[Budget of the United States Government]
[III. Creating a Better Government]
[21. Undistributed Offsetting Receipts]
[From the U.S. Government Publishing Office, www.gpo.gov]


 
                 21.  UNDISTRIBUTED OFFSETTING RECEIPTS

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                                 Table 21-1.  Undistributed Offsetting Receipts
                                            (In millions of dollars)
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                                                                               Estimate
               Function 950                   2000   -----------------------------------------------------------
                                             Actual     2001      2002      2003      2004      2005      2006
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Spending:
  Mandatory Outlays:
    Existing law..........................   -42,581   -47,656   -51,803   -60,710   -62,399   -56,213   -57,761
    Proposed legislation..................  ........  ........     2,400       331    -8,184    -2,651    -4,617
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   Undistributed offsetting receipts, totaling $49.4 billion in 2002, 
fall into two categories: (1) the Government's receipts from performing 
certain business-like activities, such as proceeds from oil and gas 
leases on the Outer Continental Shelf; and (2) collections of Federal 
agencies' contributions to Federal employees' retirement plans. Receipts 
from all business-like activities are offset against budget authority 
and outlays, instead of being recorded as governmental receipts, so that 
the budget totals represent the amount of resources allocated by the 
Government rather than by the market mechanism. Unlike most business-
like receipts, which are offset within the same function as the spending 
that gives rise to the receipt, some are so large that it would distort 
the functional totals to distribute them by function. Instead, they are 
undistributed by function and offset against the budget totals.
  Receipts of agency retirement contributions are offset against the 
payments, so that the budget totals measure the Government's 
transactions with the public. These intrabudgetary transactions are 
important for allocating costs to programs that incur the cost, but they 
have no net impact on total budget authority and outlays. They are 
offset against total budget authority and outlays because offsetting 
them within the functions in which the payments are recorded would cause 
the totals for those functions to seriously understate current 
expenditures.

Rents and Royalties on the Outer Continental Shelf (OCS)

   The Department of the Interior's Outer Continental Shelf lands 
leasing program, which began in 1954, currently generates about 26 
percent of total U.S. domestic production and 27 percent of total 
natural gas production. Since the OCS program's inception, it has held 
131 lease sales, covering areas three to 200 miles offshore and 
generating over $134 billion in rents, bonuses, and royalties--mainly 
for the general fund of the Treasury--with an estimated $5.9 billion in 
OCS receipts in 2002. OCS revenues also provide nearly all funding for 
the Land and Water Conservation Fund.

Employee Retirement

   In 2002, Federal agencies are expected to pay an estimated $41.6 
billion on behalf of their employees to the Federal retirement trust 
funds, \1\ the Medicare health insurance trust fund, and the Social 
Security trust funds. As civilian and military employees' pay rises, 
agencies must make commensurate increases in their payments to recognize 
the rising cost of retirement. The amount of

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receipts also changes with increases or decreases in the number of 
employees and changes in the retirement accruals charged to agencies. 
The agency payments and trust fund receipts are offsetting and do not 
affect the unified budget totals. Under the 1997 Balanced Budget Act, 
agency contributions for employees covered by the Civil Service 
Retirement System were increased from seven percent of salary to 8.51 
percent beginning in 1998. These higher contributions are set to expire 
in 2003.
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  \1\ The major programs are the Military Retirement System, the Civil 
Service Retirement System, and the Federal Employees' Retirement System.
---------------------------------------------------------------------------

Spectrum Auction Receipts

   In 1993, the President and Congress gave the Federal Communications 
Commission (FCC) authority to assign spectrum licenses through 
competitive bidding, which has proven to be a very efficient and 
effective way to allocate this finite public resource. Since the 
beginning of the auctions program, the FCC has auctioned over 14,300 
licenses for over $31 billion in actual and expected cash receipts--
encouraging the development of innovative telecommunications services 
and ensuring that the public receives compensation for the private use 
of a public resource. Over the next five years, spectrum auctions are 
expected to generate more than $25 billion in receipts.
  The Administration is proposing authorization language that provides a 
legislative framework for FCC to develop regulations that promote 
clearing the spectrum in channels 60-69 (747-762 and 777-792 MHz) for 
new wireless services in a manner that ensures incumbent broadcasters 
are fairly compensated. The legislative language would also shift the 
statutory deadline for the 60-69 auction from 2000 to 2004 and shift the 
statutory deadline for the auction of channels 52-59 (698-746 MHz) from 
2002 to 2006. As a result of the increased certainty about how and when 
the spectrum in channels 60-69 will become available for new entrants 
and shifting the deadlines for both auctions closer to when the spectrum 
is expected to become available, revenues for these auctions are 
expected to increase by $7.5 billion.

Arctic National Wildlife Refuge Lease Receipts

  The Administration proposes to open up the coastal plain of the Arctic 
National Wildlife Refuge in northern Alaska to environmentally sound oil 
and natural gas leasing. The budget assumes leasing begins in 2004, 
generating $2.4 billion in lease bonus bids, with the bid receipts 
shared 50/50 with the State of Alaska. The remaining $1.2 billion would 
be dedicated for research and development of solar and renewable energy 
technology, to be conducted by the Department of Energy over seven 
years.