[Analytical Perspectives]
[Special Analyses and Presentations]
[9. Aid to State and Local Governments]
[From the U.S. Government Publishing Office, www.gpo.gov]


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               9.  AID TO STATE AND LOCAL GOVERNMENTS \1\
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  \1\ Federal aid to State and local governments is defined as the 
provision of resources by the Federal Government to support a State or 
local program of governmental service to the public. The three primary 
forms of aid are grants, loan subsidies, and tax expenditures.
---------------------------------------------------------------------------
  State and local governments have a vital constitutional responsibility 
to provide government services. They have the major role in providing 
domestic public services, such as public education, law enforcement, 
roads, water supply, and sewage treatment. The Federal Government 
contributes to that role both by promoting a healthy economy and by 
providing grants, loans, and tax subsidies to State and local 
governments.
  Federal grants help State and local governments finance programs 
covering most areas of domestic public spending, including income 
support, infrastructure, education, and social services. Federal grant 
outlays were $267.1 billion in 1999 and are estimated to increase to 
$284.1 billion in 2000 and $305.6 billion in 2001.
  Grant outlays for payments for individuals, such as Medicaid, are 
estimated to be 62 percent of total grants in 2001; for physical capital 
investment, 17 percent; and for all other purposes, largely education, 
training, and social services, 21 percent.
  Federal aid to State and local governments is also provided through 
tax expenditures. Tax expenditures are revenue losses due to 
preferential provisions of the Federal tax laws, such as special 
exclusions, exemptions, deductions, credits, deferrals, or tax rates.
  The two major tax expenditures benefitting State and local governments 
are the deductibility of personal income and property taxes from gross 
income for Federal income tax purposes, and the exclusion of interest on 
State and local public purpose bonds from Federal taxation. These 
provisions, on an outlay equivalent basis, are estimated to be $95.4 
billion in 2000 and $98.7 billion in 2001. A detailed discussion of the 
measurement and definition of tax expenditures and a complete list of 
the amount of specific tax expenditures are in Chapter 5, ``Tax 
Expenditures.'' As discussed in that chapter, there are generally 
interactions among tax expenditure provisions, so that the estimates 
above only approximate the aggregate effect of these provisions.
  Tax expenditures that especially aid State and local governments are 
displayed separately at the end of Table 5-5 in that chapter.

               Table 9-1.  FEDERAL GRANT OUTLAYS BY AGENCY
                        (In billions of dollars)
------------------------------------------------------------------------
                                                            Estimate
                    Agency                       1999  -----------------
                                                actual    2000     2001
------------------------------------------------------------------------
Department of Agriculture....................     18.8     19.7     20.4
Department of Commerce.......................      0.5      0.6      0.7
Department of Education......................     19.4     22.8     23.5
Department of Energy.........................      0.2      0.1      0.2
Department of Health and Human Services......    148.8    160.7    174.7
Department of Housing and Urban Development..     27.7     24.9     26.2
Department of the Interior...................      2.0      2.2      2.2
Department of Justice........................      4.5      3.8      6.4
Department of Labor..........................      7.6      8.3      8.7
Department of Transportation.................     28.9     32.3     34.3
Department of the Treasury...................      0.5      0.5      0.5
Department of Veterans Affairs...............      0.3      0.4      0.4
Environmental Protection Agency..............      3.0      3.3      3.6
Federal Emergency Management Agency..........      3.4      2.7      2.1
Other agencies...............................      1.8      1.8      1.6
                                              --------------------------
   Total.....................................    267.1    284.1    305.6
------------------------------------------------------------------------

  Table 9-1 shows the distribution of grants by agency. Grant outlays 
for the Department of Health and Human Services are estimated to be 
$174.7 billion in 2001, 57 percent of total grants, more than five times 
as much as any other agency.

                  HIGHLIGHTS OF THE FEDERAL AID PROGRAM

  Major proposals in this budget affect Federal aid to State and local 
governments and the important relationships between the levels of 
government. Through the use of grants, the Federal government can share 
with State and local governments the cost and, ultimately, the benefits 
of a better educated, healthier, and safer citizenry. The Administration 
is committed to working with State and local governments to make our 
Federal system more efficient and effective and to improving the design 
and administration of Federal grant programs. One way the Administration 
will do this is by leading a governmentwide effort to use electronic 
processing in the administration of grant programs.
  This budget continues the Administration's commitment to giving State 
and local governments increased flexibility. Through the use of grants, 
Federal agencies can create partnerships with State and local 
governments that focus on joint goals and the progress made toward 
meeting them. The Administration's efforts to improve the grant 
administration process will include efforts to identify statutory 
impediments to grants simplification and encourage flexible legislation, 
such as

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the Workforce Investment Act of 1998, which allows Federal agencies to 
streamline the delivery of grants.
  In addition, this budget proposes several initiatives to increase 
access to health care, to increase child care assistance for low-income 
families, to help States recruit new teachers and reduce class sizes, to 
encourage investment in distressed communities, and to protect the 
environment and encourage ``smart-growth.''
  Highlights of grants to State and local governments follow. For 
additional information on grants, see the detailed Table 9-3 in this 
Chapter, or information in the Budget volume.

Education

  This budget requests $23.5 billion in budget authority for 2001 for 
grants to State and local governments for education, an increase of $7.5 
billion above the 2000 amount of $16.0 billion. The education proposals 
in this budget will help States improve accountability for school and 
student performance, enhance teacher quality, acquire better technology, 
and support innovative programs.
  The budget includes $8.4 billion for Title I grants to local 
educational agencies, providing $250 million for an Accountability Fund 
to help accelerate States' implementation of accountability provisions 
in the Title I program, nearly doubling the amount available in 2000. 
The Accountability Fund will help States identify their lowest 
performing schools, intervene with effective strategies to improve 
student outcomes, and report on their results.
  The budget proposes $1,750 million, an increase of $450 million over 
2000, as the third installment of the President's plan to help schools 
recruit, hire, and train 100,000 new teachers by 2005 and reduce class 
size in the early grades. The budget provides $1.0 billion to help 
States and districts provide sustained, content-rich professional 
development, and support State efforts to align curricula and 
assessments with content standards.
  The Administration's education technology programs serve to make 
modern computers and technologies accessible to all students; connect 
classrooms to the Internet; make high-quality educational software an 
integral part of the curriculum; and enable teachers to effectively 
integrate technology into their instruction. The budget provides $903 
million for education technology.
  A variety of innovative programs to improve the educational 
development of the Nation's students are proposed, or expanded from 
previous funding levels. As part of a comprehensive approach to fix 
failing schools the budget more than doubles the funding of the 21st 
Century Community Learning Centers/After School Programs to $1.0 
billion. In 2001 more than 10,000 schools will receive 21st Century 
Community Learning Center grants. The budget requests $247 million in 
competitive grants under the interagency Safe Schools/Healthy Students 
program, which includes contributions from the Departments of Health and 
Human Services, Justice, and Labor; $50 million for the newly 
established Coordinator initiative to ensure that more than 1,300 middle 
schools have a director of drug and violence prevention programs to 
monitor local programs and link school-based programs to community-based 
programs; and $10 million for Project SERV, a resource for responding to 
school violence incidents. The Administration proposes $175 million in 
funding for charter schools, enough to support 2,400 schools in 2001 and 
continue progress toward the President's goal of 3,000 charter schools 
by 2002. In addition, in 2001, $1.3 billion is requested to repair the 
Nation's schools.
  For higher education, this budget proposes to increase funds for GEAR-
UP by $125 million in 2001. This program provides funds for States and 
for local partnerships to help students in high-poverty schools prepare 
for and attend college.

Training and Employment

  Several initiatives in the budget continue the Administration's 
efforts to reform the Nation's workforce development system and increase 
job training opportunities to help workers succeed in the economy of the 
21st Century.
  The Workforce Investment Act of 1998 (WIA) takes full effect on July 
1, 2000, as the Job Training Partnership Act is repealed and all States 
fully implement the WIA requirements. The budget includes funding for 
initiatives to ensure that: (1) all displaced workers would receive the 
training they want and need; (2) individuals who lose their job due to 
no fault of their own could get re-employment services; and (3) every 
American would have access to One-Stop Career Centers. The budget 
proposes $1.8 billion for dislocated workers, an increase of $181 
million over 2000. The Employment Service provides a free labor exchange 
for all workers and job seekers, and is growing more effective through 
implementation of One-Stop Career Centers. The budget proposes $1.0 
billion for these activities.
  In order to enhance the prospects of employment for individuals with 
disabilities, the budget includes $20 million for competitive grants to 
partnerships or consortia in each State to provide new services and 
information for individuals with disabilities who want to return to 
work. To boost the skills and productivity of the U.S. workforce, the 
budget includes $30 million for competitive grants to States for 
training and upgrading the skills of currently employed workers. 
Applicants would be required to provide non-Federal matching resources, 
and employers that received grant assistance would be expected to 
demonstrate that training increased participant earnings.
  The Youth Opportunity Grants initiative addresses the special problems 
of out-of-school youth, especially in inner-cities and other areas where 
unemployment rates are high. The budget provides a total of $375 million 
for this program, including $250 million for the third year of 5-year 
competitive grants to 25-30 communities and $125 million for this first 
year of competitive grants to 12-15 additional communities serving a 
total of about 85,000 disadvantaged youth.

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  To build on the investments and partnerships begun under the Welfare-
to-Work program and the Workforce Investment Act, this budget includes 
an additional $255 million for FathersWork/Families Win. This initiative 
would help low income noncustodial parents work and pay child support 
and help custodial parents stay in their jobs, move up the career ladder 
and remain off cash assistance. This program includes a $10 million set 
aside to provide grants to Native Americans.
   In 2001, the Responsible Reintegration of Young Offenders initiative 
will provide competitive grants to serve almost 19,000 young ex-
offenders. The budget includes $75 million for this new initiative to 
establish partnerships between the criminal justice system and local 
one-stop delivery systems created under the Workforce Investment Act.

Social Services

  Head Start, America's premiere early childhood development program, 
supports working families by helping parents get involved in their 
children's educational lives and providing services to the entire 
family. In proposing the expansion of Head Start funding by $1.0 billion 
and adding 61,000 Head Start pre-school slots and 9,000 Early Head Start 
slots, the Administration intends to increase participation in these 
programs by under-represented groups in specifically targeted areas.
  This budget proposes to fund the social services block grant at $1,775 
million, $75 million more than the authorized level to maintain funding 
at the 2000 level. Of this amount, $25 million will be available to 
support second-chance homes for unmarried teen parents and their 
children. This block grant provides funding to States to support a wide 
range of programs including child protection and child welfare, child 
care, and services for the elderly and disabled.

Income Support

  Welfare-to-work.--In addition to the $16.5 billion per year provided 
through the Temporary Assistance for Needy Children Program, the 
Administration sought, and Congress provided, a total of $3 billion in 
1998 and 1999. This budget provides for a two-year extension of the time 
period grantees have to spend for their funds to continue their efforts 
and provide long-term recipients and non-custodial parents of children 
on welfare the work and employment services they need to help support 
their children.
  Housing assistance.--The budget continues to reduce poverty 
concentrations by providing $625 million in HOPE VI grants to local 
housing authorities to demolish 28,000 dilapidated non-viable public 
housing units over the next three years, and replace them with portable 
subsidies or newly constructed mixed income housing.
  Food and nutrition assistance.--This budget requests $9.4 billion for 
grants for the National School Lunch and School Breakfast Programs and 
other child nutrition programs. These programs provide free or low-cost 
nutritious meals to children in participating schools. In 2001, the 
programs will serve an estimated 27.8 million lunches daily. The Special 
Supplemental Nutrition Program for Women, Infants, and Children (WIC) 
provides vouchers for nutritious supplemental food packages, nutrition 
education and counseling, and health and immunization referrals. This 
budget request $4.1 billion for WIC for 2001 to serve by year-end 7.5 
million low-income women, infants, and children who are at nutritional 
risk.
  Other income security.--The Child Care and Development Fund provides 
grants to States to improve the availability, affordability, and quality 
of child care. This budget proposes an increase of $817 million for 
child care subsidies for low-income families, which is sufficient to 
provide subsidies for nearly 150,000 additional children. The budget 
also proposes to create an Early Learning Fund, which would provide 
community grants for activities to improve school readiness of children 
under five.

Health

  This budget proposes $133.4 billion in outlays for 2001 in grants to 
State and local governments for health, $10.1 billion more than for 
2000.

  Medicaid.--Medicaid is the largest grant program, and outlays for 
Medicaid are projected to be $124.8 billion in 2001. This Federal-State 
health care program served about 33 million low-income Americans in 
1999. The Federal Government spent $108 billion, 57 percent of the 
total, on the program in 1999 while States spent $81 billion, or 43 
percent. Medicaid covers a fourth of the Nation's children and is the 
largest single purchaser of maternity care as well as of nursing home 
services and other long-term care services; the program covers almost 
two-thirds of nursing home residents.
  This budget proposes several new initiatives in Medicaid, including 
eligibility expansions to parents of Medicaid and SCHIP children (see 
below), people with long-term care needs in community settings, and 
legal immigrants. This budget steps up efforts to enroll eligible 
individuals in the program by extending and improving the transitional 
Medicaid program, allowing new sites to determine presumptive 
eligibility, and aligning Medicaid with SCHIP enrollment processes. This 
budget seeks to provide States with efficiencies in the Medicaid 
prescription drug program and includes other Medicaid-related proposals 
as well.

  State Children's Health Insurance Program.--More than 11 million 
American children lack health insurance. To increase the number of 
children with insurance, the State Children's Health Insurance Program 
(SCHIP) was established in 1997 to provide $24 billion over five years 
for States to expand health insurance coverage to low-income, uninsured 
children. SCHIP provides States with broad flexibility in pro

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gram design while protecting beneficiaries through basic Federal 
standards.
  This budget requests $4.5 billion in budget authority for 2001 for 
this program and proposes to allow States to provide health insurance 
coverage to parents of children eligible for Medicaid and SCHIP.

  Other health.--This budget requests increased Federal spending for 
certain public health programs that assist State and local governments 
in addressing substance abuse, mental health, and HIV/AIDS for 2001. 
These increases include an additional $31 million for the substance 
abuse block grant and $60 million for the mental health block grant for 
State governments. Increased funds for State and local governments are 
also included in the $125 million overall increase for Ryan White AIDS 
treatment grants.

Natural Resources and Environment

  Federal water infrastructure funds in the State and Tribal Assistance 
grants account provide capitalization grants to State revolving funds, 
which make low-interest loans to help municipalities pay for wastewater 
and drinking water treatment systems required by Federal law. The 
proposed $1.6 billion in budget authority in 2001 for the State 
Revolving Fund capitalization grants in this account is consistent with 
the Administration's plans to capitalize these funds to the point where 
the Clean Water State Revolving Funds and the Drinking Water State 
Revolving Funds provide a total of $2.5 billion in average annual 
assistance.

Administration of Justice

  The budget requests $4.5 billion in budget authority in 2001 to help 
State and local governments fight crime, including $542 million to 
assist crime victims. The 2001 budget builds on the success of the 
Community Oriented Policing Services (COPS) program and includes $1.3 
billion for the second year of the 21st Century Policing Initiative. 
This program expands the concept of community policing to include 
community prosecution, law enforcement technology assistance, and 
prevention. To combat the significant problem of violence against women, 
the budget proposes $462 million to enhance the States' abilities to 
respond, and to further expand access to previously under-served rural, 
Indian, and other minority populations.

Transportation

  This budget requests $42.2 billion in budget authority in 2001 for 
grants to State and local governments to assist with transportation 
infrastructure and related programs.

  Highways.--The budget requests $34.0 billion in budget authority in 
2001 for grants to States and local governments for highways. Most of 
this, or $33.5 billion, is in the Federal-aid highways program to 
maintain and improve surface transportation infrastructure. In addition, 
States will be provided dedicated funding to heighten enforcement of 
traffic laws regarding commercial drivers (e.g., truck and bus drivers). 
Grants to States to enforce Federal and compatible State standards for 
commercial motor vehicle safety inspections, traffic enforcement, and 
compliance reviews are proposed to increase 78 percent over 2000 to $187 
million in 2001.
  Other transportation.--This budget requests $6.2 billion in budget 
authority for 2001 to assist State and local governments with mass 
transit and $2.0 billion to assist with the construction of airports.

Community and Regional Development

  Community development.--This budget proposes $1.4 billion in mandatory 
grant funding for the remaining nine years for the 15 Round II Urban 
Zones; and $120 million in mandatory grant funding for the remaining 
eight years for the 5 Rural Zones and 20 Rural Enterprise Communities as 
the Administration proposed in 1999 and 2000. These grants would allow 
communities to implement comprehensive long term strategies to address 
their local needs.
  This budget also proposes a series of tax measures to extend and 
improve economic growth in the 31 existing Round I and Round II 
Empowerment Zones and also proposes to create a Third Round of 10 new 
Empowerment Zones. The total cost of the President's tax expenditure 
proposals is approximately $4 billion over 10 years. To encourage 
employment and growth, the Budget proposes to extend until 2009 the wage 
credit currently available only for Round I Zones through 2004, and to 
make the wage credit also available in Round II and Round III Zones 
through 2009. To lower the cost of investment for small businesses in 
Empowerment Zones, the Budget proposes to allow them to deduct an 
additional $35,000 in investments above the normal small business 
investment deductions. The proposal also will allow local governments to 
issue tax-exempt bonds on behalf of Empowerment Zone businesses. 
Finally, the President's proposal would permanently extend the 
Brownfields Tax Incentive in Empowerment Zones.

  Area and regional development.--The Administration proposes to give 
States, localities, and Tribes more flexibility in how they use the 
Department of Agriculture's rural development grants and loans for 
businesses, water and wastewater facilities, and community facilities 
such as day care centers and health clinics. The 1996 Farm Bill 
authorized this approach through a new Rural Community Advancement 
Program (RCAP), combining 12 separate programs into a performance 
partnership that can tailor assistance to the unique economic 
development needs of each rural community. The budget proposes $3.4 
billion in loans and grants for RCAP, 29 percent more than in 2000 and 
the full flexibility that the 1996 Farm Bill envisioned. It also re-
proposes partnership technical assistance grants and grants for early-
warning weather systems in areas prone to tornadoes.

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  As part of the Administration's multi-agency initiative for the 
Mississippi Delta Region (MDR), $2 million of the partnership technical 
assistance grants are targeted to MDR counties (the 219 counties of the 
region as defined by P.L. 100-460). In addition, there is a set-aside of 
$8 million in Intermediary Re-lending Program Loans for the MDR as well. 
The Administration is doubling the Appalachian Regional Commission's 
Entrepreneurship Initiative, which funds innovative economic development 
projects in the region, from $5 million to $10 million in 2001.

Other Functions

  Discussions of these and other Federal aid programs can be found in 
the main budget volume in Part IV, Part V, and elsewhere. As noted 
earlier, a detailed listing of budget authority and outlays for all 
grants to State and local governments is in Table 9-3 in this chapter.

                         HISTORICAL PERSPECTIVES

  In recent decades, Federal aid to State and local governments has 
become a major factor in the financing of certain government functions. 
The rudiments of the present system date back to the Civil War. The 
Morrill Act, passed in 1862, established the land grant colleges and 
instituted certain federally-required standards for States that received 
the grants, as is characteristic of the present grant programs. Federal 
aid was later initiated for agriculture, highways, vocational education 
and rehabilitation, forestry, and public health. In the depression 
years, Federal aid was extended to meet income security and other social 
welfare needs. However, Federal grants did not become a significant 
factor in Federal Government expenditures until after World War II.
  Table 9-2 displays trends in Federal grants to State and local 
governments since 1960. Section A shows Federal grants by function. 
Functions with a substantial amount of grants are shown separately. 
Grants for the national defense, energy, and the veterans benefits and 
services functions are combined in the ``other functions'' line in the 
table.

                                                               Table 9-2.  TRENDS IN FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS
                                                                              (Outlays; dollar amounts in billions)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Actual                                                                 Estimate
                                                ------------------------------------------------------------------------------------------------------------------------------------------------
                                                   1960     1965     1970     1975     1980     1985      1990      1995      1999      2000      2001      2002      2003      2004      2005
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
A. Distribution of grants by function:
   Natural resources and environment...........      0.1      0.2      0.4      2.4      5.4       4.1       3.7       4.1       4.1       4.5       5.0       5.0       4.9       4.9       4.9
   Agriculture.................................      0.2      0.5      0.6      0.4      0.6       2.4       1.3       0.8       0.7       0.8       0.8       0.7       0.7       0.7       0.7
   Transportation..............................      3.0      4.1      4.6      5.9     13.0      17.0      19.2      25.8      28.9      32.3      34.3      35.9      35.9      36.4      36.8
   Community and regional development..........      0.1      0.6      1.8      2.8      6.5       5.2       5.0       7.2       9.3       9.0       8.2       8.2       7.6       7.6       7.2
   Education, training, employment, and social       0.5      1.1      6.4     12.1     21.9      17.8      23.4      34.1      38.2      43.7      46.8      47.9      50.3      51.1      52.2
   services....................................
   Health......................................      0.2      0.6      3.8      8.8     15.8      24.5      43.9      93.6     114.0     123.3     133.4     145.5     160.0     174.8     189.8
   Income security.............................      2.6      3.5      5.8      9.4     18.5      27.2      35.2      55.1      64.2      63.2      67.2      70.3      73.3      75.9      77.7
   Justice.....................................  .......  .......        *      0.7      0.5       0.1       0.6       1.2       4.8       4.2       6.7       5.2       4.7       4.5       4.5
   General government..........................      0.2      0.2      0.5      7.1      8.6       6.8       2.3       2.2       2.1       2.3       2.2       2.2       2.2       2.2       2.2
   Other.......................................      0.2      0.3      0.6      7.2      9.3       7.6       3.1       3.0       0.8       0.8       0.9       0.9       0.9       1.1       1.1
                                                ------------------------------------------------------------------------------------------------------------------------------------------------
     Total.....................................      7.0     10.9     24.1     49.8     91.4     105.9     135.3     225.0     267.1     284.1     305.6     321.8     340.4     359.1     377.2

B. Distribution of Grants by BEA Category:
   Discretionary...............................       NA      2.9     10.2     21.0     53.3      55.5      63.3      94.0     112.0     116.8     125.7     128.3     130.2     132.3     133.7
   Mandatory...................................       NA      8.0     13.9     28.8     38.1      50.4      72.0     131.0     155.1     167.3     179.9     193.5     210.2     226.8     243.5
                                                ------------------------------------------------------------------------------------------------------------------------------------------------
     Total.....................................      7.0     10.9     24.1     49.8     91.4     105.9     135.3     225.0     267.1     284.1     305.6     321.8     340.4     359.1     377.2

C. Composition:
   Current dollars:
     Payments for individuals \1\..............      2.5      3.7      8.7     16.8     32.6      49.3      75.7     141.2     167.7     175.6     189.0     203.7     220.4     237.1     253.6
     Physical capital \1\......................      3.3      5.0      7.1     10.9     22.6      24.9      27.2      39.6      43.9      48.7      51.7      53.2      53.6      54.9      55.5
     Other grants..............................      1.2      2.2      8.3     22.2     36.2      31.6      32.5      44.2      55.5      59.8      65.0      64.9      66.5      67.1      68.1
                                                ------------------------------------------------------------------------------------------------------------------------------------------------
       Total...................................      7.0     10.9     24.1     49.8     91.4     105.9     135.3     225.0     267.1     284.1     305.6     321.8     340.4     359.1     377.2

   Percentage of total grants:
     Payments for individuals \1\..............      35%      34%      36%      34%      36%       47%       56%       63%       63%       62%       62%       63%       65%       66%       67%
     Physical capital \1\......................      47%      46%      29%      22%      25%       24%       20%       18%       16%       17%       17%       17%       16%       15%       15%
     Other grants..............................      17%      20%      34%      45%      40%       30%       24%       20%       21%       21%       21%       20%       20%       19%       18%
                                                ------------------------------------------------------------------------------------------------------------------------------------------------
       Total...................................     100%     100%     100%     100%     100%      100%      100%      100%      100%      100%      100%      100%      100%      100%      100%

   Constant (FY 1996) dollars:
     Payments for individuals \1\..............     11.2     15.7     31.3     44.9     59.8      69.3      88.6     144.0     159.9     163.0     171.3     180.1     190.0     199.2     207.7
     Physical capital \1\......................     16.9     23.9     26.6     24.7     37.2      32.2      30.4      40.4      42.1      45.4      46.9      47.0      46.2      46.2      45.5
     Other grants..............................      8.3     12.8     36.1     67.0     72.0      45.4      38.6      45.3      51.8      54.4      57.6      56.1      55.9      55.1      54.4
                                                ------------------------------------------------------------------------------------------------------------------------------------------------
       Total...................................     36.4     52.5     94.0    136.6    169.0     146.9     157.6     229.7     253.8     262.7     275.8     283.2     292.2     300.4     307.6

D. Total grants as a percent of:
   Federal outlays:
     Total.....................................       8%       9%      12%      15%      15%       11%       11%       15%       16%       16%       17%       17%       17%       18%       18%
     Domestic programs \2\.....................      18%      18%      23%      22%      22%       18%       17%       22%       22%       22%       22%       23%       23%       23%       23%
   State and local expenditures................      19%      20%      24%      27%      30%       24%       21%       25%       25%       N/A       N/A       N/A       N/A       N/A       N/A
   Gross domestic product......................       1%       2%       2%       3%       3%        3%        2%        3%        3%        3%        3%        3%        3%        3%        3%
E. As a share of total State and local capital
 spending:
   Federal capital grants......................      24%      25%      25%      26%      35%       30%       22%       26%       22%       N/A       N/A       N/A       N/A       N/A       N/A
   State and local source financing............      76%      75%      75%      74%      65%       70%       78%       74%       78%       N/A       N/A       N/A       N/A       N/A       N/A
                                                ------------------------------------------------------------------------------------------------------------------------------------------------
     Total.....................................     100%     100%     100%     100%     100%      100%      100%      100%      100%       N/A       N/A       N/A       N/A       N/A       N/A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 AN/A: Not available.

 A* $50 million or less.

\1\ Grants that are both payments for individuals and capital investment are shown under capital investment.

\2\ Excludes national defense, international affairs, net interest, and undistributed offsetting receipts.

  Federal grants for transportation increased to $3.0 billion, or 43 
percent of all Federal grants, in 1960 after initiation of aid to States 
to build the Interstate Highway System in the late 1950s.
  By 1970 there had been significant increases in the relative amounts 
for education, training, employment, social services, and health 
(largely Medicaid).
  In the early and mid-1970s, major new grants were created for natural 
resources and environment (construction of sewage treatment plants), 
community and regional development (community development block grants), 
and general government (general revenue sharing).
  Since the late 1970s changes in the relative amounts among functions 
reflect steady growth of grants for health (Medicaid) and income 
security and restraint in most other areas. The functions with the 
largest amount of grants are health; income security; education, 
training, employment, and social services; and transportation, with 
combined estimated grant outlays of $281.8 billion or 92 percent of 
total grant outlays in 2001.
  The increase in total outlays for grants overall since 1990 has been 
driven by increases in grants for health, which more than tripled from 
$43.9 billion in 1990 to an estimated $133.4 billion in 2001. The income 
security; education, training, employment, and social services; and 
transportation functions also increased substantially, but at a slower 
rate than the increase for health.
  Section B of the Table shows the distribution of grants divided into 
mandatory and discretionary spending.
  Funding for grant programs classified as mandatory occurs in 
authorizing legislation. Funding levels for mandatory programs can only 
be changed by changing eligibility criteria or benefit formulas 
established in law and are usually not limited by the annual 
appropriations process. Outlays for mandatory grant programs are 
estimated to be $179.9 billion in 2001. The three largest mandatory 
grant programs are Medicaid, with estimated outlays of $124.8 billion in 
2001, Temporary Assistance to Needy Families, $15.8 billion in 2001, and 
Food Stamp grants for State administration and Child nutrition programs, 
with combined outlays of $13.6 billion in 2001.
  The funding level for discretionary grant programs is subject to 
approval by Congress annually through appropriations acts. Outlays for 
discretionary grant programs are estimated to be $125.7 billion in 2001. 
Table 9-3 at the end of this chapter identifies discretionary and 
mandatory grant programs separately. For more information on the Budget 
Enforcement Act and these categories, see Chapter 24. ``Budget System 
and Concepts and Glossary'' in this volume.
  Section C of the Table shows the composition of grants divided into 
three major categories: payments for individuals, grants for physical 
capital, and other grants \2\ Grant outlays for payments for 
individuals, which are mainly entitlement programs in which the Federal 
Government and the States share the costs, have grown significantly as a 
percent of total grants. They increased from 56 percent of the total in 
1990 to 63 percent of the total in 1999. While payments for individuals 
will comprise 62 percent of grants in 2001, they are estimated to 
increase to an estimated 67 percent of the total by 2005.
---------------------------------------------------------------------------
  \2\ Certain housing grants are classified in the budget as both 
payments for individuals and physical capital spending. In the text and 
tables in this section, these grants are included in the category for 
physical capital spending.
---------------------------------------------------------------------------
  These grants are distributed through State or local governments to 
provide cash or in-kind benefits that

[[Page 246]]

constitute income transfers to individuals or families. The major grant 
in this category is Medicaid, which had outlays of $108.0 billion in 
1999, increasing to $124.8 billion in 2001. Temporary Assistance for 
Needy Families, child nutrition programs, and housing assistance are 
also large grants in this category.
  Grants for physical capital assist States and localities with 
construction and other physical capital activities. The major capital 
grants are for highways, but there are also grants for airports, mass 
transit, sewage treatment plant construction, community development, and 
other facilities. Grants for physical capital were almost half of total 
grants in 1960, shortly after grants began for construction of the 
Interstate Highway System. The relative share of these outlays has 
declined, as payments for individuals have grown. In 2001, grants for

[[Page 247]]

physical capital are estimated to be 17 percent of total grants.
  The other grants are primarily for education, training, employment, 
and social services. These grants increased to 45 percent of total 
grants by 1975, and are projected to be 21 percent of total grants in 
2001.
  Section C of Table 9-2 also shows these three categories in constant 
dollars. In constant 1996 dollars, total grants increase from $157.6 
billion in 1990 to an estimated $275.8 billion in 2001, an average 
increase of 5.2 percent per year. During this same period, grants for 
payments to individuals are estimated to increase an average of 6.2 
percent per year; grants for physical capital an average of 4.0 percent 
per year, and other grants an average of 3.7 percent per year.
  The real growth in grants during the 1990s is in contrast to the 
1980s. During the period between 1980 and 1990, outlays for grants in 
constant 1996 dollars decreased from $169.0 billion in 1980 to $157.6 
billion in 1990.
  Section D of this table shows grants as a percentage of Federal 
outlays, State and local expenditures, and gross domestic product. 
Grants have increased as a percentage of total Federal outlays from 11 
percent in 1990 to an estimated 17 percent in 2001. Grants as a 
percentage of domestic spending are estimated to be 22 percent in 2001.
  As a percentage of total State and local expenditures, grants have 
increased from 21 percent in 1990 to 25 percent in 1999.
  Section E shows the relative contribution of physical capital grants 
in assisting States and localities with capital spending. After a slight 
increase to 26 percent of State and local capital spending in 1995, 
Federal capital grants have declined to be 22 percent of State and local 
spending in 1999, the same share as in 1990.

     OTHER INFORMATION ON FEDERAL AID TO STATE AND LOCAL GOVERNMENTS

  Additional information regarding aid to State and local governments 
can be found elsewhere in this budget and in other documents.
  Major public physical capital investment programs providing Federal 
grants to State and local governments are identified in Chapter 6, 
``Federal Investment Spending and Capital Budgeting.''
  Data for summary and detailed grants to State and local governments 
can be found in many sections of a separate document entitled Historical 
Tables. Section 12 of that document is devoted exclusively to grants to 
State and local governments. Additional information on grants can be 
found in Section 6 (Composition of Federal Government Outlays); Section 
9 (Federal Government Outlays for Investment: Major Physical Capital, 
Research and Development, and Education and Training); Section 11 
(Federal Government Payments for Individuals); and Section 15 (Total 
(Federal and State and Local) Government Finances).
  In addition to these sources, a number of other sources of information 
are available that use slightly different concepts of grants, provide 
State-by-State information, provide information on how to apply for 
Federal aid, or display information about audits.
  Government Finances, published annually by the Bureau of the Census in 
the Department of Commerce, provides data on public finances, including 
Federal aid to State and local governments.
  The Survey of Current Business, published monthly by the Bureau of 
Economic Analysis in the Department of Commerce, provides data on the 
national income and product accounts (NIPA), a broad statistical concept 
encompassing the entire economy. These accounts include data on Federal 
grants to State and local governments. Data using the NIPA concepts 
appear in this volume in Chapter 16, ``National Income and Product 
Accounts.''
  The Budget Information for States (BIS) report provides estimates of 
State-by-State funding allocations for the largest formula grant 
programs for the past, present, and budget year. These programs comprise 
approximately 85 percent of total Federal aid to State and local 
governments. The document is prepared by the Office of Management and 
Budget soon after the Budget is released.
  Federal Aid to States, a report prepared by the Bureau of the Census, 
shows Federal spending by State for grants for the most recently 
completed fiscal year.
  The Consolidated Federal Funds Report is an annual document that shows 
the distribution of Federal spending by State and county areas and by 
local governmental jurisdictions. It is released by the Bureau of the 
Census in the Spring.
  The Federal Assistance Awards Data System (FAADS) provides 
computerized information about current grant funding. Data on all direct 
assistance awards are provided quarterly by the Bureau of the Census to 
the States and to the Congress.
  The Catalog of Federal Domestic Assistance is a primary reference 
source for communities wishing to apply for grants and other domestic 
assistance. The Catalog is prepared by the General Services 
Administration with data collected by the Office of Management and 
Budget and is available from the Government Printing Office. The basic 
edition of the Catalog is usually published in June and an update is 
generally published in December. It contains a detailed listing of grant 
and other assistance programs; discussions of eligibility criteria, 
application procedures, and estimated obligations; and related 
information.
  The Federal Audit Clearinghouse maintains an on-line database (http://
harvester.census.gov/sac) that provides access to summary information 
about audits conducted under OMB Circular A-133, ``Audits to States, 
Local Governments, and Non-Profit Organizations.'' Information is 
available for each audited entity, including the amount of Federal money 
expended by program and whether there were audit findings.

[[Page 248]]

                       DETAILED FEDERAL AID TABLE

  Table 9-3, ``Federal Grants to State and Local Governments-Budget 
Authority and Outlays,'' provides detailed budget authority and outlay 
data for grants. This table displays discretionary and mandatory grant 
programs separately.

                                     

             Table 9-3. FEDERAL GRANTS TO STATE AND LOCAL GOVERNMENTS--BUDGET AUTHORITY AND OUTLAYS
                                            (in millions of dollars)
----------------------------------------------------------------------------------------------------------------
                                            Budget Authority                             Outlays
Function, Category, Agency and ---------------------------------------------------------------------------------
            Program                 1999         2000          2001          1999         2000          2001
                                  Actual      Estimate      Estimate       Actual      Estimate      Estimate
----------------------------------------------------------------------------------------------------------------
       NATIONAL DEFENSE
Discretionary:
  Federal Emergency Management
   Agency:
    Emergency management        ...........  ............  ............           1   ............  ............
     planning and assistance..
                               ---------------------------------------------------------------------------------
      Total, discretionary....  ...........  ............  ............           1   ............  ............
                               ---------------------------------------------------------------------------------
        Total, national         ...........  ............  ............           1   ............  ............
         defense..............
                               =================================================================================
            ENERGY
Discretionary:
  Department of Energy:
    Energy Programs:
      Energy conservation.....         176           145      219               158           124           151
                               ---------------------------------------------------------------------------------
      Total, discretionary....         176           145      219               158           124           151
                               =================================================================================
Mandatory:
  Tennessee Valley Authority:
    Tennessee Valley Authority         304           306      314               304           306           314
     fund.....................
                               ---------------------------------------------------------------------------------
      Total, mandatory........         304           306      314               304           306           314
                               ---------------------------------------------------------------------------------
        Total, energy.........         480           451      533               462           430           465
                               =================================================================================
     NATURAL RESOURCES AND
          ENVIRONMENT
Discretionary:
  Department of Agriculture:
    Natural Resources
     Conservation Service:
      Resource conservation     ...........  ............  ............           1             1             1
       and development........
      Watershed and flood               52            41       17                52            66            58
       prevention operations..
    Forest Service:
      State, private and                84           102      123                90            98           117
       international forestry.
      Management of national             3   ............       6        ...........            3             6
       forest lands for
       subsistence uses.......
  Department of Commerce:
    National Oceanic and
     Atmospheric
     Administration:
      Operations, research,            103           120      135                91            91           101
       and facilities.........
      Pacific coastal salmon    ...........           58      160        ...........           58           160
       recovery...............
  Department of the Interior:
    Office of Surface Mining
     Reclamation and
     Enforcement:
      Regulation and                    51            51       45                50            50            54
       technology.............
      Abandoned mine                   170           181      196               154           152           192
       reclamation fund.......
    Bureau of Reclamation:
      Bureau of reclamation             11            12        9                 9            14            10
       loan subsidy...........
    United States Geological
     Survey:
      Surveys, investigations   ...........  ............       8        ...........  ............            8
       and research...........
      Surveys, investigations   ...........  ............      17        ...........  ............           16
       and research...........
    United States Fish and
     Wildlife Service:
      Commercial salmon         ...........            5   ............  ...........            5   ............
       fishery capacity
       reduction..............
      Non-game wildlife state   ...........  ............     100        ...........  ............           25
       grants.................
      Cooperative endangered            14            23       65                 9            15            23
       species conservation
       fund...................
      Wildlife conservation              1             1        1                 1             1             1
       and appreciation fund..
      Miscellaneous permanent            2             2        2                 2             2             2
       appropriations.........
    National Park Service:
      National recreation and   ...........            2       20        ...........            1            13
       preservation...........
      Land acquisition and      ...........           20      145        ...........            7            51
       State assistance.......

[[Page 249]]


      Historic preservation             72            75       72                37            73            80
       fund...................
    Departmental Management:
      Priority Federal land     ...........           20   ............  ...........           10             4
       aquisitions and
       exchanges..............
  Environmental Protection
   Agency:
    State and Tribal                 3,408         3,446    2,907             2,745         3,064         3,400
     Assistance Grants........
    Hazardous substance                179           166      171               156           134           141
     superfund................
    Leaking underground                 62            60       62                59            62            61
     storage tank trust fund..
                               ---------------------------------------------------------------------------------
      Total, discretionary....       4,212         4,385    4,261             3,456         3,907         4,524
                               =================================================================================
Mandatory:
  Department of the Interior:
    Bureau of Land Management:
      Miscellaneous permanent           50             5        8                50             5             8
       payment accounts.......
    Minerals Management
     Service:
      National forests fund,             3             5        3                 3             5             3
       payment to States......
      Leases of lands acquired           1             1        1                 1             1             1
       for flood control,
       navigation, and allied
       purposes...............
    United States Fish and
     Wildlife Service:
      Federal aid in wildlife          199           228      237               212           202           209
       restoration............
      Sport fish restoration..         279           306      292               257           292           293
    Departmental Management:
      Everglades watershed      ...........  ............  ............         119            42   ............
       protection.............
      Everglades restoration             4             1        1        ...........            4             1
       account................
  Department of the Treasury:
    Financial Management
     Service:
      Payment to terrestrial             5             5        5                 5             5             5
       wildlife habitat
       restoration trust fund.
                               ---------------------------------------------------------------------------------
      Total, mandatory........         541           551      547               647           556           520
                               ---------------------------------------------------------------------------------
        Total, natural               4,753         4,936    4,808             4,103         4,463         5,044
         resources and
         environment..........
                               =================================================================================
          AGRICULTURE
Discretionary:
  Department of Agriculture:
    Departmental
     Administration:
      Outreach for socially              3             3       10                 4             3            10
       disadvantaged farmers..
    Cooperative State
     Research, Education, and
     Extension Service:
      Extension activities....         437           424      428               407           452           421
      Research and education           237           237      238               206           228           238
       activities.............
      Integrated activities...  ...........            9       18        ...........            1             4
    Agricultural Marketing
     Service:
      Payments to States and             1             1        2                 1             1             2
       possessions............
    Farm Service Agency:
      State mediation grants..           2             3        4                 2             3             5
                               ---------------------------------------------------------------------------------
      Total, discretionary....         680           677      700               620           688           680
                               =================================================================================
Mandatory:
  Department of Agriculture:
    Office of the Secretary:
      Fund for rural America..           1            20       30                12            11            22
    Farm Service Agency:
      Commodity credit                  27           132       93                27           132            93
       corporation fund.......
                               ---------------------------------------------------------------------------------
      Total, mandatory........          28           152      123                39           143           115
                               ---------------------------------------------------------------------------------
        Total, agriculture....         708           829      823               659           831           795
                               =================================================================================
  COMMERCE AND HOUSING CREDIT
Mandatory:
  Department of Commerce:
    National Oceanic and
     Atmospheric
     Administration:
      Promote and develop                3             1        2                 5             6             3
       fishery products and
       research pertaining to
       American fisheries.....
                               ---------------------------------------------------------------------------------
      Total, mandatory........           3             1        2                 5             6             3
                               ---------------------------------------------------------------------------------

[[Page 250]]


        Total, commerce and              3             1        2                 5             6             3
         housing credit.......
                               =================================================================================
        TRANSPORTATION
Discretionary:
  Department of
   Transportation:
    Coast Guard:
      Boat safety.............  ...........  ............  ............          21             9             1
    Federal Aviation
     Administration:
      Grants-in-aid for              2,322         1,896    1,950             1,565         1,896         1,899
       airports (Airport and
       airway trust fund).....
    Federal Highway
     Administration:
      State infrastructure              -7   ............  ............          29            15            12
       banks..................
      Appalachian development          132   ............  ............          73           118            76
       highway system.........
      Highway-related safety    ...........  ............  ............           1             1   ............
       grants.................
      Federal-aid highways \1\      28,244        30,530   32,764            21,118        23,739        25,829
      Miscellaneous             ...........  ............  ............          65           132            99
       appropriations.........
      Miscellaneous highway     ...........  ............  ............          40            52            34
       trust funds............
    Federal Motor Carrier
     Safety Administration:
      National motor carrier            99           105      187                87           109           128
       safety program.........
    National Highway Traffic
     Safety Administration:
      Highway traffic safety           190           197      204               180           200           207
       grants.................
    Federal Railroad
     Administration:
      Emergency railroad        ...........  ............  ............           6             8   ............
       rehabilitation and
       repair.................
      Alameda Corridor direct   ...........  ............  ............          18   ............  ............
       loan financing program.
      Local rail freight        ...........  ............  ............           3             3   ............
       assistance.............
      Alaska railroad                   38            15   ............          11            42             9
       rehabilitation.........
      Railroad research and              2             3   ............           1             2            -1
       development............
      Conrail commuter          ...........  ............  ............           5             6   ............
       transition assistance..
    Federal Transit
     Administration:
      Research, training, and   ...........  ............  ............           1             2             1
       human resources........
      Job Access and Reverse            75            75      150        ...........           20            46
       Commute Grants \1\.....
      Interstate transfer       ...........  ............  ............          11             6             3
       grants-transit.........
      Washington metropolitan           50   ............  ............         162           134            94
       area transit authority.
      Formula grants \1\......       2,799         3,049    3,345             2,174         2,356         2,248
      Capital Investment             2,307         2,489    2,646               251           579         1,147
       Grants  \1\............
      Transit planning and              74            89       91                65            64            64
       research...............
      Discretionary grants            -392   ............  ............       1,524         1,315           933
       (Highway trust fund,
       Mass transit account)..
    Research and Special
     Programs Administration:
      Research and special      ...........  ............       3                 1   ............            2
       programs...............
      Pipeline safety.........          15            16       24                14            15            16
                               ---------------------------------------------------------------------------------
      Total, discretionary \1\      35,948        38,464   41,364            27,426        30,823        32,847
                               =================================================================================
Mandatory:
  Department of
   Transportation:
    Federal Highway
     Administration:
      Federal-aid highways....         739           739      739             1,472         1,446         1,338
    Federal Motor Carrier
     Safety Administration:
      Motor carrier safety....  ...........           76       92        ...........           68            91
    Research and Special
     Programs Administration:
      Emergency preparedness             7            13       13                 6             7            10
       grants.................
                               ---------------------------------------------------------------------------------
      Total, mandatory \1\....         746           828      844             1,478         1,521         1,439
                               ---------------------------------------------------------------------------------
        Total, transportation.      36,694        39,292   42,208            28,904        32,344        34,286
                               =================================================================================
    COMMUNITY AND REGIONAL
          DEVELOPMENT
Discretionary:
  Department of Agriculture:
    Rural Development:
      Rural community                  617           590      580               529           599           513
       advancement program....
    Rural Utilities Service:
      Distance learning and             13            21       27                 9            15            18
       telemedicine program...
    Rural Housing Service:
      Rural community fire      ...........  ............  ............           2   ............  ............
       protection grants......
    Rural Business--
     Cooperative Service:
      Rural cooperative                  3             6       10                 3             6             7
       development grants.....

[[Page 251]]


    Forest Service:
      Southeast Alaska          ...........           22   ............          20            10             7
       economic disaster
       assistance fund........
  Department of Commerce:
    Economic Development
     Administration:
      Economic development             387           386      419               355           408           412
       assistance programs....
  Department of Housing and
   Urban Development:
    Public and Indian Housing
     Programs:
      Moving to work..........  ...........            5   ............  ...........            3             2
    Community Planning and
     Development:
      Community development          4,893         4,781    4,900             4,804         4,856         4,826
       block grants...........
      Urban development action  ...........  ............  ............          18            10            10
       grants.................
      Community development             30            30       30                 9            16            21
       loan guarantees subsidy
      National cities in                 5             5        5                 4             4             5
       schools community
       development program....
      Brownfields                       25            25       50        ...........           10            28
       redevelopment..........
      Urban empowerment zones.          45            55      150                 3            17            40
      Regional connections....  ...........  ............      25        ...........  ............            1
      America's private         ...........           20       37        ...........           15            28
       investment companies
       subsidy................
    Office of Lead Hazard
     Control:
      Lead hazard reduction...          80            80      120                 2            80            81
  Department of the Interior:
    Bureau of Indian Affairs:
      Operation of Indian              139           135      137               132           133           131
       programs...............
      Indian guaranteed loan             5             5        6                 4             5             7
       subsidy................
    Departmental Management:
      King Cove road and                35   ............  ............          35   ............  ............
       airstrip...............
  Department of the Treasury:
    Departmental Offices:
      United States community            9            10       10                 1            14            10
       adjustment and
       investment program.....
  Federal Emergency Management
   Agency:
    Emergency management               165           173      180                73           168           176
     planning and assistance..
    Disaster relief...........       1,797         1,797    2,564             3,184         2,339         1,654
    Disaster assistance for            230   ............  ............  ...........           74            97
     unmet needs..............
    National flood mitigation           20            20       20                 8            18            25
     fund.....................
  Appalachian Regional
   Commission:
    Appalachian regional                58            59       64               136           144           109
     commission...............
  Commission of Fine Arts:
    D.C. arts education grants  ...........  ............       1        ...........  ............  ............
  Denali Commission:
    Denali commission.........          20            20       20                 1            19            19
                               ---------------------------------------------------------------------------------
      Total, discretionary....       8,576         8,245    9,355             9,332         8,963         8,227
                               ---------------------------------------------------------------------------------
        Total, community and         8,576         8,245    9,355             9,332         8,963         8,227
         regional development.
                               =================================================================================
     EDUCATION, TRAINING,
    EMPLOYMENT, AND SOCIAL
           SERVICES
Discretionary:
  Department of Commerce:
    National
     Telecommunications and
     Information
     Administration:
      Public                            10            13      104                14            23            32
       telecommunications
       facilities, planning
       and construction.......
      Technology Opportunity             7             6       21                 7            13             9
       Grants.................
  Department of Education:
    Office of Elementary and
     Secondary Education:
      Reading excellence......         251            56      277        ...........          128           201
      Indian education........          65            75      113                56            79            78
      Impact aid..............         859           901      765             1,076         1,021           783
      Chicago litigation        ...........  ............  ............           2             3             3
       settlement.............
      Education Reform........       1,028           963      448               792           900           953
      Education for the              3,647         8,667    9,120             7,534         8,354         8,533
       disadvantaged..........
      School improvement             2,687         1,357    3,674             1,255         2,385         2,668
       programs...............
    Office of Bilingual
     Education and Minority
     Languages Affairs:
      Bilingual and immigrant          325           329      356               284           433           330
       education..............
    Office of Special
     Education and
     Rehabilitative Services:
      Special education.......       5,080         2,035    6,082             4,251         5,121         5,554
      Rehabilitation services          117           120      128                87           160           125
       and disability research
      American printing house            9            10       10                 8            13            10
       for the blind..........
    Office of Vocational and
     Adult Education:
      Vocational and adult           1,506           851    1,636             1,336         1,512         1,600
       education..............

[[Page 252]]


    Office of Postsecondary
     Education:
      Higher education........         132           150      193                42           127           150
    Office of Student
     Financial Assistance:
      Student financial                 25            40       40                23            30            40
       assistance.............
    Office of Educational
     Research and Improvement:
      Education research,              230            55       56                74           216            87
       statistics, and
       improvement............
  Department of Health and
   Human Services:
    Administration for
     Children and Families:
      Promoting safe and                 4             3        3                 4             3             3
       stable families........
      Children and families          5,730         5,003    7,323             5,421         5,906         6,663
       services programs......
    Administration on Aging:
      Aging services programs.         882           933    1,084               879           886         1,020
  Department of the Interior:
    Bureau of Indian Affairs:
      Operation of Indian               91            95      101                92            93            97
       programs...............
  Department of Labor:
    Employment and Training
     Administration:
      Training and employment        3,622         1,961    3,882             3,436         3,690         4,028
       services...............
      Community service                 97            97       97                97            97            97
       employment for older
       Americans..............
      State unemployment               162           163      196                45           185           164
       insurance and
       employment service
       operations.............
      Unemployment trust fund.         963           962      974             1,026           990           939
  Corporation for National and
   Community Service:
    Domestic volunteer service         173           182      185               152           164           177
     programs, Operating
     expenses.................
    National and community              90           112      112                55            64            56
     service programs,
     operating expenses.......
  Corporation for Public
   Broadcasting:
    Corporation for public             150           190      224               150           181           209
     broadcasting.............
  District of Columbia:
    District of Columbia
     General and Special
     Payments:
      Federal payment for       ...........           17       17        ...........           17            17
       resident tuition
       support................
  National Endowment for the
   Arts:
    National endowment for the          35            34       54                30            31            40
     arts: Grants and
     administration...........
  Institute of Museum and
   Library Services:
    Office of Museum Services:           6             6        8                 5             6             6
     Grants and administration
    Office of Library                  151           151      157               129           157           157
     Services: Grants and
     administration...........
                               ---------------------------------------------------------------------------------
      Total, discretionary....      28,134        25,537   37,440            28,362        32,988        34,829
                               =================================================================================
Mandatory:
  Department of Education:
    Office of Special
     Education and
     Rehabilitative Services:
      Rehabilitation services        2,304         2,339    2,400             2,536         2,279         2,381
       and disability research
    Office of Vocational and
     Adult Education:
      Vocational and adult      ...........  ............  ............           2   ............  ............
       education..............
  Department of Health and
   Human Services:
    Administration for
     Children and Families:
      State legalization        ...........  ............  ............          -1   ............  ............
       impact assistance
       grants.................
      Job opportunities and     ...........  ............  ............           9             8             5
       basic skills training
       program................
      Promoting safe and               269           289      299               242           280           282
       stable families........
      Social services block          1,909         1,775    1,775             1,993         1,623         1,998
       grant..................
      Payments to states for         4,922         5,697    6,406             4,707         5,495         6,294
       foster care and
       adoption assistance....
  Department of Labor:
    Employment and Training
     Administration:
      Welfare to work jobs....       1,488          -187   ............         267           860           905
      Federal unemployment             131           132      155               100           130           138
       benefits and allowances
                               ---------------------------------------------------------------------------------
      Total, mandatory........      11,023        10,045   11,035             9,855        10,675        12,003
                               ---------------------------------------------------------------------------------
        Total, education,           39,157        35,582   48,475            38,217        43,663        46,832
         training, employment,
         and social services..
                               =================================================================================
            HEALTH
Discretionary:
  Department of Agriculture:
    Food Safety and Inspection
     Service:
      Salaries and expenses...          45            45       46                44            45            46
  Department of Health and
   Human Services:
    Health Resources and
     Services Administration:
      Health Resources and           1,498         1,595    1,843             1,448         1,595         1,837
       Services...............

[[Page 253]]


    Centers for Disease
     Control and Prevention:
      Disease control,               1,773         1,957    2,041             1,571         1,745         1,846
       research, and training.
    Substance Abuse and Mental
     Health Services
     Administration:
      Substance abuse and            2,487         2,652    2,823             2,214         2,451         2,648
       mental health services.
  Department of Labor:
    Occupational Safety and
     Health Administration:
      Salaries and expenses...          80            82       88                79            81            87
    Mine Safety and Health
     Administration:
      Salaries and expenses...           6             6        8                 6             6             8
                               ---------------------------------------------------------------------------------
      Total, discretionary....       5,889         6,337    6,849             5,362         5,923         6,472
                               =================================================================================
Mandatory:
  Department of Health and
   Human Services:
    Health Care Financing
     Administration:
      Grants to States for         102,394       115,000   124,838          108,042       116,117       124,838
       Medicaid...............
      State children's health        4,247         4,259    4,461               565         1,300         2,117
       insurance fund.........
      State grants and          ...........  ............      62        ...........  ............           16
       demonstrations.........
                               ---------------------------------------------------------------------------------
      Total, mandatory........     106,641       119,259   129,361          108,607       117,417       126,971
                               ---------------------------------------------------------------------------------
        Total, health.........     112,530       125,596   136,210          113,969       123,340       133,443
                               =================================================================================
        INCOME SECURITY
Discretionary:
  Department of Agriculture:
    Rural Housing Service:
      Farm labor subsidy......  ...........  ............      36        ...........  ............            7
    Food and Nutrition
     Service:
      Food donations programs.         141           141      151               144           143           151
      Commodity assistance             131           133      158               136           132           168
       program................
      Special supplemental           3,924         4,032    4,145             3,942         4,059         4,146
       nutrition program for
       women, infants, and
       children (WIC).........
      Child nutrition programs           5            13       18                 5            13            18
  Department of Health and
   Human Services:
    Administration for
     Children and Families:
      Low income home energy         1,277         1,400    1,400             1,176         1,242         1,105
       assistance.............
      Refugee and entrant              340           333      309               236           325           318
       assistance.............
      Payments to States for           997         1,178    1,993             1,029         1,142         1,713
       the child care and
       development block grant
  Department of Housing and
   Urban Development:
    Public and Indian Housing
     Programs:
      Public housing operating       2,818         3,138    3,192             2,876         2,972         3,160
       fund...................
      Annual contributions for  ...........  ............  ............       7,364   ............  ............
       assisted housing.......
      Drug elimination grants          310           310      345               283           325           315
       for low-income housing.
      Revitalization of                625           575      625               321           588           597
       severely distressed
       public housing (HOPE
       VI)....................
      Public housing capital         3,000         2,869    2,955             3,080         3,159         3,346
       fund...................
      Native American housing          620           620      650               597           665           699
       block grant............
      Section 8 reserve         ...........  ............  ............         429   ............  ............
       preservation account...
      Housing certificate fund       5,630           458    9,044             4,715         8,450         8,886
    Community Planning and
     Development:
      Supportive housing        ...........  ............  ............          63   ............  ............
       program................
      Homeless assistance              975         1,020    1,200               643           961         1,112
       grants.................
      Shelter plus care.......  ...........  ............  ............          75   ............  ............
      Home investment                1,600         1,600    1,650             1,347         1,657         1,734
       partnership program....
      Youthbuild program......  ...........  ............  ............           2             2   ............
      Innovative homeless       ...........  ............  ............           9   ............  ............
       initiatives
       demonstration program..
      Housing opportunities            225           232      260               211           212           213
       for persons with AIDS..
      Rural housing and                 32            25       27        ...........           11            22
       economic development...
    Housing Programs:
      Congregate services.....  ...........  ............  ............           5             2   ............
      Section 8 moderate        ...........  ............  ............          31   ............  ............
       rehabilitation, single
       room occupancy.........
      Homeownership and         ...........          -11   ............          18            18            18
       opportunity for people
       everywhere grants (HOPE
       grants)................
      Housing for special              854           911      989               761           784         1,014
       populations............
  Department of Labor:
    Employment and Training
     Administration:
      Unemployment trust fund.       2,334         2,266    2,359             2,496         2,282         2,359

[[Page 254]]


  Federal Emergency Management
   Agency:
    Emergency food and shelter         100           110      140               100           110           140
     program..................
                               ---------------------------------------------------------------------------------
      Total, discretionary....      25,938        21,353   31,646            32,094        29,254        31,241
                               =================================================================================
Mandatory:
  Department of Agriculture:
    Agricultural Marketing
     Service:
      Funds for strengthening          707           730      538               816           536           538
       markets, income, and
       supply (section 32)....
    Food and Nutrition
     Service:
      Food stamp program......       3,465         3,797    3,860             3,362         3,717         3,850
      Child nutrition programs       9,041         9,403    9,389             8,735         9,198         9,728
  Department of Health and
   Human Services:
    Administration for
     Children and Families:
      Payments to states for         2,649         1,033    3,124             2,756         3,053         3,091
       child support
       enforcement and family
       support programs.......
      Child care entitlement         2,167         2,367    3,161             2,254         2,420         2,952
       to States..............
      Temporary assistance for      17,693        16,689   16,439            14,161        14,996        15,828
       needy families.........
      Children's research and   ...........  ............       9        ...........  ............            9
       technical assistance...
                               ---------------------------------------------------------------------------------
      Total, mandatory........      35,722        34,019   36,520            32,084        33,920        35,996
                               ---------------------------------------------------------------------------------
        Total, income security      61,660        55,372   68,166            64,178        63,174        67,237
                               =================================================================================
VETERANS BENEFITS AND SERVICES
Discretionary:
  Department of Veterans
   Affairs:
    Veterans Health
     Administration:
      Medical care............         273           325      347               273           325           347
    Construction:
      Grants for construction           90            90       60                40            64            85
       of State extended care
       facilities.............
      Grants for the                    10            25       25                 4             8            16
       construction of State
       veterans cemeteries....
                               ---------------------------------------------------------------------------------
      Total, discretionary....         373           440      432               317           397           448
                               ---------------------------------------------------------------------------------
        Total, veterans                373           440      432               317           397           448
         benefits and services
                               =================================================================================
   ADMINISTRATION OF JUSTICE
Discretionary:
  Department of Health and
   Human Services:
    Administration for
     Children and Families:
      Violent crime reduction           96            92      124                64            97           106
       programs...............
  Department of Housing and
   Urban Development:
    Fair Housing and Equal
     Opportunity:
      Fair housing activities.          40            44       50                31            36            31
  Department of Justice:
    Office of Justice
     Programs:
      Justice assistance......          72           214      238                28           188           185
      State and local law              547         1,520    1,577               310           496         3,236
       enforcement assistance.
      Juvenile justice                 231           242      251               127           147           308
       programs...............
      Violent crime reduction        2,370         1,182   ............       2,266         1,086   ............
       programs, State and
       local law enforcement
       assistance.............
      Community oriented             1,430           595    1,335             1,161           831         1,748
       policing services......
  Court Services and Offender
   Supervision Agency for the
   District:
    Federal payment to the              59            94   ............          57            77   ............
     Court Services and
     Offender Supervision
     Agency for the District
     of Columbia..............
  Equal Employment Opportunity
   Commission:
    Salaries and expenses.....          29            29       29                28            28            28
  State Justice Institute:
    State Justice Institute:             7             7        7                 8            14             8
     Salaries and expenses....
                               ---------------------------------------------------------------------------------
      Total, discretionary....       4,881         4,019    3,611             4,080         3,000         5,650
                               =================================================================================
Mandatory:
  Department of Justice:
    Legal Activities and U.S.
     Marshals:
      Assets forfeiture fund..         288           326      266               240           316           245

[[Page 255]]


    Office of Justice
     Programs:
      Crime victims fund......         313           495      542               341           742           690
  Department of the Treasury:
    Departmental Offices:
      Department of the                153            97       97               132           108            97
       Treasury forfeiture
       fund...................
                               ---------------------------------------------------------------------------------
      Total, mandatory........         754           918      905               713         1,166         1,032
                               ---------------------------------------------------------------------------------
        Total, administration        5,635         4,937    4,516             4,793         4,166         6,682
         of justice...........
                               =================================================================================
      GENERAL GOVERNMENT
Discretionary:
  Department of the Interior:
    Bureau of Land Management:
      Payments in lieu of              125           134      135               125           135           135
       taxes..................
    Insular Affairs:
      Trust Territory of the    ...........  ............  ............           3             6             6
       Pacific Islands........
  Department of the Treasury:
    Departmental Offices:
      Department-wide systems   ...........            3   ............  ...........            3   ............
       and Capital Investments
       Programs...............
  District of Columbia:
    District of Columbia
     Courts:
      Federal payment to the             4   ............  ............           4   ............  ............
       District of Columbia
       Criminal Justice System
      Federal payment to the           131           100      103               128            90           103
       District of Columbia
       Courts.................
      Defender services in      ...........           33       38        ...........           30            37
       District of Columbia
       courts.................
    District of Columbia
     Corrections:
      Payment to the District          185           175      134               152           209           134
       of Columbia Corrections
       Trustee, Operations....
    District of Columbia
     General and Special
     Payments:
      Federal payment for               25   ............  ............          25   ............  ............
       Management Reform......
      Federal support for              297            32       49               244            81            49
       economic development
       and management reforms
       in the District........
      Federal payment for                3   ............  ............  ...........  ............  ............
       Medicare Coordinated
       Care Demonstration
       Project................
  Federal Drug Control
   Programs:
    High intensity drug                150           154      192               130           152           166
     trafficking areas program
                               ---------------------------------------------------------------------------------
      Total, discretionary....         920           631      651               811           706           630
                               =================================================================================
Mandatory:
  Department of Agriculture:
    Forest Service:
      Payments to states        ...........  ............     270        ...........  ............          270
       stabilization..........
      Payments to States,              125           120   ............         125           120   ............
       northern spotted owl
       guarantee, Forest
       Service................
      Forest Service permanent         109           121   ............         109           120   ............
       appropriations.........
  Department of Energy:
    Energy Programs:
      Payments to States under           3             3        3                 3             3             3
       Federal Power Act......
  Department of the Interior:
    Bureau of Land Management:
      Miscellaneous permanent           69            69       76                68            67            76
       payment accounts.......
    Minerals Management
     Service:
      Mineral leasing and              478           678      583               478           678           583
       associated payments....
    United States Fish and
     Wildlife Service:
      National wildlife refuge          19            19       19                19            19            19
       fund...................
    Insular Affairs:
      Assistance to                     66            70       74                75            67            90
       territories............
      Payments to the United           109           109      106               109           109           106
       States territories,
       fiscal assistance......
  Department of the Treasury:
    Bureau of Alcohol, Tobacco
     and Firearms:
      Internal revenue                 235           285      283               235           285           283
       collections for Puerto
       Rico...................
    United States Customs
     Service:
      Refunds, transfers, and          101           112      114                97           112           114
       expenses of operation,
       Puerto Rico............
  Corps of Engineers:
    Permanent appropriations..          11             9        9                12             9             9
                               ---------------------------------------------------------------------------------
      Total, mandatory........       1,325         1,595    1,537             1,330         1,589         1,553
                               ---------------------------------------------------------------------------------
        Total, general               2,245         2,226    2,188             2,141         2,295         2,183
         government...........
                               =================================================================================

[[Page 256]]


          Total, Grants.......     272,814       277,907   317,716          267,081       284,072       305,645
            Discretionary \1\.     115,727       110,233   136,528          112,019       116,773       125,699
            Mandatory \1\.....     157,087       167,674   181,188          155,062       167,299       179,946
----------------------------------------------------------------------------------------------------------------
\1\ Budget aurhority for certain highway and mass transit programs is classified as mandatory in other budget
  presentations.

