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

    Glossary

      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

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     allocations, within the spending target, for discretionary and
     mandatory spending.

    ``Cap''

     A ``cap'' is a legal limit on 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.

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     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 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 1999 ends
     September 30, 1999.

    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.

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    Social Insurance Payroll Taxes

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

    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.