April 30, 1975
Page 12531
CONGRESSIONAL BUDGET DETERMINATION
The Senate continued with the consideration of the concurrent resolution (S. Con. Res. 32) relating to a determination of the Congressional Budget for the U.S. Government for the fiscal year beginning July 1, 1975.
Mr. MUSKIE. Mr. President, the distinguished Senator from Kansas is about to offer an amendment. Before he does, I should like to suggest the inclusion in the RECORD of some material that appears in the committee report.
As I told the Senate yesterday, in this year's concurrent resolution we did not include the subceilings on the 16 functional categories of the budget for a number of reasons. Nevertheless, our conclusions, as a committee, on the overall spending and deficit numbers were related to our evaluation of the 16 functional categories and related to a series of decisions and votes that members of the committee cast in order to indicate their priorities and their assumptions with respect to spending in these 16 categories.
After the Senate and the House have acted finally on this first concurrent resolution, it will be the responsibility of the Budget Committees to track all legislation that moves through Congress in connection with those assumptions on functional categories. I think it would be helpful if we included in the RECORD at this point, Mr. President, chapter 8 of the committee report, which is an analysis of the 16 functional categories and the assumptions of the Budget Committee with respect to each of them. So I ask unanimous consent that chapter 8 be printed in the RECORD, as a guide to Members, as we proceed through the weeks and months ahead to deal with the decisions we take today.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
CHAPTER VIII. BUDGET PROGRAMS BY FUNCTION
This section of the report discusses, by major budget function, the various program proposals that were considered by the Budget Committee, as well as the Budget Committee's recommendation in each case.
The following points should be noted in using this material:
1. PRESIDENT'S ADJUSTED BUDGET REQUEST
(MARCH 12)
Changes in the budget estimates occur more or less continuously as actions and events unfold. On March 12, 1975, the Director of the Office of Management and Budget testified before the Senate Budget Committee and updated the estimates in the original budget of February 3. These updated estimates are reflected in the various tables in this section in entries entitled "President's adjusted budget request (March 12)."
The Budget Director testified before a subcommittee of the Joint Economic Committee on April 4, 1975. In that testimony, he provided later updates of the budget estimates. While these later changes are included in the various tables in this chapter, they are not carried as part of the President's adjusted budget request. For information, the President's 1976 budget estimates as of April 4, 1975, are shown in table IV on page 39.
2. TOTAL POTENTIAL
This term is used in the tables throughout this section. It refers to the total of all recommendations made to the Budget Committee by the Senate authorizing committees pursuant to Section 301(c) of the Congressional Budget Act, as well as additional suggestions and possibilities arising from other sources. This is the total list of possibilities considered by the Budget Committee in arriving at its recommendations.
It should be noted that in many cases the suggestions of the Senate authorizing committees are tentative and subject to further refinement as the work of the committees proceeds. In addition, some dollar estimates were not included in the committee reports. In these cases, estimates were made by Budget Committee staff based on the information contained in the reports.
3. APPROPRIATIONS COMMITTEE SUGGESTIONS
The tables in this section include the Senate Appropriations Committee suggestions for budget authority and outlays for each major budget function. It should be noted that as a general rule, the Senate Appropriations Committee did not consider the effect of possible new legislation in arriving at its suggestions for budget authority and outlays.
4. FISCAL YEARS
All years referred to in this chapter are fiscal years, unless otherwise noted.
[Tables omitted]
(050) NATIONAL DEFENSE
National Defense includes the military programs of the Department of Defense, military assistance, atomic energy defense programs, and other defense-related activities. The authorizing Committees with jurisdiction over the national defense function include Armed Services, Interior and Insular Affairs (development of Naval Petroleum Reserves), and Foreign Relations (military assistance). The Joint Committee on Atomic Energy has jurisdiction over atomic energy defense activities.
President's budget request
The President proposes $107.7 billion in budget authority and estimates outlays of $94.0 billion or 27 percent of all Federal spending. The major features of his request are:
Military programs.– These represent about 95 percent of the national defense function, including $101.7 billion in budget authority (up 18.5 percent from 1975) and $89.8 billion in outlays (an increase of 8.2 percent). Major initiatives include:
Continued modernization of strategic nuclear forces.
An increase in ground combat units within existing manpower ceilings, and increased procurement and development of ground forces combat weapons, support equipment and munitions.
Additional production and development of weapons systems and munitions for the tactical air forces.
Continued modernization of naval forces, including procurement of new ships, submarines and weapons.
Improvements in strategic airlift capabilities, plus increases in war reserve stocks, in modification and overhaul of ships and aircraft and in training and equipment for the Reserve and National Guard forces.
Increased emphasis on exploratory research and technology in military-related fields.
Large increases in military construction for health facilities, troop housing and strategic nuclear forces.
The President's budget places a high priority on increases in defense purchases, for which budget authority rises $13.5 billion, or 31 percent, above 1975. This increase includes $2.3 billion to cover underestimated costs of Navy shipbuilding programs approved in prior years, about $5.0 billion for inflation, and over $5.0 billion in real growth in procurement, operations and maintenance, research and development, and military construction.
The large increase in purchases represents the first stage in a 5-year plan of continued increases in defense operations and modernization programs at the rate of 4 percent a year in constant dollars.
In current dollars, the national defense function is projected to grow from $91.3 billion in 1975 to $149.4 billion in 1980. A number of significant long-range programs with relatively small start-up costs that rise sharply in future years (so-called "wedges") , are implicit in the 1976 request and the 5-year projection. These include:
Building a fleet of B-1 bombers, with annual production costs rising above $3.0 billion by 1980. (1976 outlays $0.6 billion.)
Procurement of seven Trident submarines at a cost of over $1.0 billion each. (1976 outlays $1.5 billion.)
Equipping and operating three new Army divisions, three new Air Force wings and additional Navy units, at a cost exceeding $4.0 billion a year. (1976 Outlays $0.8 billion.)
Meeting civilian and military payrolls and financing military retirement, with total costs increasing at a rate of nearly $4.0 billion a year through 1980.
In contrast to the proposed large increase in budget authority, 1976 purchase outlays are estimated to rise by only $5.8 billion, or 14.9 percent. The major portion of the large increase in budget authority would be expended in later years. The budget projects defense outlays for military programs in 1977 of $102.0 billion.
The President's budget also recommends legislation to hold civilian, military, and military retired pay increases to 5 percent, and to permit the sale of petroleum from naval reserves as a first step toward creation of a national strategic petroleum reserve.
Military assistance
These programs include grants and credit sales to other nations. They are administered by the Department of Defense. The President asked for $4.8 billion in new budget authority (offset by $0.2 billion in receipts) plus a $0.2 billion appropriation to reimburse military departments for emergency delivery of defense stocks to Cambodia in 1974. Of the total, $1.3 billion was requested for South Vietnam. An additional $2.1 billion in budget authority results from net increases in foreign military sales orders in the Foreign Military Sales Trust Fund. Outlays for these programs are estimated to be $2.8 billion, plus $0.2 billion from the FMS Trust Fund – a $1.2 billion increase (66 percent) over estimated 1975 outlays.
Atomic energy
Defense programs include underground testing, nuclear weapons development and production, and naval propulsion system. Budget authority increases by $0.1 billion to $1.9 billion. Outlays increase by $0.2 billion.
Defense related activities
The major change in these programs is a reduction of $0.6 billion in receipts from the sale of excess strategic commodities from piles managed by the General Services Administration, reflecting lower demand and the exhaustion of disposal authority for certain commodities. Of the remaining $0.6 billion in estimated receipts, $0.5 billion depends upon enactment by Congress of net stockpile disposal legislation.
Suggestions of the authorizing committees
The Armed Services Committee advised the Budget Committee to use the President's recommended totals for this category, but stated that reductions might be recommended later
Estimates from other authorizing committees implied increases in national defense budget authority of $1.8 billion and increases in outlays of $2.0 billion above the President's budget. The Post Office and Civil Service Committee proposed removing the President's 5 percent cap on Federal pay increases, which would trigger increases in civilian and military retired pay in the defense category of $1.8 billion. The Interior and Insular Affairs Committee does not foresee passage of legislation to permit sales of Naval petroleum reserves, which would reduce the President's anticipated receipts by $0.4 billion. Finally, the Foreign Relations Committee proposed to reduce military assistance funds by $0.2 billion.
Suggestions of the Appropriations Committee
In its report to the Budget Committee, the Senate Appropriations Committee suggests target reduction of $5.2 billion in budge authority for the national defense function, resulting in an outlay reduction of $2.1 billion. These cuts all were allocated to the military programs of the Department of Defense (which include military assistance for South Vietnam).
Additional budget issues
Three issues which may affect 1976 outlays are not addressed in the President's budget or the Committee letters:
A request for additional military assistance to Israel could increase the budget by as much as $2.5 billion in authority and $1.0 billion in 1976 outlays.
Funds may be required for emergency military action in Southeast Asia to rescue American citizens with outlays of $0.1 billion.
An amendment may be introduced to increase the defense budget by an additional $5 billion in budget authority and $1.5 billion in outlays to further accelerate investment in major weapons systems.
Budget Committee Recommendation
The Committee recommends $101.0 billion in budget authority and $91.2 billion in outlays for 1976.
The committee is not persuaded by the arguments in the President's budget that 1976, a year of extraordinary fiscal strain, must be the year of major initiatives to expand or recoup foregone defense investments.
The Committee's recommended budget levels generally reflect the assessment submitted by the Appropriations Committee, combined with the Committee's own judgment. The recommendations also reflect an adjustment for a more realistic 10 percent rate of inflation from 1975 to 1976 on defense purchases than the 15 percent rate which was used by the Administration.
The Committee recognizes that the recommended funding levels will allow only the most modest increases for high-priority force modernization.
The Committee did not examine all of the major policy issues raised by the programs in this functional area in order to arrive at recommended outlay and budget authority limits.
Recognizing that the Armed Services and Appropriations Committees have jurisdiction over line-items, the Committee intends to focus on overall trends and broad policy issues.
The Committee considered using a mission approach to assess the content of the defense budget. Such an approach would allow the total resources devoted to each major defense mission to be considered in light of foreign policy requirement and defense strategy. It is the Committee's view that such a mission approach should be pursued next year to provide a framework for considering levels of outlays and budget authority. The Committee looks forward to working with the Armed Services and Appropriations Committees in developing such a mission framework.
The Committee also is aware that the spread between budget authority and outlay levels will affect the mix of spending and determine the degree to which new investments for the future can be initiated. This means the longer range, 5-year projections as well as next year's budget levels, must be an integral part of the Committee’s deliberations.
(150) INTERNATIONAL AFFAIRS
International Affairs includes the conduct of foreign affairs, foreign information and exchange activities, the Peace Corps, Food for Peace, and foreign assistance (except military). Committees of jurisdiction are Foreign Relations and Agriculture and Forestry.
President's budget request
For 1976 the President requests $12.6 billion in budget authority, an increase of $9.1 billion, or 270 percent above the amended 1975 budget. Estimated outlays in the President's budget rise 26 percent from $5.1 billion to $6.4 billion. The major spending programs are:
Budget authority of $7.0 billion and outlays of $1.0 billion are proposed for the U.S. share of a $25.0 billion multinational "special financing facility" for industrialized nations suffering oil-induced balance-of-payments difficulties.
Security supporting assistance (largely in the Middle East) accounts for $0.6 billion in budget authority and $1.2 billion in outlays (about two-thirds for Israel), while Indochina reconstruction is allocated $0.9 billion in new budget authority (up $0.3 billion from 1975), resulting in $0.8 billion in estimated outlays.
Food for Peace budget authority rises 72 percent to $1.3 billion while outlays decline from $1.3 billion to $1.0 billion.
State Department outlays increase 14 percent to $0.7 billion, while foreign information and exchange outlays (mainly the United States Information Agency) rise 18 percent to $0.4 billion.
Net outlays for the Export-Import Bank, an off-budget agency until October 1, 1976, will rise 9 percent to $1.8 billion.
Suggestions of the authorizing committees
Budget estimates received from the authorizing committees would decrease international affairs budget authority and outlays. The changes:
Reduce Indochina postwar reconstruction by $0.4 billion in budget authority and by $0.1 billion in outlays.
Remove the proposed 5 percent cap on foreign service retirement to add $5 million.
Suggestions of the Appropriations Committee
In its report to the Budget Committee, the Appropriations Committee said:
The fiscal year 1975 Foreign Assistance and Related Programs Appropriation Act is presently before the Committee.
For this reason we are unable to develop comprehensive target estimates for new budget authority or outlays in fiscal year 1976.
The uncertain nature of the situation in Southeastern Asia makes projections in this area extremely hazardous. However, we anticipate ultimately reporting a fiscal year 1976 bill well below the proposals contained in the President's fiscal year 1976 budget. When this situation is clarified, the Subcommittee will furnish these target projections to the Full Committee.
Additional budget issues
Two activities which may affect 1976 outlays are not addressed directly in the President's budget or in the Committee letters:
– Additional economic assistance to Israel.
– Emergency refugee relief and economic assistance in Southeast Asia.
No official estimates of outlays are available at this time for either program. Unofficial estimates of additional economic aid to Israel range from $0.1 billion to $0.2 billion in budget authority and outlays, and for emergency assistance to Southeast Asia from $0.3 to $0.7 billion in budget authority and outlays. (Additional military assistance for Israel amounting by unofficial estimates to as much as $2.5 billion in authority would come under the national defense function.)
Budget Committee recommendation
The Committee recommends $6.0 billion in budget authority and $4.9 billion in outlays for 1976.
The Committee reduced the President's budget for foreign economic and financial assistance by $0.6 billion in budget authority and $0.5 billion in outlays. The reduction primarily involves funds for Indochina in line with the general thrust of recommendations by the Foreign Relations Committee. The Committee recommends that any necessary humanitarian and refugee aid be taken from the funds budgeted for Indochina reconstruction.
The Committee reduced the proposed "special financing facility" by $6.0 billion in budget authority and $1.0 billion in outlays. The outlay reduction is based on the Committee's understanding that the facility is likely to involve guarantees rather than direct loans. The reduction in budget authority takes into account uncertainty about the final form of the proposal and is not a judgment about the merits of the facility. The Committee agreed that if the remaining $1.0 billion in budget authority for the facility is not needed, it should not be used for any other purpose.
(250) GENERAL SCIENCE, SPACE AND TECHNOLOGY
General Science, Space and Technology covers the civilian space program administered by NASA, the basic research programs of the National Science Foundation and the Energy Research and Development Administration, and an earth sciences program largely administered by the U.S. Geological Survey.
The category does not cover a $2.9 billion space program conducted by the Defense Department or an estimated $15.7 billion in research and development which is carried out by Federal agencies as part of their regular missions.
Senate committees of jurisdiction are Aeronautical and Space Sciences (NASA), Labor and Public Welfare (NSF), the Joint Committee on Atomic Energy (ERDA nuclear programs), and Interior and Insular Affairs (ERDA's non-nuclear programs and Geological Survey).
President's Budget Request
For 1976 the President proposed $4.7 billion in budget authority and $4.6 billion in outlays, an increase from 1975 of $0.4 billion in each category. The outlay proposals include $3.2 billion for the civilian space program, $0.7 billion for NSF, $0.4 billion for ERDA's basic research activity, and $0.3 billion for the Geological Survey.
The President's program continues a trend of diminishing space activity. No major new projects are proposed and NASA's budget in 1966 dollars would be $1.9 billion – about one-third of the peak NASA budget. To have maintained a $3.4 billion "constant level budget" as agreed to in 1972 by NASA, Congress and the Office of Management and Budget, space outlays would have to be $4.0 billion in 1976. The President's budget includes $1.2 billion for the space shuttle and funds for other projects including an earth resources satellite (LANDSAT-C).
The President's budget provides $0.8 billion in new budget authority for the National Science Foundation, an increase of $78 million.
Suggestions of the authorizing committees
Budget estimates of authorizing committees would increase general science, space, and technology outlays by $83 million and budget authority by $47 million. Most of the increases were suggested by the Committee on Labor and Public Welfare to expand NSF programs in science education. No changes in the civilian space program were suggested by the Committee on Aeronautical and Space Sciences.
The Interior and Insular Affairs Committee suggests a $0.5 billion increase for ERDA non- nuclear programs. Some of this spending could appear in the basic research subcategory of general science, space, and technology.
Suggestions of the Appropriations Committee
The Senate Appropriations Committee offered no suggestions for change in either budget authority or outlays as proposed by the President.
Budget Committee recommendations
The Committee recommends $4.7 billion in budget authority and $4.6 billion in outlays for 1976, which is in line with the recommendation of the authorizing committee and the President's proposal.
The committee explored the possibility of a reduction in the space shuttle program but decided that it should be continued at current levels.
(300) NATURAL RESOURCES, ENVIRONMENT, AND ENERGY
Natural Resources, Environment, and Energy activities include:
Water resources programs of the Soil Conservation Service, the Corps of Engineers, the Bureau of Reclamation, and the Tennessee Valley Authority;
Power programs of the Department of the Interior;
Conservation and land management programs of the Bureau of Land Management, the Soil Conservation Service, and the Forest Service;
Coastal zone programs of the National Oceanic and Atmospheric Administration;
Recreational programs of the National Park Service, the Bureau of Outdoor Recreation, and the Fish and Wildlife Service;
Pollution control programs of the Environmental Protection Agency; and
Energy programs of the Energy Research and Development Administration, the Nuclear Regulatory Commission, and the Federal Power Commission.
Committees with jurisdiction over these programs are Agriculture and Forestry (soil conservation and forestry) ; Commerce (coastal zones and energy) ; Interior and Insular Affairs (energy, land management, recreation, and reclamation) ; Public Works (pollution control and water resources) and the Joint Committee on Atomic Energy (nuclear energy).
Programs within natural resources, environment, and energy produce significant amounts of revenue. The Bureau of Land Management estimates receipts for 1976 at $0.5 billion, exclusive of the Outer Continental Shelf mineral leasing revenues. The Forest Service's estimated receipts are $0.5 billion. The Energy Research and Development Administration's estimated receipts are $0.7 billion.
President's budget request
The President proposes $12.2 billion in budget authority and $10.1 billion in outlays for natural resources, environment, and energy. Of the outlay total, $3.3 billion is for water resources/power; $0.9 billion is for conservation/land management; $0.9 billion is for recreation; $3.0 billion is for pollution control; $2.2 billion is for energy; and $0.6 billion is for other natural resource programs; less $0.9 billion offsetting receipts.
The $10.1 billion in outlays is $0.7 billion more than the $9.4 billion in 1975 outlays, an increase of 7 percent, the bulk of which is for energy programs.
For many natural resource programs (soils, forests, parks, land management, fish and wildlife), the President's proposed outlays are below levels needed to keep up with inflation. This lack of real dollar increases is aggravated by severe personnel ceilings placed upon the natural resource agencies.
The President's budget anticipates outlays of $2.4 billion for wastewater treatment facilities, an estimate that may be high given the record of previous estimates. The figure is far below the level of outlays envisioned by Congress in 1972 water quality legislation. Administration and court- ordered decisions to release some $9.0 billion in impounded water quality funds will increase 1976 outlays by only $50 million.
The President proposed to spend $2.2 billion on energy programs in this category, of which $1.6 billion is to be administered by ERDA. Total energy outlays increase $0.8 billion over 1975, of which $0.8 billion is administered by ERDA.
Within the $1.6 billion in ERDA's energy outlays, $0.3 billion is budgeted for fossil energy development, an increase of $118 million over 1975 outlays. The largest component – and the largest increase – is for coal research. The largest percentage increase among ERDA energy programs is in solar energy programs where 1976 outlays are budgeted at $57 million, an increase of 551 percent over the 1975 level of $8.8 million.
ERDA's outlays for fusion power R&D are budgeted at $120 million, an increase of nearly 10 percent over 1975. Funds proposed for fission power R&D are $0.4 billion, an increase of $59 million or 16 percent over 1975. The main project within the fission area continues to be the liquid metal breeder reactor (LMFBR) where outlays for 1976 are expected to be nearly $0.3 billion.
Suggestions of the authorizing committee
Budget estimates of authorizing committees would increase 1976 outlays by $7.7 billion above the President's adjusted budget.
The Agriculture and Forestry Committee recommends increases in outlays for soil conservation and forestry. The Interior and Insular Affairs Committee recommends additional outlays primarily for non-nuclear energy research and parklands. The Public Works Committee recommends increased outlays for EPA's operating budget and wastewater construction grant program. The Commerce Committee recommends creation of a Department of Environment and Oceans and outlays for development of energy-efficient automobiles. Both the Commerce and Interior and Insular Affairs Committees recommend outlays for a National Energy Production Board and assistance to coastal States which would be affected by offshore oil production.
The dollar amounts of the proposals are:
In billions
Committee: of dollars
Agriculture and Forestry 0.3
Interior and Insular Affairs 2.2
Commerce 2.8
Interior and Insular Affairs/Commerce 1.4
Public Works 1.0
Total 7.7
Suggestions of the Appropriations Committee
The Committee would raise the President’s 1976 outlays as follows:
[In millions of dollars]
Energy R. & D $372.0
Water resources/power $160.0
Total $532.0
Additional Budget Issues
Four other budgetary items could affect natural resources, environment, and energy outlays and budget authority. The first is H.R. 4481, the Emergency Employment Appropriations Act now in the senate Appropriations Committee, which, if enacted, could add approximately $0.2 billion to outlays. The second is a possible authorization for EPA construction grants (the program expired in 1975) that could add $5.0 – 9.0 billion in budget authority for 1976. The third item is a revised 1976 ERDA budget expected from the Administration in a few months that will likely increase the energy budget authority and outlays by $0.1– 0.2 billion. Effort will probably be made to increase ERDA spending for environmental and safety research above the President's $0.2 billion estimate. The fourth item is a possible acceleration of Corps of Engineers and Bureau of Reclamation projects that could increase outlays by $0.7.
Budget Committee Recommendation
The Committee recommends $13.4 billion budget authority and $11.7 billion outlays for 1976, an increase of $1.6 billion in outlays over the president's adjusted proposal.
The Committee's recommendation for this function represents endorsement of both the authorizing committees, and the Administration's conviction that energy independence and diversification of energy sources are important national goals requiring significant commitment of new resources this year. The committee's recommendation also reflects the views of the authorizing committees that modest increases for natural resources and environmental protection are warranted.
The Committee did not recommend new budget authority for the Environmental Protection Agency's wastewater treatment construction program because adequate budget authority, having recently been released by court action, remains available from previous years. The funds are adequate to meet EPA requirements in 1976.
(350) AGRICULTURE
Agriculture covers all price support and loan operations for farmers, plus all Agriculture Department research activities. Major agricultural programs under other functions include food stamps (Income Security, $3.6 billion) and Food for Peace (International Affairs, $1.3 billion). Agriculture and Forestry is the only committee of jurisdiction.
President's budget request
Agriculture outlays are expected to be $1.8 billion in 1978, and budget authority $4.3 billion.
Farm income stabilization outlays are expected to decrease by about 1 percent. This decrease is a result of the Administration's proposal for a "free flow" in the commodities market through the elimination of income and price stabilization mechanisms. Specifically, the Administration has removed Federal restrictions on planted acreage and is proposing legislation to reduce Federal controls over the production of rice, peanuts, and extra-long staple cotton.
The estimate of agricultural research and services outlays for 1976 is $0.9 billion, which represents an increase of $49 million over 1976.
Suggestions of the authorizing committee
The budget estimates received from the Agriculture and Forestry Committee would increase outlays by slightly less than $0.6 billion above the President's budget. Approximately $0.5 billion results from the USDA Farm Bill (cotton and milk price supports). The remainder represents an increase in agricultural research.
Suggestions of the Appropriations Committee
The Appropriations Committee proposes to adopt the President's recommendation of $1.8 billion in outlays and $4.3 billion in budget authority.
Additional budget issues
None.
Budget committee recommendation
The Committee recommends $4.3 billion in budget authority and $2.0 billion in outlays for 1978.
The Committee increased outlays by $0.2 billion over the President's budget request to cover the costs of contemplated legislative action, consistent with increased efficiencies in programs included in this function.
Outlay levels will be affected by the final terms of the pending farm bill and by commodity prices.
(400) COMMERCE AND TRANSPORTATION
Commerce and Transportation covers most Federal support for transportation, plus a miscellaneous assortment of programs benefiting commerce. Authorizing jurisdiction is shared among the Banking, Housing, and Urban Affairs; Post Office and Civil Service; Commerce; Public Works; District of Columbia; and Aeronautical and Space Sciences Committees
President's budget request
The President's budget spoke of reordering transportation priorities and proposed to reduce slightly the relative share for highways. Subsequently, the President released $2.0 billion of impounded highway funds. This will delay the President's plan to reorder priorities.
In the adjusted budget, the share of Federal transportation money for railroads, many of which are bankrupt or near collapse, would be lower in 1976 than in 1975.
The President's budget also proposed to consolidate numerous Federal-aid highway programs; utilize the highway trust fund exclusively for the Interstate Highway System; redistribute a portion of the Federal gasoline tax to the general fund and to the States; and make certain maintenance costs of the air traffic control system eligible for financing with airport and airway trust funds.
The President also signaled his intention to lower the accumulation of impounded highway trust funds by requesting only minimal new authority for 1976 and by eliminating the advance feature of contract authority.
The budget proposed a 1976 subsidy to the Postal Service of $1.5 billion, down $0.3 billion from 1975. The reduction was achieved by refusing certain requested subsidies for third-class and other reduced rate mail.
The Budget contains no Administration proposals to provide assistance to the depressed housing industry. The President said he would rely on improved mortgage markets to provide new supplies of housing funds.
Release of impounded highway funds would increase outlays in this category to $14.7 billion which seems to imply an increase of nearly $3.0 billion over 1975 outlays of $11.8 billion.
However, $1.3 billion of this increase is accounted for by financing alterations in the Farmers Home Administration, not by expanded programs. Another $1.3 billion benefits only the Federal-aid highway program. The remaining $0.4 billion is not enough to make up for inflation in other programs, many of which finance construction projects where costs are estimated to have increased 15.4 percent in the past year.
Suggestions of the authorizing committees
Senate authorizing committees are considering proposals that could add as much as $4.6 billion to commerce and transportation outlays in 1976. Approximately $2.7 billion of this would support transportation.
The Public Works Committee suggests that the highway program be funded at its maximum possible level of obligations, estimated at $7.2 billion, to combat the recession. This is $2 billion above the President's request, and would add about $0.3 billion to 1976 outlays.
The Commerce Committee is considering major aid to the rail transportation system. The proposals – to rehabilitate rail lines nationally, accelerate development of the high-speed northeast corridor project, provide for upgraded Amtrak capital facilities, subsidize unprofitable branch lines, and refurbish railroad stations – could add $2.2 billion to outlays.
Finally, the District of Columbia Committee indicates additional assistance may be necessary to complete the Washington (D.C.) Metro system. Inflation has increased the estimated Federal cost by $1.2 billion, of which about $0.2 billion may be required in 1976.
The Post Office and Civil Service Committee is considering an increase of up to $1.7 billion in the Postal Service subsidy. A proposal to set the public service cost subsidy at a maximum of 20 percent of the preceding year's budget would account for $1.5 billion. The remainder would subsidize reduced-rate mail.
New consumer legislation could account for another $49 million increase in 1976 outlays. The Commerce Committee is studying legislation to provide no-fault auto insurance ($4 million), to improve methods of consumer-merchant dispute settlement ($5 million), and to expand the antitrust enforcement activities of the FTC ($25 million). The Government Operations Committee has before it a bill to establish an Agency for Consumer Advocacy ($15 million).
The Commerce Committee also is considering legislation to provide for monitoring foreign investment in the United States ($8 million), to promote further export expansion ($25 million), and to establish a Metric Conversion Board ($3 million).
The Committee on Banking, Housing, and Urban Affairs is reviewing numerous bills to stimulate the sale of houses, provide for subsidies to homeowners threatened with foreclosure, and increase home thermal efficiency. The Committee advises that it expects to approve legislation in each of these areas. While this could increase 1976 budget authority by up to $1.4 billion, the Committee estimated that outlays would increase only by about $0.2 billion.
Suggestions of the Appropriations Committee
The Appropriations Committee suggests an outlay ceiling of $15.0 billion, $0.3 billion above the President's adjusted request. The ceiling is based on an expected increase in the budget of the Small Business Administration direct-loan program. The Appropriations Committee estimate does not include any of the $4.6 billion in proposals listed here from authorizing committees.
Additional budget issues
The House-passed Emergency Employment Appropriations Act includes additional 1975 budget authority for the SBA and for the Postal Service. The SBA appropriation would increase help to small businesses, which are especially vulnerable in a recession. The Postal Service appropriation would accelerate construction and procurement activities. Additional outlays in 1976 would be $0.2 billion for the SBA and $0.3 billion for the Postal Service.
The House Appropriations Committee may propose full funding of the Postal Service's 1976 budget request, which was $0.7 billion higher than recommended in the President's budget, and $0.5 billion higher than proposed by the Senate Post Office and Civil Service Committee.
The House is expected to approve three pieces of housing legislation – the Emergency Middle Income Housing Act of 1965, the Emergency Homeowners' Relief Act, and the Home Heating Efficiency Act of 1975. These bills are similar to those under consideration in the Senate Banking, Housing, and Urban Affairs Committee, but there is a difference of $1.7 billion in 1976 cost estimates. In its mark-up, the House Budget Committee estimated the three House bills would increase 1976 outlays by $1.9 billion. Senate Banking's figure is $0.2 billion due primarily to the assumption that GNMA would resell the mortgage paper it purchased, thereby reducing net outlays.
Budget Committee Recommendation
The Budget Committee recommends total budget authority of $9.5 billion and outlays of $18.6 billion for 1976, which is $1.9 billion in outlays higher than the President's adjusted request.
Of that increase, $1.4 billion would go to non-highway transportation programs, the bulk of that to be used to start restoring the Nation's railroad system and the remainder to be used for the Washington, D.C., Metro system. The railroad funds not only would support many improvement programs proposed by the Commerce Committee (see above) but would provide new job opportunities.
The Committee suggests that half of the $1.2 billion designated for railroads be used to finance a temporary public service employment program for railroad rehabilitation projects.
The recommendation for outlays includes increases of about $0.5 billion for programs in commerce, including funds to bolster the depressed housing industry and provide an extra measure of assistance to small business. The outlay target would permit an increase of $0.2 billion in housing-related outlays over the President's budget.
The Committee does not support a proposal under the Emergency Employment Appropriations Act of 1975 to provide $0.3 billion to accelerate Postal Service procurement and construction projects.
(450) COMMUNITY AND REGIONAL DEVELOPMENT
Community and Regional Development covers bloc grants and loans to local government and individuals for development; for rural, economic, and Indian development projects; and for disaster insurance and for relief.
Programs under the jurisdiction of the Banking, Housing, and Urban Affairs Committee account for more than half of this function's outlays. Other committees with jurisdiction are Agriculture and Forestry; District of Columbia; Interior and Insular Affairs; Labor and Public Welfare; and Public Works.
President's budget request
Except for rural water and sewer grants, the President recommends holding program levels in community and regional development at current levels or cutting them. Outlays for the function would rise from $4.9 billion in 1975 to $5.9 billion in 1976 but most of the rise stems from 1975 obligations, not new program increases. Nearly 75 percent of all outlays for community and regional development take the form of grants to State and local government and these would be held at current levels.
Suggestions of the authorizing committees
Legislative committees suggest additions to the President's budget levels of about $1.0 billion in budget authority and $0.6 billion in outlays. These would allow for increased (but not full) funding of community development bloc grants, continuation of the comprehensive planning and housing rehabilitation loan programs, full funding of various Economic Development Administration Programs, and some increase in the funding of the new Community Services Administration (formerly the Office of Economic Opportunity).
Suggestions of the appropriations committee
The Appropriations Committee suggests a modest increase in funding levels for community and regional development: $0.3 billion in budget authority and $0.4 billion in outlays. Reflected in this suggestion are some increases in funding for community development bloc grants and for Economic Development Administration programs, and continuation of the comprehensive planning grants to State and local government. The Committee also makes allowance for outlays in 1976 stemming from 1975 authority proposed in the Emergency Employment Appropriations Act.
Additional Budget Issues
House legislative committees recommended full funding for community development bloc grants and increases in the funding available for the Economic Development Administration and the Appalachian Regional Commission. These would further increase budget authority for community and regional development by $0.5 billion and outlays by $0.2 billion. The proposed Local Public Works and Capital Development and Investment Act of 1975, tentatively endorsed by the House Leadership, the House Public Works Committee, and the House Budget Committee, would authorize $5.0 billion in new funding for accelerated public works (of which some $3.0 billion would represent 1976 outlays). The House-passed Emergency Employment Appropriations Act would add $0.3 billion in 1975 budget authority for community and regional development resulting in 1976 outlay increases of $0.3 billion.
Acceptance of these programs would raise budget authority to $11.6 billion and outlays to $10.0 billion.
Budget Committee Recommendation
The Committee recommends $6.0 billion in budget authority and $6.6 billion in outlays for 1976, an increase of $0.7 billion in outlays over the President's proposal.
The Committee recommendation includes $0.3 billion in outlays for temporary public works projects and $0.3 billion for increases in community development bloc grants and economic development programs.
The Committee repeats its caution that public works projects for economic recovery should be designed to begin and end as quickly as possible. The Committee, therefore, did not endorse the approach to public works projects envisioned by the Local Public Works and Capital Development and Investment Act of 1975.
(500) EDUCATION, MANPOWER, AND SOCIAL SERVICES
Education, Manpower, and Social Services includes six program areas: (1) elementary, secondary, vocational, and adult education; (2) higher education; (3) research and general education aids; (4) manpower training; (5) other manpower services; and (6) social services.
Well over half the funds in this function go directly to State and local government. The principal beneficiaries are poor, disabled, or disadvantaged individuals.
The Committee on Labor and Public Welfare exercises jurisdiction over most of these programs. Exceptions are the Interior and Insular Affairs Committee's jurisdiction over Indian education programs administered by the Bureau of Indian Affairs and the Public Works Committee's jurisdiction over the job opportunities programs administered by the Department of Commerce.
President's budget request
The President's budget recommends 1976 outlays as follows:
In billions of dollars
Elementary, secondary, and vocational education 4.2
Higher education 2.8
Research and general education aids 0.8
Manpower training 6.1
Other manpower services 0.3
Social services 2.7
Total 16.5 *
*Does not add due to rounding.
The outlays recommended in the President's budget would not provide levels of service equal to levels of 1975. Preliminary estimates are that services might be reduced by 12 percent because of inflation.
Elementary, Secondary, Vocational, and Adult Education
Generally, the President's budget calls for a continuation of 1975 funding levels, with the exception of reductions in impact aid ($0.4 billion) and emergency school aid ($161 million). Outlays for all programs are expected to remain at $4.2 billion, while budget authority would drop from $4.5 to $4.3 billion. No new programs are proposed.
Higher Education
The President's budget recommends a $0.2 billion increase in outlays from $2.1 billion in 1975 to $2.3 billion in 1976. Budget authority decreases slightly when one excludes about $0.7 billion in budget authority for college housing construction that was rescinded in 1975.
In 1975, Congress approved three student assistance programs with combined budget authority of $1.2 billion (Supplemental Opportunity Grants, Direct Student Loans, and Basic Opportunities Grants). For 1976, the President proposed to eliminate two of the programs and retain only the Basic Opportunities Grant program with budget authority of $1.1 billion. Under his program, the Basic Opportunities Grant program also would be expanded to cover classes of students not now included. The net result of the proposals is a reduction of $0.2 billion in funds available for student assistance.
Manpower
The President's budget originally called for a reduction in budget authority for manpower from $4.5 billion in 1975 to $3.6 billion in 1976. In early March the President said he would seek $1.9 billion in additional appropriations for public service employment and summer youth employment programs. This amount is included in his adjusted budget request figure on the accompanying table.
Manpower outlays would increase in 1976, although outlays for existing manpower programs would drop from $3.8 to $3.6 billion. Spending for emergency job programs would increase.
Social services
The President's budget calls for reductions in both budget authority and outlays from $3.1 billion in 1975 to $2.7 billion in 1976.
Suggestions of the authorizing committees
Authorizing committee estimates would increase 1976 outlays by nearly $10.2 billion (or 61.6 percent) over the adjusted 1975 outlays recommended by the President. These increases would be made as follows:
(1) Restore cuts recommended by the President ($0.9 billion in social services and education impact aid);
(2) Adjust 1975 outlays for inflation to achieve current service levels in 1976 ($1.3 billion in HEW and Labor Departments) ;
(3) Provide additional public service jobs to counter unemployment ($6.2 billion) ;
(4) Expand service levels in existing programs ($1.8 billion for programs for handicapped, bilingual, preschool, disadvantaged and Indian students; for college students eligible for financial assistance; for impacted school districts; ; and for selected social service programs) ; and
(5) Enact new Social Service Programs ($50 million for child and family services).
Suggestions of the Appropriations Committee
The Appropriations Committee would raise budget authority by $1.7 billion over the President's budget but would reduce outlays by $1.1 billion. The Committee called for $1.1 billion additional budget authority for education, $0.5 billion for accelerated public works (Title X of EDA), and $44 million for the work incentive program (WIN).
The Committee report does not include $1.8 billion in additional outlays that would be generated by the President's March 3 1975, request for additional funding of public service jobs and summer youth programs.
Additional budget issues
In addition to Committee proposals, additional funds may be suggested for such items as a permanent public service jobs program (up to $5 billion) and an expanded grants program for social services (up to $1.5 to $5.0 billion).
Budget committee recommendation
The Committee recommends $20.7 billion in budget authority and $19.4 billion in outlays for 1976, an increase in outlays of $2.1 billion over the President's request.
It is the Committee's understanding that $2.4 billion of the outlay increase will permit education and social service programs to continue at existing levels of service and provide adequate funding to meet legislative requirements for impact aid and for Title I of the Elementary and Secondary Education Act, Emergency School Aid and other programs which were endorsed by the authorizing and appropriations committees.
The Committee endorses the recommendation of the President and the authorizing committee for temporary public service jobs to counter unemployment. The Committee recommendation provides $2.9 billion in outlays for this purpose, a figure which includes the President's request of $2.4 billion.
The Committee recommendation for budget authority includes a provision for $4.0 billion to fund additional public service employment beyond calendar year 1975 if economic conditions warrant a decision by Congress to extend them. The Committee did not endorse or reject an indefinite extension of public employment programs.
(550) HEALTH
Health includes outlays for health services (84 percent), research and education (10 percent), prevention and control (4 percent), and planning and construction (2 percent).
Two entitlement programs under the jurisdiction of the Finance Committee – Medicare
and Medicaid – account for 77 percent of health outlays. Maternal and child health programs also fall under the jurisdiction of the Finance Committee. All other programs administered by HEW agencies account for 21 percent of outlays and are under the jurisdiction of the Labor and Public Welfare Committee. The remaining 2 percent of health outlays fall under the jurisdiction of the Commerce, Agriculture and Forestry, or Labor and Public Welfare Committees.
President's budget request
The President proposed a moratorium on new programs and cutbacks in existing programs that would limit increases in outlays to about $2.7 billion below presently authorized levels. Outlays would be reduced an estimated $2.0 billion for Medicare and Medicaid by:
Transferring payment responsibility to beneficiaries in the form of higher insurance deductibles and copayments;
Administrative program tightening of Medicare;
Transferring more responsibility to States for Medicaid payments; and
Eliminating dental services for adults.
Outlays would be cut by $0.7 billion for HEW agencies by reducing budget authority $1.0 billion through rescissions.
Suggestions of the authorizing committees
Authorizing committees are studying proposals that would increase 1976 outlays by $4.6 billion and budget authority by $4.4 billion over the President's request.
The Commerce Committee suggests $9 million more than the President proposes in budget authority and estimated outlays for the Consumer Product Safety Commission.
The Finance Committee proposes additional budget authority of $2.6 billion with estimated outlays of nearly $4.0 billion for the following programs:
[Table omitted]
Suggestions of the Appropriations Committee
Budget authority exceeding that of the president's proposal by $1.3 billion is suggested; outlays would be higher by $0.5 billion. Distribution is shown in the table above. There is a proposed reduction in budget authority of $2 million from the President's budget for the Office of the Assistant Secretary for Health.
Additional budget issues
Budget Committee staff anticipates higher enrollment in medicaid due to unemployment, adding $0.2 billion to outlays.
Restoration of Presidential cuts in health agency programs to 1975 appropriated levels (not adjusted for inflation) would add $0.5 billion in outlays.
Budget Committee recommendation
The Committee recommends $32.6 billion in budget authority and $31.0 billion in outlays for 1976.
The Committee increased outlays by $2.9 billion over the President's estimates on the assumption, suggested by the authorizing committee, that the President's legislative proposals to reduce Federal medicare and Medicaid costs will not be approved. The Committee recommendations also include assistance above the amounts proposed by the President for health agency programs and provides some amounts for additional requirements.
(600) INCOME SECURITY
Income security includes social security and unemployment insurance, covering more than 90 percent of the work force; retirement systems for Federal and railroad employees; and assistance programs for the needy such as food stamps, public housing, supplemental security income (SSI), and aid to families with dependent children (AFDC). Income security outlays account for 34 percent of all Federal spending.
The Finance Committee has jurisdiction over 81 percent of outlays. The Post Office and Civil Service; Agriculture and Forestry; Labor and Public Welfare; and Banking, Housing and Urban Affairs Committees also have jurisdiction over major income security programs.
President's budget request
Without changes in existing law, outlays would rise 16 percent from $106.9 billion in 1975 to $124.2 billion in 1976. The President's budget assumes action by Congress to limit growth in outlays to 11 percent. It proposes outlays of $119.4 billion, allowing for rejection by Congress of proposed increases in food stamp prices.
Social security and other retirement and disability programs account for 69 percent of income security outlays and $7.7 billion of the $12.0 billion in growth under the President's budget.
Unemployment compensation would rise by $3.5 billion. Programs for the needy would increase by $1.0 billion. After adjusting for inflation, the real growth in benefits would be $1.9 billion rather than $12.0 billion; programs for the needy would decline by $0.7 billion in terms of purchasing power.
Most income security programs are open-ended matching grants to States or entitlement programs under which qualified citizens have a legal right to benefits. Changes in spending levels would require action by Congress, and the President has asked Congress to hold spending to $5.5 billion below normal growth by:
Limiting to 5 percent the normal cost-of-living increases in social security, railroad retirement, Federal employee retirement, coal miners' benefits, supplemental security income (SSI), food stamps, and child nutrition. This ceiling would cut outlays by $3.8 billion;
Converting child nutrition grant programs into bloc grants to States for a saving of $0.5 billion;
Making two changes in social security benefit formulas for a saving of $0.8 billion; and
Making various changes in aid to families with dependent children (AFDC) administration and Federal matching formulas for a saving of $0.5 billion.
The 5 percent ceiling on cost-of-living increases would affect more than 40 million persons and reduce a retired worker's future social security benefit by an average $90 a year. The other proposals would mean less income for recipients than the law now calls for.
Suggestions of the authorizing committees
Budget estimates of authorizing committees would increase 1976 outlays by $8.1 billion over the President's adjusted budget to a total of $127.5 billion.
Nearly half of the increase ($3.8 billion) is based on Committee assumptions that Congress will reject the proposed 5 percent limit on cost-of-living increases.
Authorizing committees would approve only $0.4 billion of the $1.7 billion in reductions in the other three Presidential proposals.
Most of the rest of the increase results from reestimates by Committees of outlays under other income security programs, as follows:
Unemployment compensation up $0.9 billion due to higher rates of unemployment than those forecast in the President's budget;
Trade adjustment assistance up $0.3 billion under provisions of the Trade Act of 1974 which were not taken into account by the President;
Food stamps up $1.4 billion due to a rapid increase in use of the program which was not factored into the President's budget; and
Section 235 housing subsidies up $0.2 billion as a result of action by Congress to overturn a Presidential impoundment.
Suggestions from the Appropriations Committee
The Appropriations Committee report would raise the President's adjusted 1978 budget figure by $4.2 billion to $123.8 billion. The Committee figure leaves in the savings from the President's legislative proposals but makes the following additions to 1976 outlays:
Food stamps up $1.4 billion for program underestimates;
Other food programs up $0.2 billion mostly to continue the special milk program;
Low-income housing up $99 million; and
Unemployment compensation up $2.5 billion to cover higher unemployment and a further extension of temporary emergency benefits.
Additional budget issues
Several issues not addressed by other committees will affect 1976 outlays. Three programs appear to be underestimated by a total of $0.6 billion, as follows:
AFDC up $0.4 billion, mainly due to effects of the recession on caseloads;
SSI up $0.1 billion resulting from States' contesting liability for supplemental payments made for them by the Federal Government; and
Social security up $20 million, reflecting a Supreme Court decision on benefit entitlements for widowers.
Income security outlays will be reduced by two actions by Congress. Additional funds for public service jobs will reduce AFDC, food stamp, and unemployment benefits costs in 1976. The earned income tax credit in the Tax Reduction Act of 1975 will reduce AFDC and food stamp costs by $75 million in 1976.
The rate of inflation probably will be lower than assumed in the President's budget. This would mean smaller automatic cost-of-living increases than those assumed in the authorizing committee reports by as much as $0.8 billion.
A child nutrition bill pending in the House (H.R. 4222) could raise 1976 outlays by $0.6 billion above the Agriculture Committee's March 15 estimates. Other proposals for new initiatives discussed at the staff level are not likely to be enacted in time to affect 1976 budget authority and outlays.
Budget Committee Recommendation
The Committee recommends $138.5 billion in budget authority and $126.1 billion in outlays for 1976.
The committee increased outlays by $6.7 billion over the President's estimate, of which some $3.0 billion is required to cover additional costs resulting from higher rates of unemployment than those projected by the Administration and from underestimates of the costs of those existing programs which are affected by rising unemployment.
The remaining $3.7 billion in additional outlays would provide sufficient funds for full cost-of-living increases as required by existing law in social security and other entitlement programs and as recommended by the authorizing committees.
The Committee also urges authorizing committees to consider legislative improvements which could save large amounts of money without imposing an inequitable burden upon beneficiaries.
The Committee's recommended outlay level includes an estimate of $1.8 billion in savings that could be realized through administrative improvements in the food stamp program and through legislative improvements in AFDC, OASDI and Federal employee retirement programs.
The Committee total reflects the costs of programs as they would be with unemployment at 7.5 percent at the end of calendar 1976.
(700) VETERANS BENEFITS AND SERVICE
Veterans Benefits and Services consists largely of a two-part income security program (compensation and pensions), GI bill education benefits, hospital and medical care, and other veterans benefits and services. The Veterans Affairs Committee has jurisdiction over these veterans programs.
President's budget request
Veterans benefits and services outlays in the President's budget are $15.6 billion, up $0.1 billion over 1975. This budget reflects no real growth, although some programs would grow because of shifts in spending priorities within the overall total.
The two-part veterans income-security program accounts for $7.7 billion, almost half of total outlays. The budget recommends $3.9 billion in outlays for hospital and medical care, an increase of $0.3 billion over 1975, and GI bill education outlays of $3.6 billion, a decrease of $0.4 billion from 1975.
Suggestions of the authorizing committee
A variety of proposals from the Veterans Affairs Committee could increase veterans outlays by $2.0 billion over the President's budget.
The President's estimate of a $0.4 billion drop in GI bill education outlays does not take into account recent caseload increases which could lead to a net increase in outlays of $0.1 billion rather than a reduction.
Other revisions in caseload data could lead to increases in outlays for pensions of $0.2 billion.
The President's budget assumes that Congress will repeal a 2-year extension of the period during which veterans may apply for readjustment benefits which would lead to a saving of $0.7 billion. Congress may not agree to the repeal.
The Veterans Affairs Committee may undertake a review of the compensation benefits this year instead of waiting the customary 2 years, which would result in additional outlays of $0.3 billion.
A proposal to allow an additional 9 months of GI education benefits for graduate education could result in additional outlays of $77 million. An omnibus medical bill could add $95 million. The Veterans Administration already has testified that a proposed staff reduction which was submitted in February already has been turned into an increase totalling $19 million, because of increasing workloads. This is not reflected in the budget.
Suggestions o f the Appropriations Committee
The Committee suggests total outlays of $15.6 billion in line with the President's request. However, the Committee did not consider any possible new program initiatives.
Additional budget issues
None.
Budget Committee recommendation
The Committee recommends budget authority of $17.6 billion and outlays of $16.9 billion, an increase of $1.3 billion over the President's outlay proposal.
Several factors account for the increases suggested by the authorizing committee, including reestimates of pension and medical care caseloads and of enrollments under the GI bill; allowance for an adjustment to compensation benefits in calendar 1975; a projected enactment of an Omnibus Veterans Medical bill, assuming an effective date of January 1, 1976; and pending legislation to permit 9 extra months of education assistance for students doing graduate work.
Allowance was also made for additional funds provided for in the Emergency Employment Appropriations Act of 1975 for general work programs to improve Veterans Administration facilities, including hospitals.
(750) LAW ENFORCEMENT AND JUSTICE
Law Enforcement and Justice includes outlays for the Federal judiciary; law enforcement and prosecution activities of the Justice and Treasury Departments; Federal correctional and rehabilitative programs; certain civil rights programs; and law enforcement assistance to State and local governments.
The Judiciary Committee has legislative jurisdiction over most programs. The Commerce; Labor and Public Welfare; and Post Office and Civil Service Committees also have legislative jurisdiction over some programs.
President's budget request
The President requests outlays of $3.3 billion, an increase of $0.3 billion over outlays for 1975.
The President's budget seeks a $0.1 billion reduction in budget authority for the Law Enforcement Assistance Administration. The major impact of this reduction would come in 1977 outlays, but it also would reduce LEAA outlays by an estimated $26 million in 1976.
Suggestions of the authorizing committees
Budget estimates of the authorizing committees would increase 1976 outlays by $0.1 billion above the President's budget. The Committees recommended:
A national voter registration system ($50 million) to help States register eligible citizens under a nationwide postcard registration system.
Increased investigation and prosecution of antitrust law violations ($25 million) to provide for a vigorous and effective enforcement of such laws.
Increased jury fees and expenses, District Court and Circuit Court judgeships, and the Bilingual Courts Act ($11 million) to provide additional court services.
Full funding of the Legal Services Corporation ($26 million) at authorized level of $100 million for fiscal 1978.
Suggestions of the Appropriations Committee
Reports of Appropriations Subcommittees indicate an overall increase of about $130 million in the President's adjusted budget for 1976. The State, Justice, Commerce, the Judiciary, and Related Agencies Subcommittee suggests a $150 million increase with no amounts specified for any particular program. The Treasury, Post Office, and General Government Subcommittee suggests a $14.3 million reduction in budget authority by reason of the withdrawal of the request for the construction of the new Federal Law Enforcement Training Center. This item accounts for $20 million in outlays in 1976 in the President's budget.
Additional budget issues
Approval of first year funding in 1976 for the Juvenile Justice and Delinquency Prevention Program would add $10 million in outlays and $50 million in budget authority. Another likely proposal is legislation to provide benefits to survivors and widows of law enforcement officers. This would create new outlays of $5 million and budget authority of $81 million for fiscal 1976.
Budget committee recommendation
The Committee recommends $3.3 billion in budget authority and $3.4 billion in outlays for 1978.
The slight increase in outlays over the President's estimate is in anticipation of temporary anti-recession programs and other suggestions by the authorizing committees.
(800) GENERAL GOVERNMENT
General Government covers the basic operations of the legislative and executive branches of the Federal Government. This includes the Congress, the Executive Office of the President, the Treasury Department's operational activities, the General Services Administration, the Civil Service Commission, and all activities not included in other functions. Legislative jurisdiction over these programs is shared by the Government Operations; Public Works; Post Office and Civil Service; and Interior and Insular Affairs Committees.
President's budget request
The President requests $3.2 billion in outlays for 1976, an increase of $0.5 billion over 1975. Most of this increase, more than $0.3 billion, is due to a net reduction in offsetting receipts. The remaining $0.2 billion is largely for increased salaries for 2,952 requested new positions.
The President's increases are primarily in three areas:
An increase in Internal Revenue Service personnel to strengthen tax compliance and to certify employee pension plans;
Improvement in the operation of the Federal Buildings Fund; and
Automation of the General Services Administration's commercial supply system.
The President proposes no new programs and general government outlays are relatively static.
Suggestions of the authorizing committees
The budget estimates received from the authorizing committees would increase 1976 outlays by $43 million above the President's budget. These recommendations are as follows:
Creation of a Presidential Council of Science Advisers ($15 million);
Creation of the National Center on Productivity and Quality of Work ($20 million); and
Additional payments to the Civil Service Retirement Fund ($19 million) to finance an unfunded pension liability for certain employees of the Departments of Interior; Health, Education, and Welfare; and Justice.
Suggestions of the Appropriations Committee
Target reductions by the Appropriations Committee total $44 million in 1976 outlays for general government.
Additional budget issues
The General Services Administration has identified 67 potential new construction projects at a projected cost of $1.8 billion which could be initiated within the next 12 to 18 months. Nearly $1.2 billion of that amount would finance projects of a priority nature which could be undertaken by the Public Buildings Service. This construction would be in addition to projects proposed by the Emergency Employment Appropriations Act, 1975.
Budget Committee recommendation
The Committee recommends $3.3 billion in budget authority and $3.2 billion in outlays for 1978 – the same levels as proposed by the President.
The Committee did not endorse those provisions of the Emergency Employment Appropriations Act relating to the purchase of additional replacement vehicles for the Federal government and Federal facility construction and renovation.
(850) REVENUE SHARING AND GENERAL PURPOSE FISCAL ASSISTANCE
The programs in this category are general revenue sharing, and general purpose fiscal assistance which includes the Federal payment to the District of Columbia, and shared revenues which are distributed to the States, Puerto Rico, and certain territories. The Finance, Government Operations, and District of Columbia Committees have legislative jurisdiction over these programs.
President's budget request
The President estimates revenue sharing outlays at $7.2 billion. Revenue sharing outlays under current law would rise by $0.2 billion. The President makes no request for program changes for 1976.
The principal increase in outlays results from just over $0.1 billion for general revenue sharing payments to State and local governments. The remaining portion of the increase includes $24 million in additional Federal payment to the District of Columbia, $35 million in additional payments from Federal land management activities of the Department of the Interior, and $7 million in distributions derived from tax collections to Puerto Rico and the Virgin Islands. Other transactions account for $22 million.
The President's budget also contains a recommendation for extension of general revenue sharing through 1982. The State and Local Assistance Act of 1972 expires on December 31, 1976, and the President requests a 6-year extension of the program with new budget authority and outlays of $39.4 billion.
Suggestions of the authorizing committees
Authorizing committees would increase 1976 outlays by $5.0 billion above the President's budget.
The Government Operations Committee proposes new legislation to provide temporary emergency financial assistance for State and local governments, separate and apart from that established by the State and Local Assistance Act of 1972. The program would provide targeted emergency assistance to hard-pressed State and local governments. The level of funding would fluctuate with the national rate of employment. At 6 percent unemployment, the maximum outlays would be $2.0 billion; and $1.0 billion would be added for each percentage point beyond 8 percent. Outlays for 1976 would be $5.0 billion.
Suggestions of the Appropriations Committee
The Appropriations Committee makes no change from the President's budget request
Additional budget issues
None.
Budget Committee recommendation
The Committee recommends $7.3 billion in budget authority and $7.2 billion in outlays for 1976 – the levels proposed by the President.
The Committee considered the possibility of emergency financial assistance to state and local governments, as recommended by the authorizing committee. The Committee endorsed the concept in principle. No funds were specifically allocated to its implementation at this time.
(900) INTEREST
Interest covers sums paid by the Government on the public debt and the net of interest received or paid by Government agencies in connection with program activities. The Finance Committee has primary jurisdiction over this function.
Interest on the public debt depends upon the interest rate the Government has to pay to borrow and the size of the debt. These outlays have little economic impact, however.
President's budget request
The President has requested $34.4 billion for 1976.
Suggestions of the authorizing committee
The Finance Committee suggests increasing the President's estimate by $0.9 billion to a total of $35.3 billion as they project a higher deficit than that in the President's budget.
Suggestions of the appropriations committee
The Appropriations Committee suggests no change from the President's budget request.
Additional budget issues
None.
Budget committee recommendation
The Committee recommends $35.3 billion in budget authority and $35.3 billion in outlays for 1976.
The President's estimate of interest payments on the public debt was based on anticipation of higher revenues and lower levels of spending than now seem likely. Uncertainties now exist with respect to interest rates. In accordance with the recommendations of the Finance Committee, the Committee has adjusted the budget for interest payments upward by $0.9 billion above the
President's estimate.
ALLOWANCES
Allowances includes energy tax equalization payments, civilian agency pay raises, and contingencies. The authorizing committees for this function are the Interior and Insular Affairs Committee and the Post Office and Civil Service Committee.
President's budget request
The President has requested $8.3 billion in budget authority and $8.1 billion in outlays for 1976.
Suggestions of the authorizing committees
The Interior and Insular Affairs Committee suggests eliminating the energy tax equalization payments. This would reduce both outlays and budget authority by $7.0 billion. The Post Office and Civil Service Committee suggests removing the 5-percent cap on pay raises for employees of civilian agencies recommended by the President. Such action would increase both outlays and budget authority by $0.4 billion. Following the suggestions of both Committees would result in $1.7 billion for budget authority and $1.5 billion for outlays.
Suggestions of the Appropriations Committee
The Appropriations Committee suggests no change from the President's budget request.
Additional budget issues
None.
Budget Committee recommendation
The Committee recommends $1.3 billion in budget authority and $1.1 billion in outlays for 1976.
The President's budget made provision for budget authority and outlays of $7.0 billion to equalize the impact of his original energy tax proposals on citizens, State and local governments, and the Federal Government. The Committee assumes that the President's program will not be approved by Congress and has deducted this amount.
(980) UNDISTRIBUTED OFFSETTING RECEIPTS
Undistributed Offsetting Receipts is a category created solely for accounting purposes which does not lend itself to the kinds of program analysis which are possible with other functional areas.
Funds carried in this category include Federal Government contributions to the employee retirement fund, interest earned on trust funds and revenue from leases of mineral rights on the Outer Continental Shelf.
Some Federal revenues – such as income to ERDA from uranium enrichment operations – are "distributed receipts" and reduce the budgets of the agencies to which they are credited.
President's budget request
The president listed $20.2 billion in the undistributed offsetting receipts category.
The funds are divided as follows:
In billions
Federal share, employee retirement $3.9
Interest from trust funds 8.3
OCS leases 8.0
Suggestions of the authorizing and the Appropriations Committees
Neither the major authorizing committees nor the Appropriations Committee has proposed any changes in the President's estimates. Both endorse the $20.2 billion figure.
Additional budget issues
None.
Budget Committee recommendation
The Committee recommends that $16.2 billion in undistributed offsetting receipts be deducted from the budget authority and outlay totals in 1976.
The President's budget offsets expenditures by $20.2 billion by assuming receipts of $8.0 billion during 1976 from sale of leases for offshore oil drilling. The Committee believes this estimate is high and has reduced the total to $4.0 billion. The income conceivably could be as low as $1.0 billion.