[Analytical Perspectives]
[Current Services Estimates]
[25. Current Services Estimates]
[From the U.S. Government Printing Office, www.gpo.gov]
[[Page 371]]
25. CURRENT SERVICES ESTIMATES
Table 25-1. BASELINE CATEGORY TOTALS
(In billions of dollars)
----------------------------------------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
Receipts........................... 2,407 2,550 2,714 2,831 3,008 3,151 3,348
Outlays:
Discretionary:
DoD-Military................... 499 511 444 455 464 475 486
Homeland security.............. 31 35 36 38 36 37 38
International affairs.......... 36 36 34 34 33 33 33
Other discretionary............ 451 450 448 450 454 463 470
----------------------------------------------------------------------------
Subtotal, discretionary.......... 1,017 1,032 961 976 987 1,008 1,028
Mandatory:
Social Security................ 544 582 608 640 678 718 762
Medicare....................... 325 367 391 418 447 493 503
Medicaid and SCHIP............. 186 197 209 224 241 259 279
Other mandatory................ 357 318 330 348 361 381 374
----------------------------------------------------------------------------
Subtotal, mandatory.............. 1,412 1,465 1,537 1,631 1,727 1,850 1,918
Net interest..................... 227 238 254 258 259 258 255
----------------------------------------------------------------------------
Total outlays...................... 2,655 2,735 2,752 2,866 2,973 3,116 3,201
Unified deficit.................. -248 -185 -38 -35 34 35 147
On-budget...................... -434 -368 -250 -261 -210 -228 -130
Off-budget..................... 186 183 212 225 244 263 277
Memorandum:
BEA baseline deficit............. -248 -186 -81 -104 -34 95 287
Do not extend emergencies...... ......... ......... 40 64 72 76 79
Correct growth rates for pay... ......... ......... 2 3 3 3 3
Remove special rule for ......... ......... * * 1 1 1
administrative expenses of
selected programs.............
Extend certain tax provisions.. ......... * -1 -2 -14 -146 -225
Related debt service........... ......... * 1 4 7 7 2
----------------------------------------------------------------------------
Current baseline deficit......... -248 -185 -38 -35 34 35 147
----------------------------------------------------------------------------------------------------------------
Current services estimates or the ``baseline'' are designed to provide
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. Shortly after enactment of the Budget
Enforcement Act (BEA) which provided detailed rules for calculating a
baseline, there was a consensus to define the current services estimates
according to those rules. 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. Table 25-1
[[Page 372]]
shows current services estimates of receipts, outlays, and surpluses for
2006 through 2012. 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 25-2
shows the changes proposed in the budget relative to the current
services estimates. Detailed descriptions of the budget proposals can be
found in the main Budget volume.
Table 25-2. IMPACT OF BUDGET POLICY
(in billions of dollars)
----------------------------------------------------------------------------------------------------------------
Total
2007 2008 2009 2010 2011 2012 ----------
2008-2012
----------------------------------------------------------------------------------------------------------------
Current Services Baseline Deficit.. -185 -38 -35 34 35 147 143
Proposals:
Global war on terror and other
emergencies.................... -37 -133 -94 -47 -25 -18 -316
Discretionary policy:
Security....................... -6 -17 -47 -55 -61 -52 -233
Non-security................... -7 -8 6 15 28 37 79
----------------------------------------------------------------------------
Subtotal, discretionary.......... -12 -26 -41 -40 -32 -15 -154
Revenue proposals \1\............ -10 -53 -36 -63 -60 -55 -267
Mandatory proposals:
Social security personal ......... ......... ......... ......... ......... -30 -30
accounts......................
Other proposals................ * 10 19 21 28 32 110
2008 Budget Deficit................ -244 -239 -187 -94 -54 61 -514
----------------------------------------------------------------------------------------------------------------
* $500 million or less.
Note: Each line includes debt service.
\1\ Includes outlay impact of revenue proposals.
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.
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 2007 through 2012, the only taxes
affected by this exception are taxes deposited in the Airport
and Airway trust fund, which expire on September 30, 2007, and
taxes deposited in the Highway trust fund, the Leaking
Underground Storage Tank trust fund, and the Sport Fish
Restoration and Boating Safety trust fund, which expire on
September 30, 2011.
Direct spending programs that will expire under current law
are assumed to be extended if their 2007 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 through the projection
period. However, programs enacted after the enactment of the
Balanced Budget Act of 1997 that are explicitly temporary in
nature expire in the baseline even if
[[Page 373]]
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 2007, the current services estimates
for discretionary programs are equal to enacted 2007 appropriations for
accounts included in the Defense and Homeland Security Appropriations
Acts. For all other discretionary accounts, current services estimates
are set at the annualized continuing resolution rate. For 2008 through
2012, funding for most accounts is equal to this 2007 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 2007,
which primarily provide funding for the Global War on Terror, are one-
time only expenditures. The BEA requires that the baseline 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 laws 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 2008 through 2012 would be $314 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 $110 billion higher
over the period 2008 through 2012. If certain provisions of
the 2001 and 2003 Tax Acts were assumed to expire, the deficit
would be $404 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 $18 billion lower in 2008 and $381 billion lower over the
period 2008 through 2012.
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 treat
[[Page 374]]
ment 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
2008 would be reduced by $553 billion relative to the current
estimates. Clearly this would provide an unrealistic estimate
of future spending and the government's future fiscal
position.
Table 25-3 provides estimates for a variety of changes in baseline
definitions that could be considered.
Table 25-3. ALTERNATIVE BASELINE ASSUMPTIONS
(in billions of dollars)
----------------------------------------------------------------------------------------------------------------
2007 2008 2009 2010 2011 2012 2008-2012
----------------------------------------------------------------------------------------------------------------
Current baseline surplus/deficit... -185 -38 -35 34 35 147 143
Alternative assumptions (``-''
represents deficit increase):
Extend provisions affecting parts -* -1 -2 -2 -2 -2 -9
of mandatory programs \1\.......
Do not extend any authorizing
laws:
Mandatory spending............. ......... 41 51 55 80 87 314
Trust fund excise taxes........ ......... -12 -13 -14 -16 -55 -110
Certain provisions of the 2001 -* 1 2 14 150 237 404
and 2003 Tax Acts.............
Straightline appropriations...... ......... 18 44 74 106 140 381
Do not extend any appropriations. ......... 553 863 1,005 1,105 1,193 4,718
----------------------------------------------------------------------------------------------------------------
\1\ Estimates provided here are the totals for the illustrative provisions shown in Table 25-5. This is not a
completelisting 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
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 25-4. The economic
outlook underlying these as
[[Page 375]]
sumptions is discussed in greater detail in Chapter 12 of this volume.
Table 25-4. SUMMARY OF ECONOMIC ASSUMPTIONS
(Fiscal years; dollar amounts in billions)
----------------------------------------------------------------------------------------------------------------
2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
Gross Domestic Product (GDP):
Levels, dollar amounts in billions:
Current dollars................................. 13,761 14,515 15,306 16,112 16,938 17,786
Real, chained (2000) dollars.................... 11,637 11,985 12,357 12,732 13,114 13,502
Percent change, year over year:
Current dollars................................. 5.4 5.5 5.5 5.3 5.1 5.0
Real, chained (2000) dollars.................... 2.8 3.0 3.1 3.0 3.0 3.0
Inflation measures (percent change, year over
year):
GDP chained price index......................... 2.5 2.4 2.3 2.2 2.1 2.0
Consumer price index (all urban)................ 2.0 2.6 2.6 2.5 2.4 2.3
Unemployment rate, civilian (percent)............... 4.6 4.7 4.8 4.8 4.8 4.8
Interest rates (percent):
91-day Treasury bills............................. 4.8 4.6 4.4 4.3 4.1 4.1
10-year Treasury notes............................ 4.9 5.0 5.2 5.3 5.3 5.3
MEMORANDUM
Related program assumptions:
Automatic benefit increases (percent):
Social security and veterans pensions......... 3.3 1.4 2.6 2.5 2.4 2.3
Federal employee retirement................... 3.3 1.4 2.6 2.5 2.4 2.3
Food stamps................................... 2.2 4.1 2.6 2.6 2.4 2.4
Insured unemployment rate....................... 1.9 1.9 1.9 2.0 2.0 2.0
----------------------------------------------------------------------------------------------------------------
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 25-5. Assumptions about various automatic
cost-of-living-adjustments are shown in Table 25-4.
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 Tax Relief and Health Care
Act of 2006, Medicaid Transitional Medical Assistance will expire at the
end of June 2007. The baseline does not assume additional spending under
this authority beyond that point. Table 25-6 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 25-6 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.
Table 25-5. BENEFICIARY PROJECTIONS FOR MAJOR BENEFIT PROGRAMS
(Annual average, in thousands)
----------------------------------------------------------------------------------------------------------------
Estimate
2006 -----------------------------------------------------------
Actual 2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
Farmer direct payments.................... 1,587 1,579 1,571 1,563 1,555 1,548 1,540
Federal family education loans............ 5,883 6,173 6,396 6,640 6,909 7,191 7,487
Federal direct student loans.............. 1,714 1,709 1,767 1,832 1,904 1,978 2,057
Medicaid/State Children's Health Insurance 52,273 53,353 53,859 54,400 54,914 55,227 55,622
Program..................................
Medicare-eligible military retiree health 1,871 1,903 1,938 1,969 1,995 2,025 2,069
benefits.................................
Medicare:
Hospital insurance...................... 42,684 43,356 44,190 45,132 46,084 47,153 48,505
Supplementary medical insurance......... 40,100 40,618 41,335 42,134 42,919 43,749 44,894
Railroad retirement....................... 583 573 565 558 552 547 542
Federal civil service retirement.......... 2,453 2,471 2,488 2,518 2,541 2,564 2,587
Military retirement....................... 2,116 2,142 2,162 2,178 2,188 2,193 2,196
Unemployment compensation................. 7,538 7,537 7,982 8,372 8,456 8,543 8,574
Food stamps............................... 26,736 26,335 26,245 26,113 25,860 25,661 25,430
Child nutrition........................... 32,748 33,713 34,374 34,942 35,465 35,967 36,416
Foster care and adoption assistance....... 600 616 638 658 680 703 727
Supplemental security income (SSI):
Aged.................................... 1,116 1,113 1,112 1,111 1,113 1,118 1,128
Blind/disabled.......................... 5,762 5,932 6,110 6,255 6,378 6,495 6,604
---------------------------------------------------------------------
Subtotal, SSI......................... 6,878 7,045 7,222 7,366 7,491 7,613 7,732
Child care and development fund \1\....... 2,300 2,200 2,100 2,100 2,000 2,000 2,000
Social security (OASDI):
Old age and survivor insurance.......... 40,264 40,688 41,263 42,007 42,947 43,964 45,074
Disability insurance.................... 8,373 8,729 9,056 9,329 9,550 9,764 9,954
Veterans compensation:
Veterans................................ 2,683 2,782 2,879 2,977 3,072 3,164 3,252
Survivors (non-veterans)................ 330 334 341 347 353 359 366
---------------------------------------------------------------------
Subtotal, veterans compensation....... 3,013 3,116 3,220 3,324 3,425 3,523 3,618
Veterans pensions:
Veterans................................ 332 326 320 315 309 304 298
Survivors (non-veterans)................ 203 198 193 188 183 178 174
---------------------------------------------------------------------
Subtotal, veterans pensions......... 535 524 513 503 492 482 472
----------------------------------------------------------------------------------------------------------------
\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.
[[Page 376]]
Table 25-6. IMPACT OF REGULATIONS, EXPIRING AUTHORIZATIONS, AND OTHER ASSUMPTIONS IN THE BASELINE
(In millions of dollars)
----------------------------------------------------------------------------------------------------------------
Estimate
-----------------------------------------------------------------
2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
REGULATIONS
EPA pesticides tolerance fee.................. ......... ......... -13 -13 -13 -13
Foster care and adoption assistance:
National Youth in Transition Database....... ......... 6 6 7 6 5
Impact of Total Case Management............. 10 65 68 71 73 75
Medicaid: \1\
Payment Reform.............................. -120 -530 -840 -1,170 -1,210 -1,250
School-based Services Administration Reform. ......... -615 -670 -725 -785 -850
Medicaid Graduate Medical Education Reform.. ......... -140 -290 -440 -450 -460
Medicaid Services Reform.................... ......... -230 -360 -520 -570 -610
Managed Care reform......................... ......... ......... ......... ......... ......... .........
Clarifying Regulations...................... ......... ......... ......... ......... ......... .........
Payment Error Rate Measurement.............. 5 5 5 6 6 7
Medicare: \1\
Post-Acute Care Provider Reform, Program ......... -1,000 -1,572 -2,159 -2,637 -2,867
Integrity, Upcoding Adjustments and other
efficiency and productivity improvements...
Old age and survivors insurance (OASI) and
disabilty insurance (DI):
Reduction of Title II benefits under family 18 19 20 21 23 23
maximum in cases of dual entitlement.......
Trial work period........................... 3 2 1 1 ......... .........
Expedited reinstatement of disability NA NA NA NA NA NA
benefits...................................
Continuing disability review failure to -10 -12 -12 -12 -13 -14
cooperate process..........................
State Children's Health Insurance Program: \1\
Payment Error Rate Measurement.............. 7 8 8 9 9 10
Supplemental security income (SSI):
Title XVI cross-program recovery............ -15 -15 -15 -20 -20 -20
Student earned income exclusion............. 4 4 5 5 5 5
Expedited reinstatement of disability NA NA NA NA NA NA
benefits...................................
EXPIRING AUTHORIZATIONS
Provisions extended in the baseline (effect of
extension):
Spending:
Child care entitlement to States:
Child care mandatory...................... ......... ......... ......... ......... 1,178 1,178
Child care match.......................... ......... ......... ......... ......... 1,674 1,674
Child care tribal......................... ......... ......... ......... ......... 58 58
Training and technical assistance......... ......... ......... ......... ......... 7 7
Child nutrition:
Summer food service program............... ......... ......... ......... 347 366 386
State administrative expenses............. ......... ......... ......... 191 200 208
CCC market access, bioenergy and commodity
programs:
Counter-cyclical payment program.......... ......... ......... 439 949 898 944
Dairy price support program............... ......... 60 55 47 47 47
Dairy export incentive program............ ......... ......... 3 ......... ......... .........
Direct payment program.................... ......... 1,155 5,249 5,249 5,249 5,249
Marketing assistance loan and loan ......... 735 1,154 566 656 844
deficiency payment program...............
Sugar nonrecourse loan program............ ......... ......... 170 129 111 117
Market access program..................... ......... 200 200 200 200 200
Export credit guarantee programs.......... ......... 70 70 70 70 70
Food for progress......................... ......... 154 154 154 154 154
Bill Emerson Humanitarian Trust........... ......... 140 140 140 140 140
Conservation reserve program................ ......... 22 102 228 604 1,002
Farm security and rural investment
Ground and surface water conservation..... ......... 2 17 26 35 43
Farm and ranch lands protection........... ......... 2 37 65 81 97
Food stamps:
Benefit costs............................. ......... 31,875 32,714 33,389 34,115 34,786
State administrative expenses............. ......... 2,644 2,754 2,865 2,977 3,092
Employment and training................... ......... 321 330 338 346 352
Other program costs....................... ......... 59 61 62 64 65
Nutrition assistance for Puerto Rico...... ......... 1,612 1,655 1,698 1,739 1,780
Food donations on Indian reservations..... ......... 80 83 86 88 90
The emergency food assistance program ......... 140 140 140 140 140
commodities..............................
Other activities under the Food Stamp Act ......... 28 27 26 26 27
of 1977..................................
Promoting safe and stable families.......... ......... ......... ......... ......... ......... 345
Temporary assistance for needy families
(TANF) resources:
State family assistance grants (SFAG)..... ......... ......... ......... ......... 16,553 16,480
SFAG to territories....................... ......... ......... ......... ......... 78 78
[[Page 377]]
Tribal work program....................... ......... ......... ......... ......... 8 8
Health Marriage and Fatherhood............ ......... ......... ......... ......... 150 150
Contingency fund.......................... ......... ......... ......... ......... 91 96
Welfare research.......................... ......... ......... ......... ......... 15 15
Trade adjustment assistance--training and ......... 685 841 918 968 992
income support.............................
Trade adjustment assistance--farmers........ ......... 15 15 15 15 15
Veterans compensation--annual cost of living ......... 348 1,132 2,017 2,933 3,876
adjustment.................................
Revenues:
Excise taxes dedicated to trust funds:
Airport and Airway trust fund taxes....... ......... 11,495 12,185 12,906 13,662 14,453
Aquatic Resources trust fund taxes........ ......... ......... ......... ......... ......... 516
Highway trust fund taxes.................. ......... ......... ......... ......... ......... 35,940
LUST taxes................................ ......... ......... ......... ......... ......... 212
Certain provisions for the 2001 tax cut 188 -690 -1,595 -13,789 -146,193 -224,918
and 2003 jobs and growth tax cut
(includes outlay impact).................
Provisions not extended in the baseline
(effect of extension):
Spending:
Abstinence education (Children and Families 5 25 44 49 50 50
Services)..................................
Biobased product testing.................... ......... 1 1 1 1 1
Biodiesel fuel education.................... ......... 1 1 1 1 1
EPA
Pesticide maintenance fee................. ......... ......... -15 -15 -15 -15
Pesticide registration service fee........ ......... ......... -3 -3 -3 -3
Farm bill programs:
Klamath Basin............................. ......... ......... 2 3 6 7
Grassland reserve program................. ......... 14 38 44 46 48
Milk income loss contract program......... ......... 300 185 120 85 70
Small watershed rehabiliation program..... ......... 38 56 65 65 65
Wetlands reserve program.................. ......... ......... 18 200 291 364
Wildlife habitat incentives............... ......... 1 18 31 45 58
Medicare, SMI--medicare low income premium ......... 425 440 465 495 525
assistance.................................
Medicaid--Transitional Medical Assistance... 35 554 580 601 625 650
Promoting safe and stable families--court ......... ......... ......... ......... 20 20
improvement grants.........................
TANF--supplemental grants................... ......... ......... 229 287 302 319
Trade adjustment assistance--alternative TAA ......... ......... 6 18 24 25
Veterans programs:
Income verification match................. ......... ......... 4 -1 -5 11
Medicaid for veterans and spouses in ......... ......... ......... ......... ......... -576
nursing homes............................
Adjustable rate mortgages................. ......... ......... 3 ......... 3 .........
Increase loan fees for housing loans...... ......... ......... ......... ......... ......... -170
Benefits for on-the-job training or ......... 10 14 15 15 16
apprenticeships..........................
OTHER IMPORTANT PROGRAM ASSUMPTIONS
Child support enforcement (CSE):
Alternative penalties for Family Support Act -7 -7 -7 -7 ......... .........
systems and Statewide Disbursement Unit
requirements...............................
Federal family education loan program:
Eliminate voluntary flexible agreements with -945 -123 -123 -123 -123 -123
guarantee agencies.........................
Food stamps:
Tax offset, recoupment, and general claims -181 -189 -194 -198 -203 -207
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.................................. 59,503 58,634 58,402 57,875 56,708 55,804
Contracting Reform.......................... ......... -70 -280 -550 -580 .........
Medicaid:
Financial management recoveries............. -656 -704 -759 -819 -884 -954
Vaccines for Children, total program costs.. 2,905 2,762 2,751 2,704 2,683 2,675
Institutional long term care................ 34,213 36,302 38,262 40,325 42,506 44,808
Home and community based institutional 23,548 25,635 28,836 32,435 36,438 40,983
alternatives...............................
Pharmaceuticals (FFS, net of rebates)....... 9,766 10,533 11,126 12,026 12,966 13,951
Managed care (including Medicaid MCOs, PHPs, 35,375 40,223 43,738 47,352 51,486 56,030
PCCM)......................................
State Children's Health Insurance Program 5,647 5,424 5,401 5,497 5,456 5,507
(Title XXI)..................................
Approved Demonstrations and Pilot Programs:
\2\
Medicare, HI:
Rural Hospice
Baseline estimate....................... 3 3 3 4 ......... .........
Demonstration estimate.................. 3 3 3 4 ......... .........
[[Page 378]]
Mercy Medical
Baseline estimate....................... 6 2 ......... ......... ......... .........
Demonstration estimate.................. 6 2 ......... ......... ......... .........
Premier
Baseline estimate....................... 2,894 3,047 3,264 ......... ......... .........
Demonstration estimate.................. 2,906 3,059 3,276 12 ......... .........
Rural Community Hospital \3\
Baseline estimate....................... 48 51 53 33 ......... .........
Demonstration estimate.................. 58 61 64 40 ......... .........
New York Graduate Medical Education
Baseline estimate....................... 69 69 69 ......... ......... .........
Demonstration estimate.................. 48 35 17 ......... ......... .........
Utah Graduate Medical Education
Baseline estimate....................... 8 ......... ......... ......... ......... .........
Demonstration estimate.................. 8 ......... ......... ......... ......... .........
Medicare, SMI:
Chronic Care Improvement Program (Medicare
Health Support)
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. 198 177 8 ......... ......... .........
Expansion of Coverage for Chiropractic
Services
Baseline estimate....................... 10 ......... ......... ......... ......... .........
Demonstration estimate.................. 14 ......... ......... ......... ......... .........
Municipal Health Services Programs
Baseline estimate....................... 4 ......... ......... ......... ......... .........
Demonstration estimate.................. 12 3 ......... ......... ......... .........
Telemedicine
Baseline estimate....................... 4 ......... ......... ......... ......... .........
Demonstration estimate.................. 4 ......... ......... ......... ......... .........
United Mine Workers of America
Prescription Drugs
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. 89 ......... ......... ......... ......... .........
Coordinated Care Disease Management
Baseline estimate....................... 178 90 ......... ......... ......... .........
Demonstration estimate.................. 158 79 ......... ......... ......... .........
Lifemasters Disease Management Dual
Eligibles
Baseline estimate....................... 655 159 ......... ......... ......... .........
Demonstration estimate.................. 614 149 ......... ......... ......... .........
Medicare Lifestyle Modification Program
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. ......... ......... ......... ......... ......... .........
Care Management for High-Cost
Beneficiaries
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. 95 82 13 ......... ......... .........
Low Vision Rehabilitation
Baseline estimate....................... 8 8 8 8 ......... .........
Demonstration estimate.................. 10 10 10 10 ......... .........
Cancer Prevention and Treatment for Ethnic
and Racial Minorities
Baseline estimate....................... 5 5 6 7 ......... .........
Demonstration estimate.................. 5 5 6 7 ......... .........
Medical Adult Day Care
Baseline estimate....................... 3 3 3 3 ......... .........
Demonstration estimate.................. 2 2 3 3 ......... .........
Demo to Limit Annual Change in Part D
Premiums
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. 640 210 60 ......... ......... .........
Demo to Transition Enrollment of ``Low-
Income Subsidy Beneficiaries''
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. 360 220 240 140 30 .........
Part D Reconciliation to States (402
demos)
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. 178 ......... ......... ......... ......... .........
Part D Payment (reinsurance)
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. ......... ......... ......... ......... ......... .........
Part D Late Enrollment Penalty Waiver \4\
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. ......... ......... ......... ......... ......... .........
[[Page 379]]
Medicare: HI and SMI:
ESRD Disease Management
Baseline estimate....................... 192 199 205 53 ......... .........
Demonstration estimate.................. 191 198 204 53 ......... .........
Home Health Third Party Liability
Baseline estimate....................... 191 174 187 158 13 .........
Demonstration estimate.................. 186 171 182 153 13 .........
Medicare+Choice Phase I
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. 6 ......... ......... ......... ......... .........
Medicare+Choice Phase II
Baseline estimate....................... ......... ......... ......... ......... ......... .........
Demonstration estimate.................. 66 ......... ......... ......... ......... .........
S/HMO I
Baseline estimate....................... 1,731 558 ......... ......... ......... .........
Demonstration estimate.................. 1,990 664 ......... ......... ......... .........
S/HMO II
Baseline estimate....................... 619 198 ......... ......... ......... .........
Demonstration estimate.................. 711 228 ......... ......... ......... .........
Physician Group Practice
Baseline estimate....................... 1,793 463 ......... ......... ......... .........
Demonstration estimate.................. 1,667 468 77 ......... ......... .........
Medical Savings Account
Baseline estimate....................... 1 2 4 6 8 .........
Demonstration estimate.................. ......... ......... ......... ......... ......... .........
United Mine Workers of America Health
Baseline estimate....................... 520 ......... ......... ......... ......... .........
Demonstration estimate.................. 502 6 ......... ......... ......... .........
Medicaid (baseline estimates): \5\
Alabama Family Planning................... 214 238 ......... ......... ......... .........
Arizona AHCCCS............................ 4,365 4,839 5,356 5,932 6,571 .........
Arkansas (ARKids B)....................... 91 102 ......... ......... ......... .........
Arkansas Family Planning Services......... 229 249 ......... ......... ......... .........
Arkansas Independent Choices (Cash & 5 ......... ......... ......... ......... .........
Counseling) \6\..........................
Arkansas TEFRA............................ 32 8 ......... ......... ......... .........
California Family Planning................ 612 ......... ......... ......... ......... .........
California In-Home Supportive Services 325 378 357 ......... ......... .........
Plus \6\.................................
California--MediCal Hospital/Unisured Care 766 766 766 702 ......... .........
Colorado Consumer Directed Attendant 19 3 ......... ......... ......... .........
Support \6\..............................
Delaware--Diamond State Health Plan....... 335 286 302 76 ......... .........
District of Columbia Childless Adults 50- 3 ......... ......... ......... ......... .........
64.......................................
District of Columbia HIV.................. 11 14 18 6 ......... .........
Florida Consumer Directed Care Plus (Cash 61 26 ......... ......... ......... .........
& Counseling) \6\........................
Florida Family Planning................... 910 967 1,068 ......... ......... .........
Florida MEDS-AD Program................... 975 1,072 1,180 1,298 ......... .........
Florida medicaid reform................... 4,875 5,662 6,589 7,683 4,137 .........
Hawaii Health QUEST....................... 256 289 237 ......... ......... .........
Illinois Family Planning.................. 414 443 ......... ......... ......... .........
IowaCare.................................. 109 117 125 134 ......... .........
Iowa Familiy Planning..................... 175 189 205 ......... ......... .........
Kentucky Health Care Partnership Program.. 513 568 48 ......... ......... .........
Louisiana Family Planning................. 445 483 525 569 ......... .........
Maine HIV................................. 7 ......... ......... ......... ......... .........
Maryland (Health Choice).................. 1,610 1,086 ......... ......... ......... .........
Massachusett MassHealth................... 2,757 2,960 ......... ......... ......... .........
Michigan Family Planning.................. 425 462 503 547 ......... .........
Minnesota (Prepaid Med. Assist. Project 186 148 ......... ......... ......... .........
Plus)....................................
Minnesota Family Planning................. 248 ......... ......... ......... ......... .........
Mississippi Family Planning............... 146 ......... ......... ......... ......... .........
Mississippi--Healthier Mississippi........ 71 78 86 ......... ......... .........
Missouri Managed Care Plus................ 86 ......... ......... ......... ......... .........
Montana Basic Medicaid for Able-Bodied 35 39 13 ......... ......... .........
Adults...................................
New Jersey Personal Preference (Cash & 5 3 ......... ......... ......... .........
Counseling) \6\..........................
New Mexico--Family Planning............... 109 114 119 ......... ......... .........
New York (Partnership Plan)............... 7,142 7,823 7,685 ......... ......... .........
New York Federal-State Health Reform 10,248 10,907 11,609 12,357 13,153 .........
Partnership..............................
North Carolina Family Planning............ 424 457 494 ......... ......... .........
[[Page 380]]
Oklahoma Family Planning.................. 159 166 ......... ......... ......... .........
Oregon Family Planning.................... 156 169 183 ......... ......... .........
Oregon Independent Choices \6\............ 2 ......... ......... ......... ......... .........
Rhode Island Rite Care (Medicaid)......... 192 169 ......... ......... ......... .........
South Carolina Family Planning............ 54 57 ......... ......... ......... .........
TennCare II............................... 3,124 ......... ......... ......... ......... .........
Utah (Primary Care Network)............... 106 110 117 ......... ......... .........
Vermont Long Term Care Plan \7\........... 121 135 149 166 ......... .........
Vermont Global Commitment to Health....... 494 538 586 639 160 .........
Virginia--Family Planning................. 176 ......... ......... ......... ......... .........
Washington (Take Charge/Family Planning).. 296 312 329 ......... ......... .........
Wisconsin Badger Care (Medicaid).......... 18 ......... ......... ......... ......... .........
Wisconsin Family Planning................. 23 ......... ......... ......... ......... .........
Pharmacy plus (demonstration estimate)
Wisconsin Pharmacy Plus................. 100 ......... ......... ......... ......... .........
State Children's Health Insurance Program
(Title XXI) (demonstration estimates): \5\
Alaska.................................... 9 10 11 ......... ......... .........
Hawaii.................................... 1 8 9 ......... ......... .........
Maryland Health Choice \8\................ 150 ......... ......... ......... ......... .........
Minnesota Care:
Demonstration estimate (SCHIP funds).... 39 41 39 ......... ......... .........
Baseline estimate (medicaid funds)...... ......... ......... ......... ......... ......... .........
Missouri MC+c \8\......................... 56 ......... ......... ......... ......... .........
New Jersey Family Care \9\................ 167 173 ......... ......... ......... .........
New Mexico SCHIP \8\...................... 26 ......... ......... ......... ......... .........
Rhode Island (SCHIP RiteCare) \9\......... 34 11 ......... ......... ......... .........
Wisconsin (BadgerCare).................... 88 ......... ......... ......... ......... .........
Health Insurance Flexibility and
Accountability (HIFA) (demonstration
estimate--SCHIP funds): \5\
Arizona HIFA--amendment to AHCCCS......... 36 29 24 26 28 144
Arkansas HIFA
Demonstration estimate.................. 4 8 13 24 31 .........
Baseline estimate (medicaid funds)...... 1,421 1,604 1,813 2,049 2,318 .........
Colorado HIFA............................. 13 16 18 ......... ......... .........
Idaho HIFA................................ 13 14 11 ......... ......... .........
Illinois HIFA (KidCare Parent Coverage)
Demonstration estimate.................. 159 ......... ......... ......... ......... .........
Baseline estimate (medicaid funds)...... 6 ......... ......... ......... ......... .........
Maine HIFA (Maine Care for Childless
Adults)
Baseline estimate (medicaid funds)...... 102 ......... ......... ......... ......... .........
Michigan HIFA............................. 120 112 24 ......... ......... .........
Nevada HIFA............................... 11 16 19 21 17 .........
New Mexico HIFA........................... 21 24 27 ......... ......... .........
Oklahoma Sooner Care Demo+HIFA
Baseline estimate (medicaid funds)...... 998 1,071 1,137 289 ......... .........
Oregon HIFA (Oregon Health Plan 2)
Demonstration estimate (SCHIP funds).... 16 ......... ......... ......... ......... .........
Baseline estimate (medicaid funds)...... 1,603 ......... ......... ......... ......... .........
Virginia HIFA............................. 12 12 13 ......... ......... .........
Joint Medicare and Medicaid:
Minnesota-Dual Eligibles
Baseline estimate....................... 1,213 339 ......... ......... ......... .........
Demonstration estimate.................. 1,213 339 ......... ......... ......... .........
Wisconsin Health Partnership Dual Eligible
Baseline estimate....................... 125 35 ......... ......... ......... .........
Demonstration estimate.................. 125 35 ......... ......... ......... .........
Massachusetts SCO Dual Eligible
Demonstration estimate.................. 175 47 ......... ......... ......... .........
Baseline estimate....................... 175 47 ......... ......... ......... .........
OASI, DI, SSI:
Performance of continuing disability reviews
(baseline levels):
OASDI..................................... -11 -60 -128 -211 -378 -714
SSI (federal)............................. -33 -172 -318 -462 -654 -725
Collection of overpayments:
OASI...................................... -719 -779 -836 -892 -949 -1,009
DI........................................ -691 -769 -843 -915 -984 -1,055
SSI (federal)............................. -928 -986 -1,043 -1,101 -1,155 -1,217
[[Page 381]]
Debts written off as uncollectable (no
effect on outlays):
OASI...................................... 134 145 155 166 176 188
DI........................................ 474 527 578 628 675 723
SSI (federal)............................. 415 441 467 492 516 544
OASDI:
Payments to states for vocational 80 88 95 104 112 120
rehabilitation...........................
DI:
Research and demonstration projects....... 50 57 30 ......... ......... .........
SSI:
Payments from states for state -4,050 -4,555 -4,755 -4,960 -5,565 -4,965
supplemental benefits....................
Payments for state supplemental benefits.. 4,430 4,572 4,772 4,975 5,137 5,428
Fees for administration of State
supplement:
Treasury share.......................... -128 -143 -146 -149 -164 -141
SSA share............................... -119 -122 -125 -127 -130 -133
Research and demonstration projects....... 33 28 27 27 27 27
Payments to states for vocational 53 56 59 62 66 71
rehabilitation.............................
Performance of non-disability 602 239 2 -49 -137 -681
redeterminations (excludes related
overpayment collections reported above)....
Royalies and offshore minerals management:
Increased deepwater oil and gas leases ......... 150 60 50 30 10
royalty rates..............................
Royalty-in-kind oil to fill Strategic 435 1,102 ......... ......... ......... .........
Petroleum Reserve..........................
State grants and demonstrations--health care:
Ticket to work grant programs:
Infrastructure grant program.............. 17 20 20 32 35 37
Demonstration to maintain independence and 21 22 22 10 10 10
employment...............................
High risk pools:
Initial seed grants....................... 2 ......... ......... ......... ......... .........
Operation of pools........................ 78 ......... ......... ......... ......... .........
Emergency health services for undocumented 200 200 133 200 ......... .........
aliens.....................................
Katrina relief.............................. 1,039 ......... ......... ......... ......... .........
Psychiatric residential treatment 10 17 28 33 35 .........
demonstration..............................
Money Follow the Person demonstration....... 18 57 121 213 320 .........
Medicaid transformation grants.............. 75 75 ......... ......... ......... .........
Medicaid integrity program.................. 55 50 75 75 75 75
----------------------------------------------------------------------------------------------------------------
* = $500,000 or less.
NA = Not available.
\1\ Medicare and Medicaid/SCHIP regulations reflect gross outlays.
\2\ Baseline estimates reflect costs absent the demonstration; demonstration estimate reflects costs of the
demonstration. The differences represent the net impact of the demonstration. Any demonstrations are implicity
assumed in the current services baseline.
\3\ Costs of this demonstration are offset annually by a reduction to inpatient hospital prospective payment
rates.
\4\ Costs of this demonstration are estimated to be negligible over 10 years.
\5\ Baseline estimates reflect costs absent the demonstration. Demonstration estimates reflect cost of the
demonstration.
\6\ Consumer directed program in which ``plan of care'' is converted to a cash allotment. It is expected that
these will convert to DRA State Plan options upon expiration.
\7\ Adjustments have been made since prior year submission to account for Part D.
\8\ Estimates reflect costs for SCHIP children under the State's Medicaid 1115.
\9\ States project covering a portion of their entire demonstration population with Medicaid funds.
[[Page 382]]
Current Services Receipts, Outlays, and Budget Authority
Receipts.--Table 25-7 shows baseline receipts by major source. Total
receipts are projected to increase by $164 billion from 2007 to 2008 and
by $634 billion from 2008 to 2012, largely due to assumed increases in
incomes resulting from both real economic growth and inflation.
Individual income taxes are estimated to increase by $117 billion from
2007 to 2008 under baseline assumptions. This growth of 9.9 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 6.4 percent between 2008 and 2012.
Table 25-7. BASELINE RECEIPTS BY SOURCE
(In billions of dollars)
----------------------------------------------------------------------------------------------------------------
Estimate
2006 -----------------------------------------------------------------
Actual 2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
Individual income taxes............ 1,044 1,178 1,295 1,349 1,465 1,547 1,657
Corporation income taxes........... 354 342 319 327 334 350 377
Social insurance and retirement 838 873 926 972 1,027 1,084 1,137
receipts..........................
On-budget........................ 229 239 252 261 274 288 301
Off-budget....................... 608 634 674 711 753 796 835
Excise taxes....................... 74 58 69 72 73 78 81
Estate and gift taxes.............. 28 25 26 27 22 2 1
Other.............................. 70 73 80 83 87 91 95
Total.............................. 2,407 2,550 2,714 2,831 3,008 3,151 3,348
On-budget........................ 1,799 1,916 2,040 2,119 2,254 2,356 2,513
Off-budget....................... 608 634 674 711 753 796 835
----------------------------------------------------------------------------------------------------------------
Corporation income taxes under current law are estimated to decline by
$23 billion or 6.8 percent between 2007 and 2008, in large part due to
economic factors and legislated tax changes. Corporation income taxes
are projected to increase at an annual rate of 4.3 percent from 2008 to
2012, reflecting higher corporate profits.
Social insurance and retirement receipts are estimated to increase by
$52 billion between 2007 and 2008, and by an additional $211 billion
between 2008 and 2012. The estimates reflect assumed increases in total
wages and salaries paid, and scheduled increases in the social security
taxable earnings base from $97,500 in 2007 to $123,600 in 2012.
Excise taxes are estimated to be unusually low in 2007 due to refunds
of certain telephone excise taxes. They return to normal levels in 2008
and increase by $13 billion from 2008 to 2012, 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 $22 billion from
2007 to 2012.
Outlays.--Current services outlays are estimated to grow from $2,735
billion in 2007 to $2,752 billion in 2008, a 0.6 percent increase. This
small increase is in part due to calendar quirks. When October 1 falls
on a weekend, military pay and certain benefit payments are paid on the
previous Friday, shifting them into the previous fiscal year. Between
2007 and 2012, current services outlays are projected to increase at an
average annual rate of 3.2 percent. October 1 falls on a weekend in both
2007 and 2012.
Even though most discretionary spending is assumed to grow with
inflation, outlays for discretionary programs decline from $1,032
billion in 2007 to $961 billion in 2008 because the baseline assumes no
additional spending for the war beyond what is already enacted. Outlays
increase each year thereafter, reflecting increases in resources to keep
pace with inflation, reaching $1,028 billion in 2012. Entitlement and
other mandatory programs are estimated to grow from $1,465 billion in
2007 to $1,537 billion in 2008, and to $1,918 billion in 2012, 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 $582 billion in 2007 to $762 billion in 2012,
an average annual rate of 5.5 percent. Medicare and medicaid are
projected to grow at annual average rates of 6.5 and 7.3 percent,
respectively, outpacing inflation. Other areas of growth include federal
employee retirement (average annual growth of 3.5 percent), unemployment
compensation (5.6 percent) and veterans programs (6.6 percent). Net
interest payments to the public total $238 billion in 2007 and $254
billion in 2008 and remain nearly level through the projection period.
Tables 25-9 and 25-10 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.
[[Page 383]]
Budget authority.--Tables 25-11 and 25-12 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 25-8. CHANGE IN BASELINE OUTLAY ESTIMATES BY CATEGORY
(Dollar amounts In billions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change 2007 to 2008 Change 2007 to 2012
--------------------------------------------
2007 2008 2012 Annual
Amount Percent Amount average
rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
Outlays:
Discretionary:
DoD-Military.......................................................... 511 444 486 -67 -13.1% -25 -1.0%
Homeland security..................................................... 35 36 38 * 0.9% 3 1.5%
International affairs................................................. 36 34 33 -2 -6.2% -3 -1.7%
Other discretionary................................................... 486 482 504 -4 -0.9% 18 0.7%
-----------------------------------------------------------------------------
Subtotal, discretionary................................................. 1,032 961 1,028 -71 -6.8% -4 -0.1%
Mandatory:
Farm programs......................................................... 14 14 15 -1 -3.8% * 0.3%
Medicaid.............................................................. 192 204 273 12 6.3% 82 7.3%
Other health care..................................................... 23 24 30 1 3.0% 7 5.2%
Medicare.............................................................. 367 391 503 23 6.3% 136 6.5%
Federal employee retirement
and disability...................................................... 105 109 124 4 4.3% 20 3.5%
Unemployment compensation............................................. 32 34 42 2 7.3% 10 5.6%
Other income security programs........................................ 174 182 193 8 4.8% 19 2.1%
Social Security....................................................... 582 608 762 26 4.4% 180 5.5%
Veterans programs..................................................... 39 45 53 6 15.9% 15 6.6%
Other mandatory programs.............................................. 20 13 15 -7 -33.8% -5 -5.7%
Undistributed offsetting receipts..................................... -82 -86 -91 -4 5.0% -10 2.3%
-----------------------------------------------------------------------------
Subtotal, mandatory..................................................... 1,465 1,537 1,918 72 4.9% 453 5.5%
Net interest............................................................ 238 254 255 16 6.7% 17 1.4%
-----------------------------------------------------------------------------
Total outlays............................................................. 2,735 2,752 3,201 17 0.6% 466 3.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 384]]
Table 25-9. CURRENT SERVICES OUTLAYS BY FUNCTION
(in billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimate
Function 2006 -----------------------------------------------------------------------------
Actual 2007 2008 2009 2010 2011 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
National defense:
Department of Defense--Military............................ 499.3 512.4 446.1 457.6 466.0 477.2 488.5
Other...................................................... 22.5 22.7 23.2 23.6 23.5 23.4 23.8
------------------------------------------------------------------------------------------
Total, National defense.................................... 521.8 535.1 469.3 481.1 489.5 500.6 512.3
International affairs........................................ 29.5 32.7 32.0 31.8 30.8 30.7 31.3
General science, space, and technology....................... 23.6 24.9 25.7 26.6 26.6 27.1 27.7
Energy....................................................... 0.8 1.8 1.5 1.7 1.9 2.1 2.1
Natural resources and environment............................ 33.1 35.1 33.1 31.9 33.1 33.8 34.9
Agriculture.................................................. 26.0 20.1 19.8 19.6 20.1 20.8 21.1
Commerce and housing credit.................................. 6.2 0.2 -1.4 0.7 -0.4 -0.2 1.0
On-Budget.................................................. (7.3) (-2.4) (0.9) (-1.0) (-1.7) (-2.1) (0.2)
Off-Budget................................................. (-1.1) (2.6) (-2.3) (1.7) (1.3) (1.9) (0.8)
Transportation............................................... 70.2 74.6 78.2 78.1 79.5 80.8 82.7
Community and regional development........................... 54.5 31.4 23.7 20.4 17.4 17.9 14.5
Education, training, employment, and social services......... 118.6 94.0 88.2 91.0 94.2 96.0 97.3
Health....................................................... 252.8 268.5 281.7 300.2 316.4 336.5 359.6
Medicare..................................................... 329.9 372.3 395.6 423.4 452.4 498.1 508.8
Income security.............................................. 352.5 365.4 380.4 389.4 399.5 415.5 415.0
Social security.............................................. 548.5 586.5 612.5 644.9 683.3 723.0 767.4
On-Budget.................................................. (16.1) (19.4) (20.0) (22.0) (24.2) (27.1) (30.1)
Off-Budget................................................. (532.5) (567.2) (592.5) (622.9) (659.1) (695.8) (737.3)
Veterans benefits and services............................... 69.8 72.4 79.5 83.3 87.4 95.9 92.0
Administration of justice.................................... 41.0 45.3 44.7 44.9 45.5 46.2 47.6
General government........................................... 18.2 18.8 19.8 19.6 20.1 21.0 22.1
Net interest................................................. 226.6 237.7 253.5 258.4 259.1 257.8 255.0
On-Budget.................................................. (324.3) (343.9) (368.2) (383.2) (395.6) (407.0) (417.9)
Off-Budget................................................. (-97.7) (-106.2) (-114.6) (-124.8) (-136.5) (-149.3) (-162.9)
Allowances................................................... ........... ........... ........... ........... ........... ........... ...........
Undistributed offsetting receipts:
Employer share, employee retirement (on-budget)............ -49.2 -48.8 -51.7 -55.0 -58.4 -62.1 -65.6
Employer share, employee retirement (off-budget)........... -11.6 -12.3 -13.1 -13.8 -14.7 -15.8 -16.6
Rents and royalties on the Outer Continental Shelf......... -7.3 -6.8 -9.1 -9.9 -9.9 -9.6 -9.3
Sale of major assets....................................... ........... ........... ........... -0.3 ........... ........... ...........
Other undistributed offsetting receipts.................... -0.1 -13.8 -11.8 -2.2 -0.1 -0.1 ...........
------------------------------------------------------------------------------------------
Total, Undistributed offsetting receipts................... -68.2 -81.7 -85.8 -81.3 -83.1 -87.6 -91.5
On-Budget................................................ (-56.6) (-69.4) (-72.6) (-67.4) (-68.4) (-71.8) (-74.9)
Off-Budget............................................... (-11.6) (-12.3) (-13.1) (-13.8) (-14.7) (-15.8) (-16.6)
==========================================================================================
Total........................................................ 2,655.4 2,735.0 2,752.1 2,865.7 2,973.5 3,115.9 3,200.9
------------------------------------------------------------------------------------------
On-Budget.................................................. (2,233.4) (2,283.7) (2,289.6) (2,379.8) (2,464.3) (2,583.2) (2,642.2)
Off-Budget................................................. (422.1) (451.3) (462.5) (485.9) (509.2) (532.7) (558.7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 385]]
Table 25-10. CURRENT SERVICES OUTLAYS BY AGENCY
(in billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimate
Agency 2006 -----------------------------------------------------------------------------
Actual 2007 2008 2009 2010 2011 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
Legislative Branch........................................... 4.1 4.3 4.3 4.3 4.5 4.7 4.8
Judicial Branch.............................................. 5.8 5.8 6.1 6.3 6.5 6.8 7.0
Agriculture.................................................. 93.5 88.6 89.3 90.6 93.2 96.2 98.9
Commerce..................................................... 6.4 6.2 6.5 6.9 7.0 6.8 6.7
Defense--Military............................................ 499.4 512.4 446.1 457.6 466.0 477.2 488.5
Education.................................................... 93.4 68.0 62.8 65.1 67.5 68.8 69.5
Energy....................................................... 19.6 21.9 21.8 22.7 22.8 22.7 23.2
Health and Human Services.................................... 614.3 671.2 705.4 748.6 794.8 860.3 892.7
Homeland Security............................................ 69.1 49.1 40.4 38.8 34.6 35.0 35.9
Housing and Urban Development................................ 42.4 42.8 44.2 43.5 42.5 43.5 40.5
Interior..................................................... 9.1 10.9 10.6 10.4 11.0 11.1 11.4
Justice...................................................... 23.3 22.9 23.9 24.8 25.2 25.3 26.1
Labor........................................................ 43.1 47.4 50.4 51.6 54.0 56.3 58.0
State........................................................ 13.0 15.3 14.5 14.6 14.3 14.2 14.5
Transportation............................................... 60.1 63.8 66.1 65.4 66.3 67.2 68.6
Treasury..................................................... 464.7 489.0 519.5 539.5 557.7 575.1 588.7
Veterans Affairs............................................. 69.8 72.3 79.4 83.2 87.3 95.6 91.8
Corps of Engineers--Civil Works.............................. 6.9 7.4 6.4 5.2 5.3 5.4 5.5
Other Defense Civil Programs................................. 44.4 47.6 49.1 50.4 51.4 52.5 52.8
Environmental Protection Agency.............................. 8.3 8.0 7.9 8.2 8.4 8.5 8.7
Executive Office of the President............................ 5.4 2.7 1.4 0.7 0.5 0.4 0.4
General Services Administration.............................. * 0.5 0.6 -0.2 -0.3 -0.4 -0.3
International Assistance Programs............................ 13.9 16.5 16.3 16.6 16.3 16.3 16.6
National Aeronautics and Space Administration................ 15.1 16.1 16.8 17.6 17.5 17.7 18.2
National Science Foundation.................................. 5.5 5.9 5.8 5.9 6.0 6.2 6.3
Office of Personnel Management............................... 62.4 58.8 64.2 66.8 69.2 71.2 73.9
Small Business Administration................................ 0.9 0.7 0.7 0.5 0.5 0.5 0.5
Social Security Administration............................... 585.7 622.9 654.4 689.0 729.7 775.8 813.7
On-Budget.................................................. (53.3) (55.7) (61.9) (66.1) (70.6) (80.0) (76.4)
Off-Budget................................................. (532.5) (567.2) (592.5) (622.9) (659.1) (695.8) (737.3)
Other Independent Agencies................................... 12.9 18.7 15.3 17.6 17.3 18.3 20.1
On-Budget.................................................. (14.0) (16.0) (17.6) (15.9) (16.0) (16.4) (19.2)
Off-Budget................................................. (-1.1) (2.6) (-2.3) (1.7) (1.3) (1.9) (0.8)
Allowances................................................... ........... ........... ........... ........... ........... ........... ...........
Undistributed Offsetting Receipts............................ -237.5 -263.0 -278.1 -286.5 -303.4 -323.3 -342.3
On-Budget.................................................. (-128.2) (-144.5) (-150.4) (-147.9) (-152.2) (-158.2) (-162.8)
Off-Budget................................................. (-109.3) (-118.5) (-127.7) (-138.6) (-151.2) (-165.1) (-179.5)
==========================================================================================
Total........................................................ 2,655.4 2,735.0 2,752.1 2,865.7 2,973.5 3,115.9 3,200.9
On-Budget.................................................. (2,233.4) (2,283.7) (2,289.6) (2,379.8) (2,464.3) (2,583.2) (2,642.2)
Off-Budget................................................. (422.1) (451.3) (462.5) (485.9) (509.2) (532.7) (558.7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
* $50 million or less.
[[Page 386]]
Table 25-11. CURRENT SERVICES BUDGET AUTHORITY BY FUNCTION
(in billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimate
Function 2006 -----------------------------------------------------------------------------
Actual 2007 2008 2009 2010 2011 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
National defense:
Department of Defense--Military............................ 593.8 501.2 443.9 457.3 470.6 484.2 497.8
Other...................................................... 23.4 21.8 22.5 22.8 23.1 23.6 24.0
------------------------------------------------------------------------------------------
Total, National defense.................................... 617.2 523.0 466.4 480.0 493.8 507.7 521.8
International affairs........................................ 32.8 27.1 29.5 31.1 31.9 32.7 33.6
General science, space, and technology....................... 25.1 24.9 25.5 26.2 26.8 27.4 28.0
Energy....................................................... 0.3 1.2 1.5 1.6 1.8 2.1 2.2
Natural resources and environment............................ 38.1 29.7 31.0 31.3 32.7 33.7 34.9
Agriculture.................................................. 25.6 19.1 20.0 19.7 20.5 20.9 21.5
Commerce and housing credit.................................. 14.3 11.1 10.4 8.4 8.2 8.8 8.0
On-Budget.................................................. (10.6) (2.8) (6.7) (6.7) (6.9) (6.9) (7.2)
Off-Budget................................................. (3.7) (8.3) (3.7) (1.7) (1.3) (1.9) (0.8)
Transportation............................................... 75.7 77.7 83.4 84.3 85.1 86.0 86.9
Community and regional development........................... 31.2 12.7 13.0 13.5 13.8 14.2 14.6
Education, training, employment, and social services......... 125.9 91.7 92.2 94.8 97.6 98.6 100.8
Health....................................................... 295.2 242.3 283.5 303.1 320.5 341.9 364.7
Medicare..................................................... 365.4 371.9 395.5 423.8 452.1 498.1 509.2
Income security.............................................. 351.1 361.0 377.9 390.3 402.3 421.1 419.0
Social security.............................................. 552.2 589.2 614.6 647.9 686.6 726.3 771.3
On-Budget.................................................. (16.1) (19.4) (20.0) (22.0) (24.2) (27.1) (30.1)
Off-Budget................................................. (536.2) (569.9) (594.6) (625.9) (662.4) (699.1) (741.2)
Veterans benefits and services............................... 71.0 74.5 79.5 83.8 88.0 92.4 96.8
Administration of justice.................................... 42.7 43.7 44.7 43.9 45.1 46.6 48.0
General government........................................... 19.7 18.6 19.0 19.8 20.4 21.2 22.1
Net interest................................................. 226.6 237.7 253.5 258.4 259.1 257.8 255.0
On-Budget.................................................. (324.3) (343.9) (368.2) (383.2) (395.6) (407.0) (417.9)
Off-Budget................................................. (-97.7) (-106.2) (-114.6) (-124.8) (-136.5) (-149.3) (-162.9)
Allowances................................................... ........... ........... ........... ........... ........... ........... ...........
Undistributed offsetting receipts:
Employer share, employee retirement (on-budget)............ -49.2 -48.8 -51.7 -55.0 -58.4 -62.1 -65.6
Employer share, employee retirement (off-budget)........... -11.6 -12.3 -13.1 -13.8 -14.7 -15.8 -16.6
Rents and royalties on the Outer Continental Shelf......... -7.3 -6.8 -9.1 -9.9 -9.9 -9.6 -9.3
Sale of major assets....................................... ........... ........... ........... -0.3 ........... ........... ...........
Other undistributed offsetting receipts.................... -0.1 -13.8 -11.8 -2.2 -0.1 -0.1 ...........
------------------------------------------------------------------------------------------
Total, Undistributed offsetting receipts................... -68.2 -81.7 -85.8 -81.3 -83.1 -87.6 -91.5
On-Budget................................................ (-56.6) (-69.4) (-72.6) (-67.4) (-68.4) (-71.8) (-74.9)
Off-Budget............................................... (-11.6) (-12.3) (-13.1) (-13.8) (-14.7) (-15.8) (-16.6)
==========================================================================================
Total........................................................ 2,841.7 2,675.4 2,755.7 2,880.6 3,003.4 3,149.8 3,246.7
------------------------------------------------------------------------------------------
On-Budget.................................................. (2,411.1) (2,215.8) (2,285.1) (2,391.7) (2,490.9) (2,613.8) (2,684.1)
Off-Budget................................................. (430.5) (459.6) (470.6) (488.9) (512.5) (536.0) (562.6)
------------------------------------------------------------------------------------------
MEMORANDUM
Discretionary budget authority:
National defense........................................... 556.5 519.9 462.9 476.6 490.4 504.3 518.3
International.............................................. 35.9 29.9 30.7 31.4 32.2 33.0 33.7
Domestic................................................... 404.3 375.4 393.6 404.5 415.4 426.5 437.9
------------------------------------------------------------------------------------------
Total........................................................ 996.7 925.2 887.2 912.6 938.0 963.8 990.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 387]]
Table 25-12. CURRENT SERVICES BUDGET AUTHORITY BY AGENCY
(in billions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimate
Agency 2006 -----------------------------------------------------------------------------
Actual 2007 2008 2009 2010 2011 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
Legislative Branch........................................... 4.2 4.2 4.3 4.5 4.6 4.8 5.0
Judicial Branch.............................................. 6.0 5.9 6.1 6.3 6.6 6.8 7.0
Agriculture.................................................. 97.3 87.4 91.8 93.1 96.1 99.1 102.0
Commerce..................................................... 6.6 7.9 6.1 6.4 6.5 6.7 6.9
Defense--Military............................................ 593.8 501.2 443.9 457.3 470.6 484.2 497.8
Education.................................................... 100.1 66.3 66.3 68.3 70.5 71.0 72.6
Energy....................................................... 21.1 20.5 21.2 21.7 22.2 22.8 23.3
Health and Human Services.................................... 684.6 643.3 706.8 751.1 798.3 866.7 897.4
Homeland Security............................................ 32.4 34.1 33.1 35.5 34.3 35.3 36.3
Housing and Urban Development................................ 52.4 33.8 38.4 39.3 40.3 41.0 41.8
Interior..................................................... 10.0 9.7 10.1 10.4 11.0 11.2 11.5
Justice...................................................... 23.1 22.6 24.6 24.1 24.7 25.5 26.4
Labor........................................................ 45.9 46.7 49.5 51.4 53.7 55.7 57.6
State........................................................ 15.4 13.0 13.3 13.6 14.0 14.3 14.7
Transportation............................................... 64.4 65.6 71.0 71.4 71.8 72.2 72.6
Treasury..................................................... 466.6 490.5 520.4 540.3 558.8 576.2 589.6
Veterans Affairs............................................. 71.0 74.4 79.5 83.7 87.9 92.1 96.6
Corps of Engineers--Civil Works.............................. 11.9 4.7 4.8 5.0 5.2 5.4 5.6
Other Defense Civil Programs................................. 44.7 47.8 49.2 50.6 51.6 52.7 53.0
Environmental Protection Agency.............................. 7.6 7.5 7.7 7.9 8.1 8.4 8.6
Executive Office of the President............................ 0.3 0.4 0.3 0.4 0.4 0.4 0.4
General Services Administration.............................. 0.7 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2
International Assistance Programs............................ 18.7 14.5 15.1 16.4 16.8 17.2 17.6
National Aeronautics and Space Administration................ 16.6 16.2 16.6 17.0 17.5 17.9 18.3
National Science Foundation.................................. 5.7 5.7 5.9 6.0 6.2 6.3 6.4
Office of Personnel Management............................... 66.8 62.2 66.9 69.5 72.0 75.5 77.0
Small Business Administration................................ 1.8 0.4 0.5 0.5 0.5 0.5 0.5
Social Security Administration............................... 589.5 626.3 655.5 692.0 733.0 778.7 818.1
On-Budget.................................................. (53.4) (56.4) (60.9) (66.2) (70.6) (79.6) (76.9)
Off-Budget................................................. (536.2) (569.9) (594.6) (625.9) (662.4) (699.1) (741.2)
Other Independent Agencies................................... 20.0 26.0 25.0 23.5 23.8 24.9 24.5
On-Budget.................................................. (16.3) (17.7) (21.3) (21.8) (22.4) (23.0) (23.7)
Off-Budget................................................. (3.7) (8.3) (3.7) (1.7) (1.3) (1.9) (0.8)
Allowances................................................... ........... ........... ........... ........... ........... ........... ...........
Undistributed Offsetting Receipts............................ -237.5 -263.0 -278.1 -286.5 -303.4 -323.3 -342.3
On-Budget.................................................. (-128.2) (-144.5) (-150.4) (-147.9) (-152.2) (-158.2) (-162.8)
Off-Budget................................................. (-109.3) (-118.5) (-127.7) (-138.6) (-151.2) (-165.1) (-179.5)
==========================================================================================
Total........................................................ 2,841.7 2,675.4 2,755.7 2,880.6 3,003.4 3,149.8 3,246.7
On-Budget.................................................. (2,411.1) (2,215.8) (2,285.1) (2,391.7) (2,490.9) (2,613.8) (2,684.1)
Off-Budget................................................. (430.5) (459.6) (470.6) (488.9) (512.5) (536.0) (562.6)
--------------------------------------------------------------------------------------------------------------------------------------------------------