    [Analytical Perspectives]
    [Economic Assumptions and Analyses]
    [14. National Income and Product Accounts]
    [From the U.S. Government Printing Office, www.gpo.gov]

    [[Page 207]]

                   14.   NATIONAL INCOME AND PRODUCT ACCOUNTS

      The National Income and Product Accounts (NIPAs) are an integrated set
    of statistics prepared by the Department of Commerce that measure
    aggregate U.S. economic activity. Because the NIPAs include Federal
    transactions and are widely used in economic analysis, it is important
    to understand the differences between the NIPAs' distinctive
    presentation of Federal transactions and that of the budget.
      The main purpose of the NIPAs is to measure the Nation's total
    production of goods and services, known as gross domestic product (GDP),
    and the incomes generated in its production. GDP excludes intermediate
    product to avoid double counting. Government consumption expenditures
    along with government gross investment--State and local as well as
    Federal--are included in GDP as part of final output, together with
    personal consumption expenditures, gross private domestic investment,
    and net exports of goods and services (exports minus imports).
      Not all government expenditures are counted in GDP. Social benefits,
    grants to State and local governments, subsidies, and interest
    payments--are not purchases of final output and are therefore not
    included in GDP; however, these transactions are recorded in the NIPA
    government account that records current receipts and expenditures
    (including depreciation on government gross investment) because all of
    these affect the government's claim on economic resources.
      Federal transactions are included in the NIPAs as part of the
    government sector.\1\ The Federal subsector is designed to measure
    certain important economic effects of Federal transactions in a way that
    is consistent with the conceptual framework of the entire set of
    integrated accounts. The NIPA Federal subsector is not itself a budget,
    because it is not a financial plan for proposing, determining, and
    controlling the fiscal activities of the Government. For example, it
    omits from its current receipts and current expenditures certain
    ``capital transfers'' that are recorded in the budget. NIPA concepts
    also differ in many other ways from budget concepts, and therefore the
    NIPA presentation of Federal finances is significantly different from
    that of the budget.
    ---------------------------------------------------------------------------
      \1\ The other subsector of the NIPA government sector is a single set
    of transactions for all U.S. State and local units of government,
    treated as a consolidated entity.
    ---------------------------------------------------------------------------

                  Differences between the NIPAs and the Budget

      Federal transactions in the NIPAs are measured according to NIPA
    accounting concepts and as a result they differ from the budget in
    netting and grossing, timing, and coverage. These differences cause
    current receipts and expenditures in the NIPAs to differ from total
    receipts and outlays in the budget, albeit by relatively small
    amounts.\2\ Differences in timing and coverage also cause the NIPA
    measure of net Federal Government saving to differ from the budget
    surplus or deficit. Unlike timing and coverage differences, netting and
    grossing differences have equal effects on receipts and expenditures and
    thus have no effect on net Government saving. The NIPAs also combine
    transactions into different categories from those used in the budget.
    ---------------------------------------------------------------------------
      \2\ Over the period 1994-2007, NIPA current expenditures averaged 3.6
    percent higher than budget outlays, while NIPA current receipts averaged
    2.5 percent higher than budget receipts.
    ---------------------------------------------------------------------------
       Netting and grossing differences arise because the budget records
    certain transactions as offsets to outlays that are recorded as current
    receipts in the NIPAs (or vice versa). The budget treats as governmental
    receipts all income that comes to the Government due to its sovereign
    powers--mainly, but not exclusively, taxes. The budget offsets against
    outlays any income that arises from voluntary business-type transactions
    with the public. The NIPAs generally follow this concept as well, and
    income to Government revolving accounts (such as the Government Printing
    Office) is offset against their expenditures. However, the NIPAs have a
    narrower definition of ``business-type transactions'' than does the
    budget. Rents and royalties, and some regulatory or inspection fees,
    which are classified as offsets to outlays in the budget, are recorded
    in the NIPAs as Government receipts (income receipts on assets and
    current transfer receipts, respectively). The NIPAs include Medicare
    premiums as Government receipts, while the budget classifies them as
    business-type transactions (offsetting receipts). In addition, the NIPAs
    treat the net surplus of Government enterprises as a component of
    current receipts.
      In the budget, any intragovernmental income paid from one account to
    another is offset against outlays rather than being recorded as a
    receipt so that total outlays and receipts measure only transactions
    with the public. For example, Government contributions for Federal
    employee social insurance (such as Social Security) are offset against
    outlays. In contrast, the NIPAs treat the Federal Government like any
    other employer and show contributions for Federal employee social
    insurance as expenditures by the employing agencies and as governmental
    (rather than offsetting) receipts. The NIPAs also impute certain
    transactions that are not recorded explicitly in the budget. For
    example, unemployment benefits for Federal employees are financed by
    direct appropriations rather than social insurance contributions. The
    NIPAs impute the social insurance contributions to the expenditures of
    employing agencies--again, treating the Federal Government like any
    other employer.

    [[Page 208]]

       Timing differences for receipts occur because the NIPAs generally
    record business taxes when they accrue, while the budget generally
    records all receipts when they are received. Thus the NIPAs attribute
    corporations' final settlement payments back to the quarter(s) in which
    the profits that gave rise to the tax liability occurred. The delay
    between accrual of liability and Treasury receipt of payment can result
    in significant timing differences between NIPA and budget measures of
    receipts for any given accounting period.
      Timing differences also occur for expenditures. When the first day of
    a month falls on a weekend or holiday, monthly benefit checks normally
    mailed on the first day of the month may be mailed out a day or two
    earlier; the budget then reflects two payments in one month and none the
    next. As a result, the budget totals occasionally reflect 13 monthly
    payments in one year and only 11 the next. NIPA expenditure figures
    always reflect 12 benefit payments per year, giving rise to a timing
    difference compared to the budget.
       Coverage differences arise on the expenditure side because of the
    NIPA treatment of Government investment. The budget includes outlays for
    Federal investments as they are paid, while the NIPA Federal current
    account excludes current investments but includes a depreciation charge
    on past investments (``consumption of general government fixed
    capital'') as part of ``current expenditures.'' The inclusion of
    depreciation on fixed capital (structures, equipment and software) in
    current expenditures can be thought of as a proxy for the services that
    capital renders; i.e., for its contribution to Government output of
    public services. The depreciation charge is not a full reflection of
    capital services, however, since it does not include the net return to
    capital that in a private corporation would appear as interest income or
    profit. The NIPAs would need to include an imputed interest charge for
    government capital to assure a fully parallel treatment.
      Certain items in the budget are excluded from the NIPA Federal current
    account because they are related to the acquisition or sale of assets,
    and not linked to current consumption or income. Examples include
    Federal investment grants to State and local governments, investment
    subsidies to business, lump sum payments to amortize the unfunded
    liability of the Uniformed Services Retiree Health Care Fund and the new
    Postal Service Retiree Health Benefits Fund, and forgiveness of debt
    owed by foreign governments. Likewise, estate and gift taxes, included
    in budget receipts, are excluded from NIPA current receipts as being
    capital transfers. They also exclude the proceeds from the sales of
    nonproduced assets such as land. Bonuses paid on Outer Continental Shelf
    oil leases and proceeds from broadcast spectrum auctions are shown as
    offsetting receipts in the budget and are deducted from budget outlays.
    In the NIPAs these transactions are excluded from the Federal current
    account as an exchange of assets with no current production involved.
    The NIPAs are not strictly consistent in this interpretation, however,
    since they do include in total revenues the taxation of capital gains.
    Also unlike the budget, the NIPAs exclude transactions with U.S.
    territories.
      The treatment of Government pension plan income and outgo creates a
    coverage difference. Whereas the budget treats employee payments to
    these pension plans as governmental receipts, and employer contributions
    by agencies as offsets to outlays because they are intragovernmental,
    the NIPAs treat employer contributions as personal income and employee
    payments as a transfer of income within the household sector, in the
    same way as it treats contributions to pension plans in the private
    (household) sector. Likewise, the budget records a Government check to a
    retired Government employee as an outlay, but under NIPA concepts, no
    Government expenditure occurs at that time; the payment is treated (like
    private pension payments) as a transfer of income within the household
    sector.
      Financial transactions such as loan disbursements, loan repayments,
    loan asset sales, and loan guarantees are excluded from the NIPAs on the
    grounds that such transactions simply involve an exchange of assets
    rather than current production, income, or consumption. In contrast,
    under the Federal Credit Reform Act of 1990, the budget records the
    estimated subsidy cost of the direct loan or loan guarantee as an outlay
    at the time when the loan is disbursed. The cash flows with the public
    are recorded in nonbudgetary accounts as a means of financing the budget
    rather than as budgetary transactions. This treatment recognizes that a
    Federal direct loan is an exchange of assets with equal value after
    allowing for the subsidy to the borrower implied by the terms of the
    loan. It also recognizes the subsidy element in loan guarantees. In the
    NIPAs, these subsidies are not recognized. The NIPAs, like the budget,
    include all interest transactions with the public, including interest
    received by and paid to the loan financing accounts; and both the NIPAs
    and the budget include administrative costs of credit program
    operations.
      Deposit insurance outlays for resolving failed banks and thrift
    institutions are similarly excluded from the NIPAs on the grounds that
    there are no offsetting current income flows from these transactions. In
    1991, this exclusion was the largest difference between the NIPAs and
    the budget and made NIPA net Government saving a significantly smaller
    negative number than the budget deficit that year. In subsequent years,
    as assets acquired from failed financial institutions were sold, these
    collections tended to make the budget deficit a smaller negative figure
    than NIPA net Federal Government saving.

                         Federal Sector Current Receipts

      Table 14-1 shows the NIPA classification of Federal current receipts
    in five major categories and four of the subcategories used to measure
    taxes, which are similar to the budget categories but with some
    significant differences.
      Current tax receipts is the largest category of current receipts, and
    its personal current taxes subcategory--

    [[Page 209]]

                                                        Table 14-1.  FEDERAL TRANSACTIONS IN THE NATIONAL INCOME AND PRODUCT ACCOUNTS, 1998-2009
                                                                                        (In billions of dollars)
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                      Estimate
                          Description                                1998       1999       2000       2001       2002       2003       2004       2005       2006       2007   ---------------------
                                                                                                                                                                                   2008       2009
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                          CURRENT RECEIPTS

    Current tax receipts........................................   1,105.9    1,165.2    1,305.6    1,266.9    1,089.7    1,065.9    1,113.8    1,328.9    1,515.5    1,644.0    1,555.0    1,701.6
      Personal current taxes....................................     814.1      868.5      987.4      993.8      851.1      781.7      778.7      914.1    1,037.8    1,149.3    1,079.3    1,234.4
      Taxes on production and imports...........................      80.7       82.5       87.8       86.4       86.4       89.1       93.2       98.1       99.0      100.5      102.2      103.0
      Taxes on corporate income.................................     205.9      207.9      223.5      179.5      144.7      186.8      232.7      305.0      367.6      380.5      360.9      351.7
      Taxes from the rest of the world..........................       5.2        6.2        6.8        7.1        7.4        8.3        9.3       11.7       11.1       13.7       12.6       12.6
    Contributions for government social insurance...............     604.4      642.2      687.8      713.8      729.6      749.9      795.1      843.4      887.6      937.2      981.0    1,032.8
    Income receipts on assets...................................      22.3       20.9       24.3       26.4       21.3       21.4       23.7       24.9       24.3       25.9       26.0       28.3
    Current transfer receipts...................................      21.0       21.8       24.9       26.5       25.5       24.7       27.7       11.0       35.0       35.7       37.7       42.4
    Current surplus of government enterprises...................        -*        0.3       -1.3       -6.5       -1.1        2.5        0.2       -5.2       -3.7       -1.9       -0.4       -0.2
                                                                 -----------------------------------------------------------------------------------------------------------------------------------

          Total current receipts................................   1,753.5    1,850.3    2,041.2    2,027.1    1,865.0    1,864.4    1,960.6    2,203.0    2,458.7    2,641.0    2,599.2    2,805.0

                                                                 ===================================================================================================================================
                        CURRENT EXPENDITURES

    Consumption expenditures....................................     452.9      469.5      496.0      519.7      575.5      648.0      706.6      757.9      800.3      841.6      912.1     1005.6
      Defense...................................................     301.3      307.2      321.2      335.7      368.4      424.5      470.4      507.8      532.1      568.0      604.7      679.0
      Nondefense................................................     151.6      162.3      174.8      184.0      207.1      223.5      236.2      250.2      268.2      273.6      307.4      326.6
    Current transfer payments...................................     940.3      976.3    1,023.2    1,108.0    1,216.6    1,308.9    1,377.5    1,462.8    1,548.4    1,644.1    1,738.2    1,808.8
      Government social benefits................................     716.4      733.0      762.7      823.6      900.9      956.3    1,005.1    1,071.6    1,154.5     1241.0    1,311.5    1,377.3
      Grants-in-aid to State and local governments..............     209.9      227.7      244.1      268.2      296.7      329.3      347.6      359.5      360.8      370.8      390.9      398.2
      Other transfers to the rest of the world..................      14.0       15.7       16.4       16.3       19.0       23.2       24.7       31.7       33.1       32.2       35.9       33.4
    Interest payments...........................................     299.7      285.9      283.3      267.9      234.9      214.6      216.8      243.1      284.1      302.8      319.2      338.0
    Subsidies...................................................      33.6       36.1       49.6       53.7       37.9       46.1       43.5       55.0       52.7       45.6       52.5       45.9
    Wage disbursements less accruals............................  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........  .........
                                                                 -----------------------------------------------------------------------------------------------------------------------------------

          Total current expenditures............................   1,726.5    1,767.8    1,852.0    1,949.3    2,064.9    2,217.6    2,344.4    2,518.9    2,685.6    2,834.0    3,022.0    3,198.3

                                                                 ===================================================================================================================================
          Net Federal Government saving.........................      27.0       82.4      189.2       77.8     -199.9     -353.2     -383.8     -315.8     -226.9     -193.0     -422.7     -393.3

              ADDENDUM: TOTAL RECEIPTS AND EXPENDITURES

    Current receipts............................................   1,753.5    1,850.3    2,041.2    2,027.1    1,865.0    1,864.4    1,960.6    2,203.0    2,458.7    2,641.0    2,599.2    2,805.0
    Capital transfer receipts...................................      23.9       27.6       28.8       28.2       26.4       21.7       24.7       24.6       27.7       25.8       26.5       26.1
                                                                 -----------------------------------------------------------------------------------------------------------------------------------

          Total receipts........................................   1,777.4    1,877.9    2,070.1    2,055.3    1,891.3    1,886.1    1,985.3    2,227.6    2,486.4    2,666.8    2,625.8    2,831.1

    Current expenditures........................................   1,726.5    1,767.9    1,852.0    1,949.3    2,064.9    2,217.6    2,344.4    2,518.9    2,685.6    2,834.0    3,022.0    3,198.3
    Net investment:
      Gross government investment:
        Defense.................................................      45.4       46.5       48.5       49.9       54.5       59.0       65.1       72.3       77.2       81.9       94.0       95.5
        Nondefense..............................................      29.7       31.9       32.2       30.3       32.6       33.3       33.6       35.9       40.5       38.4       39.2       39.2
      Less: Consumption of fixed capital:
        Defense.................................................      59.8       59.7       60.2       60.3       60.4       61.4       63.4       67.0       71.2       74.9       78.1       81.3
        Nondefense..............................................      22.9       24.5       26.5       27.7       28.2       28.7       29.3       30.8       32.6       33.4       36.8       39.9
    Capital transfer payments...................................      28.2       31.3       39.3       39.8       44.3       62.0       62.9       66.0       69.2       76.7       91.4       95.2
    Net purchases of nonproduced assets.........................      -5.3       -1.7       -0.3       -0.9        0.3          *        0.1       -0.7       -0.3      -13.6      -15.5       -2.5
                                                                 -----------------------------------------------------------------------------------------------------------------------------------

          Total expenditures....................................   1,741.8    1,791.8    1,885.1    1,980.3    2,108.0    2,281.9    2,413.5    2,594.5    2,768.4    2,909.0    3,116.2    3,304.5

                                                                 ===================================================================================================================================
          Net lending or net borrowing (-)......................      35.7       86.1      185.0       75.0     -216.7     -395.8     -428.1     -366.9     -281.9     -242.2     -490.4    -473.5
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    * $50 million or less.

    composed primarily of the individual income tax--is the largest single
    subcategory. The NIPAs' taxes on corporate income subcategory differs in
    classification from the corresponding budget category primarily because
    the NIPAs include the deposit of earnings of the Federal Reserve System
    as corporate income taxes, while the budget treats these collections as
    miscellaneous receipts. (The timing difference between the NIPAs and the
    budget is especially large for corporate receipts.) The taxes on
    production and imports subcategory is composed of excise taxes and
    customs duties.
      Contributions for Government social insurance is the second largest
    category of current receipts. It differs from the corresponding budget
    category primarily be

    [[Page 210]]

    cause: (1) the NIPAs include Federal employer contributions for social
    insurance as a governmental receipt, while the budget offsets these
    contributions against outlays as undistributed offsetting receipts; (2)
    the NIPAs include premiums for Parts B and D of Medicare as governmental
    receipts, while the budget nets them against outlays; (3) the NIPAs
    treat Government employee contributions to their pension plans as a
    transfer of personal income within the household sector (as if the
    pension system were private), while the budget includes them in
    governmental receipts; and (4) the NIPAs impute employer contributions
    for Federal employees' unemployment insurance and workers' compensation.
      The income receipts on assets category consists mainly of interest
    payments received on Government direct loans (such as student loans) and
    rents and royalties on Outer Continental Shelf oil leases. The current
    transfer receipts category consists primarily of deposit insurance
    premiums, fees, fines and other receipts from both individuals and
    businesses, less insurance settlements from the National Flood Insurance
    Program--virtually all of which are netted against outlays in the
    budget. The current surplus (or deficit) of Government enterprises
    category is the profit or loss of ``Government enterprises,'' such as
    the Postal Service, which are business-type operations of Government
    that usually appear in the budget as public enterprise revolving funds.
    Depreciation (consumption of enterprise fixed capital) is netted in
    calculating the current surplus of Government enterprises.

                       Federal Sector Current Expenditures

      Table 14-1 shows the five major NIPA categories for current
    expenditures and five subcategories, which differ greatly from the
    corresponding budget categories.
      Government consumption expenditures consist of goods and services
    purchased by the Federal Government, including compensation of employees
    and depreciation on fixed capital. Gross investment (shown among the
    addendum items in Table 14-1) is thus excluded from current expenditures
    and does not figure in computing net Government saving on a NIPA basis,
    whereas depreciation--charges on federally-owned fixed capital--
    (``consumption of general government fixed capital'') is included. The
    NIPAs treat State and local investment and capital consumption in the
    same way--regardless of the extent to which it is financed with Federal
    aid (capital transfer payments) or from State and local own-source
    receipts.
      Although gross investment is not included in Government current
    expenditures, Government gross investment is included in total GDP along
    with current consumption expenditures (including depreciation), which
    makes the treatment of the government sector in the NIPAs similar to
    that of the private sector. Investment includes structures, equipment,
    and computer software.
      The largest expenditure category consists mainly of current transfer
    payments for Government income security and health benefits, such as
    Social Security and Medicare. Payment of pension benefits to former
    Government employees is not included, as explained previously. Grants-
    in-aid to State and local governments help finance a range of programs,
    including income security, Medicaid, and education (but capital transfer
    payments for construction of highways, airports, waste-water treatment
    plants, and mass transit are excluded). ``Current transfer payments to
    the rest of the world (net)'' consists mainly of grants to foreign
    governments.
      Interest payments consist of the interest paid by the Government on
    its debt (excluding debt held by trust funds, other than Federal
    employee pension plans; and other Government accounts). Where the budget
    nets interest received on loans against outlays, the NIPAs treat it as
    current receipts.
      Subsidies consist of subsidy payments for resident businesses
    (excluding subsidies for investment). NIPA subsidies do not include the
    imputed credit subsidies estimated as budget outlays under credit
    reform. Rather, as explained previously loans and guarantees are
    excluded from the NIPAs except for associated interest and fees.
      Wage disbursements less accruals is an adjustment that is necessary to
    the extent that the wages paid in a period differ from the amount earned
    in the period.

                          Differences in the Estimates

      Since the introduction of the unified budget in January 1968, NIPA
    current receipts have been greater than budget receipts in most years.
    This is due principally to grossing differences and the fact that estate
    and gift taxes, which the NIPAs exclude as capital transfers, have been
    roughly matched by Medicare premiums, which the NIPAs include as a
    governmental receipt but the budget treats as an offsetting receipt. (In
    the budget, offsetting receipts are not included in the governmental
    receipts total but instead are netted against the outlay total.) Since
    1986, NIPA current expenditures have usually been higher than budget
    outlays (from which the Medicare premiums and employer retirement
    contributions are netted out as offsetting receipts); despite the
    omission from NIPA expenditures of capital transfer grants and pension
    benefit payments to former Government employees.
      Two components of budget outlays, however, are sometimes sufficiently
    large in combination to exceed the usual netting and grossing
    adjustments. These are financial transactions and net investment (the
    difference between gross investment and depreciation). Large outlays
    associated with resolving the failed savings and loan associations and
    banks in 1990 and 1991 caused those year's budget outlays to exceed NIPA
    current expenditures. With the change in budgetary treatment of direct
    loans in 1992 under credit reform, the cost of direct loans to the
    public recorded in the budget has been reduced bringing it closer to the
    NIPA treatment. Disbursement and repayment of loans made since that time
    are recorded outside the budget; only credit subsidies are recorded as
    budget outlays, unlike the

    [[Page 211]]

                                                                  Table 14-2.  RELATIONSHIP OF THE BUDGET TO THE FEDERAL SECTOR, NIPA's
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                      Estimate
                          Description                                1998       1999       2000       2001       2002       2003       2004       2005       2006       2007   ---------------------
                                                                                                                                                                                   2008       2009
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                              RECEIPTS

    Budget receipts.............................................   1,722.0    1,827.6    2,025.5    1,991.4    1,853.4    1,782.5    1,880.3    2,153.9    2,407.3    2,568.2    2,521.2    2,699.9
      Contributions to government employee retirement plans.....      -4.3       -4.5       -4.8       -4.7       -4.6       -4.6       -4.6       -4.5       -4.4       -4.3       -4.7       -4.8
      Capital transfers received................................     -23.9      -27.6      -28.8      -28.2      -26.3      -21.7      -24.7      -24.6      -27.7      -25.8      -26.5      -26.1
      Other coverage differences................................      -5.8       -7.0       -8.0       -7.9       -8.9       -9.0      -10.4      -11.3      -11.7      -12.3      -13.2      -14.3
      Netting and grossing......................................      64.5       65.7       70.6       69.9       77.0       85.1       89.7       75.0      108.3      117.5      127.9      140.0
      Timing differences........................................       1.1       -3.9      -13.2        6.7      -25.6       32.1       30.3       14.4      -13.0       -2.4       -5.4       10.1

        NIPA current receipts...................................   1,753.5    1,850.3    2,041.2    2,027.1    1,865.0    1,864.4    1,960.6    2,203.0    2,458.7    2,641.0    2,599.2    2,805.0

                                                                 ===================================================================================================================================
                            EXPENDITURES

    Budget outlays..............................................   1,652.7    1,702.0    1,789.2    1,863.2    2,011.2    2,160.1    2,293.0    2,472.2    2,655.4    2,730.2    2,931.2    3,107.4
      Government employee retirement plan transactions..........      31.3       32.1       31.7       31.5       33.7       33.1       33.5       39.4       42.1       41.1       51.2       55.7
      Deposit insurance and other financial transactions........      -7.1       -6.1       -9.0       -6.2       -6.7        2.1        0.4        7.1       -3.4       12.7       21.7       13.3
      Capital transfer payments.................................     -28.2      -31.3      -35.1      -39.8      -44.1      -45.4      -46.4      -47.7      -51.2      -76.7      -91.4      -95.2
      Net purchases of nonproduced assets.......................       5.3        1.7        0.3        0.9       -0.3         -*       -0.1        0.7        0.3       13.6       15.5        2.5
      Net investment............................................       7.6        5.7        6.0        7.9        1.4       -2.3       -6.1      -10.3      -13.9      -11.8      -18.4      -13.5
      Other coverage differences................................       1.0        2.7        4.0        7.9       -0.6      -13.5      -21.3      -26.5      -38.4       -6.3      -12.5       -7.2
      Netting and grossing differences..........................      64.5       65.7       70.6       69.9       77.0       85.1       89.7       75.0      108.3      117.5      127.9      140.0
      Timing differences........................................      -0.7       -4.7       -5.6       14.3       -6.7       -1.6        1.6        8.9      -13.6       13.7       -3.3       -4.6

        NIPA current expenditures...............................   1,726.5    1,767.8    1,852.0    1,949.3    2,064.9    2,217.6    2,344.4    2,518.9    2,685.6    2,834.0    3,022.0    3,198.3

                              ADDENDUM

      Budget surplus or deficit (-).............................      69.3      125.6      236.2      128.2     -157.8     -377.6     -412.7     -318.3     -248.2     -162.0     -410.0     -407.4
      NIPA net Federal Government saving........................      27.0       82.4      189.2       77.8     -199.9     -353.2     -383.8     -315.8     -226.9     -193.0     -422.7     -393.3
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    * $50 million or less.

    NIPAs which do not include this element of government expenditure.
      Every year during the period 1975-1992, the budget deficit exceeded in
    absolute value net Federal Government saving as measured in the NIPAs.
    The largest difference, $78.8 billion, occurred in 1991 as a result of
    resolving failed financial institutions as discussed above; the budget
    deficit was then -$269.2 billion, while the NIPA net Government saving
    was -$190.5 billion. In 1993-2002, NIPA net Federal Government saving
    exceeded the budget deficit in absolute value when the budget was in
    deficit and fell short of the budget surplus during the years the budget
    was in surplus. For 2003-2006, and again for 2009, the NIPA net Federal
    Government saving was, or is estimated to be, smaller than the budget
    deficit in absolute value, while for 2007 and 2008 the reverse is the
    case.
      Table 14-1 displays Federal transactions using NIPA concepts with
    actual data for 1998-2007 and estimates for 2008 and 2009 consistent
    with the Administration's budget proposals. Table 14-2 summarizes the
    reasons for differences between the data. Annual NIPA data for 1948-2009
    are published in Section 14 of a separate budget volume, Historical
    Tables, Budget of the U.S. Government, Fiscal Year 2009.
      Detailed estimates of NIPA current receipts and expenditures
    consistent with the budget and including quarterly estimates will be
    published in a forthcoming issue of the Department of Commerce
    publication, Survey of Current Business and on the Bureau of Economic
    Analysis website at www.bea.doc.gov/bea/pubs.htm.