Budget Issues: Fiscal Year 1994 Budget Estimates and Actual Results
(Letter Report, 04/05/95, GAO/AIMD-95-109).

Budget estimates seldom reflect actual year-end results. However,
accurate budget projections are important to achieving fiscal
responsibility in the federal government.  Identifying and understanding
recurring variations between estimates and results can help future
budget decisions and deficit cutting. This report compares the Office of
Management and Budget's original and revised estimates of the deficit,
receipts, outlays, and economic assumption with the actual fiscal year
1994 results. This is the fourth in a series of annual reports that
identifies large differences between budget estimates and actual results
and highlights the factors that have led to these differences.  It is
also the third year in which GAO has examined account-level budget
estimates. This report has the additional objective of looking at the
trends in estimates for receipts, outlays, and economic assumptions
during fiscal years 1991-94.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-95-109
     TITLE:  Budget Issues: Fiscal Year 1994 Budget Estimates and Actual 
             Results
      DATE:  04/05/95
   SUBJECT:  Budget deficit
             Future budget projections
             Budget outlays
             Macroeconomic analysis
             Budget administration
             Budget receipts
             Deficit reduction
             Fiscal policies
             Revolving funds
             Presidential budgets
IDENTIFIER:  Medicare Program
             Medicaid Program
             Defense Business Operations Fund
             OMB MAX Budget System
             OMB Budget Preparation System
             Guaranteed Student Loan Program
             Social Security Program
             Bank Insurance Fund
             BIF
             SAIF
             Savings Association Insurance Fund
             FSLIC Resolution Fund
             Federal Family Education Loan Liquidating Account
             Old Age and Survivors Insurance Trust Fund
             CCC Fund
             Federal Disaster Relief Program
             Earned Income Tax Credit
             
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Cover
================================================================ COVER


Report to the Chairman, Committee on the Budget, House of
Representatives

April 1995

BUDGET ISSUES - FISCAL YEAR 1994
BUDGET ESTIMATES AND ACTUAL
RESULTS

GAO/AIMD-95-109

Budget Estimates

(935149)


Abbreviations
=============================================================== ABBREV

  BIF - Bank Insurance Fund
  CBO - Congressional Budget Office
  CPI - Consumer Price Index
  DBOF - Defense Business Operations Fund
  DOD - Department of Defense
  FDIC - Federal Deposit Insurance Corporation
  FRF - Federal Savings and Loan Insurance Corporation Resolution
     Fund
  GDP - Gross Domestic Product
  HCFA - Health Care Financing Administration
  HI - Hospital Insurance
  MTS - Monthly Treasury Statement of Receipts and Outlays of the
     United States Government
  NCUSIF - National Credit Union Share Insurance Fund
  0BRA93 - Omnibus Budget Reconciliation Act of 1993
  OMB - Office of Management and Budget
  RTC - Resolution Trust Corporation
  SAIF - Savings Association Insurance Fund
  SNF - skilled nursing facilities

Letter
=============================================================== LETTER


B-260770

April 5, 1995

The Honorable John R.  Kasich
Chairman, Committee on the Budget
House of Representatives

Dear Mr.  Chairman: 

Budget estimates seldom reflect actual year-end results.  However,
accuracy of budget projections is important to achieving fiscal
responsibility in the federal government.  Identifying and
understanding recurring patterns among variations between estimates
and actual results can facilitate future budget decision-making and
deficit reduction efforts. 

This report responds to your request that we compare the Office of
Management's (OMB) original and revised estimates of the deficit,
receipts, outlays, and economic assumptions with the actual fiscal
year 1994 results.  This is the fourth in a series of annual reports
\1 that identifies large differences between budget estimates and
actual results and highlights the factors that have led to these
differences.  It is also the third year in which we examined
account-level budget estimates.  This report has the additional
objective of looking at the trends in estimates for receipts,
outlays, and economic assumptions over the 4-year period of fiscal
years 1991 through 1994. 


--------------------
\1 Budget Issues:  Fiscal Year 1993 Budget Estimates and Actual
Results (GAO/AIMD-94-68, February 4, 1994), Budget Issues:  A
Comparison of Fiscal Year 1992 Budget Estimates and Actual Results
(GAO/AFMD-93-51, February 12, 1993), and Budget Issues:  1991 Budget
Estimates:  What Went Wrong (GAO/OCG-92-1, January 15, 1992). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

At $203.2 billion, the federal budget deficit for fiscal year 1994
proved $60.9 billion, or 23 percent, lower than the level estimated
when the budget was submitted in April 1993.  Lower-than-estimated
outlays, in part a result of better-than-expected economic
performance, are largely responsible for the difference. 

The economy in fiscal year 1994 was stronger in several dimensions
than OMB predicted in April 1993.  Although OMB's assumptions did not
differ significantly from the forecast made by the Congressional
Budget Office (CBO) or the Blue Chip consensus of forecasters, \2 the
Gross Domestic Product (GDP) grew faster than all anticipated, while
inflation and unemployment rates were lower than expected.  These
differences helped reduce outlays and raise revenues from the 1993
estimates. 

Although fiscal year 1994 revenues of $1,257.7 billion were only $6.5
billion higher than originally estimated, the totals mask significant
offsetting differences for particular types of receipts.  Corporate
income tax receipts surged 16.7 percent beyond estimates as a
consequence of better-than-expected economic growth and an increase
in corporate profits as a share of national income.  Individual
income and social insurance tax receipts were somewhat lower than
anticipated primarily because changes to the tax code created
incentives, especially for high income taxpayers, to shift their tax
liability from 1994 to 1993 or defer some to 1995 and 1996.  This
small percentage decline from the original estimate of taxes owed by
individuals almost entirely offset the corporate tax increases. 

Outlays for fiscal year 1994 were $1,460.9 billion, $54.4 billion
less than estimated in the President's budget submission.  As in
prior years, a number of increases and decreases in different
accounts occurred.  But unlike prior years, no single area, such as
deposit insurance, exerted a dominant impact.  The largest dollar
decreases from the outlay estimates can be attributed to deposit
insurance, interest on the public debt, and health care programs
(Medicare and Medicaid), all large accounts.  The largest dollar
increases over the original estimates are in the Defense Business
Operations Fund and disaster relief activities. 

Our systematic review of accounts over the last 4 years disclosed
that revolving funds have presented perennial estimating problems as
evidenced by significant percentage differences between estimates and
actuals.  This may be due in part to financial management problems as
in the Defense Business Operations Fund (DBOF) or the nature of
revolving funds where collections are used to offset outlays. 


--------------------
\2 Eggert Economic Enterprises, Inc., publishes monthly the Blue Chip
Economic Indicators, a summary of major private sector estimates. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The time from submission of the President's annual budget, which
contains the first official estimates for a fiscal year, to the
completion of that fiscal year spans nearly 2 years.  For any given
budget, the congressional budget process begins with the presentation
of the President's budget request to the Congress.  The President
must submit his budget for the fiscal year beginning on October 1 of
that year to the Congress no later than the first Monday in February. 
These budget estimates are subsequently revised as part of the budget
request for the upcoming fiscal year.  These revisions reflect
updated technical and economic assumptions as well as policy changes
resulting from enacted legislation.  Also, midsession reviews
conducted during the summer, usually in July, also update budget
estimates prior to the completion of the current fiscal year. 

The President transmitted the account level details for his fiscal
year 1994 budget request to the Congress in April 1993.  \3 He
presented detailed estimates of receipts and outlays and a total
deficit estimate of $264.1 billion.  In the President's fiscal year
1995 budget request submitted to the Congress in February 1994, the
fiscal year 1994 deficit estimate was revised downward to $234.8
billion.  On October 28, 1994, the Department of the Treasury
released the Final Monthly Treasury Statement of Receipts and Outlays
of the United States Government (MTS) for fiscal year 1994, which
reported the actual 1994 deficit of $203.4 billion.  The President
transmitted his fiscal year 1996 budget to the Congress on February
6, 1995.  In this document, the actual fiscal year 1994 deficit was
reported at $203.2 billion. 

On August 10, 1993, the President signed into law the Omnibus Budget
Reconciliation Act of 1993 (OBRA 93).  The act was estimated to
reduce the budget deficits in 1994 through 1998 by a total of $504.8
billion through spending cuts of $254.7 billion and revenue increases
of $250.1 billion. 


--------------------
\3 Budget of the United States Government, Fiscal Year 1994, April
1993, Executive Office of the President, Office of Management and
Budget.  In addition, the budget documents included A Vision of
Change for America, dated February 17, 1993, and various parts from
Budget Baselines, Historical Data, and Alternatives for the Future,
issued by the previous administration, on January 6, 1993. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :3

The objectives of this study were to (1) identify receipt and outlay
components or accounts which experienced large variations between
original estimates and actual results for fiscal year 1994, (2)
determine in the fiscal years covered by our series of lookback
reports (fiscal years 1991-1994) what factors contributed to these
changes, and (3) assess whether there are any patterns in the
variations between estimates and actuals. 

To identify large differences between original fiscal year 1994
estimates and actual results, we compared estimates to actual results
both in the aggregate and on an account-level basis.  To identify
variations on an aggregate basis, we examined receipt, outlay, and
the resulting deficit estimates included in the original and revised
budget estimates to the actual 1994 results reported by the Treasury
and OMB.  \4 Throughout this report, we will refer to the April 1993
and February 1994 estimates as OMB's original and revised estimates,
respectively. 

For detailed analysis of receipts, we focused on the Treasury's
estimates for seven "receipts source" categories in the President's
budget request and Treasury's final MTS.  We obtained explanations of
the differences from Treasury. 

To analyze outlays on an account-level basis, we obtained data from
OMB's MAX budget system and its predecessor Budget Preparation
System--the automated system used to collect and process information
for the President's budget request.  Using these data, we identified
187 accounts that collectively represented 95 percent of OMB's
revised estimate of gross outlays.  For each account, we compared
OMB's original and revised net outlay estimates to the actual outlay
data from Treasury and OMB.  Appendix II displays the original and
revised estimates and the actual outlays for the 187 accounts. 

To determine the factors that contributed to the variations between
the original outlay estimates and actual results for specific
accounts, we interviewed OMB budget examiners and agency officials. 
We also reviewed the economic assumptions, policy proposals, and
program information contained in the President's budget requests for
fiscal years 1994 and 1995 as well as the midsession budget updates
released in September 1993 and July 1994. 

To analyze OMB's estimates of economic conditions, we compared its
April 1993 macroeconomic projections for calendar year 1994 to CBO
and the Blue Chip consensus of private forecasters' projections and
to the actual 1994 results.  Appendix I displays the forecasts and
the actual data. 

To assess whether there were patterns of estimating problems, we
analyzed differences between the revised estimates and the actual
results for fiscal years 1991 through 1994.  We focused on this
comparison for two reasons.  First, it minimizes differences
attributable either to unenacted presidential proposals or to enacted
congressional initiatives not included in the President's proposals. 
Second, it highlights accounts where estimating problems are the
greatest--accounts where even estimates made in midfiscal year were
not accurate.  Appendix III lists major budget accounts for which
actual outlays differed by more than 10 percent from the original
estimates during at least 3 of the 4 fiscal years 1991 through 1994. 

We did not attempt to verify the data discussed in this report which
were obtained from the President's budget requests, the final MTS, or
agency officials.  We conducted our work from September 1994 through
February 1995. 


--------------------
\4 Our original analysis was based on the fiscal year results
reported by the Treasury in the final MTS.  We then updated the data
to reflect actual results reported in the fiscal year 1996 budget
issued on February 6, 1995. 


   DEFICIT LESS THAN ORIGINALLY
   ESTIMATED
------------------------------------------------------------ Letter :4

The $203.2 billion fiscal year 1994 deficit represented a $60.9 (23
percent) decline from the original April 1993 estimate, and was $31.6
billion less than OMB's revised estimate.  This pattern shows that
although OMB expected the 1994 deficit to drop, it did not predict
the magnitude of the decline.  Table 1 gives the detail. 



                                Table 1
                
                Fiscal Year 1994 Aggregate Estimates and
                                Actuals

                         (Dollars in billions)

                              Origin  Revise          Actual
                                  al       d           minus   Percent
                              estima  estima          origin        of
                                  te      te  Actual      al  original
------  ---------------------  ------  ------  ------  ------  --------
Receipts                      $1,251  $1,249  $1,257    $6.5       0.5
                                  .3      .1      .7
Outlays                       1,515.  1,483.  1,460.   -54.4      -3.6
                                   3       8       9
Deficit                       $264.1  $234.8  $203.2      $-     -23.1
                                                        60.9
----------------------------------------------------------------------
Note:  Small discrepancies may be due to rounding. 

Source:  Office of Management and Budget. 

The actual fiscal year 1994 deficit represented a $52.0 billion
decline from the $255.1 billion deficit for fiscal year 1993.  A 3.7
percent growth in actual 1994 outlays over the fiscal year 1993
levels was offset by an even larger 9 percent growth in receipts from
1993 to 1994.  The fiscal year 1994 deficit was the lowest since the
$152.5 billion recorded for fiscal year 1989 and the second
consecutive year that the deficit declined. 


   ECONOMY PERFORMED ABOVE
   EXPECTATIONS
------------------------------------------------------------ Letter :5

OMB's economic assumptions underlying the fiscal year 1994 budget
underestimated actual economic performance.  The unanticipated
strength in the economy for fiscal year 1994 explains much of the
differences between estimated and actual receipts and outlays.  OMB
underestimated GDP growth and overestimated both inflation (as
measured by the Consumer Price Index (CPI)) and the unemployment
rate.  For calendar year 1994, actual long-term interest rates were
slightly higher than OMB's April 1993 estimate while actual
short-term rates were slightly lower than the April 1993 estimate. 
The effect of these interest rate increases were not fully reflected
in the interest on the public debt.  Table 2 compares OMB's original
assumptions with actual 1994 results. 



                                     Table 2
                     
                      Comparison of OMB Economic Assumptions
                                and Actual Results

                                                                          Actual
                                                                           minus
                                                         Estima          estimat
                                                             te  Actual        e
-------------------------------------------------------  ------  ------  -------
Real gross domestic product (percent change, 4th            3.3     3.7       .4
 quarter over 4th quarter)
Consumer price index (percent change, 4th quarter over      3.1     2.9      -.2
 4th quarter)
Unemployment rate, civilian (annual average)                6.4     6.1      -.3
Long-term interest rate (10-year)                           6.6     7.0       .4
Short-term interest rate (91-day)                           4.3    4.25     -.05
--------------------------------------------------------------------------------
The Council of Economic Advisers, with Treasury and OMB, prepares the
economic forecasts that are used in developing the President's budget
request.  Estimates of major macroeconomic indicators that affect
outlays and receipts are included in the budget documents.  CBO and
private forecasters also develop estimates of these indicators (as
shown in appendix I).  The administration's economic projections were
generally close to those of CBO and the Blue Chip consensus of
private forecasters. 

During the fiscal year 1994 budget cycle, the performance of the
economy had a positive impact on the budget.  The growth in GDP for
1994 was 3.7 percent compared to the original estimate of 3.3
percent.  The higher-than-anticipated economic growth was accompanied
by lower-than-anticipated unemployment and lower-than-anticipated
inflation as measured by the CPI.  Strong economic growth and low
unemployment increased receipts and reduced expenditures for some
mandatory programs. 

Interest rates on 3-month and 10-year Treasury notes were close to or
slightly above OMB's April 1993 estimates.  Although the actual
annual averages for long- and short-term interest rates approximated
the original estimates, this average obscures the
lower-than-estimated interest rates prevailing for the first half of
fiscal year 1994 which lowered interest payments.  Interest rates, as
measured by the 3-month and 10-year Treasury yields, began increasing
in the third quarter of the fiscal year, largely in response to the
Federal Reserve Board's six successive interest rate hikes in 1994. 
The rise in interest rates in the latter half of fiscal year 1994 did
not increase the debt service cost of the nation's debt above the
original estimate and did not substantially reduce economic growth
during the fiscal year.  However, the effect of the rise in interest
rates will affect the cost of borrowing in fiscal year 1995. 


   OFFSETTING DIFFERENCES KEPT
   TOTAL RECEIPT ACTUALS CLOSE TO
   ESTIMATES
------------------------------------------------------------ Letter :6

Actual receipts for fiscal year 1994 were $1,257.7 billion, just $6.5
billion or 0.5 percent greater than the original estimate.  This
represents the smallest difference between overall receipt estimates
and actuals in the 4 years we have examined them.  This is the net
result, however, of large offsetting variations among major receipt
categories, in particular corporate income taxes and individual
income taxes.  Corporate income tax receipts were $20.1 billion above
estimated levels.  Despite stronger-than-expected national economic
growth, individual income tax receipts fell $17.0 billion below
original estimates.  These results are shown in table 3. 



                                     Table 3
                     
                     Receipt Estimates and Actual Results for
                                 Fiscal Year 1994

                              (Dollars in billions)


                        Origin  Revise                          Actual
                            al       d                           minus   Percent
                        estima  estima                          origin        of
Receipt source            te\a      te          Actual              al  original
----------------------  ------  ------  ----------------------  ------  --------
Individual income       $560.0  $549.9          $543.1              $-      -3.0
 taxes                                                            17.0
Corporate income taxes   120.3   130.7          140.4             20.1      16.7
Social insurance taxes   465.0   461.9          461.5             -3.5       -.8
 and contributions
Excise taxes              51.4    54.6           55.2              3.9       7.5
Estate and gift taxes     12.7    12.7           15.2              2.5      20.1
Customs duties            21.3    19.2           20.1             -1.2      -5.6
Miscellaneous receipts    20.6    20.0           22.3              1.7       8.1
================================================================================
Total                   $1,251  $1,249         $1,257.7           $6.5        .5
                            .3      .1
--------------------------------------------------------------------------------
Note:  Small discrepancies may be due to rounding. 

\a Includes legislative proposals. 

Source:  Office of Management and Budget. 


      CORPORATE INCOME TAXES
---------------------------------------------------------- Letter :6.1

Corporate tax receipts were 16.7 percent ($20.1 billion) above
original estimates, despite the fact that the original estimate
assumed a tax rate increase twice that enacted.  The increase
reflects both the unexpected strength of the economy in 1994 and the
fact that corporate profits gained more from that economic growth
than expected.  Fiscal year 1994 represents the second year in a row
that corporate receipts exceeded initial projections. 

Growth in taxable corporate profits can be difficult to predict. 
First, growth rate changes in either corporate revenue or
expenditures can create large percentage swings in net profit,
thereby complicating forecasts.  Second, not all net profit is
taxable, and taxable income can vary considerably depending on the
extent of available offsets.  Consequently, the receipts from taxing
corporate profits can vary tremendously from one year to another. 

This observation appears consistent with recent federal experience,
as depicted in table 4.  Annual growth in corporate income has varied
a great deal compared to that of the overall economy, and federal
receipt estimates have been affected.  In fiscal year 1993, actual
corporate tax receipts exceeded estimates by about 14 percent, but in
1992 and 1991 estimates exceeded actuals by about 2 percent and 24
percent, respectively. 



                                Table 4
                
                  Percentage Change in GDP, Growth in
                Corporate Profits, and Actual Corporate
                Income Tax Receipts Compared to Original
                               Estimates

                            (Percent change)

                                                1991  1992  1993  1994
----------------------------------------------  ----  ----  ----  ----
Real GDP growth                                    -   2.3   3.1   4.0
                                                 0.6
Growth in corporate profits                        -   8.4  16.8  16.4
                                                 0.1
Corporate income tax receipts actual to            -     -  13.9  16.7
 estimate                                       24.3   1.6
----------------------------------------------------------------------

      INDIVIDUAL INCOME TAXES
---------------------------------------------------------- Letter :6.2

Individual income tax receipts fell below estimates for the fourth
consecutive year, this time by 3.0 percent ($17.0 billion).  Since a
stronger-than-expected economy would be expected to produce
higher-than-expected receipts, the drop understates the gap.  The
positive effects of unforeseen economic growth were offset by three
factors:  (1) changes to proposed income tax increases assumed in the
original estimate, (2) changes in the tax code that created
incentives for taxpayers to shift income from the 1994 tax year, and
(3) the fact that overall economic growth led to less-than-expected
growth in wage income. 

About $10 billion of the $17 billion shortfall can be attributed to
changes to originally-proposed tax increases.  In its April 1993
estimate, OMB assumed enactment of tax proposals estimated to
generate $23.5 billion.  The majority of these proposals were related
to an increase in the tax rate for high income individuals.  Although
the rate changes were enacted, the final legislation allowed
taxpayers to spread their increased liability over 3 years.  This had
the effect of shifting some tax receipts from 1994 to 1995 and 1996. 

Other changes to the tax code may also have shifted tax collections
away from fiscal year 1994.  Taxpayers, particularly those in the top
brackets, have significant discretion over when they recognize income
for tax purposes and can adjust the timing of income recognition to
reduce overall tax liability when tax laws change.  For example, the
removal of the Hospital Insurance (HI) wage cap created incentives
for such taxpayers to shift income from the 1993 tax year to 1992,
thereby reducing collections for fiscal year 1994. 

Estimators believe that a variety of other factors also contributed
to the remaining decrease.  For example, as noted above, a slower
wage growth explained at least some of this difference.  The
economy's unexpected strength did not reflect wage growth rates
consistent with past experience.  Corporate profits drove increases
in national income to a much greater extent than wage income.  Hence,
the economy's unforeseen strength had only marginal effects on
individual income tax receipts, although absent such strength,
receipts would have been even lower. 


      SOCIAL INSURANCE RECEIPTS
---------------------------------------------------------- Letter :6.3

Not surprisingly, the weakness in wage growth also affected social
insurance receipts.  Actual social insurance receipts for fiscal year
1994 fell $3.5 billion short of the original estimate.  This is only
a 0.8 percent drop and represents, for a revenue source this large, a
near exact match of estimates with actuals. 

However, this overall match masks offsetting changes.  We were told,
for example, that the positive effects of removing the HI wage cap
and the unexpectedly strong economy were offset by the unexpectedly
weak wage response to the strong economy. 


      OTHER RECEIPTS
---------------------------------------------------------- Letter :6.4

Other receipts for fiscal year 1994 totaled $112.8 billion.  These
receipts included $55.2 billion for excise taxes, $20.1 billion in
custom duties and fees, $15.2 billion in estate and gift taxes, and
$22.3 billion for miscellaneous receipts.  The difference between the
actual receipts and original estimates were the result of enacted
legislation and strong economic conditions as described below. 

  -- Excise taxes:  The phasein of an increase in the transportation
     fuels tax and stronger than anticipated economic growth resulted
     in an increase of $3.9 billion over the estimate. 

  -- Custom duties and fees:  A 1-year extension of the Generalized
     System of Preferences and the implementation of the North
     American Free Trade Agreement were responsible for the decrease
     of $1.2 billion in duties collected compared to the estimate. 

  -- Estate and gift taxes:  The value of assets subject to
     inheritance and gift taxes was greater than anticipated, which
     resulted in a $2.5 billion increase in estate and gift taxes. 

  -- Miscellaneous Receipts:  Miscellaneous receipts are primarily
     composed of earnings on Federal Reserve assets.  Higher than
     anticipated average interest rates and higher-than-expected
     asset values on securities denominated in foreign currencies
     increased earnings on Federal Reserve deposits by $1.9 billion. 


   OUTLAYS LESS THAN EXPECTED IN A
   VARIETY OF ACCOUNTS
------------------------------------------------------------ Letter :7

Actual fiscal year 1994 outlays of $1,460.9 billion were $54.4
billion lower than OMB's original April 1993 estimate.  Unlike 1991
through 1993, when deposit insurance accounted for the bulk of the
difference in outlays, there is no single component or account that
dominates the reduction from the original estimates.  Although
deposit insurance still represents the largest dollar decrease ($15.1
billion) from the original estimates, numerous others, such as
interest on the public debt, Medicare, Medicaid, Guaranteed Student
Loans, and Social Security, accounted for other large dollar
reductions.  These reductions were partially offset by outlays
exceeding estimates for the Defense Business Operations Fund,
Disaster Relief, and to a lesser extent, several other activities. 


      DEPOSIT INSURANCE OUTLAYS
      LESS VOLATILE THAN IN PRIOR
      YEARS
---------------------------------------------------------- Letter :7.1

Although the original estimates of deposit insurance outlays differed
less from actual outlays in 1994 than in prior years, they still
represent the largest difference between estimates and actuals of all
the components or accounts in the budget.  Actual results were
outlays of $-7.6 billion, \5 a $15.1 billion swing from the original
outlay estimate of $7.5 billion.  Most of this change resulted from
improvements in the financial condition of the banking and thrift
industries due to favorable economic conditions, especially lower
interest rates. 

Nearly all of the variation in the estimates occurred in three
deposit insurance accounts:  the Bank Insurance Fund (BIF), the
Resolution Trust Corporation's (RTC) revolving fund, and the Savings
Association Insurance Fund (SAIF).  The other deposit insurance
account that experienced a notable change is the Federal Savings and
Loan Insurance Corporation Resolution Fund (FRF).  As shown in table
5, the largest change occurred in BIF.  Although there are variations
in RTC and SAIF, these differences are mostly attributable to the
timing of the RTC's transferring the resolution of thrift failures to
SAIF.  \6 When the outlays for SAIF and RTC are viewed together, the
variations are minimal.  FRF experienced a smaller but still
significant variation.  These four accounts, BIF, RTC, SAIF, and FRF,
constitute more than 95 percent of deposit insurance total outlays in
1994. 

Both RTC and the Federal Deposit Insurance Corporation (FDIC) are
responsible for the resolution of insolvent thrifts and banks, that
is, selling the assets of failed institutions and settling all
claims, including deposit guarantees of insured customers.  The
Financial Institutions Reform, Recovery, and Enforcement Act of 1989
established RTC as a temporary agency charged with resolving failed
thrifts.  Since February 1989, thrift resolutions have been funded
through RTC's revolving fund.  \7 FDIC administers the other bank and
thrift deposit insurance activities through (1) BIF for banks, (2)
FRF for resolution commitments stemming from thrifts which failed
before January 1, 1989, and (3) SAIF, which is scheduled to take over
the resolution of failed thrifts from RTC on July 1, 1995. 



                                Table 5
                
                 Deposit Insurance Estimates and Actual
                      Results for Fiscal Year 1994

                         (Dollars in billions)


                              Origin  Revise          Actual
                                  al       d           minus   Percent
                              estima  estima          origin        of
Deposit insurance component     te\a      te  Actual      al  original
----------------------------  ------  ------  ------  ------  --------
BIF                             $2.8   $-6.8   $-9.5      $-    -441.9
                                                        12.3
RTC                             -4.3     3.5     4.1     8.4     195.0
SAIF                             7.9    -1.1    -1.2    -9.1    -115.2
FRF                              1.3     1.4    -0.7    -2.0    -153.0
NCUSIF\b                        -0.2    -0.3    -0.3    -0.1      67.9
======================================================================
Total                           $7.5   $-3.3   $-7.6      $-    -201.0
                                                        15.1
----------------------------------------------------------------------
Note:  Small discrepancies may be due to rounding. 

\a Includes legislative proposals. 

\b National Credit Union Share Insurance Fund. 

Source:  Office of Management and Budget. 


--------------------
\5 Negative outlays occur when collections exceed spending. 

\6 The RTC Completion Act of 1993 extended RTC's resolution authority
from September 30, 1993, to at least January 1, 1995, and no later
than July 1, 1995, the exact date of which was to be determined by
the chairperson of the Thrift Depositor Protection Oversight Board. 
On December 5, 1994, the chairperson made the determination that RTC
would continue to resolve failed thrift institutions through June 30,
1995. 

\7 Under the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, SAIF currently has financial responsibility for all
federally insured depository institutions that became members of SAIF
after August 8, 1989, for which RTC does not have resolution
authority, and all deposits insured by SAIF that are held by
BIF-member banks, so called "Oakar" banks, created pursuant to the
"Oakar amendment" provisions, section 5(d)(3) of the Federal Deposit
Insurance Act. 


         BANK INSURANCE FUND
-------------------------------------------------------- Letter :7.1.1

Actual outlays for BIF were $-9.5 billion, $12.3 billion lower than
the original estimate of $2.8 billion.  This difference resulted
primarily from improved economic conditions.  Declining interest
rates reduced the number of bank failures and increased bank
profitability.  The original estimate of failed bank assets was
revised downward from $43.0 billion to $10.2 billion.  Actual failed
assets were $1.6 billion. 


         RESOLUTION TRUST
         CORPORATION AND SAVINGS
         ASSOCIATION INSURANCE
         FUND
-------------------------------------------------------- Letter :7.1.2

RTC outlays were $8.4 billion higher than originally estimated and
SAIF outlays were $9.1 billion less than originally estimated, as
shown in table 5.  These differences are largely a result of a change
in timing.  Therefore, combining the outlays for both RTC and SAIF
represents a more accurate picture of the gap between estimates and
actuals.  When the original estimates for the 1994 budget were being
developed, it was assumed that SAIF would be taking over the
resolution of failed thrifts from RTC in the beginning of 1994. 
However, the passage of the RTC Completion Act in December 1993
effectively extended RTC's authority to resolve most thrifts through
the first half of 1995.  Combined actual outlays were $0.6 billion
less than the original estimate. 


         FEDERAL SAVINGS AND LOAN
         INSURANCE CORPORATION
         RESOLUTION FUND
-------------------------------------------------------- Letter :7.1.3

Actual outlays for FRF were $-0.7 billion (153 percent) lower than
the original estimate of $1.3 billion.  Outlays were less than
anticipated both because FRF received more than expected from asset
sales--due to the improved economy--and because some 1994 outlays
were unexpectedly delayed until 1995. 


      OUTLAYS FOR MAJOR HEALTH
      PROGRAMS WERE OVERESTIMATED
---------------------------------------------------------- Letter :7.2

Although growth in expenditures for both Medicaid and Medicare, the
two largest health care programs, continued to outpace inflation,
actual outlays were less than originally estimated.  Between 1993 and
1994, Medicaid outlays grew 8 percent and Medicare outlays grew 11
percent.  However, for the second year in a row, Medicaid outlays
were less than originally expected.  In addition, the recent pattern
of higher-than-estimated outlays for Medicare was reversed in 1994. 


         MEDICAID
-------------------------------------------------------- Letter :7.2.1

In 1994, Medicaid outlays were 10.8 percent less than the original
estimate ($82.0 billion versus $92.0 billion).  This repeats the 1993
experience when outlays were 10.2 percent lower than the original
estimate ($75.8 billion versus $84.4 billion).  The experience of
1993 and 1994 differs from that of the early 1990s when actual
outlays were over 10 percent higher than originally estimated. 



                                Table 6
                
                 Medicaid Estimates and Actual Results
                          for Fiscal Year 1994

                         (Dollars in billions)


                            Origin  Revise           Actual
                                al       d            minus    Percent
                            estima  estima           origin         of
Component                     te\a      te   Actual      al   original
--------------------------  ------  ------  -------  ------  ---------
Medicaid                     $92.0   $87.2    $82.0   $-9.9      -10.8
----------------------------------------------------------------------
Note:  Small discrepancies may be due to rounding. 

\a Includes legislative and investment proposals. 

Source:  Office of Management and Budget. 

As in 1993, difficulty in anticipating state behavior was a key
contributor to the difference between the original Medicaid estimate
and the actual outlays for fiscal year 1994.  Medicaid outlays rise
and fall with state claims for federal Medicaid funds, which in
1994--like in 1993-- were lower than expected.  Although lower than
expected state claims for the first half of the year led the Health
Care Financing Administration (HCFA) to revise its outlay estimates
downward by $4.8 billion, as shown in table 6, actual outlays were an
additional $5.1 billion less than the revised estimate.  The reasons
for the decrease are not readily identifiable, but they appear to
include factors ranging from recent federal legislation (see below),
state efforts to control costs, and changes in the economy. 

Estimating the impact of the Medicaid Voluntary Contribution and
Provider-Specific Tax Amendments of 1991 and OBRA 93 proved
difficult.  This legislation sought to limit actions states could
take to increase the federal government's share of Medicaid costs by
(1) restricting the use of provider specific taxes and donations as a
source of state matching funds and (2) limiting disproportionate
share payments to hospitals.  \8 HCFA originally underestimated the
impact on state spending of this legislation.  In addition, many
states tried to lower costs by implementing managed care.  The
economy also influences medical spending; both medical price
inflation and the number of beneficiaries were lower than expected. 

The Medicaid program presents a major estimating challenge.  Each
state makes different program choices.  Further, eligibility is hard
to predict, benefits are not cash, implementation and financing are
shared among multiple parties and levels of government, and
interactions with other programs are complex.  \9

Also, estimators may use different assumptions to move from previous
actuals to future estimates.  For example, in fiscal year 1993, both
OMB and CBO developed estimates for Medicaid using HCFA quarterly
estimates of state Medicaid spending projections as a base.  However,
OMB and CBO made different assumptions about the increase in health
care costs, number of beneficiaries, and program utilization rates
and intensity to inflate HCFA data.  Furthermore, OMB and CBO
assessed the accuracy of state forecasts differently.  \10


--------------------
\8 For a further discussion of this legislation see Medicaid:  States
Use Illusory Approaches To Shift Program Costs to Federal Government
(GAO/HEHS-94-133, August 1, 1994). 

\9 For a fuller discussion of these program features and their
influence on estimating, see Budget Policy:  Issues in Capping
Mandatory Spending (GAO/AIMD-94-155, July 18, 1994). 

\10 Budget Issues:  Compliance with the Budget Enforcement Act of
1990 (GAO/AFMD-93-38, November 23, 1992). 


         MEDICARE
-------------------------------------------------------- Letter :7.2.2

In 1994, the trend of underestimating Medicare outlays was reversed;
actual outlays of $162.5 billion were $2.3 billion (1.4 percent)
lower than the original estimate.  Outlays for Medicare Part A \11
--the Hospital Insurance component--were $1.6 billion (1.5 percent)
more than estimated.  Outlays for Medicare Part B \12 --the
Supplemental Medical Insurance component--more than offset the Part A
increase with results $3.8 billion (6 percent) lower than expected. 



                                Table 7
                
                 Medicare Estimates and Actual Results
                          for Fiscal Year 1994

                         (Dollars in billions)


                              Origin  Revise          Actual
                                  al       d           minus   Percent
                              estima  estima          origin        of
Component                       te\a      te  Actual      al  original
----------------------------  ------  ------  ------  ------  --------
Part A                        $101.2  $102.9  $102.8    $1.6       1.5
Part B                          63.6    58.3    59.7    -3.8      -6.0
======================================================================
Total                         $164.8  $161.2  $162.5   $-2.3      -1.4
----------------------------------------------------------------------
Note:  Small discrepancies may be due to rounding. 

\a Includes legislative and investment proposals. 

Source:  Office of Management and Budget. 

Part A 1994 outlays of $102.8 billion were only 1.5 percent higher
than the original estimate of $101.2 billion.  This is a
significantly smaller gap than in the past when Part A outlays had
been approximately 10 percent higher than estimates.  The primary
reason for the 1994 difference is that legislation provided less
savings than anticipated in the original estimate.  \13 However, this
slight increase masks offsetting differences within the components of
Part A, specifically, differences between the original estimate and
actual outlays for skilled nursing facilities (SNFs) and home health
care. 

As in 1993, SNF costs exceeded estimates in 1994.  In 1993, SNF
outlays soared more than 75 percent above the original estimate; 1994
outlays of $7.1 billion represented a 29 percent increase over the
original estimate of $5.5 billion.  HCFA staff told us that they had
assumed growth in SNF expenditures would slow in 1994.  \14 However,
the actual rate of growth for SNF expenditures in 1994 was
significantly higher than that HCFA assumed.  Increases primarily in
SNF costs per day are responsible for the increase in outlays. 

Lower than expected Part A payments for home health care offset the
SNF difference.  In 1994, home health care outlays of $12.0 billion
were $1.6 billion (12 percent) less than the original estimate of
$13.6 billion.  When HCFA was developing its 1994 estimate, home
health care expenditures had been increasing rapidly.  In 1993, home
health care expenditures of $9.5 billion were more than 37 percent
higher than the original estimate of $6.9 billion.  \15

Although HCFA assumed the growth in home health care expenditures
would slow, the rate of increase slowed even more than anticipated. 



                                Table 8
                
                  Skilled Nursing Facilities and Home
                Health Care Estimates and Actual Results
                          for Fiscal Year 1994

                         (Dollars in billions)

                                      Origin          Actual
                                          al           minus   Percent
                                      estima          origin        of
Component                                 te  Actual      al  original
------  -----------------------------  ------  ------  ------  --------
SNF                                     $5.5    $7.1    $1.6      29.1
Home Health Care                       $13.6   $12.0   $-1.6     -11.8
----------------------------------------------------------------------
Source:  Health Care Financing Administration. 

Consistent with the 1993 experience Part B outlays were less than
expected in 1994.  In 1993, Part B outlays were 11 percent less than
the original estimate.  In 1994, Part B outlays were 6.0 percent less
than the original estimate.  Most of this difference in 1994 was due
to lower-than-expected physician payments caused by a continued, yet
unanticipated, reduction in the volume of services performed by
physicians.  Although physician payments have been decreasing since
the new physician fee schedule was implemented in 1992, HCFA staff
suggested that this trend is temporary and they expect physician
payments will soon experience rates of increase similar to those in
the past. 


--------------------
\11 Medicare Part A funds hospital or related care for the elderly
and disabled. 

\12 Medicare Part B covers expenses for physicians and other medical
services. 

\13 When the 1994 Part A outlay estimates were developed, HCFA
assumed proposed legislation would save $1.8 billion from the current
services estimate of $103.0 billion.  However, only about one half of
the anticipated savings were realized because (1) not all of the
proposed legislation was enacted and (2) some of the savings
associated with the legislation that was enacted were less than
expected. 

\14 In 1992 and 1993, SNFs grew rapidly due to increased awareness of
the existing skilled nursing care benefit resulting from the
enactment and subsequent repeal of the Medicare Catastrophic Coverage
Act of 1988, which contained provisions expanding some of the
program's benefits.  Budget Issues:  Fiscal Year 1993 Budget
Estimates and Actual Results (GAO/AIMD-94-68, February 4, 1994). 

\15 This unanticipated growth in home health care was due to expanded
coverage resulting from an out-of-court settlement of a 1989 lawsuit
against HCFA.  Budget Issues:  Fiscal Year 1993 Budget Estimates and
Actual Results (GAO/AIMD-94-68, February 4, 1994). 


      DEFICIT REDUCTION AND
      LOWER-THAN-EXPECTED INTEREST
      RATES REDUCED DEBT SERVICING
      COSTS
---------------------------------------------------------- Letter :7.3

Interest on the public debt totaled $296.3 billion for fiscal year
1994, $13.4 billion (4.3 percent) less than OMB's April 1993 estimate
of $309.7 billion.  About $1.5 billion of the decrease was the result
of lower-than-expected borrowing for fiscal year 1994 and about $11.9
billion was the result of lower-than-expected interest rates.  The
lower rates reduced both the costs of refinancing existing debt and
the cost of new borrowing. 

The refinancing of existing government debt influences the amount of
interest expenditure more than the amount of new borrowing because
the amount of refinanced debt in any given year is far greater than
the current year's deficit.  In fiscal year 1994, the government
borrowed $184.7 billion from the public to cover the deficit.  \16
However, the Treasury borrowed about $2 trillion to refinance
existing debt.  Approximately half of the outstanding Treasury
securities have a maturity of 5 years or less.  This means that the
Treasury has to refinance a substantial portion of existing debt
every year.  Although short-term borrowing should lower interest
expenditures as opposed to long-term borrowing, it exposes the
government to yearly interest rate fluctuations and causes interest
expenditures to be heavily influenced by the prevailing interest
rates in the current fiscal year. 

The April 1993 estimate for interest on the public debt assumed
higher interest rates than turned out to exist during the first half
of fiscal year 1994.  A majority of the debt was refinanced during
this period in fiscal year 1994 with lower than anticipated interest
rates.  The rise in interest rates occurring in the latter part of
fiscal year 1994 will not be fully reflected in interest payments
until fiscal year 1995 when a large portion of the outstanding debt
is refinanced under those higher rates. 


--------------------
\16 The federal government finances the deficit primarily through
borrowing from the public.  Other means of financing the deficit
include changes in Treasury cash balances, revenue from the
manufacture of coins, and net financing disbursements for direct and
guaranteed loans. 


      OTHER SIGNIFICANT BUT
      OFFSETTING OUTLAY VARIATIONS
---------------------------------------------------------- Letter :7.4

In addition to the accounts discussed above, there are many other
accounts with significant differences between estimated and actual
outlays.  Of the 187 accounts constituting 95 percent of fiscal year
1994 gross outlays (see appendix II), including the accounts
discussed previously, there were 28 accounts for which actual outlays
were $500 million or more lower than their original estimates, while
17 accounts had actual outlays exceed estimates by $500 million or
more.  Some of the accounts not previously discussed that have
significant differences are discussed below. 

The Federal Family Education Loan (Guaranteed Student Loans)
Liquidating Account was $4.8 billion (272 percent) less than the
original estimate.  This decrease is due to an unanticipated and one
time event--the Student Loan Marketing Association prepaid its entire
debt of $4.7 billion in 1994. 

A $1.7 billion (less than 1 percent) decrease from the original
estimate for Social Security's \17 Old Age and Survivors Insurance
Trust Fund and a $1.1 billion (4 percent) decrease in Supplemental
Security Income are the result of lower than expected inflation and
an improved economy, which caused both benefit amounts and the number
of beneficiaries to be less than expected. 

Outlays for the Commodity Credit Corporation Fund for fiscal year
1994 were $9.8 billion, $1.7 billion (15 percent) below the original
estimate.  The April 1993 estimate was based on 1992 supply and
demand estimates.  The 1993 floods in the Midwest reduced corn
production and thus reduced outlays for corn price supports, a
primary explanation of the difference.  This reduction in outlays was
partially offset by an increase in 1993 crop disaster assistance in
response to the same flood.  \18

Defense Business Operations Fund outlays were $3.4 billion, $5.8
billion (235 percent) more than the $2.5 billion in negative outlays
originally estimated.  We have previously reported that accurate
estimates for DBOF are difficult to develop because Department of
Defense (DOD) lacks effective cash management practices, financial
reporting, and cost accounting systems.  For example, we reported
that DBOF's fiscal year 1993 financial information on the results of
operations differed by $6.1 billion from the data used in preparing
DBOF's budget.  \19 We also reported that an analysis of DOD budget
documents disclosed that DOD's estimates of DBOF's operating results
have been consistently overly optimistic.  \20

Outlays for Disaster Relief for fiscal year 1994 were $3.7 billion,
$2.4 billion (180 percent) above the original estimate.  Greater than
anticipated outlays for the Northridge earthquake and the midwestern
floods were responsible for the increase in expenditures. 

Payments Where Earned Income Credit Exceeds Liability for Taxes for
fiscal year 1994 were $10.9 billion, $1.2 billion (12 percent) higher
than the original estimate.  This difference resulted from the
unanticipated increase in largely people with one or more children,
applying for the credit.  In addition, the average credit was larger
than originally anticipated to an increase in the amount of people
applying for the credit, OBRA 93 increased the size of the credit
claimed. 


--------------------
\17 The Disability Insurance Trust Fund, the other component of
Social Security, experienced a less significant decrease of $600
million from the original estimate to actual outlays. 

\18 The 1993 crop disaster program was not authorized until Public
Law 103-75 was enacted on August 12, 1993. 

\19 Financial Management:  Status of the Defense Business Operations
Fund (GAO/AIMD-94-80, March 9, 1994).  See also Defense Business
Operations Fund:  Management Issues Challenge Fund Implementation
(GAO/AIMD-95-79, March 1, 1995). 

\20 Defense Business Operations Fund:  Improved Pricing Practices and
Financial Reports Are Needed To Set Accurate Prices (GAO/AIMD-94-132,
June 22, 1994). 


   TREND ANALYSIS HIGHLIGHTS
   REVOLVING FUND ISSUES
------------------------------------------------------------ Letter :8

Examining trends in estimation error can highlight potential
problems.  In the preceding analysis, we looked at accounts with
large dollar differences between estimates and actuals in fiscal year
1994, observing similarities and differences in prior years'
estimating experience with those accounts.  In the following
analysis, we examine those accounts with the largest percentage
difference between revised estimates and actuals over the last 4
fiscal years.  By using a percentage difference threshold, we have
isolated those accounts with the greatest proportionate problems; by
using revised estimates as the basis for comparison, we have both (a)
eliminated the disparities reflecting the differences between
proposed policies and those ultimately enacted and (b) isolated those
accounts where estimation errors remained large even at midfiscal
year. 

In this analysis, we found that 46 accounts--listed in appendix
III--had differences of over 10 percent between the revised estimates
and actual outlays at least three times during the 4 years fiscal
years 1991 through 1994.  Together these 46 accounts explained
approximately 85 percent of the difference between the revised
estimates and actual outlays over all 4 years.  Over half of
these--26 accounts--were revolving funds. 

The nature of revolving fund accounts may help explain this apparent
estimating problem.  Revolving funds' net outlays are equal to gross
outlays (i.e., the costs of providing the services) minus offsetting
collections (the amount paid for the services).  The funds'
dependency on offsetting collections increases the sensitivity of the
estimates to changes in external factors.  For example, the estimates
for the Bonneville Power Administration Fund are dependent on
assumptions about both the supply of and demand for federal energy. 
Deviations from the assumed conditions (i.e., decreases in demand or
a drought which decreases the ability to generate hydroelectric
power) can lead to large shifts in the offsetting collections and
thus to large percentage shifts in the net outlays.  This may be the
reason why 8 of the 10 accounts with the largest average absolute
percentage difference were revolving funds.  (See table 9.)

As shown in table 9, three of the eight revolving funds were credit
reform liquidating accounts.  Differences between revised estimates
and actual outlays for these accounts may be due in part to the
longstanding financial system problems within agencies.  We have
reported \21 that in preparing estimates, agencies had to rely on
information that has historically been incomplete and unreliable. 



                                     Table 9
                     
                      Accounts with Largest Average Absolute
                      Percentage Difference Between Revised
                           Estimate and Actual Outlays

                              (Dollars in billions)

                                                                Actual
                                                                  1994  Absolute
                                                                 gross   average
                                                              outlays\   percent
          Agency             Account            Account type         a    change
--------  -----------------  -----------------  ------------  --------  --------
1         Department of      Rural              Revolving         $3.0    432.06
          Agriculture        Electrification    fund
                             and Telephone
                             Revolving Fund
                             Liquidating
                             Account

2         Federal Emergency  National Flood     Revolving          0.7    314.87
          Management Agency  Insurance Fund     fund

3         Department of      Program            Discretionar       2.1    202.75
          Health and Human   Management         y
          Services

4         Department of      FHA Mutual         Revolving          4.4    145.47
          Housing and Urban  Mortgage and       fund
          Development        Cooperative
                             Housing Insurance
                             Funds Liquidating
                             Account

5         Department of      Uranium Supply     Revolving          1.5    140.34
          Energy             and Enrichment     fund\b
                             Activities

6         Legislative        Government         Revolving          0.9    134.10
          Branch             Printing Office    fund
                             Revolving Fund

7         Federal Deposit    Bank Insurance     Revolving          3.2    118.04
          Insurance          Fund               fund
          Corporation

8         Department of      Defense Business   Revolving         81.2    103.37
          Defense            Operations Fund    fund

9         Department of      State              Discretionar       3.6     94.95
          Labor              Unemployment       y
                             Insurance and
                             Employment
                             Service
                             Operations

10        Department of      Loan Guaranty      Revolving          1.4     85.55
          Veterans Affairs   Revolving Fund     fund
                             Liquidating
                             Account
--------------------------------------------------------------------------------
\a These outlays are shown to provide perspective on the size of
these accounts. 

\b This account is a merged account that includes the activities of
the United States Enrichment Corporation. 

After revolving funds, the second largest grouping was the seven
discretionary accounts with activity in the National Defense function
(050).  As we have noted previously, differences between estimates
and actual outlays are not unusual for military accounts.  \22
Reprogramming agreements between congressional committees and DOD
allow the shifting of funds within appropriations, and transfer
authority allows the shifting of funds between appropriations. 
Second, since several of these accounts have operational links with
DBOF--which itself shows up on the top ten accounts list--they were
affected by DBOF's financial management difficulties.  As we have
previously stated in this report, accurate DBOF estimates are
difficult to develop because DOD lacks effective cash management
practices and accounting systems. 


--------------------
\21 Federal Credit Programs:  Agencies Had Serious Problems Meeting
Credit Reform Accounting Requirements (GAO/AFMD-93-17, January 6,
1993). 

\22 Budget Issues:  Fiscal Year 1993 Budget Estimates and Actual
Results (GAO/AIMD-94-68, February 4, 1994). 


   OBSERVATIONS
------------------------------------------------------------ Letter :9

No truly large and daunting estimation differences existed in 1994, a
result consistent with a budget world experiencing a stable economy
and frozen discretionary spending.  Most accounts controlled by
discretionary budget limits did not--as they should not--vary
significantly from estimates; economic assumptions that form the
basis for estimates of receipts and of mandatory outlays were close
to experience and resulted mainly in small estimate-to-actual
differences.  Furthermore, deposit insurance continued to fade both
as a driver of the deficit and a source of estimate-to-actual
volatility.  In such a year, the more routine technical estimation
difficulties emerge from the background. 

Yet the experience of 1994 also underscores the sensitivity of budget
outlays and receipts to changes in economic conditions.  As we noted
in our February 1994 report, economic forecasting is an enormously
complex process involving multiple variables and estimates about
future events.  Because economic turning points are so difficult to
anticipate, budget forecasts will be closer to reality when the
economy is stable, as in 1994.  Yet the difficulty of anticipating
turning points applies not only to the aggregate economy but also to
movements below the aggregate.  For example, although 1994 receipt
estimates proved nearly exactly right in total, this overall result
masked large offsetting differences between corporate income-based
receipts and wage-based receipts, a result in part of extremely rapid
income growth in the corporate sector--for 2 years running--and the
wage base's more sluggish response to overall economic growth.  Such
differences between estimates and actuals, although not affecting
total receipts in 1994, bear watching as potential indicators of
larger economic change and, ultimately, larger estimation problems. 

In addition, our 4-year trend analysis revealed that certain
accounts, primarily revolving funds, are prone to perennial technical
problems in estimating net outlays.  Further study would be necessary
to assess the specific nature of these estimating problems.  Although
net outlays for revolving funds may be inherently difficult to
forecast, improved financial management might help agencies gain
better information on the operations of these programs and contribute
to improved estimation.  The issue of accurately forecasting net
outlays for revolving funds will become more important if more of the
government's business-type operations are moved to such a form of
financial management, as has been proposed. 

We are sending copies of this report to the Ranking Minority Member
of your Committee and to the Chairman and Ranking Member of the
Senate Committee on the Budget.  We are also sending copies to the
Chairmen and Ranking Members of the Senate Committees on
Appropriations, on Governmental Affairs, and on Finance and to the
Chairmen and Ranking Minority Members of the the House Committees on
Appropriations, on Government Reform and Oversight, and on Ways and
Means.  Copies are also being provided to the Director of the
Congressional Budget Office, The Secretary of the Treasury, and the
Director of the Office of Management and Budget.  Copies will be made
available to others upon request. 

Sincerely yours,

Susan J.  Irving
Associate Director, Budget Issues


CALENDAR YEAR 1994 ECONOMIC
ASSUMPTIONS
=========================================================== Appendix I

                                                                     Blue  Actua
                                                   CBO\a    OMB    Chip\b      l
-------------------------------------------------  -----  -----  --------  -----
Real Gross Domestic Product (percent change, 4th                             3.7
 quarter over 4th quarter)
Early 1993                                           3.0    3.3       3.2
Midyear 1993                                         2.7    3.0       2.7
Early 1994                                           2.8    3.0       2.7
Midyear 1994                                         3.6    3.0       3.1
Consumer Price Index (percent change, 4th quarter                            2.9
 over 4th quarter)
Early 1993                                           2.7    3.1       3.6
Midyear 1993                                         3.1    3.3       3.4
Early 1994                                           2.9    3.0       3.1
Midyear 1994                                         2.8    2.9       2.8
Unemployment rate (annual average)                                           6.1
Early 1993                                           6.6    6.4       6.5
Midyear 1993                                         6.6    6.5       6.6
Early 1994                                           6.4    6.4       6.4
Midyear 1994                                         6.2    6.3       6.3
Long-term interest rate                                                      7.0
Early 1993                                           6.6    6.6       7.2
Midyear 1993                                         6.1    5.9       6.3
Early 1994                                           5.8    5.8       5.9
Midyear 1994                                         6.8    6.8       6.8
Short-term interest rate                                                    4.25
Early 1993                                           3.7    4.3       4.2
Midyear 1993                                         3.6    3.6       3.6
Early 1994                                           3.5    3.4       3.4
Midyear 1994                                         4.1    4.0       4.0
--------------------------------------------------------------------------------
\a The CBO summer forecasts were used for the midyear 1994 estimate. 

\b The Blue Chip does not project a 10-year Treasury yield.  The
values shown are based on the Blue Chip estimates for the Aaa
corporate bond rate adjusted to reflect the estimated spread between
the Aaa bond and the 10-year Treasury rates. 


FISCAL YEAR 1994 NET OUTLAYS FOR
MAJOR BUDGET ACCOUNTS
========================================================== Appendix II

                       (Dollars in billions, in descending
                           order of original estimates)

     Accoun                                                      Origina  Revise
Actual  Code  Agency                    Account                         l       d
------  ----  ------------------------  ------------------------  -------  ------
1       20-  Department of the         Other Interest on the       309.7   298.5
     0550\a  Treasury                  Public Debt                         296.3

2       20-  Social Security           Federal Old-Age and         283.3   282.4
       8006  Administration            Survivors Insurance                 281.6
                                       Trust Fund

3       20-  Department of Health and  Federal Hospital            101.2   102.9
       8005  Human Services            Insurance Trust Fund                102.8

4       75-  Department of Health and  Grants to States for         92.0    87.2
       0512  Human Services            Medicaid                             82.0

5       20-  Department of Health and  Federal Supplementary        63.6    58.3
       8004  Human Services            Medical Insurance Trust              59.7
                                       Fund

6       75-  Department of Health and  Payments to Health Care      46.6    40.4
       0580  Human Services            Trust Funds                          40.6

7       20-  Social Security           Federal Disability           37.4    38.1
       8007  Administration            Insurance Trust Fund                 38.0

8       24-  Office of Personnel       Civil Service Retirement     36.1    36.2
       8135  Management                and Disability Fund                  36.4

9       20-  Department of Labor       Unemployment Trust Fund      30.9    31.0
       8042                                                                 30.4

10      75-  Department of Health and  Supplemental Security        27.3    26.7
       0406  Human Services            Income Program                       26.3

11      97-  Department of Defense--   Military Retirement Fund     26.8    26.5
       8097  Civil                                                          26.7

12      12-  Department of             Food Stamp Program           26.2    26.6
     3505\a  Agriculture                                                    25.4

13      21-  Department of Defense--   Military Personnel, Army     21.3    21.6
       2010  Military                                                       22.5

14      17-  Department of Defense--   Operation and                20.3    20.7
       1804  Military                  Maintenance, Navy                    20.3

15      24-  Office of Personnel       Payment to Civil Service     19.8    20.2
       0200  Management                Retirement and                       19.7
                                       Disability Fund

16      69-  Department of             Federal-Aid Highways         19.7    17.8
       8083  Transportation                                                 18.6

17      57-  Department of Defense--   Operation and                19.3    19.8
       3400  Military                  Maintenance, Air Force               20.4

18      17-  Department of Defense--   Military Personnel, Navy     18.4    18.3
       1453  Military                                                       18.6

19      36-  Department of Veterans    Compensation and             18.3    18.8
     0102\a  Affairs                   Pensions                             18.6

20      21-  Department of Defense--   Operation and                16.7    17.6
       2020  Military                  Maintenance, Army                    17.8

21      75-  Department of Health and  Family Support Payments      16.0    16.4
       1501  Human Services            to States                            16.5

22      57-  Department of Defense--   Military Personnel, Air      15.7    16.1
       3500  Military                  Force                                16.7

23      36-  Department of Veterans    Medical Care                 15.5    15.3
       0160  Affairs                                                        15.1

24      86-  Department of Housing     Annual Contributions for     14.1    14.0
       0164  and Urban Development     Assisted Housing                     15.1

25      57-  Department of Defense--   Research, Development,       13.6    12.2
       3600  Military                  Test, and Evaluation,                12.5
                                       Air Force

26      11-  Funds Appropriated to     Foreign Military Sales       13.1    13.4
       8242  the President             Trust Fund                           13.2

27      97-  Department of Defense--   Payment to Military          12.9    11.9
       0040  Civil                     Retirement Fund                      11.9

28      12-  Department of             Commodity Credit             11.4    11.3
       4336  Agriculture               Corporation Fund                      9.8

29      89-  Department of Energy      Atomic Energy Defense        11.4    11.1
     0220\a                            Activities                           11.8

30      57-  Department of Defense--   Aircraft Procurement,        10.9    10.4
       3010  Military                  Air Force                            10.3

31      75-  Department of Health and  National Institutes of        9.9    10.3
     9915\a  Human Services            Health                               10.2

32      97-  Department of Defense--   Research, Development,        9.8     9.2
       0400  Military                  Test, and Evaluation,                 8.3
                                       Defense-Wide

33      20-  Department of the         Payment Where Earned          9.8    10.0
       0906  Treasury                  Income Credit Exceeds                10.9
                                       Liability for Tax

34      97-  Department of Defense--   Operation and                 9.4     9.3
       0100  Military                  Maintenance, Defense-                 9.1
                                       Wide

35      17-  Department of Defense--   Research, Development,        9.0     8.6
       1319  Military                  Test, and Evaluation,                 8.0
                                       Navy

36      97-  Department of Defense--   Defense Health Program        9.0     9.0
       0130  Military                                                        9.2

37      17-  Department of Defense--   Shipbuilding and              8.8     9.0
       1611  Military                  Conversion, Navy                      9.1

38      57-  Department of Defense--   Other Procurement, Air        8.2     8.3
       3080  Military                  Force                                 8.2

39      60-  Railroad Retirement       Railroad Social Security      8.0     8.0
       8010  Board                     Equivalent Benefit                    7.9
                                       Account

40      91-  Department of Education   Student Financial             7.9     7.4
       0200                            Assistance                            7.1

41      12-  Department of             State Child Nutrition         7.5     7.2
       3539  Agriculture               Programs                              7.0

42      80-  National Aeronautics and  Research and Development      7.3     7.2
       0108  Space Administration                                            6.8

43      91-  Department of Education   Education for the             6.9     6.9
       0900                            Disadvantaged                         6.8

44      17-  Department of Defense--   Aircraft Procurement,         6.7     6.2
       1506  Military                  Navy                                  6.8

45      75-  Department of Health and  Payments to Social            6.5     5.8
       0404  Human Services            Security Trust Funds                  5.7

46      17-  Department of Defense--   Military Personnel,           5.7     5.7
       1105  Military                  Marine Corps                          5.9

47      21-  Department of Defense--   Research, Development,        5.5     5.5
       2040  Military                  Test, and Evaluation,                 5.7
                                       Army

48      80-  National Aeronautics and  Space Flight, Control,        5.2     4.7
       0105  Space Administration      and Data Communications               4.9

49      17-  Department of Defense--   Other Procurement, Navy       5.1     5.0
       1810  Military                                                        5.7

50      57-  Department of Defense--   Weapons Procurement, Air      5.0     4.7
       3020  Military                  Force                                 4.3

51      86-  Department of Housing     Community Development         5.0     3.7
       0162  and Urban Development     Grants                                3.7

52      16-  Department of Labor       Training and Employment       4.9     4.5
       0174                            Services                              4.4

53      75-  Department of Health and  Children and Families         4.4     4.1
       1536  Human Services            Services Programs                     4.3

54      86-  Department of Housing     Assistance for the            4.1     4.1
       0194  and Urban Development     Renewal of Expiring                   3.5
                                       Section 8 Subsidy
                                       Contracts

55      20-  Department of the         Tax Law Enforcement           4.0     4.0
       0913  Treasury                                                        3.9

56      17-  Department of Defense--   Weapons Procurement,          4.0     4.3
       1507  Military                  Navy                                  4.0

57      24-  Office of Personnel       Government Payment for        3.9     3.9
       0206  Management                Annuitants, Employees                 3.9
                                       Health Benefits

58      11-  Funds Appropriated to     Foreign Military              3.6     4.1
       1082  the President             Financing Grants                      4.0

59      91-  Department of Education   Special Education             3.5     3.6
       0300                                                                  3.0

60      60-  Railroad Retirement       Federal Payments to the       3.3     3.1
       0113  Board                     Railroad Retirement                   3.5
                                       Accounts

61      21-  Department of Defense--   National Guard                3.3     3.4
       2060  Military                  Personnel, Army                       3.4

62      12-  Department of             Special Supplemental          3.3     3.2
       3510  Agriculture               Food Program for Women,               3.2
                                       Infants, and Children

63      89-  Department of Energy      Energy Supply, R&D            3.1     3.1
       0224                            Activities                            3.0

64      11-  Funds Appropriated to     Economic Support Fund         3.0     2.8
       1037  the President                                                   2.8

65      75-  Department of Health and  Payments to States for        3.0     3.0
       1545  Human Services            Foster Care and Adoption              3.0
                                       Assistance

66      60-  Railroad Retirement       Rail Industry Pension         2.9     2.9
       8011  Board                     Fund                                  2.9

67      21-  Department of Defense--   Other Procurement, Army       2.9     2.8
       2035  Military                                                        3.1

68      75-  Department of Health and  Social Services Block         2.8     2.9
       1534  Human Services            Grant                                 2.7

69      51-  Federal Deposit           Bank Insurance Fund           2.8  -6.8 -
       4064  Insurance Corporation                                           9.5

70      20-  Department of the         Refunding Internal            2.7     2.7
       0904  Treasury                  Revenue Collections,                  3.1
                                       Interest

71      75-  Department of Health and  Health Resources and          2.7     2.6
       0350  Human Services            Services                              2.5

72      57-  Department of Defense--   Operation and                 2.6     2.6
       3840  Military                  Maintenance, Air                      2.6
                                       National Guard

73      68-  Environmental Protection  Water Infrastructure          2.6     2.4
       0103  Agency                    Financing                             2.0

74      16-  Department of Labor       Advances to the               2.6     3.0
       0327                            Unemployment Trust Fund               3.0
                                       and Other Funds

75      69-  Department of             Operating Expenses            2.5     2.6
       0201  Transportation                                                  2.5

76      86-  Department of Housing     Payments for Operation        2.5     2.5
       0163  and Urban Development     of Low Income Housing                 2.6
                                       Projects

77      10-  The Judiciary Department  Salaries and Expenses     2.4 2.3     2.2
       0920  of the Treasury           Payment to the                        2.1
        20-                            Resolution Funding                    2.3
       1851                            Corporation                           2.3

78      69-  Department of             Operations                    2.3     2.3
       1301  Transportation                                                  2.4

79      75-  Department of Health and  Substance Abuse and           2.3     2.4
     1362\a  Human Services            Mental Health Services                2.4

80      69-  Department of             Trust Fund Share of FAA       2.3     2.3
       8104  Transportation            Operations                            2.2

81      91-  Department of Education   Rehabilitation Services       2.2     2.4
       0301                            and Disability Research               2.2

82      21-  Department of Defense--   Operation and                 2.2     2.2
       2065  Military                  Maintenance, Army                     2.2
                                       National Guard

83      19-  Department of State       Diplomatic and Consular       2.2     1.8
       0113                            Programs                              1.8

84      49-  National Science          Research and Related          2.1     2.1
       0100  Foundation                Activities                            2.0

85      69-  Department of             Facilities and Equipment      2.1     2.0
       8107  Transportation                                                  2.4

86      75-  Department of Health and  Low Income Home Energy        2.1     2.1
       1502  Human Services            Assistance                            2.1

87      21-  Department of Defense--   Reserve Personnel, Army       2.1     2.1
       2070  Military                                                        2.1

88      91-  Department of Education   Federal Family Education      2.0     2.5
       0231                            Loan Program Account                  2.7

89      97-  Department of Defense--   Procurement, Defense-         2.0     1.9
       0300  Military                  Wide                                  1.8

90      15-  Department of Justice     Salaries and Expenses         1.9     2.0
       0200                                                                  2.1

91      15-  Department of Justice     Salaries and Expenses         1.9     1.9
       1060                                                                  1.9

92      69-  Department of             Grants-in-Aid for             1.9     1.9
       8106  Transportation            Airports                              1.6

93      17-  Department of Defense--   Operation and                 1.8     1.8
       1106  Military                  Maintenance, Marine                   1.9
                                       Corps

94      12-  Department of             Conservation Reserve          1.8     1.8
       3319  Agriculture               Program                               1.7

95      91-  Department of Education   School Improvement            1.8     1.6
       1000                            Programs                              1.5

96      75-  Department of Health and  Disease Control,              1.8     1.7
       0943  Human Services            Research, and Training                1.6

97      91-  Department of Education   Federal Family Education      1.8  -0.6 -
       0230                            Loan Liquidating Account              3.0

98      20-  Department of the         Processing Tax Returns        1.7     1.7
       0912  Treasury                  and Assistance                        1.8

99      21-  Department of Defense--   Aircraft Procurement,         1.7     1.7
       2031  Military                  Army                                  1.7

100     80-  National Aeronautics and  Research and Program          1.7     1.7
       0103  Space Administration      Management                            1.7

101     13-  Department of Commerce    Operations, Research,         1.7     1.7
       1450                            and Facilities                        1.7

102     20-  Environmental Protection  Hazardous Substance           1.6     1.6
       8145  Agency                    Superfund                             1.5

103     18-  Postal Service            Postal Service Fund           1.6     1.7
       4020                                                                  1.1

104     75-  Department of Health and  Indian Health Services        1.6     1.6
       0390  Human Services                                                  1.5

105     97-  Department of Defense--   National Guard and            1.5     1.4
       0350  Military                  Reserve Equipment                     2.0

106     17-  Department of Defense--   Reserve Personnel, Navy       1.5     1.5
       1405  Military                                                        1.6

107     89-  Department of Energy      General Science and           1.5     1.6
       0222                            Research Activities                   1.3

108     20-  Department of the         Information Systems           1.5     1.5
       0919  Treasury                                                        1.3

109     20-  Department of the         Salaries and Expenses         1.5     1.5
       0602  Treasury                                                        1.6

110     69-  Department of             Discretionary Grants          1.5     1.4
       8191  Transportation                                                  1.7

111     14-  Department of the         Operation of Indian           1.4     1.4
       2100  Interior                  Programs                              1.4

112     91-  Department of Education   Vocational and Adult          1.4     1.3
       0400                            Education                             1.3

113     21-  Department of Defense--   Procurement of Weapons        1.4     1.5
       2033  Military                  and Tracked Combat                    1.0
                                       Vehicles, Army

114     68-  Environmental Protection  Abatement, Control, and       1.4     1.3
       0108  Agency                    Compliance                            1.3

115     21-  Department of Defense--   Missile Procurement,          1.4     1.3
       2032  Military                  Army                                  1.4

116     11-  Funds Appropriated to     Functional Development        1.3     1.3
       1021  the President             Assistance Program                    1.5

117     21-  Department of Defense--   Family Housing, Army          1.3     1.3
       0702  Military                                                        1.3

118     58-  Federal Emergency         Disaster Relief               1.3     2.0
       0104  Management Agency                                               3.7

119     12-  Department of             National Forest System        1.3     1.5
       1106  Agriculture                                                     1.3

120     51-  Federal Deposit           FSLIC Resolution Fund         1.3   1.4 -
       4065  Insurance Corporation                                           0.7

121     57-  Department of Defense--   Operation and                 1.3     1.3
       3740  Military                  Maintenance, Air Force                1.3
                                       Reserve

122     21-  Department of Defense--   Procurement of                1.2     1.0
       2034  Military                  Ammunition, Army                      1.0

123     36-  Department of Veterans    National Service Life         1.2     1.2
       8132  Affairs                   Insurance Fund                        1.2

124     69-  Department of             Trust Fund Share of           1.2     1.7
       8350  Transportation            Expenses                              1.7

125     96-  Department of Defense--   Operation and                 1.2     1.3
       3123  Civil                     Maintenance, General                  1.2

126     57-  Department of Defense--   National Guard                1.2     1.2
       3850  Military                  Personnel, Air Force                  1.3

127     36-  Department of Veterans    Readjustment Benefits         1.2     1.2
       0137  Affairs                                                         1.1

129     12-  Department of             P.L. 480 Grants -Titles       1.2     1.3
       2278  Agriculture               I, II, and III                        1.3

130     97-  Department of Defense--   Base Realignment and          1.2     1.3
       0103  Military                  Closure Account                       1.7

131     96-  Department of Defense--   Construction, General         1.2     1.3
       3122  Civil                                                           1.0

132     14-  Department of the         Operation of the              1.1     1.0
       1036  Interior                  National Park System                  1.0

133     17-  Department of Defense--   Family Housing, Navy and      1.1     0.9
       0703  Military                  Marine Corps                          0.8

134     57-  Department of Defense--   Family Housing, Air           1.1     1.1
       0704  Military                  Force                                 1.1

135     57-  Department of Defense--   Military Construction,        1.1     0.9
       3300  Military                  Air Force                             1.0

136     11-  Funds Appropriated to     Contribution to the           1.1     0.9
       0073  the President             International                         0.9
                                       Development Association

137     21-  Department of Defense--   Operation and                 1.1     1.0
       2080  Military                  Maintenance, Army                     1.0
                                       Reserve

138     12-  Department of             Rural Housing Insurance       1.1     1.1
       2081  Agriculture               Fund Program Account                  1.0

139     97-  Department of Defense--   Real Property                 1.1     1.0
       0131  Military                  Maintenance, Defense                  1.0

140     75-  Department of Health and  Payments to States for        1.0     1.0
       1515  Human Services            Child Care Assistance                 0.8

141     20-  Department of Labor       Black Lung Disability         1.0     1.0
       8144                            Trust Fund                            1.0

142     64-  Tennessee Valley          Tennessee Valley              1.0     0.9
       4110  Authority                 Authority Fund                        1.2

143     19-  Department of State       Contributions to              1.0     0.9
       1126                            International                         0.8
                                       Organizations

144     15-  Department of Justice     Salaries and Expenses         1.0     1.1
       1217                                                                  1.0

145     68-  Environmental Protection  Program and Research          0.9     0.9
       0200  Agency                    Operations                            0.9

146     86-  Department of Housing     Home Investment               0.9     0.9
       0205  and Urban Development     Partnerships Program                  0.8

147     91-  Department of Education   Higher Education              0.8     0.9
       0201                                                                  0.8

148     17-  Department of Defense--   Military Construction,        0.8     0.7
       1205  Military                  Navy                                  0.6

149     15-  Department of Justice     Salaries and Expenses,        0.8     0.8
       0322                            United States Attorneys               0.8

150     36-  Department of Veterans    General Operating             0.8     0.8
       0151  Affairs                   Expenses                              0.8

151     69-  Department of             Formula Grants                0.8     0.3
       1129  Transportation                                                  0.2

152     21-  Department of Defense--   Military Construction,        0.8     0.7
       2050  Military                  Army                                  0.7

153     91-  Department of Education   Impact Aid                    0.7     1.0
       0102                                                                  0.8

154     75-  Department of Health and  Salaries and Expenses         0.7     0.9
     9911\a  Human Services                                                  0.8

155     47-  General Services          Federal Buildings Fund        0.7     0.8
       4542  Administration                                                  0.2

156     12-  Department of             Federal Crop Insurance        0.6     0.7
       4085  Agriculture               Corporation Fund                      1.0

157     15-  Department of Justice     Justice Assistance            0.6     0.8
       0401                                                                  0.7

158     19-  Department of State       Contributions for             0.5     1.1
       1124                            International                         1.0
                                       Peacekeeping Activities

159     12-  Department of             Rural Housing Insurance       0.5     0.4
       4141  Agriculture               Fund Liquidating Account              0.1

160     86-  Department of Housing     FHA General and Special       0.5   0.0 -
       4072  and Urban Development     Risk Insurance Funds                  0.3
                                       Liquidating Account

161     86-  Department of Housing     Salaries and Expenses,        0.5     0.4
       0143  and Urban Development     Including Transfer of                 0.5
                                       Funds

162     12-  Department of             Rural Development             0.4     0.4
       4155  Agriculture               Insurance Fund                        0.3
                                       Liquidating Account

163     75-  Department of Health and  Program Management            0.4     0.0
       0511  Human Services                                                  0.0

164     16-  Department of Labor       Special Benefits              0.2     0.2
       1521                                                                  0.1

165     36-  Department of Veterans    Loan Guaranty Revolving       0.2   0.1 -
       4025  Affairs                   Fund Liquidating Account              0.1

166     17-  Department of Defense--   National Defense Sealift      0.2     0.1
       4557  Military                  Fund                                  0.4

167     16-  Department of Labor       State Unemployment            0.1     0.0
       0179                            Insurance and Employment              0.2
                                       Service Operations

168     89-  Department of Energy      Bonneville Power              0.0     0.1
       4045                            Administration Fund                   0.2

169     04-  Legislative Branch        Government Printing           0.0     0.0
       4505                            Office Revolving Fund                 0.0

170     86-  Department of Housing     Housing for the Elderly       0.0     0.1
       4115  and Urban Development     or Handicapped Fund                   0.0
                                       Liquidating Account

171     47-  General Services          Information Technology        0.0     0.1
       4548  Administration            Fund                                  0.0

172     21-  Department of Defense--   Army Conventional             0.0     0.0
       4528  Military                  Ammunition Working                    0.1
                                       Capital Fund

173     96-  Department of Defense--   Revolving Fund                0.0   0.0 -
       4902  Civil                                                           0.1

174     20-  Department of the         Federal Financing Bank        0.0     0.0
       4521  Treasury                                                        0.0

175     47-  General Services          General Supply Fund           0.0     0.0
       4530  Administration                                                  0.0

176     75-  Department of Health and  Service, Supply, and          0.0     0.0
     9941\a  Human Services            Other Funds                           0.0

177     58-  Federal Emergency         National Flood Insurance      0.0   0.1 -
       4236  Management Agency         Fund                                  0.1

178     24-  Office of Personnel       Employees and Retired        -0.2  -1.0 -
     9981\a  Management                Employees Health                      0.7
                                       Benefits Fund

179     86-  Department of Housing     FHA Mutual Mortgage and      -0.3  -1.5 -
       4070  and Urban Development     Cooperative Housing                   0.2
                                       Insurance Funds
                                       Liquidating Account

180     12-  Department of             Agricultural Credit          -0.4  -0.1 -
       4140  Agriculture               Insurance Fund                        0.2
                                       Liquidating Account

181     89-  Department of Energy      Uranium Supply and           -0.4     0.1
     0226\a                            Enrichment Activities                 0.1

182     86-  Department of Housing     Guarantees of Mortgage-      -0.5  -0.6 -
       4238  and Urban Development     Backed Securities                     0.5
                                       Liquidating Account

183     12-  Department of             Rural Electrification        -0.9  -0.6 -
       4230  Agriculture               and Telephone Revolving               0.7
                                       Fund Liquidating Account

184     24-  Office of Personnel       Employees Life Insurance     -1.0  -1.1 -
       8424  Management                Fund                                  1.1

185     20-  Department of the         Exchange Stabilization       -1.1  -0.9 -
       4444  Treasury                  Fund                                  1.3

186     97-  Department of Defense--   Defense Business             -2.5     3.3
     4930\a  Military                  Operations Fund                       3.4

187     22-  Resolution Trust          RTC Revolving Fund           -4.3     3.5
       4055  Corporation                                                     4.1
--------------------------------------------------------------------------------
\a Represents a combination of accounts to ensure comparability (1)
between original and/or revised estimates and actual outlays or (2)
between fiscal year 1994 outlays and prior year outlays. 


ACCOUNTS WITH MORE THAN A
10-PERCENT DIFFERENCE BETWEEN
REVISED ESTIMATES AND ACTUAL
OUTLAYS AT LEAST THREE TIMES
BETWEEN FISCAL YEARS 1991 AND 1994
========================================================= Appendix III

                                                           (Dollars in billions, sorted in
                                                         descending order of absolute average
                                                                 percentage change.)


                                                                         Actual              Actual              Actual              Actual
                                                Account       Account       net   Percent       net   Percent       net   Percent       net   Percent
      Agency              Account               type             code   outlays    change   outlays    change   outlays    change   outlays    change
----  ------------------  --------------------  ----------  ---------  --------  --------  --------  --------  --------  --------  --------  --------
1     Department of       Rural                 Revolving     12-4230        \a        \a      -1.0    -271.2      -1.4     145.2      -0.7      27.7
      Agriculture         Electrification and   fund
                          Telephone Revolving
                          Fund Liquidating
                          Account

2     Federal Emergency   National Flood        Revolving     58-4236      -0.2     341.0      -0.1     -31.6       0.5   -3525.9      -0.1    -176.0
      Management Agency   Insurance Fund        fund

3     Department of       Program Management    Discretion    75-0511       0.1     120.8      -0.1     -59.4       0.1     -49.6       0.0    -139.8
      Health and Human                          ary
      Services

4     Department of       FHA Mutual Mortgage   Revolving     86-4070        \a        \a       0.9    -603.1       0.2    -191.5      -0.2     -83.1
      Housing and Urban   and Cooperative       fund
      Development         Housing Insurance
                          Funds Liquidating
                          Account

5     Department of       Uranium Supply and    Revolving         89-      -0.1      11.3      -0.3      40.1      -0.4     284.1       0.1     -17.4
      Energy              Enrichment            fund\b         0226\c
                          Activities

6     Legislative Branch  Government Printing   Revolving     04-4505       0.0     187.5       0.0     132.0       0.0   -2714.1       0.0     163.4
                          Office Revolving      fund
                          Fund

7     Federal Deposit     Bank Insurance Fund   Revolving     51-4064       7.4     -53.6       3.7     -88.9      -9.8    -345.3      -9.5      39.0
      Insurance                                 fund
      Corporation

8     Department of       Defense Business      Revolving         97-      -1.9    -427.1       3.2     -43.0      -4.9      71.9       3.4       0.4
      Defense--Military   Operations Fund       fund           4930\c

9     Department of       State Unemployment    Discretion    16-0179       0.0    -199.7       0.0    -259.6       0.0      -1.3       0.2     616.7
      Labor               Insurance and         ary
                          Employment Service
                          Operations

10    Department of       Loan Guaranty         Revolving     36-4025        \a        \a       0.1     -72.2       0.1     -71.4      -0.1    -165.5
      Veterans Affairs    Revolving Fund        fund
                          Liquidating Account

11    Resolution Trust    RTC Revolving Fund    Revolving     22-4055      50.7     -40.0      -9.0    -122.1     -19.2     386.9       4.1      16.6
      Corporation                               fund

12    Department of       Bonneville Power      Revolving     89-4045      -0.4      81.5       0.4   -4604.5       0.6       4.7       0.2     118.6
      Energy              Administration Fund   fund

13    Tennessee Valley    Tennessee Valley      Revolving     64-4110       0.0    -139.5       1.5     295.1       1.6      19.4       1.2      32.6
      Authority           Authority Fund        fund

14    Department of       Federal Family        Mandatory    91-0230\        \a        \a       1.5     -20.4       3.2      16.5      -3.0     447.5
      Education           Education Loan
                          Liquidating Account

15    General Services    Federal Buildings     Revolving     47-4542       0.3     -58.0       0.3      -7.4       0.6     -46.3       0.2     -81.3
      Administration      Fund                  fund

16    Export-Import Bank  Export-Import Bank    Revolving    83-4027\        \a        \a      -0.2    -155.9      -1.0     -24.2      -1.0      49.7
      of the United       of the United States  fund
      States              Liquidating Account

17    General Services    Information           Revolving     47-4548       0.1      38.4       0.0     -89.8       0.0     -77.6       0.0     -80.5
      Administration      Technology Fund       fund

18    Department of       Housing for the       Revolving    86-4115\        \a        \a       0.5     -25.5       0.1     -55.3       0.0    -118.0
      Housing and Urban   Elderly or            fund
      Development         Handicapped Fund
                          Liquidating Account

19    Department of       FHA General and       Revolving    86-4072\        \a        \a       1.1      21.8       0.3     -68.6      -0.3   -3287.0
      Housing and Urban   Special Risk          fund
      Development         Insurance Funds
                          Liquidating Account

20    Department of       Payments to States    Discretion    75-1515       0.0    -100.0       0.0    -100.0       0.4      -0.4       0.8     -19.8
      Health and Human    for Child Care        ary
      Services            Assistance

21    Department of       Rural Housing         Revolving    12-4141\        \a        \a       1.3     -18.9       0.2     -67.5       0.1     -73.0
      Agriculture         Insurance Fund        fund
                          Liquidating Account

22    Department of the   Exchange              Revolving     20-4444      -2.2      22.5      -2.3      46.6      -1.4      37.9      -1.3      43.4
      Treasury            Stabilization Fund    fund

23    Department of       Commodity Credit      Revolving    12-4338\        \a        \a       0.5     -46.0       0.5     -49.8       0.5      19.7
      Agriculture         Corporation           fund
                          Guaranteed Loans
                          Liquidating Account

24    Office of           Employees and         Revolving     24-9981      -0.9      11.0      -0.4      24.3      -0.9     498.2      -0.7     -32.3
      Personnel           Retired Employees     fund
      Management          Health Benefits Fund

25    Funds Appropriated  Functional            Discretion    11-1021       1.6      46.4       1.4      27.2       1.5      15.3       1.5      17.6
      to the President    Development           ary
                          Assistance Program

26    Federal Emergency   Disaster Relief       Discretion    58-0104       0.6     -32.9       0.9      36.7       2.3      -9.9       3.7      85.0
      Management Agency                         ary

27    Federal Deposit     FSLIC Resolution      Revolving     51-4065       8.6     -22.7       8.5      20.6       2.4     -38.4      -0.7    -151.6
      Insurance           Fund                  fund
      Corporation

28    Department of       Pension Benefit       Revolving     16-4204      -0.8      30.1      -0.7      33.3      -1.5      91.2      -0.4     -57.5
      Labor               Guaranty Corporation  fund
                          Fund

29    Department of       Home Investment       Discretion    86-0205       0.0    -100.0       0.0     -90.9       0.2     -23.7       0.8     -10.7
      Housing and Urban   Partnerships Program  ary
      Development

30    Department of       National Guard and    Discretion    97-0350       1.3      12.1       1.6      15.4       1.7      -2.4       2.0      42.7
      Defense--Military   Reserve Equipment     ary

31    Department of       Rural Development     Revolving    12-4155\        \a        \a       0.7     -10.6       0.5     -15.4       0.3     -26.5
      Agriculture         Insurance Fund        fund
                          Liquidating Account

32    Department of       Military              Discretion    17-1205       0.8     -25.2       1.0       5.0       0.9     -15.5       0.6     -21.5
      Defense--Military   Construction, Navy    ary

33    Department of       Special Benefits      Mandatory     16-1521       0.2     -14.0       0.2      16.7       0.2     -16.6       0.1     -37.1
      Labor

34    Department of       Justice Assistance    Discretion    15-0401       0.5     -18.2       0.6      14.8       0.6     -18.6       0.7     -22.6
      Justice                                   ary

35    Department of       Other Procurement,    Discretion    21-2035       4.8      12.1       3.8       9.4       3.9      19.4       3.1      11.4
      Defense--Military   Army                  ary

36    Department of       Assistance for the    Discretion    86-0194       0.4     -32.5       1.5      19.5       2.5     -17.8       3.5     -15.2
      Housing and Urban   Renewal of Expiring   ary
      Development         Section 8 Subsidy
                          Contracts

37    Department of       Other Procurement,    Discretion    17-1810       6.2      16.2       6.1      11.1       6.4       6.2       5.7      13.7
      Defense--Military   Navy                  ary

38    Department of       Base Realignment and  Discretion    97-0103       0.2      -7.4       0.4     -33.6       0.8      19.7       1.7      28.1
      Defense--Military   Closure Account       ary

39    Department of the   Refunding Internal    Mandatory     20-0904       2.8      24.6       3.3      23.9       2.1     -18.0       3.1      14.5
      Treasury            Revenue Collections,
                          Interest

40    Department of       Procurement of        Discretion    21-2033       2.5      -9.4       2.2     -17.5       2.1      16.5       1.0     -33.0
      Defense--Military   Weapons and Tracked   ary
                          Combat Vehicles,
                          Army

41    Department of       Military              Discretion    57-3300       0.8     -27.6       0.9      21.0       0.9     -19.2       1.0       4.1
      Defense--Military   Construction, Air     ary
                          Force

42    Department of       Guarantees of         Revolving    86-4238\        \a        \a      -0.4      25.8      -0.5      26.4      -0.5     -13.9
      Housing and Urban   Mortgage-Backed       fund
      Development         Securities
                          Liquidating Account

43    Postal Service      Postal Service Fund   Revolving     18-4020       1.3    2137.8       0.7     -20.1       1.4     -11.4       1.1     -36.9
                                                fund

44    Department of       Federal Crop          Revolving     12-4085       0.5     -11.4       0.6       7.9       0.1     -73.4       1.0      38.8
      Agriculture         Insurance             fund
                          Corporation Fund

45    Department of       School Improvement    Discretion    91-1000       1.4     -11.4       1.5     -12.7       2.0      18.5       1.5     -11.3
      Education           Programs              ary

46    Department of       Construction,         Discretion    96-3122       1.1      22.3       1.2      33.9       1.0      -7.5       1.0     -26.8
      Defense--Civil      General               ary
-----------------------------------------------------------------------------------------------------------------------------------------------------
\a Account created as a result of the Credit Reform Act of 1990. 
Pre-1992 data are either nonexistant or not comparable.  Therefore,
no 1991 data are shown. 

\b This account includes the activities of the United States
Enrichment Corporation. 

\c Represents a combination of accounts to ensure comparability
between fiscal years. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV


   ACCOUNTING AND INFORMATION
   MANAGEMENT DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix IV:1

Barbara D.  Bovbjerg, Assistant Director
Robert M.  Sexton, Evaluator-in-Charge
Sheri L.  Powner, Evaluator
John W.  Mingus, Evaluator
Christian G.  Stockel, Auditor


   OFFICE OF THE CHIEF ECONOMIST
-------------------------------------------------------- Appendix IV:2

Richard S.  Krashevski, Senior Economist


*** End of document. ***