[Analytical Perspectives]
[Federal Receipts and Collections]
[5. User Fees and Other Collections]
[From the U.S. Government Publishing Office, www.gpo.gov]
[[Page 83]]
5. USER FEES AND OTHER COLLECTIONS
In addition to collecting taxes and other receipts by the exercise of
its sovereign powers, which is discussed in the previous chapter, the
Federal Government collects income from the public from market-oriented
activities and the financing of regulatory expenses. Some of these
collections are classified as user fees, which include the sale of
postage stamps and electricity, fees for admittance to national parks,
and premiums for deposit insurance; and some are other offsetting
collections or receipts, such as rents and royalties for the right to
extract oil from the Outer Continental Shelf.
Depending on the laws that authorize the collections, the collections
can be credited directly to expenditure accounts as ``offsetting
collections,'' or to receipt accounts as ``offsetting receipts.''
Usually offsetting collections are authorized to be spent for the
purposes of the account without further action by the Congress.
Offsetting receipts may or may not be earmarked for a specific purpose,
depending on the legislation that authorizes them, and the authorizing
legislation may either authorize them to be spent without further action
by the Congress, or require them to be appropriated in annual
appropriations acts before they can be spent.
The budget refers to them as offsetting collections and offsetting
receipts, because they are subtracted from gross outlays rather than
added to taxes on the receipts side of the budget. The purpose of this
treatment is to produce budget totals for receipts, outlays, and budget
authority in terms of the amount of resources allocated governmentally,
through collective political choice, rather than through the market. \1\
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\1\ Showing collections from business-type transactions as offsets on
the spending side of the budget follows the concept recommended by the
1967 Report of the President's Commission on Budget Concepts. The
concept is discussed in Chapter 25: ``Budget System and Concepts and
Glossary'' in this volume.
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Offsetting collections and receipts include most user fees, which are
discussed below, as well as some amounts that are not user fees. Table
5-1 summarizes these transactions. For 2003, total offsetting
collections and receipts from the public are estimated to be $231.2
billion, and total user fees are estimated to be $154.3 billion.
The following section discusses user fees and the Administration's
user fee proposals. The subsequent section displays more information on
offsetting collections and receipts. The offsetting collections and
receipts by agency are also displayed in Table 21-1, ``Outlays to the
Public, Net and Gross,'' which appears in Chapter 21 of this volume.
Table 5-1. GROSS OUTLAYS, USER FEES, OTHER OFFSETTING COLLECTIONS AND RECEIPTS FROM THE PUBLIC, AND NET OUTLAYS
(In billions of dollars)
----------------------------------------------------------------------------------------------------------------
Estimate
2001 -----------------------
Actual 2002 2003
----------------------------------------------------------------------------------------------------------------
Gross outlays............................................................... 2,084.5 2,275.7 2,359.5
Offsetting collections and receipts from the public:
User fees \1\........................................................... -132.1 -140.2 -152.7
Other................................................................... -88.4 -83.2 -78.5
-----------------------------------
Subtotal, offsetting collections and receipts from the public............. -220.6 -223.4 -231.2
-----------------------------------
Net outlays................................................................. 1,863.9 2,052.3 2,128.2
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\1\ Total user fees are shown below. They include user fees that are classified on the receipts side of the
budget in addition to the amounts shown on this line. For additional details of total user fees, see table 5-
2. ``Total User Fee Collections.''
Total user fees:
Offsetting collections and receipts from the public.................... 132.1 140.2 152.7
Receipts............................................................... 1.5 1.5 1.6
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Total, user fees......................................................... 133.7 141.6 154.3
[[Page 84]]
USER FEES
I. Introduction and Background
The Federal Government may charge user fees to those who benefit
directly from a particular activity or those subject to regulation.
According to the definition of user fees used in this chapter, Table 5-2
shows that user fees were $133.7 billion in 2001, and are estimated to
increase to $141.6 billion in 2002 and to $154.3 billion in 2003,
growing to an estimated $176.9 billion in 2007, including the user fee
proposals that are shown in Table 5-3. This table shows that the
Administration is proposing to increase user fees by an estimated $1.5
billion in 2003, growing to an estimated $2.9 billion in 2007.
Definition. The term ``user fee'' as defined here is fees, charges,
and assessments levied on groups or individuals directly benefitting
from, or subject to regulation by, a government program or activity, and
to be utilized solely to support the program or activity. In addition,
the payers of the fee must be limited to those benefitting from, or
subject to regulation by, the program or activity, and may not include
the general public or a broad segment of the public. The user fee must
be authorized for use only to fund the specified programs or activities
for which it is charged, including directly associated agency functions,
not for unrelated programs or activities and not for the broad purposes
of the Government or an agency.
Examples of business-type or market-oriented user fees
include fees for the sale of postal services (the sale of
stamps), electricity (e.g., sales by the Tennessee Valley
Authority), payments for Medicare voluntary supplemental
medical insurance, life insurance premiums for veterans,
recreation fees for parks, NASA fees for shuttle services, the
sale of weather maps and related information by the Department
of Commerce, the sale of commemorative coins, and fees for the
sale of books.
Examples of regulatory and licensing user fees include fees
for regulating the nuclear energy industry, bankruptcy filing
fees, immigration fees, food inspection fees, passport fees,
and patent and trademark fees.
User fees do not include all offsetting collections and receipts, such
as the interest and repayments received from credit programs; proceeds
from the sale of loans and other financial investments; interest,
dividends, and other earnings; cost sharing contributions; the sale of
timber, minerals, oil, commodities, and other natural resources;
proceeds from asset sales (property, plant, and equipment); Outer
Continental Shelf receipts; or spectrum auction proceeds. Neither do
they include earmarked taxes (such as taxes paid to social insurance
programs or excise taxes), or customs duties, fines, penalties, and
forfeitures.
Alternative definitions. The definition used in this chapter is useful
because it identifies goods, services, and regulations financed by
earmarked collections and receipts.\2\ Other definitions may be used for
other purposes. Much of the discussion of user fees below--their
purpose, when they should be levied, and how the amount should be set--
applies to these alternatives as well.
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\2\ The definition of user fees used here is similar to one the House
of Representatives uses as a guide for purposes of committee
jurisdiction. The definition helps differentiate between taxes, which
are under the jurisdiction of the Ways and Means Committee, and fees,
which can be under the jurisdiction of other committees. See the
Congressional Record, January 3, 1991, p. H31, item 8.
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OMB uses the broader concept of ``user charges'' to establish policy
for charging prices to the public for the sale or use of goods,
services, property, and resources (see OMB Circular A-25, ``User
Charges,'' July 8, 1993). User charges are all amounts assessed for the
provision of Government services and for the sale or use of Government
goods, property, or resources. The payers of the user charge must be
limited in the authorizing legislation to those receiving special
benefits from, or subject to regulation by, the program or activity
beyond the benefits received by the general public or broad segments of
the public (such as those who pay income taxes or customs duties). The
term is broader than user fees as defined in this chapter in two ways.
First, user charges encompass proceeds from the sale of government goods
and services regardless of whether they are earmarked to fund the
specific program or activity for which they are charged. Second, the
term includes proceeds from the sale of natural resources (such as
timber, oil, and minerals) and asset sales (such as property, plant, and
equipment) as well as goods and services.
Other alternative definitions of user fees could, for example:
be narrower than the one used here, by excluding regulatory
fees and analyzing them as a separate category.
interpret more broadly whether a program has private
beneficiaries, or whether the proceeds are earmarked to
benefit directly those paying the fee. A broader
interpretation might include beneficiary- or liability-based
excise taxes.\3\
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\3\ Beneficiary- and liability-based taxes are terms taken from the
Congressional Budget Office, The Growth of Federal User Charges, August
1993, and updated in October 1995. Examples of beneficiary-based taxes
include taxes on gasoline, which finance grants to States for highway
construction, or taxes on airline tickets, which finance air traffic
control activities and airports. An example of a liability-based tax is
the excise tax that formerly helped fund the hazardous substance
superfund in the Environmental Protection Agency. This tax was paid by
industry groups to finance environmental cleanup activities related to
the industry activity but not necessarily caused by the payer of the
fee.
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What is the purpose of user fees? The purpose of user fees is to
improve the efficiency and equity of certain Government activities, and
to reduce the burden on the taxpayer to finance activities whose
benefits accrue to a relatively limited number of people.
User fees that are set to cover the costs of production of goods and
services can provide efficiency in the allocation of resources within
the economy. They allocate goods and services to those who value them
the most, and they signal to the Government how much of the goods or
services it should provide. Prices in private, competitive markets serve
the same purposes.
[[Page 85]]
User fees for goods and services that do not have special social
benefits improve equity, or fairness, by requiring that those who
benefit from an activity are the same people who pay for it. The public
often perceives user fees as fair because those who benefit from the
good or service pay for it in whole or in part, and those who do not
benefit do not pay.
When should the Government charge a fee? Discussions of whether to
finance spending with a tax or a fee often focus on whether the benefits
of the activity are to the public in general or to a limited group of
people. In general, if the benefits accrue broadly to the public, then
the program should be financed by taxes paid by the public; in contrast,
if the benefits accrue to a limited number of private individuals or
groups, then the program should be financed by fees paid by the private
beneficiaries. For Federal programs where the benefits are entirely
public or entirely private, applying this principle is relatively easy.
For example, according to this principle, the benefits from national
defense accrue to the public in general and should be (and are) financed
by taxes. In contrast, the benefits of electricity sold by the Tennessee
Valley Authority accrue exclusively to those using the electricity, and
should be (and are) financed by user fees.
In many cases, however, an activity has benefits that accrue to both
public and to private groups, and it may be difficult to identify how
much of the benefits accrue to each. Because of this, it can be
difficult to know how much of the program should be financed by taxes
and how much by fees. For example, the benefits from recreation areas
are mixed. Fees for visitors to these areas are appropriate because the
visitors benefit directly from their visit, but the public in general
also benefits because these areas protect the Nation's natural and
historical heritage now and for posterity.
As a further complication, where a fee may be appropriate to finance
all or part of an activity, some consideration must be given to the ease
of administering the fee.
What should be the amount of the fee? For programs that have private
beneficiaries, the amount of the fee should depend on the costs of
producing the goods or services and the portion of the program that is
for private benefits. If the benefit is primarily private, and any
public benefits are incidental, current policies support fees that cover
the full cost to the Government, including both direct and indirect
costs.\4\
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\4\ Policies for setting user charges are promulgated in OMB Circular
No. A-25: ``User Charges'' (July 8, 1993). These policies are required
regardless of whether or not the proceeds are earmarked to finance the
related activity.
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The Executive Branch is working to put cost accounting systems in
place across the Government that would make the calculation of full cost
more feasible. The difficulties in measuring full cost are associated in
part with allocating to an activity the full costs of capital,
retirement benefits, and insurance, as well as other Federal costs that
may appear in other parts of the budget. Guidance in the Statement of
Federal Financial Accounting Standards No. 4, Managerial Cost Accounting
Concepts and Standards for the Federal Government (July 31, 1995),
should underlie cost accounting in the Federal Government.
Classification of user fees in the budget. As shown in Table 5-1, most
user fees are classified as offsets to outlays on the spending side of
the budget, but a few are classified on the receipts side of the budget.
An estimated $1.6 billion in 2003 are classified this way and are
included in the totals described in Chapter 4. ``Federal Receipts.''
They are classified as receipts because they are regulatory fees
collected by the Federal Government by the exercise of its sovereign
powers.
The remaining user fees, an estimated $152.7 billion in 2003, are
classified as offsetting collections and receipts on the spending side
of the budget. Some of these are collected by the Federal Government by
the exercise of its sovereign powers and would normally appear on the
receipts side of the budget, but are required by law to be classified as
offsetting collections or receipts.
An estimated $108.8 billion of user fees for 2003 are credited
directly to expenditure accounts, and are generally available for
expenditure when they are collected, without further action by the
Congress. An estimated $43.9 billion of user fees for 2003 are deposited
in offsetting receipt accounts, and are available to be spent only
according to the legislation that established the fees.
As a further classification, the accompanying Tables 5-2 and 5-3
identify the fees as discretionary or mandatory. These classifications
are terms from the Budget Enforcement Act of 1990 as amended and are
used frequently in the analysis of the budget. ``Discretionary'' in this
chapter refers to fees generally controlled through annual
appropriations acts and under the jurisdiction of the appropriations
committees in the Congress. These fees offset discretionary spending
under the discretionary caps. ``Mandatory'' refers to fees controlled by
permanent laws and under the jurisdiction of the authorizing committees.
These fees are subject to rules of paygo, whereby changes in law
affecting mandatory programs and receipts cannot result in a net cost.
Mandatory spending is sometimes referred to as direct spending.
These and other classifications are discussed further in this volume
in Chapter 25, ``Budget System and Concepts and Glossary.''
II. Current User Fees
As shown in Table 5-2, total user fee collections (including those
proposed in this budget) are estimated to be $154.3 billion in 2003,
increasing to $176.9 billion in 2007. User fee collections by the Postal
Service and Medicare premiums are the largest and are estimated to be
almost two-thirds of total user fee collections in 2003.
[[Page 86]]
Table 5-2. TOTAL USER FEE COLLECTIONS
(In millions of dollars)
----------------------------------------------------------------------------------------------------------------
Estimates
2001 -----------------------------------------------------------
Actual 2002 2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------------
Receipts
Agricultural quarantine inspection fees... 265 215 260 259 266 272 279
Corps of Engineers, Harbor maintenance 722 733 823 839 909 972 1,005
fees.....................................
Other governmental receipts user fees..... 545 515 532 538 548 552 559
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Subtotal, receipts...................... 1,532 1,463 1,615 1,636 1,723 1,796 1,843
Offsetting Collections and Receipts from
the Public
Discretionary
Department of Agriculture: Food safety 153 185 221 233 238 241 246
inspection and other fees..............
Department of Commerce: Patent and 1,366 1,665 1,826 1,985 2,145 2,299 2,405
trademark, fees for weather services,
and other fees.........................
Department of Defense: Commissary and 5,834 5,828 6,052 6,052 6,052 6,052 6,052
other fees.............................
Department of Energy: Federal Energy 917 1,297 1,276 1,303 1,329 1,362 1,393
Regulatory Commission, power marketing,
and other fees.........................
Department of Health and Human Services: 273 294 529 531 543 545 549
Food and Drug Administration, Centers
for Medicare and Medicaid Services, and
other fees.............................
Department of the Interior: Minerals 212 210 209 212 217 223 227
Management Service and other fees......
Department of Justice: Antitrust and 304 414 435 441 446 452 458
other fees.............................
Department of State: Passport and other 544 508 656 670 685 701 717
fees...................................
Department of Transportation: Railroad 38 144 381 629 640 652 665
safety, navigation, and other fees.....
Department of the Treasury: Sale of 1,489 1,257 1,910 1,439 1,470 1,505 1,539
commemorative coins and other fees.....
Department of Veterans Affairs: Medical 774 808 1,087 1,288 1,377 1,467 1,558
care and other fees....................
Social Security Administration: State 91 106 111 119 126 134 143
supplemental fees, supplemental
security income........................
Federal Communications Commission: 208 227 248 253 258 264 270
Regulatory fees........................
Federal Trade Commission: Regulatory 91 163 178 182 187 192 197
fees...................................
Nuclear Regulatory Commission: 453 479 518 523 528 545 563
Regulatory fees........................
Securities and Exchange Commission: 735 1,149 1,332 1,542 1,837 2,171 1,142
Regulatory fees........................
All other agencies, discretionary user 220 267 293 338 346 354 365
fees...................................
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Subtotal, discretionary user fees..... 13,702 15,001 17,262 17,740 18,424 19,159 18,489
Mandatory
Department of Agriculture: Crop 1,240 1,100 1,097 1,198 1,237 1,199 1,215
insurance and other fees...............
Department of Defense: Commissary 265 743 599 599 599 599 599
surcharge and other fees...............
Department of Energy: Proceeds from the 4,851 4,623 4,508 4,650 4,295 4,246 4,237
sale of energy, nuclear waste disposal
fees, and other fees...................
Department of Health and Human Services: 23,764 25,637 27,363 29,063 31,082 33,264 35,568
Medicare Part B insurance premiums and
other fees.............................
Department of the Interior: Recreation 634 672 626 641 643 646 649
and other fees.........................
Department of Justice: Immigration and 1,821 2,241 2,320 2,312 2,352 2,394 2,438
other fees.............................
Department of Labor: Insurance premiums 850 886 829 818 830 827 823
to guaranty private pensions...........
Department of the Treasury: Customs, 1,929 1,992 2,143 717 736 751 766
bank regulation, and other fees........
Department of Veterans Affairs: Veterans 1,553 1,974 2,114 2,101 2,059 2,077 2,035
life insurance and other fees..........
Federal Emergency Management Agency: 1,603 1,729 1,785 1,839 1,906 1,980 2,069
Flood insurance fees...................
Office of Personnel Management: Federal 7,404 8,037 9,881 10,680 11,372 12,091 12,886
employee health and life insurance fees
Federal Communications Commission: ........ ........ ........ ........ ........ ........ 500
Analog spectrum lease fee..............
Federal Deposit Insurance Corporation: 83 86 893 2,123 2,274 2,333 2,375
Deposit insurance fees.................
Postal Service: Fees for postal services 64,871 67,794 73,727 75,796 77,996 79,996 81,996
Tennessee Valley Authority: Proceeds 7,326 7,348 7,205 7,462 7,674 7,806 8,018
from the sale of energy................
All other agencies, mandatory user fees. 224 322 337 372 384 397 405
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Subtotal, mandatory user fees......... 118,418 125,184 135,427 140,371 145,439 150,606 156,579
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Subtotal, offsetting collections and 132,120 140,185 152,689 158,111 163,863 169,765 175,068
receipts from the public...............
=====================================================================
Total, User fees.......................... 133,652 141,648 154,304 159,747 165,586 171,561 176,911
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User fee collections are used to offset outlays in both the
discretionary and mandatory parts of the budget. User fee collections
classified in the discretionary part of the budget are estimated to be
$17.3 billion in 2003, and those in the mandatory part are estimated to
be $135.4 billion in 2003.
[[Page 87]]
III. User Fee Proposals
As shown in Table 5-3, the Administration is proposing new or
increased user fees that would increase collections by an estimated $1.5
billion in 2003, increasing to $2.9 billion in 2007.
A. User Fee Proposals to Offset Discretionary Spending
1. Offsetting collections
Department of Agriculture
Animal and Plant Health Inspection Service.--Legislation will be
proposed to establish user fees for APHIS costs for animal welfare
inspections, such as for animal research centers, humane societies, and
kennels.
Grain Inspection, Packers and Stockyards Administration.--Legislation
will be proposed to establish a fee for the standardization activities
of the Grain Inspection, Packers and Stockyards Administration, and a
licensing fee to cover the costs of administering these programs.
Table 5-3. USER FEE PROPOSALS
(Estimated collections in millions of dollars)
----------------------------------------------------------------------------------------------------------------
2003 2004 2005 2006 2007 2003-2007
----------------------------------------------------------------------------------------------------------------
DISCRETIONARY
1. Offsetting collections
Department of Agriculture
Animal Plant and Health Inspection Service............ 5 5 5 5 5 25
Grain Inspection, Packers, and Stockyards 29 29 29 29 29 145
Administration.......................................
Department of Commerce
Patent and Trademark Office: Increase current fees and ....... 136 79 40 40 295
raise fee rates......................................
International Trade Administration: Increased fee 10 10 10 10 10 50
revenues for export promotion........................
Department of Health and Human Services
User fees for Medicare providers for paper claims and 130 130 130 130 130 650
duplicate or unprocessable claims....................
Food and Drug Administration: Fees for the review of 272 272 272 272 272 1,360
new prescription drugs...............................
Department of State
Machine readable visa fee............................. 139 144 150 155 161 749
Commodity Futures Trading Commission
Fees on each round-turn commodities futures and 33 70 73 78 83 337
options transactions.................................
Federal Trade Commission
Do Not Call List fee.................................. 3 3 3 3 3 15
2. Offsetting receipts
Department of Transportation
Hazardous materials transportation safety fees........ 6 25 25 25 25 106
Railroad safety inspection fees....................... 59 120 122 124 127 552
Coast Guard commercial navigation assistance fee...... 165 330 336 342 349 1,522
Department of the Treasury
Customs Service air/sea passenger fee and cruise 250 ....... ....... ....... ....... 250
vessel fee...........................................
Department of Veterans Affairs
Implement $1,500 deductible for priority level 7 (non- 363 381 400 420 441 2,005
disabled, higher income) veterans for health care....
Environmental Protection Agency
Abolish cap on pre-manufacturing notification fees.... 4 8 8 8 8 36
Nuclear Regulatory Commission
Extend NRC fees at their 2005 level for 2006 and later ....... ....... ....... 345 357 702
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Subtotal, discretionary fee proposals............... 1,468 1,663 1,642 1,986 2,040 8,799
MANDATORY
1. Offsetting collections
Federal Emergency Managment Agency
Flood insurance fees.................................. 8 43 83 130 191 455
2. Offsetting receipts
Department of Agriculture
Food Safety and Inspection Service user fees.......... ....... 72 72 74 74 292
Forest Service ski fee permits........................ ....... 3 10 14 15 42
Forest Service recreation and entrance fees........... ....... ....... 43 44 44 131
Department of the Interior
Recreation and entrance fees.......................... ....... ....... 43 44 44 131
Corps of Engineers
Recreation user fees.................................. 6 11 16 21 21 75
Federal Communications Commission
Analog spectrum lease fee............................ ....... ....... ....... ....... 500 500
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Subtotal, mandatory user fee proposals.............. 14 129 267 327 889 1,626
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Total, user fee proposals......................... 1,482 1,792 1,909 2,313 2,929 10,425
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Department of Commerce
Patent and Trademark Office.--The Administration proposes changes to
patent and trademark fee schedules effective in 2004 to fully support
the PTO's long-term objectives to reduce application processing times
and increase patent and trademark quality. As a first step, the
Administration is proposing a one-year surcharge on all patent and
trademark fees in 2003 as a proxy for the draft legislation.
International Trade Administration.--The Budget proposes an increase
in fee collections of $10 million in 2003 and later years for ITA. In
addition, ITA will study different fee options in 2002 to determine an
appropriate model for cost recovery from firms that receive trade
promotion services.
Department of Health and Human Services
User Fees for Medicare providers for paper claims and duplicate or
unprocessable claims.--The Administration is proposing new user fees for
providers submitting paper claims and duplicate or unprocessable claims.
Under this proposal, providers would be charged $1.50 for every paper
claim submitted for payment. The fee is necessary because processing
paper claims is more costly than processing electronic claims. Paper
claim fees would be waived for rural and poor providers.
The Centers for Medicare and Medicaid Services and its contractors go
to great lengths to ensure that providers are aware of billing
requirements and the need to submit accurate claims. Charging a fee for
duplicate or unprocessable claims would heighten provider awareness of
these issues and increase efficiency by deterring this action.
Fees for the review of new prescription drugs.--The Administration is
proposing the reauthorization of the Prescription Drug User Fee Act
(PDUFA). Originally authorized in 1992 and reauthorized in 1997, PDUFA
assesses user fees to pharmaceutical manufacturers for the Food and Drug
Administration (FDA) review of new prescription drugs for safety and
efficacy. FDA review of a new prescription drug is required before these
drugs are available to consumers on the market. Spending financed by
these fees would be in addition to regular appropriations.
Department of State
Machine readable visa fee.--The State Department plans to increase
machine readable visa (MRV) collection fees by more than 30 percent,
from $45 to $65. Since 1996, MRVs have been available at all 221 U.S.
visa issuing posts around the world. These visas provide increased
border security control through the use of biometric technology. MRVs
currently include digitized photographs and personal information related
to the traveler. However, they have the capability to encode retinal
images, fingerprints and other personal details, which can then be read
electronically and relayed to other Federal agencies to be compared to
other database information. Approximately 5 million visas are processed
annually.
Commodity Futures Trading Commission
Fees on each round-turn commodities futures and options
transactions.--The Commodities Futures Trading Commission regulates U.S.
futures and options markets. It strives to protect investors by
preventing fraud and abuse and ensuring adequate disclosure of
information. The President's Budget includes a fee on each round-turn
commodities futures and options transaction that will be phased in
during 2003. This proposal recognizes that market participants derive
direct benefits from CFTC's oversight, which provides legal certainty
and contributes to the integrity and soundness of the markets.
Federal Trade Commission
Do Not Call List fee.--The Federal Trade Commission is proposing new
fees that will be assessed, collected and used to cover costs of
developing, implementing and maintaining a national database of
telephone numbers of consumers who choose not to receive telephone
solicitations, as authorized by the Telephone Consumer and Abuse
Prevention Act.
2. Offsetting receipts
Department of Transportation
Hazardous materials transportation safety fees.--Beginning in 2003,
hazardous materials transportation safety activities previously financed
by general fund appropriations to the Research and Special Programs
Administration are proposed to be financed instead by an increase in
hazardous materials registration fees. Appropriation language is
proposed to increase the fees
[[Page 88]]
paid by shippers and carriers of hazardous materials in 2003 to fund
these safety activities.
Railroad safety inspection fee.--This proposal would fund Federal
Railroad Administration safety inspections and the safety component of
the railroad research and development program. The fees would be
collected from the primary beneficiaries of these services, the railroad
carriers, and be based upon a calculation of their usage as established
through regulations. The estimated 2003 collections are 50 percent of
the anticipated cost of safety services. In subsequent years these
services would be fully funded with user fees.
. Coast Guard commercial navigation assistance fee.--This proposal
would partially recover the costs of providing Coast Guard navigational
assistance services. The fees would be collected from the primary
beneficiaries of these services, which are commercial cargo and cruise
vessels. The estimated 2003 collections assume a six month
implementation period for this new fee and represent 50 percent of the
anticipated full year receipts.
[[Page 89]]
Department of the Treasury
Customs Service air/sea passenger fee and cruise vessel fee.--The
Administration proposes an increase in two of the user fees collected by
the Customs Service. The air/sea passenger fee was established in 1986
at $5.00 per passenger. The cruise vessel passenger fee was established
at $1.75 per passenger. The receipts from these fees are used to pay for
Customs' overtime inspections and related expenses. The air/sea fee
would increase to $11 per passenger. The cruise vessel fee would
increase to $2 per passenger. The new fee levels would help to offset
higher costs incurred by the Customs Service.
Department of Veterans Affairs
Implement a $1,500 deductible for priority level 7 veterans for health
care.--The budget request includes a proposal to establish a $1,500
annual deductible for priority level 7 veterans (non-disabled, higher-
income). This proposal is in response to the significant growth in
enrollment and usage by priority level 7 veterans over the last 3 years,
as well as anticipated future growth. The objective is to have these
veterans pay a larger portion of the cost of their health care. Coupled
with the recent increase in pharmacy copayments and decrease in
outpatient care copayments, this proposal makes certain that VA's health
care system is able to continue providing high-quality health care to
its core population--disabled and low-income veterans.
Environmental Protection Agency
Abolish cap on pre-manufacturing notification fees.--EPA collects fees
from chemical manufacturers seeking to bring new chemicals into
commerce. These fees are authorized by the Toxic Substances Control Act
and are now subject to an outdated statutory cap. The Administration is
proposing appropriations language to modify the cap so that EPA can
increase fees to fully cover the cost of the program.
Nuclear Regulatory Commission
Extend NRC fees at their 2005 level for 2006 and later.--The Omnibus
Budget Reconciliation Act (OBRA) of 1990, as amended, required that the
Nuclear Regulatory Commission (NRC) assess license and annual fees that
recover approximately 94 percent of its budget authority in 2003, less
the appropriation from the Nuclear Waste Fund. Licensees are required to
reimburse NRC for its services, because licensees benefit from such
services.
Under OBRA, as amended, the budget authority recovery requirement
decreases by 2 percentage points per year until it reaches 90 percent in
2005. After 2005, the requirement reverts to 33 percent per year. If the
90 percent requirement is not extended beyond 2005, fees would drop from
an estimated $528 million in 2005 to $200 million in 2006; with an
extension at 90 percent, fees would be an estimated $545 million in
2006, an increase of $345 million.
B. User Fee Proposals to Offset Mandatory Spending
1. Offsetting collections
Federal Emergency Management Agency
Flood insurance fees.--The Administration proposes to phase out
subsidized premiums for flood insurance for vacation homes, rental
properties, and other non-primary residences. Insurance rates for
primary residences, which represent the majority of the program's
policies, would not change under these proposal. In addition, the
Administration proposes to include the cost of expected erosion losses
for flood insurance policies in coastal areas, require that mortgage
borrowers insure the full replacement value of their properties, and end
State taxation of flood insurance polices.
2. Offsetting receipts
Department of Agriculture
Food Safety and Inspection Service.--Legislation will be proposed
replacing the existing overtime fee structure with a revised structure
that would distribute fees more proportionately between large and small
plants. Overtime fees would also apply to all inspection hours provided
after one eight hour shift. However, since the goal of the proposed fee
is equity, rather than revenue, the costs for the overtime would be
shared with the Federal Government paying 50 percent of the total
overtime costs.
In addition to overtime fees, the legislative proposal would recover
some overhead costs by charging all plants an annual fee in direct
proportion to the plants volume of output. The funds collected would be
available without appropriation to cover food safety-related activities
and research.
Forest Service ski fees permits.--This proposal would require the
receipt of fair market value from use and occupancy of ski resorts on
national forest lands. The proposal would amend the Omnibus Parks and
Public Lands Management Act (P.L. 104-333), which established a new fee
schedule for ski resorts on National Forest System lands. The amendment
would adjust percentages of gross revenue that determine fees to the
Government. Funds collected are available for forest restoration of
landscapes impacted by ski resorts.
Forest Service recreation and entrance fees.--The Administration
proposes to permanently extend the current pilot program that allows the
Forest Service to collect increased recreation and entrance fees. These
receipts would be available for use without further appropriation and
are necessary to maintain and improve recreation facilities and
services. A similar proposal affects recreation fees for the National
Park Service, the Bureau of Land Management, and the Fish and Wildlife
Service in the Department of the Interior.
Department of the Interior
Recreation and entrance fees.--The Administration proposes to extend
permanently the current recreation fee demonstration program. Since
1996, this program
[[Page 90]]
has allowed the National Park Service, the Bureau of Land Management,
and the Fish and Wildlife Service to collect increased recreation and
entrance fees and spend the receipts without further appropriation on
facility improvements, visitor programs, and other services. At least
half of the National Park Service receipts will be used to address
deferred maintenance needs. A related proposal affects recreation fees
for the Forest Service in the Department of Agriculture.
Corps of Engineers
Recreation user fees.--The Administration proposes to phase in
recreation user fee increases with the entire increase available without
further legislative action for spending on operation, maintenance, and
improvements of the recreation facilities of the Corps of Engineers,
many of which are obsolete. Legislation will be required to increase
limits on existing recreation user fees, authorize new fees, or
reclassify existing fees. In addition, the Administration recommends
extending the recreation demonstration program, which makes available to
the Corps without further appropriation recreation fee revenues above a
baseline of $34 million per year, to be used for operation and
maintenance of its recreation facilities. The Corps spends about $250
million annually on these activities.
Federal Communications Commission
Analog spectrum lease fee.--The Administration proposes authorizing
the FCC to establish an annual lease fee totaling $500 million for the
use of analog spectrum by commercial broadcasters beginning in 2007, to
facilitate the clearing of analog television broadcast spectrum and
provide taxpayers some compensation for use of this scarce resource.
OTHER OFFSETTING COLLECTIONS AND RECEIPTS
Table 5-4 shows that total offsetting collections and receipts from
the public are estimated to be $231.2 billion in 2003. Of these, an
estimated $149.3 billion are offsetting collections credited to
appropriation accounts and an estimated $81.9 billion are deposited in
offsetting receipt accounts.
The user fees in Table 5-4 were discussed in the previous section.
Major offsetting collections deposited in expenditure accounts that are
not user fees are pre-credit reform loan repayments, collections from
States to supplement payments in the supplemental security income
program, and collections for the Federal Savings and Loan resolution
fund. Major offsetting receipts that are not user fees include spectrum
auction receipts, military assistance program sales, rents and royalties
for oil and gas on the Outer Continental Shelf, and interest income.
Table 5-5 includes all offsetting receipts deposited in receipt
accounts. These include payments from one part of the Government to
another, called intragovernmental transactions, and collections from the
public. These receipts are offset (deducted) from outlays in the Federal
budget. In total, offsetting receipts are estimated to be $511.5 billion
in 2003--$429.6 billion are intragovernmental transactions, and $81.9
billion are from the public, shown in the table as proprietary receipts
from the public and offsetting governmental receipts.
As noted above, offsetting collections and receipts by agency are also
displayed in Table 21-1, ``Outlays to the Public, Net and Gross,'' which
appears in Chapter 21 of this volume.
[[Page 91]]
Table 5-4. OFFSETTING COLLECTIONS AND RECEIPTS FROM THE PUBLIC
(In millions of dollars)
------------------------------------------------------------------------
Estimate
2001 Actual ---------------------------
2002 2003
------------------------------------------------------------------------
Offsetting collections
credited to expenditure
accounts:
User fees:
Postal service stamps and 64,871 67,794 73,727
other postal fees........
Defense Commissary Agency. 5,083 5,101 5,351
Employee contributions for 5,855 6,503 ............
employees and retired
employees health benefits
funds \1\................
Sale of energy:
Tennessee Valley 7,326 7,348 7,205
Authority..............
Bonneville Power 3,937 3,697 3,616
Administration.........
All other user fees....... 14,880 16,942 18,871
-----------------------------------------
Subtotal, user fees..... 101,952 107,385 108,770
Other collections credited
to expenditure accounts:
Pre-credit reform loan 14,078 14,851 13,551
repayments...............
Supplemental security 3,160 3,797 3,937
income (collections from
the States)..............
Federal Savings and Loan 1,688 1,243 267
Insurance Corporation
resolution fund..........
Other collections......... 19,386 20,082 22,786
-----------------------------------------
Subtotal, other 38,312 39,973 40,541
collections............
-----------------------------------------
Subtotal, offsetting 140,264 147,358 149,311
collections credited to
expenditure accounts.....
Offsetting receipts:
User fees:
Medicare premiums......... 23,748 25,622 27,347
Employee contributions for ............ ............ 8,264
employees and retired
employees health benefits
funds \1\................
All other user fees...... 6,420 7,178 8,308
-----------------------------------------
Subtotal, user fees 30,168 32,800 43,919
deposited in receipt
accounts...............
Other collections deposited
in receipt accounts:
Spectrum auction receipts 1,024 530 460
Military assistance 10,229 10,300 10,410
program sales............
OCS rents, bonuses, and 7,194 3,806 2,832
royalties................
Interest income.......... 12,175 12,513 13,887
All other collections 19,497 16,086 10,402
deposited in receipt
accounts.................
-----------------------------------------
Subtotal, other collections 50,119 43,235 37,991
deposited in receipt accounts
-----------------------------------------
Subtotal, collections 80,287 76,035 81,910
deposited in receipt
accounts...................
=========================================
Total, offsetting collections 220,551 223,393 231,221
and receipts from the public.
Total, offsetting collections 155,554 155,454 157,344
and receipts excluding off-
budget.......................
ADDENDUM:
User fees that are offsetting 132,120 140,185 152,689
collections and receipts \2\.
Other offsetting collections 88,431 83,208 78,532
and receipts from the public.
-----------------------------------------
Total, offsetting collections 220,551 223,393 231,221
and receipts from the public.
------------------------------------------------------------------------
\1\ Beginning in 2003, amounts received by the Federal Employees Health
Benefits Program (FEHBP), previously treated as offsetting
collections, are now treated as offsetting receipts. This reflects a
change in the FEHBP from a trust revolving fund to a special fund and
is consistent with the President's proposed Managerial Flexibility
Act.
\2\ Excludes user fees that are classified on the receipts side of the
budget. For total user fees, see Table 5.1 or Table 5.2.
[[Page 92]]
Table 5-5. OFFSETTING RECEIPTS BY TYPE
(In millions of dollars)
----------------------------------------------------------------------------------------------------------------
Estimate
Source 2001 -----------------------------------------------------------------------
Actual 2002 2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------------
INTRAGOVERNMENTAL
TRANSACTIONS
On-budget receipts:
Federal intrafund
transactions:
Distributed by agency:
Interest from the 2,157 1,930 1,484 1,724 2,044 2,342 2,230
Federal Financing
Bank.................
Interest on Government 1,091 1,095 1,075 1,047 1,165 932 826
capital in
enterprises..........
Interest received by .......... .......... 773 1,335 1,899 2,491 3,112
retirement and health
benefits funds.......
General fund payments
to retirement and
health benefits
funds:
Employees health .......... .......... 11,622 11,026 11,026 11,026 11,026
benefits fund......
DoD retiree health .......... .......... 16,351 24,455 27,034 29,816 32,817
care fund..........
Miscellaneous .......... .......... 888 893 902 912 923
Federal retirement
funds \1\..........
Subsidy balance 4,026 909 .......... .......... .......... .......... ..........
transfers............
Other................. 3,323 2,403 2,475 2,538 2,661 2,779 2,896
Undistributed by agency:
Employing agency
contributions:
Employees health .......... .......... 16,404 17,475 18,587 19,800 21,168
benefits fund......
DoD retiree health .......... .......... 8,312 15,475 16,416 17,418 18,500
care fund..........
Miscellaneous 8,219 8,683 279 331 288 285 286
Federal retirement
funds..............
-----------------------------------------------------------------------------------
Total Federal 18,816 15,020 59,663 76,299 82,022 87,801 93,784
intrafunds...........
-----------------------------------------------------------------------------------
Trust intrafund
transactions:
Distributed by agency:
Payments to railroad 3,283 3,863 3,854 3,807 3,808 3,658 3,911
retirement...........
Other................. 1 1 1 1 1 1 1
-----------------------------------------------------------------------------------
Total trust intrafunds 3,284 3,864 3,855 3,808 3,809 3,659 3,912
-----------------------------------------------------------------------------------
Total intrafund 22,100 18,884 63,518 80,107 85,831 91,460 97,696
transactions...........
-----------------------------------------------------------------------------------
Interfund transactions:
Distributed by agency:
Federal fund payments
to trust funds:
Contributions to
insurance programs:
Military 16,089 17,047 17,643 18,261 18,900 19,563 20,247
retirement fund..
Supplementary 69,838 77,295 80,905 84,790 90,003 96,284 103,019
medical insurance
Proposed .......... .......... -19 -1 102 74 54
Legislation (non-
PAYGO)...........
Hospital insurance 5,594 11,544 9,423 9,807 10,385 10,963 11,657
Railroad social 98 95 100 103 106 109 114
security
equivalent fund..
Rail industry 229 242 254 265 275 284 296
pension fund.....
Civilian 21,890 22,399 29,660 29,666 29,669 29,672 29,674
supplementary
retirement
contributions....
Unemployment 432 517 531 526 522 526 541
insurance........
Other 560 482 506 508 535 533 536
contributions....
-----------------------------------------------------------------------------------
Subtotal.......... 114,730 129,621 139,003 143,925 150,497 158,008 166,138
-----------------------------------------------------------------------------------
Miscellaneous 1,520 930 988 944 901 882 865
payments...........
Proposed Legislation .......... .......... 2,066 .......... .......... .......... ..........
(non-PAYGO)........
-----------------------------------------------------------------------------------
Subtotal............ 116,250 130,551 142,057 144,869 151,398 158,890 167,003
-----------------------------------------------------------------------------------
Trust fund payments to
Federal funds:
Quinquennial 836 .......... .......... .......... .......... .......... ..........
adjustment for
military service
credits............
Other............... 2,301 1,141 1,171 1,193 1,217 1,242 1,278
Proposed Legislation .......... .......... 1,606 -446 -435 -430 -427
(non-PAYGO)........
-----------------------------------------------------------------------------------
Subtotal............ 3,137 1,141 2,777 747 782 812 851
-----------------------------------------------------------------------------------
Total interfunds 119,387 131,692 144,834 145,616 152,180 159,702 167,854
distributed by agency
-----------------------------------------------------------------------------------
Undistributed by agency:
Employer share,
employee retirement
(on-budget):
Civil service 10,072 10,612 14,233 14,599 14,956 15,239 15,475
retirement and
disability
insurance..........
CSRDI from Postal 6,600 6,780 6,932 7,089 7,320 7,555 7,745
Service............
Hospital insurance 2,031 2,183 2,299 2,402 2,538 2,645 2,755
(contribution as
employer) \2\ .....
Postal employer 673 711 733 756 781 808 836
contributions to
FHI................
Military retirement 11,371 12,491 11,934 12,396 12,911 13,383 13,847
fund...............
[[Page 93]]
Other Federal 136 134 138 142 147 152 157
employees
retirement.........
-----------------------------------------------------------------------------------
Total employer 30,883 32,911 36,269 37,384 38,653 39,782 40,815
share, employee
retirement (on-
budget)............
-----------------------------------------------------------------------------------
Interest received by 75,302 74,287 77,254 80,145 83,559 87,259 91,793
on-budget trust
funds..............
Proposed Legislation .......... .......... -9 -44 -93 -149 -204
(non-PAYGO)........
-----------------------------------------------------------------------------------
Total interfund 106,185 107,198 113,514 117,485 122,119 126,892 132,404
transactions
undistributed by
agency...............
-----------------------------------------------------------------------------------
Total interfund 225,572 238,890 258,348 263,101 274,299 286,594 300,258
transactions...........
-----------------------------------------------------------------------------------
Total on-budget receipts.. 247,672 257,774 321,866 343,208 360,130 378,054 397,954
-----------------------------------------------------------------------------------
Off-budget receipts:
Trust intrafund
transactions:
Distributed by agency:
Interfund transactions:
Distributed by agency:
Federal fund payments
to trust funds:
Old-age, survivors, 12,528 13,478 14,282 15,149 16,041 16,841 17,990
and disability
insurance..........
Undistributed by agency:
Employer share, 7,910 9,243 9,564 10,232 11,034 11,744 12,448
employee retirement
(off-budget).......
Interest received by 68,811 76,822 83,849 92,029 101,015 110,959 122,109
off-budget trust
funds..............
-----------------------------------------------------------------------------------
Total off-budget receipts: 89,249 99,543 107,695 117,410 128,090 139,544 152,547
-----------------------------------------------------------------------------------
Total intragovernmental 336,921 357,317 429,561 460,618 488,220 517,598 550,501
transactions...............
===================================================================================
PROPRIETARY RECEIPTS FROM
THE PUBLIC
Distributed by agency:
Interest:
Interest on foreign 576 651 639 633 625 608 632
loans and deferred
foreign collections....
Interest on deposits in 951 451 585 585 585 585 585
tax and loan accounts..
Other interest 10,647 11,411 12,663 13,283 13,770 14,238 14,659
(domestic--civil) \3\ .
-----------------------------------------------------------------------------------
Total interest.......... 12,174 12,513 13,887 14,501 14,980 15,431 15,876
-----------------------------------------------------------------------------------
Dividends and other .......... .......... .......... .......... .......... .......... ..........
earnings...............
Royalties and rents....... 2,235 1,458 1,494 1,551 1,526 1,604 1,635
Sale of products:
Sale of timber and other 218 623 635 400 407 397 387
natural land products..
Proposed Legislation .......... .......... .......... 3 10 14 15
(PAYGO)................
Sale of minerals and 31 27 30 33 32 32 30
mineral products.......
Sale of power and other 562 721 683 695 695 714 717
utilities..............
Proposed Legislation .......... .......... -149 -149 -150 -150 -150
(PAYGO)................
Other \3\............... 73 89 77 77 77 77 77
-----------------------------------------------------------------------------------
Total sale of products.. 884 1,460 1,276 1,059 1,071 1,084 1,076
-----------------------------------------------------------------------------------
Fees and other charges for
services and special
benefits:
Medicare premiums and 23,748 25,622 27,347 29,013 30,984 33,152 35,529
other charges (trust
funds).................
Proposed Legislation .......... .......... .......... 35 82 95 23
(PAYGO)................
Employees health .......... .......... 8,352 9,077 9,717 10,380 11,121
benefits premiums......
Nuclear waste disposal 689 640 647 612 637 621 609
revenues...............
Veterans life insurance 194 198 184 170 154 139 125
(trust funds)..........
Other \3\ .............. 2,409 3,124 3,480 3,780 3,808 3,990 4,133
Proposed Legislation .......... .......... 6 93 189 207 208
(PAYGO)................
-----------------------------------------------------------------------------------
Total fees and other 27,040 29,584 40,016 42,780 45,571 48,584 51,748
charges................
-----------------------------------------------------------------------------------
Sale of Government
property:
Sale of land and other 86 150 412 110 110 110 107
real property \3\......
Military assistance 10,229 10,300 10,410 10,380 10,570 10,730 10,890
program sales (trust
funds).................
Other................... 358 759 90 65 66 41 7
-----------------------------------------------------------------------------------
Total sale of Government 10,673 11,209 10,912 10,555 10,746 10,881 11,004
property...............
-----------------------------------------------------------------------------------
[[Page 94]]
Realization upon loans and
investments:
Negative subsidies and 8,627 6,027 751 757 764 773 748
downward reestimates...
Repayment of loans to 291 71 85 88 94 108 25
foreign nations........
Other................... 83 117 97 93 89 85 83
-----------------------------------------------------------------------------------
Total realization upon 9,001 6,215 933 938 947 966 856
loans and investments..
-----------------------------------------------------------------------------------
Recoveries and refunds \3\ 3,730 2,780 2,882 3,011 3,119 3,201 3,305
Proposed Legislation .......... .......... 7 14 -103 -164 -172
(PAYGO)..................
Miscellaneous receipt 2,293 1,909 1,916 1,924 1,928 1,941 1,945
accounts \3\.............
-----------------------------------------------------------------------------------
Total proprietary receipts 68,030 67,128 73,323 76,333 79,785 83,528 87,273
from the public
distributed by agency....
-----------------------------------------------------------------------------------
Undistributed by agency:
Other interest: Interest 1 .......... .......... .......... .......... .......... ..........
received from Outer
Continental Shelf escrow
account..................
Rents, bonuses, and
royalties:
Outer Continental Shelf 719 834 466 509 427 396 347
rents and bonuses......
Outer Continental Shelf 6,475 2,972 2,366 2,443 3,243 3,573 3,671
royalties..............
Arctic National Wildlife
Refuge:
Proposed Legislation .......... .......... .......... 2,402 2 202 2
(PAYGO)................
Sale of major assets...... .......... .......... .......... .......... 323 .......... ..........
-----------------------------------------------------------------------------------
Total proprietary receipts 7,195 3,806 2,832 5,354 3,995 4,171 4,020
from the public
undistributed by agency..
-----------------------------------------------------------------------------------
Total proprietary receipts 75,225 70,934 76,155 81,687 83,780 87,699 91,293
from the public \4\ .......
===================================================================================
OFFSETTING GOVERNMENTAL
RECEIPTS
Distributed by agency:
Regulatory fees \3\....... 3,964 4,494 4,739 3,015 3,056 3,111 3,168
Proposed Legislation (non- .......... .......... 313 128 130 132 135
PAYGO)...................
Other..................... 74 77 243 409 416 423 431
Undistributed by agency:
Spectrum auction proceeds. 1,024 530 4,510 10,565 8,770 675 680
Proposed Legislation .......... .......... -4,050 3,350 2,700 4,700 500
(PAYGO)..................
-----------------------------------------------------------------------------------
Total offsetting 5,062 5,101 5,755 17,467 15,072 9,041 4,914
governmental receipts....
===================================================================================
Total offsetting receipts... 417,208 433,352 511,471 559,772 587,072 614,338 646,708
----------------------------------------------------------------------------------------------------------------
\1\ 2001 and 2002 amounts are offsets for the Administration's retirement acrual proposal.
\2\ Includes provision for covered Federal civilian employees and military personnel.
\3\ Includes both Federal funds and trust funds.
\4\ Consists of:
MEMORANDUM
Composition of proprietary receipts from the public
----------------------------------------------------------------------------------------------------------------
Estimate
2001 -----------------------------------------------------------------
Actual 2002 2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------------
On-budget:
Federal funds.................... 39,952 33,366 36,428 40,180 40,076 41,639 42,775
Trust funds...................... 35,190 37,489 39,646 41,423 43,618 45,972 48,427
Off-budget......................... 83 79 81 84 86 88 91
----------------------------------------------------------------------------------------------------------------