[House Report 105-555]
[From the U.S. Government Publishing Office]



105th Congress                                         Report
2d Session              HOUSE OF REPRESENTATIVES       105-555      
_______________________________________________________________________

                                     



 
                     CONCURRENT RESOLUTION ON THE
                       BUDGET--FISCAL YEAR 1999

                               __________

                              R E P O R T

                                 of the

                        COMMITTEE ON THE BUDGET

                        HOUSE OF REPRESENTATIVES

                              to accompany

                            H. Con. Res. 284

REVISING THE CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR 
FISCAL YEAR 1998, ESTABLISHING THE CONGRESSIONAL BUDGET FOR THE UNITED 
 STATES GOVERNMENT FOR FISCAL YEAR 1999, AND SETTING FORTH APPROPRIATE 
      BUDGETARY LEVELS FOR FISCAL YEARS 2000, 2001, 2002, AND 2003

                             together with

        ADDITIONAL, SUPPLEMENTAL, DISSENTING, AND MINORITY VIEWS




  May 27, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed


                            C O N T E N T S

                              ----------                              
                                                                   Page
Budget Overview..................................................     3
Today's Prosperity--and Tomorrow's: Economic Assumptions.........     7
Function-by-Function Presentation................................    11
Additional Language..............................................    31
Summary Tables...................................................    33
The Congressional Budget Process.................................    53
    Spending Allocations.........................................    53
        Appropriations Committee.................................    53
        Authorizing Committees...................................    54
    Reconciliation Instructions..................................    61
Enforcing the Budget Resolution..................................    63
Statutory Controls Over the Budget...............................    65
    Discretionary Spending Limits................................    65
    Pay-As-You-Go Requirements...................................    66
Technical Changes in the Budget Process..........................    69
Task Force on Budget Process Reform..............................    73
Rollcall Votes and Related Matter................................    75
    Committee Votes..............................................    75
    Budget Committee Oversight Statement.........................    84
    Oversight Findings and Recommendations of the Committee on 
      Government Reform and Oversight............................    86
    Miscellaneous Budgetary Information..........................    86
    Establishment of the Statutory Limit on the Public Debt......    87
Views of Committee Members.......................................    87
Appendix--The Concurrent Budget Resolution (legislative text)....   166




105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-555
_______________________________________________________________________



         CONCURRENT RESOLUTION ON THE BUDGET--FISCAL YEAR 1999

                                _______
                                

  May 27, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


 Mr. Kasich, from the Committee on the Budget, submitted the following

                              R E P O R T

                             together with

        ADDITIONAL, SUPPLEMENTAL, DISSENTING, AND MINORITY VIEWS

                    [To accompany H. Con. Res. 284]
                            BUDGET OVERVIEW

    The Republican Congress's determined effort to balance the 
Federal budget is now expected to yield a surplus this year, 4 
years ahead of schedule. The economy continues to grow, job 
opportunities are expanding, and inflation remains in check. 
But the Balanced Budget Act of 1997 was just the beginning. The 
momentum created from our determined efforts of the past 4 
years should be used as a platform from which to pursue further 
reform--and to secure for the long term the benefits that 
balancing the budget has brought. In our effort to keep the 
budget in balance and promote continued prosperity, we must 
pursue policies and reforms that will:

--Pay Down the Public Debt.

--Preserve and Protect Social Security.

--Shrink the Growth of Government by 1 Percent Over 5 Years so 
    we can * * *

--Relieve Families of the Marriage Penalty.

    Congress should stand firm on these principles, building on 
the accomplishments of the Balanced Budget Act. This budget 
resolution represents our commitment to do so.

                          paying down the debt

    This year, for the first time in nearly 30 years, the 
unified Federal budget is in balance. This means that every 
dollar of government spending is paid for.
    But notwithstanding the importance of this achievement, our 
balanced budget is only the first step. We are still carrying a 
debt of $5.4 trillion--about three times the size of the total 
budget. In addition, we face unfunded liabilities of $14 
trillion--mainly in Social Security and Medicare--largely 
driven by the coming retirement of the baby boomers. To secure 
our balanced budget achievement, and--more important--to 
maintain a climate of continued prosperity, we should start 
today to reduce this massive debt.

               preserving and protecting social security

    Even before taking control of Congress in 1995, we pledged 
to protect the Social Security benefits of America's workers 
and retirees. We have kept that promise.
    We have balanced the Federal budget for the first time 
since 1969. Now, to protect Social Security in the long run, we 
are taking the next step by reserving the unified budget 
surplus for preserving Social Security.
    But Social Security faces a huge challenge in the near 
future. Starting in 2008, members of the 76-million ``baby 
boom'' generation--those born between 1946 and 1964--will begin 
to retire. This will start a substantial shift in the 
population, such that there will be far more senior citizens 
for every working person. By 2030, the number of people 65 and 
older will have risen by 96 percent, from 35 million today to 
68 million then. But the number of workers--the people paying 
in to the Social Security system--will have grown by only 13 
percent, from 148 million today to 167 million then.
    Unless we act soon, the system will be bankrupt, and the 
retirement security of millions of Americans will be placed in 
jeopardy. We need to permanently save Social Security while 
increasing the retirement income available for all Americans. 
Our goal should be the creation of a dramatically better, 
modern, personal Social Security system for the Information Age 
while protecting the benefits in the current system. We should 
use the opportunity presented by the surplus to create a huge 
new pool of private capital that will lower interest rates, 
strengthen economic growth, and increase the personal control 
individuals have over their savings by funding new personal, 
market-based retirement accounts for working Americans. Every 
American should have the opportunity to rise above the status 
quo.
    We must save Social Security for the sake of three 
generations--you, your parents, and your children. We should 
save it in such a way that your children, not Washington, have 
more control over their money. Through personal retirement 
accounts, we can protect every current and future retiree, and 
start the transition for younger Americans toward a modern, 
personal, market-oriented retirement system.

                        shrinking the government

    Over the past 5 years, the Federal Government spent $7.8 
trillion. Without congressional action, total Federal spending 
over the next 5 years will total about $9.1 trillion. This 
budget resolution proposes to slow the growth of government by 
roughly 1 percent over that period.
    Such savings are clearly achievable. Right now, there are 
more than 150 Federal job training programs, 340 programs in 
housing and 760 programs in education. Every Federal program 
requires bureaucrats, paperwork, and regulations. Surely, in 
this vast array of programs, a savings of 1 percent can be 
found.
    There are many ways to achieve the goals of this 
resolution, and there is no shortage of good ideas. Indeed, the 
budget resolution is, by definition, simply the blueprint, 
setting out the framework of this policy direction. 
Consequently, this resolution provides broad flexibility to the 
committees with jurisdiction over government programs. These 
authorizing and appropriating committees will work with the 
Budget Committee through the summer to develop the best 
policies for this effort. The committees will then bring to the 
floor a package of sound reforms that achieve these fundamental 
policy goals.
    But shrinking government is not an end in itself. The real 
goal of reducing the government's budget is to expand family 
budgets. The Federal Government's tax collections are higher 
today--measured as a share of economic resources--than at any 
other time since World War II. Government revenues are growing 
twice as fast as wages. The best way to permanently ease the 
tax burden on American families is by reducing the amount 
government takes from them--in short, by shrinking the 
government. As government is reduced, this plan calls for 
restoring the savings directly to American families by * * *

               Relieving Families of the Marriage Penalty

    The President's 1993 tax bill exacerbated the marriage 
penalty by making permanent certain provisions of the tax code 
that were supposed to be temporary, including the top marginal 
tax rate of 39.6 percent and the phase-outs for personal 
exemptions and certain credits. Where the marriage penalty 
occurs, it punishes those who are trying to form stable 
families--which are the basis of values and morals in the 
Nation. At a time when promoting strong families is most 
needed, the marriage penalty works at cross-purposes with 
America's best interests.
    The marriage penalty's effect on a family's economic well-
being is not a theoretical exercise: the Congressional Budget 
Office [CBO] reports that the marriage penalty actually reduces 
the incentive to work and therefore reduces family income as 
parents are forced into higher tax brackets. The CBO estimates 
that in 1996, 21 million married couples paid an average of 
$1,400 a year in higher taxes as a direct result of the 
marriage penalty.

                     Comparison With the President

    Since we first took the majority in Congress in 1995, we 
have cut taxes for the first time in 16 years; balanced the 
budget for the first time since the New York Mets won their 
first World Series; reformed welfare so that welfare recipients 
were required to work; saved Medicare from bankruptcy; and 
protected Social Security.
    When this record is compared with the President's, the 
results are illuminating. The President has increased spending, 
increased government, and increased taxes. In 1993, the 
President proposed, fought for, and won the largest tax 
increase in American history. At the beginning of 1995, he 
proposed budget deficits of $200 billion a year as far as the 
eye could see. Contrary to his rhetoric of creating a 
government that ``works better and spends less,'' the record 
shows he has sought only to reinvent big government.
    His latest budget proposal calls for 85 new spending 
programs, including 39 entitlements, and more than $150 billion 
in new spending over 5 years. It also calls for $129 billion in 
tax increases over 5 years.

                               Conclusion

    Not long ago, mainstream economists warned that too much 
deficit reduction achieved too quickly could slow the economy. 
But in the year since the Balanced Budget Agreement was 
reached, a projected $90-billion deficit for fiscal year 1998 
has been replaced with a surplus of approximately $53 billion--
and the economy continues to grow. Washington economists 
clearly have underestimated the strength and resiliency of the 
Nation's economic power--which come from the American people 
themselves.
    This budget continues the process started with the Balanced 
Budget Act of 1997. It calls for paying down debt, and 
preserving and protecting Social Security. It calls for 
shrinking government by 1 percent over 5 years--that is, 
spending $9 trillion instead of $9.1 trillion--and putting the 
savings directly in the hands of American families by relieving 
them of the marriage penalty.
    In short, this budget underscores our belief that when the 
American people have the resources and freedom to pursue their 
own destinies, our country prospers.



                   TODAY'S PROSPERITY--AND TOMORROW'S

             Economic Assumptions of the Budget Resolution

                              ----------                              


                       The Budget and the Economy

    Two factors have stood out in promoting the economic 
stability that now exists in the United States: low inflation 
and declining interest rates.
    ``Declining inflation has had a pervasive tax cut effect 
throughout the economy, boosting real incomes, and real 
wages,'' says economist Lawrence A. Kudlow. Today's low 
inflation is, in fact, the product of a long-term effort that 
began with the Reagan administration. President Reagan 
recognized that high inflation punished everyone, and he vowed 
to reverse the inflationary trend that he inherited when he 
took office in 1981. Economists long have known that price 
stability is a necessary foundation for a growing economy.
    So are low interest rates. Long-term interest rates have 
declined from 7.8 percent in January 1995, when our Republican 
majorities in Congress took office, to approximately 5.7 
percent now. ``It has been that decline [in long-term interest 
rates] which perhaps more than anything else in our economy has 
been the factor which has been driving this really quite 
extraordinary 7-year economic expansion,'' says Federal Reserve 
Chairman Alan Greenspan. Chairman Greenspan also has credited 
this decline largely to Congress's determined effort to balance 
the Federal budget. As he has said: ``A substantial part * * * 
of the very considerable decline in long-term interest rates 
has been a function of the decline in the budget deficit, 
because it's removed pressures of the Federal Government's 
borrowing from the marketplace.''
    This decline in interest rates has a direct impact on 
family budgets. The decline in interest rates since the 
beginning of 1995 has saved the typical family $50,850 on a 
home mortgage, $901 on an auto loan, and $1,438 on a student 
loan.
    Interestingly, the reverse occurred with the President's 
1993 tax bill. ``A year after Clinton's '93 tax hike, long-term 
Treasury rates moved up from 5.75 percent to 8.25 percent,'' 
says Kudlow. ``The trend of real economic growth slowed from 
3.3 percent to 1.7 percent.''
    It is noteworthy that many of Washington's economic 
experts, including the Congressional Budget Office [CBO], 
seriously underestimated the power, diversity, and resilience 
of the American economy. For example, when the Balanced Budget 
Agreement was reached in May 1997, CBO projected a deficit in 
fiscal year 1998 of approximately $90 billion. Today, CBO 
estimates a surplus this year of about $53 billion, and Federal 
revenues continue to pour in at a much-higher-than-expected 
rate. Meanwhile, since 1997 private forecasts have consistently 
seen higher surpluses than did CBO. The latest revision was 
widely anticipated, as $50-billion to $60-billion surpluses for 
1998 were expected as the consensus on Wall Street during the 
previous several months.
    CBO has been unable to fully explain its frequent 
misestimates of recent years. But the answer may lie in the 
nature of well-functioning free markets. The market is not a 
single entity. It comprises millions of individual decisions 
made every day. It feeds on innovations large and small.
    If anything, the successes of the past several years 
demonstrate that controlling government spending, restraining 
taxes, and reducing regulation can pay dividends that are 
consistently larger than expected--and that is a reason to 
continue on this path.

                Review of Economic Developments in 1997

    Economic performance improved in 1997, with higher growth, 
lower unemployment, and lower inflation than in 1996. The 
economy grew in 1997 at a real economic rate of 3.8 percent, 
the highest in a decade and well above the 2.4 percent of 1996. 
In 1997, the average unemployment rate was 4.7 percent, the 
lowest in a quarter century. This is substantially lower than 
the 5.4 percent rate in 1996.
    But this lower unemployment was achieved while price levels 
remained stable: The Consumer Price Index [CPI] increased only 
1.7 percent in 1997, the lowest in 30 years and half of its 
pace in 1996. Several factors of the last few years have 
continued rather than faded, including: a continuation of the 
worldwide trend toward lower inflation; strength of the dollar 
and financial crisis in Asia so that import prices declined; 
continued sharp slowdown in medical care costs; unusually rapid 
declines in computer prices; fall in commodities prices, and 
technical revisions by the Bureau of Labor Statistics [BLS] on 
the CPI.
    The Federal Reserve Board reaction to these developments 
was to keep its policy unchanged. The main policy objective of 
the Fed has been to ensure that its monetary policy supports a 
rate of economic growth that is consistent with low inflation 
and price stability. In contrast to 1994, when the Fed raised 
rates several times to preemptively lower inflationary 
pressures, the Fed in 1997 held rates almost steady (there was 
a single hike in March of a quarter percent). With inflation 
and inflationary expectations falling,keeping the nominal 
Federal funds rate (the Fed's main policy tool) unchanged is to allow a 
higher and therefore more restrictive real rate.
    Perhaps more than other sectors, housing has benefitted 
from the improved economic environment. Strong household income 
gains, high levels of consumer confidence and lower interest 
rates have led to the highest home ownership rate since 
tabulations started 34 years ago. Sales of new homes are nearly 
the highest since record keeping started in 1963. Yet prices 
have picked up only slightly and builders have not responded 
with excessive over-building.
    Even the economic and financial crisis in Asia, which 
started in the fall of 1997, did not materially affect the 
gains in 1997.

             Summary of CBO Economic Forecast Through 2003

    The CBO economic forecast is very similar to OMB and the 
Blue Chip consensus forecasts, with differences within the 
range of error for such forecasts.
    CBO expects real economic growth to gradually slow from its 
rate of 3.8 percent in 1997 to 2.7 percent in 1998 and 2.0 
percent in 1999, and then to gradually trend toward CBO's 
projected potential growth rate of the economy which ranges 
from 2.1 percent to 2.3 percent in the projection period. The 
weakness occurs largely from a combination of a worsened trade 
balance due to the impact of the economic turmoil in Asia, 
lower investment from much lower corporate profits and somewhat 
higher short-term interest rates from Federal Reserve 
tightening of monetary policy.
    On inflation and unemployment, CBO's short-term forecast 
shows that for 1998, both are expected to remain at their very 
low rates of 1997. But both are expected to worsen after 1999: 
CBO forecasts assume a risk of higher inflation if the 
unemployment rate is below 5.8 percent. Accordingly, over 5 
years unemployment rises to 5.8 percent, and over 4 years 
inflation rises to 2.8 percent. Like most analysts, CBO sees no 
obvious signs of imbalance, and therefore no recession likely 
in the forecast period.
    After 1999, CBO does not attempt to forecast cyclical 
fluctuations in the economy more than 2 years ahead; instead, 
its longer-term projections are based on trends in the labor 
force, productivity, and saving. CBO projects for the period 
after 2002 that the economy will grow between 2.1 percent and 
2.3 percent, adjusted for inflation. Also, CBO's long-term 
projections assume that the Fed will pursue a low-inflation 
environment that supports a rate of economic growth close to 
its long-term potential and reflects the likelihood of a 
recession at some time in the projection period.
    Deficits continued to fall; the Federal deficit for fiscal 
year 1997 came in much lower than projected due to unexpectedly 
strong revenues. The Federal budget deficit dropped sharply 
lower in 1997 to a level $100 billion lower than projected at 
the beginning of the calendar year; $70 billion was due to 
revenue. The improved economic environment accounts for about a 
third of the cumulative deficit improvement since September 
1997 over the 1999-2003 period. As of May 1998, the past 12-
month cumulative surplus is already $49 billion.
    Revenues have outgrown GDP growth in the past four years by 
at least 2 percent each year, so that the share of Federal 
Government in the economic output, 20.6 percent expected in 
1998--one measure of the size of government--is currently a 
post-WWII record.
    As in 1997, CBO revised up its estimates of surpluses due 
to large revenue inflows. In May 1998, CBO estimated surpluses 
of between $35 billion and $55 billion higher for the current 
fiscal year 1998. Some 65 percent to 70 percent ($25 to $35 
billion) is due to the strength in revenues collected (the rest 
is from lower outlays). For 1999, most of the revenues strength 
continues ($20 billion to $30 billion) improving the fiscal 
year 1999 surplus to $29 billion to $39 billion. For the 
outyears, reduced interest payments for debt service from lower 
national debt can be expected. CBO found no significant change 
to indicate an improvement in long-term economic trends, unlike 
the ``April Surprise'' in 1997, which was based on an upward 
revision in economic statistics on investment that 
significantly increased the capital base in the outyears.
    As noted above, since 1997, private forecasts have 
consistently foreseen higher surpluses than officially 
forecast. The latest revision was widely anticipated, as $50-
billion to $60-billion surpluses for 1998 were expected as the 
consensus on Wall Street during the previous several months.
    Most of the surge (CBO estimates 85 percent) in unexpected 
1997 tax revenues has been in the area of individual taxes, 
especially in the category of non-withheld taxes. Although the 
data to establish where these taxes came from are not yet 
available (details will not be available for 2 years), most 
likely they are from the following: stronger-than- expected 
personal income growth due to the economy; a rise in the 
effective tax rate; and continued high capital gains 
realizations, probably related to the boom in the stock market. 
CBO notes that the first two reasons may be why individual 
taxes are growing at twice the rate of personal incomes. 
Preliminary tax data suggest that capital gains tax payments 
could be a major factor: capital gains realizations probably 
grew at a 45- percent rate in 1997, to $370 billion, repeating 
the same growth as in 1996. Federal Reserve statistics show 
that over 1988 to 1997, stock market gains have added $6.1 
trillion to wealth of households and nonprofits (probably about 
an eighth of this total), with $3.9 trillion in gains for 1995 
to 1997. Some analysts cite this growth as the basis for 
assuming permanently higher future revenues from capital gains 
realizations.

                                              ECONOMIC ASSUMPTIONS                                              
                                                [Calendar years]                                                
----------------------------------------------------------------------------------------------------------------
                                                                Forecast                   Projected            
                                                    Actual -----------------------------------------------------
                                                    (1997)    1998     1999     2000     2001     2002     2003 
----------------------------------------------------------------------------------------------------------------
Percent change (year over year):                                                                                
    Real GDP.....................................      3.8      2.7      2.0      1.9      2.0      2.1      2.3
    Implicit GDP deflator........................      2.0      2.0      2.2      2.3      2.4      2.4      2.5
    Inflation (CPI-U)............................      2.3      2.2      2.5      2.7      2.8      2.8      2.8
Annual rate:                                                                                                    
    Unemployment.................................      4.9      4.8      5.1      5,4      5.6      5.8      5.8
    3-month Treasury Bill........................      5.1      5.3      5.2      4.8      4.7      4.7      4.7
    1-year Treasury Note.........................      6.4      6.0      6.1      6.0      5.9      5.9      5.9
Income shares (percentage of GDP):                                                                              
    Corporate profits............................      9.9      9.7      9.2      8.8      8.5      8.3      8.2
    Wage and salary..............................     48.0     48.4     48.5     48.6     48.6     48.6     48.6
----------------------------------------------------------------------------------------------------------------
 Source: Congressional Budget Office.                                                                           

                   FUNCTION-BY-FUNCTION PRESENTATION

                              ----------                              


                     Function 050: National Defense

                            FUNCTION SUMMARY

    The National Defense function includes funds to develop, 
maintain, and equip the military forces of the United States. 
Major areas of funding include pay and benefits for military 
and civilian personnel; research, development, testing, and 
evaluation; procurement of weapons systems; military 
construction and family housing; and operations and maintenance 
of the defense establishment.

              DESCRIPTION OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$271.6 billion in budget authority [BA] and $266.6 billion in 
outlays in fiscal year 1999, and $1,416.3 billion in BA and 
$1,360.2 billion in outlays over 5 years.
    Mandatory spending in this function would be -$1.1 billion 
in BA and -$1.1 billion in outlays in fiscal year 1999, and 
-$5.3 billion in BA and -$5.3 billion in outlays over 5 years.

                                         FUNCTION 050: NATIONAL DEFENSE                                         
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................     $270.5     $274.3     $280.8     $288.6     $296.8
Outlays..................................................      265.5      267.9      269.6      272.1      279.8
----------------------------------------------------------------------------------------------------------------

                  Function 150: International Affairs

                            FUNCTION SUMMARY

    The International Affairs function includes funds to 
finance the foreign affairs establishment, including embassies 
and other diplomatic missions abroad; humanitarian assistance; 
foreign aid in less developed countries; international security 
assistance; U.S. contributions to the international financial 
institutions; foreign information and exchange activities; 
Export-Import Bank activities; and refugee assistance. The 
major departments and agencies in this function include the 
Department of State, the Department of the Treasury, the Agency 
for International Development, the United States Information 
Agency, and the Export-Import Bank.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$18.5 billion in budget authority [BA] and $18.2 billion in 
outlays in fiscal year 1999, and $80.4 billion in BA and $83.5 
billion in outlays over 5 years. Mandatory spending in this 
function would be -$4.3 billion in BA and -$4.4 billion in 
outlays in fiscal year 1999, and -$17.1 billion in BA and 
-$20.0 billion in outlays over 5 years.

                                       FUNCTION 150: INTERNATIONAL AFFAIRS                                      
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      $14.2      $12.1      $12.3      $12.3      $12.2
Outlays..................................................       13.8       13.7       12.9       11.9       11.3
----------------------------------------------------------------------------------------------------------------

          Function 250: General Science, Space, and Technology

                            FUNCTION SUMMARY

    The General Science, Space, and Technology function 
includes funds for space flight and research, general science, 
and basic research not specifically covered by other functional 
areas. The programs in this function are the primary source of 
funding for the physical and engineering sciences. The budgets 
for the National Science Foundation [NSF], the high energy and 
nuclear physics research programs of the Department of Energy 
[DOE], and the National Aeronautics and Space Administration 
[NASA]--except for its air transportation programs which are 
included in Function 400--are within this category.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending--which represents nearly 100 
percent of the function's totals--the budget resolution calls 
for $17.9 billion in budget authority [BA] and $17.8 billion in 
outlays in fiscal year 1999, and $88.9 billion in BA and $88.5 
billion in outlays over 5 years.

                              FUNCTION 250: GENERAL SCIENCE, SPACE, AND TECHNOLOGY                              
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      $17.9      $17.7      $17.8      $17.8      $17.8
Outlays..................................................       17.8       17.8       17.6       17.7       17.7
----------------------------------------------------------------------------------------------------------------

                          Function 270: Energy

                            FUNCTION SUMMARY

    The Energy function includes the civilian activities in the 
Department of Energy, rural electrification and 
telecommunications loans within the Department of Agriculture, 
the power programs of the Tennessee Valley Authority [TVA], and 
the Nuclear Regulatory Commission [NRC].

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$2.8 billion in budget authority [BA] and $3.3 billion in 
outlays in fiscal year 1999, and $9.5 billion in BA and $12.0 
billion in outlays over 5 years. Mandatory spending in this 
function would be -$2.2 billion in BA and -$3.1 billion in 
outlays in fiscal year 1999, and -$17.5 billion in BA and 
-$21.8 billion in outlays over 5 years.

                                              FUNCTION 270: ENERGY                                              
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................       $0.6      -$0.3      -$1.3      -$6.1      -$0.7
Outlays..................................................        0.3       -0.2       -1.8       -6.6       -1.5
----------------------------------------------------------------------------------------------------------------

            Function 300: Natural Resources And Environment

                            FUNCTION SUMMARY

    The Natural Resources and Environment function includes 
funds to develop, manage, and maintain the Nation's natural 
resources, and protect public health by ensuring a clean 
environment. Funding is provided for water resources, 
conservation and land management, recreational resources, 
pollution control and abatement, and other natural resources. 
The major departments and agencies in this function include the 
Department of the Interior; the Department of Agriculture; the 
Army Corps of Engineers; the Environmental Protection Agency; 
and the National Oceanic and Atmospheric Administration [NOAA], 
in the Department of Commerce.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$22.0 billion in budget authority [BA] and $22.0 billion in 
outlays in fiscal year 1999, and $102.9 billion in BA and 
$105.7 billion in outlays over 5 years. Mandatory spending in 
this function would be $0.6 billion in BA and $0.8 billion in 
outlays in fiscal year 1999, and $2.2 billion in BA and $2.4 
billion in outlays over 5 years.

                                 FUNCTION 300: NATURAL RESOURCES AND ENVIRONMENT                                
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      $22.6      $21.0      $20.5      $20.5      $20.5
Outlays..................................................       22.8       22.4       21.6       20.8       20.5
----------------------------------------------------------------------------------------------------------------

                       Function 350: Agriculture

                            FUNCTION SUMMARY

    The Agriculture function includes funds for direct 
assistance and loans to food and fiber producers, export 
assistance, market information and inspection services, and 
agricultural research.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$4.3 billion in budget authority [BA] and $4.3 billion in 
outlays in fiscal year 1999, and $20.7 billion in BA and $20.8 
billion in outlays over 5 years. Mandatory spending in this 
function would be $7.9 billion in BA and $6.2 billion in 
outlays in fiscal year 1999, and $34.8 billion in BA and $26.4 
billion in outlays over 5 years.

                                            FUNCTION 350: AGRICULTURE                                           
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      $12.6      $11.7      $10.6      $10.4      $10.7
Outlays..................................................       10.5       10.1        9.0        8.8        9.1
----------------------------------------------------------------------------------------------------------------

               Function 370: Commerce and Housing Credit

                            FUNCTION SUMMARY

    The Commerce and Housing Credit function includes certain 
discretionary housing programs, such as subsidies for single 
and multifamily housing in rural areas; net spending by the 
Postal Service; discretionary funding for commerce programs, 
such as international trade and exports, science and 
technology, the periodic census, and small business; and 
mandatory spending for deposit insurance activities related to 
banks, thrifts, and credit unions; and mortgage insurance 
provided by the Federal Housing Administration.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$3.9 billion in budget authority [BA] and $3.2 billion in 
outlays in fiscal year 1999, and $15.0 billion in BA and $15.3 
billion in outlays over 5 years. Mandatory spending in this 
function would be $0.5 billion in BA and -$0.4 billion in 
outlays in fiscal year 1999, and $47.6 billion in BA and $30.4 
billion in outlays over 5 years.

                                    FUNCTION 370: COMMERCE AND HOUSING CREDIT                                   
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................       $4.4      $15.3      $13.9      $14.8      $14.2
Outlays..................................................        2.8       10.2       10.3       11.4       11.0
----------------------------------------------------------------------------------------------------------------

                      Function 400: Transportation

                            FUNCTION SUMMARY

    The Transportation function includes Federal funding for 
highway, transit, railroad, aviation, maritime, and Coast Guard 
programs.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$12.6 billion in budget authority [BA] and $40.4 billion in 
outlays in fiscal year 1999, and $61.4 billion in BA and $200.8 
billion in outlays over 5 years. Mandatory spending in this 
function would be $31.6 billion in BA and $1.7 billion in 
outlays in fiscal year 1999, and $156.8 billion in BA and $5.0 
billion in outlays over 5 years.

                                          FUNCTION 400: TRANSPORTATION                                          
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      $44.3      $43.6      $43.6      $43.1      $43.7
Outlays..................................................       42.1       41.6       41.3       40.2       40.6
----------------------------------------------------------------------------------------------------------------

            Function 450: Community and Regional Development

                            FUNCTION SUMMARY

    The Community and Regional Development function includes 
programs that provide Federal funding for economic and 
community development in both urban and rural areas. It 
includes programs such as Community Development Block Grants, 
the Tennessee Valley Authority, the Appalachian Regional 
Commission and the Federal Emergency Management Agency.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$8.3 billion in budget authority [BA] and $10.7 billion in 
outlays in fiscal year 1999, and $35.3 billion in BA and $44.2 
billion in outlays over 5 years. Mandatory spending in this 
function would be $0.4 billion in BA and -$0.1 billion in 
outlays in fiscal year 1999, and $0.2 billion in BA and -$2.3 
billion in outlays over 5 years.

                                FUNCTION 450: COMMUNITY AND REGIONAL DEVELOPMENT                                
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................       $8.7       $7.3       $6.8       $6.2       $6.2
Outlays..................................................       10.6        9.1        8.2        7.4        6.6
----------------------------------------------------------------------------------------------------------------

   Function 500: Education, Training, Employment, and Social Services

                            function summary

    The Education, Training, Employment, and Social Services 
function includes elementary and secondary education programs, 
vocational and higher education, employment and job training 
programs, and grants to States for general social services and 
rehabilitation services.

                summary of committee-reported resolution

    For discretionary spending, the budget resolution calls for 
$47.3 billion in budget authority [BA] and $46.2 billion in 
outlays in fiscal year 1999, and $238.7 billion in BA and 
$233.7 billion in outlays over 5 years. Mandatory spending in 
this function would be $14.1 billion in BA and $14.0 billion in 
outlays in fiscal year 1999, and $77.3 billion in BA and $75.6 
billion in outlays over 5 years.

                       FUNCTION 500: EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES                       
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      $61.4      $62.3      $63.3      $63.2      $65.6
Outlays..................................................       60.2       61.3       62.0       61.8       63.9
----------------------------------------------------------------------------------------------------------------

                          Function 550: Health

                            function summary

    The Health function includes the biomedical research 
services, and health education activities of the United States, 
including the National Institutes of Health, substance abuse 
prevention and treatment, and women's health issues. It also 
includes Medicaid, the Nation's major program to pay for 
medical and long-term care services for low-income people.

                Summary of committee-reported resolution

    For discretionary spending, the budget resolution calls for 
$26.7 billion in budget authority [BA] and $26.3 billion in 
outlays in fiscal year 1999, and $131.5 billion in BA and 
$131.0 billion in outlays over 5 years. Mandatory spending in 
this function would be $117.1 billion in BA and $116.0 billion 
in outlays in fiscal year 1999, and $652.1 billion in BA and 
$651.9 billion in outlays over 5 years.

                                              FUNCTION 550: HEALTH                                              
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................     $143.8     $149.9     $155.9     $162.8     $171.2
Outlays..................................................      142.3      149.5      155.6      163.6      172.0
----------------------------------------------------------------------------------------------------------------

                         Function 570: Medicare

                            function summary

    This budget function includes the Medicare Part A Hospital 
Insurance [HI] program, Part B Supplementary Medical Insurance 
[SMI] program, and premiums paid by qualified aged and disabled 
beneficiaries.

                summary of committee-reported resolution

    For discretionary spending, the budget resolution calls for 
$2.7 billion in budget authority [BA] and $2.8 billion in 
outlays in fiscal year 1999, and $13.5 billion in BA and $13.6 
billion in outlays over 5 years. Mandatory spending in this 
function would be $206.9 billion in BA and $207.4 billion in 
outlays in fiscal year 1999, and $1,172.9 billion in BA and 
$1,173.4 billion in outlays over 5 years.

                                             FUNCTION 570: MEDICARE                                             
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................     $209.6     $220.5     $237.5     $248.7     $270.2
Outlays..................................................      210.1      219.8      240.4      246.3      270.4
----------------------------------------------------------------------------------------------------------------

                     Function 600: Income Security

                            FUNCTION SUMMARY

    The Income Security function includes most of the Federal 
Government's income support programs. The function includes 
benefits to Federal retirees and railroad retirees; 
unemployment benefits; low-income housing; food-stamps; school 
lunch subsidies; and financial assistance to low-income groups 
including families with children, the disabled, the elderly, 
refugees, and households with high energy costs.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$33.7 billion in budget authority [BA] and $41.2 billion in 
outlays in fiscal year 1999, and $185.7 billion in BA and 
$197.6 billion in outlays over 5 years. Mandatory spending in 
this function would be $210.1 billion in BA and $206.3 billion 
in outlays in fiscal year 1999, and $1,147.3 billion in BA and 
$1,133.6 billion in outlays over 5 years.

                                          FUNCTION 600: INCOME SECURITY                                         
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................     $243.8     $256.8     $267.2     $277.4     $287.8
Outlays..................................................      247.6      258.2      267.0      274.5      284.0
----------------------------------------------------------------------------------------------------------------

                     Function 650: Social Security

                            FUNCTION SUMMARY

    Function 650 consists of the Social Security Program.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$3.2 billion in budget authority [BA] and $3.4 billion in 
outlays in fiscal year 1999, and $16.0 billion in BA and $16.3 
billion in outlays over 5 years. Mandatory spending in this 
function would be $391.5 billion in BA and outlays in fiscal 
year 1999, and $2,147.8 billion in BA and outlays over 5 years.

                                          FUNCTION 650: SOCIAL SECURITY                                         
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................     $394.7     $411.9     $430.9     $451.9     $474.4
Outlays..................................................      394.9      412.0      430.9      451.9      474.4
----------------------------------------------------------------------------------------------------------------

             Function 700: Veterans' Benefits and Services

                            FUNCTION SUMMARY

    The Veterans' Benefits and Services function includes 
funding for the Department of Veterans Affairs [VA] which 
provides veterans who meet various eligibility rules benefits 
ranging from medical care, to compensation, pensions, 
education, housing, insurance, and burial benefits. There are 
about 25.9 million veterans and about 44 million members of 
their families.
    The VA administers a vast health care system for veterans 
who meet certain eligibility criteria. Care is provided largely 
in facilities owned and operated by the VA. In 1996, the VA-
operated facilities included 173 medical centers, 130 nursing 
home care units, 375 outpatient clinics, and 39 domiciliaries. 
In recent years, about 2.8 million veterans used the VA health 
care system, representing just over 10 percent of the total 
veteran population.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$19.1 billion in budget authority [BA] and $19.6 billion in 
outlays in fiscal year 1999, and $95.6 billion in BA and $96.3 
billion in outlays over 5 years. Mandatory spending in this 
function would be $23.3 billion in BA and $23.4 billion in 
outlays in fiscal year 1999, and $121.9 billion in BA and 
$123.1 billion in outlays over 5 years.

                                 FUNCTION 700: VETERANS'' BENEFITS AND SERVICES                                 
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      $42.4      $43.0      $43.5      $43.9      $44.8
Outlays..................................................       42.9       43.3       43.7       44.2       45.2
----------------------------------------------------------------------------------------------------------------

                Function 750: Administration of Justice

                            FUNCTION SUMMARY

    The Administration of Justice function includes funding for 
Federal law enforcement activities, including criminal 
investigations by the Federal Bureau of Investigation [FBI] and 
the Drug Enforcement Administration [DEA], border enforcement 
and the control of illegal immigration by the Customs Service 
and Immigration and Naturalization Service [INS], as well as 
funding for prison construction, drug treatment, crime 
prevention programs, and the Federal Judiciary.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$24.4 billion in budget authority [BA] and $23.4 billion in 
outlays in fiscal year 1999, and $114.2 billion in BA and 
$116.3 billion in outlays over 5 years. Mandatory spending in 
this function would be $0.6 billion in BA and $0.6 billion in 
outlays in fiscal year 1999, and $1.9 billion in BA and $1.6 
billion in outlays over 5 years.

                                     FUNCTION 750: ADMINISTRATION OF JUSTICE                                    
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      $25.0      $23.3      $22.7      $22.6      $22.5
Outlays..................................................       24.0       24.1       23.9       23.4       22.6
----------------------------------------------------------------------------------------------------------------

                    Function 800: General Government

                            FUNCTION SUMMARY

    The General Government function consists of the activities 
of the Legislative Branch, the Executive Office of the 
President, U.S. Treasury fiscal operations (including Internal 
Revenue Service), personnel and property management, and 
general purpose fiscal assistance to states, localities, and 
U.S. territories.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
$12.5 billion in budget authority [BA] and $11.9 billion in 
outlays in fiscal year 1999, and $57.2 billion in BA and $56.2 
billion in outlays over 5 years. Mandatory spending in this 
function would be $2.3 billion in BA and $2.4 billion in 
outlays in fiscal year 1999, and $11.7 billion in BA and $11.9 
billion in outlays over 5 years.

                                        FUNCTION 800: GENERAL GOVERNMENT                                        
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      $14.8      $13.6      $13.6      $13.6      $13.3
Outlays..................................................       14.2       13.9       13.5       13.3       13.1
----------------------------------------------------------------------------------------------------------------

                       Function 900: Net Interest

                            FUNCTION SUMMARY

    Net interest is the interest paid on the Federal public 
debt, minus the interest income received. Function 900 is a 
mandatory payment, with no discretionary components.

                                           FUNCTION 900: NET INTEREST                                           
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................     $244.0     $238.2     $231.4     $224.5     $219.1
Outlays..................................................      244.0      238.2      231.4      224.5      219.1
----------------------------------------------------------------------------------------------------------------

                        Function 920: Allowances

                            FUNCTION SUMMARY

    The Allowances function displays the budgetary effects of 
proposals or assumptions that cannot be easily distributed 
across other budget functions.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    For discretionary spending, the budget resolution calls for 
-$0.5 billion in budget authority [BA] and -$0.5 billion in 
outlays in fiscal year 1999, and -$12.3 billion in BA and 
-$10.7 billion in outlays over 5 years. The resolution assumes 
no mandatory budget authority or outlays in fiscal year 1999 or 
over 5 years.

                                            FUNCTION 920: ALLOWANCES                                            
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................      -$0.5      -$0.9      -$2.9      -$3.2      -$3.2
Outlays..................................................       -0.5       -0.9       -2.9       -3.2       -3.2
----------------------------------------------------------------------------------------------------------------

            Function 950: Undistributed Offsetting Receipts

                            FUNCTION SUMMARY

    This function records offsetting receipts that are too 
large to record in other budget functions. Such receipts are 
either intrabudgetary (a payment from one Federal agency to 
another, such as agency payments to the retirement trust funds) 
or proprietary (a payment from the public for some type of 
business transaction with the government). The main types of 
receipts recorded as ``undistributed'' in this function are: 
the payments Federal agencies make to retirement trust funds 
for their employees, payments made by companies for the right 
to explore and produce oil and gas on the Outer Continental 
Shelf, and payments by those who bid for the right to buy or 
use public property or resources, such as the electromagnetic 
spectrum.

                SUMMARY OF COMMITTEE-REPORTED RESOLUTION

    There is no Discretionary spending in this function. 
Mandatory spending in this function would be -$44.0 billion in 
BA and -$44.0 billion in outlays in fiscal year 1999, and 
-$236.2 billion in BA and -$236.2 billion in outlays over 5 
years.

                                 FUNCTION 950: UNDISTRIBUTED OFFSETTING RECEIPTS                                
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Budget Authority.........................................     -$44.0     -$44.4     -$46.9     -$54.6     -$46.3
Outlays..................................................      -44.0      -44.4      -46.9      -54.6      -46.3
----------------------------------------------------------------------------------------------------------------

                                Revenues

    This budget proposes to relieve families of one of the most 
onerous forms of taxation--the marriage penalty.
    The President's 1993 tax bill exacerbated the marriage 
penalty by making permanent certain provisions of the tax code 
that were supposed to be temporary, including the top marginal 
tax rate of 39.6 percent and the phase-outs for personal 
exemptions and certain credits. Where the marriage penalty 
occurs, it punishes those who are trying to form stable 
families--which are the basis of values and morals in the 
Nation. At a time when promoting strong families is most 
needed, the marriage penalty discourages the moral practice of 
building families.
    As noted earlier, taxes in this country are too high. The 
Federal Government's tax collections are higher today--21 
percent of Gross Domestic Product--than at any other time since 
World War II. Government revenues are growing twice as fast as 
wages.

                                                    REVENUES                                                    
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                              1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Total Revenues...........................................   $1,755.6   $1,788.8   $1,835.4   $1,906.0   $1,973.7
----------------------------------------------------------------------------------------------------------------

                          ADDITIONAL LANGUAGE

                              ----------                              


                       Sense of Congress Language

    Sections 7 through 11 of the budget resolution contain the 
following Sense of Congress provisions.
    Section 7--Sense of Congress on the Social Security Trust 
Fund.
    Section 8--Sense of Congress on the Assets for Independence 
Act.
    Section 9--Sense of Congress on a demonstration project on 
clinical cancer trials.
    Section 10--Sense of Congress on the interim payment system 
for home health benefits under Medicare.
    Section 11--Sense of Congress on the levels of Special 
Education funding.

                       Additional Report Language

    The Committee notes that one of the goals of the Balanced 
Budget Act [BBA] of 1997 was to expand options for Medicare 
beneficiaries under the new Medicare+Choice program. The new 
Medicare payment formula in the BBA was intended to make these 
choices available to all Americans. But the blending of rates 
to create greater equity for rural and other lower-payment 
areas was not implemented in 1998. The resolution assumes that 
the functional totals reflect the maximum funding of the 
blended rate as set forth in the Balanced Budget Act of 1997.
    It is the goal of the Budget Committee to ultimately 
balance the budget without relying on the practice of borrowing 
from Social Security. We wish to emphasize this point so that 
Americans realize both the unfinished task of balancing the 
budget and the existence of an ongoing deficit in Federal 
operations other than Social Security.
    The Army Corps of Engineers carries out construction, 
rehabilitation, and related activities for water resources 
development projects. These projects have navigation, flood 
control, water supply, hydroelectric, and other attendant 
benefits to the Nation. Adequate funding of the Army Corps of 
Engineers is critical to the health and well-being of the 
Nation's citizens and its economy. The budget resolution, 
therefore, assumes funding for the Army Corps of Engineers will 
be maintained at the 1998 level.


                             SUMMARY TABLES

                              ----------                              


                                          TOTAL SPENDING AND REVENUES-                                          
                                     HOUSE BUDGET COMMITTEE RECOMMENDATION-                                     
                                            [In billions of dollars]-                                           
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year--                               
                                    ----------------------------------------------------------------------------
                                        1998       1999       2000       2001       2002       2003    1999-2003
----------------------------------------------------------------------------------------------------------------
                                                     SUMMARY                                                    
                                                                                                                
Total Spending:                                                                                                 
    Budget authority...............   1,673.4-   1,730.4-   1,775.7-   1,820.9-   1,858.4-   1,940.7-    9,126.1
    Outlays........................   1,657.0-   1,721.9-   1,767.6-   1,807.3-   1,858.4-   1,910.3-   9,036.5-
    On-Budget:-                                                                                                 
        Budget authority-..........   1,359.5-   1,408.8-   1,443.8-   1,477.5-   1,502.7-   1,571.4-   7,404.2-
        Outlays....................   1,343.1-   1,400.3-   1,435.7-   1,463.9-   1,473.7-   1,541.0-   7,314.6-
    Off-Budget:-                                                                                                
        Budget authority-..........     313.9-     321.6-     331.9-     343.4-     355.7-     369.3-   1,721.9-
        Outlays-...................     313.9-     321.6-     331.9-     343.4-     355.7-     369.3-   1,721.9-
Revenues, Total....................   1,709.7-    1755.6-    1788.8-    1835.4-    1906.0-    1973.7-    9259.5-
    On-Budget--....................   1,292.4-   1,317.4-   1,331.0-    1358.3-    1408.1-    1452.9-    6867.7-
    Off-Budget--...................     417.3-     438.2-     457.8-     477.1-     497.9-     520.8-   2,391.8-
Surplus/Deficit (-), Total -.......      52.7-      33.7-      21.2-      28.1-      76.6-      63.4-     223.0-
    On-Budget......................     -50.7-      -82.9     -104.7    -105.6-      -65.6      -88.1    -446.9-
    Off-Budget.....................     103.4-      116.6      125.9      133.7      142.2     151.5-     669.9-
Debt Subject to Limit (end of year)   5,436.9-    5,597.0    5,777.2   5,957.2-   6,102.4-   6,269.4-         NA
----------------------------------------------------------------------------------------------------------------
                                                  -BY FUNCTION                                                  
                                                                                                                
-National Defense (050):                                                                                        
    Budget authority...............      267.4     270.5-     274.3-      280.8     288.6-     296.8-   1,411.0-
    Outlays........................     268.1-     265.5-     267.9-      269.6      272.1     279.8-   1,354.9-
International Affairs (150):                                                                                    
    Budget authority-..............      15.2-      14.2-      12.1-      12.3-      12.3-      12.2-      63.1-
    Outlays-.......................      14.1-      13.8-      13.7-      12.9-      11.9-      11.3-      63.6-
General Science, Space & Technology                                                                             
 (250):                                                                                                         
    Budget authority...............      18.0-      17.9-      17.7-      17.8-      17.8-      17.8-      89.0-
    Outlays........................      17.7-      17.8-      17.8-      17.6-      17.7-      17.7-      88.6-
Energy (270):                                                                                                   
    Budget authority...............       0.5-       0.6-      -0.3-      -1.3-      -6.1-      -0.7-      -7.8-
    Outlays-.......................       1.0-       0.3-      -0.2-      -1.8-      -6.6-      -1.5-      -9.8-
Natural Resources & Environment                                                                                 
 (300):                                                                                                         
    Budget authority-..............      24.2-      22.6-      21.0-      20.5-      20.5-      20.5-    105.09-
    Outlays........................      23.0-      22.8-      22.4-      21.6-      20.8-      20.5-     108.1-
Agriculture (350):                                                                                              
    Budget authority...............       11.8      12.2-      11.7-      10.6-      10.4-      10.7-      55.6-
    Outlays........................      10.8-      10.5-      10.1-       9.0-       8.8-       9.1-      47.5-
Commerce & Housing Credit (370):                                                                                
    Total:                                                                                                      
        Budget authority...........       7.9-       4.4-      15.3-      13.9-      14.8-      14.2-      62.6-
        Outlays....................       1.3-       2.8-      10.2-      10.3-      11.4-      110.-      45.7-
    On-Budget:-                                                                                                 
        Budget authority-..........       7.3-       4.4-      14.9-      14.5-      14.8-      14.2-      62.8-
        Outlays....................        0.7       2.8-       9.8-      10.9-      11.4-      11.0-      45.9-
    Off-Budget:-                                                                                                
        Budget authority-..........       0.6-       0.0-       0.4-      -0.6-       0.0-       0.0-      -0.2-
        Outlays....................       0.6-       0.0-       0.4-      -0.6-       0.0-       0.0-      -0.2-
Transportation (400):                                                                                           
    Budget authority-..............      46.0-      44.3-      43.6-      43.6-      43.1-      43.7-     218.3-
    Outlays-.......................      42.5-      42.1-      41.6-      41.3-      40.2-      40.6-      205.8
Community & Regional Development:                                                                               
    Budget authority...............        8.7       8.7-       7.3-       6.8-       6.2-       6.2-      35.2-
    Outlays........................      11.2-      10.6-       9.1-       8.2-       7.4-       6.6-      41.9-
Education, Training, Employment, &                                                                              
 Social Services (500):                                                                                         
    Budget authority...............      61.3-      61.4-      62.3-      63.3-      63.2-      65.6-     315.8-
    Outlays........................      56.1-      60.2-      61.3-      62.0-      61.8-      63.9-     309.2-
Health (550):                                                                                                   
    Budget authority-..............     136.2-     143.8-     149.9-     155.9-     162.8-     171.2-     783.6-
    Outlays........................     132.0-     142.3-     149.5-     155.6-     163.6-     172.0-     783.0-
Medicare (570):                                                                                                 
    Budget authority...............      199.2     209.6-     220.5-      237.5     248.7-     270.2-   1,186.5-
    Outlays -......................     199.7-     210.1-     219.8-     240.4-     246.3-     270.4-   1,187.0-
Income Security (600):                                                                                          
    Budget authority...............     229.5-     243.8-     256.8-     267.2-     277.4-     287.8-   1,333.0-
    Outlays-.......................     234.7-     247.6-     258.2-     267.0-     274.5-     284.0-   1,331.3-
Social Security (650):--                                                                                        
    Total:-                                                                                                     
        Budget authority...........     378.9-     394.7-     411.9-     430.9-     451.9-     474.4-   2,163.8-
        Outlays....................     379.1-     394.9-     412.0-     430.9-     451.9-     474.4-   2,164.1-
    On-Budget:-                                                                                                 
        Budget authority...........      12.0-      12.6-      13.1-      12.6-      14.5-      15.3-      68.1-
        Outlays....................      12.2-      12.8-      13.2-      12.6-      14.5-      15.3-      68.4-
    Off-Budget:                                                                                                 
        Budget authority...........     366.9-     382.1-     398.8-     418.3-     437.4-     459.1-   2,095.7-
        Outlays....................     366.9-     382.1-     398.8-     418.3-     437.4-     459.1-   2,095.7-
Veterans Benefits & Services (700):                                                                             
    Budget authority...............      42.6-      42.4-      43.0-      43.5-      43.9-      44.8-    217.59-
    Outlays........................      42.5-      42.9-      43.3-      43.7-      44.2-      45.2-    219.31-
Administration of Justice (750):                                                                                
    Budget authority...............       25.1      25.0-      23.3-      22.7-      22.6-      22.5-     116.1-
    Outlays........................      22.5-      24.0-      24.1-      23.9-      23.4-      22.6-     118.0-
General Government (800):-                                                                                      
    Budget authority--.............      14.5-      14.8-      13.6-      13.6-      13.6-      13.3-      68.9-
    Outlays-.......................      14.3-      14.2-      13.9-      13.5-      13.3-      13.1-      68.0-
Net Interest (900):--                                                                                           
    Total:-                                                                                                     
        Budget authority...........     244.2-     244.0-     238.2-     231.4-     224.5-     219.1-   1,157.2-
        Outlays....................     244.2-     244.0-     238.2-     231.4-     224.5-     219.1-   1,157.2-
    On-Budget:-                                                                                                 
        Budget authority...........     290.7-     296.8-     297.2-     296.8-     296.6-     298.5-   1,485.9-
        Outlays....................     290.7-     296.8-     297.2-     296.8-     296.6-     298.5-   1,485.9-
    Off-Budget:-                                                                                                
        Budget authority...........     -46.5-     -52.8-     -59.0-     -65.4-     -72.1-      -79.4    -328.7-
        Outlays....................     -46.5-     -52.8-     -59.8-     -65.4-     -72.1-     -79.4-    -328.7-
Allowances (920):                                                                                               
    Budget authority...............     -14.0-     -0.5 -      -2.1-      -3.2-      -3.2-      -3.3-     -12.3-
    Outlays........................     -14.0-      -0.5-      -0.9-      -2.9-      -3.2-      -3.2-     -10.7-
Undistributed Offsetting Receipts                                                                               
 (950):                                                                                                         
    Total:                                                                                                      
        Budget authority-..........     -43.8-     -44.0-     -44.4-     -46.9-     -54.6-     -46.3-    -236.2-
        Outlays....................     -43.8-     -44.0-      -44.4     -46.9-     -54.6-     -46.3-    -236.2-
    On Budget:                                                                                                  
        Budget authority...........     -36.7-     -36.3-     -36.1-     -38.0-     -45.0-     -35.9-    -191.3-
        Outlays....................     -36.7-     -36.3-     -36.1-     -38.0-      -45.0     -35.9-    -191.3-
    Off-Budget:-                                                                                                
        Budget authority...........      -7.1-      -7.7-      -8.3-      -8.9-      -9.6-     -10.4-     -44.9-
        Outlays....................      -7.1-      -7.7-      -8.3-      -8.9-      -9.6-     -10.4-     -44.9-
----------------------------------------------------------------------------------------------------------------


                                             DISCRETIONARY SPENDING                                             
                                      HOUSE BUDGET COMMITTEE RECOMMENDATION                                     
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal year--                            
                                          ----------------------------------------------------------------------
                                             1998      1999      2000      2001      2002      2003    1999-2003
----------------------------------------------------------------------------------------------------------------
                                                     SUMMARY                                                    
                                                                                                                
Total Spending:                                                                                                 
    Budget authority.....................    527.9-    531.0-    527.1-    529.1-    536.9-    546.4-    2,670.5
    Outlays..............................     557.6    560.8-     561.1    554.4-    550.3-    554.7-    2,781.3
Defense Spending:                                                                                               
    Budget authority.....................     268.6     271.6     275.4     281.9     289.6     297.8    1,416.3
    Outlays..............................     269.2     266.6     269.0     270.7     273.1     280.8    1,360.2
Nondefense Spending:                                                                                            
    Budget authority.....................     259.3     259.4     251.7     247.2     247.3     248.6   1,254.2-
    Outlays..............................     288.4     294.2     292.1     283.7     277.2     273.9    1,421.1
----------------------------------------------------------------------------------------------------------------
                                                   BY FUNCTION                                                  
                                                                                                                
National Defense (050):---                                                                                      
    Budget authority.....................     268.6     271.6     275.4     281.9     289.6     297.8   1,416.3-
    Outlays..............................    269.2-     266.6    269.0-     270.7    273.1-     280.8   1,360.2-
International Affairs (150):                                                                                    
    Budget authority.....................      19.1      18.5      16.2      15.5     15.2-     15.0-       80.4
    Outlays..............................      18.7      18.2      17.7     16.8-     15.8-     15.0-       83.5
General Science, Space, & Technology                                                                            
 (250):                                                                                                         
    Budget authority.....................      17.9      17.9      17.7      17.7     17.8-      17.8       88.9
    Outlays..............................      17.6      17.8      17.7     17.6-      17.7      17.7       88.5
Energy (270):                                                                                                   
    Budget authority.....................       2.8       2.8      1.8-      1.8-      1.6-      1.5-        9.5
    Outlays..............................       3.9      3.3-       2.8       2.3       2.0       1.6       12.0
Natural Resources & Environment (300):                                                                          
    Budget authority.....................      23.2      22.0      20.4      20.1     20.2-     20.2-      102.9
    Outlays..............................      22.2      22.0      21.8     21.1-     20.6-     20.2-      105.7
Agriculture (350):                                                                                              
    Budget authority-....................      4.3-      4.3-      4.1-      4.1-      4.1-      4.1-      20.7-
    Outlays..............................      4.2-      4.3-      4.2-      4.1-      4.1-      4.1-      20.8-
Commerce & Housing Credit (370):                                                                                
    Budget authority.....................       3.0       3.9      4.7-      2.2-      2.1-      2.1-       15.0
    Outlays..............................       2.8      3.2-      4.7-      2.9-      2.4-      2.1-      15.3-
Transportation (400):                                                                                           
    Budget authority.....................      13.7      12.6      12.2      12.2     12.2-     12.2-       61.4
    Outlays..............................      40.0      40.4      40.3     40.3-     40.0-     39.8-      200.8
Community & Regional Development (450):                                                                         
    Budget authority.....................       8.6       8.3      7.2-      6.9-      6.4-      6.5-       35.3
    Outlays..............................      11.4      10.7      9.5-      8.8-      8.1-      7.1-      44.2-
Education, Training, Employment, & Social                                                                       
 Services (500):                                                                                                
    Budget authority.....................      46.4      47.3      47.4      47.6     47.9-     48.5-      238.7
    Outlays..............................      42.6      46.2      46.5     46.8-     47.0-     47.2-      233.7
Health (550):                                                                                                   
    Budget authority-....................     26.4-     26.7-     26.5-     26.3-     26.1-     25.9-      131.5
    Outlays..............................      25.3      26.3      26.4     26.3-     26.1-     25.9-      131.0
Medicare (570):                                                                                                 
    Budget authority.....................      2.7-      2.7-      2.7-      2.7-      2.7-      2.7-      13.5-
    Outlays..............................      2.8-      2.8-      2.7-      2.7-      2.7-      2.7-       13.6
Income Security (600):                                                                                          
    Budget authority-....................     32.2-     33.7-     36.4-     37.4-     38.5-     39.7-      185.7
    Outlays..............................      40.6      41.2      41.2     39.8-     37.5-     37.9-      197.6
Social Security (650):                                                                                          
    Budget authority-....................      3.2-      3.2-      3.2-      3.2-      3.2-      3.2-       16.0
    Outlays-.............................      3.3-      3.4-      3.3-      3.2-      3.2-      3.2-      16.3-
Veterans Benefits & Services (700):                                                                             
    Budget authority.....................     19.1-     19.1-     19.1-     19.1-     19.0-     19.3-       95.6
    Outlays..............................      19.1      19.6      19.2     19.1-     19.1-     19.3-       96.3
Administration of Justice (750):                                                                                
    Budget authority-....................     24.2-     24.4-     22.9-     22.3-     22.3-     22.3-     114.2-
    Outlays-.............................     21.5-     23.4-     23.7-     23.6-     23.1-     22.5-     116.3-
General Government (800):                                                                                       
    Budget authority.....................      12.5      12.5      11.3      11.3     11.2-     10.9-      57.2-
    Outlays..............................      12.4      11.9      11.3     11.2-      11.0      10.8       56.2
Net Interest (900):                                                                                             
    Budget authority.....................       0.0       0.0       0.0       0.0       0.0       0.0        0.0
    Outlays..............................       0.0       0.0       0.0       0.0       0.0       0.0        0.0
Allowances (920):                                                                                               
    Budget authority.....................       0.0      -0.5      -2.1      -3.2     -3.2-     -3.3-   -12.3---
    Outlays-.............................      0.0-     -0.5-     -0.9-     -2.9-     -3.2-     -3.2-     -10.7-
Undistributed Offsetting Receipts (950):                                                                        
    Budget authority.....................       0.0       0.0       0.0       0.0       0.0       0.0        0.0
    Outlays..............................       0.0       0.0       0.0       0.0       0.0       0.0        0.0
----------------------------------------------------------------------------------------------------------------


                                               MANDATORY SPENDING-                                              
                                     HOUSE BUDGET COMMITTEE RECOMMENDATION-                                     
                                            [In billions of dollars]-                                           
----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal year--                            
                                          ----------------------------------------------------------------------
                                             1998      1999      2000      2001      2002      2003    1999-2003
----------------------------------------------------------------------------------------------------------------
                                                     SUMMARY                                                    
                                                                                                                
Total Spending:                                                                                                 
    Budget authority.....................   1,145.5   1,199.3   1,248.8   1,291.7   1,321.4   1,394.4    6,455.6
    Outlays..............................   1,099.4   1,161.2   1,206.6   1,252.5   1,279.0   1,355.4    6,254.7
Defense Spending:                                                                                               
    Budget authority.....................      -1.2      -1.1      -1.1      -1.1      -1.0      -1.0      -5.3-
    Outlays..............................      -1.1      -1.1      -1.1      -1.1      -1.0      -1.0      -5.3-
Nondefense Spending:                                                                                            
    Budget authority.....................     902.5   1,200.4   1,249.9   1,292.8   1,322.4   1,395.4   6,460.9-
    Outlays..............................   1,100.5   1,162.3   1,207.7   1,253.6   1,280.0   1,356.4    6,260.0
----------------------------------------------------------------------------------------------------------------
                                                  -BY FUNCTION                                                  
                                                                                                                
National Defense (050):                                                                                         
    Budget authority.....................      -1.2      -1.1      -1.1      -1.1      -1.0      -1.0      -5.3-
    Outlays..............................      -1.1      -1.1      -1.1      -1.1      -1.0      -1.0      -5.3-
International Affairs (150):                                                                                    
    Budget authority.....................      -3.8      -4.3      -4.0      -3.1      -2.9      -2.8     -17.1-
    Outlays..............................      -4.6      -4.4      -4.0      -4.0      -3.9      -3.7     -20.0-
General Science, Space, & Technology                                                                            
 (250):                                                                                                         
    Budget authority.....................       0.0       0.0       0.0       0.0       0.0       0.0       0.0-
    Outlays..............................       0.0       0.0       0.0       0.0       0.0       0.0       0.0-
Energy (270):                                                                                                   
    Budget authority.....................      -2.3      -2.2      -2.1      -3.2      -7.8      -2.2     -17.5-
    Outlays..............................      -2.9      -3.1      -2.9      -4.1      -8.6      -3.1     -21.8-
Natural Resources & Environment (300):                                                                          
    Budget authority.....................      1.0-      0.6-      0.6-      0.4-      0.3-      0.3-       2.2-
    Outlays..............................      0.9-      0.8-      0.6-      0.5-      0.2-      0.3-       2.4-
Agriculture (350):---                                                                                           
    Budget authority.....................      7.5-      7.9-      7.6-      6.4-      6.3-      6.6-      34.8-
    Outlays-.............................      6.6-      6.2-      5.9-      4.8-      4.6-      4.9-      26.4-
Commerce & Housing Credit (370):---                                                                             
    Budget authority.....................      4.9-      0.5-     10.6-     11.7-     12.7-     12.1-      47.6-
    Outlays-.............................     -1.6-     -0.4-      5.5-      7.4-      9.0-      8.9-      30.4-
    On-Budget:-                                                                                                 
        Budget authority.................      4.3-      0.5-     10.2-     12.3-     12.7-     12.1-  47.8- ---
        Outlays..........................     -2.2-     -0.4-      5.1-      8.0-      9.0-      8.9-   30.6- --
    Off-Budget:-                                                                                                
        Budget authority.................      0.6-      0.0-      0.4-     -0.6-      0.0-      0.0-  -0.2- ---
        Outlays..........................      0.6-      0.0-      0.4-     -0.6-      0.0-      0.0-      -0.2-
Transportation (400):---                                                                                        
    Budget authority.....................     32.3-     31.6-     31.4-     31.4-     30.9-     31.5-  156.8- ---
                                                                                                                
    Outlays..............................      2.6-      1.7-      1.3-      0.9-      0.3-      0.8-       5.0-
Community & Regional Development:---                                                                            
    Budget authority.....................      0.1-      0.4-      0.2-     -0.1-     -0.1-     -0.2-       0.2-
    Outlays..............................     -0.2-     -0.1-     -0.4-     -0.6-     -0.7-     -0.5-      -2.3-
Education, Training, Employment, & Social                                                                       
 Services (500):                                                                                                
    Budget authority.....................     14.9-     14.1-     15.0-     15.7-     15.4-     17.1-  77.3- ---
    Outlays..............................     13.6-     14.0-     14.9-     15.2-     14.9-     16.6-      75.6-
Health (550):---                                                                                                
    Budget authority.....................    109.8-    117.1-    123.4-    129.6-    136.7-    145.3-  652.1- ---
                                                                                                                
    Outlays..............................    106.7-     116.0    123.1-    129.2-    137.5-    146.1-     651.9-
Medicare (570):---                                                                                              
    Budget authority.....................    196.5-    206.9-    217.8-    234.8-    245.9-    267.5-  1,172.9- -
                                                                                                              --
    Outlays..............................    196.9-    207.4-    217.1-    237.6-    243.6-    267.7-   1,173.4-
Income Security (600):---                                                                                       
    Budget authority.....................     197.3    210.1-    220.3-    229.9-    238.9-    248.1-  1,147.3--
                                                                                                               -
    Outlays..............................     194.2     206.3     217.0     227.3     236.9     246.1    1,133.6
Social Security (650):                                                                                          
    Budget authority.....................     375.7     391.5     408.7     427.7     448.7     471.2  2,147.8 --
                                                                                                               -
    Outlays-.............................     375.7    391.5-     408.7     427.7     448.7     471.2  2,147.8 --
                                                                                                                
    On-Budget:                                                                                                  
        Budget authority.................      8.8-      9.4-      9.9-      9.4-     11.3-     12.1-  52.1- ---
        Outlays-.........................      8.8-      9.4-      9.9-      9.4-     11.3-     12.1-   52.1- --
    Off-Budget:                                                                                                 
        Budget authority.................    366.9-    382.1-    398.8-    418.3-    437.4-    459.1-  2,095.7 --
                                                                                                               -
        Outlays-.........................    366.9-    382.1-    398.8-    418.3-    437.4-    459.1-   2,095.7-
Veterans Benefits & Services (700):---                                                                          
    Budget authority.....................     23.5-     23.3-     23.9-     24.4-     24.8-     25.5-  121.9- ---
                                                                                                                
    Outlays-.............................     23.4-     23.4-     24.1-     24.6-     25.1-     25.9-      123.1
Administration of Justice (750):---                                                                             
    Budget authority.....................      0.9-      0.6-      0.4-      0.4-      0.3-      0.2-   1.9- ---
    Outlays-.............................      0.9-      0.6-      0.4-      0.3-      0.2-      0.1-       1.6-
General Government (800):---                                                                                    
    Budget authority.....................      2.0-      2.3-      2.3-      2.3-      2.4-      2.4-  11.7- ---
    Outlays-.............................      1.9-      2.4-      2.6-      2.3-      2.3-      2.3-      11.9-
Net Interest (900):                                                                                             
    Budget authority.....................    244.2-    244.0-    238.2-    231.4-     224.5    219.1-  1,157.2- -
                                                                                                              --
    Outlays-.............................    244.2-    244.0-    238.2-    231.4-    224.5-    219.1-  1,157.2- -
                                                                                                               -
    On-Budget:                                                                                                  
        Budget authority.................    290.7-    296.8-    297.2-    296.8-    296.6-    298.5-   1,485.9-
        Outlays-.........................    290.7-    296.8-    297.2-    296.8-    296.6-    298.5-  1,485.9--
    Off-Budget:                                                                                                 
        Budget authority.................    -46.5-    -52.8-    -59.0-    -65.4-    -72.1-    -79.4-  -328.7- --
                                                                                                               -
        Outlays..........................    -46.5-    -52.8-    -59.0-    -65.4-    -72.1-    -79.4-    -328.7-
Allowances (920):---                                                                                            
    Budget authority.....................    -14.0-      0.0-      0.0-      0.0-      0.0-      0.0-   0.0- ---
    Outlays..............................    -14.0-      0.0-      0.0-      0.0-      0.0-      0.0-       0.0-
Undistributed Offsetting Receipts (950):                                                                        
    Budget authority.....................    -43.8-    -44.0-    -44.4-    -46.9-    -54.6-    -46.3-     -236.2
    Outlays..............................    -43.8-    -44.0-    -44.4-    -46.9-    -54.6-    -46.3-  -236.2 --
    On-Budget:                                                                                                  
        Budget authority.................    -36.7-    -36.3-    -36.1-    -38.0-    -45.0-    -35.9-  -191.3- --
                                                                                                               -
        Outlays..........................    -36.7-    -36.3-    -36.1-    -38.0-    -45.0-    -35.9-  -191.3- --
                                                                                                                
    Off-Budget:                                                                                                 
        Budget authority.................     -7.1-     -7.7-     -8.3-     -8.9-     -9.6-    -10.4-  -44.9- ---
                                                                                                                
        Outlays..........................     -7.1-     -7.7-     -8.3-     -8.9-     -9.6-    -10.4-     -44.9-
----------------------------------------------------------------------------------------------------------------


                                          TAX EXPENDITURE ESTIMATES BY BUDGET FUNCTION, FISCAL YEARS 1998-2002                                          
                                                                  [Billions of Dollars]                                                                 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Corporations                                       Individuals                            
                 Function                  ----------------------------------------------------------------------------------------------------   Total 
                                              1998      1999      2000      2001      2002      1998      1999      2000      2001      2002     1998-02
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Defense                                                                                                                                        
    Exclusion of benefits and allowances                                                                                                                
     to Armed Forces personnel............  ........  ........  ........  ........  ........       1.9       1.9       1.9       2.0       2.0       9.7
    Exclusion of military disability                                                                                                                    
     benefits.............................  ........  ........  ........  ........  ........       0.1       0.1       0.1       0.1       0.1       0.5
International Affairs                                                                                                                                   
    Exclusion of income earned abroad by                                                                                                                
     U.S. citizens........................  ........  ........  ........  ........  ........       1.8       1.9       2.0       2.2       2.3      10.2
    Exclusion of certain allowances for                                                                                                                 
     Federal employees abroad.............  ........  ........  ........  ........  ........       0.2       0.2       0.2       0.2       0.2       1.0
    Exclusion of income of foreign sales                                                                                                                
     corporations (FSCs)..................       1.6       1.7       1.9       2.0       2.1  ........  ........  ........  ........  ........       9.3
    Deferral of income of controlled                                                                                                                    
     foreign corporations.................       1.2       1.3       1.3       1.4       1.5  ........  ........  ........  ........  ........       6.7
    Inventory property sales source rule                                                                                                                
     exception............................       3.8       3.9       4.0       4.1       4.2  ........  ........  ........  ........  ........      20.0
General Science, Space, and Technology                                                                                                                  
    Tax credit for qualified research                                                                                                                   
     expenditures.........................       1.6       1.1       0.7       0.4       0.1     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       3.9
    Expensing of research and experimental                                                                                                              
     expenditures.........................       2.6       2.8       3.0       3.2       3.4     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)      15.0
Energy                                                                                                                                                  
    Expensing of exploration and                                                                                                                        
     development costs:                                                                                                                                 
        Oil and gas.......................       0.2       0.2       0.2       0.2       0.2     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       1.0
        Other fuels.......................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.2
    Excess of percentage over cost                                                                                                                      
     depletion:                                                                                                                                         
        Oil and gas.......................       0.4       0.4       0.4       0.4       0.4       0.1       0.1       0.1       0.1       0.1       2.4
        Other fuels.......................       0.2       0.2       0.2       0.2       0.2       0.1       0.1       0.1       0.1       0.1       1.5
    Tax credit for enhanced oil recovery                                                                                                                
     costs................................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.3
    Tax credit for production of non-                                                                                                                   
     conventional fuels...................       1.1       1.1       1.1       1.0       1.0       0.3       0.3       0.3       0.3       0.2       6.7
    Tax credits for alcohol fuels \2\.....     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)  ........  ........  ........  ........  ........     (\1\)
    Exclusion of interest on State and                                                                                                                  
     local government industrial                                                                                                                        
     development bonds for energy                                                                                                                       
     production facilities................       0.1       0.1       0.1       0.1       0.1       0.2       0.2       0.2       01.       0.1       1.2
    Expensing of tertiary injectants......     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
    Exclusion of energy conservation                                                                                                                    
     subsidies provided by public                                                                                                                       
     utilities............................  ........  ........  ........  ........  ........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.2
    Tax credit for investments in solar                                                                                                                 
     and geothermal energy facilities.....       0.1       0.1       0.1       0.1       0.1     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.5
    Tax credit for electricity production                                                                                                               
     from wind and biomass................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.3
    Tax credit for electric vehicles......     (\1\)     (\1\)       0.1       0.1       0.1     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.3
    Deductions for clean-fuel vehicles and                                                                                                              
     refueling property...................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
Natural Resources and Environment                                                                                                                       
    Expensing of exploration and                                                                                                                        
     development costs, nonfuel minerals..     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
    Excess of percentage over cost                                                                                                                      
     depletion, nonfuel minerals..........       0.2       0.2       0.2       0.2       0.2       0.1       0.1       0.1       0.1       0.1       1.5
    Tax credit and 7-year amortization for                                                                                                              
     reforestation expenditures...........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
    Expensing of multiperiod timber-                                                                                                                    
     growing costs........................       0.2       0.2       0.2       0.2       0.2     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       1.1
    Exclusion of interest on State and                                                                                                                  
     local government sewage, water, and                                                                                                                
     hazardous waste facilities bonds.....       0.2       0.2       0.2       0.2       0.2       0.6       0.6       0.6       0.6       0.6       3.7
    Tax credit for rehabilitation of                                                                                                                    
     historic structures..................       0.1       0.1       0.1       0.1       0.1  ........  ........  ........  ........  ........       0.5
    Special rules for mining reclamation                                                                                                                
     reserves.............................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.2
    Exclusion of contributions in aid of                                                                                                                
     construction for water and sewer                                                                                                                   
     utilities............................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)  ........  ........  ........  ........  ........       0.2
Agriculture                                                                                                                                             
    Expensing of soil and water                                                                                                                         
     conservation expenditures............     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.2
    Expensing of fertilizer and soil                                                                                                                    
     conditioner costs....................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.2
    Expensing of the costs of raising                                                                                                                   
     dairy and breeding cattle............     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1       0.1       0.2       0.2       0.2       0.8
    Exclusion of cost-sharing payments....     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
    Exclusion of cancellation of                                                                                                                        
     indebtedness income of farmers.......  ........  ........  ........  ........  ........       0.1       0.1       0.1       0.1       0.1       0.4
    Cash accounting for agriculture.......     (\1\)       0.1       0.1       0.1       0.1       0.1       0.2       0.2       0.2       0.2       1.2
    Income averaging for farmers..........  ........  ........  ........  ........  ........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
Commerce and Housing                                                                                                                                    
    Financial institutions:                                                                                                                             
        Bad-debt reserves of financial                                                                                                                  
         institutions.....................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)  ........  ........  ........  ........  ........       0.1
        Exemption of credit union income..       0.8       0.8       0.9       0.9       1.0  ........  ........  ........  ........  ........       4.4
    Insurance companies:                                                                                                                                
        Exclusion of investment income on                                                                                                               
         life insurance and annuity                                                                                                                     
         contracts........................       1.2       1.2       1.3       1.3       1.3      20.9      21.5      22.0      22.5      23.1     116.2
        Small life insurance company                                                                                                                    
         taxable income adjustment........       0.1       0.1       0.1       0.1       0.1  ........  ........  ........  ........  ........       0.5
        Special treatment of life                                                                                                                       
         insurance company reserves.......       1.9       2.0       2.1       2.3       2.4  ........  ........  ........  ........  ........      10.8
        Deduction for unpaid property loss                                                                                                              
         reserves for property and                                                                                                                      
         casualty insurance companies.....       2.8       3.0       3.1       3.3       3.5  ........  ........  ........  ........  ........      15.7
        Special deduction for Blue Cross                                                                                                                
         and Blue Shield companies........       0.4       0.4       0.4       0.4       0.3  ........  ........  ........  ........  ........       1.9
    Housing:                                                                                                                                            
        Deduction for mortgage interest on                                                                                                              
         owner-occupied residences........  ........  ........  ........  ........  ........      43.0      44.7      46.4      48.3      50.2     232.6
        Deduction for property taxes on                                                                                                                 
         owner-occupied residences........  ........  ........  ........  ........  ........      16.6      17.3      17.9      18.7      19.5      89.9
        Exclusion of capital gains on                                                                                                                   
         sales of principal residences....  ........  ........  ........  ........  ........       5.6       5.7       5.9       6.1       6.3      29.6
        Exclusion of interest on State and                                                                                                              
         local government bonds for owner-                                                                                                              
         occupied housing.................       0.6       0.6       0.7       0.7       0.7       1.6       1.7       1.8       1.9       1.9      12.2
        Exclusion of interest on State and                                                                                                              
         local government bonds for rental                                                                                                              
         housing..........................       0.3       0.3       0.3       0.3       0.3       0.8       0.8       0.9       0.9       0.9       5.8
        Depreciation of rental housing in                                                                                                               
         excess of the alternative                                                                                                                      
         depreciation system..............       1.0       1.0       1.0       1.0       1.0       0.8       0.7       0.7       0.7       0.7       8.7
        Tax credit for low-income housing.       1.1       1.2       1.4       1.5       1.6       2.1       2.3       2.5       2.8       3.0      19.6
        Tax credit for first-time                                                                                                                       
         homebuyers in the District of                                                                                                                  
         Columbia (sunsets taxable years                                                                                                                
         beginning after 12/31/00)........  ........  ........  ........  ........  ........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
    Other business and commerce:                                                                                                                        
        Reduced rates of tax on long-term                                                                                                               
         capital gains....................  ........  ........  ........  ........  ........      30.8      29.4      29.0      38.8      35.0     163.1
        Depreciation of buildings other                                                                                                                 
         than rental housing in excess of                                                                                                               
         the alternative depreciation                                                                                                                   
         system...........................       2.6       1.9       1.5       1.2       1.2       1.1       0.9       0.7       0.5       0.5      12.1
        Depreciation of equipment in                                                                                                                    
         excess of the alternative                                                                                                                      
         depreciation system..............      25.3      26.9      28.2      28.8      29.0       6.8       7.4       7.8       7.8       7.7     175.7
        Expensing of depreciable business                                                                                                               
         property.........................       0.7       0.6       0.6       0.8       0.8       0.4       0.3       0.3       0.4       0.5       5.4
        Exclusion of capital gains at                                                                                                                   
         death............................  ........  ........  ........  ........  ........      18.0      19.2      20.5      21.9      23.4     103.0
        Carryover basis of capital gains                                                                                                                
         on gifts.........................  ........  ........  ........  ........  ........       1.8       1.9       1.9       2.0       2.1       9.7
        Amortization of business startup                                                                                                                
         costs............................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.3       0.3       0.3       0.3       0.3       1.6
        Reduced rates on first $10,000,000                                                                                                              
         of corporate taxable income......       4.2       4.3       4.4       4.5       4.7  ........  ........  ........  ........  ........      22.1
        Permanent exemption from imputed                                                                                                                
         interest rules...................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.2       0.2       0.2       0.2       0.2       1.1
        Expensing of magazine circulation                                                                                                               
         expenditures.....................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.2
        Special rules for magazine,                                                                                                                     
         paperback book, and record                                                                                                                     
         returns..........................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
        Deferral of gain on non-dealer                                                                                                                  
         installment sales................       0.5       0.5       0.5       0.5       0.5       0.4       0.4       0.4       0.4       0.4       4.5
        Completed contract rules..........       0.2       0.2       0.2       0.2       0.2     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       1.1
        Cash accounting, other than                                                                                                                     
         agriculture......................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1       0.1       0.1       0.1       0.1       0.6
        Exclusion of interest on State and                                                                                                              
         local government small-issue                                                                                                                   
         industrial development bonds.....       0.1       0.1       0.1       0.1       0.1       0.3       0.3       0.2       0.2       0.2       1.7
        Deferral of gain on like-kind                                                                                                                   
         exchanges........................       0.4       0.4       0.4       0.4       0.4       0.3       0.3       0.3       0.3       0.3       3.5
        Exception from net operating loss                                                                                                               
         limitations for corporations in                                                                                                                
         bankruptcy proceedings...........       0.5       0.5       0.5       0.5       0.4  ........  ........  ........  ........  ........       2.4
        Tax credit for employer-paid FICA                                                                                                               
         taxes on tips....................       0.1       0.1       0.1       0.1       0.1       0.1       0.2       0.2       0.2       0.2       1.4
        Deferral of gain on involuntary                                                                                                                 
         conversions resulting from                                                                                                                     
         Presidentially-declared disasters  ........  ........  ........  ........  ........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
Transportation                                                                                                                                          
    Deferral of tax on capital                                                                                                                          
     construction funds of shipping                                                                                                                     
     companies............................       0.1       0.1       0.1       0.1       0.1  ........  ........  ........  ........  ........       0.5
    Exclusion of employer-paid                                                                                                                          
     transportation benefits..............  ........  ........  ........  ........  ........       3.3       3.2       3.2       3.2       3.2      16.1
    Exclusion of interest on State and                                                                                                                  
     local government bonds for high-speed                                                                                                              
     rail.................................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
Community and Regional Development                                                                                                                      
    Empowerment zone tax incentives.......       0.2       0.2       0.3       0.4       0.3       0.2       0.3       0.4       0.4       0.3       3.0
    District of Columbia tax incentives...     (\1\)     (\1\)       0.1       0.1       0.1     (\1\)       0.1       0.1       0.1       0.1       0.6
    Indian reservation tax incentives.....       0.1       0.1       0.1       0.1       0.1       0.2       0.2       0.2       0.1       0.1       1.4
    Expensing of redevelopment costs in                                                                                                                 
     certain environmentally contaminated                                                                                                               
     areas (``Brownfields'')..............     (\1\)       0.1       0.1       0.1     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.4
    Tax credit for rehabilitation of                                                                                                                    
     structures, other than historic                                                                                                                    
     structures...........................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.4
    Exclusion of interest on State and                                                                                                                  
     local government bonds for private                                                                                                                 
     airports, docks, and mass-commuting                                                                                                                
     facilities...........................       0.3       0.3       0.4       0.4       0.4       0.8       0.9       1.0       1.1       1.0       6.6
Education, Training, Employment, and                                                                                                                    
 Social Services                                                                                                                                        
    Education and training:                                                                                                                             
        Tax credits for tuition for post-                                                                                                               
         secondary education..............  ........  ........  ........  ........  ........       6.2       6.3       7.2       7.7       7.6      35.1
        Deduction for interest on student                                                                                                               
         loans............................  ........  ........  ........  ........  ........     (\1\)       0.1       0.1       0.2       0.3       0.7
        Exclusion of earnings of trust                                                                                                                  
         accounts for higher education                                                                                                                  
         (``education IRAs'').............  ........  ........  ........  ........  ........       0.2       0.5       0.7       0.8       1.1       3.3
        Exclusion of interest on                                                                                                                        
         educational savings bonds........  ........  ........  ........  ........  ........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
        Deferral of tax on earnings of                                                                                                                  
         qualified State tuition programs.  ........  ........  ........  ........  ........     (\1\)       0.1       0.1       0.2       0.2       0.7
        Exclusion of scholarship and                                                                                                                    
         fellowship income................  ........  ........  ........  ........  ........       0.8       0.9       0.9       1.0       1.1       4.6
        Exclusion of employer-provided                                                                                                                  
         education assistance benefits....  ........  ........  ........  ........  ........       0.2       0.3       0.2       0.1  ........       0.8
        Parental personal exemption for                                                                                                                 
         students age 19 to 23............  ........  ........  ........  ........  ........       0.8       0.9       0.9       1.0       1.1       4.7
        Exclusion of interest on State and                                                                                                              
         local government student loan                                                                                                                  
         bonds............................       0.1       0.1       0.1       0.1       0.1       0.2       0.2       0.2       0.2       0.2       1.6
        Exclusion of interest on State and                                                                                                              
         local government bonds for                                                                                                                     
         private nonprofit educational                                                                                                                  
         facilities.......................       0.3       0.3       0.3       0.4       0.4       0.8       0.8       0.9       1.0       1.0       6.2
        Tax credit for holders of                                                                                                                       
         qualified education bonds........     (\1\)       0.1       0.1       0.1       0.1  ........  ........  ........  ........  ........       0.4
        Deduction for charitable                                                                                                                        
         contributions to educational                                                                                                                   
         institutions.....................       0.9       1.0       1.1       1.2       1.4       2.6       2.7       2.8       2.9       3.0      19.6
    Employment:                                                                                                                                         
        Exclusion of employee meals and                                                                                                                 
         lodging (other than military)....  ........  ........  ........  ........  ........       0.7       0.7       0.8       0.8       0.8       3.8
        Exclusion of benefits provided                                                                                                                  
         under cafeteria plans \3\........  ........  ........  ........  ........  ........       5.7       6.5       7.2       7.9       8.7      35.9
        Exclusion of rental allowances for                                                                                                              
         ministers' homes.................  ........  ........  ........  ........  ........       0.3       0.3       0.3       0.4       0.4       1.7
        Exclusion of miscellaneous fringe                                                                                                               
         benefits.........................  ........  ........  ........  ........  ........       5.8       6.2       6.5       6.9       7.3      32.7
        Exclusion of employee awards......  ........  ........  ........  ........  ........       0.1       0.1       0.1       0.1       0.1       0.7
        Exclusion of income earned by                                                                                                                   
         voluntary employees' beneficiary                                                                                                               
         associations.....................  ........  ........  ........  ........  ........       0.5       0.5       0.5       0.6       0.6       2.7
        Special tax provisions for                                                                                                                      
         employee stock ownership plans                                                                                                                 
         (ESOPs)..........................       0.8       0.8       0.9       0.9       1.0     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       4.6
        Work opportunity tax credit.......       0.1       0.1       0.1     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.4
        Welfare-to-work tax credit........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
    Social services:                                                                                                                                    
        Tax credit for children under age                                                                                                               
         17 \4\...........................  ........  ........  ........  ........  ........      11.6      19.3      20.3      20.2      19.9      91.4
        Tax credit for child and dependent                                                                                                              
         care expenses....................  ........  ........  ........  ........  ........       2.8       2.8       2.9       2.9       2.9      14.3
        Exclusion of employer-provided                                                                                                                  
         child care \5\...................  ........  ........  ........  ........  ........       0.9       1.0       1.1       1.2       1.2       5.4
        Exclusion of certain foster care                                                                                                                
         payments.........................  ........  ........  ........  ........  ........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
        Adoption credit and employee                                                                                                                    
         adoption benefits exclusion......  ........  ........  ........  ........  ........       0.4       0.4       0.4       0.4       0.2       1.7
        Deduction for charitable                                                                                                                        
         contributions, other than for                                                                                                                  
         education and health.............       0.9       1.0       1.1       1.2       1.3      16.3      17.0      17.8      18.7      19.5      94.8
        Expensing of costs for removing                                                                                                                 
         architectural barriers...........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
        Tax credit for disabled access                                                                                                                  
         expenditures.....................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
Health                                                                                                                                                  
    Exclusion of employer contributions                                                                                                                 
     for medical care, health insurance                                                                                                                 
     premiums, and long-term care                                                                                                                       
     insurance premiums \6\...............  ........  ........  ........  ........  ........      51.4      54.8      58.1      61.7      65.4     291.3
    Exclusion of medical care and CHAMPUS/                                                                                                              
     TRICARE medical insurance for                                                                                                                      
     military dependents, retirees, and                                                                                                                 
     retiree dependents...................  ........  ........  ........  ........  ........       1.5       1.4       1.5       1.5       1.5       7.4
    Deduction for health insurance                                                                                                                      
     premiums and long-term care insurance                                                                                                              
     premiums by the self-employed........  ........  ........  ........  ........  ........       0.8       0.9       1.0       1.1       1.4       5.2
    Deduction for medical expenses and                                                                                                                  
     long-term care expenses..............  ........  ........  ........  ........  ........       4.4       4.9       5.3       5.9       6.5      27.1
    Medical savings accounts..............  ........  ........  ........  ........  ........     (\1\)       0.1       0.1       0.2       0.2       0.6
    Exclusion of interest on State and                                                                                                                  
     local government bonds for private                                                                                                                 
     nonprofit hospital facilities........       0.5       0.6       0.6       0.7       0.7       1.5       1.6       1.7       1.9       1.9      11.7
    Deduction for charitable contributions                                                                                                              
     to health organizations..............       0.7       0.7       0.8       0.9       1.0       1.9       2.0       2.1       2.2       2.3      14.6
    Tax credit for orphan drug research...     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)  ........  ........  ........  ........  ........       0.2
Medicare                                                                                                                                                
    Exclusion of untaxed medicare                                                                                                                       
     benefits:                                                                                                                                          
        Hospital insurance................  ........  ........  ........  ........  ........      13.4      14.9      16.5      18.3      20.2      83.2
        Supplementary medical insurance...  ........  ........  ........  ........  ........       5.8       6.7       7.6       8.6       9.7      38.4
Income Security                                                                                                                                         
    Exclusion of workers' compensation                                                                                                                  
     benefits.............................  ........  ........  ........  ........  ........       3.8       3.9       4.0       4.2       4.3      20.2
    Exclusion of special benefits for                                                                                                                   
     disabled coal miners.................  ........  ........  ........  ........  ........       0.1       0.1       0.1       0.1       0.1       0.5
    Exclusion of cash public assistance                                                                                                                 
     benefits.............................  ........  ........  ........  ........  ........       0.4       0.5       0.5       0.5       0.5       2.4
    Net exclusion of pension contributions                                                                                                              
     and earnings:                                                                                                                                      
        Employer plans....................  ........  ........  ........  ........  ........      73.5      76.7      80.0      79.9      78.7     388.8
        Individual retirement plans.......  ........  ........  ........  ........  ........       9.9      10.8      11.9      13.0      14.3      59.9
        Keogh plans.......................  ........  ........  ........  ........  ........       3.9       4.2       4.4       4.6       4.9      22.0
    Exclusion of other employee benefits:                                                                                                               
        Premiums on group term life                                                                                                                     
         insurance........................  ........  ........  ........  ........  ........       1.9       1.9       2.0       2.1       2.1      10.0
        Premiums on accident and                                                                                                                        
         disability insurance.............  ........  ........  ........  ........  ........       0.2       0.2       0.2       0.2       0.2       1.0
    Exclusion of employer-provided death                                                                                                                
     benefits.............................  ........  ........  ........  ........  ........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.2
    Additional standard deduction for the                                                                                                               
     blind and the elderly................  ........  ........  ........  ........  ........       2.0       2.2       2.3       2.5       2.6      11.6
    Tax credit for the elderly and                                                                                                                      
     disabled.............................  ........  ........  ........  ........  ........     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1
    Deduction for casualty and theft                                                                                                                    
     losses...............................  ........  ........  ........  ........  ........       0.3       0.3       0.3       0.3       0.3       1.5
    Earned income credit (EIC) \7\........  ........  ........  ........  ........  ........       5.2       5.2       5.3       5.5       5.9      27.2
Social Security and Railroad Retirement                                                                                                                 
    Exclusion of untaxed social security                                                                                                                
     and railroad retirement benefits.....  ........  ........  ........  ........  ........      27.0      28.2      29.5      30.8      32.2     147.8
Veterans' Benefits and Services                                                                                                                         
    Exclusion of veterans' disability                                                                                                                   
     compensation.........................  ........  ........  ........  ........  ........       1.9       2.0       2.0       2.1       2.1      10.1
    Exclusion of veterans' pensions.......  ........  ........  ........  ........  ........       0.1       0.1       0.1       0.1       0.1       0.5
    Exclusion of GI bill benefits.........  ........  ........  ........  ........  ........       0.1       0.1       0.1       0.1       0.1       0.5
    Exclusion of interest on State and                                                                                                                  
     local government bonds for veterans'                                                                                                               
     housing..............................     (\1\)     (\1\)     (\1\)     (\1\)     (\1\)       0.1       0.1       0.1       0.1       0.1       0.5
General Purpose Fiscal Assistance                                                                                                                       
    Exclusion of interest on public                                                                                                                     
     purpose State and local government                                                                                                                 
     debt.................................       4.3       4.5       5.1       5.4       5.6      11.7      12.2      13.7      14.7      15.2      92.4
    Deduction for nonbusiness State and                                                                                                                 
     local government income and personal                                                                                                               
     property taxes.......................  ........  ........  ........  ........  ........      29.1      30.2      31.3      32.5      33.8     156.8
    Tax credit for Puerto Rico and                                                                                                                      
     possession income....................       3.4       3.7       3.9       4.0       3.6  ........  ........  ........  ........  ........      18.6
Interest                                                                                                                                                
    Deferral of interest on savings bonds.  ........  ........  ........  ........  ........       1.5       1.5       1.5       1.5       1.5       7.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Positive tax expenditure of less than $50 million.                                                                                                  
\2\ In addition, the 54-cents-per-gallon exemption from excise tax for alcohol fuels results in a reduction in excise tax receipts, net of income tax   
  effect, of $0.5 billion per year in fiscal years 1998 through 2000, and $0.6 billion in fiscal years 2001 and 2002.                                   
\3\ Estimate includes revenue losses from amounts of health insurance purchased through cafeteria plans and child care purchased through flexible       
  spending accounts. These amounts are also included in other line items in this table.                                                                 
\4\ The figures in the table show the effect of the child credit on receipts. The increase in outlays is: $0.6 billion in 1998, $1.1 billion in 1999,   
  $1.1 billion in 2000, $1.1 billion in 2001, and $1.1 billion in 2002.                                                                                 
\5\ Estimate includes employer-provided child care purchased through dependent care flexible spending accounts.                                         
\6\ Estimate includes employer-provided health insurance purchased through cafeteria plans.                                                             
\7\ The figures in the table show the effect of the EIC on receipts. The increase in outlays is: $21.7 billion in 1998, $22.5 billion in 1999, $23.4    
  billion in 2000, $24.4 billion in 2001, and $25.4 billion in 2002.                                                                                    
                                                                                                                                                        
Note.--Details may not add to totals due to rounding.                                                                                                   
                                                                                                                                                        
Source: Joint Committee on Taxation.                                                                                                                    

                           REVENUE COMPARISONS

              Table 1.--Comparison of Total Budget Revenues

                        [In billions of dollars]

Fiscal year:                                                      Amount
    1993 actual-..............................................   1,154.4
    1994 actual-..............................................   1,258.6
    1995 actual-..............................................   1,351.8
    1996 actual-..............................................   1,453.1
    1997 actual-..............................................   1,579.0
    1998 estimated (CBO)-.....................................    1709.7
Fiscal year 1999:
    Administration's request (February 1998)..................   1,742.7
    Committee level...........................................   1,755.6
Fiscal year 2000:
    Administration's request (February 1998)..................   1,793.6
    Committee level...........................................   1,788.8
Fiscal year 2001:
    Administration's request (February 1998)..................   1,862.6
    Committee level...........................................   1,835.4
Fiscal year 2002:
    Administration's request (February 1998)..................   1,949.3
    Committee level-..........................................   1,906.0
Fiscal year 2003:
    Administration's request (February 1998)..................   2,028.2
    Committee level...........................................   1,973.7

               Table 2.--Comparison of On-Budget Revenues

                        [In billions of dollars]

Fiscal year:                                                      Amount
    1993 actual-..............................................     842.5
    1994 actual-..............................................     923.6
    1995 actual-..............................................   1,000.8
    1996 actual-..............................................   1,085.6
    1997 actual-..............................................   1,187.3
    1998 estimated (CBO)......................................   1,292.4
Fiscal year 1999:
    Administration's request (February 1998)..................   1,308.6
    Committee level...........................................   1,317.4
Fiscal year 2000:
    Administration's request (February 1998)..................   1,339.7
    Committee level...........................................   1,331.0
Fiscal year 2001:
    Administration's request (February 1998)..................   1,389.9
    Committee level...........................................   1,358.3
Fiscal year 2002:
    Administration's request (February 1998)-.................   1,455.0
    Committee level...........................................   1,408.1
Fiscal year 2003:
    Administration's request (February 1998)----..............   1,511.5
    Committee level...........................................   1,453.0

                      TABLE 3.--CBO BASELINE REVENUES BY SOURCE UNDER PAST AND CURRENT LAW                      
                   [Includes on- and off-budget revenues, fiscal years, billions of dollars]--                  
----------------------------------------------------------------------------------------------------------------
                                                               Historical                             Projected 
                                   -----------------------------------------------------------------------------
                                        1950         1960         1970         1980         1990         1999   
----------------------------------------------------------------------------------------------------------------
Individual income tax.............        15.8-        40.7-        90.4-       244.1-       466.9-        791.6
Corporate income tax-.............        10.4-        21.5-        32.8-        64.6-        93.5-        200.0
Social Insurance tax and                                                                                        
 contributions....................         4.3-        14.7-        44.4-       157.8-       380.0-        600.0
Excises...........................         7.6-        11.7-        15.7-        24.3-        35.3-         69.3
Estate and gift taxes.............         0.7-         1.6-         3.6-         6.4-        11.5-         23.1
Custom duties.....................         0.4-         1.1-         2.4-         7.2-        16.7-         19.3
Miscellanous receipts.............         0.2-         1.2-         3.4-        12.7-        28.0-         35.3
                                   -----------------------------------------------------------------------------
      -----Total 1................        39.4-        92.5-       192.8-       517.1-       1032.0       1738.5
                                   =============================================================================
On-budget revenues-...............        37.3-        81.9-       159.3-       403.9-       750.3-       1300.2
Off-budget revenues 2.............         2.1-        10.6-        33.5-       113.2-       281.7-        438.2
----------------------------------------------------------------------------------------------------------------
1 Details may not add to totals due to rounding.---------                                                       
2 Social Security (OASDI) revenues.                                                                             
                                                                                                                
Source: CBO March 1998 baseline revenues.                                                                       


               TABLE 4.--CBO BASELINE REVENUES SOURCE AS PERCENT OF GDP UNDER PAST AND CURRENT LAW              
                              [Includes on- and off-budget revenues, fiscal years]                              
----------------------------------------------------------------------------------------------------------------
                                                               Historical                             Projected 
                                   -----------------------------------------------------------------------------
                                        1950         1960         1970         1980         1990         1999   
----------------------------------------------------------------------------------------------------------------
Individual income tax.............         5.8-         7.9-         9.0-         9.0-         8.2-          9.1
Corporate income tax..............         3.8-         4.1-         3.3-         2.4-         1.6-          2.3
Social Insurance tax and                                                                                        
 contributions....................         1.6-         2.8-         4.4-         5.8-         6.7-          6.9
Excises...........................         2.8-         2.3-         1.6-         0.9-         0.6-          0.8
Estate and gift taxes.............         0.2-         0.3-         0.4-         0.2-         0.2-          0.3
Custom duties.....................         0.1-         0.2-         0.2-         0.3-         0.3-          0.2
Miscellanous receipts.............         0.1-         0.2-         0.3-         0.5-         0.5-          0.4
                                   -----------------------------------------------------------------------------
      -----Total 1................        14.4-        17.8-        19.1-        19.0-        18.2-         19.9
                                   =============================================================================
On-budget revenues................        13.6-        15.8-        15.8-        14.9-        13.2-         14.9
Off-budget revenues 2.............         0.8-         2.1-         3.3-         4.2-         5.0-          5.0
----------------------------------------------------------------------------------------------------------------
1 Details may not add to totals due to rounding.---------                                                       
2 Social Security (OASDI) revenues.                                                                             
                                                                                                                
Source: CBO March 1998 baseline revenues.                                                                       


                                           TOTAL SPENDING AND REVENUES                                          
                       HOUSE BUDGET COMMITTEE RECOMMENDATION MINUS THE PRESIDENT'S REQUEST                      
                                            [In billions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal Year--                            
                                          ----------------------------------------------------------------------
                                             1998      1999      2000      2001      2002      2003    1999-2003
----------------------------------------------------------------------------------------------------------------
                                                     SUMMARY                                                    
                                                                                                                
Total Spending:                                                                                                 
    Budget authority.....................       2.7     -25.8     -31.4     -42.7     -46.4     -53.5     -199.8
    Outlays..............................       0.6     -21.4     -30.9     -42.7     -61.4     -66.6     -223.0
    On-Budget:                                                                                                  
        Budget authority.................       2.7     -25.7     -31.2     -42.5     -46.2     -53.3     -198.9
        Outlays..........................       0.6     -21.3     -30.7     -42.5     -62.0     -68.1     -224.6
    Off-Budget:                                                                                                 
        Budget authority.................       0.0      -0.1      -0.2      -0.2      -0.2      -0.2       -0.9
        Outlays..........................       0.0      -0.1      -0.2      -0.2       0.6       1.5        1.6
Revenues, Total..........................      -0.1     -16.7     -25.4     -37.4     -45.7     -55.6     -180.8
Surplus/Deficit, Total...................      -0.7      -4.7       5.5       5.3      15.7      11.0       42.2
Debt Subject to Limit (end of year)......    5436.9    5597.0    5777.2    5957.2    6102.4    6269.4         NA
----------------------------------------------------------------------------------------------------------------
                                                   BY FUNCTION                                                  
                                                                                                                
National Defense (050):                                                                                         
    Outlays..............................       0.0      -3.6      -4.2      -1.1      -7.1      -8.9      -24.9
    Budget authority.....................       0.0      -0.4      -1.4      -2.8       1.7      -0.1       -3.0
International Affairs (150):                                                                                    
    Budget authority.....................       0.0      -1.7      -3.1      -3.5      -3.7      -3.8      -15.8
    Outlays..............................       0.0      -0.7      -1.6      -2.4      -3.3      -3.9      -11.9
General Science, Space & Technology                                                                             
 (250):                                                                                                         
    Budget authority.....................       0.0      -0.6      -0.8      -1.0      -1.2      -1.3       -4.9
    Outlays..............................       0.0      -0.3      -0.6      -0.8      -1.0      -1.2       -3.9
Energy (270):                                                                                                   
    Budget authority.....................       0.0      -0.8      -1.4      -2.3      -7.0      -1.5      -13.0
    Outlays..............................       0.0      -0.4      -0.7      -2.1      -6.7      -1.4      -11.3
Natural Resources & Environment (300):                                                                          
    Budget authority.....................       0.0      -1.1      -2.3      -2.2      -2.3      -2.5      -10.4
    Outlays..............................       0.0      -0.8      -1.7      -2.2      -2.2      -2.5       -9.4
Agriculture (350):                                                                                              
    Budget authority.....................       0.0       0.0       0.1       0.2       0.1       0.2        0.6
    Outlays..............................       0.0       0.0       0.0       0.2       0.1       0.2        0.5
Commerce & Housing Credit (370):                                                                                
    Total:                                                                                                      
        Budget authority.................       0.0       0.3      -0.2      -0.6      -0.6      -0.6       -1.7
        Outlays..........................      -0.2      -0.1      -0.0       0.2      -0.1      -0.4       -0.4
    On-Budget:                                                                                                  
        Budget authority.................       0.0       0.3      -0.2      -0.6      -0.6      -0.6       -1.7
        Outlays..........................      -0.2      -0.1       0.0       0.2      -0.9      -2.1       -2.9
    Off-Budget:                                                                                                 
        Budget authority.................       0.0       0.0       0.0       0.0       0.0       0.0        0.0
        Outlays..........................       0.0       0.0       0.0       0.0       0.8       1.7        2.5
Transportation (400):                                                                                           
    Budget authority.....................       1.9       0.4      -0.6      -0.9      -1.4      -2.7       -5.2
    Outlays..............................       0.0      -1.4      -2.6      -3.4      -4.2      -5.0      -16.6
Community & Regional Development (450):                                                                         
    Budget authority.....................       0.0      -3.4      -1.3      -1.5      -2.9      -2.0      -10.1
    Outlays..............................       0.0      -0.5      -1.5      -2.0      -1.9      -2.4       -8.3
Education, Training, Employment, & Social                                                                       
 Services (500):                                                                                                
    Budget authority.....................       0.6      -4.4      -3.5      -3.9      -3.9      -3.4      -19.1
    Outlays..............................       0.6      -1.0      -3.3      -4.3      -4.5      -4.5      -17.6
Health (550):                                                                                                   
    Budget authority.....................       0.2      -1.6      -3.1      -6.0      -7.5     -11.7      -29.9
    Outlays..............................       0.2      -0.8      -2.3      -5.4      -6.5      -9.8      -24.8
Medicare (570):                                                                                                 
    Budget authority.....................       0.0      -0.6      -1.4      -2.0      -0.7      -3.3       -8.0
    Outlays..............................       0.0      -0.6      -1.3  -
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