[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.
---------------------------------------------------------------------------
  \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.
---------------------------------------------------------------------------

                                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)
----------------------------------------------------------------------------------------------------------------
                                                         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
                                         -----------------------------------------------------------------------
   Total................................   1,729.8            -*          36.7       60.9       97.6    1,827.5
----------------------------------------------------------------------------------------------------------------
* 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)
----------------------------------------------------------------------------------------------------------------
                                                      Current                  Changes
                                                     Services -----------------------------------------
                                                       (Feb.                                    Total    Actual
                                                       1998)    Policy   Economic  Technical   changes
----------------------------------------------------------------------------------------------------------------
Discretionary:.....................................
   Defense.........................................     271.0       3.5  ........        1.0       4.5     275.5
   Nondefense......................................     298.4       5.0  ........       -3.9       1.1     299.5
                                                    ------------------------------------------------------------
     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
                                                    ------------------------------------------------------------
     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
                                                    ------------------------------------------------------------
 Total outlays.....................................   1,732.4      10.0     -19.1      -20.3     -29.4   1,703.0
----------------------------------------------------------------------------------------------------------------

  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)
----------------------------------------------------------------------------------------------------------------
                                                      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
----------------------------------------------------------------------------------------------------------------
* 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)
----------------------------------------------------------------------------------------------------------------
                                                                                          1999
                                                                       -----------------------------------------
                                                                          Feb. 1998
                                                                          estimate       Actual        Change
----------------------------------------------------------------------------------------------------------------
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
                                                                       -----------------------------------------
         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
                                                                       -----------------------------------------
         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
                                                                       -----------------------------------------
         Total veterans benefits and services.........................        24.7          23.8          -0.8
                                                                       -----------------------------------------
         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
                                                                       -----------------------------------------
       Total, other functions.........................................         2.2          17.1          14.9
                                                                       -----------------------------------------
   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
                                                                       -----------------------------------------
       Total undistributed offsetting receipts........................       -42.6         -40.4           2.1
                                                                       -----------------------------------------
         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
                                                                       -----------------------------------------
         Total net interest...........................................       242.1         229.7         -12.4
                                                                       -----------------------------------------
         Total outlays for mandatory and net interest.................     1,163.0       1,128.1         -35.0
----------------------------------------------------------------------------------------------------------------

  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)
----------------------------------------------------------------------------------------------------------------
                                                                     Receipts         Outlays         Surplus
----------------------------------------------------------------------------------------------------------------
Totals published by Treasury (September 30, 1999, Monthly              1,827,285       1,704,545         122,740
 Treasury Statement)............................................
 Miscellaneous Treasury adjustments.............................  ..............            -539             539
                                                                 -----------------------------------------------
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
                                                                 -----------------------------------------------
 Total adjustments, net.........................................             169            -966           1,135
                                                                 -----------------------------------------------
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
----------------------------------------------------------------------------------------------------------------
\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.

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