[Economic Outlook, Highlights from FY 1994 to FY 2001, FY 2002 Baseline Projections]
[IV.  Current Services Estimates and the Pending Policy Agenda]
[From the U.S. Government Printing Office, www.gpo.gov]


[[Page 205]]

 
      IV.  CURRENT SERVICES ESTIMATES AND THE PENDING POLICY AGENDA

  The current services baseline shows what receipts, outlays, surpluses, 
and budget authority would be if no changes were made to laws already 
enacted. It is an essential starting point in developing the annual 
budget. Although it is not intended to be a prediction of the final 
outcome of the budget process, it serves several useful purposes. First, 
it provides a measuring stick against which competing proposals can be 
compared. The extent to which proposals change the level of services 
provided under current law can be readily determined and communicated. 
Second, it warns of future problems, either for Government fiscal policy 
as a whole or for individual tax and spending programs. The baseline 
levels of surpluses can provide policymakers with important information 
on what resources are available for priority needs.
  OMB follows the rules in the Budget Enforcement Act (BEA) that specify 
how to develop baseline estimates. These rules require largely 
mechanical applications of estimating models. Receipts and mandatory 
programs are projected based on continuation of existing laws into the 
future. In some instances, the way the rules were written can understate 
the full demands on future resources. For example, baseline rules 
require that certain provisions of law that affect receipts and 
mandatory programs expire as specified under current law. In a number of 
cases, these provisions have been routinely extended in the past. 
Because it is widely assumed that they will again be extended at their 
expiration, the failure to include them in baseline estimates 
understates virtually certain demands on resources. A more prudent 
approach would be to include these expiring provisions as part of the 
baseline before considering further policy changes.
  In this section of the document, we show the baseline estimates, 
discuss baseline anomalies and provide an adjusted baseline, provide 
alternative formulations for the discretionary baseline, and finally 
discuss and summarize pending Administration policies that provide an 
important reference point.

Baseline Issues

  Anomalies are created by the mechanical nature of the BEA baseline 
rules. This section discusses those anomalies and what they mean for the 
overall baseline.

  Expiring Mandatory and Receipts Provisions: The BEA rules require that 
expiring provisions of law not specifically covered by a BEA exemption 
be assumed to expire as scheduled in the current services baseline. As a 
result, a number of provisions that in the past have been routinely 
reauthorized by the Congress are not assumed to continue in the baseline 
estimates. Extension of expiring provisions of the tax code that have 
been previously extended would reduce tax receipts by $118 billion over 
the 10 years, 2002 through 2011. Similarly, emergency farm aid is 
assumed only for the current crop year even though emergency aid has 
been provided to farmers routinely in recent years. If aid at the 
average level of the past three years were provided each year, total 
spending would increase by $74 billion over the projection period. Some 
savings provisions that have been routinely extended are also affected 
by the BEA rules. For example, customs user fees are due to expire at 
the end of 2003. If extended, these fees would yield $14 billion over 
the projection period. Table IV-1 provides a listing of expiring 
receipts and mandatory provisions that have been extended in the past.

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  ----------------------------------------------------------------------

             Table IV-1.  Accounting for Expiring Provisions
------------------------------------------------------------------------
                                                    Estimate
                                      ----------------------------------
                                          2002     2002-2006   2002-2011
------------------------------------------------------------------------

          Revenue Provisions
   (Revenue effect, in billions of
               dollars)

Tax credit for first-time D.C.         .........        -0.1        -0.2
 homebuyers..........................
D.C. enterprise zone/renewal           .........  ..........        -0.1
 community designation...............
Contributions of computer technology   .........        -0.3        -1.1
 and equipment to schools............
Archer Medical Savings Accounts               -*        -0.1        -0.2
 (MSAs)..............................
Round I and Round II empowerment       .........  ..........        -1.7
 zones...............................
Tax credit for research and            .........        -9.9       -48.9
 experimentation expenditures........
Work opportunity tax credit..........       -0.1        -1.6        -5.0
Welfare-to-work tax credit...........         -*        -0.4        -1.3
Exclusion for employer-provided             -0.2        -1.8        -4.2
 educational assistance..............
Expensing of Brownfields               .........        -1.0        -2.6
 environmental remediation costs.....
Generalized system of preferences           -0.3        -1.8        -4.2
 (GSP) \1\...........................
Wind and biomass tax credit..........         -*        -0.2        -0.7
Net income limitation on percentage           -*        -0.1        -0.3
 depletion from marginal wells.......
Qualified zone academy bonds.........         -*        -0.1        -0.7
Exceptions provided under Subpart F         -0.9        -7.2       -16.2
 for active financing income.........
Treatment of nonrefundable personal         -0.3        -9.0       -39.1
 credits under AMT...................
IRS letters of determination.........  .........         0.1         0.3
Luxury tax on passenger vehicles \1\.  .........         0.5         1.3
Abandoned mine reclamation fund \1\..  .........         0.4         1.6
FUTA surtax of 0.2 percentage points   .........  ..........         5.5
 \1\.................................
                                      ----------------------------------
   Total, revenue provisions.........       -1.8       -32.3      -117.8

         Mandatory Provisions
    (Outlay effect, in billions of
               dollars)

CCC conservation technical assistance          *         0.2         0.4
CCC emergency farm income and crop/          7.3        36.6        73.3
 livestock loss assistance...........
Customs user fees....................  .........        -4.6       -13.8
Medicaid transitional medical                0.4         2.1         5.0
 assistance..........................
Recreation fee demonstrations........  .........         0.1         0.5
Veterans housing:
   Fee increase of .75 for loans.....  .........  ..........        -0.6
   Fee for subsequent loans..........  .........  ..........        -0.3
   Inclusion of resale losses in net   .........  ..........          -*
   calculation.......................
Veterans compensation and pensions:
   IRS income verification...........  .........          -*        -0.1
   Round down COLAs..................  .........        -0.2        -0.8
   Limit VA pensions to Medicaid-      .........  ..........        -0.5
   eligible recipients...............
                                      ----------------------------------
     Total, mandatory provisions.....        7.7        34.1        63.0

Total, revenue and mandatory                -9.5       -66.5      -180.8
 provisions (surplus impact).........
------------------------------------------------------------------------
* $50 million or less.

\1\ Net of income offsets.

  ----------------------------------------------------------------------

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  Non-Defense Discretionary Anomalies in the Baseline: Application of 
BEA baseline rules to each program and account can lead to exaggerated 
or understated program levels in some instances, thus misstating the 
funding needed to meet future demands. For example, there are two 
instances where there are already enacted caps for specific 
discretionary programs at levels above the inflation-adjusted levels 
required by the BEA. The Transportation Equity Act for the 21st Century 
(TEA-21) established new caps for highway and mass transit spending that 
created a guaranteed spending level tied to the collections of receipts 
in the Highway trust fund. Failure to acknowledge the higher TEA-21 
levels leads to an understatement of transportation spending of $24 
billion over the 10-year projection period. Likewise, the new 
conservation spending category established in this year's appropriations 
bills provides dedicated funding, which may be appropriated for 
conservation programs. The BEA baseline underfunds these programs by $7 
billion over 10 years compared to the newly enacted caps.
  ----------------------------------------------------------------------

        Table IV-2.  Major Anomalies Caused by BEA Baseline Rules
                        (In billions of dollars)
------------------------------------------------------------------------
                                                     Estimate
                                        --------------------------------
                                            2002    2002-2006  2002-2011
------------------------------------------------------------------------

Reflect previously enacted caps for
  Highways:
     Budget Authority..................        2.1       10.9       23.1
     Outlays...........................        0.6        7.7       19.3
  Mass transit:
     Budget Authority..................        0.4        3.2        7.1
     Outlays...........................          *        1.4        5.0
  Conservation programs:
     Budget Authority..................        0.3        2.6        7.3
     Outlays...........................       -0.2        2.1        6.6
                                        --------------------------------
  Subtotal, reflect enacted caps:
     Budget Authority..................        2.7       16.8       37.5
     Outlays...........................        0.4       11.1       30.9
Examples of major anomalies:
  Reflect outyear cyclical Census
   spending:
     Budget Authority..................        0.1        1.3        9.5
     Outlays...........................        0.1        1.2        9.4
  Reflect lack of outyear needs for
   Woodrow Wilson Bridge:
     Budget Authority..................       -0.6       -3.2       -6.7
     Outlays...........................       -0.2       -2.3       -5.8
                                        --------------------------------
Total:
  Budget Authority.....................        2.2       14.8       40.2
  Outlays..............................        0.3       10.1       34.5
------------------------------------------------------------------------
* $50 million or less.

  ----------------------------------------------------------------------
  There are also specific programmatic reasons that BEA baseline rules 
fail to accurately estimate funding needs. For example, the decennial 
census was just completed and enacted spending for the census in 2001 is 
relatively low. However, spending on the census will need to increase as 
the cycle for the next census begins. If the spending on the census 
follows its traditional path, spending would be $9 billion higher over 
the 10-year projection period than projected under BEA baseline rules. 
Other anomalies created by BEA rules are the result of

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oddities in the 2001 appropriated level. For example, one-time funding 
was provided in 2001 for the construction of the Woodrow Wilson Bridge 
across the Potomac River. The baseline, however, assumes continued 
funding at the same level into the future in the bridge account. Table 
IV-2 provides a listing of several large anomalous results that arise 
from application of BEA baseline rules.
  ----------------------------------------------------------------------

    Table IV-3.  Bridge from BEA Baseline Surplus to Anomaly Adjusted
                            Baseline Surplus
                        (In billions of dollars)
------------------------------------------------------------------------
                                                     Estimate
                                        --------------------------------
                                            2002    2002-2006  2002-2011
------------------------------------------------------------------------
On-budget surplus (excluding HI)                69        474      1,914
 applying BEA rules....................
  Adjustments for:
    Extension of expiring provisions:
      Revenues.........................         -2        -32       -118
      Mandatory programs...............         -8        -34        -63
    Reflect previously enacted caps for         -*        -11        -31
     specific programs.................
    Adjust for major anomalies.........          *          1         -4
    Related debt service...............         -*        -10        -56
                                        --------------------------------
  Subtotal, adjustments................        -10        -86       -271

Surplus with adjustments...............         58        388      1,643
------------------------------------------------------------------------
* $50 million or less.

  ----------------------------------------------------------------------

Baseline Alternatives

  Discretionary, or annually funded, programs are estimated by adjusting 
the current year enacted level by inflation into future years. In recent 
years, discretionary appropriations have grown above the rate of 
inflation and at the same time discretionary programs, both for defense 
and non-defense purposes, were at all time lows as a percent of GDP in 
1999. While the inflation adjustment specified by the BEA is an 
approximate measure to maintain the purchasing power of Federal 
programs, there are several other approaches to projecting discretionary 
funding needs that should be considered.
  Many programs would be expected to need more funding to serve 
          an increasing population. A reasonable expected growth rate 
          for discretionary spending might be inflation plus population 
          growth. For example, funding for the Child Care and 
          Development Block Grant provides assistance to a set number of 
          children per year under baseline rules. As the population of 
          young children grows, a smaller percentage of them will be 
          assisted under the program at this funding level. If 
          population were factored in to the baseline calculations for 
          discretionary programs, outlays for discretionary programs 
          would grow by $362 billion over 10 years.
  Another reasonable expected growth pattern for discretionary 
          spending is to allow it to grow with the economy. Outlays for 
          discretionary programs would grow by $979 billion over 10 
          years compared with the inflation adjustment in the current 
          services estimates.
  Unlike other agencies, budgeting for the Department of Defense 
          (DOD) is based on multi-year plans with large research, 
          procurement, and construction needs. It is normal to measure 
          changes in funding for DOD from the previous long-term plan 
          rather than a baseline developed under BEA baseline rules. The 
          level under BEA baseline rules would protect the value of the 
          $112 billion defense budget authority increase provided by the 
          President in the 2000 Budget, subsequent changes in law,

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          and would be sufficient to accommodate potential increases. 
          This baseline level would continue high levels of readiness, 
          offset the impact of higher fuel and inflation costs, and 
          finance the expanded health care and pay provisions enacted in 
          the 2001 National Defense Authorization Act.

Pending Policy Proposals

  While this Administration has many legislative and budgetary 
achievements, there are a number of policy goals that remain unfinished. 
The following section discusses a number of examples of both legislation 
and funding that reflect this remaining agenda. (See Table IV-4.)

  Medicare and Social Security Lockboxes: The Administration remains 
committed to solvency the long-term solvency problems of medicare and 
social security. Locking away the trust fund surpluses ensures that 
these resources are used to reduce public debt and not used for other 
purposes. The medicare and social security chapters of Section III 
discuss the specifics of the Administration's proposals.
  Medicare Prescription Drug Benefit: The President proposed to 
modernize the medicare benefit structure by adding a long-overdue 
voluntary outpatient prescription drug benefit. The Administration's 
proposal offers a broad based benefit through the medicare program which 
ensures that all medicare beneficiaries receive a standard, affordable 
drug benefit. This historic drug benefit has no deductible and pays for 
half of the beneficiary's drug costs from the first prescription filled 
each year up to $5,000 in spending when fully phased-in. It also ensures 
that beneficiary liability for drug cost sharing is limited to $4,000. 
The benefit provides beneficiaries with a price discount similar to that 
offered by many employer-sponsored plans for each prescription 
purchased--even after the $5,000 limit is reached. The Administration's 
plan ensures low-income beneficiaries assistance with cost-sharing. The 
Administration estimates the costs of this benefit at $253 billion over 
10 years.
  Equity in Benefits for Legal Immigrants: The Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996 (PRWORA) placed 
eligibility restrictions on benefits to legal immigrants that were 
unrelated to the goal of moving people from welfare to work. In addition 
to restrictions on Supplemental Security Income, hundreds of thousands 
of legal immigrants face restrictions on access to food stamps and 
medicaid, which presents important health implications for noncitizens 
as well as citizen children. While subsequent legislation substantially 
restored benefit eligibility to many immigrants who were in the United 
States when PRWORA was enacted, the remaining restrictions leave too 
many immigrants in a precarious position should they suffer a disabling 
injury or other hardship that affects their ability to support 
themselves and their families, including their citizen children. For 
example, children and pregnant women who are legal immigrants are not 
eligible for health insurance through medicaid or SCHIP for five years. 
PRWORA restrictions contributed to a 22-percent decline in Medicaid/
SCHIP coverage of legal immigrant children between 1995 and 1999. Nearly 
half of immigrant children lack a regular source of health care, often 
ending up in expensive emergency rooms. For reasons of equity and public 
health, these restrictions should be reversed. In addition, although the 
Administration sought legislation to eliminate the disparate treatment 
of refugees under our immigration laws, it was not successful. It is 
important that work continue to provide full parity for Salvadorans, 
Guatemalans, Hondurans, Haitians, and Liberians with other refugees. It 
is unjust to treat refugees fleeing repression by some dictators better 
than those fleeing other equally oppressive regimes. A fair, uniform set 
of procedures for all of these refugees must be created.

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                                      Table IV-4.  Pending Policy Proposals
                                   (Budget authority, in millions of dollars)
----------------------------------------------------------------------------------------------------------------
                                                                            2001             2001       Program
                        Program                             2000   ----------------------   Funding    Shortfall
                                                          Enacted    Request    Enacted    Shortfall   2002-2011
----------------------------------------------------------------------------------------------------------------
Education:
  After School.........................................        453      1,000        846        -154      -1,818
  Eisenhower Title II Teaching to High Standards.......         23        690        485        -205      -2,421
  Teaching to High Standards, National Activities......         23        255         82        -173      -2,043
  School Renovation....................................  .........      1,300      1,200        -100      -1,181
  Class Size Reduction.................................      1,300      1,750      1,623        -127      -1,500
  Head Start...........................................      5,267      6,267      6,200         -67        -791
  National Service.....................................        437        534        463         -71        -838
  National Endowment for the Arts......................         98        150        105         -45        -531
  National Endowment for the Humanities................        116        150        120         -30        -354

Civil Rights:
  Outreach for Socially-Disadvantaged Farmers..........          3         10          3          -7         -83
  Civil Rights Division (Justice)......................         82         98         92          -6         -71
  Legal Services Corporation...........................        304        340        330         -10        -118
  Equal Employment Opportunity Commission..............        281        322        304         -18        -213
  Fair Housing (HUD)...................................         77         50         46          -4         -47

Environment:
  Natural Resources Conservation Service...............        661        747        714         -33        -390
  Clean Water Action Plan..............................         57        105         76         -29        -342
  Climate Change (including Climate Change Technology          151        324        173        -151      -1,783
   Initiative and Montreal Protocol)...................
  Wetlands Reserve Program.............................        145        259        147        -112      -1,322
  Coastal Zone Management Grants.......................         59        159         77         -82        -968
  Solar and Renewable Energy...........................        310        410        375         -35        -413
  California Bay-Delta.................................         60         60  .........         -60        -708
  Everglades Restoration...............................         95        135        118         -17        -201
  Columbia River Salmon Restoration....................         68         91         81         -10        -118
  Clean Water Action Plan..............................        196        211        202          -9        -106
  Brownfields (HUD)....................................         25         50         25         -25        -295
  Superfund............................................      1,270      1,337      1,270         -67        -791
  Clean Air Partnership................................  .........         85  .........         -85      -1,004
  Environmental Quality Improvement Program............        174        325        174        -151      -1,783

International:
  International Development Association................        771        836        775         -61        -720
  Global Environment Facility..........................         36        176        108         -68        -803
  Other Multilateral Development Banks.................        172        237        158         -79        -933
  Nonproliferation, Anti-terrorism, Demining, and              218        353        312         -41        -484
   Related Programs....................................
  Export/Import Bank...................................        796      1,010        911         -99      -1,169
  Middle East..........................................  .........        750  .........        -750      -1,200
  International Population/Family Planning.............        328        484        368        -116      -1,370
  Other International Funding..........................      2,137      2,390      2,288        -102      -1,204

Counterterrorism:
  Bioterrorism (FDA)...................................          8         12          5          -7         -83
  Counterterrorism.....................................        822      1,039        927        -112      -1,323

Research, Development, and Technology:
  Agriculture Research Initiatives.....................        159        324        174        -150      -1,771
  Bioproducts/Bioenergy................................         57         94         63         -31        -366
  Food and Nutrition Service Research..................  .........         17          1         -16        -189
  Advanced Technology Program..........................        211        200        191          -9        -106
  National Science Foundation..........................      3,897      4,572      4,426        -146      -1,724
  Connect America's Families...........................  .........         50  .........         -50        -590
  DTV Transition for Public Broadcasters...............         27        110         44         -66        -779


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Law Enforcement:
  COPS/21st Century Policing Initiative................        903      1,135        937        -198      -2,338
  Gun Prosecutors......................................  .........        150         75         -75        -886
  Community Prosecutors................................         10         50         25         -25        -295
  Immigration and Naturalization.......................      2,992      3,270      3,224         -46        -543
  Native American Law Enforcement......................        350        508        391        -117      -1,381
  Customs Air and Marine Enforcement...................        109        157        133         -24        -283

Labor:
  Dislocated Workers...................................      1,589      1,771      1,590        -181      -2,137
  International Labor Activities.......................         70        167        148         -19        -224
  Youth Opportunity Grants.............................        250        375        275        -100      -1,181
  Fathers Work/Families Win............................  .........        255  .........        -255      -3,011
  One-Stop Career Centers..............................        130        174        170          -4         -47
  Youth Violence.......................................  .........        115         75         -40        -472
  Minimum Wage Increase (Older Americans/Youth           .........        139  .........        -139      -1,641
   Activities).........................................

Health:
  Family Planning......................................        239        274        254         -20        -236

Housing and Community Development:
  HUD Incremental Vouchers.............................        347        643        453        -190      -2,243
  Empowerment Zones....................................         70        200         90        -110      -1,299
  America's Private Investment Companies...............         20         37  .........         -37        -437
  Community Development Financial Institutions.........        115        125        118          -7         -83
  Distressed Public Housing (HOPE VI)..................        575        625        575         -50        -590
  Fund for Rural America...............................         60         60         30         -30        -354
  Amtrak/Expanded Intercity Rail Service...............        571        989        521        -468      -5,526

Maintaining Basic Government Services:
  FAA Operations/Safety................................      5,968      6,592      6,544         -48        -567
  IRS Operations and Modernization.....................      8,218      8,939      8,855         -84        -992
  Critical Infrastructure Protection (GSA).............  .........         15          8          -7         -83
  Repair and Alterations of Public Buildings...........        666        721        679         -42        -496
  Construction of Public Buildings.....................         87        679        395        -284      -3,353
  Bureau of Indian Affairs Operations..................      1,640      1,795      1,741         -54        -638
----------------------------------------------------------------------------------------------------------------

  Bipartisan Family Opportunity Act for Children with Disabilities: 
Children with disabilities have special health care needs; they are more 
likely to be ill as well as use more hospital days than other children. 
Because private insurance is often inaccessible or unaffordable for 
people with disabilities, many parents of children with special needs 
turn down jobs, raises, and overtime to keep their income low enough so 
that their children qualify for medicaid. The Family Opportunity Act 
would establish a new medicaid buy-in option for children with 
disabilities in families with income up to 300 percent of poverty 
($42,000 for a family of three). The original bill had 78 cosponsors in 
the Senate (S. 2274) and 140 cosponsors in the House (H.R. 4825). The 
Congressional Budget Office cost of the provision is $2.1 billion over 
five years and $7.3 billion over 10 years.
  Class Size Reduction: The 2001 appropriation provided $1.6 billion to 
help school districts hire and train 37,000 high quality teachers to 
reduce class sizes in the early grades to an average of 18 students per 
class. This was the third installment in the bipartisan commitment to 
hire 100,000 teachers by 2005 to reduce class sizes in grades 1-3.
  School Modernization: According to a recent report by the National 
Center for Education Statistics, half of the nation's public schools 
need repairs at a total estimated cost of $127 billion. The 2001 
appropriation

[[Page 212]]

established a new $1.2 billion school renovation grant program that will 
help schools finance emergency repairs. This initiative was one 
component of a two-part strategy proposed by the Clinton-Gore 
Administration this past year. The second component--also essential to 
adequately address our substandard schools--was legislation that won 230 
cosponsors in the House of Representatives that would have authorized 
Federal tax credits to support $25 billion in local School Modernization 
Bonds.
  After-School Programs: Statistics provided by the General Accounting 
Office (GAO), the National Institute on Out-of-School Time, and other 
surveys show that the lack of affordable, accessible after-school 
opportunities for school-age children means that an estimated eight 
million and up to as many as 15 million ``latchkey children'' on any 
given day go home to an empty house after school. Studies by the FBI and 
youth-advocacy groups have found that the peak hours for juvenile crime 
and victimization are from 2 p.m. to 8 p.m.-hours when youth are most 
often without supervision. The 2001 appropriation provided $846 million, 
compared with the Administration's request of $1.0 billion, to fund 
after-school programs for approximately 1.3 million children. A 
significant expansion of this program is necessary to meet the needs of 
``latch-key'' children and their parents as well as providing every 
child in a failing school the opportunity to receive extended learning 
services.
  National Security Investments: While the concerted efforts of the 
Administration have increased the international affairs budget function 
from its nadir in FY 1996, overall spending levels have decreased 
significantly in real terms--almost nine percent since 1993, and over 19 
percent since 1986. At the same time, the costs of pursuing U.S. 
national interests overseas continue to increase, as we attempt to 
adequately protect our diplomats overseas, continue efforts to encourage 
peace in the Middle East and transitions to democracy in Eastern Europe 
and the former Soviet Union, respond to increasingly severe man-made and 
natural disasters, and increase efforts to control the global spread of 
HIV/AIDS, stem the flow of drugs to our shore, and address other global 
problems that directly impact our quality of life in the United States. 
In order to meet these needs, the effort to gain bipartisan approval of 
an international affairs budget that effectively and efficiently funds 
our pursuit of these national interests should continue.
  Since the terrorist bombings of two embassies in Africa in 1998, the 
Administration has embarked upon an unprecedented program of security 
initiatives around the world. The Administration initiated a long-term 
capital program. Because it will take a multi-year effort to address 
these vulnerabilities, advanced appropriations of $3.4 billion over the 
2002 through 2005 period were proposed to sustain that program.
  The leadership provided by the United States in seeking stability in 
the Middle East serves our overall national interest, because conflict 
in the region poses such significant threats to U.S. political, 
economic, and security interests. As an integral part of the ongoing 
effort to achieve a comprehensive Middle East peace agreement, there is 
a pending request of $750 million in supplemental 2001 funding and an 
additional $500 million in 2002 funding that has been recommended to 
assist those countries and parties in the Middle East that undertake 
constructive steps to move the process forward. It is imperative that 
the United States continue forward with its efforts to bring the parties 
together in a workable solution to this conflict, which could in turn 
open the door to a final comprehensive peace agreement.

Current BEA Baseline Definitions and Estimates

  The BEA established different estimating rules for the two major 
categories of receipts and outlays: those controlled by authorizing 
legislation (direct spending and receipts) and those controlled through 
the annual appropriations process (discretionary spending).

  Direct Spending and Receipts: Direct spending includes the major 
entitlement programs, such as social security, medicare, medicaid, 
Federal employee retirement, unemployment compensation, food stamps and 
other means-tested entitlements. It also includes such programs as 
deposit insurance and farm price and income supports, where the 
Government is legally obligated to make payments

[[Page 213]]

under certain conditions. Receipts and direct spending are alike in that 
they involve ongoing activities that generally operate under permanent 
authority (they do not require annual appropriations), and the 
underlying statutes generally specify the tax rates or benefit levels 
that must be collected or paid, and who must pay or who is eligible to 
receive benefits. The current services baseline assumes that receipts 
and direct spending continue in the future as specified by current law. 
In most cases, that is what will occur without enactment of new 
legislation.
  The BEA requires that current services estimates assume extension of 
two types of authority. First, expiring provisions affecting excise 
taxes dedicated to a trust fund are assumed to be extended at current 
rates. During the projection period of 2001 through 2011, taxes 
deposited in the Highway trust fund, Airport and Airways trust fund, 
Aquatic Resources trust fund, and Leaking Underground Storage Tank trust 
fund are scheduled to expire. The current services baseline assumes 
extension of these taxes, increasing receipts by $287 billion over the 
period. Second, direct spending programs that will expire under current 
law are assumed to be extended if their 2001 outlays exceed $50 million. 
Programs that will expire under current law but are extended throughout 
the projection period include food stamps, farm price supports, child 
nutrition programs, and temporary assistance to needy families (TANF). 
Provisions of law not specifically covered by the two exceptions 
discussed above are assumed to expire as scheduled in the current 
services baseline.

  Discretionary Programs: Discretionary programs differ in one important 
aspect from direct spending programs--Congress usually provides spending 
authority for discretionary programs one year at a time. The spending 
authority is normally provided in the form of annual appropriations. 
Absent appropriations of additional funds in the future, discretionary 
programs would cease to exist after remaining balances were spent. The 
BEA requires that the baseline assume that discretionary programs will 
maintain program resources at the enacted level for the current year in 
real terms throughout the projection period. The BEA also specifies that 
non-pay funding be inflated using the GDP deflator and that pay-related 
funding be inflated using the rate of growth in average wages for 
private sector employees.
  Current Estimates: The current services baseline surplus, as defined 
by the BEA, is $256 billion in 2001 and $277 billion in 2002 under 
current assumptions. Table IV-5 presents current services receipts, 
outlays, and surpluses for the 10-year projection period. They are shown 
on a unified budget basis. The table also shows the surplus separately 
for off-budget social security and Postal Service, the Hospital 
Insurance trust fund, and all other programs. The estimates are based on 
the economic assumptions presented in Section II of this document, which 
are summarized in Table IV-8.
  ----------------------------------------------------------------------

                               Table IV-5.  Current Services Estimates, 2000-2011
                                            (In billions of dollars)
----------------------------------------------------------------------------------------------------------------
                                                                                          Estimate
                                                                     2000  -------------------------------------
                                                                    Actual   2001    2002   2002-2006  2002-2011
----------------------------------------------------------------------------------------------------------------
Receipts..........................................................   2,025   2,125   2,210     12,086     27,587
Outlays:
  Discretionary:
    Department of Defense (DOD)...................................     282     289     291      1,570      3,380
    Non-DOD.......................................................     335     365     390      2,068      4,421
                                                                   ---------------------------------------------
  Subtotal, discretionary.........................................     617     654     682      3,637      7,801

  Mandatory:
    Social security...............................................     406     431     451      2,506      5,849
    Medicare......................................................     194     219     226      1,279      3,030
    Medicaid......................................................     118     129     143        845      2,135
    All other.....................................................     231     225     239      1,304      2,957
                                                                   ---------------------------------------------
  Subtotal, mandatory.............................................     949   1,004   1,059      5,935     13,971
  Net interest....................................................     223     210     192        761        818
Total, outlays....................................................   1,789   1,868   1,933     10,333     22,591
Surplus...........................................................     236     256     277      1,753      4,996
  Social security and postal service..............................     150     158     174      1,060      2,551
  Medicare hospital insurance.....................................      30      27      35        218        532
  Remaining on-budget.............................................      57      71      69        474      1,914

Memorandum:
  Adjustments for expiring provisions and discretionary anomalies.  ......  ......     -10        -86       -271
  Resulting surplus...............................................     236     256     267      1,666      4,725
----------------------------------------------------------------------------------------------------------------

  ----------------------------------------------------------------------
  Many other assumptions must be made in order to calculate the baseline 
estimates. These include the number of beneficiaries who receive 
payments from the major benefit programs and annual cost-of-living 
adjustments in the indexed programs. Assumptions on baseline caseload 
projections for the major benefit programs are shown in Table IV-9, 
while assumptions about various cost-of-living adjustments are shown in 
Table IV-8. It is also necessary to make assumptions about extension of 
expiring programs and provisions, as discussed above, and other 
important program parameters. These include assumptions about the timing 
and substance of regulations that will be issued over the projection 
period, the use of administrative discretion provided under current law, 
and other assumptions about the way programs operate. Table IV-10 
provides a list of many of these assumptions and their impact on the 
baseline estimates. It is not intended to be an exhaustive listing; the 
variety and complexity of Government programs are too great to provide a 
complete list. Instead, some of the more important program assumptions 
are shown.
  Receipts. Table IV-6 shows baseline receipts by major source. Total 
receipts are projected to increase by $85 billion from 2001 to 2002, and 
by $1,224 billion from 2002 to 2011, largely due to assumed increases in 
incomes resulting from both real economic growth and inflation.
  ----------------------------------------------------------------------

                Table IV-6.  Baseline Receipts by Source
                        (In billions of dollars)
------------------------------------------------------------------------
                                                        Estimate
                                              --------------------------
                                                 2001     2002     2011
------------------------------------------------------------------------
Individual income taxes......................    1,061    1,097    1,766
Corporation income taxes.....................      212      214      277
Social insurance receipts....................      688      725    1,145
Excise taxes.................................       71       74       96
Estate and gift taxes........................       31       33       50
Customs duties...............................       21       23       36
Miscellaneous receipts:
   Federal reserve deposits..................       28       33       47
   Other.....................................       11       11       17
                                              --------------------------
   Total, miscellaneous receipts.............       39       44       64
Total, governmental receipts.................    2,125    2,210    3,434
------------------------------------------------------------------------

  ----------------------------------------------------------------------

[[Page 215]]


  Individual income tax receipts are estimated to increase by $36 
billion from 2001 to 2002 under current law. This growth of 3.4 percent 
is primarily the result of the effect of increased collections resulting 
from rising personal incomes. Individual income taxes grow at an average 
annual rate of 5.4 percent between 2002 and 2011. Corporation income 
taxes under current law are estimated to increase by $2 billion, or 0.9 
percent, from 2001 to 2002 due to higher corporate profits. These taxes 
continue growing at an annual average growth rate of 2.9 percent from 
2002 through 2011.
  Social insurance receipts are estimated to increase by $36 billion 
between 2001 and 2002 and by an additional $421 billion between 2002 and 
2011. The estimates reflect assumed increases in total wages and 
salaries paid, and scheduled increases in the social security taxable 
earnings base from $80,400 in 2001 to $126,600 in 2011.
  Excise taxes are estimated to increase by $25 billion from 2001 to 
2011, in large part due to increased economic activity. Other baseline 
receipts (estate and gift taxes, customs duties, and miscellaneous 
receipts) are projected to increase by $58 billion from 2001 to 2011.
  Outlays. Current services outlays are projected to grow from $1,868 
billion in 2001 to $1,933 billion in 2002, a 3.4 percent increase. 
Between 2002 and 2011, they are projected to grow at an average annual 
rate of 3.5 percent. Outlays for discretionary programs increase from 
$654 billion in 2001 to $682 billion in 2002, and to $876 billion in 
2011, largely reflecting increases in resources to keep pace with 
inflation.
  Outlays for entitlement and other mandatory programs are estimated to 
grow from $1,004 billion in 2001 to $1,059 billion in 2002, and to 
$1,822 billion in 2011, due in large part to changes in the number of 
beneficiaries and to automatic cost-of-living adjustments and other 
adjustments for inflation. Social security outlays grow from $451 
billion in 2002 to $756 billion in 2011, an average rate of 5.9 percent. 
Over the same period, medicare and medicaid are projected to grow at 
annual average rates of 6.6 percent and 8.7 percent, respectively, 
outpacing inflation. Unemployment compensation also grows substantially 
over the projection period. Spending on agriculture programs declines by 
$7 billion from 2001 to 2002, reflecting the expiration of emergency 
aid. Net interest payments to the public are estimated to decline over 
the period, reflecting reduced borrowing by the Government resulting 
from projected surpluses over the period. Toward the end of the period, 
net interest payments turn negative reflecting earnings on excess 
balances. Policy decisions will be required on the use of the surpluses 
that are accumulated as excess balances.

[[Page 216]]

  ----------------------------------------------------------------------

                               Table IV-7.  Change in Baseline Outlays by Category
                                            (In billions of dollars)
----------------------------------------------------------------------------------------------------------------
                                                                           Estimate             Change from:
                                                                   ---------------------------------------------
                                                                     2001    2002    2011   2001-2002  2002-2011
----------------------------------------------------------------------------------------------------------------
Discretionary:
  Department of Defense (DOD).....................................     289     291     383          2         91
  Non-DOD.........................................................     365     390     493         25        103
                                                                   ---------------------------------------------
Subtotal, discretionary...........................................     654     682     876         27        194

Mandatory:
  Social Security.................................................     431     451     756         20        305
  Medicare........................................................     219     226     402          8        175
  Medicaid........................................................     129     143     303         14        160
  Federal employee retirement and disability......................      81      84     126          3         42
  Unemployment compensation.......................................      22      26      48          3         22
  Agriculture.....................................................      20      13      10         -7         -3
  Undistributed offsetting receipts...............................     -47     -51     -70         -4        -19
  All other.......................................................     148     166     247         18         81
                                                                   ---------------------------------------------
Subtotal, mandatory...............................................   1,004   1,059   1,822         55        763
Net interest......................................................     210     192     -75        -18       -267
                                                                   ---------------------------------------------
Total, outlays....................................................   1,868   1,933   2,623         64        691
----------------------------------------------------------------------------------------------------------------

  ----------------------------------------------------------------------

[[Page 217]]



                                                      Table IV-8.  Summary of Economic Assumptions
                                                              (Dollar amounts in billions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Estimate
                                    2000   -------------------------------------------------------------------------------------------------------------
                                   Actual     2001      2002      2003      2004      2005      2006      2007      2008      2009      2010      2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gross Domestic Product (GDP):
  Levels, dollar amounts in
   billions:
    Current dollars.............     9,830    10,402    10,954    11,543    12,163    12,817    13,501    14,208    14,936    15,692    16,487    17,321
    Real, chained (1996) dollars     9,244     9,569     9,876    10,192    10,518    10,855    11,198    11,541    11,883    12,227    12,582    12,946
  Percent change, year over
   year:
    Current dollars.............       7.4       5.8       5.3       5.4       5.4       5.4       5.3       5.2       5.1       5.1       5.1       5.1
    Real, chained (1996) dollars       5.4       3.5       3.2       3.2       3.2       3.2       3.2       3.1       3.0       2.9       2.9       2.9
Inflation measures (percent
 change, year/year):
  GDP chained price index.......       1.9       2.1       2.0       2.1       2.1       2.1       2.1       2.1       2.1       2.1       2.1       2.1
  Consumer price index (all            3.3       2.9       2.5       2.6       2.7       2.7       2.7       2.7       2.7       2.7       2.7       2.7
   urban).......................
Unemployment rate, civilian            4.1       4.1       4.4       4.6       4.7       4.8       4.9       5.0       5.1       5.1       5.1       5.1
 (percent)......................
Interest rates (percent):
  91-day Treasury bills.........       5.6       6.0       5.8       5.5       5.3       5.3       5.3       5.3       5.3       5.3       5.3       5.3
  10-year Treasury notes........       6.2       5.8       5.8       5.8       5.8       5.8       5.8       5.8       5.8       5.8       5.8       5.8

Memorandum

Related programmatic
 assumptions:
  Automatic benefit increases
   (percent):
    Social security and veterans       2.4       3.5       2.5       2.5       2.7       2.7       2.7       2.7       2.7       2.7       2.7       2.7
     pensions...................
    Federal employee retirement.       2.4       3.5       2.5       2.5       2.7       2.7       2.7       2.7       2.7       2.7       2.7       2.7
    Food stamps.................       1.8       1.8       3.1       2.5       2.7       2.7       2.7       2.7       2.7       2.7       2.7       2.7
  Insured unemployment rate.....       1.7       1.7       1.9       2.0       2.0       2.0       2.0       2.1       2.1       2.1       2.1       2.1
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 218]]


                                             Table IV-9.  Beneficiary Projections for Major Benefit Programs
                                                             (Annual average, in thousands)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Estimate
                                    2000   -------------------------------------------------------------------------------------------------------------
                                   Actual     2001      2002      2003      2004      2005      2006      2007      2008      2009      2010      2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Federal family education loans..     3,847     4,003     4,112     4,264     4,422     4,587     4,760     4,941     5,129     5,327     5,534     5,751
Federal direct student loans....     1,902     2,053     1,960     2,031     2,105     2,182     2,263     2,348     2,436     2,527     2,623     2,724
Foster care and adoption               517       551       592       639       689       742       800       860       926       999     1,079     1,167
 assistance.....................
Medicaid........................    33,400    33,900    34,300    34,700    35,100    35,500    35,900    36,300    36,700    37,200    37,600    38,000
State Children's Health              2,100     2,600     2,900     3,200     3,300     3,000     2,900     2,700     2,600     2,400     2,500     2,500
 Insurance Program..............
Medicare-eligible military        ........  ........  ........     1,617     1,646     1,666     1,684     1,701     1,717     1,724     1,727     1,740
 retiree health benefits \1\....
Medicare:
  Hospital insurance............    39,131    39,581    40,016    40,493    41,028    41,601    42,232    42,985    43,879    44,820    45,723    46,791
  Supplementary medical             37,254    37,673    38,007    38,377    38,803    39,255    39,760    40,361    41,124    41,946    42,714    43,550
   insurance....................
Railroad retirement.............       682       664       645       626       609       593       578       565       553       542       534       527
Federal civil service retirement     2,372     2,387     2,408     2,432     2,459     2,488     2,518     2,544     2,567     2,590     2,613     2,636
Military retirement.............     1,950     1,964     1,977     1,990     2,000     2,010     2,018     2,026     2,034     2,039     2,044     2,049
Unemployment compensation.......     6,920     7,360     7,890     8,250     8,390     8,570     8,760     8,980     9,170     9,200     9,260     9,330
Food stamps.....................    17,163    17,481    18,156    18,703    18,822    19,019    19,247    19,476    19,692    19,812    19,877    19,973
Child nutrition.................    29,686    30,208    30,739    31,239    31,653    32,015    32,345    32,674    33,008    33,350    33,697    34,033
Supplemental security income
 (SSI):
  Aged..........................     1,203     1,185     1,172     1,162     1,153     1,143     1,134     1,124     1,113     1,102     1,091     1,082
  Blind/disabled................     5,125     5,142     5,220     5,313     5,414     5,519     5,625     5,728     5,826     5,917     6,001     6,078
                                 -----------------------------------------------------------------------------------------------------------------------
    Subtotal, SSI...............     6,328     6,327     6,392     6,475     6,567     6,662     6,759     6,852     6,939     7,019     7,092     7,160
Child care and development fund      1,816     2,058     2,116     2,144     2,153     2,153     2,153     2,153     2,153     2,153     2,153     2,153
 \2\............................
Social security (OASDI):
  Old age and survivor insurance    38,205    38,860    39,201    39,546    39,914    40,361    40,860    41,400    42,019    42,823    43,797    44,802
  Disability insurance..........     6,559     6,741     6,982     7,262     7,599     7,963     8,342     8,730     9,116     9,471     9,782    10,104
Veterans compensation...........     2,607     2,632     2,681     2,720     2,750     2,773     2,784     2,790     2,790     2,782     2,767     2,744
Veterans pensions...............       635       610       587       568       550       535       522       510       501       493       486       481
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Mandatory funding of this program begins in 2003.

\2\ Includes mandatory child care entitlement to States, discretionary Child Care and Development Block Grant, and TANF transfers.


[[Page 219]]


                           Table IV-10.  Impact of Regulations, Expiring Authorizations, and Other Assumptions in the Baseline
                                                                (In millions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Estimate
            Category            ------------------------------------------------------------------------------------------------------------------------
                                    2001       2002       2003       2004       2005       2006       2007       2008       2009       2010       2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
          REGULATIONS

Old age and survivors insurance
 (OASI) and disabilty insurance
 (DI):
  Disabilty redesign prototypes        70        155        360        751      1,247      1,776      2,321      2,887      3,472      4,066      4,684
  Ticket to Work and Self-       .........         2          2          3        -10        -20        -29        -41        -64       -101       -101
   Sufficiency (767P)..........
  Administrative procedures for        -1         -1         -1         -1         -1         -1         -1         -1         -1         -1         -1
   imposing penalties for false
   or misleading statements....
  Reduction of Title II                13         14         14         15         16         17         18         19         20         21         23
   benefits under family
   maximum in cases of dual
   enrollment..................
  Trial work period............         7          6          5          5          4          3          3          2          1          1   .........
Medicare, HI:
  BIPA Codifying regulations...     2,780      5,035      3,180      3,330      3,460      3,160      2,670      2,640      2,790      2,910      3,080
  BBRA Codifying Regulations...     2,675      2,210      1,019        665        477        660        633        649        676         NA         NA
  BBA 1997 Codifying              -41,680    -49,460    -56,135    -62,905    -68,620    -74,130    -80,125         NA         NA         NA         NA
   Regulations.................
  Disabilty redesign prototypes  .........         1         14         38         88        174        286        407        532        660        799
Medicare, SMI:
  BIPA Codifying regulations...     2,030      3,260      3,900      4,520      5,680      6,705      7,165      7,555      8,140      8,700      9,450
  BBRA Codifying Regulations...     3,943      2,992      1,624        468        210        289        255        265        275         NA         NA
  BBRA Administrative                 800        930      1,150      1,510      1,790      1,860      2,060      2,240      2,450         NA         NA
   Clarification Codifying
   Regulations.................
  BBA 1997 Codifying                4,865      8,430     11,675     11,760     11,965     12,210     12,560         NA         NA         NA         NA
   Regulations.................
  Disabilty redesign prototypes  .........         1         13         36         85        170        284        409        541        680        833
Medicare, HI and SMI:
  Identification of potential         115        160        200        240         NA         NA         NA         NA         NA         NA         NA
   organ, tissue, and eye
   donors......................
  Medicare clinical trials            620        690        790        840        900        960      1,020      1,090      1,160      1,230         NA
   expansion...................
  Extending TRICARE coverage to  .........       110        330        380        410        440        460        490        520        550         NA
   medicare-eligible military
   retirees....................
Medicaid:
  BIPA Codifying regulations...       220        650     -1,980     -2,910     -4,100     -4,970     -5,520     -6,080     -6,700     -7,100     -7,520
  BBRA Codifying Regulations...       375        279        158        114         99        107        110        119        123        128         NA
  BBA 1997 Codifying                 -660     -1,071     -1,628     -1,825     -1,985     -2,126     -2,350         NA         NA         NA         NA
   Regulations.................
  SSI childhood disability           -125       -135       -150         NA         NA         NA         NA         NA         NA         NA         NA
   standard to implement
   welfare reform (Medicaid
   effect).....................
  Removal of the 100 hour             140        160        175        190        210        225        245        265        285         NA         NA
   limitation on employment....
  1902 (R) (2) regulation......        40        125        220        230        245        255        270        280        295        310        325
  Disabilty redesign prototypes         3         40        120        310        576        876      1,204      1,553      1,928      2,329      2,753
Medicare and Medicaid:
  Net Medicaid and Medicare            -9        -11        -13        -19        -38        -46        -60        -83        -89         NA         NA
   effects of upcoming SSA
   regulation on the
   substantial gainful activity
   earnings threshold..........
Supplemental security income
 (SSI):
  Disabilty redesign prototypes         4         30         81        188        335        437        510        664        779        893      1,084
  Ticket to Work and Self-       .........        -1          3          4         -6        -16        -27        -36        -50        -65        -65
   Sufficiency (767P)..........

[[Page 220]]


  Title XVI cross-program             -15        -15        -15        -40        -30        -15        -15        -15        -15        -20        -20
   recovery (746P).............
  Administrative procedures for        -2         -1         -1         -1         -1         -1         -1         -1         -1         -1         -1
   imposing penalties for false
   or misleading statements....
  Student earned income                 3          3          3          3          4          4          4          4          5          5          5
   exclusion...................
Veterans medical care:
  Nursing home co-pays.........  .........       -41        -82        -82        -82        -82        -82        -82        -82        -82        -82
Environmental Protection
 Agency:
  Pesticide registration fees..  .........       -25        -26        -27        -28        -30        -31        -32        -34        -35        -37
  Pesticide tolerance fees.....  .........       -40        -57        -43        -14   .........  .........  .........  .........  .........  .........

    EXPIRING AUTHORIZATIONS

Provisions extended in the
 baseline (effect of
 extension):
Spending:
  Child care entitlement to      .........  .........     2,717      2,717      2,717      2,717      2,717      2,717      2,717      2,717      2,717
   States......................
  Child nutrition:
    Summer food service program  .........  .........  .........       377        403        427        451        478        505        534        565
    State administrative         .........  .........  .........       144        152        160        167        174        182        190        198
     expenses..................
  CCC commodity program          .........  .........     9,641      8,555      8,403      8,488      8,437      8,383      8,372      8,346      8,313
   assistance..................
  Compact of free association..  .........  .........  .........       144        144        144        144        144        144        144        144
  Food stamps:
    Benefit costs..............  .........  .........    18,187     18,983     19,951     20,939     21,875     22,913     23,853     24,797     25,698
    State administrative         .........  .........     2,034      2,099      2,165      2,234      2,377      2,451      2,529      2,608      2,716
     expenses..................
    Employment and training....  .........  .........       337        342        347        352        358        363        369        375        381
    Other program costs........  .........  .........        71         69         69         70         70         72         72         72         74
    Nutrition assistance for     .........  .........     1,370      1,407      1,445      1,484      1,524      1,565      1,607      1,650      1,695
     Puerto Rico...............
    Food donations on Indian     .........  .........        75         76         78         79         81         83         84         86         88
     reservations..............
    The emergency food           .........  .........       100        100        100        100        100        100        100        100        100
     assistance program
     commodities...............
  Fund for Rural America.......  .........  .........  .........        32         43         53         61         61         61         61         61
  Future Agriculture and Food    .........  .........  .........         6         48         90        120        120        120        120        120
   Systems initiative..........
  NAFTA transitional trade       .........        30         60         69         70         72         73         74         76         78         79
   adjustment assistance.......
  Promoting safe and stable      .........        46        241        293        299        305        305        305        305        305        305
   families....................
  Temporary assistance for
   needy families (TANF):
    State family assistance      .........  .........    16,489     16,489     16,489     16,489     16,489     16,489     16,489     16,489     16,489
     grants (SFAG).............
    SFAG to territories........  .........  .........        78         78         78         78         78         78         78         78         78
    Bonus to reward high         .........  .........  .........       200        200        200        200        200        200        200        200
     performing States.........
    Bonus to reward decrease in  .........  .........       100        100        100        100        100        100        100        100        100
     illegitimacy..............
    Tribal work program........  .........  .........         8          8          8          8          8          8          8          8          8
  Trade adjustment assistance..  .........       282        323        355        367        378        390        402        415        428        441
Revenues:
  Airport and airway trust fund  .........  .........  .........  .........  .........  .........  .........    14,476     15,923     16,896     17,898
   taxes \2\...................
  Aquatic resources trust fund   .........  .........  .........  .........  .........       310        318        324        331        337        344
   taxes \2\...................
  Highway trust fund taxes \2\.  .........  .........  .........  .........  .........    33,678     34,910     35,869     36,854     37,854     38,873
  Leaking Underground Storage    .........  .........  .........  .........       104        211        214        221        225        229        235
   Tank taxes \2\..............

[[Page 221]]


Provisions not extended in the
 baseline (effect of extension)
 \3\...........................
Spending:
  Census: survey of program      .........  .........        10         10         10         10         10         10         10         10         10
   dynamics....................
  Civil service retirement:
    Increased non-Postal agency  .........  .........      -316       -373       -327       -287       -242       -192       -138        -76        -22
     contributions for
     employees of 1.51 percent.
  Medicare, HI:
    Reduction in PPS Capital     .........  .........      -180       -220       -230       -240       -260       -270       -280       -290         NA
     Payments (BBA 4402).......
    Reduction in PPS Capital     .........  .........      -130       -150       -160       -170       -180       -190       -190       -200         NA
     Payments (BBA 4412).......
  Medicare, SMI:
    Medicare low income premium  .........  .........        80         90        100        110        120        130        140        150         NA
     assistance................
  Medicaid:
    Emergency services for       .........        25         25         25         25         25         25         25         25         25         NA
     undocumented aliens.......
  Spectrum auction authority...  .........  .........  .........  .........  .........  .........  .........  .........      -500       -500       -500
  Veterans medical care:         .........  .........      -120       -120       -120       -120       -120       -220       -220       -220       -220
   pharmaceutical copay........

    OTHER IMPORTANT PROGRAM
          ASSUMPTIONS

Child support enforcement
 (CSE):
  Effect of hold harmless              10         10   .........  .........  .........  .........  .........  .........  .........  .........  .........
   payments to States..........
  Effect of enhanced automated         32         13   .........  .........  .........  .........  .........  .........  .........  .........  .........
   system matching rates.......
  Penalties for Family Support       -148       -194       -100        -15   .........  .........  .........  .........  .........  .........  .........
   Act systems and Statewide
   Disbursement Unit
   requirements................
  Effect of enhanced rate of            8          8          9          9         10         10         10         11         11         12         12
   paternity testing...........
Food stamps:
  Tax offset, recoupment, and        -177       -177       -177       -177       -177       -177       -177       -177       -177       -177       -177
   general claims collection...
  Quality control liabilities..       -68        -72        -77        -76        -80        -87        -92        -96       -100       -104       -108
  Allocation of administrative       -197       -197       -197       -197       -197       -197       -197       -197       -197       -197       -197
   costs between public
   assistance programs.........
  State incentive payments.....        42         46         47         49         50         52         53         55         56         58         60
  Non-employment and training          90        105        110        115        120        125        130        135        140        145        150
   costs of BBA changes to work
   requirement for able-bodied
   adults without dependents...
  Administrative actions to            15         25         30         31         32         33         34         35         36         37         38
   promote employment and
   training program............
Medicare: Medicare Integrity      -10,660    -10,970    -11,290    -11,290    -11,290    -11,290    -11,290    -11,290    -11,290         NA         NA
 Program (MIP) \4\.............
Medicaid:
  Home and Community Care for         100        110        120        130        140        150        160        170         NA         NA         NA
   the Frail Elderly (Section
   1929).......................
  Financial management               -171       -187       -204       -223       -244       -267       -291       -316       -343       -373       -405
   recoveries..................
  Vaccines for Children, total        775        796        792        784        821        853        796        813        819        844        844
   program costs...............

[[Page 222]]


  Personal Responsibility and        -800     -1,650     -1,885         NA         NA         NA         NA         NA         NA         NA         NA
   Work Opportunity
   Reconciliation Act of 1996..
  Allocation of administrative        311        355        393        432        471        509        549        593        640        692        747
   costs between public
   assistance programs.........
  48 Hour Maternity Stay.......        20         20         20         20         20         20         20         NA         NA         NA         NA
  Adoption and Safe Families            2          2          2          2          3          3          4         NA         NA         NA         NA
   Act of 1997.................
  SSI change in effective date         10         15         15         15         15         20         20         20         NA         NA         NA
   for benefits (medicaid
   effect).....................
HHS Inspector General: Audit         -840       -980     -1,050     -1,050         NA         NA         NA         NA         NA         NA         NA
 and Investigative Recoveries..
State children's health             4,035      3,355      4,072      4,260      4,290      4,370      4,460      4,560      4,600      5,030      5,160
 insurance program (Title XXI).
Approved Demonstrations: \5\
  Medicare:
      Costs....................     1,314      3,499      5,835      5,523         86   .........  .........  .........  .........  .........  .........
      Replacement Benefits.....     1,328      3,528      5,879      5,565         88   .........  .........  .........  .........  .........  .........
  Medicaid:
      Costs....................    29,373     26,352      1,664      1,524         10          1   .........  .........  .........  .........  .........
      Replacement Benefits.....    29,373     26,352      1,664      1,524         10          1   .........  .........  .........  .........  .........
   Joint medicare and medicaid:
      Costs....................     2,234      2,308      2,337      2,307   .........  .........  .........  .........  .........  .........  .........
      Replacement Benefits.....     2,052      2,115      2,144      2,107   .........  .........  .........  .........  .........  .........  .........
OASI, DI, SSI:
   Expansion of tax refund            -44        -44        -44        -44        -44        -44        -44        -44        -44        -44        -44
   offset to debts previously
   written off (OASI, DI)......
   Performance of continuing         -485       -975     -1,425     -1,820     -2,260     -2,520     -2,735     -3,160     -3,480     -3,795     -4,235
   disability reviews (baseline
   levels) (OASI, DI, SSI).....
   Collection of overpayments:
    OASI.......................      -981       -976       -973       -971       -971       -971       -971       -971       -971       -971       -971
    DI.........................      -335       -353       -361       -366       -368       -368       -368       -368       -368       -368       -368
    SSI........................      -783       -822       -842       -851       -856       -856       -856       -856       -856       -856       -856
  Debts written off as
   uncollectable (no effect on
   outlays):
    OASI.......................        94         93         92         91         90         90         90         90         90         90         90
    DI.........................       272        287        294        297        299        299        299        299        299        299        299
    SSI........................       526        488        450        412        374        374        374        374        374        374        374
  DI:
    Payments to states for             86         73         63         53         37         41         45         49         53         57         61
     vocational rehabilitation.
    Limitation on prisoner's          -38        -38        -43        -46        -51        -57        -62        -66        -73        -78        -82
     benefits..................
    Research and demonstration          6         12         12         12         12          6   .........  .........  .........  .........  .........
     projects..................
  OASI: limitation on                 -16        -17        -18        -20        -22        -25        -26        -29        -31        -33        -35
   prisoner's benefits.........
  SSI:
    Payments from states for       -3,554     -3,660     -3,785     -3,914     -4,073     -4,168     -4,263     -4,387     -4,139     -4,647     -4,780
     state supplemental
     benefits..................
    Payments for state              3,554      3,660      3,785      3,914      4,073      4,168      4,263      4,387      4,139      4,647      4,780
     supplemental benefits.....

[[Page 223]]


    Fees for administration of
     State supplement:
      Treasury share...........       150        152        153        155        157        159        160        162        164        165        166
      SSA share................       100        106        115        123        132        141        151        160        157        182        192
    Research and demonstration         37         41         30         30         30         30         30         30         30         30         30
     projects..................
    Payments to states for             71         58         59         59         57         54         52         49         51         53         55
     vocational rehabilitation.
    Performance of non-              -279       -221        -27        -17        -10         -8         -6         -4         -2   .........  .........
     disability
     redeterminations..........
Ticket to work grant programs:
  Infrastructure grant program.        16         25         30         35         40         41         42         43         44         45         46
  Demonstration to maintain      .........         4         11         15         18         24         18         13          9          7          6
   independence and employment.
TANF:
  Transfers from TANF to SSBG..       600        500        600        700        700        700        700        700        700   .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
NA = Not available.
\1\ Not shown on the table are medicare and medicaid regulations that have not been specifically priced.
\2\ Net of income offsets.
\3\ See Table 2 in this Section for a listing of additional expiring provisions.
\4\ These amounts reflect gross MIP savings that are not offset with MIP costs.
\5\ Estimates for demonstrations reflect Federal costs of the projects. Replacement benefits represent the program costs in the absence of the
  demonstrations. The differences represent the net impact of the demonstration projects on the baseline. DoD Medicare Subvenstion demonstration is
  reflected under BBA97 codifying regulations.


[[Page 224]]


                                                                            Table IV-11.  Baseline Receipts by Source
                                                                                    (In billions of dollars)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 Estimate
                           Source                                2000   ------------------------------------------------------------------------------------------------------------------------
                                                                Actual      2001       2002       2003       2004       2005       2006       2007       2008       2009       2010       2011
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Individual income taxes.....................................   1,004.5    1,061.3    1,097.1    1,139.4    1,188.3    1,250.3    1,319.6    1,396.8    1,479.4    1,568.4    1,663.6    1,765.7
Corporation income taxes....................................     207.3      211.9      213.7      216.8      221.8      230.1      238.8      248.1      256.9      264.0      270.6      277.4
Social insurance and retirement receipts....................     652.9      688.4      724.8      763.4      801.2      851.2      891.7      938.0      983.5     1030.8     1088.2     1145.3
Excise taxes................................................      68.9       71.4       74.2       76.4       78.5       80.9       82.8       85.2       87.7       90.3       93.1       96.0
Estate and gift taxes.......................................      29.0       31.2       33.0       35.5       38.1       36.4       36.7       38.5       41.3       43.9       46.7       49.6
Customs duties..............................................      19.9       21.4       23.2       24.4       25.0       26.1       27.6       29.1       30.4       32.7       34.2       35.9
Miscellaneous receipts:
  Federal Reserve System deposit of earnings................      32.3       27.9       32.6       33.4       34.8       36.4       37.9       39.5       41.4       43.3       45.2       47.2
  Other.....................................................      10.5       11.2       11.2       12.0       12.8       13.3       14.2       13.3       13.9       14.7       15.6       16.5
                                                             -----------------------------------------------------------------------------------------------------------------------------------
    Total, miscellaneous receipts...........................      42.8       39.2       43.8       45.4       47.6       49.7       52.1       52.8       55.3       58.0       60.8       63.7
                                                             -----------------------------------------------------------------------------------------------------------------------------------
Total, governmental receipts................................   2,025.2    2,124.6    2,209.7    2,301.3    2,400.6    2,524.7    2,649.3    2,788.4    2,934.4    3,088.1    3,257.2    3,433.6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 225]]


                                                                        Table IV-12.  Baseline Outlay Totals by Category
                                                                                    (In billions of dollars)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 Estimate
                          Category                               2000   ------------------------------------------------------------------------------------------------------------------------
                                                                Actual      2001       2002       2003       2004       2005       2006       2007       2008       2009       2010       2011
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Outlays:

  Discretionary:
    Defense.................................................     295.0      303.7      306.7      321.1      331.0      340.7      350.6      360.1      369.2      379.5      390.2      401.3
    Non-Defense.............................................     322.0      350.5      374.9      388.7      397.5      408.0      418.3      429.8      441.7      452.7      464.9      474.7
                                                             -----------------------------------------------------------------------------------------------------------------------------------
    Subtotal, discretionary.................................     617.0      654.1      681.5      709.8      728.5      748.7      768.9      789.9      810.9      832.2      855.1      876.0

  Mandatory:
    Social Security.........................................     406.0      431.4      451.3      473.6      498.7      526.4      556.2      588.9      624.5      664.6      708.7      756.0
    Medicare and Medicaid...................................     312.0      347.7      369.2      394.2      421.6      456.8      482.6      522.2      561.5      603.8      649.1      704.3
    Means-tested entitlements \1\...........................     105.2      108.7      114.5      120.2      125.0      132.3      134.6      136.5      144.1      148.8      154.1      162.1
    Other mandatory.........................................     125.5      116.2      124.2      122.8      129.3      147.9      153.5      160.3      172.6      182.8      192.4      199.5
                                                             -----------------------------------------------------------------------------------------------------------------------------------
    Subtotal, mandatory.....................................     948.8    1,004.0    1,059.2    1,110.8    1,174.4    1,263.3    1,326.8    1,407.9    1,502.7    1,599.9    1,704.3    1,822.0

  Net interest..............................................     223.2      210.2      192.0      173.8      154.6      132.8      107.8       81.2       51.4       18.3      -19.3      -74.6
                                                             -----------------------------------------------------------------------------------------------------------------------------------
  Total Outlays.............................................   1,789.0    1,868.3    1,932.8    1,994.4    2,057.5    2,144.8    2,203.5    2,279.1    2,364.9    2,450.4    2,540.1    2,623.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Food stamps, TANF/family support, SSI, child nutrition, EITC, veterans pensions, children's health insurance fund.


[[Page 226]]


                                                                           Table IV-13.  Baseline Outlays by Function
                                                                                    (In billions of dollars)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 Estimate
                          Function                               2000   ------------------------------------------------------------------------------------------------------------------------
                                                                Actual      2001       2002       2003       2004       2005       2006       2007       2008       2009       2010       2011
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
National defense:
  Department of Defense--Military...........................     281.2      288.0      290.4      304.2      313.7      323.1      332.7      341.9      350.7      360.5      370.9      381.5
  Other.....................................................      13.3       15.3       16.1       16.6       16.7       17.1       17.2       17.6       17.9       18.4       18.8       19.2
                                                             -----------------------------------------------------------------------------------------------------------------------------------
  Total, National defense...................................     294.5      303.2      306.5      320.8      330.5      340.1      349.9      359.5      368.6      378.9      389.6      400.7
International affairs.......................................      17.2       15.5       18.7       18.4       18.3       18.6       19.1       19.8       20.5       21.1       21.8       22.4
General science, space, and technology......................      18.6       19.7       20.7       21.4       22.1       22.6       23.1       23.6       24.1       24.7       25.3       25.9
Energy......................................................      -1.1       -0.6       -0.3          *       -0.7       -0.7       -0.3       -0.4        2.0        2.1        2.2        2.4
Natural resources and environment...........................      25.0       27.5       29.7       30.7       31.4       32.2       33.1       34.1       35.1       36.0       37.0       38.0
Agriculture.................................................      36.6       25.5       18.8       15.5       14.5       14.6       15.0       15.4       15.8       16.3       16.8       17.1
Commerce and housing credit.................................       3.2        7.1        6.1        3.9        3.4        4.2        3.8        5.6        5.5        6.7        7.3        7.1
Transportation..............................................      46.9       51.1       55.3       58.2       60.5       62.8       64.6       66.2       67.9       69.7       71.3       73.1
Community and regional development..........................      10.6       10.6       11.5       11.7       11.9       11.9       11.9       12.0       12.2       12.5       12.8       13.2
Education, training, employment, and social services........      59.4       66.1       76.7       80.5       81.5       83.3       85.5       87.8       90.4       92.9       95.7       95.8
Health......................................................     154.5      172.9      190.5      208.6      224.6      241.7      259.7      279.4      300.6      323.1      348.9      373.9
Medicare....................................................     197.1      222.1      229.8      244.2      257.8      278.0      287.8      309.9      330.2      352.4      375.3      407.0
Income security.............................................     247.9      258.3      272.4      285.7      297.2      312.2      322.9      333.1      349.3      361.6      375.4      392.9
Social security.............................................     409.4      435.0      454.9      477.3      502.5      530.3      560.3      593.1      628.9      669.2      713.4      760.9
Veterans benefits and services..............................      47.1       45.3       50.8       53.3       56.0       61.0       60.6       60.3       64.8       67.8       69.9       72.1
Administration of justice...................................      28.0       29.4       32.4       33.1       35.3       36.2       37.1       38.3       39.5       40.8       42.2       43.6
General government..........................................      13.2       16.7       16.9       17.0       17.7       18.0       18.4       19.1       19.6       20.1       20.7       21.3
Net interest................................................     223.2      210.2      192.0      173.8      154.6      132.8      107.8       81.2       51.4       18.3      -19.3      -74.6
Allowances..................................................  .........      -0.1         -*        0.1        0.1        0.1        0.2        0.2        0.2        0.2        0.2        0.2
Undistributed offsetting receipts:
  Employer share, employee retirement (on-budget)...........     -30.2      -31.3      -32.6      -36.2      -37.6      -39.2      -40.8      -42.4      -44.3      -46.1      -48.0      -50.0
  Employer share, employee retirement (off-budget)..........      -7.6       -8.3       -8.5       -9.2       -9.9      -10.7      -11.4      -12.2      -13.1      -14.0      -15.0      -16.2
  Rents and royalties on the Outer Continental Shelf........      -4.6       -6.1       -5.2       -4.5       -4.3       -4.1       -3.9       -3.8       -3.6       -3.5       -3.4       -3.3
  Sale of major assets......................................  .........  .........  .........      -0.3   .........  .........  .........  .........  .........  .........  .........  .........
  Other undistributed offsetting receipts...................      -0.2       -1.6       -4.4       -9.7       -9.7       -1.3       -0.7       -0.7       -0.7         -*         -*         -*
                                                             -----------------------------------------------------------------------------------------------------------------------------------
  Total, Undistributed offsetting receipts..................     -42.6      -47.2      -50.7      -59.8      -61.4      -55.3      -56.8      -59.1      -61.7      -63.7      -66.5      -69.6
                                                             ===================================================================================================================================
Total.......................................................   1,789.0    1,868.3    1,932.8    1,994.4    2,057.5    2,144.8    2,203.5    2,279.1    2,364.9    2,450.4    2,540.1    2,623.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* $50 million or less.


[[Page 227]]


                                                                            Table IV-14.  Baseline Outlays by Agency
                                                                                    (In billions of dollars)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 Estimate
                           Agency                                2000   ------------------------------------------------------------------------------------------------------------------------
                                                                Actual      2001       2002       2003       2004       2005       2006       2007       2008       2009       2010       2011
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Legislative Branch..........................................       2.9        3.1        3.0        3.1        3.2        3.3        3.4        3.5        3.6        3.7        3.8        3.9
Judicial Branch.............................................       4.1        4.5        4.6        4.7        4.8        5.0        5.2        5.3        5.5        5.7        5.9        6.1
Agriculture.................................................      75.7       69.1       64.1       63.4       64.4       66.5       69.0       71.6       74.1       76.9       79.8       82.1
Commerce....................................................       7.8        5.8        5.0        5.2        5.1        5.1        5.1        5.3        5.5        5.8        6.0        6.2
Defense--Military...........................................     281.2      288.0      290.4      304.2      313.7      323.1      332.7      341.9      350.7      360.5      370.9      381.5
Education...................................................      34.0       38.2       45.2       48.5       49.3       50.2       51.2       52.4       53.7       54.9       56.2       54.7
Energy......................................................      15.0       16.8       17.6       18.3       18.6       18.9       19.1       19.5       20.4       20.8       21.3       21.8
Health and Human Services...................................     382.6      429.4      457.6      486.3      516.5      554.3      582.6      624.8      666.6      711.5      760.0      818.3
Housing and Urban Development...............................      30.8       37.2       35.1       35.3       34.5       35.0       35.6       36.5       36.9       37.2       37.9       38.7
Interior....................................................       8.0        9.0       10.1       10.4       10.6       11.0       11.3       11.7       12.0       12.4       12.8       13.2
Justice.....................................................      19.6       20.5       22.9       23.4       23.8       24.3       25.1       25.9       26.7       27.5       28.4       29.4
Labor.......................................................      31.4       35.0       39.6       43.1       44.8       47.3       50.0       52.9       56.0       58.2       60.6       63.2
State.......................................................       6.8        9.4        9.2        8.9        8.8        8.9        9.1        9.3        9.6        9.8       10.1       10.4
Transportation..............................................      46.0       50.6       55.0       57.7       59.9       62.2       64.0       65.6       67.3       69.0       70.6       72.3
Treasury....................................................     391.2      389.5      384.9      381.2      379.5      374.7      368.4      363.1      356.2      347.7      334.5      305.1
Veterans Affairs............................................      47.1       45.2       50.7       53.2       55.9       60.9       60.5       60.2       64.7       67.7       69.8       72.0
Corps of Engineers..........................................       4.3        4.4        4.7        4.8        4.9        5.0        5.2        5.3        5.5        5.6        5.8        5.9
Other Defense Civil Programs................................      32.9       34.4       35.4       38.2       39.3       40.5       41.6       42.9       44.2       45.4       46.7       48.0
Environmental Protection Agency.............................       7.2        7.5        7.7        7.9        8.1        8.4        8.6        8.8        9.1        9.3        9.5        9.7
Executive Office of the President...........................       0.3        0.3        0.3        0.3        0.3        0.3        0.4        0.4        0.4        0.4        0.4        0.4
Federal Emergency Management Agency.........................       3.1        3.1        2.9        3.1        2.9        2.8        2.6        2.4        2.4        2.4        2.5        2.6
General Services Administration.............................         *        0.6       -0.1        0.4        0.6        0.7        0.7        0.7        0.7        0.7        0.8        0.8
International Assistance Programs...........................      12.1       11.5       12.6       12.6       12.6       12.8       13.1       13.5       13.9       14.3       14.7       15.0
National Aeronautics and Space Administration...............      13.4       13.8       14.3       14.7       15.2       15.6       15.9       16.3       16.7       17.1       17.5       18.0
National Science Foundation.................................       3.5        3.9        4.3        4.5        4.7        4.8        4.8        4.9        5.0        5.2        5.3        5.4
Office of Personnel Management..............................      48.7       51.0       53.4       56.3       59.9       63.6       67.4       71.5       76.1       80.6       86.4       90.5
Small Business Administration...............................      -0.4       -0.9        0.9        0.9        0.9        0.9        1.0        1.0        1.0        1.0        1.1        1.1
Social Security Administration..............................     441.8      463.8      487.3      511.1      537.8      569.8      599.0      630.8      670.9      712.9      758.9      811.4
Other Independent Agencies..................................      10.6       12.5       17.8       16.3       16.9       18.4       19.5       21.3       23.5       24.9       26.1       26.6
Allowances..................................................  .........       0.6        0.4        0.5        0.5        0.6        0.6        0.6        0.6        0.6        0.6        0.5
Undistributed Offsetting Receipts...........................    -172.8     -189.3     -204.4     -224.1     -240.5     -250.1     -269.2     -291.0     -314.5     -339.2     -364.4     -391.4
                                                             ===================================================================================================================================
Total.......................................................   1,789.0    1,868.3    1,932.8    1,994.4    2,057.5    2,144.8    2,203.5    2,279.1    2,364.9    2,450.4    2,540.1    2,623.4
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* $50 million or less.


[[Page 228]]


                                                                Table IV-15.  Baseline Discretionary Budget Authority by Function
                                                                                    (In billions of dollars)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 Estimate
                          Function                               2000   ------------------------------------------------------------------------------------------------------------------------
                                                                Actual      2001       2002       2003       2004       2005       2006       2007       2008       2009       2010       2011
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
National defense:
  Department of Defense--Military...........................     287.7      296.1      306.0      314.4      323.2      332.2      341.5      351.1      361.1      371.3      381.9      392.8
  Other.....................................................      13.4       15.0       15.3       15.7       16.0       16.4       16.8       17.2       17.6       18.0       18.4       18.8
                                                             -----------------------------------------------------------------------------------------------------------------------------------
  Total, National defense...................................     301.2      311.0      321.3      330.1      339.2      348.6      358.3      368.3      378.6      389.3      400.2      411.6
International affairs.......................................      23.5       22.7       23.2       23.7       24.3       24.9       25.5       26.1       26.7       27.3       27.9       28.6
General science, space, and technology......................      19.2       20.8       21.3       21.8       22.3       22.8       23.3       23.9       24.4       25.0       25.6       26.2
Energy......................................................       2.7        3.1        2.9        2.9        3.0        3.1        3.5        3.6        4.2        4.3        4.4        4.5
Natural resources and environment...........................      24.7       28.8       29.7       30.4       31.3       32.2       33.1       34.1       35.1       36.1       37.2       38.3
Agriculture.................................................       4.5        4.8        5.3        5.4        5.6        5.8        5.9        6.1        6.3        6.5        6.7        6.9
Commerce and housing credit.................................       7.1        2.9        3.0        3.0        2.9        2.8        2.6        3.5        3.7        3.8        3.9        4.1
Transportation..............................................      15.2       19.1       19.7       20.3       20.9       21.6       22.2       22.9       23.6       24.4       25.1       25.9
Community and regional development..........................      13.7       11.0       11.8       12.1       12.4       12.6       12.9       13.2       13.5       13.8       14.1       14.4
Education, training, employment, and social services........      44.4       61.1       64.4       65.8       67.2       68.7       70.2       71.7       73.3       74.9       76.5       78.2
Health......................................................      33.8       38.9       39.8       40.7       41.7       42.7       43.7       44.8       45.8       46.9       48.1       49.2
Medicare....................................................       3.0        3.4        3.5        3.7        3.8        4.0        4.2        4.3        4.6        4.8        5.0        5.3
Income security.............................................      30.0       39.5       44.1       45.6       47.0       48.5       49.7       50.8       52.0       53.2       54.6       55.9
Social security.............................................       3.2        3.4        3.6        3.7        3.8        4.0        4.1        4.3        4.4        4.6        4.7        4.9
Veterans benefits and services..............................      20.9       22.5       23.4       24.2       25.0       25.9       26.8       27.7       28.7       29.7       30.7       31.9
Administration of justice...................................      27.0       30.0       31.1       32.0       33.1       34.2       35.3       36.5       37.7       39.0       40.3       41.6
General government..........................................      12.4       14.0       14.8       15.3       15.9       16.4       16.9       17.5       18.1       18.8       19.5       20.2
Allowances..................................................  .........      -0.6   .........  .........  .........  .........  .........  .........  .........  .........  .........  .........
                                                             ===================================================================================================================================
Total.......................................................     586.6      636.5      662.9      680.6      699.4      718.5      738.2      759.4      780.8      802.4      824.6      847.7
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[[Page 229]]


                                                                 Table IV-16.  Baseline Discretionary Budget Authority by Agency
                                                                                    (In billions of dollars)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 Estimate
                           Agency                                2000   ------------------------------------------------------------------------------------------------------------------------
                                                                Actual      2001       2002       2003       2004       2005       2006       2007       2008       2009       2010       2011
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Legislative Branch..........................................       2.5        2.7        2.8        2.9        3.0        3.1        3.2        3.3        3.4        3.5        3.6        3.8
Judicial Branch.............................................       3.7        4.0        4.1        4.3        4.4        4.6        4.7        4.9        5.0        5.2        5.4        5.6
Agriculture.................................................      16.9       19.0       19.9       20.4       21.0       21.6       22.2       22.8       23.5       24.2       24.8       25.6
Commerce....................................................       8.7        5.1        5.1        5.2        5.3        5.3        5.2        5.5        5.7        5.9        6.1        6.4
Defense--Military...........................................     287.7      296.1      306.0      314.4      323.2      332.2      341.5      351.1      361.1      371.3      381.9      392.8
Education...................................................      29.4       39.9       42.7       43.6       44.5       45.4       46.4       47.4       48.4       49.4       50.5       51.5
Energy......................................................      17.8       19.7       19.9       20.2       20.7       21.2       21.7       22.2       23.2       23.7       24.2       24.8
Health and Human Services...................................      45.5       53.9       55.2       56.5       57.8       59.2       60.7       62.2       63.7       65.3       66.9       68.6
Housing and Urban Development...............................      23.1       30.8       34.9       36.1       37.3       38.5       39.3       40.2       41.0       42.0       43.0       44.0
Interior....................................................       8.5       10.2       10.7       10.8       11.1       11.4       11.8       12.2       12.5       12.9       13.3       13.7
Justice.....................................................      18.8       21.0       21.7       22.4       23.1       23.9       24.6       25.4       26.3       27.1       28.0       28.9
Labor.......................................................       8.8       11.9       12.3       12.7       13.1       13.5       13.9       14.3       14.7       15.0       15.4       15.8
State.......................................................       7.8        7.5        7.7        7.9        8.1        8.3        8.5        8.8        9.0        9.2        9.4        9.7
Transportation..............................................      14.5       18.5       19.1       19.7       20.3       20.9       21.5       22.2       22.9       23.6       24.3       25.1
Treasury....................................................      12.5       14.0       14.6       15.1       15.7       16.3       16.8       17.5       18.1       18.8       19.5       20.2
Veterans Affairs............................................      20.8       22.4       23.3       24.1       24.9       25.8       26.7       27.6       28.6       29.6       30.5       31.7
Corps of Engineers..........................................       4.1        4.6        4.7        4.8        4.9        5.1        5.2        5.4        5.5        5.7        5.8        6.0
Other Defense Civil Programs................................       0.1        0.1        0.1        0.2        0.2        0.2        0.2        0.2        0.2        0.2        0.2        0.2
Environmental Protection Agency.............................       7.6        7.8        8.0        8.2        8.5        8.7        8.9        9.1        9.4        9.6        9.9       10.2
Executive Office of the President...........................       0.3        0.3        0.3        0.3        0.3        0.3        0.4        0.4        0.4        0.4        0.4        0.4
Federal Emergency Management Agency.........................       3.9        2.4        2.5        2.5        2.6        2.6        2.7        2.8        2.8        2.9        3.0        3.0
General Services Administration.............................        -*        0.5        0.8        0.8        0.8        0.8        0.8        0.9        0.9        0.9        1.0        1.0
International Assistance Programs...........................      13.6       13.0       13.2       13.5       13.8       14.1       14.4       14.7       15.0       15.4       15.7       16.1
National Aeronautics and Space Administration...............      13.6       14.3       14.6       15.0       15.3       15.7       16.1       16.5       16.9       17.3       17.7       18.2
National Science Foundation.................................       3.9        4.4        4.5        4.6        4.7        4.8        4.9        5.0        5.1        5.2        5.4        5.5
Office of Personnel Management..............................       0.2        0.2        0.2        0.2        0.2        0.2        0.2        0.3        0.3        0.3        0.3        0.3
Small Business Administration...............................       0.9        0.3        0.9        0.9        1.0        1.0        1.0        1.0        1.0        1.1        1.1        1.1
Social Security Administration..............................       5.6        6.0        6.3        6.5        6.7        6.9        7.2        7.4        7.7        8.0        8.3        8.6
Other Independent Agencies..................................       5.8        6.3        6.6        6.7        6.9        7.0        7.4        8.4        8.6        8.8        8.9        9.1
Allowances..................................................  .........      -0.6   .........  .........  .........  .........  .........  .........  .........  .........  .........  .........
                                                             ===================================================================================================================================
Total.......................................................     586.6      636.5      662.9      680.6      699.4      718.5      738.2      759.4      780.8      802.4      824.6      847.7
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* $50 million or less.