    [Analytical Perspectives]
    [Other Technical Presentations]
    [17. Comparison of Actual to Estimated Totals for 2000]
    [From the U.S. Government Publishing Office, www.gpo.gov]

             17.  COMPARISON OF ACTUAL TO ESTIMATED TOTALS FOR 2000

      The following three parts of this chapter compare the actual total
    receipts, outlays, and surplus for 2000 with the current services
    estimates \1\ shown in the 2000 Budget published in February 1999. The
    fourth part of this chapter shows additional details for a comparison of
    mandatory and related programs, and the final part reconciles actual
    receipts, outlays, and surplus totals for 2000 previously published by
    the Department of the Treasury with those in this budget.
    ---------------------------------------------------------------------------
      \1\ The current services concept is discussed in Chapter 14: ``Current
    Services Estimates.'' For mandatory programs and receipts the February
    1999 current services estimate is based on laws then in place. For
    discretionary programs the current services estimate is based on the
    prior year estimates adjusted for inflation.
    ---------------------------------------------------------------------------

                                    Receipts

      Receipts in 2000 were $2,025.2 billion, which is $153.4 billion
    greater than the current services estimate of $1,871.8 billion in the
    2000 Budget. As shown in Table 17-1, this increase was the net effect of
    legislative and administrative changes; economic conditions that
    differed from what had been expected; and technical factors that
    resulted in different collection patterns and effective tax rates than
    had been assumed.

       Policy differences.--The Consolidated Appropriations Act for FY 2000
    and the repeal of the Social Security earnings test increased 2000
    receipts by $3.8 billion and $1.3 billion, respectively. Other
    legislative and administrative changes enacted after February 1999
    partially offset the increases provided in these two Acts, resulting in
    a net increase in 2000 receipts relative to the February 1999 current
    services estimate of $4.5 billion.
      Economic differences.--Differences between the economic assumptions
    upon which the current services estimates were made and actual economic
    performance accounted for a net increase in 2000 receipts of $87.6
    billion. Higher-than-anticipated wages and salaries and other sources of
    personal income were in large part responsible for the increases in
    individual income taxes and social insurance and retirement receipts of
    $39.0 billion and $16.2 billion, respectively. Increased corporation
    income taxes, attributable to higher-than-expected corporate profits,
    increased 2000 receipts by an additional $24.7 billion relative to the
    February 1999 estimate. Excise taxes were also higher than the budget
    estimate, in large part due to higher-than-estimated levels of gross
    domestic product (GDP). Higher-than-expected imports, which affect
    customs duties, and higher-than-expected interest rates, which affect
    deposits of earnings by the Federal Reserve (miscellaneous receipts),
    increased receipts above the budget estimates by an additional $1.8
    billion and $3.9 billion, respectively.
      Technical reestimates.--Technical factors increased 2000 receipts a
    net $61.2 billion above the February 1999 current services estimate.
    This net increase was in large part attributable to higher-than-
    anticipated collections of individual income taxes and estate and gift
    taxes, which were partially offset by lower-than-anticipated collections
    of corporation income taxes. Higher effective tax rates on personal
    income than estimated in February 1999, and the continued strength of
    the stock market and its effect on capital gains, were in large part
    responsible for the increase in individual income taxes of $61.2
    billion. Greater-than-anticipated numbers and values of taxable estates,
    attributable in large part to the continued strength of the stock
    market, increased estate and gift taxes $2.4 billion above the budget
    estimate. Different collection patterns and effective tax rates than
    assumed in February 1999 were primarily responsible for the lower-than-
    anticipated collections of corporation income taxes of $3.1 billion.

               Table 17-1.  COMPARISON OF ACTUAL 2000 RECEIPTS WITH THE INITIAL CURRENT SERVICES ESTIMATES
                                                (In billions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                             Enacted
                                              Feb. 1999   legislation/    Different  Technical     Net
                                               estimate  administrative   economic    factors     change     Actual
                                                             actions     conditions
    ----------------------------------------------------------------------------------------------------------------
    Individual income taxes.................     902.1           2.2          39.0       61.2      102.4    1,004.5
    Corporation income taxes................     186.5          -0.8          24.7       -3.1       20.8      207.3
    Social insurance and retirement receipts     636.2   ..............       16.2        0.4       16.6      652.9
    Excise taxes............................      65.2             *           2.2        1.4        3.6       68.9
    Estate and gift taxes...................      26.7   ..............       -0.1        2.4        2.3       29.0
    Customs duties..........................      19.6          -0.6           1.8       -0.9        0.3       19.9
    Miscellaneous receipts..................      35.4           3.8           3.9       -0.2        7.4       42.8
                                             -----------------------------------------------------------------------
       Total................................   1,871.8           4.5          87.6       61.2      153.4   2,025.2
    ----------------------------------------------------------------------------------------------------------------
    * Indicates $50 million or less.

    [[Page 324]]

                                     Outlays

      Outlays for 2000 were $1,788.8 billion. This was $14.7 billion more
    than the $1,774.1 billion current services estimate in the 2000 Budget
    (February 1999).
      Table 17-2 distributes the $14.7 billion net increase in outlays among
    discretionary and mandatory programs and net interest. Discretionary
    programs, those whose spending is controlled by annual appropriations
    acts, are $18.8 billion above the February 1999 estimate. Mandatory
    programs are those controlled by authorizing legislation. Outlays for
    mandatory programs depend on eligibility criteria, benefit levels, and
    other factors established in law. Major examples of these programs
    include Social Security and Medicare benefits for the elderly,
    agricultural price support payments to farmers, and deposit insurance
    for banks and thrift institutions. On net, mandatory outlays are $11.8
    billion below the February 1999 estimate.
      The table also makes rough estimates according to three reasons for
    the changes: policy; economic conditions; and technical estimating
    differences, a residual.

       Policy changes are the result of actions by the Congress or the
    Administration that change spending levels, primarily through higher or
    lower appropriations or changes in authorizing legislation. For 2000,
    policy changes increased outlays an estimated $27.2 billion relative to
    the initial current services estimates.
      Policy changes increased discretionary outlays by $7.6 billion,
    because outlays from final appropriations were above the current
    services estimates. Defense discretionary outlays increased by $4.2
    billion and nondefense discretionary outlays increased by $3.4 billion.
    Policy changes increased mandatory outlays by $18.9 billion above
    current law. The largest changes were increases of $14.0 billion for
    emergency and non-emergency spending for agricultural programs and a
    $4.5 billion increase in Social Security benefit payments from repealing
    the Social Security earnings test.
      Economic conditions that differed from those forecasted in February
    1999 resulted in a net decrease in outlays of $0.1 billion. Outlays for
    mandatory programs decreased an estimated $7.8 billion, largely due to
    lower-than-expected unemployment rates, which in turn reduced outlays
    for unemployment compensation and food stamps. Most of this reduction
    was offset by an increase of $7.7 billion in net interest due to a
    combination of higher-than-projected interest rates, partially offset by
    decreased borrowing requirements that resulted from the effect of
    economic factors on receipts and outlays.
      Technical estimating differences and other changes resulted in a net
    decrease in outlays of $12.4 billion. Outlays for discretionary programs
    increased an estimated $11.2 billion, largely due to higher-than-
    estimated outlays for defense programs. Technical changes for mandatory
    programs result from changes in such factors as the number of
    beneficiaries for entitlement programs, crop conditions, or other
    factors not associated with policy changes or economic conditions.
    Outlays for mandatory programs decreased an estimated $23.0 billion,
    largely due to lower-than-anticipated outlays for Medicare. Medicare
    spending decreased by over $20 billion due to overestimation of benefit
    expenditures, in particular those in the areas of inpatient hospital
    care and home health.

                                     Surplus

      The preceding two sections discussed the differences between the
    initial current services estimates and the actual amounts of Federal
    Government receipts and outlays for 2000. This section combines these
    effects to show the net impact of these differences on the surplus.

       As shown in Table 17-3, the 2000 current services surplus was
    initially estimated to be $97.7 billion. The actual surplus was $236.4
    billion, which was a $138.7 billion increase from the initial estimate.
    Receipts were $153.4 billion more than the initial estimate, and outlays
    were $14.7 billion more. The table shows the distribution of the changes
    according to the categories in the preceding two sections.

               Table 17-2.  COMPARISON OF ACTUAL 2000 OUTLAYS WITH THE INITIAL CURRENT SERVICES ESTIMATES
                                                (In billions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                          Current                  Changes
                                                         Services -----------------------------------------
                                                           (Feb.                                    Total    Actual
                                                           1999)    Policy   Economic  Technical   changes
    ----------------------------------------------------------------------------------------------------------------
    Discretionary:.....................................
       Defense.........................................     279.0       4.2  ........       11.8      16.0     295.0
       Nondefense......................................     317.1       3.4  ........       -0.6       2.8     319.9
                                                        ------------------------------------------------------------
         Subtotal, discretionary.......................     596.1       7.6  ........       11.2      18.8     614.8

    Mandatory:
       Social Security.................................     405.2       4.5      -0.1       -3.6       0.8     406.0
       Other programs..................................     557.4      14.4      -7.7      -19.4     -12.7     544.7
                                                        ------------------------------------------------------------
         Subtotal, mandatory...........................     962.6      18.9      -7.8      -23.0     -11.8     950.8
    Net interest.......................................     215.5       0.7       7.7       -0.6       7.8     223.2
                                                        ------------------------------------------------------------
     Total outlays.....................................   1,774.1      27.2      -0.1      -12.4      14.7   1,788.8
    ----------------------------------------------------------------------------------------------------------------

    [[Page 325]]

          Table 17-3.  COMPARISON OF THE ACTUAL 2000 SURPLUS WITH THE INITIAL CURRENT SERVICES SURPLUS ESTIMATE
                                                 (In billions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                          Current                  Changes
                                                         Services -----------------------------------------
                                                           (Feb.                                    Total    Actual
                                                           1999)    Policy   Economic  Technical   changes
    ----------------------------------------------------------------------------------------------------------------
    Receipts...........................................   1,871.8       4.5      87.6       61.2     153.4   2,025.2

    Outlays............................................   1,774.1      27.2      -0.1      -12.4      14.7   1,788.8
                                                        ------------------------------------------------------------

        Surplus........................................      97.7     -22.7      87.7       73.6     138.7    236.4
    ----------------------------------------------------------------------------------------------------------------
    Note: Surplus changes are receipts minus outlays.

      The net effect of policy changes for receipts and outlays reduced the
    surplus by $22.7 billion. Economic conditions that differed from the
    initial assumptions in February 1999 accounted for an estimated $87.7
    billion increase in the surplus, almost entirely due to higher receipts.
    Technical factors increased the surplus by an estimated $73.6 billion.
    This was due to an increase in receipts of $61.2 billion and a decrease
    in outlays of $12.4 billion.

    Comparison of the Actual and Estimated Outlays for Mandatory and Related
                                Programs for 2000

      This section compares the original 2000 outlay estimates for mandatory
    and related programs under current law in the 2000 Budget (February
    1999) with the actual outlays. This section includes net interest
    outlays and undistributed offsetting receipts. Net interest outlays
    consist of interest paid on Treasury debt securities, interest received
    by on and off-budget trust funds, and other interest earnings and
    payments. Undistributed offsetting receipts include Federal employer
    contributions to retirement trust funds, rents and royalties on the
    Outer Continental Shelf, and spectrum auction receipts.
      A number of factors may cause differences between the amounts
    estimated in the budget and the actual outlays. For example, legislation
    may change benefit rates or coverage; the actual number of beneficiaries
    may differ from the number estimated; or economic conditions (such as
    inflation or interest rates) may differ from what was assumed in making
    the original estimates.
      Table 17-4 shows the differences between the actual outlays for these
    programs in 2000 and the amounts originally estimated in the 2000
    Budget, based on laws in effect at that time. Actual outlays for
    mandatory spending and net interest in 2000 were $1,174.0 billion, which
    was $4.1 billion less than the estimate based on existing law in
    February 1999.
      Actual outlays for mandatory human resources programs were $967.8
    billion, $30.0 billion less than originally estimated. This decrease was
    the net effect of legislative action, differences between actual and
    assumed economic conditions, differences between the anticipated and
    actual number of beneficiaries, and other technical differences.
      Outlays for other functions were $18.4 billion more than originally
    estimated, largely because of increases of $21.0 billion for agriculture
    programs. Undistributed offsetting receipts were $0.3 billion more than
    expected.
      Outlays for net interest were $223.2 billion or $7.8 billion more than
    the original estimate. This increase was the net impact of changes in
    interest rates from those initially assumed, lower borrowing
    requirements due to surpluses in 1999 and 2000, and technical factors.

      Reconciliation of Differences with Amounts Published by Treasury for
                                      2000

       Table 17-5 provides a reconciliation of the receipts, outlays, and
    surplus totals published by the Department of the Treasury in the
    September 30, 2000, Monthly Treasury Statement and those published in
    this budget. The Department of the Treasury made technical adjustments
    to the estimates for the U.S. Government Annual Report, which increased
    outlays by $95 million. Additional adjustments made for this budget
    increased receipts by $181 million and increased outlays by $686
    million. The major changes were for Federal family education loans,
    student loan reserve funds, and transactions of the United Mine Workers
    of America benefit funds.

    [[Page 326]]

      Table 17-4.  COMPARISON OF ACTUAL AND ESTIMATED OUTLAYS FOR MANDATORY AND RELATED PROGRAMS UNDER CURRENT LAW
                                                (In billions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                                              2000
                                                                           -----------------------------------------
                                                                              Feb. 1999
                                                                              estimate       Actual        Change
    ----------------------------------------------------------------------------------------------------------------
    Mandatory outlays:
      Human resources programs:
         Education, training, employment, and social services.............        14.9          10.3          -4.56
         Health:
           Medicaid.......................................................       114.8         117.9           3.1
           Other..........................................................         7.9           6.6          -1.3
                                                                           -----------------------------------------
             Total, health................................................       122.8         124.5           1.8

         Medicare.........................................................       214.9         194.1         -20.8

         Income security:
           Retirement and disability......................................        83.8          81.6          -2.2
           Unemployment compensation......................................        25.6          20.7          -4.9
           Food and nutrition assistance..................................        31.6          28.0          -3.6
           Other..........................................................        73.9          76.1           2.2
                                                                           -----------------------------------------
             Total, income security.......................................       215.0         206.5          -8.5

         Social security..................................................       405.2         406.0           0.8

         Veterans benefits and services:
           Income security for veterans...................................        23.3          24.9           1.6
           Other..........................................................         1.6           1.5          -0.2
                                                                           -----------------------------------------
             Total, veterans benefits and services........................        24.9          26.3           1.4
                                                                           -----------------------------------------
             Total, mandatory human resources programs....................       997.7         967.8         -30.0

       Other functions:
         Agriculture......................................................        10.9          32.0          21.0
         Deposit insurance................................................        -2.2          -3.1          -0.8
         Other functions..................................................        -1.5          -3.3          -1.8
                                                                           -----------------------------------------
           Total, other functions.........................................         7.2          25.6          18.4
                                                                           -----------------------------------------
       Undistributed offsetting receipts:
         Employer share, employee retirement..............................       -37.0         -37.9          -0.9
         Rents and royalties on the outer continental shelf...............        -2.8          -4.6          -1.8
         Other undistributed offsetting receipts..........................        -2.5          -0.2           2.4
                                                                           -----------------------------------------
           Total, undistributed offsetting receipts.......................       -42.3         -42.6          -0.3
                                                                           -----------------------------------------
             Total, mandatory.............................................       962.6         950.8         -11.8

    Net interest:.........................................................
       Interest on Treasury debt securities (gross).......................       346.6         362.0          15.4
       Interest received by trust funds...................................      -125.0        -128.9          -3.9
       Other interest.....................................................        -6.2          -9.9          -3.7
                                                                           -----------------------------------------
             Total, net interest..........................................       215.5         223.2           7.8
                                                                           -----------------------------------------
             Total, outlays for mandatory and net interest................     1,178.1       1,174.0          -4.1
    ----------------------------------------------------------------------------------------------------------------

    [[Page 327]]

                                  Table 17-5.  RECONCILIATION OF FINAL AMOUNTS FOR 2000
                                                (In millions of dollars)
    ----------------------------------------------------------------------------------------------------------------
                                                                         Receipts         Outlays         Surplus
    ----------------------------------------------------------------------------------------------------------------
    Totals published by Treasury (September 30, 2000, Monthly              2,025,038       1,788,045         236,993
     Treasury Statement)............................................
       Miscellaneous Treasury adjustments...........................              -*              95             -95
                                                                     -----------------------------------------------
    Adjustments: Totals published by Treasury in U.S. Government           2,025,037       1,788,140         236,897
     Annual Report..................................................
       Federal family education loans...............................  ..............             731            -731
       Student loan reserve funds...................................  ..............            -139             139
       United Mine Workers of America benefit funds.................             155             155  ..............
       Other........................................................              26             -61              87
                                                                     -----------------------------------------------
     Total adjustments, net.........................................             181             686            -505
                                                                     -----------------------------------------------
    Totals in the budget............................................       2,025,218       1,788,826         236,392

                               MEMORANDUM:

     Total change since September 30, 2000, Monthly Treasury                     180             781            -601
     Statement......................................................
    ----------------------------------------------------------------------------------------------------------------