    [Analytical Perspectives]
    [Table of Contents]
    [From the U.S. Government Printing Office, www.gpo.gov]

    [[Page i]]

                                                                        TABLE OF CONTENTS

                                                                                                                                                     Page

    List of Charts and Tables..................................................................................................................          iii

    Introduction

         1.           Introduction.............................................................................................................            3

    Performance and Management Assessments

         2.           Budget and Performance Integration.......................................................................................            9

    Crosscutting Programs

         3.           Homeland Security Funding Analysis.......................................................................................           19

         4.           Strengthening Federal Statistics.........................................................................................           35

         5.           Research and Development.................................................................................................           43

         6.           Federal Investment.......................................................................................................           53

         7.           Credit and Insurance.....................................................................................................           65

         8.           Aid to State and Local Governments.......................................................................................           99

         9.           Integrating Services with Information Technology.........................................................................          151

        10.           Federal Drug Control Funding.............................................................................................          159

        11.           California-Federal Bay-Delta Program Budget Crosscut (CALFED)............................................................          161

    Economic Assumptions and Analyses

        12.           Economic Assumptions.....................................................................................................          165

        13.           Stewardship..............................................................................................................          175

        14.           National Income and Product Accounts.....................................................................................          203

    Budget Reform Proposals

        15.           Budget Reform Proposals..................................................................................................          211

    Federal Borrowing and Debt

        16.           Federal Borrowing and Debt...............................................................................................          221

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    Federal Receipts and Collections

        17.           Federal Receipts.........................................................................................................          237

        18.           User Charges and Other Collections.......................................................................................          271

        19.           Tax Expenditures.........................................................................................................          285

    Dimensions of the Budget

        20.           Comparison of Actual to Estimated Totals.................................................................................          331

        21.           Outlays to the Public, Gross and Net.....................................................................................          339

        22.           Trust Funds and Federal Funds............................................................................................          341

        23.           Off-Budget Federal Entities and Non-Budgetary Activities.................................................................          347

        24.           Federal Employment and Compensation......................................................................................          351

    Current Services Estimates

        25.           Current Services Estimates...............................................................................................          359

    The Budget System and Concepts

        26.           The Budget System and Concepts...........................................................................................          377

    Detailed Functional Table

        27.           Detailed Functional Table................................................................................................       CD-ROM

    Federal Programs by Agency and Account

        28.           Federal Programs by Agency and Account...................................................................................       CD-ROM

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    ........................................................................

                            LIST OF CHARTS AND TABLES

      ......................................................................

    [[Page v]]

                            LIST OF CHARTS AND TABLES

                                 LIST OF CHARTS

                                                                       Page

       2-1.....   Program Ratings are Improving.....................      15
       4-1.....   ICSP Statistical Quality and Program Performance        36
                  Dimensions, 2007..................................
       4-2.....   Most Recent PART Summary Ratings for Statistical        38
                  Programs..........................................
       5-1.....   American Competitiveness Initiative Research......      43
       5-2.....   Scores of R&D PART Assessments....................      45
       7-1.....   Fannie Mae and Freddie Mac Growth of GSE Asset          72
                  Portfolios........................................
       7-2.....   Fannie Mae and Freddie Mac Combined Income........      73
       7-3.....   Face Value of Federal Credit Outstanding..........      85
       13-1....   The Financial Condition of the Federal Government      177
                  and the Nation....................................
       13-2....   Net Federal Liabilities...........................     181
       13-3....   Health Care Cost Alternatives.....................     186
       13-4....   Alternative Discretionary Spending Assumptions....     187
       13-5....   A Constant Revenue Share..........................     187
       13-6....  Alternative Productivity Assumptions...............     188
       13-7....  Alternative Fertility Assumptions..................     189
       13-8....   Alternative Immigration Assumptions...............     189
       13-9....   Alternative Mortality Assumptions.................     190
       17-1....   Major Provisions of the Tax Code Under the 2001,       238
                  2003 and 2004 Tax Cuts............................
       20-1....   Illustrative Range of Budget Outcomes.............     337
       26-1....   Relationship of Budget Authority to Outlays for        389
                  2007..............................................

                                 LIST OF TABLES

                                                                     Page

    Crosscutting Programs

      Homeland Security Funding Analysis:
       3-1.....  Homeland Security Funding by Agency............          20
       3-2.....  Homeland Security Funding by National Strategy           21
                  Mission Area..................................
       3-3.....  Intelligence and Warning Funding...............          22
       3-4.....  Border and Transportation Security Funding.....          23
       3-5.....  Domestic Counterterrorism Funding..............          25
       3-6.....  Protecting Critical Infrastructure and Key               26
                  Assets Funding................................
       3-7.....  Defending Against Catastrophic Threats Funding.          27
       3-8.....  Emergency Preparedness and Response Funding....          29
       3-9.....  Discretionary Fee-Funded Homeland Security               31
                  Activities by Agency..........................
       3-10....  Mandatory Homeland Security Funding by Agency..          31
       3-11....  Baseline Estimates--Total Homeland Security              32
                  Funding by Agency.............................
       3-12....  Homeland Security Funding by Budget Function...          33
       3-13....  Baseline Estimates--Homeland Security Funding            34
                  by Budget Function............................
        .......  Appendix--Homeland Security Mission Funding by       CD-ROM
                  Agency and Budget Account.....................

      Strengthening Federal Statistics:
       4-1.....  2005-2007 Budget Authority for Principal                 41
                  Statistical Agencies..........................

      Research and Development:
       5-1.....  Federal Research and Development...............          49
       5-2.....  Federal Science and Technology Budget..........          51

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       5-3.....  Agency Detail of Selected Interagency R&D                52
                  Efforts.......................................

      Federal Investment:
       6-1.....  Composition of Federal Investment Outlays......          55
       6-2.....  Federal Investment Budget Authority and                  56
                  Outlays: Grant and Direct Federal Programs....
       6-3.....  Summary of PART Ratings and Scores for Direct            59
                  Federal Investment Programs...................
       6-4.....  Net Stock of Federally Financed Physical                 62
                  Capital.......................................
       6-5.....  Net Stock of Federally Financed Research and             63
                  Development...................................
       6-6.....  Net Stock of Federally Financed Education                64
                  Capital.......................................

      Credit and Insurance:

          Text Tables:
                   Summary of PART Scores.......................          67
                   Largest 10 Claims Against the PBGC's Single-           81
                  Employer Program, 1975-2005...................
       7-1.....  Estimated Future Cost of Outstanding Federal             86
                  Credit Programs...............................
       7-2.....  Reestimates of Credit Subsidies on Loans                 87
                  Disbursed Between 1992-2005...................
       7-3.....  Direct Loan Subsidy Rates, Budget Authority,             89
                  and Loan Levels, 2005-2007....................
       7-4.....  Loan Guarantee Subsidy Rates, Budget Authority,          90
                  and Loan Levels, 2005-2007....................
       7-5.....  Summary of Federal Direct Loans and Loan                 91
                  Guarantees....................................
       7-6.....  Direct Loan Write-Offs and Guaranteed Loan               92
                  Terminations for Defaults.....................
       7-7.....  Appropriations Acts Limitations on Credit Loan           94
                  Levels........................................
       7-8.....  Face Value of Government-Sponsored Lending.....          95
       7-9.....  Lending and Borrowing By Government-Sponsored            96
                  Enterprises (GSEs)............................
       7-10....  Direct Loan Transactions of the Federal              CD-ROM
                  Government....................................
       7-11....  Guaranteed Loan Transactions of the Federal          CD-ROM
                  Government....................................

      Aid to State and Local Governments:
       8-1.....  Federal Grant Outlays by Agency................          99
       8-2.....  Summary of PART Ratings and Scores for Grants           106
                  to State and Local Governments................
       8-3.....  Trends in Federal Grants to State and Local             108
                  Governments...................................
       8-4.....  Federal Grants to State and Local Governments--         111
                  Budget Authority and Outlays..................
       8-5.....  Summary of Programs by Agency, Bureau, and              119
                  Program.......................................
       8-6.....  Summary of Programs by State...................         120
       8-7.....  National School Lunch Program..................         121
       8-8.....  Special Supplemental Nutrition Program for              122
                  Women, Infants, and Children (WIC)............
       8-9.....  Child and Adult Care Food Program..............         123
       8-10....  State Administrative Matching Grants for Food           124
                  Stamp Program.................................
       8-11....  Title I Grants to Local Educational Agencies...         125
       8-12....  Improving Teacher Quality State Grants.........         126
       8-13....  Special Education--Grants to States............         127
       8-14....  Rehabilitation Services--Vocational                     128
                  Rehabilitation Grants to States...............
       8-15....  State Children's Health Insurance Program......         129
       8-16....  Grants to States for Medicaid..................         130
       8-17....  Temporary Assistance for Needy Families (TANF)--        131
                  Family Assistance Grants......................
       8-18....  Child Support Enforcement--Federal Share of             132
                  State and Local Administrative Costs and
                  Incentives....................................
       8-19....  Low Income Home Energy Assistance Program......         133
       8-20....  Child Care and Development Block Grant.........         134
       8-21....  Child Care and Development Fund--Mandatory.....         135
       8-22....  Child Care and Development Fund--Matching......         136
       8-23....  Head Start.....................................         137
       8-24....  Foster Care--Title IV-E........................         138
       8-25....  Adoption Assistance............................         139
       8-26....  Homeland Security Grant Program................         140
       8-27....  Public Housing Operating Fund..................         141

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       8-28....  Housing Choice Vouchers........................         142
       8-29....  Public Housing Capital Fund....................         143
       8-30....  Community Development Block Grants.............         144
       8-31....  HOME Investment Partnerships Program...........         145
       8-32....  Airport Improvement Program....................         146
       8-33....  Highway Planning and Construction..............         147
       8-34....  Capital Investment Grants--Fixed Guideway               148
                  Modernization.................................
       8-35....  Federal Transit Formula Grants and Research....         149

      Integrating Services with Information Technology:
       9-1.....  Effectiveness of Agency's IT Management and E-       CD-ROM
                  Gov Processes.................................
       9-2.....  Management Guidance............................      CD-ROM
       9-3.....  Status of the Presidential E-Government              CD-ROM
                  Initiatives...................................

      Federal Drug Control Funding:
       10-1....  Federal Drug Control Funding, FY 2005-2007.....         159

      California-Federal Bay-Delta Program Budget Crosscut (CALFED):

          Text Table:
                   CALFED-Related Federal Funding Budget                 161
                  Crosscut......................................

                 CALFED Budget Crosscut Methodology.............      CD-ROM
                 CALFED Federal Agency Funding--Summary by            CD-ROM
                  Category and Agency Breakout..................
                 CALFED Project Descriptions....................      CD-ROM
                 CALFED Prior Year (2005) Federal Funding.......      CD-ROM
                 CALFED Fiscal Year 2007 Funding Under New and        CD-ROM
                  Old Authority.................................
                 CALFED State Agency Funding....................      CD-ROM
                 Department of the Interior Certification of          CD-ROM
                  Budget Numbers................................
    Economic Assumptions and Analyses

      Economic Assumptions:
       12-1....  Economic Assumptions...........................         169
       12-2....  Comparison of Economic Assumptions.............         170
       12-3....  Comparison of Economic Assumptions in the 2006          172
                  and 2007 Budgets..............................
       12-4....  Adjusted Structural Balance....................         172
       12-5....  Sensitivity of the Budget to Economic                   174
                  Assumptions...................................

      Stewardship:
       13-1....  Government Assets and Liabilities..............         182
       13-2....  Long-Run Budget Projections....................         185
       13-3....  Actuarial Present Values of Benefits in Excess          193
                  of Future Taxes and Premiums..................
       13-4....  National Wealth................................         195
       13-5....  Trends in National Wealth......................         197
       13-6....  Economic and Social Indicators.................         198

      National Income and Product Accounts:
       14-1....  Federal Transactions in the National Income and         205
                  Product Accounts, 1996-2007...................
       14-2....  Relationship of the Budget to the Federal               207
                  Sector, NIPA's................................
       14-3....  Federal Receipts and Expenditures in the                208
                  NIPA's, Quarterly, 2005-2007..................
    Budget Reform Proposals

      Budget Reform Proposals:
       15-1....  Mandatory Proposals............................         211
       15-2....  Discretionary Caps and Adjustments.............         213
       15-3....  Transportation Category for Highways and Mass           214
                  Transit Spending..............................
    Federal Borrowing and Debt

      Federal Borrowing and Debt:
       16-1....  Trends in Federal Debt Held by the Public......         221

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       16-2....  Federal Government Financing and Debt..........         223
       16-3....  Agency Debt....................................         227
       16-4....  Debt Held by Government Accounts...............         229
       16-5....  Federal Funds Financing and Change in Debt              231
                  Subject to Statutory Limit....................
       16-6....  Foreign Holdings of Federal Debt...............         233
    Federal Receipts and Collections

      Federal Receipts:
       17-1....  Receipts by Source-Summary.....................         237
       17-2....  Effect on Receipts of Changes in the Social             237
                  Security Taxable Earnings Base................
       17-3....  Effect of Proposals on Receipts................         265
       17-4....  Receipts by Source.............................         268

      User Charges and Other Collections:
       18-1....  Gross Outlays, User Charges, Other Offsetting           271
                  Collections and Receipts from the Public, and
                  Net Outlays...................................
       18-2....  Total User Charge Collections..................         274
       18-3....  User Fee and Other User Charge Proposals.......         276
       18-4....  Offsetting Collections and Receipts from the            281
                  Public........................................
       18-5....  Offsetting Receipts by Type....................         282

      Tax Expenditures:
       19-1....  Estimates of Total Income Tax Expenditures.....         287
       19-2....  Estimates of Tax Expenditures for the Corporate         291
                  and Individual Income Taxes...................
       19-3....  Income Tax Expenditures Ranked by Total 2007-           296
                  2011 Projected Revenue Effect.................
       19-4....  Present Value of Selected Tax Expenditures for          299
                  Activity in Calendar Year 2005................

        Appendix Tables:

             1.   Comparison of Current Tax Expenditures with            327
                  Those Implied by a Comprehensive Income Tax...
             2.   Comparison of Current Tax Expenditures with            328
                  Those Implied by a Comprehensive Consumption
                  Tax...........................................
             3.   Revised Tax Expenditure Estimates.............         328

    Dimensions of the Budget

      Comparison of Actual to Estimated Totals:
       20-1....  Comparison of Actual 2005 Receipts with the             331
                  Initial Current Services Estimates............
       20-2....  Comparison of Actual 2005 Outlays with the              332
                  Initial Current Services Estimates............
       20-3....  Comparison of the Actual 2005 Deficit with the          333
                  Initial Current Services Estimate.............
       20-4....  Comparison of Actual and Estimated Outlays for          334
                  Mandatory and Related Programs Under Current
                  Law...........................................
       20-5....  Reconciliation of Final Amounts for 2005.......         335
       20-6....  Comparison of Actual and Estimated Surpluses or         336
                  Deficits Since 1982...........................
       20-7....  Differences Between Estimated and Actual                337
                  Surpluses or Deficits for Five-year Budget
                  Estimates Since 1982..........................

      Outlays to Public, Gross and Net:
       21-1....  Total Outlays, Gross and Net of Offsetting              339
                  Collections and Receipts from the Public, by
                  Agency, 2005-2007.............................

      Trust Funds and Federal Funds:
       22-1....  Receipts, Outlays, and Surplus or Deficit by            341
                  Fund Group....................................
       22-2....  Income, Outgo, and Balances of Trust Funds              343
                  Group.........................................
       22-3....  Relationship of Total Federal Fund and Trust            344
                  Fund Receipts to Unified Budget Receipts,
                  Fiscal Year 2005..............................
       22-4....  Income, Outgo, and Balances of Major Trust           CD-ROM
                  Funds.........................................
       22-5....  Income, Outgo, and Balances of Selected Federal      CD-ROM
                  Funds.........................................

    [[Page ix]]

      Off-Budget Federal Entities and Non-Budgetary Activities:
       23-1....  Comparison of Total, On-Budget, and Off-Budget          347
                  Transactions..................................

      Federal Employment and Compensation:
       24-1....  Federal Civilian Employment in the Executive            353
                  Branch........................................
       24-2....  Total Federal Employment (As measured by total          354
                  positions filled).............................
       24-3....  Total Federal Employment (As measured by Full-          355
                  Time Equivalents).............................
       24-4....  Personnel Compensation and Benefits............         356
    Current Service Estimates

      Current Service Estimates:
       25-1....  Baseline Category Totals.......................         360
       25-2....  Alternative Baseline Assumptions...............         361
       25-3....  Summary of Economic Assumptions................         362
       25-4....  Beneficiary Projections for Major Benefit               363
                  Programs......................................
       25-5....  Impact of Regulations, Expiring Authorizations,         363
                  and Other Assumptions in the Baseline.........
       25-6....  Baseline Receipts by Source....................         369
       25-7....  Change in Baseline Outlay Estimates by Category         370
       25-8....  Current Services Outlays by Function...........         371
       25-9....  Current Services Outlays by Agency.............         372
       25-10...  Current Services Budget Authority by Function..         373
       25-11...  Current Services Budget Authority by Agency....         374
       25-12...  Current Services Budget Authority by Function,       CD-ROM
                  Category and Program..........................
       25-13...  Current Services Outlays by Function, Category       CD-ROM
                  and Program...................................
    The Budget System and Concepts

      The Budget System and Concepts:
       26-1....  Totals for the Budget and the Federal                   381
                  Government....................................
    Detailed Functional Table

      Detailed Functional Table:
       27-1....  Budget Authority and Outlays by Function,            CD-ROM
                  Category and Program..........................
    Federal Programs by Agency and Account

      Federal Programs by Agency and Account:
       28-1....  The Budget for Fiscal Year 2007 by Agency and        CD-ROM
                  Account.......................................