[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.
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\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.
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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)
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Enacted
Feb. 1999 legislation/ Different Technical Net
estimate administrative economic factors change Actual
actions conditions
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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
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Total................................ 1,871.8 4.5 87.6 61.2 153.4 2,025.2
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* 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)
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Current Changes
Services -----------------------------------------
(Feb. Total Actual
1999) Policy Economic Technical changes
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Discretionary:.....................................
Defense......................................... 279.0 4.2 ........ 11.8 16.0 295.0
Nondefense...................................... 317.1 3.4 ........ -0.6 2.8 319.9
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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
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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
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Total outlays..................................... 1,774.1 27.2 -0.1 -12.4 14.7 1,788.8
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[[Page 325]]
Table 17-3. COMPARISON OF THE ACTUAL 2000 SURPLUS WITH THE INITIAL CURRENT SERVICES SURPLUS ESTIMATE
(In billions of dollars)
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Current Changes
Services -----------------------------------------
(Feb. Total Actual
1999) Policy Economic Technical changes
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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
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Surplus........................................ 97.7 -22.7 87.7 73.6 138.7 236.4
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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)
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2000
-----------------------------------------
Feb. 1999
estimate Actual Change
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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
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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
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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
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Total, veterans benefits and services........................ 24.9 26.3 1.4
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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
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Total, other functions......................................... 7.2 25.6 18.4
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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
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Total, undistributed offsetting receipts....................... -42.3 -42.6 -0.3
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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
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Total, net interest.......................................... 215.5 223.2 7.8
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Total, outlays for mandatory and net interest................ 1,178.1 1,174.0 -4.1
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[[Page 327]]
Table 17-5. RECONCILIATION OF FINAL AMOUNTS FOR 2000
(In millions of dollars)
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Receipts Outlays Surplus
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Totals published by Treasury (September 30, 2000, Monthly 2,025,038 1,788,045 236,993
Treasury Statement)............................................
Miscellaneous Treasury adjustments........................... -* 95 -95
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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
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Total adjustments, net......................................... 181 686 -505
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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......................................................
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