[Analytical Perspectives]
[Other Technical Presentations]
[17. Comparison of Actual to Estimated Totals for 1999]
[From the U.S. Government Publishing Office, www.gpo.gov]
[[Page 367]]
17. COMPARISON OF ACTUAL TO ESTIMATED TOTALS FOR 1999
The following three parts of this chapter compare the actual total
receipts, outlays, and surplus for 1999 with the current services
estimates \1\ shown in the 1999 Budget published in February 1998. The
fourth part of this chapter shows additional details for a comparison of
mandatory and related programs, and the final part reconciles actual
receipts, outlays, and surplus totals for 1999 previously published by
the Department of the Treasury with those in this budget.
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\1\ The current services concept is discussed in Chapter 14: ``Current
Services Estimates.'' For mandatory programs and receipts the February
1998 current services estimate is based on laws then in place. For
discretionary programs the current services estimate is based on the
prior year estimates adjusted for inflation.
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Receipts
Receipts in 1999 were $1,827.5 billion, which is $97.6 billion greater
than the current services estimate of $1,729.8 billion in the 1999
Budget. As shown in Table 17-1, this increase was the net effect of
legislative and administrative changes; economic conditions that
differed from what had been expected; and technical factors that
resulted in different collection patterns and effective tax rates than
had been assumed.
Table 17-1. COMPARISON OF ACTUAL 1999 RECEIPTS WITH THE INITIAL CURRENT SERVICES ESTIMATES
(In billions of dollars)
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Enacted
Feb. 1998 legislation/ Different Technical Net
estimate administrative economic factors change Actual
actions conditions
----------------------------------------------------------------------------------------------------------------
Individual income taxes................. 792.7 -1.4 27.9 60.2 86.7 879.5
Corporation income taxes................ 194.4 2.0 -4.8 -6.9 -9.7 184.7
Social insurance and retirement receipts 595.7 * 14.7 1.4 16.1 611.8
Excise taxes............................ 70.7 -0.1 1.2 -1.5 -0.3 70.4
Estate and gift taxes................... 20.5 .............. -0.2 7.5 7.2 27.8
Customs duties.......................... 18.8 -0.5 -0.5 0.4 -0.5 18.3
Miscellaneous receipts.................. 36.8 .............. -1.7 -0.2 -1.9 34.9
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Total................................ 1,729.8 -* 36.7 60.9 97.6 1,827.5
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* indicates $50 million or less.
Policy differences.--The Transportation Equity Act for the 21st
Century, Internal Revenue Service Restructuring and Reform Act of 1998,
and The Omnibus Consolidated and Emergency Supplemental Appropriations
Act, 1999, were the only major laws enacted after February 1998 that
affected 1999 receipts. The changes provided in these Acts, together
with several minor legislative and administrative changes, were in large
part offsetting, resulting in a net decrease in 1999 receipts relative
to the February 1998 current services estimate of only $5 million.
Economic differences.--Differences between the economic assumptions
upon which the current services estimates were made and actual economic
performance accounted for a net increase in 1999 receipts of $36.7
billion. Higher-than-anticipated wages and salaries were in large part
responsible for the increases in individual income taxes and social
insurance and retirement receipts of $27.9 billion and $14.7 billion,
respectively. Excise taxes were also higher than the budget estimate, in
large part due to higher-than-estimated levels of gross domestic product
(GDP). These increases were partially offset by lower-than-expected
shares of corporate profits in GDP, which reduced corporation income
taxes $4.8 billion below the budget estimate. Lower-than-expected
imports, which affect customs duties, and lower-than-expected interest
rates, which affect deposits of earnings by the Federal Reserve
(miscellaneous receipts), reduced receipts below the budget estimates by
an additional $0.5 billion and $1.7 billion, respectively.
Technical reestimates.--Technical factors increased 1999 receipts a
net $60.9 billion above the February 1998 current services estimate.
This net increase was in large part attributable to higher-than-
anticipated collections of individual income taxes and estate and gift
taxes, which were partially offset by lower-than-anticipated collections
of corporation income taxes. Higher effective tax rates on personal
income than estimated in February 1998, and the continued strength of
the stock market and its effect on capital gains, were in large part
responsible for the increase in individual income taxes of $60.2
billion. Greater-than-anticipated numbers and values of taxable estates,
attributable in large part to the continued strength of the stock
market, increased estate and gift taxes $7.5 billion above the budget
estimate. Different collections patterns and effective tax rates than
assumed in February 1998 were primarily responsible for the lower-than-
anticipated collections of corporation income taxes of $6.9 billion.
[[Page 368]]
Outlays
Outlays for 1999 were $1,703.0 billion. This was $29.4 billion less
than the $1,732.4 billion current services estimate in the 1999 Budget
(February 1998).
Table 17-2 distributes the $29.4 billion net decrease in outlays among
discretionary and mandatory programs and net interest. The table also
makes rough estimates according to three reasons for the changes:
policy; economic conditions; and technical estimating differences, a
residual.
Table 17-2. COMPARISON OF ACTUAL 1999 OUTLAYS WITH THE INITIAL CURRENT SERVICES ESTIMATES
(In billions of dollars)
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Current Changes
Services -----------------------------------------
(Feb. Total Actual
1998) Policy Economic Technical changes
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Discretionary:.....................................
Defense......................................... 271.0 3.5 ........ 1.0 4.5 275.5
Nondefense...................................... 298.4 5.0 ........ -3.9 1.1 299.5
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Subtotal, discretionary....................... 569.4 8.5 ........ -2.9 5.6 575.0
Mandatory:
Deposit insurance............................... -4.4 ........ -0.1 -0.8 -0.9 -5.3
Other programs.................................. 925.3 1.2 -10.1 -12.8 -21.7 903.6
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Subtotal, mandatory........................... 920.9 1.2 -10.1 -13.6 -22.6 898.3
Net interest....................................... 242.1 0.3 -9.0 -3.7 -12.4 229.7
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Total outlays..................................... 1,732.4 10.0 -19.1 -20.3 -29.4 1,703.0
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Policy changes are the result of actions by the Congress or the
Administration that change spending levels, primarily through higher or
lower appropriations or changes in authorizing legislation. For 1999,
policy changes increased outlays an estimated $10.0 billion relative to
the initial current services estimates.
Policy changes increased discretionary outlays by $8.5 billion because
outlays from final appropriations were above the initial current
services estimates. Defense discretionary outlays increased by $3.5
billion and nondefense discretionary outlays increased by $5.0 billion.
Policy changes increased mandatory outlays $1.2 billion above current
law. The largest changes were an increase of $5.7 billion for emergency
spending for agricultural programs, partially offset by $2.4 billion in
collections from the sale of pension assets of the District of Columbia.
(Mandatory programs are mostly formula benefit or entitlement programs
not normally controlled by annual appropriations.)
Economic conditions that differed from those forecast in February 1998
for current services (as well as policy) resulted in a net decrease in
outlays of $19.1 billion. Outlays for mandatory programs decreased an
estimated $10.1 billion, largely due to lower than expected unemployment
rates, which in turn reduced outlays for unemployment compensation and
food stamps; and lower than expected inflation, which caused lower than
estimated increases for Social Security and other inflation-sensitive
programs. Outlays for net interest decreased $9.0 billion due to a
combination of lower than projected interest rates and changes in
borrowing requirements that resulted from the effect of economic factors
on receipts and outlays.
Technical estimating differences and other changes result from changes
in such factors as the number of beneficiaries for entitlement programs,
crop conditions, or other factors not associated with policy changes or
economic conditions. Technical changes accounted for a net decrease of
$20.3 billion. The largest decrease was for Medicare.
Deficit/Surplus
The preceding two sections discussed the differences between the
initial current services estimates and the actual amounts of Federal
Government receipts and outlays for 1999. This section combines these
effects to show the net impact of these differences on the deficit or
surplus.
Table 17-3. COMPARISON OF THE ACTUAL 1999 SURPLUS WITH THE INITIAL CURRENT SERVICES ESTIMATES OF THE DEFICIT
(In billions of dollars)
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Current Changes
Services -----------------------------------------
(Feb. Total Actual
1998) Policy Economic Technical changes
----------------------------------------------------------------------------------------------------------------
Receipts........................................... 1,729.8 -* 36.7 60.9 97.6 1,827.5
Outlays............................................ 1,732.4 10.0 -19.1 -20.3 -29.4 1,703.0
------------------------------------------------------------
Surplus/deficit (-)............................ -2.6 -10.0 55.9 81.2 127.0 124.4
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* indicates $50 million or less.
Note: Surplus/deficit(-) changes are receipts minus outlays. For these changes, a plus indicates an increase in
the surplus or a decrease in the deficit.
As shown in Table 17-3, the 1999 current services deficit was
initially estimated to be $2.6 billion. The actual surplus was $124.4
billion, which was a $127.0 billion change from the initial estimate.
Receipts were $97.6 billion more than the initial estimate, and outlays
were $29.4 billion less. The table shows the distribution of the changes
according to the categories in the preceding two sections.
The net effect of policy decreases for receipts and outlays increased
the deficit $10.0 billion.
Economic conditions that differed from the initial assumptions in
February 1998 accounted for an estimated $55.9 billion decrease in the
deficit. This was the combined effect of an increase in receipts of
$36.7 billion and a decrease in outlays of $19.1 billion. Technical
factors decreased the deficit by an estimated $81.2 billion. This was
due to an increase in receipts of $60.9 billion and a decrease in
outlays of $20.3 billion for technical estimating reasons.
[[Page 369]]
Comparison of the Actual and Estimated Outlays for Mandatory and Related
Programs for 1999
This section compares the original 1999 outlay estimates for mandatory
and related programs under current law in the 1999 Budget (February
1998) with the actual outlays. Mandatory and related programs are
programs with permanent spending authority that is generally controlled
by authorizing legislation rather than by annual appropriations. Outlays
for these programs depend on eligibility criteria, benefit levels, and
other factors established in law. Major examples of these programs
include Social Security and Medicare benefits for the elderly,
agricultural price support payments to farmers, and deposit insurance
for banks and thrift institutions. This category also includes net
interest outlays and undistributed offsetting receipts.
A number of factors may cause differences between the amounts
estimated in the budget and the actual outlays. For example, legislation
may change benefit rates or coverage; the actual number of beneficiaries
may differ from the number estimated; or economic conditions (such as
inflation or interest rates) may differ from what was assumed in making
the original estimates.
Table 17-4 shows the differences between the actual outlays for these
programs in 1999 and the amounts originally estimated in the 1999
Budget, based on laws in effect at that time. Actual outlays for
mandatory spending and net interest in 1999 were $1,128.1 billion, which
was $35.0 billion less than the initial estimate of $1,163.0 billion,
based on existing law in February 1998.
Actual outlays for mandatory human resources programs were $921.7
billion, $39.6 billion less than originally estimated. This decrease was
the net effect of legislative action, differences between actual and
assumed economic conditions, differences between the anticipated and
actual number of beneficiaries, and other technical differences.
Outlays for other functions were $14.9 billion more than originally
estimated, largely because of increases of $11.1 billion for agriculture
programs. Undistributed offsetting receipts were $2.1 billion less than
expected.
Outlays for net interest were $229.7 billion or $12.4 billion less
than the original estimate. This decrease was the net effect of changes
in interest rates from those initially assumed, lower borrowing
requirements due to actual surpluses in 1998 and 1999, and technical
factors.
[[Page 370]]
Table 17-4. COMPARISON OF ACTUAL AND ESTIMATED OUTLAYS FOR MANDATORY AND RELATED PROGRAMS UNDER CURRENT LAW
(In billions of dollars)
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1999
-----------------------------------------
Feb. 1998
estimate Actual Change
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Mandatory outlays:
Human resources programs:
Education, training, employment, and social services............. 13.9 11.3 -2.7
Health:
Medicaid....................................................... 107.9 108.0 0.1
Other.......................................................... 7.1 6.1 -1.0
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Total health................................................. 115.1 114.1 -0.9
Medicare......................................................... 204.7 187.7 -17.0
Income security:
Retirement and disability...................................... 81.1 76.5 -4.6
Unemployment compensation...................................... 23.9 21.4 -2.6
Food and nutrition assistance.................................. 33.1 28.7 -4.4
Other.......................................................... 72.0 71.2 -0.8
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Total, income security....................................... 210.1 197.8 -12.4
Social security.................................................. 392.8 387.0 -5.9
Veterans benefits and services:
Income security for veterans................................... 23.3 22.2 -1.1
Other.......................................................... 1.4 1.7 0.3
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Total veterans benefits and services......................... 24.7 23.8 -0.8
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Total mandatory human resources programs..................... 961.3 921.7 -39.6
Other functions:
Agriculture...................................................... 7.0 18.1 11.1
Deposit insurance................................................ -4.4 -5.3 -0.9
Other functions.................................................. -0.4 4.3 4.7
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Total, other functions......................................... 2.2 17.1 14.9
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Undistributed offsetting receipts:
Employer share, employee retirement.............................. -36.6 -35.6 1.0
Rents and royalties on the outer continental shelf............... -4.2 -3.1 1.1
Other undistributed offsetting receipts.......................... -1.8 -1.8 0.1
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Total undistributed offsetting receipts........................ -42.6 -40.4 2.1
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Total, mandatory............................................. 920.9 898.3 -22.6
Net interest:.........................................................
Interest on the public debt........................................ 366.8 353.5 -13.2
Interest received by trust funds................................... -118.8 -118.6 0.2
Other interest..................................................... -5.8 -5.1 0.7
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Total net interest........................................... 242.1 229.7 -12.4
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Total outlays for mandatory and net interest................. 1,163.0 1,128.1 -35.0
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Reconciliation of Differences with Amounts Published by Treasury for
1999
Table 17-5 provides a reconciliation of the receipts, outlays, and
surplus totals published by the Department of the Treasury in the
September 30, 1999, Monthly Treasury Statement and those published in
this budget. The Department of the Treasury made technical adjustments
to the estimates for the U.S. Government Annual Report, which lowered
outlays by $539 million. Additional adjustments made for this budget
increased receipts by $169 million and decreased outlays by $966
million. The major changes were for Federal family education loans and
transactions of the United Mine Workers of America benefit funds.
[[Page 371]]
Table 17-5. RECONCILIATION OF FINAL AMOUNTS FOR 1999
(In millions of dollars)
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Receipts Outlays Surplus
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Totals published by Treasury (September 30, 1999, Monthly 1,827,285 1,704,545 122,740
Treasury Statement)............................................
Miscellaneous Treasury adjustments............................. .............. -539 539
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Totals published by Treasury in U.S. Government Annual Report 1,827,285 1,704,006 123,279
\1\............................................................
Federal family education loans \1\........................... .............. -1,086 1,086
United Mine Workers of America benefit funds................. 148 148 ..............
Other........................................................ 21 -28 49
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Total adjustments, net......................................... 169 -966 1,135
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Totals in the budget............................................ 1,827,454 1,703,040 124,414
MEMORANDUM:
Total change September 30, 1999, Monthly Treasury Statement.... 169 -1,505 1,674
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\1\ Estimates shown for the Treasury Annual Report are consistent with detailed estimates in the Treasury Annual
Report Appendix. The Federal family education loan change is included in Treasury Annual Report summary
material.