefits to railroad retirees, in addition
to the regular railroad pension. These benefits are financed by a
payment from the Federal Old-Age and Survivors Insurance trust fund to
the railroad retirement trust funds. The payment and collection are
deducted so that total trust fund income and outgo measure disbursements
to the public and to Federal funds.
\3\ For example, postage stamp fees are deposited as offsetting
collections in the Postal Service fund. As a result, the Fund's outgo is
disbursements net of collections.
---------------------------------------------------------------------------
Some funds in the Federal funds group and some trust funds are
authorized to borrow from the general fund of the Treasury. \4\ Borrowed
funds are not recorded as receipts and are excluded from the income of
the fund. The borrowed funds finance outlays by the fund in excess of
available receipts. Subsequently, fund receipts are transferred from the
fund to the general fund in repayment of the borrowing. The repayment is
not recorded as an outlay of the fund or included in fund outgo. \5\
---------------------------------------------------------------------------
\4\ For example, the Bonneville Power Administration Fund, a revolving
fund in the Department of Energy, is authorized to borrow from the
general fund, and the Black Lung Disability Trust Fund in the Department
of Labor is authorized to receive appropriations of repayable advances
from the general fund (a form of borrowing).
\5\ Prior to the 1998 budget, trust fund borrowing was included in
Federal fund outgo (as a payment from the general fund) and trust fund
income, and the repayments were included in trust fund outgo and Federal
fund income (as a general fund receipt). The treatment of trust fund
borrowing and repayment was revised to make it parallel to the treatment
of borrowing by Federal fund accounts from the general fund, borrowing
by the general fund from Government accounts (including trust funds),
and borrowing by the Government from the public.
---------------------------------------------------------------------------
In order to derive unified budget receipts and outlays, Table 17-1
adds Federal funds and trust funds income and outgo, respectively, and
subtracts offsetting receipts from each. Offsetting receipts are income
for the fund group that receives them, but instead of being part of
receipts in the unified budget, they are deposited in receipt accounts
and are offset against outgo to calculate unified budget outlays. The
reason for subtracting offsetting receipts is twofold.
Offsetting receipts from the public.--Unified budget
receipts measure the amount of collections raised by the
Government in its sovereign capacity, and unified budget
outlays measure the amount of resources allocated by the
Government in a non-market capacity. Voluntary business-like
collections from the public need to be subtracted from the
income and outgo of the fund groups, respectively, to derive
these amounts.
Offsetting receipts from other fund groups.--Unified budget
receipts and outlays measure the Government's net transactions
with the public. Interfund receipts need to be subtracted from
the income and outgo of the fund groups, respectively, to
derive these amounts.
Which Fund Group is Responsible for Past Unified Budget Deficits?
Trust fund income exceeded outgo by $126 billion in 1997. As mandated
by law, this surplus was invested in Federal securities, and thereby
partially offset Government borrowing from the public to finance the
$148 billion Federal funds deficit. The sum of the trust fund surplus
and the Federal fund deficit equals the unified deficit, which was $22
billion. This pattern of trust fund surpluses and Federal fund deficits
has persisted for the past 3\1/2\ decades, and as shown in Table 17-1,
it is expected to continue. However, enactment of the Balanced Budget
Act, along with strong economic growth, and the proposals in this Budget
are projected to produce unified budget surpluses beginning in 1999, and
reduce the Federal funds deficit to less than $120 billion by 2003.
Historically, the combination of large and growing trust fund
surpluses and Federal fund deficits led to claims and counterclaims
about the causes of unified deficits, and by implication, which part of
the budget should be the focus of deficit-reduction efforts. The two
main views were illustrated by the contrary positions expressed in
reports published several years ago by two Congressional branch
agencies--the Congressional
[[Page 323]]
Table 17-1. RECEIPTS, OUTLAYS, AND SURPLUS OR DEFICIT BY FUND GROUP
(In billions of dollars)
----------------------------------------------------------------------------------------------------------------
Estimate
1997 -----------------------------------------------------------------
actual 1998 1999 2000 2001 2002 2003
----------------------------------------------------------------------------------------------------------------
Receipts:
Federal funds cash income:
From the public................ 1,047.9 1,085.8 1,128.2 1,155.5 1,198.3 1,263.9 1,304.8
From trust funds............... 1.0 1.1 1.1 1.1 2.3 1.1 1.2
----------------------------------------------------------------------------
Total, Federal funds cash
income.................... 1,049.0 1,086.8 1,129.2 1,156.6 1,200.6 1,265.0 1,306.0
Trust funds cash income:
From the public................ 607.0 644.6 685.9 710.4 739.3 771.6 802.7
From Federal funds:
Interest..................... 106.6 114.2 120.6 126.2 133.7 141.9 150.8
Other........................ 141.7 146.7 150.4 159.9 169.4 180.4 192.1
----------------------------------------------------------------------------
Total, trust funds cash
income.................... 855.4 905.5 956.9 996.5 1,042.4 1,093.9 1,145.6
Offsetting receipts.............. -325.1 -334.5 -343.4 -359.6 -380.4 -409.7 -423.4
----------------------------------------------------------------------------
Total, unified budget receipts. 1,579.3 1,657.9 1,742.7 1,793.6 1,862.6 1,949.3 2,028.2
Outlays:
Federal funds cash outgo......... 1,196.9 1,245.5 1,290.7 1,321.3 1,349.0 1,376.3 1,425.7
Trust funds cash outgo........... 729.4 756.8 785.9 823.4 865.9 892.9 943.1
Offsetting receipts.............. -325.1 -334.5 -343.4 -359.6 -380.4 -409.7 -423.4
----------------------------------------------------------------------------
Total, unified budget outlays.. 1,601.2 1,667.8 1,733.2 1,785.0 1,834.4 1,859.6 1,945.4
Surplus or deficit (-):
Federal funds.................... -147.9 -158.7 -161.5 -164.6 -148.4 -111.3 -119.7
Trust funds...................... 126.0 148.7 171.0 173.2 176.6 201.0 202.5
----------------------------------------------------------------------------
Total, unified surplus/deficit
(-)........................... -21.9 -10.0 9.5 8.5 28.2 89.7 82.8
----------------------------------------------------------------------------------------------------------------
Note: Receipts include governmental, interfund, and proprietary receipts. They exclude intrafund receipts, which
are offset against intrafund payments so that cash income and cash outgo are not overstated.
Research Service (CRS) and the General Accounting Office (GAO).
CRS: ``The treatment of trust fund programs in the Federal budget
is complicated and confusing. As a result, the impact of these
programs on the financial condition of the Government is often
misunderstood. Perhaps the biggest misconception today is that these
programs are offsetting the Federal deficit by $124 billion and
thereby masking the true size of the deficit. Although attention has
been drawn to the large social security surpluses, trust fund
programs overall actually have been running cash deficits . . . On
the whole, trust fund programs ran deficits in their cash
transactions with the public in 19 of the last 21 years.'' \6\
---------------------------------------------------------------------------
\6\ Congressional Research Service, Trust Funds and the Federal
Deficit, February 26, 1990, summary.
GAO: ``As the unified budget is presently structured, the
surpluses in the trust funds are merged with the rest of the budget,
effectively masking the magnitude of those surpluses and the size of
the deficit in the rest of the government . . . Because the trust
fund surpluses--especially those in Social Security--are growing so
rapidly, the merger of trust and nontrust funds creates the
erroneous impression that the deficit is under control and
declining. In reality, the nontrust fund deficit has grown from $222
billion in 1987 to $255 billion in 1988 and is projected to reach
$283 billion or more in 1989. The fact is that increased payroll
taxes, levied to meet the long-term needs of the Social Security
system, are being used to finance the current operating costs of the
government.'' \7\
---------------------------------------------------------------------------
\7\ General Accounting Office, Managing The Cost Of The Government,
October 1989, p. 9.
The critical difference between these views concerns the relevance of
transactions between the two fund groups. These interfund transactions
consist mostly of Federal fund payments to trust funds. They affect the
bottom line of each fund group. For example, Treasury interest payments
to the Social Security trust funds add to the Federal fund deficit, and
the interest earnings add to the trust fund surplus. The CRS analysis
excludes such payments because they are offset in the unified budget by
an equal amount of collections, and together they have no net impact on
the unified surplus or deficit. In contrast, GAO's analysis includes
interfund transactions because they allocate the cost of Federal
activities to the fund group that gives rise to the cost.
Because these views are representative of much of the past debate over
the responsibility for the unified deficit, they are discussed in
greater detail below. However, neither is satisfactory for every
purpose, and an alternative explanation is offered.
The Record Based on Transactions With the Public.--The unified surplus
or deficit measures the Federal Government's net transactions with the
public. The deficit can be reduced or the surplus increased only by
increasing receipts from the public or by decreasing payments to the
public. This is true whether the transactions with the public are by
trust funds or by Federal funds. It can be said, therefore, that a fund
group contributes to lower deficits or higher surpluses if it collects
more from the public than it pays to the public, and that it contributes
to higher
[[Page 324]]
deficits or lower surpluses if it pays more to the public than it
collects from the public.
Measured on this basis, both fund groups have been responsible for
past unified deficits. As shown in Chart 17-1, payments to the public by
both fund groups exceeded their income from the public in most years
from 1960 to 1997. Trust funds were in deficit in 34 of the 38 years,
and Federal funds were in deficit 33 years. Trust funds were responsible
for $1.2 trillion of the cumulative unified deficits over the period,
and Federal funds were responsible for the other $2.3 trillion. Under
the President's budget proposal, the trust funds deficit in its
transactions with the public would decrease through 1999 and then
increase each year thereafter. In contrast, Federal fund transactions
with the public were in surplus in 1997. This Federal funds surplus is
estimated to grow to $222 billion by 2003.
It may be surprising that trust funds are adding to the unified
deficit or reducing the unified surplus when they are simultaneously
reporting large surpluses and balances in their total transactions. The
experience varies among the individual trust funds. Consider the
transactions of the public with the following eight major trust funds.
Together, these funds ran a $126 billion surplus in 1997--100 percent of
the total trust fund surplus--and held $1.4 trillion of balances--95
percent of the balance for all trust funds combined. Nevertheless, from
1960 to 1997, the combined payments to the public by these trust funds
exceeded their combined income from the public by $1.1 trillion. (The
status of fund tables in the Budget Appendix and in Table 3 of this
chapter, unlike this discussion, which only considers transactions with
the public, reflect all of the trust funds' transactions, including
interest received from Federal funds and other interfund collections.)
The Highway Trust Fund is financed entirely by earmarked
taxes on gasoline and other fuels and by interest earnings.
Tax receipts exceeded the Fund's spending in more than half
the years between 1960 and 1997. These surpluses were invested
in Treasury securities, and together with the interest
earnings, were used to finance spending in other years when
spending exceeded tax collections. Although Highway Trust Fund
receipts exceed spending, the trust fund is authorized to
obligate, and currently has obligated almost one and one-half
years' worth of estimated future receipts. The current $22
billion balance is enough to fund almost one year's spending.
The two Social Security Trust Funds, Federal Old-Age and
Survivors Insurance and Federal Disability Insurance, are
financed primarily by payroll taxes. However they also receive
additional income from the general fund in the form of
interest earnings, Federal agencies' payments as employers for
the social security benefits earned by military and Federal
civilian employees, and Treasury payments for part of the
estimated amount of income
[[Page 325]]
taxes paid on social security benefits. In 19 of the 26 years from 1960 through 1985, social security payments to the public exceeded payroll taxes. The Funds' cumulative payments to the public exceeded their cumulative collections from the public by $2 billion through 1978, and rose to $60 billion in 1985.�1A\8\N Largely due to the Greenspan Commission reforms, in 1986 social security began to run a surplus in its transactions with the public. In 1990 social security taxes exceeded payments to the public by $36 billion. Since then, social security taxes have continued to exceed payments to the public, but only by about half that amount each year.
\8\ If balances of net transactions with the public are credited with
a prorated share of the Funds' interest earnings, the adjusted
cumulative balance would still have turned negative, but not until 1984,
and it would have remained negative until 1988.
---------------------------------------------------------------------------
The Hospital Insurance (HI) Trust Fund (Medicare Part A)
had a balance of $116 billion as of the end of 1997. This
reflects interest and other interfund collections as well as
collections from the public. However, when considering only
payroll tax income, benefit payments, and other outlays to the
public, it has run a deficit in these transactions with the
public in 20 of 32 years since 1966.
The Supplementary Medical Insurance (SMI) Trust Fund
(Medicare Part B) is funded by premiums charged to enrollees,
general fund subsidies, and interest payments. Premiums
currently cover about one-quarter of SMI's expenditures with
the remainder financed by Federal fund payments. These shares
have changed significantly since SMI's early years of
operation, beginning in 1967. In its first seven years,
premiums covered half of the expenses. This share fell
throughout the next decade, and by the early 1980s premiums
covered only 22 percent of expenses. SMI's total balance,
including interfund collections, stood at $35 billion at the
end of 1997. However, its cumulative payments to the public
exceeded its income from the public by $540 billion.
The Unemployment (UI) Trust Fund is funded primarily by
taxes on employers. It also has interfund interest earnings
paid by Federal funds, and it has been supplemented by large
transfers from the general fund during periods of high and
extended unemployment. Since 1960 UI has run deficits in its
transactions with the public in 17 years. At the end of 1997
its total balance, including those due to interfund
collections, was $62 billion. However, this balance was
essentially due to interfund collections. Since 1960, UI's
cumulative payments to the public have exceeded its income
from the public by $32 billion.
The Civil Service Retirement and Disability (CSRD) Trust
Fund, which comprises almost all of the Federal Civilian
Employees Retirement Funds shown in Table 17-3, is financed by
Federal civilian employees' contributions, agencies'
contributions on behalf of the employees, general fund
payments that limit the growth in the unfunded liability, and
interest earnings. In 1997, employee contributions were
approximately 6 percent of total income to the Fund. Interfund
collections made up the rest. CSRD has run a surplus in each
year since 1960, and its balance has increased from $10
billion in 1960 to $422 billion in 1997. Because the Fund is
intended to be funded mostly by payments from the Government
as an employer, the buildup in balances is due to interfund
payments. From 1960 through 1997, CSRD payments to the public
exceeded its income from the public by $480 billion.
The Military Retirement Fund is financed entirely by
payments by the Department of Defense on behalf of military
employees, general fund payments for the unfunded liability
existent when the Fund was created, and interest earnings.
Since its inception in 1985, the Fund has run a surplus each
year, and it had a $139 billion balance at the end of 1997.
Because the fund receives no income from the public, the
annual surpluses and the current balance are due totally to
interfund payments. Over the same period, the Fund paid $283
billion of benefits to the public.
The Record if Interfund Transactions are Included.--Transactions with
the public are not the only basis--and for some purposes may not be the
best--for identifying the source of the unified budget surplus or
deficit. Most interfund payments allocate the cost of Federal activities
to the fund group that is responsible for the cost, and most interfund
collections are valid reimbursements for the assumption of a cost by the
fund that receives the collection. Including these interfund
transactions, therefore, may provide a more reasonable measure of the
contribution of each fund group to the overall surplus or deficit.
The bulk of interfund transactions are Federal fund payments to trust
funds. In 1997, Federal funds paid $247 billion to trust funds, net of
collections from trust funds. Almost 93 percent of these were payments
by the Government as an employer to various retirement trust funds,
interest on general fund borrowing of trust fund balances, and the
general fund payment to SMI.
Payments by the Government as an employer to Federal employees
retirement trust funds allow the total cost of employee compensation to
be charged to the Federal fund programs that employ Federal workers, or
to the general fund. These benefits do not show up as payments to the
public for many years, and the eventual payments are recorded as trust
fund outlays. But since the eventual payments result from commitments
made in the course of carrying out past Federal fund activities, their
impact on the unified surplus or deficit could be attributed to the
Federal funds group. The interfund payments made for these purposes are
a partial measure of the amount that could reasonably be attributed to
Federal funds. In 1997, interfund pay
[[Page 326]]
ments for military and Federal civilian employee retirement were $62
billion.
Interest payments by the general fund on trust fund investments in
Treasury debt appropriately recognize the time value of money to both
the borrower and the lender. By law, trust fund balances are invested in
Treasury securities, and the interest payments and collections are
recorded as interfund transactions--increasing the trust funds surplus
and the Federal funds deficit. This is efficient from the standpoint of
cash management, and it is an effective method of recognizing the time
value of money without forcing trust funds to invest in private
securities, which are riskier and would raise the specter of direct
Federal control over vast amounts of private resources. However, if
permitted by law, trust fund balances could have been invested outside
the Government and earned interest from the public. The general fund
would have offset the loss of this source of financing by borrowing more
from the public, which would have increased Federal fund interest
outlays to the public. In terms of transactions with the public, the
result would be substantially lower trust fund deficits and higher
Federal fund deficits. But this would not mean that trust funds were
less responsible--or Federal funds more responsible--for the unified
surplus or deficit than under current practice. All taxes and
programmatic spending would have been the same. Trust fund interest
income was $107 billion in 1997, and it is expected to grow to $151
billion by the year 2003.
The SMI trust fund is different from other trust funds in that it is
mostly funded by a general fund payment, and the payment is not
compensation for services provided by the trust fund to the general
fund. The payment is simply a general fund subsidy of trust fund
spending. Interfund accounting therefore assigns the general fund its
share of SMI payments to the public. The general fund payment was almost
$60 billion in 1997.
Because fund accounting allocates costs between the two fund groups,
it is inappropriate to exclude interfund transactions from the analysis
of responsibility for the unified budget surplus or deficit. However, it
does not follow automatically that trust fund surpluses and Federal fund
deficits mean that Federal funds bear the sole responsibility for the
unified budget surplus or deficit. That is a separable issue, and as the
next section shows, more questionable.
Both Fund Groups Bear the Responsibility.--The Federal budget has been
presented on a unified basis since 1968. Its purpose is to present in
one place the totality of the Federal Government's fiscal operations.
The most important information provided by the unified budget is (1)
how much of the Nation's resources are used by the Government, and (2)
how these resources are allocated among the many purposes of Government.
By combining all receipts and spending in one budget, the implicit
tradeoffs between public and private spending, and between Government
programs, become more visible. The intention is that by surfacing these
basic tradeoffs, conflicts over competing demands for the Nation's
resources will be resolved, and the pieces of the budget will add to the
desired total. However, there is no automatic mechanism that forces
resolution of these conflicts. Congress and the President can choose to
use the budget to force the components of the budget to stay within
targets for total receipts and spending, as it has for discretionary
programs in the Budget Enforcement Act. Or they can allow tax and
spending programs to occur autonomously without regard to what those
actions have on other programs or on the budget totals.
As shown in Chart 17-2, trust fund outlays to the public as a percent
of GDP increased steadily between 1960 and the early 1990s, rising from
4.1 percent in the first half of the 1960s to 7.3 percent in the latter
half of the 1970s, and rising even further to 8.7 percent in the early
1990s. \9\ Over the same period, Federal fund payments to the public
moved up and down slightly but stayed between 14 and 15 percent of GDP.
The combination of growing trust fund spending and constant Federal fund
spending meant that total spending as a percent of GDP increased from 18
percent in 1960 to 23 percent in 1992. However, total spending as a
percent of GDP has decreased since 1992, falling to 20.1 percent in
1997, the lowest level in 23 years.
---------------------------------------------------------------------------
\9\ This section focuses on receipts and outlays as they are defined
in the unified budget, instead of income and outgo. The difference is
that proprietary receipts and interfund collections are offset against
outlays in the unified budget, but they are considered income for a fund
group. Since the comparisons over time are based on changes in shares of
GDP, it is better to use receipts and outlays.
---------------------------------------------------------------------------
Because the norm has been for trust funds to be in balance, or to
accumulate balances to fund future benefits, trust fund taxes were
increased commensurately with the increase in trust fund outlays. As
shown in Chart 17-3, trust fund receipts as a percent of GDP increased
in every five-year period since 1960, rising from 3.7 percent in the
first half of the 1960s to 6.0 percent in the latter half of the 1970s,
and rising even further to 7.3 percent in the first half of the 1990s.
However, unlike Federal fund outlays, Federal fund receipts did not stay
the same when trust fund receipts rose. During this period, increases in
trust fund receipts were offset by decreases in Federal fund receipts,
and total budget receipts remained constant at 18 to 19 percent of GDP.
In recent years, total budget receipts as a percent of GDP have risen
consistently, growing from 18 percent in 1993 to 20 percent in 1997.
What explains the growth in the unified budget deficit until 1992,
therefore, is the basic conflict between the goal of expanding and fully
funding one part of Government, and an unwillingness either to allow the
total tax burden to increase or to reduce the rest of Government. \10\
The Nation wanted to expand trust fund spending, and it said it was
willing to finance that expansion. The latter could only have been
accomplished by increasing the total tax burden or by reducing Federal
fund spending. In fact, neither occurred. Taxes were shifted from
Federal funds to trust funds,
[[Page 327]]
[[Page 328]]
and the total tax burden remained the same. Federal fund spending
remained constant, and total spending increased. If Federal fund taxes
had stayed at the levels experienced in the first half of the 1960s,
Federal fund tax receipts would have been much higher over the period,
and the higher receipts plus the associated interest savings would have
been sufficient to avoid most or all of the unified deficits. The same
outcome could have been achieved by reducing Federal fund spending
commensurately with the reduction in Federal fund taxes.
---------------------------------------------------------------------------
\10\ For similar analyses, see The Budget Deficit--Outlook,
Implications, and Choices, General Accounting Office, September 1990,
pp.29-32; and John F. Cogan, ``the Dispersion of Spending Authority and
Federal Budget Deficits,'' in The Budget Puzzle by John F. Cogan,
Timothy J. Muris, and Allen Schick, Stanford University Press, 1994, pp.
39-40.
---------------------------------------------------------------------------
In short, the imbalances seen in the fund group and unified budget
totals were symptomatic of the unresolved conflict over the size of
Government and how it is to be financed. Instead of resolving this
conflict, increases in trust fund spending were ``financed'' at the
expense of financing for Federal funds. In that sense, both fund groups
were responsible for the unified budget deficit.
This pattern of behavior is changing. The enactment of the Balanced
Budget Act along with the proposals in this Budget will eliminate the
unified budget deficit in 1999, and (as shown in Table 17-1) reduce the
Federal funds deficit to $120 billion by 2003, less than one-third of
its peak level of $386 billion in 1992. Federal fund transactions with
the public have gone from a deficit of over $200 billion in the early
1990s to a surplus of almost $100 billion in 1997, and this surplus is
projected to more than double by 2003.
Income, Outgo, and Balances of Trust Funds
Table 17-2 shows the trust funds balance at the start of each year,
income and outgo during the year, and the end of year balance. Income
and outgo are divided between transactions with the public and
transactions with Federal funds. Receipts from Federal funds are divided
between interest and other interfund receipts.
The definition of income and outgo in this table differs from those in
Table 17-1 in one important way. Trust fund collections that are offset
against outgo (as offsetting collections) within expenditure accounts
instead of being deposited in separate receipt accounts are classified
as income in this table but not in Table 17-1. This classification is
consistent with the definitions of income and outgo for trust funds used
elsewhere in the budget. It has the effect of increasing both income and
outgo by the amount of the offsetting collections. The difference is
approximately $23 billion in 1997. This table, therefore, provides a
more complete summary of trust fund income and outgo.
The trust funds group is expected to have large and growing surpluses
over the projection period. As a consequence, trust fund balances will
grow substantially, as they have over the past decade. The size of the
anticipated balances is unprecedented, and it results mainly from
relatively recent changes in the way some trust funds are financed.
Until the 1980s, most trust funds operated on a pay-as-you-go basis.
Taxes and user fees were set at levels high enough to finance benefits
and administrative expenses, and to maintain prudent reserves, generally
defined as being equal to one year's expenditures. As a result, trust
fund balances tended to grow at about the same rate as their annual
expenditures.
Pay-as-you-go financing was replaced in the 1980s by full or partial
accrual funding for some of the larger trust funds. In order to
partially prefund the ``baby-boomers'' social security benefits, the
Social Security Amendments of 1983 raised payroll taxes above the levels
necessary to finance current expenditures. In 1984 a new system was set
up to finance military retirement benefits on a full accrual basis. In
1986 full accrual funding of retirement benefits was mandated for
Federal civilian employees hired after December 31, 1983. The latter two
changes require Federal agencies and their employees to make annual
payments to the Federal employees' retirement trust funds in an amount
equal to the value of the retirement benefits earned by employees in
that year. Since many years will pass before current employees are paid
retirement benefits, the trust funds will accumulate substantial
balances over time.
Primarily because of these changes, but also because of the impact of
real growth and inflation, trust fund balances increased sevenfold from
1982 to 1997, from $205 billion to $1.5 trillion. Under the proposals in
the President's budget, the balances are estimated to increase by
another 71 percent by the year 2003, rising to $2.6 trillion. Almost all
of these balances are invested in Treasury securities and earn interest.
Therefore, they effectively represent the value, in current dollars, of
taxes and user fees that have been paid in advance for future benefits
and services.
These balances are available to finance future benefit payments and
other trust fund expenditures--but only in a bookkeeping sense. Unlike
the assets of private pension plans, they do not consist of real
economic assets that can be drawn down in the future to fund benefits.
Instead, they are claims on the Treasury that, when redeemed, will have
to be financed by raising taxes, borrowing from the public, or reducing
benefits or other expenditures. The existence of large trust fund
balances, therefore, does not, by itself, make it easier for the
Government to pay benefits.
From an economic standpoint, the Government is able to prefund
benefits only by increasing saving and investment in the economy as a
whole. This can be fully accomplished only by simultaneously running
trust fund surpluses equal to the actuarial present value of the
accumulating benefits and not allowing the Federal fund deficit to
increase, so that the trust fund surplus reduces a unified budget
deficit or increases a unified budget surplus. This would reduce Federal
borrowing by the amount of the trust funds surplus and increase the
amount of national saving available to finance investment. Greater
investment would increase future incomes and wealth, particularly if it
increased the rate of productivity growth. In turn, this would make it
possible for the trust funds to draw down on their investments in
Treasury debt to pay future benefits with-
[[Page 329]]
Table 17-2. INCOME, OUTGO, AND BALANCES OF TRUST FUNDS GROUP
(In billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimate
1997 -----------------------------------------------------------------------
actual 1998 1999 2000 2001 2002 2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Trust Funds
Balance, start of year.............................................. 1,390.2 1,515.4 1,664.1 1,835.1 2,008.3 2,184.8 2,385.9
Income:
Governmental receipts............................................. 570.0 608.5 650.2 673.0 700.2 730.5 759.4
Proprietary receipts.............................................. 44.7 44.5 44.6 46.3 48.2 50.3 53.2
Receipts from Federal funds:
Interest........................................................ 106.8 114.3 120.7 127.8 135.2 143.5 152.3
Other........................................................... 156.8 170.3 177.7 184.6 193.4 203.7 213.5
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 878.3 937.5 993.3 1,031.8 1,077.0 1,128.1 1,178.5
Outgo:
To the public..................................................... 751.3 787.7 821.2 857.6 898.3 925.8 974.8
Payments to Federal funds......................................... 1.0 1.1 1.1 1.1 2.3 1.1 1.2
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 752.4 788.8 822.3 858.6 900.6 926.9 976.0
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. 19.2 34.4 50.3 45.3 41.3 57.5 50.2
Interest........................................................ 106.8 114.3 120.7 127.8 135.2 143.5 152.3
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. 126.0 148.7 171.0 173.2 176.6 201.0 202.5
Adjustments:
Transfers/lapses (net).......................................... -0.8 -* -* .......... .......... .......... ..........
Other adjustments............................................... -* * -* .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... 125.2 148.7 171.0 173.2 176.6 201.0 202.5
===================================================================================
Balance, end of year................................................ 1,515.4 1,664.1 1,835.1 2,008.3 2,184.8 2,385.9 2,588.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Less than $50 million.
out having to increase the burden on future workers by raising tax
rates, reducing spending, or increasing Government borrowing.
Table 17-3 shows estimates of income, outgo, and balances for 1997
through 2003 for the major trust funds. With the exception of
transactions between trust funds, the data for the individual trust
funds are conceptually the same as the data in Table 17-2 for the trust
funds group. As explained previously, transactions between trust funds
are shown as outgo of the fund that makes the payment and as income of
the fund that collects it in the data for an individual trust fund, but
the collections are offset against outgo in the data for the trust fund
group. Additional information for these and other trust funds can be
found in the Status of Funds tables in the Budget Appendix.
Table 17-4, which appears at the end of this chapter, shows income,
outgo, and balances of four Federal funds--a revolving fund and three
special funds. These funds are similar to trust funds in that they are
financed by earmarked receipts, excesses of income over outgo are
invested, the interest earnings add to balances, and the balances remain
available to finance future expenditures. The table is illustrative of
the Federal funds group, which includes many other revolving funds and
special funds in addition to the ones shown.
[[Page 330]]
Table 17-3. INCOME, OUTGO, AND BALANCES OF MAJOR TRUST FUNDS
(In billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimate
1997 -----------------------------------------------------------------------
actual 1998 1999 2000 2001 2002 2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
Airport and Airway Trust Fund
Balance, start of year.............................................. 7.7 6.4 9.3 14.2 16.9 19.8 23.1
Income:
Governmental receipts............................................. 4.0 8.0 10.0 11.5 12.1 12.8 12.2
Proprietary receipts.............................................. * * * * * * *
Receipts from Federal funds:
Interest........................................................ 0.5 0.4 0.6 1.0 1.1 1.3 1.4
Other........................................................... * 0.1 0.1 0.1 0.1 0.1 0.1
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 4.5 8.5 10.7 12.6 13.3 14.1 13.7
Outgo:
To the public..................................................... 5.8 5.6 5.8 9.9 10.4 10.9 11.6
Payments to Other funds........................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 5.8 5.6 5.8 9.9 10.4 10.9 11.6
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. -1.7 2.5 4.3 1.8 1.8 2.0 0.7
Interest........................................................ 0.5 0.4 0.6 1.0 1.1 1.3 1.4
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. -1.2 2.9 4.9 2.7 2.9 3.3 2.2
Adjustments:
Transfers/lapses (net).......................................... -* .......... .......... .......... .......... .......... ..........
Other adjustments............................................... * .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... -1.2 2.9 4.9 2.7 2.9 3.3 2.2
===================================================================================
Balance, end of year................................................ 6.4 9.3 14.2 16.9 19.8 23.1 25.3
Federal Employees Health Benefits Fund
Balance, start of year.............................................. 7.4 6.7 6.6 6.5 6.7 6.8 6.9
Income:
Governmental receipts............................................. .......... .......... .......... .......... .......... .......... ..........
Proprietary receipts.............................................. 4.8 5.3 5.5 5.8 6.0 6.0 6.7
Receipts from Federal funds:
Interest........................................................ 0.5 0.4 0.4 0.4 0.4 0.5 0.5
Other........................................................... 10.6 11.3 12.1 13.3 14.2 15.7 16.5
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 15.9 17.0 18.0 19.6 20.7 22.1 23.6
Outgo:
To the public..................................................... 16.6 17.1 18.1 19.4 20.6 22.1 23.6
Payments to Other funds........................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 16.6 17.1 18.1 19.4 20.6 22.1 23.6
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. -1.1 -0.5 -0.5 -0.2 -0.3 -0.5 -0.4
Interest........................................................ 0.5 0.4 0.4 0.4 0.4 0.5 0.5
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. -0.7 -0.1 -0.1 0.2 0.1 * 0.1
Adjustments:
Transfers/lapses (net).......................................... .......... .......... .......... .......... .......... .......... ..........
Other adjustments............................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... -0.7 -0.1 -0.1 0.2 0.1 * 0.1
===================================================================================
Balance, end of year................................................ 6.7 6.6 6.5 6.7 6.8 6.9 6.9
Federal Civilian Employees Retirement Funds
Balance, start of year.............................................. 401.7 430.9 461.0 490.8 520.2 549.2 578.3
Income:
Governmental receipts............................................. 4.4 4.3 4.5 4.6 4.9 4.6 4.1
Proprietary receipts.............................................. .......... .......... .......... .......... .......... .......... ..........
[[Page 331]]
Receipts from Federal funds:
Interest........................................................ 31.2 33.2 34.3 35.0 35.8 36.7 37.5
Other........................................................... 35.8 36.4 36.7 37.5 37.9 38.5 38.5
Receipts from Trust funds......................................... * * * * * * *
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 71.4 73.9 75.6 77.1 78.6 79.8 80.2
Outgo:
To the public..................................................... 42.2 43.8 45.7 47.7 49.6 50.8 53.6
Payments to Other funds........................................... * * * * * * *
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 42.2 43.8 45.7 47.7 49.6 50.8 53.6
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. -2.0 -3.1 -4.5 -5.6 -6.8 -7.7 -11.0
Interest........................................................ 31.2 33.2 34.3 35.0 35.8 36.7 37.5
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. 29.1 30.1 29.9 29.4 29.0 29.1 26.6
Adjustments:
Transfers/lapses (net).......................................... .......... .......... .......... .......... .......... .......... ..........
Other adjustments............................................... -* * -* .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... 29.1 30.1 29.9 29.4 29.0 29.1 26.6
===================================================================================
Balance, end of year................................................ 430.9 461.0 490.8 520.2 549.2 578.3 604.8
Federal Old-Age, Survivors and Disability Insurance Trust Funds
Balance, start of year.............................................. 549.6 630.9 728.9 835.0 950.9 1,073.8 1,207.4
Income:
Governmental receipts............................................. 392.0 416.0 434.1 453.9 472.7 494.3 516.6
Proprietary receipts.............................................. * 0.1 0.1 0.1 0.1 0.1 0.1
Receipts from Federal funds:
Interest........................................................ 41.2 46.7 51.6 57.0 62.9 69.3 76.3
Other........................................................... 15.4 19.1 19.0 20.0 21.1 22.5 23.9
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 448.7 481.9 504.8 531.0 556.8 586.2 617.0
Outgo:
To the public..................................................... 363.3 379.7 394.6 410.9 428.8 448.5 469.0
Payments to Other funds........................................... 4.1 4.1 4.1 4.1 5.2 4.1 4.1
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 367.3 383.9 398.7 415.1 434.0 452.6 473.1
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. 40.1 51.3 54.5 59.0 59.9 64.3 67.5
Interest........................................................ 41.2 46.7 51.6 57.0 62.9 69.3 76.3
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. 81.3 98.0 106.1 115.9 122.8 133.6 143.9
Adjustments:
Transfers/lapses (net).......................................... .......... .......... .......... .......... .......... .......... ..........
Other adjustments............................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... 81.3 98.0 106.1 115.9 122.8 133.6 143.9
===================================================================================
Balance, end of year................................................ 630.9 728.9 835.0 950.9 1,073.8 1,207.4 1,351.2
Foreign Military Sales Trust Fund
Balance, start of year.............................................. 5.9 5.9 5.9 5.9 5.9 5.9 5.9
Income:
Governmental receipts............................................. .......... .......... .......... .......... .......... .......... ..........
Proprietary receipts.............................................. 15.1 13.8 12.6 11.8 11.1 10.6 9.8
Receipts from Federal funds:
Interest........................................................ .......... .......... .......... .......... .......... .......... ..........
Other........................................................... .......... .......... .......... .......... .......... .......... ..........
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 15.1 13.8 12.6 11.8 11.1 10.6 9.8
Outgo:
To the public..................................................... 15.1 13.8 12.6 11.8 11.1 10.6 9.8
[[Page 332]]
Payments to Other funds........................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 15.1 13.8 12.6 11.8 11.1 10.6 9.8
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. * -* .......... .......... .......... .......... ..........
Interest........................................................ .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. * -* .......... .......... .......... .......... ..........
Adjustments:
Transfers/lapses (net).......................................... .......... .......... .......... .......... .......... .......... ..........
Other adjustments............................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... * -* .......... .......... .......... .......... ..........
===================================================================================
Balance, end of year................................................ 5.9 5.9 5.9 5.9 5.9 5.9 5.9
Highway Trust Fund \1\
Balance, start of year.............................................. 21.2 22.0 23.5 38.3 47.5 56.7 66.5
Income:
Governmental receipts............................................. 23.9 26.1 38.6 33.2 33.8 34.4 35.1
Proprietary receipts.............................................. 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Receipts from Federal funds:
Interest........................................................ 1.4 1.4 1.4 2.2 2.7 3.1 3.6
Other........................................................... * .......... 0.1 0.1 0.1 0.1 0.1
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, Income.............................................. 25.4 27.6 40.2 35.6 36.6 37.7 38.9
Outgo:
To the public..................................................... 24.6 26.0 25.4 26.4 27.4 27.9 28.4
Payments to Other funds........................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, Outgo............................................... 24.6 26.0 25.4 26.4 27.4 27.9 28.4
Change in fund balance:
Surplus or deficit:
Excluding interest.............................................. -0.6 0.1 13.4 7.0 6.5 6.7 6.8
Interest........................................................ 1.4 1.4 1.4 2.2 2.7 3.1 3.6
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit.................................. 0.8 1.6 14.8 9.2 9.2 9.8 10.4
Adjustments:
Transfers/lapses (net).......................................... .......... -* -* .......... .......... .......... ..........
Other adjustments............................................... .......... * .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, Change in fund balance................................... 0.8 1.5 14.8 9.2 9.2 9.8 10.4
===================================================================================
Balance, End of Year................................................ 22.0 23.5 38.3 47.5 56.7 66.5 77.0
Medicare: Federal Hospital Insurance (HI) Trust Fund
Balance, start of year.............................................. 125.3 116.0 111.0 107.9 106.7 104.5 109.2
Income:
Governmental receipts............................................. 110.8 118.1 122.7 128.5 134.1 140.5 147.0
Proprietary receipts.............................................. 1.3 1.3 1.8 1.7 1.9 2.1 2.3
Receipts from Federal funds:
Interest........................................................ 9.8 9.2 8.8 8.3 8.0 7.7 7.7
Other........................................................... 6.7 7.9 8.6 9.0 9.4 9.9 10.5
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 128.5 136.5 141.9 147.6 153.4 160.2 167.4
Outgo:
To the public..................................................... 137.9 141.5 145.0 148.8 155.7 155.5 166.2
Payments to Other funds........................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 137.9 141.5 145.0 148.8 155.7 155.5 166.2
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. -19.1 -14.2 -11.9 -9.5 -10.2 -3.0 -6.5
Interest........................................................ 9.8 9.2 8.8 8.3 8.0 7.7 7.7
-----------------------------------------------------------------------------------
[[Page 333]]
Subtotal, surplus or deficit (-).............................. -9.3 -5.0 -3.1 -1.2 -2.2 4.7 1.2
Adjustments:
Transfers/lapses (net).......................................... -* .......... .......... .......... .......... .......... ..........
Other adjustments............................................... * .......... * .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... -9.3 -5.0 -3.1 -1.2 -2.2 4.7 1.2
===================================================================================
Balance, end of year................................................ 116.0 111.0 107.9 106.7 104.5 109.2 110.4
Medicare: Federal Supplementary Medical Insurance (SMI) Trust Fund
Balance, start of year.............................................. 27.0 35.2 39.5 40.0 39.9 37.7 40.5
Income:
Governmental receipts............................................. .......... .......... .......... .......... .......... .......... ..........
Proprietary receipts.............................................. 19.1 19.4 20.1 22.2 24.4 26.8 29.5
Receipts from Federal funds:
Interest........................................................ 2.2 2.5 2.6 2.5 2.5 2.5 2.5
Other........................................................... 59.5 67.5 72.5 75.4 80.4 85.9 91.9
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 80.8 89.3 95.1 100.1 107.3 115.2 123.8
Outgo:
To the public..................................................... 72.6 85.0 94.6 100.2 109.5 112.4 122.8
Payments to Other funds........................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 72.6 85.0 94.6 100.2 109.5 112.4 122.8
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. 6.1 1.8 -2.0 -2.6 -4.7 0.3 -1.4
Interest........................................................ 2.2 2.5 2.6 2.5 2.5 2.5 2.5
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. 8.3 4.3 0.5 -0.1 -2.2 2.8 1.1
Adjustments:
Transfers/lapses (net).......................................... .......... .......... .......... .......... .......... .......... ..........
Other adjustments............................................... .......... -* .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... 8.3 4.3 0.5 -0.1 -2.2 2.8 1.1
===================================================================================
Balance, end of year................................................ 35.2 39.5 40.0 39.9 37.7 40.5 41.6
Military Retirement Fund
Balance, start of year.............................................. 131.2 139.2 145.6 151.9 158.1 164.3 170.7
Income:
Governmental receipts............................................. .......... .......... .......... .......... .......... .......... ..........
Proprietary receipts.............................................. .......... .......... .......... .......... .......... .......... ..........
Receipts from Federal funds:
Interest........................................................ 11.9 12.1 12.3 12.5 12.7 13.0 13.2
Other........................................................... 26.3 25.7 26.3 26.9 27.6 28.4 29.4
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 38.2 37.8 38.6 39.4 40.3 41.4 42.6
Outgo:
To the public..................................................... 30.2 31.4 32.3 33.3 34.1 35.0 35.9
Payments to Other funds........................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 30.2 31.4 32.3 33.3 34.1 35.0 35.9
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. -3.9 -5.7 -6.0 -6.4 -6.5 -6.6 -6.5
Interest........................................................ 11.9 12.1 12.3 12.5 12.7 13.0 13.2
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. 8.0 6.4 6.3 6.2 6.2 6.4 6.7
Adjustments:
Transfers/lapses (net).......................................... .......... .......... .......... .......... .......... .......... ..........
Other adjustments............................................... -* .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... 8.0 6.4 6.3 6.2 6.2 6.4 6.7
===================================================================================
Balance, end of year................................................ 139.2 145.6 151.9 158.1 164.3 170.7 177.3
[[Page 334]]
Railroad Retirement Trust Funds
Balance, start of year.............................................. 14.1 15.0 15.9 16.6 17.3 18.0 18.7
Income:
Governmental receipts............................................. 4.1 4.1 4.1 4.1 4.2 4.2 4.2
Proprietary receipts.............................................. .......... .......... .......... .......... .......... .......... ..........
Receipts from Federal funds:
Interest........................................................ 1.2 1.1 1.0 1.1 1.1 1.2 1.2
Other........................................................... 0.2 0.3 0.3 0.3 0.3 0.3 0.3
Receipts from Trust funds......................................... 3.7 3.8 3.8 3.8 3.7 3.8 3.8
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 9.3 9.3 9.2 9.3 9.2 9.4 9.5
Outgo:
To the public..................................................... 8.1 8.2 8.3 8.3 8.4 8.4 8.5
Payments to Other funds........................................... 0.2 0.2 0.2 0.2 0.2 0.2 0.2
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 8.3 8.4 8.5 8.6 8.6 8.7 8.8
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. -0.3 -0.3 -0.3 -0.4 -0.5 -0.4 -0.5
Interest........................................................ 1.2 1.1 1.0 1.1 1.1 1.2 1.2
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. 0.9 0.9 0.7 0.7 0.6 0.7 0.7
Adjustments:
Transfers/lapses (net).......................................... .......... .......... .......... .......... .......... .......... ..........
Other adjustments............................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... 0.9 0.9 0.7 0.7 0.6 0.7 0.7
===================================================================================
Balance, end of year................................................ 15.0 15.9 16.6 17.3 18.0 18.7 19.4
Unemployment Trust Fund
Balance, start of year.............................................. 54.0 62.1 71.0 78.7 86.3 93.6 101.0
Income:
Governmental receipts............................................. 28.2 28.9 30.5 31.9 33.2 34.2 34.7
Proprietary receipts.............................................. * * * * * * *
Receipts from Federal funds:
Interest........................................................ 3.7 4.2 4.5 4.7 4.9 5.1 5.2
Other........................................................... 0.6 0.5 0.5 0.6 0.6 0.6 0.6
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 32.5 33.7 35.6 37.1 38.7 39.9 40.4
Outgo:
To the public..................................................... 24.4 24.8 27.8 29.6 31.4 32.5 34.0
Payments to Other funds........................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 24.4 24.8 27.8 29.6 31.4 32.5 34.0
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. 4.4 4.6 3.3 2.9 2.4 2.3 1.2
Interest........................................................ 3.7 4.2 4.5 4.7 4.9 5.1 5.2
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. 8.1 8.8 7.8 7.6 7.3 7.4 6.4
Adjustments:
Transfers/lapses (net).......................................... .......... .......... .......... .......... .......... .......... ..........
Other adjustments............................................... .......... .......... * .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... 8.1 8.8 7.8 7.6 7.3 7.4 6.4
===================================================================================
Balance, end of year................................................ 62.1 71.0 78.7 86.3 93.6 101.0 107.4
Veterans Life Insurance Trust Funds
Balance, start of year.............................................. 13.7 13.7 13.6 13.5 13.2 12.9 12.6
Income:
Governmental receipts............................................. .......... .......... .......... .......... .......... .......... ..........
Proprietary receipts.............................................. 0.9 0.9 0.9 0.8 0.8 0.7 0.7
Receipts from Federal funds:
Interest........................................................ 1.2 1.1 1.1 1.0 1.0 0.9 0.9
[[Page 335]]
Other........................................................... * * * * * * *
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 2.1 2.0 1.9 1.8 1.7 1.6 1.6
Outgo:
To the public..................................................... 2.0 2.1 2.1 2.1 2.0 2.0 1.9
Payments to Other funds........................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 2.0 2.1 2.1 2.1 2.0 2.0 1.9
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. -1.1 -1.2 -1.2 -1.3 -1.3 -1.3 -1.3
Interest........................................................ 1.2 1.1 1.1 1.0 1.0 0.9 0.9
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. * -0.1 -0.2 -0.3 -0.3 -0.3 -0.4
Adjustments:
Transfers/lapses (net).......................................... .......... .......... .......... .......... .......... .......... ..........
Other adjustments............................................... .......... * .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... * -0.1 -0.2 -0.3 -0.3 -0.3 -0.4
===================================================================================
Balance, end of year................................................ 13.7 13.6 13.5 13.2 12.9 12.6 12.2
Other Trust Funds
Balance, start of year.............................................. 31.4 31.3 32.2 35.6 38.4 41.6 45.2
Income:
Governmental receipts............................................. 2.7 3.0 5.6 5.2 5.2 5.4 5.5
Proprietary receipts.............................................. 3.3 3.7 3.6 3.8 3.9 4.0 4.2
Receipts from Federal funds:
Interest........................................................ 2.0 1.9 2.0 2.1 2.2 2.2 2.3
Other........................................................... 1.7 1.5 1.6 1.6 1.7 1.7 1.8
Receipts from Trust funds......................................... .......... .......... .......... .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Subtotal, income.............................................. 9.8 10.1 12.9 12.7 13.0 13.4 13.8
Outgo:
To the public..................................................... 8.7 8.7 9.0 9.3 9.2 9.2 9.4
Payments to Other funds........................................... 0.5 0.5 0.5 0.5 0.6 0.6 0.6
-----------------------------------------------------------------------------------
Subtotal, outgo............................................... 9.2 9.2 9.5 9.8 9.8 9.8 10.0
Change in fund balance:
Surplus or deficit (-):
Excluding interest.............................................. -1.4 -1.0 1.4 0.7 1.1 1.3 1.5
Interest........................................................ 2.0 1.9 2.0 2.1 2.2 2.2 2.3
-----------------------------------------------------------------------------------
Subtotal, surplus or deficit (-).............................. 0.6 0.9 3.4 2.8 3.2 3.6 3.8
Adjustments:
Transfers/lapses (net).......................................... -0.7 -* .......... .......... .......... .......... ..........
Other adjustments............................................... -* .......... -* .......... .......... .......... ..........
-----------------------------------------------------------------------------------
Total, change in fund balance................................... -0.1 0.9 3.4 2.8 3.2 3.6 3.8
===================================================================================
Balance, end of year................................................ 31.3 32.2 35.6 38.4 41.6 45.2 49.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Less than $50 million
Note: Balances shown include committed and uncommitted cash balances.
\1\ The increase in 1999 governmental receipts reflects the transfer of 4.3 cents per gallon motor fuels tax revenue from the general fund to the
Highway Trust Fund. The increase also results from a provision of the Taxpayer Relief Act of 1997 to delay two months of 1998 excise tax
deposits to the trust fund, thereby shifting those deposits to 1999.
[[Page 336]]
Table 17-4. INCOME, OUTGO, AND BALANCES OF SELECTED FEDERAL FUNDS
(In billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimate
1997 -----------------------------------------------------
actual 1998 1999 2000 2001 2002 2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
Abandoned Mine Reclamation Fund
Balance, start of year.................................................................. 1.4 1.5 1.7 1.8 1.9 2.1 2.2
Income:
Governmental receipts................................................................. 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Proprietary receipts.................................................................. * * * * * * *
Receipts from Federal funds:
Interest............................................................................ 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Other............................................................................... ........ ....... ....... ....... ....... ....... .......
Receipts from Trust funds............................................................. ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Subtotal, income.................................................................. 0.3 0.4 0.4 0.4 0.4 0.4 0.4
Outgo:
To the public......................................................................... 0.2 0.2 0.2 0.2 0.3 0.3 0.3
Payments to Other funds............................................................... ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Subtotal, outgo................................................................... 0.2 0.2 0.2 0.2 0.3 0.3 0.3
Change in fund balance:
Surplus or deficit (-):
Excluding interest.................................................................. * 0.1 * * * * *
Interest............................................................................ 0.1 0.1 0.1 0.1 0.1 0.1 0.1
---------------------------------------------------------------
Subtotal, surplus or deficit (-).................................................. 0.1 0.2 0.1 0.1 0.1 0.1 0.2
Adjustments:
Transfers/lapses (net).............................................................. ........ ....... ....... ....... ....... ....... .......
Other adjustments................................................................... ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Total, change in fund balance....................................................... 0.1 0.2 0.1 0.1 0.1 0.1 0.2
===============================================================
Balance, end of year.................................................................... 1.5 1.7 1.8 1.9 2.1 2.2 2.4
Nuclear Waste Disposal Fund
Balance, start of year.................................................................. 5.3 6.2 7.1 8.0 8.9 9.9 11.1
Income:
Governmental receipts................................................................. ........ ....... ....... ....... ....... ....... .......
Proprietary receipts.................................................................. 0.6 0.6 0.6 0.6 0.6 0.6 0.7
Receipts from Federal funds:
Interest............................................................................ 0.5 0.5 0.5 0.6 0.6 0.7 0.8
Other............................................................................... ........ ....... ....... ....... ....... ....... .......
Receipts from Trust funds............................................................. ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Subtotal, income.................................................................. 1.1 1.1 1.1 1.2 1.3 1.3 1.4
Outgo:
To the public......................................................................... 0.2 0.2 0.2 0.3 0.2 0.2 0.2
Payments to Other funds............................................................... ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Subtotal, outgo................................................................... 0.2 0.2 0.2 0.3 0.2 0.2 0.2
Change in fund balance:
Surplus or deficit (-):
Excluding interest.................................................................. 0.4 0.4 0.4 0.3 0.4 0.4 0.5
Interest............................................................................ 0.5 0.5 0.5 0.6 0.6 0.7 0.8
---------------------------------------------------------------
Subtotal, surplus or deficit (-).................................................. 0.9 0.9 0.9 0.9 1.1 1.2 1.2
Adjustments:
Transfers/lapses (net).............................................................. ........ ....... ....... ....... ....... ....... .......
Other adjustments................................................................... -* * -* ....... ....... ....... .......
---------------------------------------------------------------
Total, change in fund balance....................................................... 0.9 0.9 0.9 0.9 1.1 1.2 1.2
===============================================================
Balance, end of year.................................................................... 6.2 7.1 8.0 8.9 9.9 11.1 12.3
Overseas Private Investment Corporation
Balance, start of year.................................................................. 2.2 2.5 2.7 2.8 3.1 3.4 3.8
Income:
Governmental receipts................................................................. ........ ....... ....... ....... ....... ....... .......
Proprietary receipts.................................................................. 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Receipts from Federal funds:
Interest............................................................................ 0.2 0.2 0.2 0.2 0.2 0.3 0.3
Other............................................................................... * * * * * * *
[[Page 337]]
Receipts from Trust funds............................................................. ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Subtotal, income.................................................................. 0.3 0.3 0.3 0.3 0.4 0.4 0.4
Outgo:
To the public......................................................................... * * 0.1 0.1 0.1 0.1 0.1
Payments to Other funds............................................................... ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Subtotal, outgo................................................................... * * 0.1 0.1 0.1 0.1 0.1
Change in fund balance:
Surplus or deficit (-):
Excluding interest.................................................................. 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Interest............................................................................ 0.2 0.2 0.2 0.2 0.2 0.3 0.3
---------------------------------------------------------------
Subtotal, surplus or deficit (-).................................................. 0.2 0.3 0.3 0.3 0.3 0.3 0.3
Adjustments:
Transfers/lapses (net).............................................................. -* -0.1 -0.1 ....... ....... ....... .......
Other adjustments................................................................... ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Total, change in fund balance....................................................... 0.2 0.2 0.2 0.3 0.3 0.3 0.3
===============================================================
Balance, end of year.................................................................... 2.5 2.7 2.8 3.1 3.4 3.8 4.1
Uranium Enrichment Decontamination and Decommissioning Fund
Balance, start of year.................................................................. 0.5 0.9 1.3 1.7 2.1 2.6 3.1
Income:
Governmental receipts................................................................. 0.2 0.1 0.2 0.2 0.2 0.2 0.2
Proprietary receipts.................................................................. ........ ....... ....... ....... ....... ....... .......
Receipts from Federal funds:
Interest............................................................................ * 0.1 0.1 0.1 0.1 0.1 0.2
Other............................................................................... 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Receipts from Trust funds............................................................. ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Subtotal, income.................................................................. 0.6 0.6 0.7 0.7 0.7 0.8 0.8
Outgo:
To the public......................................................................... 0.2 0.2 0.3 0.2 0.2 0.2 0.2
Payments to Other funds............................................................... ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Subtotal, outgo................................................................... 0.2 0.2 0.3 0.2 0.2 0.2 0.2
Change in fund balance:
Surplus or deficit (-):
Excluding interest.................................................................. 0.4 0.3 0.3 0.3 0.4 0.4 0.4
Interest............................................................................ * 0.1 0.1 0.1 0.1 0.1 0.2
---------------------------------------------------------------
Subtotal, surplus or deficit (-).................................................. 0.4 0.4 0.4 0.4 0.5 0.5 0.6
Adjustments:
Transfers/lapses (net).............................................................. * ....... ....... ....... ....... ....... .......
Other adjustments................................................................... ........ ....... ....... ....... ....... ....... .......
---------------------------------------------------------------
Total, change in fund balance....................................................... 0.4 0.4 0.4 0.4 0.5 0.5 0.6
===============================================================
Balance, end of year.................................................................... 0.9 1.3 1.7 2.1 2.6 3.1 3.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Less than $50 million
Note: Balances shown include committed and uncommitted cash balances.