[Analytical Perspectives]
[Current Services Estimates]
[25. Current Services Estimates]
[From the U.S. Government Printing Office, www.gpo.gov]



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                     25.  CURRENT SERVICES ESTIMATES

  There has long been a desire to have a neutral benchmark against which 
policy proposals can be measured. Since the early 1970s when the first 
requirements for the calculation of a ``current services'' baseline were 
enacted, a variety of concepts and measures have been employed. In 
recent years, the current services baseline has been defined to be 
identical to the baseline required by the Budget Enforcement Act (BEA). 
However, that baseline has serious technical flaws, which compromise its 
ability to serve as a neutral measure. This section provides detailed 
estimates of a baseline that corrects these flaws. It also discusses 
alternative formulations for the baseline.
  Ideally, a current services baseline would provide a projection of 
estimated receipts, outlays, deficits or surpluses, and budget authority 
needed to reflect this year's enacted policies and programs for each 
year in the future. Because such a concept would be nearly impossible to 
apply across all segments of the government, the baseline has instead 
become largely a mechanical construct.
  Moreover, it is important to discuss what a baseline is not. The 
baseline is not a prediction of the final outcome of the annual budget 
process, nor is it a proposed budget. By itself, the current services 
baseline commits no one to any particular policy. Instead, the 
commitments or constraints reflected in the current services estimates 
are based on the tax and spending policies contained in current law.
  The current services baseline is used in a variety of ways: It can 
warn of future problems, either for Government fiscal policy as a whole 
or for individual tax and spending programs. It is also a ``policy-
neutral'' benchmark against which the President's Budget and other 
budget proposals can be compared to measure the magnitude of the 
proposed changes. The following table shows current services estimates 
of receipts, outlays, and surpluses for 2005 through 2011. They are 
based on the economic assumptions described later in this chapter. The 
estimates are shown on a unified budget basis, i.e., the off-budget 
receipts and outlays of the Social Security trust funds and the Postal 
Service Fund are added to the on-budget receipts and outlays to 
calculate the unified budget totals. The table also shows the current 
services estimates by major component. The BEA baseline deficits are 
shown as a memorandum in the table.

                                      Table 25-1.  BASELINE CATEGORY TOTALS
                                            (In billions of dollars)
----------------------------------------------------------------------------------------------------------------
                                        2005       2006       2007       2008       2009       2010       2011
----------------------------------------------------------------------------------------------------------------
Receipts...........................    2,154      2,301      2,444      2,597      2,729      2,901      3,064
Outlays:
  Discretionary:
    DoD-Military...................      473        480        440        438        445        456        472
    Homeland security..............       30         32         34         35         35         36         38
    Other discretionary............      465        486        488        484        493        498        507
                                    ----------------------------------------------------------------------------
  Subtotal, discretionary..........      968        998        962        957        973        990      1,017
  Mandatory:
    Social Security................      519        550        581        612        645        683        723
    Medicare.......................      294        338        390        405        429        457        500
    Medicaid and SCHIP.............      187        198        205        219        234        251        270
    Other mandatory................      320        365        319        340        359        371        390
                                    ----------------------------------------------------------------------------
  Subtotal, mandatory..............    1,320      1,451      1,495      1,575      1,668      1,762      1,883
  Net interest.....................      184        219        244        266        284        298        310
                                    ----------------------------------------------------------------------------
Total outlays......................    2,472      2,669      2,701      2,798      2,925      3,050      3,210
 
  Unified deficit..................     -318       -367       -257       -201       -196       -149       -146
    On-budget......................     -494       -549       -449       -416       -428       -402       -420
    Off-budget.....................      175        182        192        216        233        252        274
 
Memorandum:
  BEA baseline deficit.............     -318       -367       -305       -266       -244       -230       -127
    Do not extend emergencies......  .........  .........       45         67         76         82         86
    Correct growth rates for pay...  .........  .........        2          3          3          3          3
    Remove special rule for
      administrative expenses of
      selected programs............  .........  .........        *          *          *          *          1
    Extend certain tax provisions..  .........        *         -1         -8        -37        -14       -119
    Related debt service...........  .........        *          1          4          6          9         11
                                    ----------------------------------------------------------------------------
  Current baseline deficit.........     -318       -367       -257       -201       -196       -149       -146
----------------------------------------------------------------------------------------------------------------

                     Conceptual Basis for Estimates

  Receipts and outlays are divided into two categories that are 
important for calculating the current services estimates: those 
controlled by authorizing legislation (direct spending and receipts) and 
those controlled through the annual appropriations process 
(discretionary spending). Different estimating rules apply to each 
category. There are numerous alternative rules that could be used to 
develop current services estimates for both categories. The next section 
discusses some alternatives that might be considered.
  Direct spending and receipts.--Direct spending includes the major 
entitlement programs, such as social security, medicare, medicaid, 
Federal employee retirement, unemployment compensation, food stamps and 
other means-tested entitlements. It also includes such programs as 
deposit insurance and farm price and income supports, where the 
Government is legally obligated to make payments under certain 
conditions. Receipts and direct spending are alike in that they involve 
ongoing activities that generally operate under permanent authority 
(they do not require annual authorization), and the underlying statutes 
generally specify the tax rates or benefit levels that must be collected 
or paid, and who must pay or who is eligible to receive benefits. The 
current services baseline assumes that receipts and direct spending 
programs continue in the future as specified by current law. The 
budgetary impact of anticipated regulations and administrative actions 
that are permissible under current law are also reflected in the 
estimates. This year, because the major deficit reduction package in the 
Deficit Reduction Act has passed both chambers in Congress with only a 
small technical difference that is expected to be resolved shortly, the 
impact of the Act is included here as current law.
  If a baseline is intended to reflect current law, then the provisions 
of law providing spending authority and the authority to collect taxes 
or other receipts that expire under current law should be assumed to 
expire. However, the current services baseline assumes extension of 
several types of authority:
     Expiring provisions affecting excise taxes dedicated to a 
          trust fund are assumed to be extended at current rates. During 
          the projection period of 2006 through 2011, taxes deposited in 
          the Airport and Airway trust fund, which expire on September 
          30, 2007, are the only taxes affected by this exception.
     Direct spending programs that will expire under current law 
          are assumed to be extended if their 2006 outlays exceed $50 
          million. For example, Temporary Assistance for Needy Families 
          and child care entitlement to States are scheduled to expire 
          at the end of 2010. The baseline estimates provided here 
          assume continuation of these programs in 2011. However, 
          programs enacted after the enactment of the Balanced Budget 
          Act of 1997 that are explicitly temporary in nature expire in

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          the baseline even if their current year outlays exceed the $50 
          million threshold.
     Certain provisions in the 2001 and 2003 Tax Acts that were 
          clearly not intended to be temporary are assumed to continue 
          past their expiration date. These provisions include 
          reductions in individual income taxes on capital gains and 
          dividends, increased expensing for small businesses, and 
          reductions in income taxes and estate and gift taxes scheduled 
          to sunset on December 31, 2010. Unlike the two extensions 
          discussed above, the BEA baseline definitions, developed 
          before the enactment of the 2001 and 2003 tax acts, do not 
          provide for extension of these provisions.
  Discretionary spending.--Discretionary programs differ in one 
important aspect from direct spending programs--Congress provides 
spending authority for almost all discretionary programs one year at a 
time. The spending authority is normally provided in the form of annual 
appropriations. Absent appropriations of additional funds in the future, 
discretionary programs would cease to exist after existing balances were 
spent. If the baseline was intended to reflect current law, then a 
baseline would only reflect the expenditure of remaining balances from 
appropriations laws. Instead the current services baseline provides a 
mechanical definition for discretionary programs that is somewhat 
arbitrary. The definition used here attempts to keep discretionary 
spending level in real terms. For 2006, the current services estimates 
for discretionary programs are equal to enacted 2006 appropriations. For 
2007 through 2011, funding for most accounts is equal to this 2006 level 
adjusted for inflation. The inflation rates used here are similar to 
those required by the BEA but adjusted to remove the overcompensation 
for federal pay inherent in the BEA definition. Unlike the BEA 
requirements, these current services estimates assume that federal pay 
raises are effective in January, as required under current law. At the 
time the BEA was enacted, it ignored the nearly contemporaneous 
enactment of the Federal Employees Compensation Act of 1991 that shifted 
the effective date of federal employee pay raises from October to 
January. Also, the estimates presented here exclude the special 
adjustment for administrative expenses for certain benefit programs 
required by the BEA. This provision is inconsistent with the baseline 
rules for other accounts that fund administrative costs. In addition, 
the baseline estimates presented here assume that emergency 
appropriations enacted for 2006, including the response to Hurricane 
Katrina, funding to address Pandemic Influenza, and funding for the 
Global War on Terror, are one-time only events. The BEA requires that 
the base

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line assume funding for emergencies repeatedly through the projection 
period.

                  Alternative Formulations of Baseline

  Throughout much of U.S. history, budget proposals were often compared 
to either the President's request or the previous year's budget. In the 
early 1970s, policymakers developed the concept of a baseline to provide 
a more neutral benchmark for comparisons. While the Congressional Budget 
Act of 1974 included a requirement that OMB and the Congressional Budget 
Office (CBO) provide estimates of a current services baseline, the 
definition of the baseline was very general and specific guidance was 
not provided.
  Subsequent budget acts have specified in increasing detail the 
requirements for constructing baselines. Current services estimates for 
direct spending programs and receipts are generally estimated based on 
laws currently in place and most major programs are assumed to continue 
even past sunset dates set in law. In the case of receipts, the BEA 
requires only the extension of trust fund excise taxes, but otherwise 
bases the estimates on current law. For discretionary programs, these 
acts instituted a precise definition of baseline with numerous rules for 
its construction.
  It is clear, however, that a number of baseline definitions could be 
developed that differ for those presented in this chapter:
    Extend provisions affecting parts of mandatory programs. 
          Currently, mandatory programs that have current year outlays 
          of over $50 million are generally assumed to continue. 
          However, provisions of law that affect parts of mandatory 
          programs, even those that have been consistently extended in 
          the past, are assumed to expire as scheduled.
    Do not extend any authorizing laws that expire. If all 
          mandatory programs were assumed to expire as scheduled, 
          deficits for 2007 through 2011 would be $244 billion lower 
          than the current estimates. (See the section below on major 
          program assumptions for details on mandatory program 
          extensions assumed in the estimates.) If excise taxes were 
          allowed to expire, the deficit would be $54 billion higher 
          over the period 2007 through 2011. If certain provisions of 
          the 2001 and 2003 Tax Acts were assumed to expire, the deficit 
          would be $188 billion lower over the period.
    Straightline appropriations. If all discretionary budgetary 
          resources were to be the same in each year in the projection 
          period as provided for the current year, total outlays would 
          be $15 billion lower in 2007 and $350 billion lower over the 
          period 2007 through 2011.
    Do not extend any appropriations. The current treatment of 
          expiring provisions is inconsistent with the treatment of 
          discretionary spending. All discretionary spending continues 
          whether there is authorization for the program or not and 
          whether funds have already been provided or not. In nearly all 
          cases, funds for discretionary programs have not been provided 
          in advance for years beyond the current year. If rules 
          consistent with the treatment of other expiring provisions 
          were applied to discretionary spending, no new budgetary 
          resources would be provided. Thus, under a strict ``current 
          law'' approach, the only discretionary outlays that would be 
          included in the baseline would be the lagged spending from the 
          current year budgetary resource. If this rule were followed, 
          outlays in 2007 would be reduced by $551 billion relative to 
          the current estimates. Clearly this would provide an 
          unrealistic estimate of future spending and the government's 
          future fiscal position.
  Table 25-2 provides estimates for a variety of changes in baseline 
definitions that could be considered.

                                  Table 25-2.  ALTERNATIVE BASELINE ASSUMPTIONS
                                            (in billions of dollars)
----------------------------------------------------------------------------------------------------------------
                                        2006       2007       2008       2009       2010       2011    2006-2011
----------------------------------------------------------------------------------------------------------------
Current baseline deficit...........       -367       -257       -201       -196       -149       -146       -948
 
Alternative assumptions (``-''
 represents deficit increase) \1\:
  Extend provisions affecting parts  .........         -*         -1         -1         -1         -2         -5
   of mandatory programs \2\.......
 
  Do not extend any authorizing
   laws:
    Mandatory spending.............  .........          1         43         54         60         85        244
    Trust fund excise taxes........  .........  .........        -12        -13        -14        -16        -54
    Certain provisions of the 2001          -*          1          8         38         16        125        188
     and 2003 Tax Acts.............
 
  Straightline appropriations......  .........         15         39         67         97        130        350
 
  Do not extend any appropriations.  .........        551        858        996      1,094      1,184      4,684
----------------------------------------------------------------------------------------------------------------
\1\ Estimates include related debt service.
\2\ Estimates provided here are the totals for the illustrative provisions shown in Table 25-5. This is not a
  complete listing of all provisions that expire

                          Economic Assumptions

  The current services estimates are based on the same economic 
assumptions as the President's Budget, which are based on enactment of 
the President's Budget proposals. The economy and the budget interact. 
Changes in economic conditions significantly alter the estimates of tax 
receipts, unemployment benefits, entitlement payments that are 
automatically adjusted for changes in cost-of-living (COLAs), income 
support programs for low-income individuals, and interest on the Federal

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debt. In turn, Government tax and spending policies influence prices, 
economic growth, consumption, savings, and investment. Because of these 
interactions, it would be reasonable, from an economic perspective, to 
assume different economic paths for the current services baseline and 
the President's Budget. However, this would diminish the value of 
current services estimates as a benchmark for measuring proposed policy 
changes, because it would then be difficult to separate the effects of 
proposed policy changes from the effects of different economic 
assumptions. By using the same economic assumptions for current services 
and the President's Budget, this potential source of confusion is 
eliminated. The economic assumptions underlying both the budget and the 
current service estimates are summarized in Table 25-3. The economic 
outlook underlying these assumptions is discussed in greater detail in 
Chapter 12 of this volume.
  

                                  Table 25-3.  SUMMARY OF ECONOMIC ASSUMPTIONS
                                   (Fiscal years; dollar amounts in billions)
----------------------------------------------------------------------------------------------------------------
                                                        2006      2007      2008      2009      2010      2011
----------------------------------------------------------------------------------------------------------------
Gross Domestic Product (GDP):
  Levels, dollar amounts in billions:
    Current dollars.................................    13,030    13,761    14,521    15,296    16,102    16,955
    Real, chained (2000) dollars....................    11,418    11,800    12,187    12,573    12,963    13,364
  Percent change, year over year:
    Current dollars.................................       6.0       5.6       5.5       5.3       5.3       5.3
    Real, chained (2000) dollars....................       3.4       3.3       3.3       3.2       3.1       3.1
  Inflation measures (percent change, year over
   year):
    GDP chained price index.........................       2.5       2.2       2.2       2.1       2.1       2.1
    Consumer price index (all urban)................       3.3       2.4       2.4       2.4       2.4       2.4
Unemployment rate, civilian (percent)...............       5.0       5.0       5.0       5.0       5.0       5.0
Interest rates (percent):
  91-day Treasury bills.............................       4.1       4.2       4.2       4.3       4.3       4.3
  10-year Treasury notes............................       4.9       5.3       5.5       5.6       5.6       5.6
 
MEMORANDUM
  Related program assumptions:
    Automatic benefit increases (percent):
      Social security and veterans pensions.........       4.1       2.6       2.4       2.4       2.4       2.4
      Federal employee retirement...................       4.1       2.6       2.4       2.4       2.4       2.4
      Food stamps...................................       1.5       2.7       2.4       2.4       2.4       2.4
    Insured unemployment rate.......................       2.2       2.2       2.2       2.2       2.2       2.2
----------------------------------------------------------------------------------------------------------------

                     Major Programmatic Assumptions

  A number of programmatic assumptions must be made in order to 
calculate the baseline estimates. These include assumptions about the 
number of beneficiaries who will receive payments from the major benefit 
programs and annual cost-of-living adjustments in the indexed programs. 
Assumptions on baseline caseload projections for the major benefit 
programs are shown in Table 25-4. Assumptions about various automatic 
cost-of-living-adjustments are shown in Table 25-3.
  It is also necessary to make assumptions about the continuation of 
expiring programs and provisions. In the estimates provided here, 
expiring excise taxes dedicated to a trust fund are extended at current 
rates. Certain income tax provisions from the 2001 and 2003 Tax Acts, 
that were not designed to be temporary in nature, are assumed to be 
permanent for purposes of calculating revenue estimates. In general, 
mandatory programs with current year spending of at least $50 million 
are also assumed to continue. All discretionary programs with enacted 
non-emergency appropriations in the current year are assumed to 
continue. However, specific provisions of law that affect mandatory 
programs (but are not necessary for program operation) are allowed to 
expire as scheduled. For example, under the Deficit Reduction Act, 
medicaid transition assistance will expire at the end of December 2006. 
The baseline does not assume additional spending under this authority 
beyond that point. Table 25-5 provides a listing of mandatory programs 
and taxes assumed to continue in the baseline after their expiration.
  Many other important assumptions must be made in order to calculate 
the baseline estimates. These include assumptions about the timing and 
substance of regulations that will be issued over the projection period, 
the use of administrative discretion provided under current law, and 
other assumptions about the way programs operate. Table 25-5 lists many 
of these assumptions and their impact on the baseline estimates. It is 
not intended to be an exhaustive listing; the variety and complexity of 
Government programs are too great to provide a complete list. Instead, 
some of the more important assumptions are shown.

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                         Table 25-4.  BENEFICIARY PROJECTIONS FOR MAJOR BENEFIT PROGRAMS
                                         (Annual average, in thousands)
----------------------------------------------------------------------------------------------------------------
                                                                               Estimate
                                              2005   -----------------------------------------------------------
                                             Actual     2006      2007      2008      2009      2010      2011
----------------------------------------------------------------------------------------------------------------
Farmer direct payments....................     1,674     1,780     1,746     1,716     1,695     1,702     1,704
Federal family education loans............     5,864     6,213     6,490     6,781     7,102     7,436     7,790
Federal direct student loans..............     1,806     1,882     1,963     2,049     2,141     2,238     2,339
Medicaid/State Children's Health Insurance    53,400    56,200    56,800    57,400    57,900    58,300    58,700
 Program..................................
Medicare-eligible military retiree health      1,841     1,872     1,902     1,935     1,966     1,991     2,019
 benefits.................................
Medicare:
  Hospital insurance......................    41,874    42,489    43,201    44,027    44,927    45,889    46,973
  Supplementary medical insurance.........    39,462    39,986    40,592    41,300    42,076    42,883    43,778
Railroad retirement.......................       595       585       574       564       556       549       543
Federal civil service retirement..........     2,413     2,468     2,531     2,564     2,597     2,630     2,661
Military retirement.......................     2,087     2,111     2,135     2,154     2,169     2,178     2,182
Unemployment compensation.................     8,085     9,044     9,082     9,154     9,222     9,308     9,410
Food stamps...............................    25,681    26,946    25,868    25,390    24,773    24,539    24,451
Child nutrition...........................    32,343    33,158    33,880    34,546    35,139    35,670    36,165
Foster care and adoption assistance.......       597       623       651       682       713       746       780
Supplemental security income (SSI):
  Aged....................................     1,118     1,111     1,105     1,103     1,102     1,103     1,105
  Blind/disabled..........................     5,657     5,803     5,998     6,141     6,245     6,323     6,389
    Subtotal, SSI.........................     6,775     6,914     7,103     7,244     7,347     7,426     7,494
Child care and development fund \1\.......     2,200     2,100     2,000     2,000     1,900     1,900     1,800
Social security (OASDI):
  Old age and survivor insurance..........    39,844    40,262    40,762    41,389    42,163    43,080    44,070
  Disability insurance....................     8,054     8,424     8,743     9,017     9,251     9,448     9,649
Veterans compensation:
  Veterans................................     2,601     2,714     2,867     2,989     3,099     3,217     3,333
  Survivors (non-veterans)................       326       340       349       358       367       377       387
                                           ---------------------------------------------------------------------
    Subtotal, veterans compensation.......     2,927     3,054     3,216     3,347     3,466     3,594     3,720
Veterans pensions:
  Veterans................................       338       331       325       319       314       308       303
  Survivors (non-veterans)................       211       203       195       187       179       172       165
                                           ---------------------------------------------------------------------
      Subtotal, veterans pensions.........       549       534       520       506       493       480       468
----------------------------------------------------------------------------------------------------------------
\1\ Includes children served through the CCDF (including TANF transfers) and through funds spent directly on
  child care in the Social Services Block Grant and TANF programs.

                                     

       Table 25-5.  IMPACT OF REGULATIONS, EXPIRING AUTHORIZATIONS, AND OTHER ASSUMPTIONS IN THE BASELINE
                                            (in millions of dollars)
----------------------------------------------------------------------------------------------------------------
                                                                            Estimate
                                               -----------------------------------------------------------------
                                                   2006       2007       2008       2009       2010       2011
----------------------------------------------------------------------------------------------------------------
 
                  REGULATIONS
Old age and survivors insurance (OASI) and
 disabilty insurance (DI):
  Ticket to Work and Self-Sufficiency.........        18         26         27         18          5        -14
  Reduction of Title II benefits under family         17         18         19         20         21         23
   maximum in cases of dual entitlement.......
  Trial work period...........................         3          3          2          1          1   .........
  Expedited reinstatment of disability                NA         NA         NA         NA         NA         NA
   benefits...................................
Medicaid: \1\
  Payment Reform..............................  .........      -384       -624       -900       -939       -965
  Provider Tax Reform.........................  .........  .........      -230       -460       -690       -690
  Medicaid Services Reform....................  .........      -225       -364       -523       -564       -610
  Pharmacy Pay and Chase Reform...............  .........      -105        -95        -85        -75        -70
  Clarifying Regulations......................  .........  .........  .........  .........  .........  .........
  School-based Services Administration Reform.  .........      -615       -670       -725       -785       -850
Medicare, HI: \1\
  Long-term care hospitals....................  .........      -280       -480       -550       -570       -600
  Inpatient rehabiliation facilities..........  .........      -180       -210       -220       -230       -250
Medicare, SMI: \1\
  Part B covered drugs, supplies, and               -100       -260       -360       -360       -410       -410
   wheelchairs................................
Supplemental security income (SSI):
  Ticket to Work and Self-Sufficiency.........       -12        -12         -6         -3         -7        -19

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  Title XVI cross-program recovery............       -15        -15        -15        -15        -20        -20
  Student earned income exclusion.............         4          4          4          5          5          5
  Expedited reinstatment of disability                NA         NA         NA         NA         NA         NA
   benefits...................................
EPA Pesticides tolerance fee..................  .........  .........  .........       -13        -13        -13
 
            EXPIRING AUTHORIZATIONS
 
Provisions extended in the baseline (effect of
 extension):
Spending:
  Child care entitlement to States............  .........  .........  .........  .........  .........     2,917
  Child nutrition:
    Summer food service program...............  .........  .........  .........  .........       360        380
    State administrative expenses.............  .........  .........  .........  .........       191        200
  CCC market access, bioenergy and commodity
   programs:
    Counter-cyclical payment program..........  .........  .........  .........     1,489      2,193      1,847
    Dairy price support program...............  .........  .........        67        171        204        208
    Dairy export incentive program............  .........  .........        40         45         48         49
    Direct payment program....................  .........  .........     1,142      5,257      5,257      5,257
    Marketing assistance loan and loan          .........        73        310      1,616      1,407      1,154
     deficiency payment program...............
    Sugar nonrecourse loan program............  .........  .........  .........  .........  .........  .........
    Upland cotton foregiven interest..........  .........  .........        25   .........  .........  .........
    Market access program.....................  .........  .........       200        200        200        200
    Export credit guarantee programs..........  .........  .........       115        115        115        115
    Food for progress.........................  .........  .........       154        154        154        154
    Bill Emerson Humanitarian Trust...........  .........  .........       140        140        140        140
  Conservation reserve program................  .........  .........       408        779      1,242      1,673
  Farm security and rural investment..........  .........  .........     1,915      1,959      2,020      2,174
  Food stamps:
    Benefit costs.............................  .........  .........    30,412     30,489     31,103     31,849
    State administrative expenses.............  .........  .........     2,689      2,790      2,896      3,006
    Employment and training...................  .........  .........       347        355        364        373
    Other program costs.......................  .........  .........        60         61         63         64
    Nutrition assistance for Puerto Rico......  .........  .........     1,594      1,632      1,671      1,711
    Food donations on Indian reservations.....  .........  .........        77         80         85         87
    The emergency food assistance program       .........  .........       140        140        140        140
     commodities..............................
  Promoting safe and stable families..........  .........       345        345        345        345        345
  Temporary assistance for needy families
   (TANF) resources:
    State family assistance grants (SFAG).....  .........  .........  .........  .........  .........    16,489
    SFAG to territories.......................  .........  .........  .........  .........  .........        78
    Matching grants to territories............  .........  .........  .........  .........  .........         6
    Tribal work program.......................  .........  .........  .........  .........  .........         7
    Health Marriage and Fatherhood............  .........  .........  .........  .........  .........       150
    Census survey of program dynamics.........  .........  .........  .........  .........  .........        10
  Trade adjustment assistance--training and     .........  .........       547        934        985      1,019
   income support.............................
  Trade adjustment assistance--farmers........  .........  .........        90         90         90         90
  Veterans compensation--annual cost of living  .........       590      1,353      2,185      3,090      4,076
   adjustment.................................
Revenues:
  Excise taxes dedicated to trust funds:
    Airport and Airway trust fund taxes.......  .........  .........    11,396     12,071     12,784     13,542
  Certain provisions for the 2001 tax cut and         83       -531     -7,736    -37,023    -13,596   -119,388
   2003 jobs and growth tax cut (includes
   outlay impact).............................
Provisions not extended in the baseline
 (effect of extension):
Spending:
  Medicare, SMI:
    Medicare low income premium assistance \2\  .........  .........       380        405        430        460
  Medicaid:
    Transition benefits \3\...................  .........       393        554        580        601        625
  Promoting safe and stable families:
    Court improvement grants..................  .........  .........  .........  .........  .........        20
  TANF:
    Supplemental grants.......................  .........  .........  .........  .........  .........       319
    Welfare research..........................  .........  .........  .........  .........  .........        15
  Veterans programs:
    Income verification match.................  .........  .........  .........        -6        -11        -16
    Contract disability medical exams.........  .........  .........  .........  .........        92         96
    Native American veterans housing loans....  .........  .........  .........        -1         -1         -1
    Hybrid adjustable rate mortgages..........  .........  .........  .........         4          4          4
    Mandatory appropriation for administration  .........  .........  .........        11         11         11
     of income verification match.............
    Loan guarantees for multifamily             .........  .........  .........  .........  .........         3
     transitional housing for homeless
     veterans.................................
 

[[Page 365]]

 
      OTHER IMPORTANT PROGRAM ASSUMPTIONS
 
Child support enforcement (CSE):
  Alternative penalties for Family Support Act      -224         -7         -7         -7         -7   .........
   systems and Statewide Disbursement Unit
   requirements...............................
Food stamps:
  Tax offset, recoupment, and general claims        -175       -174       -176       -176       -180       -184
   collection.................................
  Quality control liabilities.................        -3         -3         -3         -3         -3         -3
  Allocation of administrative costs between        -197       -197       -197       -197       -197       -197
   public assistance programs.................
Medicare:
  Physicians..................................    58,739     60,984     59,103     59,356     58,650     57,635
  Contracting Reform..........................  .........  .........       -70       -280       -550       -580
Medicaid: \4\
  Financial management recoveries.............      -480       -505       -545       -588       -634       -685
  Vaccines for Children, total program costs..     1,958      2,006      1,698      1,688      1,713      1,729
  Institutional long term care................    35,279     36,476     38,352     40,335     42,471     44,833
  Home and community based institutional          21,334     23,183     25,731     28,495     31,471     34,837
   alternatives...............................
  Pharmaceuticals (FFS, net of rebates).......    14,931     14,378     15,110     16,132     17,269     18,578
  Managed care (including Medicaid MCOs, PHPs,    32,569     36,331     39,936     43,597     47,770     52,466
   PCCM)......................................
State Children's Health Insurance Program          5,775      5,244      5,345      5,316      5,311      5,176
 (Title XXI)..................................
Approved Demonstrations and Pilot Programs:
 \5\
  Medicare, HI:
    Rural Hospice
      Baseline estimate.......................         *          1          1          1          1   .........
      Demonstration estimate..................         *          1          1          1          1   .........
    Mercy Medical SNF
      Baseline estimate.......................         6          2   .........  .........  .........  .........
      Demonstration estimate..................         6          2   .........  .........  .........  .........
    Premier--Hospital Quality Incentive
      Baseline estimate.......................     3,265   .........  .........  .........  .........  .........
      Demonstration estimate..................     3,299         12   .........  .........  .........  .........
    Rural Community Hospital \6\
      Baseline estimate.......................        66         47         49         51         54   .........
      Demonstration estimate..................        79         56         59         62         59   .........
    New York Graduate Medical Education
      Baseline estimate.......................        69         69         69         69   .........  .........
      Demonstration estimate..................        59         48         35         17   .........  .........
    Utah Graduate Medical Education
      Baseline estimate.......................         6          6   .........  .........  .........  .........
      Demonstration estimate..................         6          6   .........  .........  .........  .........
  Medicare, SMI:
    Chronic Care Improvement Program (Medicare
     Health Support)
      Baseline estimate.......................  .........  .........  .........  .........  .........  .........
      Demonstration estimate..................       175        198        177   .........  .........  .........
    Chiropractic
      Baseline estimate.......................        20         10   .........  .........  .........  .........
      Demonstration estimate..................        30         14   .........  .........  .........  .........
    Municipal Health
      Baseline estimate.......................        15          4   .........  .........  .........  .........
      Demonstration estimate..................        29          8   .........  .........  .........  .........
    Diabetes (Telemedicine)
      Baseline estimate.......................         7          4   .........  .........  .........  .........
      Demonstration estimate..................         7          4   .........  .........  .........  .........
    United Mine Workers Program--Prescription
     Drug Benefits
      Baseline estimate.......................        26         37   .........  .........  .........  .........
      Demonstration estimate..................       114        118   .........  .........  .........  .........
    BIPA Disease Management
      Baseline estimate.......................       582        318   .........  .........  .........  .........
      Demonstration estimate..................       582        318   .........  .........  .........  .........
    Coordinated Care
      Baseline estimate.......................       174        178         90   .........  .........  .........
      Demonstration estimate..................       151        158         79   .........  .........  .........
    Medicare Replacement Drug
      Baseline estimate.......................  .........  .........  .........  .........  .........  .........
      Demonstration estimate..................       149   .........  .........  .........  .........  .........
    Disease Management for Chronically Ill
     Dual Beneficiaries (Lifemasters)
      Baseline estimate.......................       584        679        164   .........  .........  .........
      Demonstration estimate..................       526        613        149   .........  .........  .........

[[Page 366]]

 
    Medicare Lifestyle Modification Program
      Baseline estimate.......................         2          1   .........  .........  .........  .........
      Demonstration estimate..................         1          1   .........  .........  .........  .........
    Oncology/quality of care
      Baseline estimate.......................  .........  .........  .........  .........  .........  .........
      Demonstration estimate..................       100   .........  .........  .........  .........  .........
    Care Management for High-Cost
     Beneficiaries
      Baseline estimate.......................        NA   .........  .........  .........  .........  .........
      Demonstration estimate..................        61         95         82         13   .........  .........
    Low Vision Rehabilitation
      Baseline estimate.......................         1          2          2          2          2          1
      Demonstration estimate..................         1          4          4          4          4          2
  Medicare: HI and SMI:
    ESRD Disease Management
      Baseline estimate.......................       150        240        278        287         75   .........
      Demonstration estimate..................       149        239        277        286         74   .........
    Home Health Third Party Liability
      Baseline estimate.......................       173        191        174         31   .........  .........
      Demonstration estimate..................       171        186        171         28   .........  .........
    Homebound
      Baseline estimate.......................  .........  .........  .........  .........  .........  .........
      Demonstration estimate..................         1          1   .........  .........  .........  .........
    Medicare+Choice Phase I
      Baseline estimate.......................  .........  .........  .........  .........  .........  .........
      Demonstration estimate..................         6          3   .........  .........  .........  .........
    Medicare+Choice Phase II
      Baseline estimate.......................       195   .........  .........  .........  .........  .........
      Demonstration estimate..................       210         35   .........  .........  .........  .........
    SHMO-ESRD
      Baseline estimate.......................         4   .........  .........  .........  .........  .........
      Demonstration estimate..................         4   .........  .........  .........  .........  .........
    S/HMO I--Medicare
      Baseline estimate.......................     1,140      1,534        515   .........  .........  .........
      Demonstration estimate..................     1,368      1,741        584   .........  .........  .........
    S/HMO II--Medicare
      Baseline estimate.......................       507        629        202   .........  .........  .........
      Demonstration estimate..................       608        711        228   .........  .........  .........
    Physician Group Practice
      Baseline estimate.......................     1,702      1,793        454   .........  .........  .........
      Demonstration estimate..................     1,618      1,666        459         77   .........  .........
    United Mine Workers Program--Health
     Benefits
      Baseline estimate.......................       415        440   .........  .........  .........  .........
      Demonstration estimate..................       404        420   .........  .........  .........  .........
  Medicaid: \5\
    Alabama Family Planning...................        31   .........  .........  .........  .........  .........
    Arizona AHCCCS............................     3,300   .........  .........  .........  .........  .........
    Arkansas (ARKids B).......................        81         91        102   .........  .........  .........
    Arkansas Family Planning Services.........        61   .........  .........  .........  .........  .........
    Arkansas Independent Choices (Cash &               9          2   .........  .........  .........  .........
     Counseling)..............................
    Arkansas TEFRA............................        30         32          8   .........  .........  .........
    California Family Planning................       612   .........  .........  .........  .........  .........
    California In-Home Supportive Services           280        325        378        357   .........  .........
     Plus.....................................
    California--MediCal Hospital/Unisured Care       601        766        766        766        702   .........
    Colorado Consumer Directed Attendant              17         19          3   .........  .........  .........
     Support..................................
    Delaware--Diamond State Health Plan.......       504        129   .........  .........  .........  .........
    District of Columbia Childless Adults 50-          5          3   .........  .........  .........  .........
     64.......................................
    District of Columbia HIV..................         8         11         14         18          6   .........
    Florida Consumer Directed Care Plus (Cash         57         61         26   .........  .........  .........
     & Counseling)............................
    Florida Family Planning...................         8   .........  .........  .........  .........  .........
    Florida MEDS-AD Program...................       680        975      1,072      1,180      1,298   .........
    Hawaii Health QUEST.......................        85   .........  .........  .........  .........  .........
    Illinois Family Planning..................       387        414        442   .........  .........  .........
    IowaCare..................................       102        109        117        125        134   .........
    Kentucky Health Care Partnership Program..       482        513        568         48   .........  .........
    Maine HIV.................................         9          7   .........  .........  .........  .........
    Maryland (Health Choice)..................     1,578      1,610      1,086   .........  .........  .........
    Massachusetts MassHealth..................     2,569      2,757      2,960   .........  .........  .........

[[Page 367]]

 
    Minnesota (Prepaid Med. Assist. Project          156        186        148   .........  .........  .........
     Plus)....................................
    Minnesota Family Planning.................       217        248   .........  .........  .........  .........
    Mississippi Family Planning...............       134        146   .........  .........  .........  .........
    Mississippi--Healthier Mississippi........        65         71         78         86   .........  .........
    Missouri Managed Care Plus................       204         86   .........  .........  .........  .........
    Montana Basic Medicaid for Able-Bodied            32         35         39         13   .........  .........
     Adults...................................
    New Jersey Personal Preference (Cash &             4          5          3   .........  .........  .........
     Counseling)..............................
    New Mexico--Family Planning Expansion.....        11   .........  .........  .........  .........  .........
    New York (Partnership Plan)...............     5,252   .........  .........  .........  .........  .........
    North Carolina Family Planning............       392        424        457        494   .........  .........
    Oklahoma Family Planning..................       153        159        166   .........  .........  .........
    Oregon Family Planning....................        77   .........  .........  .........  .........  .........
    Oregon Independent Choices................         3          1   .........  .........  .........  .........
    Rhode Island Rite Care (Medicaid).........       179        192        169   .........  .........  .........
    South Carolina Family Planning............        26   .........  .........  .........  .........  .........
    TennCare II...............................     3,865      3,124   .........  .........  .........  .........
    Utah (Primary Care Network)...............        97         79   .........  .........  .........  .........
    Vermont Long Term Care Plan...............       116        129        143        159        176   .........
    Vermont Global Commitment to Health.......       492        494        538        586        639        160
    Virginia--Family Planning.................       171        176   .........  .........  .........  .........
    Washington (Take Charge/Family Planning)..       170   .........  .........  .........  .........  .........
    Wisconsin Badger Care (Medicaid)..........        42         18   .........  .........  .........  .........
    Wisconsin Family Planning.................        20         23   .........  .........  .........  .........
    Pharmacy plus (demonstration estimate):
        Wisconsin Pharmacy Plus...............       126        150   .........  .........  .........  .........
        Florida Pharmacy Plus.................        24   .........  .........  .........  .........  .........
        Illinois Pharmacy Plus................        26   .........  .........  .........  .........  .........
        South Carolina Pharmacy Plus..........        11   .........  .........  .........  .........  .........
  State Children's Health Insurance Program
   (Title XXI) (demonstration estimates):
    Alaska....................................         9          9         10         11   .........  .........
    Maryland Health Choice \7\................       139        150   .........  .........  .........  .........
    Minnesota Care
        Demonstration estimate (SCHIP funds)..        53         39         41         39   .........  .........
        Baseline estimate (medicaid funds)....  .........  .........  .........  .........  .........  .........
    Missouri MC+c \7\.........................       108         56   .........  .........  .........  .........
    New Jersey FamilyCare \8\.................       132        167        173   .........  .........  .........
    New Mexico SCHIP \7\......................        25         26   .........  .........  .........  .........
    Rhode Island (SCHIP RiteCare) \8\.........        30         34         11   .........  .........  .........
    Wisconsin (BadgerCare)....................        84         88   .........  .........  .........  .........
  Health Insurance Flexibility and
   Accountability (HIFA) (demonstration
   estimate--SCHIP funds):
    Arizona HIFA--amendment to AHCCCS.........        43   .........  .........  .........  .........  .........
    Colorado HIFA.............................        11   .........  .........  .........  .........  .........
    Idaho HIFA................................        19         21         23         18   .........  .........
    Illinois HIFA (KidCare Parent Coverage)
        Demonstration estimate................       133        159   .........  .........  .........  .........
        Baseline estimate (medicaid funds)....         5          6   .........  .........  .........  .........
    Maine HIFA (Maine Care for Childless
     Adults)
        Baseline estimate (medicaid funds)....       102        102   .........  .........  .........  .........
    Michigan HIFA.............................       127        120        112         24   .........  .........
    New Mexico HIFA...........................        18         21         24         27   .........  .........
    Oklahoma Sooner Care Demo+HIFA
        Baseline estimate (medicaid funds)....       906        230   .........  .........  .........  .........
    Oregon HIFA (Oregon Health Plan 2)
        Demonstration estimate (SCHIP funds)..        15         16   .........  .........  .........  .........
        Baseline estimate (medicaid funds)....     1,467      1,603   .........  .........  .........  .........
    Virginia HIFA.............................        11         12         12         13   .........  .........
  Joint Medicare and Medicaid: \9\
    Minnesota-Dual Eligibles
      Baseline estimate.......................       600      1,231        308   .........  .........  .........
      Demonstration estimate..................       599      1,231        308   .........  .........  .........
    Wisconsin-Dual Eligibles
      Baseline estimate.......................        88         95         24   .........  .........  .........
      Demonstration estimate \10\.............        88         95         24   .........  .........  .........
    Massachusetts--Dual Eligibles
        Demonstration estimate................        62         85         21   .........  .........  .........
        Baseline estimate.....................        62         85         21   .........  .........  .........

[[Page 368]]

 
OASI, DI, SSI:
  Performance of continuing disability reviews       -95       -460     -1,010     -1,600     -2,195     -2,900
   (baseline levels) (OASI, DI, SSI)..........
  Collection of overpayments:
    OASI......................................      -630       -678       -678       -678       -678       -678
    DI........................................      -522       -581       -581       -581       -581       -581
    SSI (federal).............................      -884       -960       -960       -960       -960       -960
    Debts written off as uncollectable (no
     effect on outlays):
    OASI......................................       126        135        135        135        135        135
    DI........................................       411        458        458        458        458        458
    SSI (federal).............................       353        383        383        383        383        383
  OASDI:
    Payments to states for vocational                 77         80         87         95        102        110
     rehabilitation...........................
  DI:
    Research and demonstration projects.......        38         59         54         27   .........  .........
  SSI:
    Payments from states for state                -4,240     -4,560     -4,725     -4,917     -5,083     -5,219
     supplemental benefits....................
    Payments for state supplemental benefits..     4,240      4,175      4,715      4,900      5,070      5,645
    Fees for administration of State
     supplement:
        Treasury share........................      -138       -130       -144       -146       -148       -161
        SSA share.............................      -119       -122       -124       -127       -130       -132
    Research and demonstration projects.......        37         27         27         28         28         29
  Payments to states for vocational                   51         53         56         59         63         67
   rehabilitation.............................
  Performance of non-disability                     -390     -1,180     -1,490     -1,570     -1,650     -1,730
   redeterminations (excludes related
   overpayment collections reported above)....
State grants and demonstrations--health care:
  Ticket to work grant programs:
    Infrastructure grant program..............        17         17         20         20         32         35
    Demonstration to maintain independence and        21         21         22         22         10         10
     employment...............................
  High risk pools:
    Initial seed grants.......................  .........  .........  .........  .........  .........  .........
    Operation of pools........................        21   .........  .........  .........  .........  .........
  Emergency health services for undocumented         150        175        200        175        175        125
   aliens.....................................
  Pilot program for national and state                 8          8          7   .........  .........  .........
   background checks..........................
  State pharmaceutical assistance programs....        32         50         30   .........  .........  .........
  Health care infrastructure improvement             140          1   .........  .........  .........  .........
   program....................................
TANF:
  Work verification penalties.................  .........  .........  .........        -7        -16        -28
----------------------------------------------------------------------------------------------------------------
* = $500,000 or less.
NA = Not available.
\1\ Medicare and medicaid regulations reflect gross outlays.
\2\C urrent law extends program through September 30, 2007.
\3\ Deficit Reduction Act extends program through December 31, 2006.
\4\ Not shown on table are anticipated collections from various state liabilities under current law.
\5\ Baseline estimates reflect costs absent the demonstration; demonstration estimate reflects costs of the
  demonstration. The differences represent the net impact of the demonstration.
\6\ Costs of this demonstration are offset annually by a reduction to inpatient hospital prospective payment
  rates.
\7\ Estimates reflect costs for SCHIP children under the State's Medicaid 1115.
\8\ States project covering a portion or their entire demonstration population with medicaid funds.
\9\ Large enrollment increases due to passive enrollment in Medicare Advantage Special Needs Plan demonstration.
  Enrollees would be in other Medicare Advantage plans in the absence of demonstrations.
\10\ Demonstration estimate includes Medicare and Medicaid Federal Share. Medicare share is 50% and 60%,
  respectively for 2006 and 2007. Medicaid share is 38% and 46%.

        Current Services Receipts, Outlays, and Budget Authority

  Receipts.--Table 25-6 shows baseline receipts by major source. Total 
receipts are projected to increase by $143 billion from 2006 to 2007 and 
by $620 billion from 2007 to 2011, largely due to assumed increases in 
incomes resulting from both real economic growth and inflation.
  Individual income taxes are estimated to increase by $108 billion from 
2006 to 2007 under baseline assumptions. This growth of 10.6 percent is 
primarily the effect of increased collections resulting from rising 
personal incomes. Individual income taxes are projected to grow at an 
annual rate of 7.3 percent between 2007 and 2011.
  

[[Page 369]]



                                    Table 25-6.  BASELINE RECEIPTS BY SOURCE
                                            (In billions of dollars)
----------------------------------------------------------------------------------------------------------------
                                                                            Estimate
                                        2005   -----------------------------------------------------------------
                                       Actual      2006       2007       2008       2009       2010       2011
----------------------------------------------------------------------------------------------------------------
Individual income taxes............        927      1,011      1,119      1,211      1,276      1,383      1,486
Corporation income taxes...........        278        279        265        273        284        292        302
Social insurance and retirement            794        841        884        931        979      1,036      1,095
 receipts..........................
  On-budget........................        217        231        242        252        263        277        293
  Off-budget.......................        577        610        642        679        716        758        802
Excise taxes.......................         73         74         75         76         78         79         83
Estate and gift taxes..............         25         28         24         24         26         20          2
Other..............................         56         69         77         82         86         92         97
 
Total..............................      2,154      2,301      2,444      2,597      2,729      2,901      3,064
  On-budget........................      1,576      1,691      1,802      1,918      2,013      2,142      2,262
  Off-budget.......................        577        610        642        679        716        758        802
----------------------------------------------------------------------------------------------------------------

  Corporation income taxes under current law are estimated to decline by 
$14 billion or 5.0 percent between 2006 and 2007, in large part due to 
economic factors and legislated tax changes. Corporation income taxes 
are projected to increase at an annual rate of 3.3 percent from 2007 to 
2011, reflecting higher corporate profits.
  Social insurance and retirement receipts are estimated to increase by 
$43 billion between 2006 and 2007, and by an additional $211 billion 
between 2007 and 2011. The estimates reflect assumed increases in total 
wages and salaries paid, and scheduled increases in the social security 
taxable earnings base from $94,200 in 2006 to $119,400 in 2011.
  Excise taxes are estimated to increase by $10 billion from 2006 to 
2011, in large part due to increased economic activity and the 
expiration of various excise tax credits. Estate and gift taxes remain 
relatively level until 2010 when the estate tax is repealed. Other 
baseline receipts (customs duties and miscellaneous receipts) are 
projected to increase by $28 billion from 2006 to 2011.
  Outlays.--Current services outlays are estimated to grow from $2,669 
billion in 2006 to $2,701 billion in 2007, a 1.2 percent increase. 
Between 2006 and 2011, they are projected to increase at an average 
annual rate of 3.8 percent. However, quirks in the calendar somewhat 
distort this comparison. When October 1 falls on a weekend, military pay 
and certain benefit payments are paid the previous Friday, shifting them 
into the previous fiscal year. Outlays for 2006 are relatively low 
because payments shifted from 2006 into 2005 while estimates for 2011 
include $23 billion in payments that have shifted from 2012. After 
adjustment for timing shifts, the average annual rate of growth between 
2006 and 2011 is 3.6 percent.
  Even though most discretionary spending is assumed to grow with 
inflation, outlays for discretionary programs decline from $998 billion 
in 2006 to $962 billion in 2007 and $957 billion in 2008 because the 
baseline assumes no additional spending for the war or Katrina-related 
disasters beyond what is already enacted. Outlays increase each year 
thereafter, reflecting increases in resources to keep pace with 
inflation, reaching $1,017 billion in 2011. Entitlement and other 
mandatory programs are estimated to grow from $1,451 billion in 2006 to 
$1,495 billion in 2007, and to $1,883 billion in 2011, due in large part 
to changes in the number of beneficiaries and to automatic cost-of-
living adjustments and other adjustments for inflation. Social security 
outlays grow from $550 billion in 2006 to $723 billion in 2011, an 
average annual rate of 5.6 percent. Medicare and medicaid are projected 
to grow at annual average rates of 8.1 (7.4 after adjustment for timing 
shifts) and 6.6 percent, respectively, outpacing inflation. Other areas 
of growth include federal employee retirement (average annual growth of 
3.9 percent), unemployment compensation (5.6 percent) and veterans 
programs (8.8 percent, but 7.4 percent after adjustment for timing 
shifts).
  Partially offsetting this growth, outlays for flood insurance and 
higher education decline from high levels in 2006. Flood insurance is 
estimated to spike to $18 billion in 2006 due to large claims related to 
Katrina. For 2007 and beyond, the program returns to its normal level. 
Likewise, higher education spending is projected to remain very high in 
2006 as people take advantage of favorable conditions in which to 
refinance loans. Projections for 2007 and beyond assume that this trend 
will not continue as interest rates remain relatively level. 
Undistributed offsetting receipts spike in 2007, reflecting expected 
large one-time payments from auctions of electromagnetic spectrum, and 
thus contribute to lower total outlays in that year.
  Farm program spending is also projected to decline through the 
projection period reflecting changes in market supply and demand. For 
the first time, the Budget incorporates probabilistic price and 
production variability into its baseline for Commodity Credit 
Corporation programs for feed grains, wheat, rice, upland cotton, 
soybeans, and dairy. Previously, farm program outlays projections were 
based solely on a point estimate or deterministic approach. Because some 
commodity support programs protect producer income only when prices fall 
below targeted levels, deterministic projections, by their nature, tend 
to underestimate outlays. Probabilistic outlay estimates account for the 
price and corresponding outlay variability around the deter

[[Page 370]]

ministic estimate. The change in methodology has increased commodity 
outlay projections by about $11 billion over the 2006 through 2011 
period relative to deterministic projections.
  Net interest payments to the public total $219 billion in 2006 and 
$244 billion in 2007. They then continue to rise each year reaching $310 
billion in 2011. This pattern reflects increased borrowing requirements 
as well as changes in the mix of debt issuance and interest rates over 
the period.
  Tables 25-8 and 25-9 show current services outlays by function and by 
agency, respectively. A more detailed presentation of outlays (by 
function, subfunction, category, and program) appears on the CD-ROM that 
accompanies this volume.
  Budget authority.--Tables 25-10 and 25-11 show current services 
estimates of budget authority by function and by agency, respectively. A 
more detailed presentation of budget authority with program level 
estimates appears on the CD-ROM that accompanies this volume.

                                     

                                              Table 25-7.  CHANGE IN BASELINE OUTLAY ESTIMATES BY CATEGORY
                                                              (Dollar amounts In billions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Change 2006 to 2007   Change 2001 to 2011
                                                                                                            --------------------------------------------
                                                                               2006       2007       2011                                       Average
                                                                                                               Amount    Percent     Amount     Annual
                                                                                                                                                 Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Outlays:
  Discretionary:
    DoD-Military..........................................................        480        440        472        -40      -8.3%         -8       -0.3%
    Homeland security.....................................................         32         34         38          2       6.2%          6        3.3%
    Other discretionary...................................................        486        488        507          2       0.4%         21        0.9%
                                                                           -----------------------------------------------------------------------------
  Subtotal, discretionary.................................................        998        962      1,017        -36      -3.6%         18        0.4%
  Mandatory:
    Farm programs.........................................................         22         21         16         -1      -3.8%         -6       -6.4%
    Flood insurance.......................................................         18          *          *        -17     -99.1%        -17      -66.1%
    Higher education......................................................         11          5          7         -6     -55.7%         -4       -9.7%
    Medicaid..............................................................        192        199        265          7       3.7%         73        6.6%
    Medicare..............................................................        338        390        500         52      15.3%        162        8.1%
    Federal employee retirement
      and disability......................................................         99        104        120          5       4.9%         21        3.9%
    Unemployment compensation.............................................         36         38         47          2       5.2%         11        5.6%
    Other income security programs........................................        171        170        195         -1      -0.4%         24        2.7%
    Social Security.......................................................        550        581        723         31       5.7%        173        5.6%
    Veterans programs.....................................................         38         39         57          1       4.0%         20        8.8%
    Other mandatory programs..............................................         36         38         37          2       5.2%          *        0.1%
    Credit sudsidy reestimates............................................         10  .........  .........        -10         NA        -10          NA
    Undistributed offsetting receipts.....................................        -69        -91        -83        -22      31.3%        -14        3.7%
                                                                           -----------------------------------------------------------------------------
  Subtotal, mandatory.....................................................      1,451      1,495      1,883         43       3.0%        431        5.3%
  Net interest............................................................        219        244        310         25      11.4%         91        7.2%
                                                                           -----------------------------------------------------------------------------
Total outlays.............................................................      2,669      2,701      3,210         32       1.2%        541        3.8%
 
Memorandum:
  Timing shifts caused by calendar........................................          4          3        -23  .........  .........  .........  ..........
 
Total outlays adjusted for timing shifts..................................      2,672      2,704      3,187         32       1.2%        515        3.6%
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 371]]


                                                    Table 25-8. CURRENT SERVICES OUTLAYS BY FUNCTION
                                                                (in billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Estimate
                           Function                                2005    -----------------------------------------------------------------------------
                                                                 Actual         2006         2007         2008         2009         2010         2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
National defense:
  Department of Defense--Military............................       474.2        482.0        442.2        439.7        447.2        458.4        474.1
  Other......................................................        21.2         23.9         23.9         23.8         24.2         24.6         25.1
                                                              ------------------------------------------------------------------------------------------
  Total, National defense....................................       495.3        505.9        466.0        463.5        471.3        483.0        499.2
International affairs........................................        34.6         34.8         32.5         32.3         32.0         32.2         32.8
General science, space, and technology.......................        23.7         24.0         25.0         25.4         26.3         26.6         27.2
Energy.......................................................         0.4          2.6          1.1          2.3          2.1          2.4          2.6
Natural resources and environment............................        28.0         32.7         33.1         33.3         34.4         35.6         36.6
Agriculture..................................................        26.6         26.8         27.0         25.1         23.7         22.8         22.6
Commerce and housing credit..................................         7.6          7.9          9.6          6.9          5.8          3.9          3.5
  On-Budget..................................................        (9.4)        (9.4)        (9.4)       (10.3)        (9.3)        (8.1)        (7.2)
  Off-Budget.................................................       (-1.8)       (-1.5)        (0.2)       (-3.4)       (-3.6)       (-4.2)       (-3.7)
Transportation...............................................        67.9         71.6         76.9         77.6         78.9         79.9         81.7
Community and regional development...........................        26.3         47.0         26.8         20.6         20.8         16.6         14.7
Education, training, employment, and social services.........        97.5        109.7         89.9         89.9         92.2         94.6         96.6
Health.......................................................       250.6        267.1        276.4        291.6        308.2        327.1        349.1
Medicare.....................................................       298.6        343.0        394.5        410.0        434.8        462.1        505.2
Income security..............................................       345.8        360.6        367.0        382.4        391.7        402.5        418.9
Social security..............................................       523.3        554.7        586.1        616.8        650.6        688.6        728.4
  On-Budget..................................................       (16.5)       (16.0)       (18.3)       (21.4)       (22.1)       (23.8)       (27.4)
  Off-Budget.................................................      (506.8)      (538.7)      (567.7)      (595.4)      (628.5)      (664.8)      (700.9)
Veterans benefits and services...............................        70.2         70.4         72.6         79.2         83.3         87.3         95.2
Administration of justice....................................        40.0         41.3         43.5         42.8         44.1         45.5         47.0
General government...........................................        17.0         19.0         20.1         20.1         20.4         21.0         21.9
Net interest.................................................       184.0        218.8        243.7        265.9        283.8        298.0        310.3
  On-Budget..................................................      (275.8)      (316.2)      (349.5)      (381.6)      (411.6)      (438.4)      (464.6)
  Off-Budget.................................................      (-91.8)      (-97.4)     (-105.7)     (-115.7)     (-127.8)     (-140.4)     (-154.3)
Allowances...................................................  ...........  ...........  ...........  ...........  ...........  ...........  ...........
Undistributed offsetting receipts:
  Employer share, employee retirement (on-budget)............       -48.0        -48.5        -49.8        -51.9        -54.3        -56.8        -59.5
  Employer share, employee retirement (off-budget)...........       -10.9        -11.7        -12.2        -12.8        -13.5        -14.2        -15.0
  Rents and royalties on the Outer Continental Shelf.........        -6.1         -9.1         -9.5         -9.2         -9.1         -8.8         -8.8
  Sale of major assets.......................................  ...........  ...........  ...........        -0.3   ...........  ...........  ...........
  Other undistributed offsetting receipts....................        -0.2         -0.1        -19.7        -13.3         -2.9         -0.1         -0.1
                                                              ------------------------------------------------------------------------------------------
  Total, Undistributed offsetting receipts...................       -65.2        -69.4        -91.2        -87.6        -79.7        -79.9        -83.4
    On-Budget................................................      (-54.3)      (-57.8)      (-79.0)      (-74.8)      (-66.2)      (-65.7)      (-68.4)
    Off-Budget...............................................      (-10.9)      (-11.7)      (-12.2)      (-12.8)      (-13.5)      (-14.2)      (-15.0)
                                                              ==========================================================================================
Total........................................................     2,472.2      2,668.5      2,700.7      2,798.0      2,924.7      3,049.8      3,209.8
                                                              ------------------------------------------------------------------------------------------
  On-Budget..................................................    (2,070.0)    (2,240.5)    (2,250.6)    (2,334.6)    (2,441.1)    (2,543.8)    (2,682.0)
  Off-Budget.................................................      (402.2)      (428.1)      (450.1)      (463.5)      (483.7)      (506.0)      (527.8)
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 372]]


                                                     Table 25-9. CURRENT SERVICES OUTLAYS BY AGENCY
                                                                (in billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Estimate
                            Agency                                 2005    -----------------------------------------------------------------------------
                                                                 Actual         2006         2007         2008         2009         2010         2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Legislative Branch...........................................         4.0          4.4          4.2          4.4          4.6          4.7          4.9
Judicial Branch..............................................         5.6          6.1          6.1          6.3          6.5          6.7          7.0
Agriculture..................................................        85.3         95.7         95.0         94.6         94.3         95.2         97.3
Commerce.....................................................         6.2          6.5          6.7          7.5          8.1          7.6          7.5
Defense--Military............................................       474.4        482.0        442.2        439.7        447.2        458.4        474.1
Education....................................................        72.9         84.0         65.4         66.0         67.7         69.6         71.1
Energy.......................................................        21.3         21.7         21.8         22.5         22.8         23.5         24.0
Health and Human Services....................................       581.5        641.5        701.0        730.1        770.2        816.3        880.7
Homeland Security............................................        39.3         61.7         42.5         37.3         38.2         34.5         33.9
Housing and Urban Development................................        42.5         46.8         43.7         43.4         43.0         43.0         43.4
Interior.....................................................         9.1          9.1         10.2         10.5         11.0         11.4         11.6
Justice......................................................        22.7         22.3         25.3         23.8         24.6         25.3         26.2
Labor........................................................        47.0         51.4         51.6         53.5         56.1         59.0         61.9
State........................................................        12.8         13.6         14.0         14.5         14.6         14.8         15.1
Transportation...............................................        56.9         61.3         65.5         65.7         66.5         67.2         68.4
Treasury.....................................................       408.7        450.8        492.5        531.1        566.1        599.1        631.5
Veterans Affairs.............................................        70.0         70.4         72.5         79.0         83.0         87.1         95.0
Corps of Engineers--Civil Works..............................         4.8          7.4          6.3          5.7          5.9          6.1          6.3
Other Defense Civil Programs.................................        43.5         45.7         47.2         48.6         49.6         50.2         50.5
Environmental Protection Agency..............................         7.9          7.9          8.0          8.3          8.4          8.6          8.8
Executive Office of the President............................         7.7          7.4          2.4          1.1          0.4          0.4          0.4
General Services Administration..............................         0.1          0.4          1.0          0.4          0.5          0.5          0.5
International Assistance Programs............................        15.0         16.3         16.6         17.1         17.3         17.3         17.6
National Aeronautics and Space Administration................        15.6         15.6         16.4         16.9         17.6         17.7         18.2
National Science Foundation..................................         5.4          5.8          5.7          5.8          5.9          6.1          6.2
Office of Personnel Management...............................        59.5         63.5         67.3         70.7         73.7         76.5         78.8
Small Business Administration................................         2.5          1.2          0.5          0.5          0.6          0.6          0.6
Social Security Administration...............................       561.3        592.4        622.6        658.9        694.4        734.0        779.6
  On-Budget..................................................       (54.5)       (53.7)       (54.9)       (63.4)       (66.0)       (69.2)       (78.6)
  Off-Budget.................................................      (506.8)      (538.7)      (567.7)      (595.4)      (628.5)      (664.8)      (700.9)
Other Independent Agencies...................................        14.8         14.4         18.7         16.3         16.5         15.5         16.1
  On-Budget..................................................       (16.6)       (15.9)       (18.4)       (19.7)       (20.1)       (19.7)       (19.8)
  Off-Budget.................................................       (-1.8)       (-1.5)        (0.2)       (-3.4)       (-3.6)       (-4.2)       (-3.7)
Allowances...................................................  ...........  ...........  ...........  ...........  ...........  ...........  ...........
Undistributed Offsetting Receipts............................      -226.2       -238.6       -272.3       -282.3       -290.7       -307.0       -327.2
  On-Budget..................................................     (-123.4)     (-129.5)     (-154.4)     (-153.8)     (-149.4)     (-152.4)     (-157.9)
  Off-Budget.................................................     (-102.8)     (-109.1)     (-117.9)     (-128.5)     (-141.2)     (-154.6)     (-169.4)
                                                              ==========================================================================================
Total........................................................     2,472.2      2,668.5      2,700.7      2,798.0      2,924.7      3,049.8      3,209.8
  On-Budget..................................................    (2,070.0)    (2,240.5)    (2,250.6)    (2,334.6)    (2,441.1)    (2,543.8)    (2,682.0)
  Off-Budget.................................................      (402.2)      (428.1)      (450.1)      (463.5)      (483.7)      (506.0)      (527.8)
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 373]]


                                               Table 25-10. CURRENT SERVICES BUDGET AUTHORITY BY FUNCTION
                                                                (in billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Estimate
                           Function                                2005    -----------------------------------------------------------------------------
                                                                 Actual         2006         2007         2008         2009         2010         2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
National defense:
  Department of Defense--Military............................       483.9        468.2        424.5        437.0        449.8        463.1        476.8
  Other......................................................        21.9         23.7         23.4         23.9         24.3         24.8         25.3
                                                              ------------------------------------------------------------------------------------------
  Total, National defense....................................       505.8        491.8        447.9        460.9        474.2        487.9        502.1
International affairs........................................        32.9         27.7         30.7         32.5         33.3         34.2         35.1
General science, space, and technology.......................        24.4         24.9         25.2         25.8         26.4         27.0         27.6
Energy.......................................................         1.3          1.6          1.4          2.1          2.0          2.4          2.6
Natural resources and environment............................        33.0         33.0         32.3         32.8         34.3         35.7         36.8
Agriculture..................................................        29.2         24.7         28.6         25.3         23.6         23.0         22.7
Commerce and housing credit..................................        14.2         12.1         17.2         17.1         13.2         13.2         13.7
  On-Budget..................................................       (13.2)       (10.0)       (13.4)       (16.2)       (12.4)       (12.8)       (13.2)
  Off-Budget.................................................        (1.0)        (2.0)        (3.9)        (0.9)        (0.8)        (0.4)        (0.5)
Transportation...............................................        76.2         75.4         81.0         82.7         75.7         85.0         86.0
Community and regional development...........................        84.5         16.7         11.5         12.2         12.4         12.6         12.8
Education, training, employment, and social services.........        99.9        114.2         91.7         94.1         96.6         99.3        100.7
Health.......................................................       251.8        292.8        276.1        293.2        313.1        331.0        353.4
Medicare.....................................................       303.4        360.5        394.2        409.9        435.1        461.8        505.2
Income security..............................................       349.0        352.3        368.1        382.3        393.5        405.2        423.3
Social security..............................................       531.7        557.9        588.6        619.4        653.5        691.9        731.8
  On-Budget..................................................       (16.5)       (16.0)       (18.3)       (21.4)       (22.1)       (23.8)       (27.4)
  Off-Budget.................................................      (515.1)      (541.8)      (570.3)      (598.0)      (631.4)      (668.1)      (704.3)
Veterans benefits and services...............................        69.2         70.4         76.2         80.0         84.1         88.1         92.1
Administration of justice....................................        40.6         40.8         43.5         43.1         44.5         46.0         47.5
General government...........................................        16.9         19.8         20.4         20.7         21.4         21.9         22.7
Net interest.................................................       184.0        218.8        243.7        265.9        283.8        298.0        310.3
  On-Budget..................................................      (275.8)      (316.2)      (349.5)      (381.6)      (411.6)      (438.4)      (464.6)
  Off-Budget.................................................      (-91.8)      (-97.4)     (-105.7)     (-115.7)     (-127.8)     (-140.4)     (-154.3)
Allowances...................................................  ...........  ...........  ...........  ...........  ...........  ...........  ...........
Undistributed offsetting receipts:
  Employer share, employee retirement (on-budget)............       -48.0        -48.5        -49.8        -51.9        -54.3        -56.8        -59.5
  Employer share, employee retirement (off-budget)...........       -10.9        -11.7        -12.2        -12.8        -13.5        -14.2        -15.0
  Rents and royalties on the Outer Continental Shelf.........        -6.1         -9.1         -9.5         -9.2         -9.1         -8.8         -8.8
  Sale of major assets.......................................  ...........  ...........  ...........        -0.3   ...........  ...........  ...........
  Other undistributed offsetting receipts....................        -0.2         -0.1        -19.7        -13.3         -2.9         -0.1         -0.1
                                                              ------------------------------------------------------------------------------------------
  Total, Undistributed offsetting receipts...................       -65.2        -69.4        -91.2        -87.6        -79.7        -79.9        -83.4
    On-Budget................................................      (-54.3)      (-57.8)      (-79.0)      (-74.8)      (-66.2)      (-65.7)      (-68.4)
    Off-Budget...............................................      (-10.9)      (-11.7)      (-12.2)      (-12.8)      (-13.5)      (-14.2)      (-15.0)
                                                              ==========================================================================================
Total........................................................     2,582.9      2,665.8      2,687.1      2,812.7      2,941.0      3,084.4      3,243.0
                                                              ------------------------------------------------------------------------------------------
  On-Budget..................................................    (2,169.5)    (2,231.1)    (2,230.9)    (2,342.2)    (2,450.1)    (2,570.5)    (2,707.6)
  Off-Budget.................................................      (413.4)      (434.7)      (456.2)      (470.4)      (490.9)      (513.9)      (535.5)
                                                              ------------------------------------------------------------------------------------------
                          MEMORANDUM
 
Discretionary budget authority:
  National defense...........................................       499.8        488.3        444.6        457.8        471.1        484.8        499.0
  International..............................................        34.7         31.5         32.1         32.9         33.7         34.5         35.3
  Domestic...................................................       450.4        382.0        391.8        403.3        414.3        425.6        437.1
                                                              ------------------------------------------------------------------------------------------
Total........................................................       984.9        901.8        868.6        894.0        919.1        944.9        971.4
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 374]]


                                                Table 25-11. CURRENT SERVICES BUDGET AUTHORITY BY AGENCY
                                                                (in billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              Estimate
                            Agency                                 2005    -----------------------------------------------------------------------------
                                                                 Actual         2006         2007         2008         2009         2010         2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Legislative Branch...........................................         4.1          4.2          4.4          4.5          4.7          4.9          5.1
Judicial Branch..............................................         5.7          6.0          6.2          6.4          6.6          6.9          7.1
Agriculture..................................................        95.0         96.3         99.6         96.9         96.6         98.1        100.3
Commerce.....................................................         6.5          6.4          6.8          9.2          7.2          7.4          7.7
Defense--Military............................................       483.9        468.2        424.5        437.0        449.8        463.1        476.8
Education....................................................        74.6         88.6         66.4         68.3         70.3         72.4         73.2
Energy.......................................................        21.2         21.0         21.2         22.4         22.9         23.5         24.1
Health and Human Services....................................       591.5        676.9        700.3        731.5        773.2        819.4        886.5
Homeland Security............................................       101.3         22.7         29.8         31.0         34.0         32.6         33.5
Housing and Urban Development................................        35.1         47.8         37.7         38.7         39.6         40.6         41.6
Interior.....................................................        10.4          9.3         10.2         10.4         11.0         11.5         11.6
Justice......................................................        22.1         22.6         24.8         23.9         24.7         25.6         26.4
Labor........................................................        47.2         51.3         52.6         55.1         57.5         60.1         62.7
State........................................................        14.7         13.6         13.9         14.2         14.6         15.0         15.4
Transportation...............................................        64.9         64.6         69.3         70.6         63.2         72.1         72.6
Treasury.....................................................       410.2        452.5        494.1        532.6        567.9        600.9        633.2
Veterans Affairs.............................................        69.1         70.4         76.0         79.8         83.8         87.9         91.9
Corps of Engineers--Civil Works..............................         5.5          8.3          5.5          5.7          5.9          6.1          6.3
Other Defense Civil Programs.................................        43.7         45.9         47.4         48.7         49.8         50.4         50.7
Environmental Protection Agency..............................         8.0          7.6          7.8          8.0          8.2          8.5          8.7
Executive Office of the President............................         0.4          0.3          0.4          0.4          0.4          0.4          0.4
General Services Administration..............................         0.3          0.6          0.6          0.6          0.6          0.6          0.7
International Assistance Programs............................        18.2         15.6         16.1         17.4         17.9         18.3         18.8
National Aeronautics and Space Administration................        16.2         16.6         16.7         17.1         17.5         18.0         18.4
National Science Foundation..................................         5.6          5.7          5.8          6.0          6.1          6.2          6.4
Office of Personnel Management...............................        63.1         66.8         70.3         73.5         76.5         79.5         82.4
Small Business Administration................................         3.3          0.5          0.6          0.6          0.6          0.6          0.7
Social Security Administration...............................       569.9        594.9        625.4        661.5        697.4        737.4        782.6
  On-Budget..................................................       (54.8)       (53.0)       (55.2)       (63.4)       (66.0)       (69.2)       (78.2)
  Off-Budget.................................................      (515.1)      (541.8)      (570.3)      (598.0)      (631.4)      (668.1)      (704.3)
Other Independent Agencies...................................        17.5         19.3         24.8         22.8         23.2         23.4         24.8
  On-Budget..................................................       (16.5)       (17.3)       (21.0)       (21.9)       (22.4)       (23.0)       (24.3)
  Off-Budget.................................................        (1.0)        (2.0)        (3.9)        (0.9)        (0.8)        (0.4)        (0.5)
Allowances...................................................  ...........  ...........  ...........  ...........  ...........  ...........  ...........
Undistributed Offsetting Receipts............................      -226.2       -238.6       -272.3       -282.3       -290.7       -307.0       -327.2
  On-Budget..................................................     (-123.4)     (-129.5)     (-154.4)     (-153.8)     (-149.4)     (-152.4)     (-157.9)
  Off-Budget.................................................     (-102.8)     (-109.1)     (-117.9)     (-128.5)     (-141.2)     (-154.6)     (-169.4)
                                                              ==========================================================================================
Total........................................................     2,582.9      2,665.8      2,687.1      2,812.7      2,941.0      3,084.4      3,243.0
  On-Budget..................................................    (2,169.5)    (2,231.1)    (2,230.9)    (2,342.2)    (2,450.1)    (2,570.5)    (2,707.6)
  Off-Budget.................................................      (413.4)      (434.7)      (456.2)      (470.4)      (490.9)      (513.9)      (535.5)
--------------------------------------------------------------------------------------------------------------------------------------------------------