April 24, 1978
Page 11120
CHAPTER V. THE BUDGET BY FUNCTION AND MISSION
INTRODUCTION
This chapter provides details on the Committee's spending recommendations for each of the 19 functional areas of the budget.
This information differs from that presented in prior years in two major respects:
Much greater emphasis has been placed on the five-year (FY 1979-83) outlook for the budget in recognition of the fact that effective budget choices cannot be made in a one year context; a
new focus has been provided on the major missions within each functional area of the budget as a result of the Committee's efforts over the past year to develop and improve this aspect of budget presentation.
The discussion of each functional area of the budget is divided into the following parts:
A narrative statement sets forth the major national need addressed by the program in the function, the major missions in the function under which individual programs are grouped, the results expected by 1983 from Federal program efforts, and possible future year choices. Against this background, the details of the Committee's recommendations for the function and each major mission in the function are explained.
Each functional section also contains tables providing numerical information on current trends in the function and compares the Committee's recommendations with those recommended by President Carter or suggested by other Senate committees. These recommendations and suggestions were considered by the Committee in arriving at the recommended First Budget Resolution targets.
The "current law" and "current policy" estimates used in this chapter have been prepared by the Congressional Budget Office on the basis of the program detail contained in the FY 1978 estimate, which represents action to date by the Congress plus likely requirements that remain to be acted upon. The "current law"estimates reflects program and caseload changes and adjustments for inflation that are required by law. The "current policy" estimate is the current law estimate plus a further adjustment for inflation which, though not required by law, would be necessary to keep all programs constant in real terms. Both the current law and current policy estimates assume extension of established programs for which authorizations expire in the FY 1979-83 period; this is consistent with longstanding Office of Management and Budget and Congressional practice.
The "President's budget request" figures used in this chapter include the estimates transmitted in the President's original-budget request in January, as well as an update of the President's original budget request submitted by OMB to the Congress on March18 and the President's urban policy proposals submitted on March 27.
The "Senate authorizing committees" estimates in this chapter represent the information received in the March 15 reports to the Budget Committee pursuant to Section 301(c) of the Congressional Budget Act. As requested, most committees furnished budget estimates for FY 1979 and the five-year period, FY 1979-83, for all programs under their jurisdiction. It has been necessary, however, in some cases, for the Budget Committee staff to calculate FY 1979 or future year estimates where the data submitted were insufficient. These Senate Budget Committee staff estimates were made in consultation with the staff of the relevant authorizing committees, the CBO, and Executive departments, where appropriate. This information represents the policies recommended by the authorizing committees and is intended to provide the Senate with the best possible set of FY 1979-83 estimates based on those recommended policies.
In the case of all tabular material in this chapter, details may not add to totals due to spending:
[Tables omitted]
(050)NATIONAL DEFENSE
National need and missions
The national need addressed by National Defense is the protection of America's people, society, territory, and allies from attack by potential adversaries. Defense programs address this need by: preservation of an overall military balance in total force capabilities between the United States and its allies and the Soviet Union and its allies that is at least as favorable as the present balance; maintenance of essential equivalence in strategic nuclear deterrence with the Soviet Union, including the preservation of the capability to launch a retaliatory second strike that would inflict unacceptable damage; maintenance of sufficient forces, together with our allies, to deter or counter aggression at levels below strategic nuclear conflict; and negotiation of international agreements which limit and reduce armaments as well as strengthen international stability.
The major mission areas in National Defense are: (1) strategic warfare forces, (2) tactical warfare forces, (3) defense-wide forces and support, and (4) other national defense programs.
Current trends
The following table shows the Committee recommendations for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Over the next five years, current law would cost a total of $654.2 billion in budget authority and $627.6 billion in outlays for National Defense, while current policy would cost a total of $654.2 billion in budget authority and $50.5 billion in outlays. The implications of current trends in the four major mission areas are:
(1) Strategic Warfare Forces.— Current law would cost a total of $80.9 billion, in budget authority and $77.3 billion in outlays over the FY 1979-83 period. This would provide for selective continuation of the air-, land-, and sea-based elements of the TRIAD, but might force a choice between maintaining force levels and upgrading the quality of our strategic systems. Current policy would cost an additional $10.9 billion in budget authority and $7.1 billion in outlays, and would sustain all elements of the TRIAD, provide growth in Trident and cruise missilecapabilities, and provide for development of the MX missile system.
(2) Tactical Warfare Forces.— Current law would cost an additional $10.9 billion in authority and $368.0 billion in outlays over the FY 1979-83 period. This would provide for limited force modernization, particularly for improvements in NATO force capabilities, and selective modernization of sea control forces, but would not simultaneously permit upgrading of naval force projection capabilities. Current policy would cost an additional $51.2 billion in budget authority and $33.0 billion in outlays. This would permit more rapid force modernization, with emphasis on upgrading NATO forces and sea control force capabilities, but permit very limited upgrading of naval force projection capabilities unless force level tradeoffs occurred in the sea control area.
(3) Defense-Wide Forces and Support.— Current law would cost a total of $114.9 billion in budget authority and $109.1 billion in outlays over the FY 1979-83 period. This would allow gradually declining funding levels for research and development, intelligence and telecommunications, defense agencies and other support programs and effort. Current policy would cost an additional $13.0 billion in budget authority and $8.4 billion in outlays, and would protect these programs from degradation due to price rises.
(4) Other National Defense Programs.— Current law would cost a total of $73.3 billion in budget authority and $72.8 billion in outlays over the FY 1979-83 period. This would provide military retirement benefits for military retirees, but would force a cutback in the defense-related activities of the Department of Energy. Current policy would cost an additional $3.1 billion in budget authority and $2.3 billion in outlays, and would permit the continuation of the DOE defense-related activities at current levels of effort.
Future-year choices
(1) Strategic Warfare Forces: Outcome of SALT 11.— The failure to achieve a satisfactory arms limitation agreement with the Soviet Union would force some difficult strategic policy choices as to proper responses and levels of capability. The failure to achieve an arms agreement could drive costs up by as much as $70 billion (in constant FY 1979 dollars) over the next 15 years under an option that includes 300 MX ICBM's 32 Tridents, 75 cruise missile carriers, and other systems.
Multi-Mission: Reform of the Military Retirement System.— The President's Commission on Military Compensation has recommended far-reaching reform of the military retirement system to bring it more closely into alignment with the civil service retirement system. The budgetary impact of these reforms is uncertain, although savings almost certainly would result. The reforms might also have a significant impact on military service career patterns.
COMMITTEE RECOMMENDATIONS
The Committee recommends $129.8 billion in budget authority and $116.6 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $782.2 billion in budget authority and $720.5 billion in outlays over the FY 1979-83 period force level; (b) possible start-up of a second source for production of the Trident submarine; and (c) increased R&D activity on alternative ICBM technology associated with a hard target kill capability.
Over the five-year period, this level of funding can be expected to permit the continuation of the TRIAD and provide significant real growth in spending for strategic force modernizations and enhancement of U.S. strategic capabilities.
(2) Tactical Warfare Forces.— The Committee recommends $80.2 billion in budget authority and $70.5 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $478.1 billion in budget authority and $439.7 billion in outlays over the FY 1979-83 period.
The Committee's recommended targets permit a considerable increase in modernization of U.S. tactical land, air, sea, and mobility forces. The Committee is concerned that the United States meet its NATO pledge that each member country aim at an increase in the region of three percent real growth in defense expenditures over the next several years. The Committee's recommendations also permit funding for enhancement of U.S. sea warfare forces, including potential actions associated with AEGIS ships and mid-sized carriers.
Over the five-year period, this level of funding can be expected to permit the United States to meet its three percent pledge to NATO, as the alliance moves to counterbalance the growth in Warsaw Pact military strength.
For the missions in this function, the Committee makes the following recommendations :
(1) Strategic Warfare Forces.— The Committee recommends $14.3 billion in budget authority and $13.7 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $91.3 billion in budget authority and $84.0 billion in outlays over the FY 1979-83 period.
The Committee recommendation would permit maintaining the current TRIAD force levels with continuing modernization focusing on the strategic cruise missile, MX, and Trident systems. The recommended funding levels would accommodate the following potential actions: (a) deferral of the planned FY 1979 appropriation of the Trident submarine with no effect on the overall Trident
(3) Defense-Wide Forces and Support. The Committee recommends $23.3 billion in budget authority and $20.7 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $139.9 billion in budget authority and $125.3 billion in outlays over the FY 1979-83 period.
The Committee's recommended targets permit a broad range of program enhancements and program growth for such efforts as basic technology R&D, intelligence and telecommunication, and essential support activities.
Over the five-year period, this level of funding can be expected to permit three percent annual real growth for these activities.
(4) Other National Defense Programs.— The Committee recommends $13.0 billion in budget authority and $12.7 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $76.6 billion in budget authority and $75.2 billion in outlays over the FY 1979-83 period.
The Committee's recommended targets permit the government to meet its obligations to retired military personnel as well as to provide adequate funding for those Department of Energy activities related to U.S. defense programs.
Over the five-year period, this level of funding can be expected to permit the government to meet its military retired pay obligations and allow for energy-related research and production efforts to keep pace with anticipated U.S. nuclear force modernizations.
Multi-Mission Issues.—The Committee recommends savings of $1.0 billion in both budget authority and outlays for FY 1979 based upon expected limitations on the October 1978 pay raise. The Committee anticipates that these figures will total $3.7 billion in savings in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation assumes that a five percent limit will be placed on the October 1978 pay raise for Federal civilian and military employees. The Committee also recommends that the Department of Defense be required to absorb, through savings in other activities, 20 percent of the costs of the October 1978 pay raise and each succeeding fiscal year's pay raise required by law during the five-year period. The Committee's recommendation does not assume Congressional enactment of wage board pay reform or the requested level of new stockpile disposals above the level of stockpile acquisitions in FY 1979.
Intelligence Spending.— The Committee recognizes that, in the past, Congress has reduced the President's request for funding for national foreign intelligence and defense-related intelligence. This part of the budget will likely be subject to similar reductions this year. In the future, it will be necessary for the Committee to review intelligence spending and its five-year implications as carefully as any other area of the Federal budget.
Tax expenditures related to this function
The estimated revenue losses resulting from tax expenditures related to this function are set forth in the following table:
(150)INTERNATIONAL AFFAIRS
National need and missions
The national need addressed by International Affairs is the advancement of U.S. political and economic interests abroad. Federal programs meet this need through: political, economic, and cultural relations with foreign nations; economic and security support for allies and friendly governments; maintenance of a healthy international economic system and promotion of U.S. exports; efforts to improve the quality of life in the developing world; and the furtherance of respect for human rights throughout the world.
The major mission areas in International Affairs are: (1) foreign economic assistance and financial programs; (2) foreign military assistance and sales; and (3) other international affairs programs.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for fiscal year 1979-83
Over the next five years, current law would cost a total of $58.5 billion in budget authority and $38.0 billion in outlays for International Affairs, while current policy would cost an additional $9.0 billion in budget authority and $5.8 billion in outlays. The implications of current trends in the three major mission areas are:
(1) Foreign Economic Assistance and Financial Programs.— Current law would cost a total of $37.7 billion in budget authority and $28.3 billion in outlays over the FY 1979-83 period. This would permit the continuation of existing bilateral, multilateral, and financial programs, but would force cutbacks in several areas. Reductions in financial programs might force poor countries to rely more heavily on short-term commercial loans, which could retard their long-term growth and development. The promotion of U.S. exports through the Export-Import Bank and the Food for Peace programs also would decline. Current policy would cost an additional $7.0 billion in budget authority and $3.7 billion in outlays. This would avoid these cutbacks, and facilitate agreements among OECD and OPEC countries to further assist developing countries.
(2) Foreign Military Assistance and Sales.— Current law would cost a total of $13.4 billion in budget authority and $2.3 billion in outlays over the FY 1979-83 period. This would allow the U.S. to meet most security requirements of allies and friendly governments, but grants and credit sales of arms and supporting equipment would be reduced. While such a development is consistent with efforts to restrain arms sales, current law would not provide for possible security requirements of African countries that are threatened by forces inimical to the U.S., but are unable to afford the cash purchases of defense materials. Should these countries turn to alternative sources of supply, the U.S. share of security-related exports would decline. Current policy would cost an additional $0.9 billion in budget authority and $0.8 billion in outlays. This would provide for a fairly extensive global military assistance and sales program, and for additional base agreements between the U.S. and foreign countries.
(3) Other International Affairs Programs. — Current law would cost a total of $7.4 billion in both budget authority and outlays over the FY 1979-83 period, providing for a declining level of diplomatic and informational activities. Current policy would cost an additional $1.1 billion in budget authority and $1.0 billion in outlays, and would permit continuation of current program levels.
Future-year choices
(1) Foreign Economic Assistance and Financial Programs: (a) Development Assistance.— Administration officials and some members of Congress are giving serious consideration to a Brookings Institution recommendation that foreign economic development assistance be doubled by FY 1983, an increase over current policy of $2.8 billion in budget authority and $1.4 billion in outlays. No specific Administration proposals have yet been offered.
(b) IMF Quota Increase.— The next regular increase in funds committed to the International Monetary Fund (IMF) for balance-of-payments loans is due by FY 1981. The U.S. share of this increase is expected to be in the range of $3 to $5 billion.
Committee recommendations
The Committee recommends $12.8 billion in budget authority and $7.2 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $71.2 billion in budget authority and $42.1 billion in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations:
(1) Foreign Economic Assistance and Financial Programs.— The Committee recommends $9.0 billion in budget authority and $5.1 billion in outlays for this mission In FY 1979. The Committee anticipates that these figures will total $49.1 billion in budget authority and $31.0 billion in outlays over the FY 1979-83 period.
The Committee's recommended targets permit, at a minimum, discretionary inflation adjustments to keep all programs in the mission, other than security supporting assistance, constant in real terms. The targets take into account some of the President's reductions from FY 1978 levels in supporting assistance. The Committee assumes that in FY 1979 the U.S. contributions to the multilateral development banks will not exceed ninety percent of the President's request and that real growth for other economic development assistance and contributions to international organizations will be no more than five percent. The recommended targets also permit full appropriation of the U.S. share of the proposed Witteveen Facility of the International Monetary Fund.
Over the five-year period, this level of funding can be expected to permit expanded bilateral and multilateral efforts to reduce poverty in the poorest areas of the world. Funds provided through the International Monetary Fund and U.S.-backed multilateral development bank borrowing in private money markets will facilitate the flow of capital to middle income developing countries to help strengthen the international economic system. Growth in the middle income developing countries and U.S. export promotion programs together can be expected to assist American agricultural and industrial exports.
MISSION 1:FOREIGN ECONOMIC ASSISTANCE AND FINANCING
2) Foreign Military Assistance and Sales.— The Committee recommends $2.4 billion in budget authority and $0.6 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $13.5 billion in budget authority and $2.6 billion in outlays over the FY 1979-83 period.
The Committee's recommended targets permit foreign military sales to continue at FY 1978 levels. An increment above current levels in grant military assistance for possible base agreements with Greece and Turkey is included.
Over the five-year period, this level of funding can be expected to permit the U.S. to meet most presently identified security requirements of allies and friendly governments, but grants and credit sales of arms and supporting equipment would be available to fewer countries than at present as military assistance declines in real terms due to a Congressionally mandated phase out of the Military Assistance Program.
(3) Other International Affairs Programs.— The Committee recommends $1.5 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total 68.8 billion in budget authority and $8.5 billion in outlays over the FY 1979-83 period.
The Committee's recommended targets permit the current level of diplomatic activities in support of U.S. political and economic interests abroad to continue in real terms. A small allowance for the effects of dollar depreciation will enable information and cultural activities abroad to escape the effects of sharply escalating dollar costs needed to meet contracts for goods and services denominated in foreign currencies.
Over the five-year period, this level of funding can be expected to permit the diplomatic service, arms control endeavors, people-to-people activities, and Radio Free Europe/Radio Liberty, and the Voice of America to continue at present levels.
(250)GENERAL SCIENCE, SPACE, AND TECHNOLOGY
National need and missions
The national need addressed by General Science, Space, and Technology is the advancement of scientific knowledge and the exploration of space. Federal programs meet this need through support of basic research in all major disciplines and a civilian space program of manned and unmanned missions to earth orbit and beyond.
The major mission areas in General Science, Space, and Technology are: (1) science, and 2) civilian space program.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
FY 1979-83
Over the next five years current law would cost a total of $24.9 billion in budget authority and $24.6 billion in outlays for General Science, Space, and Technology, while current policy would cost an additional $5.2 billion in budget authority and $4.3 billion in outlays. The implications of current trends in the two major mission areas are:
(1) Science.— Current law would cost a total of $6.4 billion in budget authority and $6.2 billion in outlays over the FY 1979-83 period. This would continue basic research in many disciplines such as physics and biology, but at gradually declining levels of support as price increases occurred. Current policy would cost an additional $1.5 billion in budget authority and $1.1 billion in outlays, and would prevent a decline in support levels due to inflation.
(2) Civilian Space Program.— Current law would cost a total of $18.5 billion in both budget authority and outlays over the FY 1979-83 period. This would provide for a four-orbiter Space Shuttle program, but would force NASA to reduce planned flight operations. Current policy would cost an additional $3.6 billion in budget authority and $3.2 billion in outlays. This would permit planned flight operations to be conducted, and would permit either a fifth Space Shuttle orbiter or additional space science missions.
Future-year choices
No new major policy choices are forthcoming over the FY 1980-83 period that can be expected to alter significantly the size of this function.
Committee recommendations
The Committee recommends $5.2 billion inbudget authority and $6.0 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $29.2 billion in budget authority and $28.3 billion in outlays over the FY 1979-83 period.
The amounts recommended for FY 1979 will support the Federal role in sponsoring basic research and will continue the nation's civilian space program.
For the missions in this function, the Committee makes the following recommendations:
(1) Science.—The Committee recommends$1.4 billion in budget authority and $1.3 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $7.5 billion in budget authority and $7.0 billion in outlays over the FY 1979-83 period.
The Committee's recommendation supports funding levels for basic research that will maintain current levels of effort with an allowance for inflation. The five-year totals, however, do not provide a full adjustment for inflation, and thus necessitate greater efficiencies to maintain current program levels.
2) Civilian Space Program.—The Committee recommends $3.8 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $21.7 million in budget authority and $21.3 billion in outlays over the FY 1979-83 period.
The Committee's recommendation would continue the U.S. civilian presence in space. The amounts recommended for FY 1979 would accommodate procurement of long lead items in FT 1979 for a fifth Space Shuttle orbiter, should Congress direct the administration to include procurement of this orbiter as part of the overall U.S. effort in space. The five-year cumulative totals do not provide a full adjustment for inflation. Hence, procurement of a fifth orbiter would necessitate real reductions in other projected activities.
(270)ENERGY
National need and missions
The national need addressed by Energy is the provision of sufficient and secure energy resources. Federal programs meet this need through: development of supply-related technologies; conservation of energy; creation of a strategic petroleum reserve; development and dissemination of reliable data; and regulation of energy prices.
The major mission areas in Energy are: (1) energy supply, (2) energy conservation, (3) emergency energy preparedness, and (4) other energy programs.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Over the next five years, current law would cost a total of $31.5 billion in budget authority and $36.2 billion in outlays for Energy, while current policy would cost an additional $5.3 billion in budget authority and $4.0 billion in outlays. The implications of current trends in the four major mission areas are:
(1) Energy Supply.— Current law would cost a total of $18.4 billion in budget authority and $22.1 billion in outlays over the FY 1979-83 period. This would fund gradually declining levels of ongoing research and development in such areas as solar energy, fossil fuels, and nuclear power. The gradual decline in real spending would lengthen the already-long process of commercializing fuel technologies. Current policy would cost an additional $3.9 billion in budget authority and $2.9 billion in outlays. These additional funds would permit more comprehensive solar energy research and development, increase the likelihood of constructing a commercial sized demonstration plant for coal-derived fuels, and support greater research and development efforts on the thorium and plutonium nuclear fuel cycles.
(2) Energy Conservation.— Current law would cost a total of $6.0 billion in budget authority and $3.7 billion in outlays over the FY 1979-83 period. This would provide: Weatherization of about 310,000 low-income homes; commercialization of some energy-efficient building standards; development of advanced electrical transmission systems; installation of cogeneration units; and insulation of schools and hospitals. Current policy would cost an. additional $0.7 billion in budget authority and $0.5 billion in outlays, and would prevent program efforts from declining due to price inflation (for example, about 18,000 more low-income homes could be insulated).
(3) Emergency Energy Preparedness.— Current law and current policy are the same, and would cost a total of $3.4 billion in budget authority and $6.7 billion in outlays over the FY 1979-83 period. This would provide an oil reserve of 500 million barrels by the end of calendar year 1980, assuming no unforeseen developments.
(4) Other Energy Programs.— Current law would cost a total of $3.7 billion in both budget authority and outlays over the FY 1979-83 period. This would support declining levels in informational, administration, and regulatory programs of the Department of Energy, Federal Energy Regulatory Commission (formerly Federal Power Commission), and the Nuclear Regulatory Commission. Current policy would cost an additional $0.8 billion in budget authority and $0.6 billion in outlays, and would prevent a decline in real program levels due to rising costs.
Future-year choices
(3) Emergency Energy Preparedness: Strategic Petroleum Reserve.— The major decision affecting the Energy function is the decision as to whether the strategic petroleum reserve will be expanded beyond 500 million barrels, which is discussed in the next section.
Committee recommendations
The Committee recommends $102 billion in budget authority and $10.1 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $42.6 billion in budget authority and $47.1 billion in outlays over the FY 1979-83 period.
The amounts recommended reflect the Committee's strong belief that energy programs must continue to be treated within the budget as an important national priority. Together with appropriate energy price and regulatory policies, the programs in this function can accelerate the development of sufficient and secure domestic energy resources, which are essential to U.S. economic prosperity and national security.
For the missions in this function, the Committee makes the following recommendations :
(1) Energy Supply.— The Committee recommends $3.9 billion in budget authority and $4.8 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $22.6 billion in budget authority and $25.3 billion in outlays over the FY 1979-83 period.
The Committee recommendations represent increases above the President's budget request and above current policy amounts, which the Committee believes would be insufficient levels of investment for stimulating additional energy supplies. The Committee's recommendation assumes no enactment of the legislation regarding commercial pricing of enriched uranium.
(2) Energy Conservation.— The Committee recommends $1.2 billion in budget authority and $1.0 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $4.6 billion in budget authority and $4.5 billion in outlays over the FY 1979-83 period.
While the Committee recommendations appear to represent a decrease from the President's budget request, they in fact represent a slight increase as the President's request is artificially inflated by inclusion of a refund from the proposed tax on fuel inefficient automobiles, a refund that is not expected to be enacted. The Committee believes the traditional conservation spending programs are an important element in U.S. energy strategy and has recommended amounts that will support a wide variety of conservation activities.
(3) Emergency Energy Preparedness.—The Committee recommends $4.3 billion in budget authority and $3.5 billion in outlays for this mission in FY 1970. The Committee anticipates that these figures will total $10.8 billion in budget authority and $12.7 billion in out-lays over the FY 1979-83 period.
The Committee recommendations for FY 1979 will support initial expansion of reserve facilities above the currently planned 500 million barrel capacity as well as the purchase of oil in quantities that, together with funds already provided, will enable nearly 500 million barrels to be procured. The cumulative five-year totals associated with the recommendation would complete the expansion of facilities and allow at least 250 million additional barrels of oil to be purchased. The remaining oil would be procured in FY 1984-85. The amounts assumed by the Committee are those requested by the President and recommended by the Committee on Energy and Natural Resources and include the OMB March 1978 estimate. The Budget Committee concurs with their view that our increasing dependence upon foreign oil necessitates a larger strategic petroleum reserve. The Committee regards its recommendations as a clear signal that the United States will protect itself against both the threat and actuality of another oil embargo.
(4) Other Energy Programs.— The Committee recommends $0.8 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $4.6 billion in both budget authority and outlays over the FY 1979-83 period
The Committee recommendations are sufficient to sustain the administrative, informational, and regulatory activities covered by this mission.
Tax expenditures related to this function
The estimated revenue losses resulting from tax expenditures related to this function are set forth in the following table:
(300)NATURAL RESOURCES AND ENVIRONMENT
National need and missions
The national need addressed by Natural Resources and Environment is the preservation and utilization of the Nation's natural resources and the improvement of the environment. Federal programs meet this need through: development of water resources in ways that realize both economic benefits and environmental protection; conservation and management of Federal lands and the encouragement of conservation on private lands; provision of recreational opportunities in national parks, recreation areas, wild and scenic areas, and wildlife refuges, and assistance to States for recreation, fish and wildlife conservation, and historic preservation; control and abatement of pollution; and promotion of increased understanding of the earth's structure, environment, and atmosphere.
The major mission areas in Natural Resources and Environment are: (1) water resources, 2) conservation and land management, (3) recreational resources, (4) pollution control and abatement, and (5) other natural resources and environment programs.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee
Current law and current policy for fiscal year 1979-83
Over the next five years, current law would cost a total of $66.4 billion in budget authority and $86.2 billion in outlays for Natural Resources and Environment, while current policy would cost an additional $10.5 billion in budget authority and $7.4 billion in outlays. The implications of current trends in the five major mission areas are:
(1) Water Resources.— Current law would cost a total of $19.5 billion in both budget authority and outlays over the FY 1979-83 period. This would continue programs for navigation, flood control and protection, irrigation, hydroelectric power generation, provision of municipal and industrial water supplies, soil conservation, and recreation at a rate that would maintain construction schedules and meet ongoing operation and maintenance requirements. A limited number of new planning and construction starts could be accommodated as ongoing projects were completed, although by FY 1983, only about 10 (instead of 20) new Corps of Engineers construction starts could be accommodated annually, out of a backlog of 200-300 active, authorized projects. The Soil Conservation Service (Department of Agriculture) could maintain 25 new construction starts annually on watershed and flood prevention projects, but construction schedules would have to be delayed. Current policy would cost an additional $3.6 billion in budget authority and $3.0 billion in outlays, and by FY 1983 would allow about 20 new Corps of Engineers construction starts annually, to address a wider variety of needs. Present construction schedules for the Soil Conservation Service could be maintained.
(2) Conservation and Land Management.— Current law would cost a total of $10.8 billion in budget authority and $10.5 billion in outlays over the FY 1979-83 period. This would provide for continued administration of the 760 million acres of Federal land, but would limit new data collection for land-use planning decisions. Department of Agriculture programs for maintaining the long-term productivity of agricultural lands would continue, but at declining levels of effort. The Forest Service could continue timber production and road construction activities on schedule, but would have to reduce from 15 percent to 10 percent the share of its funds devoted to future outputs such as reforestation and research. Current policy would cost an additional $1.4 billion in budget authority and $1.1 billion in outlays. This would maintain current levels of reforestation and research by the Forest Service, provide improved land management programs through increased data acquisition for management decisions, and maintain the current level of effort for conservation of topsoil on agricultural acreage.
(3) Recreational Resources.— Current law would cost a total of $8.6 billion in budget authority and $8.3 billion in outlays over the FY 1979-83 period. This would continue the Federal acquisition of lands for recreational use and preservation of natural and historic areas, but probably would not permit elimination of the land acquisition backlog by FY 1983. Assistance to States of up to 50 percent of the costs of planning, acquiring, and developing recreational resources also would be continued. Current policy would cost an additional $1.2 billion in budget authority and $0.8 billion in outlays. This would increase the probability of eliminating the existing land acquisition backlog by FY 1983, and provide a constant level of real assistance to States.
(4) Pollution Control and Abatement.— Current law would cost a total of $27.6 billion in budget authority and $282 billion in outlays over the FY 1979-83 period. This would maintain 75 percent assistance to States and municipalities in the form of EPA wastewater treatment construction grants. There currently are about 12,000 active projects, and by FY 1983, about 1,800 completions could be expected annually. The levels of effort would decline in EPA research and regulatory programs for development of environmental standards; pollution monitoring; grant support for State and local planning and enforcement programs; and research and development for regulating, preventing, and abating pollution. As a consequence, some environmental degradation and threats to public health and welfare could occur. Current policy would cost an additional $3.6 billion in budget authority and $1.9 billion in outlays, which could increase annual wastewater treatment project completions to about 2,000 annually by FY 1983 and prevent declines in research and regulatory programs.
(5) Other Natural Resources and Environment Programs.— Current law would result in net receipts, for a total of -$0.1 billion in budget authority and -$0.3 billion in outlays over the FY 1979-83 period. This would provide for declining levels of research and other services of the Geological Survey, National Oceanic and Atmospheric Administration, and Bureau of Mines, such as supervision of Federal mineral leasing, topographic surveys and mapping, water resources investigations, atmospheric environmental monitoring, protection of marine mammals and endangered species, and control of the adverse environmental impacts of mining. Current policy would cost an additional $0.7 billion in budget authority and $0.6 billion in outlays, and would prevent program declines due to inflation.
Future-year choices
(4) Pollution Control and Abatement.— Pursuant to the Safe Drinking Water Act of 1974, the EPA recently promulgated safe drinking water standards for major urban areas. A grant program may be proposed to assist State and local governments in meeting these and related drinking water standards. Assuming a 50 percent Federal share of costs it is estimated that a $5 billion program would be adequate to assist all municipalities with public water systems serving a population of 50,000 or more.
Committee recommendations
The Committee recommends $13.7 billion in budget authority and $12.5 billion in outlays for this function in FT 1979. The Committee anticipates that these figures will total $77.6 billion in budget authority and $75.8 billion in outlays over the FY 1979-83 period, through prevention of nonpoint source pollution could be funded at the level authorized in the Clean Water Act of 1977. Funding for Forest Service activities could be continued at a level that would allow the agency to meet 85 percent of its long-term renewable resources management goals as determined pursuant to the Forest and Rangelands Renewable Resources Planning Act of 1974. Increased funding for the Bureau of Land Management would allow greater emphasis on management of lands and resources.
For the missions in this function, the Committee makes the following recommendations:
(1) Water Resources. — The Committee recommends $3.6 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $22.2 billion in budget authority and $22.1 billion in outlays over the FY 1979-83 period.
The Committee recommendation would allow for maintenance of ongoing planning and construction schedules of the Corps of Engineers as well as for all new planning and construction starts recommended by that agency. Funding would be available for the continuation of construction on the Auburn Dam and the Garrison Diversion Project by the Bureau of Reclamation pending resolution of safety and legal questions. Acceleration of some ongoing construction activities of that agency would be possible.
(3) Recreational Resources.—The Committee recommends $1.9 billion in budget authority and $1.6 billion in outlays for this mission in FT 1979. The Committee anticipates that these figures will total $10.3 billion in budget authority and $9.2 billion in outlays over the FY 1979-83 period.
The Committee recommendation would permit the programs in this mission to experience real growth beginning in FY 1979. The increases for the Land and Water Conservation Fund would provide for greater Federal and State land acquisition. Increased funding for the Fish and Wildlife Service would allow that agency to meet responsibilities resulting from new legislation. Increases for other mission elements would allow continuation of those programs at nearly constant levels.
(5) Other Natural Resources and Environment Programs.—The Committee recommends $0.1 billion in budget authority and less than $0.05 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $0.6 billion in budget authority and $0.4 billion in outlays over the FY 1979-83 period.
The Committee recommendation would permit funding for programs in this mission to continue at approximately constant real levels through FY 1983. These include research and other services by the Geologic Survey, National Oceanic and Atmospheric Administration, and Bureau of Mines.
Tax expenditures related to the function
The estimated revenue losses resulting 'from tax expenditures related to this function are set forth in the following table:
2) Conservation and Land Management.
The Committee recommends $2.4 billion in budget authority and $2.0 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $13.2 billion in budget authority and $12.4 billion in outlays over the FY 1979-83 period.
The Committee recommendation would continue ongoing programs for the conservation of agricultural lands at current levels in FY 1979, and would permit real growth in future years. A new agricultural cost sharing program to improve water quality
(4) Pollution Control and Abatement.
The Committee recommends $5.7 billion in budget authority and $5.4 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $31.3 billion in budget authority and $31.7 billion in outlays over the FY 1979-83 period.
The Committee recommendation would maintain the programs in this mission at approximately constant real levels for the next five years. Increases over the President's recommendation for EPA research and regulatory programs would allow that agency to comply more closely with statutory requirements. The wastewater treatment construction grants program could be increased over current levels, though funding would remain below the authorized level.
(350)AGRICULTURE
National need and missions
The national need addressed by Agriculture is the promotion of a healthy and efficient agricultural economy. Federal programs meet this need through: financial assistance to farmers, to ensure them a fair return on theirproduction costs; maintenance of food and fiber supplies adequate to meet domestic and export needs; and support of research and other services to increase agricultural efficiency and output, improve health through better nutrition and food safety, and improve the efficiency and reliability of domestic and export marketing systems.
The major mission areas in Agriculture are:(1) farm income stabilization, and (2) agricultural research and services.
Current trends
The following table shows the Committee recommendations for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Over the next five years, current law would cost a total of $38.5 billion in budget authority and $37.5 billion in outlays for Agriculture, while current policy would cost an additional $0.8 billion in budget authority and $0.7 billion in outlays. The implications of current trends in the two major mission areas are:
(1) Farm Income Stabilization.— Current law would cost a total of $31.7 billion in budget authority and $30.9 billion in outlays over the FY 1979-83 period. This would provide farm price supports for increases in annual production from 2 billion to 2.8 billion bushels in food grains and from 8.3 billion to 8.8 billion bushels in feed grains, and for sustained annual production of 1.7 billion bushels in oil grains, assuming normal weather and the formulas set forth in the Food and Agriculture Act of 1977. Government-assisted agriculture loans would be sustained at the current $2.9 billion annual level, which would fall below expected demand. Administrative services for farm programs in the States and counties would decline in real terms, by about 12 percent in FY 1983. Current policy would cost an additional $0.2 billion in both budget authority and outlays, and would prevent declines in real program levels for loans and administrative services.
(2) Agricultural Research and Services.— Current law would cost a total of $6.8 billion in budget authority and $8.8 billion in outlays over the FY 1979-83 period. This would provide for declining levels of program activities for basic research and services in areas such as animal and plant production; human nutrition; conservation of soil, water, and energy; animal and plant pest management; animal and plant health inspection; Federal grain inspection; and economic, statistical and marketing services. Current policy would cost an additional $0.8 billion in budget authority and $0.5 billion in outlays, and would prevent program de-clines due to inflation.
Future-year choices
(1) Farm Income Stabilization: (a) CCC Price Supports.— Under the Food and Agriculture Act of 1977, the Secretary of Agriculture has broad discretionary authority to increase income assistance to farmers by establishing loan and target prices for major commodities and by diverting land from production. The exercise of this authority and the impact of variations in the weather could cause significant increases regardless of the FY 1979 decisions of the Congress with respect to farm income stabilization.
(b) Direct Grant Disaster Assistance Payments.— Authority for direct grant disaster assistance payments to producers of wheat, feed grains, cotton, and rice expires with the 1979 crops (FY 1980). Although an Administration proposal is expected shortly, neither the Administration nor the Agriculture Committees have made specific recommendations as to whether and in what form these payments should be reauthorized. The Congressional Budget Office has analyzed several options, including one which would eliminate direct grant payments and expand Federal Crop Insurance to a nationwide program with a 50 percent Federal subsidy for insurance premiums. This option would increase budget authority and outlays by $0.3 to $0.5 billion in FY 1983.
Committee recommendations
The Committee recommends $12.4 billion in budget authority and $7.8 billion in outlays for this function in FT 1979. The Committee anticipates that these figures will total $44.9 billion in budget authority and $39.9 billion in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations :
(1) Farm Income Stabilization.—The Committee recommends $11.0 billion in budget authority and $8.4 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $36.9 billion in budget authority and $32.1 billion in outlays over the FY 1979-83 period.
The Committee recommendation provides for CBO's April estimate of current law and current policy for CCC price supports, allows a full inflation adjustment for other programs in this mission, and would provide additional budget authority to increase CCC borrowing authority to $25 billion and CCC outlays by $1.0 billion. These increases would allow for some increased farm price supports, but would not accommodate the larger outlays that would occur in FY 1979 if H.R. 8782, the Emergency Agricultural Act of 1978, were enacted.
The Committee's five-year totals would generally allow the program activities announced by the Secretary of Agriculture under the 1977 Food and Agriculture Act to continue at current policy levels. They assume that the $1.0 billion increase in outlays in FY 1979 would not recur in future years, and that full inflation adjustments would be made in other programs in this mission through FY 1983.
2) Agricultural Research and Services.—The Committee recommends $1.4 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $8.0 billion in budget authority and $7.7 billion in outlays over the FY 1979-83 period.
The Committee recommendation for FY 1979 would generally support the same real level of basic agricultural research and services as now exists at universities, colleges, and other agriculture installations across the nation. It would also permit funding of some increases above current law recommended by the Senate Agriculture and Appropriations Committees for selected programs such as nutritional status monitoring and pest control research.
The Committee's five-year totals would generally allow for the continuation of the same real level of research and services as recommended for FY 1979.
Tax expenditures related to this function The estimated revenue losses resulting from tax expenditures related to this function are set forth in the following table:
(370)COMMERCE AND HOUSING CREDIT
National need and missions
The national need addressed by Commerce and Housing Credit is the advancement of commerce and housing, and support of postal operations. Federal programs meet this need through: mortgage market assistance to ensure an adequate supply of mortgage credit; financial assistance to assure the provision of adequate mail service; financial and technical assistance for the development of small business; and support of administrative and regulatory activities that maintain a competitive economy and protect the consumer.
The major mission areas in Commerce and Housing Credit are: (1) mortgage credit and thrift insurance, 2) Postal Service, and (3) other commerce and housing credit pro-grams.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Over the next five years, current law would cost a total of $29.8 billion in budget authority and $18.2 billion in outlays for Commerce and Housing Credit, while current policy would cost an additional $4.5 billion in budget authority and $1.8 billion in outlays. The implications of current trends in the three major mission areas are:
(1) Mortgage Credit and Thrift Insurance.— Current law would cost a total of $13.3 billion in budget authority and $1.9 billion in outlays over the FY 1979-83 period. This would provide for declining program levels to increase housing production and partially protect the housing industry from the effects of cyclical swings in the flow of deposits to thrift institutions. By FY 1983, assistance for construction of low-income housing would support only 75,000 annual starts, just over 40 percent of the annual goal of 180,000 new or substantially rehabilitated units stated in the President's budget for FY 1979. Current policy would cost an additional $3.5 billion in budget authority and $1.1 billion in outlays. This would continue mortgage market assistance at current real levels, and would support a total of 95,000 annual starts in low-income housing.
(2) Postal Service.— Current law and current policy are the same, and would cost a total of $8.4 billion in both budget authority and outlays over the FY 1979-83 period. This would provide a decreasing "public service cost" payment, and put additional pressure on the Postal Service to raise postal rates and/or reduce services to live within its own resources. Since this payment currently is inadequate to cover operating losses and since it is unlikely that the Postal Service will be able to eliminate losses in the foreseeable future, the Service probably would exercise its existing authority to borrow up to $500 million annually from the off-budget Federal Financing Bank (FFB) to cover operating losses. It is unlikely that these loans could be repaid without supplementary Federal payments to the Postal Service for that purpose.
(3) Other Commerce and Housing Credit Programs.— Current law would cost a total of $8.1 billion in budget authority and $7.9 billion in outlays over the FY 1979-83 period. This would support decreasing levels of services by such agencies as the Department of Commerce, Small Business Administration, Federal Communications Commission, Federal Trade Commission, and Securities and Exchange Commission. Current policy would cost an additional $1.0 billion in budget authority and $0.7 billion in outlays. This would prevent program declines due to inflation, and permit the SBA to rely somewhat more on direct loans in lieu of loan guarantees than would current law:
Future-year choices
(1) Mortgage Credit and Thrift Insurance: GNMA Assistance.— It is possible that additional Government National Mortgage Association (GNMA) assistance may be recommended in support of low-income housing, should this housing continue to be heavily dependent on GNMA mortgage purchase assistance and the Congress decide to maintain current levels of new Section 8 construction. This could add $1 to $3 billion in budget authority in FY 1983, and about 10 percent of that amount in outlays.
2) Other Commerce and Housing Credit Programs: Federal Financing Bank.— It is possible that a proposal will be offered to include the FFB, which is now off-budget, in budget totals. This change might have no programmatic effect, but would significantly increase budget totals, the amount depending on pending proposals such as energy financing. It is likely that FY 1983 totals would be increased by $25 to $30 billion in budget authority and $20 to $25 billion in outlays if FFB were brought on-budget.
Committee recommendations
The Committee recommends $5.9 billion in budget authority and $3.6 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $34.8 billion in budget authority and $19.7 billion in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations:
(1) Mortgage Credit and Thrift Insurance.— The Committee recommends $2.4 billion in budget authority and $0.3 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $16.9 billion in budget authority and $3.0 billion in outlays over the FY 1979-83 period.
The Committee recommendation would accommodate funding required to ensure an adequate supply of mortgage credit with Federal assistance maintained at current levels in real terms. The targets would allow GNMA mortgage purchase activities to provide below market interest rate mortgages at levels requested by the President to help finance new subsidized housing for low-income families and unsubsidized housing for moderate income families in distressed areas. The Committee recommendation also assumes funding at current policy levels of assistance for housing in rural areas and for elderly and handicapped people.
(2) Postal Service.— The Committee recommends $1.8 billion in budget authority and $1.8 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $8.4 billion in budget authority and $8.4 billion in outlays over the FY 1979-83 period.
The Committee recommendation assumes a continuation of the Federal Payment to the Postal Service consistent with existing law, which anticipates that the Postal Service will make steady progress toward achieving financial self-sufficiency. During markup, the Committee was advised that Assistant Postmaster General Finch recommended against any increase in appropriations, apparently believing that the Postal Service will be able significantly to improve its financial situation if it is required to accommodate its operations to the decreasing level of financial assistance permitted under current law. Accordingly, the Committee has recommended mission targets which anticipate that appropriations will approximate $1.8 billion in FY 1979, and will decline steadily thereafter to $1.6 billion in FY 1983. The Senate should be aware, however, that if the Postal Service is not able to improve its performance as it expects, this decreasing funding level will exacerbate its financial problems, and further increase the pressure to raise postal rates and reduce delivery standards. Under these circumstances, the Postal Service also will be likely to return to its practice of financing up to $500 million of its annual operating losses by "borrowing" off budget from the Federal Financing Bank. As history has shown, such "borrowing" cannot be repaid except with the assistance of emergency congressional appropriations.
(3) Other commerce and housing credit programs.— The Committee recommends $1.6 billion in budget authority and $1.4 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $9.4 billion in budget authority and $8.4 billion in outlays over the FY 1979-83 period.
The Committee recommendation would generally allow for a continuation of the current level of activity in programs administered by agencies such as the Department of Commerce, FCC, FTC and SEC. For SBA's programs of credit assistance to small business, the recommended targets could accommodate the recommendation of the President and the Senate Select Committee on Small Business, that future assistance should place more emphasis on the use of loan guarantees, which require the participation of private lenders, in comparison with 100 percent direct Federal loans. The targets do not include allowances for the creation of new programs or agencies which would require substantial amounts of Federal funding.
Tax expenditures related to this junction
The estimated revenue losses resulting from tax expenditures related to this function are set forth in the following tables:
(400)TRANSPORTATION
National need and missions
The national need addressed by Transportation is satisfaction of the transportation needs of commerce and the public. Federal programs meet this need through development of the various modes of transportation and regulation of transportation activities.
The major mission areas in Transportation are: (1) highways, (2) railroads, (3) mass transit, (4) air transportation, and (5) water and other transportation.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Over the next five years, current law would cost a total of $86.0 billion in budget authority and $90.3 billion in outlays for Transportation, while current policy would cost an additional $11.7 billion in budget authority and $4.7 billion in outlays. The implications of current trends in the five major missions areas are:
(1) Highways.— Current law would cost a total of $38.0 billion in budget authority and $38.9 billion in outlays over the FY 1979-83 period. This would continue adequate construction funding for the Federal-aid highway system, predominantly for the 42,500-mile Interstate system, which now is about 92 percent (39,000 miles) constructed, a proportion which would reach almost 98 percent(41,500 miles) by the end of FT 1983. However, increasing costs could cause declines in real assistance for maintenance projects and for construction projects not on a Federal-aid system. Current policy would cost an additional $4.9 billion in budget authority and $1.2 billion in outlays, and would support increased highway and bridge rehabilitation. However, since rehabilitation expenses appear to be growing at a rate higher than the inflation rate, even these additional funds might not be enough to keep pace with requirements, which might necessitate an increase in highway taxes.
(2) Railroads.— Current law would cost a total of $7.1 billion in budget authority and $7.7 billion in outlays over the FY 1979-83 period. This would be adequate to fund completion of the high-speed Northeast Corridor Project by 1983, and to continue at current funding levels, the existing pilot rail rehabilitation programs to improve rail freight service and safety. However, current law levels would result in substantial cuts in Amtrak services and would provide for no additional assistance to Conrail, resulting in a serious funding shortage. Current policy would cost an additional $0.6 billion in budget authority and $0.4 billion in outlays. This should allow Amtrak to maintain its current route schedule, but provide no significant increase in Federal assistance to rail freight. This means that in the absence of substantial budget increases, rail rehabilitation investment may be restricted to private funding or to off-budget loans and/or loan guarantees.
(3) Mass Transit.— Current law would cost a total of $10.7 billion in budget authority and $13.8 billion in outlays over the FY 1979-83 period. This would continue funding of the currently approved new rail systems in six cities, but real levels of other capital assistance and operating subsidies gradually would decline. Urban areas thus might be pressured to increase the share of funds they provide by transit fares or local subsidies, or to cut back on equipment purchases and service standards. Current policy would cost an additional $3.4 billion in budget authority and $1.1 billion in outlays. This could permit construction starts on one or two additional new rail systems, although Federal grant assistance would continue to emphasize less capital intensive projects such as rail rehabilitation and modernization, bus replacement, restricted traffic lanes, improved traffic management, and the like. Financial pressures on local transit systems would be eased somewhat, but it still would not be certain that Federal assistance would be adequate to both continue the current rate of bus fleet expansion and pay an average of 16 percent of transit operating expenses.
(4) Air Transportation.— Current law would cost a total of $18.3 billion in budget authority and $18.4 billion in outlays over the FY 1979-83 period. This probably would continue adequate operation of the air traffic control system and other administrative and technical functions of the Federal Aviation Administration (FAA) , but would result in decreasing real levels of assistance for airport development and the purchase of supporting facilities and equipment. Current policy would cost an additional $1.5 billion in budget authority and $1.1 billion in outlays. Since Federal programs of assistance to air transportation are well established and experiencing no inherent pressures for expansion, this funding should be adequate to meet currently projected needs for the airport development and facilities and equipment programs.
(5) Water and Other Transportation.— Current law would cost a total of $11.9 billion in budget authority and $11.5 billion in outlays over the FY 1979-83 period, but would result in declining real levels of assistance. Current policy would cost an additional $1.2 billion in budget authority and $0.9 billion in outlays, and would prevent declines in assistance due to inflation.
Future-year choices
2) Railroads: Rail Rehabilitation.—The Administration has indicated its intent to recommend next year a comprehensive program to assist national rail rehabilitation, which is expected to require elimination of duplicative freight lines in return for financial assistance in support of roadbed and other physical asset rehabilitation. Rehabilitation would increase the speed and reliability of rail freight transport, enhance the ability of railroads to transport coal as necessary to implement the energy conversion strategy, and reduce the probability of train derailments. In FY 1983, the program would cost from zero to about $1 billion in budget authority and zero to $0.8 billion in outlays, depending on whether direct loans or loan guarantees were used.
(4) Air Transportation: Airport development.—The Senate Commerce Committee indicates that an increase in the airport development grant program may be proposed when the current authorization expires in FY 1980, to reduce aircraft noise problems through the purchase of real estate adjoining airports. In FY 1983, this could add $0.2 to $9.4 billion in budget authority and $0.2 to $0.3 billion in outlays.
Committee recommendations
The Committee recommends $19.5 billion in budget authority and $17.5 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $103.1 billion in budget authority and $97.0 billion in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations:
(1) Highways.— The Committee recommends $8.2 billion in budget authority and $7.4 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $42.6 billion in budget authority and $41.2 billion in outlays over the FY 1979-83 period.
The Committee recommendation would accommodate the recommendation of the Senate Environment and Public Works Committee to increase funding slightly above the President's request in FY 1979, but to allow for only very moderate increases thereafter. As recommended by the authorizing committee, such funding in FY 1979 could allow acceleration of interstate construction and also permit a significant expansion in the level of assistance to help meet the priority need for highway bridge repair and replacement. The level of spending assumed for highways is consistent with the level of receipts projected for the Highway Trust Fund. Higher levels of highway spending would require increases in the gasoline and other excise taxes supporting the Trust Fund.
(2) Railroads.— The Committee recommends $2.4 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $8.8 billion in budget authority and $9.3 billion in outlays over the FY 1979-83 period.
The Committee recommendation would support the continuation of current activity levels for the programs of the Federal Railroad Administration, and would accommodate additional on-budget investment in Conrail equal to that railroad's minimum needs estimate of $1.3 billion. The targets also assume that the "zero base" study of Amtrak's route structure currently being undertaken by DOT will result in implementation sometime next year of a more efficient rail passenger network, and that this will permit a reduction in the rate of growth of future Amtrak subsidies.
(3) Mass Transit.— The Committee recommends $3.2 billion in budget authority and $2.3 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $18.7 billion in budget authority and $14.6 billion in outlays over the FY 1979-83 period.
The Committee recommendation would permit funding slightly in excess of the President's January budget request, and thus would approximately maintain current activity levels for programs providing assistance for mass transit construction, extension and rehabilitation, bus purchases, other capital assistance, and operating subsidies. Without reductions in other programs, however, it is unlikely that the recommended targets would be adequate to fund construction of any major new rail systems or to implement any sizable new grant programs such as that recently proposed by the President for construction of multi-modal transportation terminals in central cities.
(4) Air Transportation and (5) Water and Other Transportation.— The Committee recommends a total of $5.7 billion in budget authority and $5.3 billion in outlays for these missions in FY 1979.
The Committee anticipates that these figures will total $33.0 billion in budget authority and $31.9 billion in outlays over the FY 1979-83 period.
The Committee recommendation would continue current real program levels for agencies such as the Federal Aviation Administration, National Aeronautics and Space Administration, Civil Aeronautics Board, Coast Guard, Maritime Administration, Federal Maritime Commission, and Interstate Commerce Commission. Funding would be likely to prove inadequate to accommodate any major new or significantly expanded programs without major reductions in other programs.
(450) COMMUNITY AND REGIONAL DEVELOPMENT
National need and missions
The national need addressed by Community and Regional Development is strengthening the economies and physical structure of urban and rural areas. Federal programs meet this need through: assistance to State and local governments in rehabilitating housing, constructing public facilities, and attracting job-producing private investment; investment in improved roads, water and waste treatment systems, health centers, and other facilities; and disaster assistance to State and local governments, private firms, and individuals to facilitate recovery from the effects of floods, drought, and other natural and economic disasters.
The major mission areas in Community and Regional Development are: (1) community development, (2) area and regional development, and (3) disaster relief and insurance.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Over the next five years, current law would cost a total of $40.3 billion in budget authority and $41.9 billion in outlays for Community and Regional Development, while current policy would cost an additional $8.7 billion in budget authority and $4.8 billion in outlays. The implications of current trends in the three major mission areas are:
(1) Community Development.— Current law would cost a total of $23.5 billion in budget authority and $23.0 billion in outlays over the FY 1979-83 period. This would provide grants-in-aid to almost all State and local governments at a level equal to about 2 percent of their total spending in FY 1979, but declining to about 1 percent by FY 1983. These grants and direct loans assist these governments in the repair and construction of public facilities such as parks, streets, and sewer lines; subsidize firms willing to relocate to or expand in economically distressed localities; and support State and local planning for the development of urban and rural areas. Recent revisions to distribution formulas and other changes would direct an increasing portion of this aid to high-need areas such as older cities, and to lower-income people within these areas. Some analysts suggest that an undetermined but growing number of distressed local governments depend on this Federal aid to avoid financial crisis, and that a decline in real levels of assistance might cause financial crises in a number of areas. Current policy would cost an additional $4.8 billion in budget authority and $2.4 billion in outlays, and would sustain Federal assistance at a level equal to about 2 percent of total State and local spending.
(2) Area and Regional Development.— Current law would cost a total of $11.9 billion in budget authority and $14.2 billion in outlays over the FY 1979-83 period, while current policy would cost an additional $2.6 billion in budget authority and $1.3 billion in outlays. Except for the fact that programs in this mission focus on broader geographic areas, the discussion under the preceding mission applies equally well to these programs.
(3) Disaster Relief and Insurance.— Current law would cost a total of $4.9 billion in budget authority and $4.8 billion in outlays over the FY 1979-83 period. If the occurrence of disasters is consistent with the experience of recent years, these amounts would not be adequate to sustain real levels of assistance, and could force such measures as increased interest rates charged to borrowers under the Small Business Administration (SBA) and Farmers Home Administration (FmHA) disaster loan programs. Current policy would cost an additional $1.3 billion in budget authority and $1.2 billion in outlays, and would provide adequate assistance for the average level of disasters experienced in recent years.
Future-year choices
Since Congressional action is expected in FY 1979 on disaster assistance and on the President's urban policy proposals, no major choices are now foreseen for the FY 1980-83 period.
Committee recommendations
The Committee recommends $10.4 billion in budget authority and $9.0 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $53.2 billion in budget authority and $50.8 billion in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations:
(1) Community Development.—The Committee recommends $5.0 billion in budget authority and $4.0 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $27.0 billion in budget authority and $25.0 billion in outlays over the FY 1979-83 period. The Committee recommendation assumes an increase in rehabilitation loans to levels that would bring over 20,000 homes and commercial properties up to code standards. The Committee recommendation would accommodate moderate increases in the Community Development Block Grant program and other community development program over the next five years.
(2) Area and Regional Development.— The Committee recommends $3.7 billion in budget authority and $3.9 billion in outlays for this mission In FY 1979. The Committee anticipates that these figures will total $18.6 billion in budget authority and $19.0 billion in outlays over the FY 1979-83 period.
The Committee recommendation assumes the levels of funding requested by the President for the Economic Development Administration's programs to aid local economies hurt by long term decline or shifts in foreign trade. The Committee recommendation would accommodate funding for the labor-intensive "soft public works" program proposed in the President's urban message. The recommended targets assume funding of other regional development programs at levels that would maintain current levels in real terms.
(3) Disaster Relief and Insurance.—The Committee recommends $12 billion in budget authority and $1.0 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $4.9 billion in budget authority and $4.8 billion in outlays over the FY 1978-80 period.
The Committee recommendation would accommodate disaster loans and grants adequate
for a level of disasters slightly below the average experienced in recent years. It is assumed that SBA disaster loans for crop damage would continue, but would be provided at the government's cost of capital, as current law will require, beginning in FY 1979.
Multi-Mission Issue.— The Committee recommends $0.6 billion in budget authority and$0.1 billion in outlays for the National Development Bank programs in FY 1979. The Committee anticipates that these figures will total $2.8 billion in budget authority and $2.0 billion in outlays over the FY 1979-83 period.
The Committee recommendation would accommodate funding of Federal grants the President has requested as part of his proposed National Development Bank. These grants would be provided through HUD and the Economic Development Administration to encourage private firms to locate or expand facilities in economically distressed areas. The Committee recommendation would not accommodate the President's recommended amounts for such other elements of the National Development Bank proposal as loan guarantee default reserves, interest rate subsidies and secondary market activities.
Tax expenditures related to this junction
The estimated revenue losses resulting from the tax expenditure related to this function are set forth in the following table:
(500) EDUCATION, TRAINING, EMPLOYMENT, AND SOCIAL SERVICES
National Need and Missions
The national need addressed by Education, Training, Employment, and Social Services is the assurance of full and equal educational and employment opportunities for all Americans. Federal programs meet this need through: improvement of elementary and secondary education opportunities for students in need of financial assistance; support for educational and cultural institutions and activities; improvement of the understanding of the educational process through research; training and employment opportunities to promote sustained full employment; regulation of standards applicable to labor-management relationships; collection and dissemination of labor statistics; and supportive services to the poor, the aged, the handicapped, and other groups with special needs, to help them become self-sufficient.
The major mission areas in Education, Training, Employment, and Social Services are: (1) elementary, secondary, and vocational education; (2) higher education; (3) research and general education aids; (4) training and employment; (5) other labor services; and (6) social services.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for fiscal year 1979-83
Over the next five years, current law would cost a total of $150.5 billion in budget authority and $152.1 billion in outlays for Education, Training, Employment, and Social Services, while current policy would cost an additional $26.9 billion in budget authority and $21.4 billion in outlays. The implications of current trends in the six major mission areas are:
(1) Elementary, Secondary, and Vocational Education.— Current law would cost a total of $34.0 billion in both budget authority and outlays over the FY 1979-83 period. The proportion of educationally handicapped children being served would decline from 62 percent to 40 percent, and the Federal share of the costs of educating the handicapped would drop from 8 percent to 5 percent. Current policy would cost an additional $9.0 billion in budget authority and $5.9 billion in outlays, and would maintain the current levels of 62 percent of educationally disadvantaged children served and 8 percent Federal share of costs educating the handicapped.
(2) Higher Education.— Current law would cost a total of $20.8 billion in budget authority and $20.7 billion in outlays over the FY 1979-83 period. The proportion of students receiving Federal higher education subsidies would decline from the current 27 percent to 14 percent in FY 1983, in part because of inflation, and in part because rising family incomes would reduce the eligible population. Current policy would cost an additional $2.6 billion in budget authority and $2.1 billion in outlays, and would provide higher education subsidies for about 21 percent of all students.
(3) Research and General Education Aids.— Current law would cost a total of $6.6 billion in budget authority and $6.5 billion in outlays over the FY 1979-83 period. This would maintain the current mix of assistance to cultural institutions and activities, educational and scientific research, and related projects, but at gradually declining levels. Current policy would cost an additional $1.1 billion in budget authority and $0.8 billion in outlays, and would prevent program declines due to inflation.
(4) Training and Employment.— Current law would cost a total of $61.3 billion in budget authority and $82.9 billion in outlays over the FY 1979-83 period. By FY 1983, the number of public service jobs and of training slots funded would decline by over 17 percent and over 27 percent to 600,000 and 717,800 respectively. Current policy would cost an additional $11.3 billion in budget authority and $9.2 billion in outlays, and would sustain the current levels of 725,000 public service jobs and 990,800 training slots.
(5) Other Labor Services— Current law would cost a total of $2.5 billion in budget authority and $2.4 billion in outlays over the FY 1979-83 period, and would result in declining levels of service in programs to establish and enforce employer-employee relationship standards and to collect and disseminate statistics on employment, wages, and prices. Current policy would cost an additional $0.2 billion in both budget authority and outlays, and would maintain current levels of service.
(6) Social Services.— Current law would cost a total of $25.5 billion in both budget authority and outlays over the FY 1979-83 period. This would result in substantial reductions in services, because the Title XX program of social services grants to States is "capped" and 47 of the 50 States currently are at their ceiling. Current policy would cost an additional $2.7 billion in budget authority and $2.2 billion in outlays. However, unless the "cap" on Title XX grants is raised, real levels of services still would decline.
Future year choices
(1) Elementary, Secondary, and Vocational Education: Services to the Handicapped.— The enactment of two recent laws may cause pressures to increase funding for services to the handicapped. The Education for All Handicapped Children Act of 1975 authorized Federal sharing of the costs of educating handicapped children, at a rate increasing by 10 percent per year from the FY 1978 level of 10 percent to 40 percent in FY 1981. Should the Congress decide to fund these increasing shares and extend the 40 percent share through FY 1983, the Federal share would rise to $1,023 per child in FY 1983 for a total cost of $4.2 billion, or $3.2 billion above the current policy estimate for that year (which assumed a 10 percent share). Section 504 of the Vocational Rehabilitation Act of 1973 requires that all public facilities and programs be open and accessible to handicapped citizens. Several bills have been introduced to provide Federal sharing of the costs of removing architectural barriers, with cost estimates ranging from $0.5 to $1.5 billion.
2) Higher Education: Student Aid.— The Congress currently is considering alternatives for tuition assistance for middle-income families, which will influence choices in reauthorizing the Higher Education Act next year. Whichever option is chosen by this Congress, direct grants or tuition tax credits, pressures for increased assistance are likely to arise.
The House Education and Labor Committee has suggested $1.2 billion for grants in FY 1979, and $2.0 billion in FY 1980. The Finance Committee has reported a bill that includes a tax credit for elementary and secondary school tuition, the enactment of which may accelerate pressures to provide general aid to public schools, in addition to the existing Federal aid for schools serving disadvantaged students. Additional Federal assistance could cost from $7 to $18 billion in FY 1983.
Committee recommendations
The Committee recommends $31.8 billion in budget authority and $31.2 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $177.2 billion in budget authority and $174.8 billion in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations :
(1) Elementary, Secondary, and Vocational Education.—The Committee recommends $7.7billion in budget authority and $6.6 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $43.0 billion in budget authority and $40.3 billion in outlays over the FY 1979-83 period.
The Committee recommendation permits sufficient funds to accommodate increases for Title I of the Elementary and Secondary Education Act, to fund the Federal share of the excess cost of educating handicapped children at 12 percent, and to provide for increases in other elementary and secondary programs, such as Head Start and Emergency School Aid. The Committee assumes savings from inclusion of smaller programs for the disadvantaged and set-aside programs in Title I.
(2) Higher Education.—The Committee recommends $4.4 billion in budget authority and $4.2 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $22.7 billion in budget authority and $22.6 billion in outlays over the FY 1979-83 period.
The Committee recommendation would permit current law spending for programs in this mission, plus an amount for the refundable portion of a higher education tuition tax credit.
(3) Research and General Education Aids.—The Committee recommends $1.2 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $7.2 billion in budget authority and $7.0 billion in outlays over the FY 1979-83 period.
The Committee recommendation permits current law funding for all programs included in this function with some adjustment for inflation. The Committee expressed concern over the possible costs which could be involved in removing architectural barriers to the handicapped, but concluded that there was inadequate information available to assume any funds for this purpose at this time. The Committee expressed an interest in directing a portion of the EDA "soft public works" funding, assumed in function 450, for this purpose.
(4) Training and Employment.—The Committee recommends $12.0 billion in budget authority and $12.9 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $74.2 billion in budget authority and $75.0 billion in outlays over the FY 1979-83 period.
The Committee's recommended targets permit the maintenance of current policy levels for employment and training programs. In view of changing economic conditions, the Committee recognizes the reduced need for countercyclical employment subsidies. The Committee therefore recommends that half the current spending effort for public service jobs be directed toward employment and training services for the structurally unemployed. The Committee assumed that increased efforts for youth initiatives, services to welfare recipients, and new private sector initiatives could be accommodated within the total funding assumed for comprehensive services to the structurally unemployed. The Committee mark includes sufficient funds to provide some increases for expansion in WIN services to AFDC recipients.
(5) Other Labor Services.—The Committee recommends $0.4 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $2.5 billion in budget authority and $2.4 billion in outlays over the FY 1979-83 period.
The Committee's recommended targets permit current law spending for programs included in this mission.
(6) Social Services.—The Committee recommends $5.9 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $27.5 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee's recommended targets permit sufficient funds to provide for increases in the level of social services funded under Titles XX and IV(B) of the Social Security Act, and payments of retroactive claims for social services.
Tax expenditures related to this function
The estimated revenue losses resulting from tax expenditures related to this function are set forth in the following table:
(550)HEALTH
National need and missions
The national need addressed by Health is the improved health status of Americans. Federal programs meet this need through: efforts to improve access to health care services for those who otherwise could not afford proper health care, primarily by payments for services; research into the cause, treatment, and prevention of disease; support for health care work force education and for facility construction; and regulatory efforts to improve public protection on the job and in the consumer marketplace.
The major mission areas in Health are; (1) health care services;(2) health research; (3) education and training of the health care work force; and (4) consumer and occupational health and safety.
Current trends
The following table shows the Committee recommendations for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for fiscal years 1979-83
Over the next five years, current law would cost a total of $339.8 billion in budget authority and $317.5 billion in outlays for Health, while current policy would cost an additional $7.8 billion in budget authority and $6.6 billion in outlays. The Federal Government would account for about one-third of the Nation's total expenditures for health. The implications of current trends in the four major mission areas are:
(1) Health Care Services.— Current law would cost a total of $316.2 billion in budget authority and $294.1 billion in outlays over the FY 1979-83 period. This would account for about 28 percent of the Nation's total spending for health care services, and would finance services for about 44 million people in 1979 and 47 to 48 million people in 1983. Current policy would cost an additional $3.0 billion in budget authority and $2.9 billion in outlays, and would sustain current levels of assistance in certain programs where adjustments for inflation are not mandated by current law.
Despite these sizeable costs, access to health care will continue to be limited for many. Although the aged and disabled are eligible for medicare, cost-sharing requirements and non-covered services result in their paying 40 percent of their own health costs. Further, about 25 percent of the Nation's poor are ineligible for medicaid because they do not receive welfare benefits under categorical income security programs. (Even the poor who do qualify for medicaid often find their choices limited to health care providers that are willing to take the "less than going rate" reimbursement imposed by State reimbursement schedules.) Between 12 and 18 million Americans have no private health insurance, and are ineligible for Federal assistance.
Finally, the focus on the institutional mode of treatment limits cost-effective care for those in need of outpatient care, home care, or preventive services.
(2) Health Research.— Current law would cost a total of $14.9 billion in budget authority and $14.8 billion over the FY 1979-83period. This would provide a total nominal increase of only 2.9 percent over the period, causing substantial reductions in the real level of support. Currently, research efforts focus on treatment rather than prevention, although prevention appears to be more promising. Current policy would cost an additional $3.8 billion in budget authority and $2.6 billion in outlays, and would prevent research support declines due to inflation.
(3) Education and Training of the Health Care Work Force.— Current law would cost a total of $4.4 billion in budget authority and $4.3 billion in outlays over the FY 1979-83 period, with real levels of support declining steadily as the result of inflation. Because of the long lead-time between obligation of funds and the completion of training, this decline should cause no appreciable decrease in the number of health care workers in1983, but might have serious implications for the post-1983 period. At present, more than 4.8 million people — about 5 percent of the total civilian labor force — are employed in health-related jobs, and many received their training as the result of Federal aid. Current policy would cost an additional $1.1billion in budget authority and $0.7 billion in outlays, and would sustain real program levels. However, current projections indicate that significant surpluses in physician and nursing manpower may occur by 1990.
(4) Consumer and Occupational Health and Safety.— Current law would cost a total of $4.4 billion in both budget authority and outlays over the FY 1979-83 period. Anticipated inflation during the period would reduce Federal compliance and review efforts by 14 percent, a critical development in view of the fact that current Federal efforts are inadequate (for example, only 1 to 2 percent of the Nation's workplaces are now reviewed for compliance with safety requirements in any one year, and about 2.2 million disabling injuries occur every year because of "unsafe" work places). Current policy would cost an additional $0.4 billion in budget authority and $0.3 billion in outlays, and would prevent program declines due to inflation.
Future-year choices
(1) Health Care Services: National Health Insurance.— The need of many Americans for improved access to health care has been the genesis of many national health insurance proposals, currently ranging from a limited expansion of existing programs to complete financing of all services for all people. The future-year implications of national health insurance depend very heavily on the policies adopted by the Congress. If cost control efforts fail and health care prices continue to rise at the 15 percent per year rate of the past decade, the choices as to the form of national health insurance will be particularly difficult. Continued health cost inflation could make the need for comprehensive national health insurance more critical, but could also force the adoption of a more limited approach that could be accommodated at more reasonable Federal costs.
Depending on the approach adopted, Federal costa for national health insurance by FY 1983 could range from $25 to $150 billion per year.
Committee recommendations
The Committee recommends $52.7 billion in budget authority and $49.5 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $349.7 billion in budget authority and $308.2 billion in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations:
(1) Health Care Services.— The Committee recommends $47.9 billion in budget authority and $44.8 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $322.5 billion in budget authority and $281.7 billion in outlays over the FY 1979-83 period.
The Committee recommendation anticipates legislation to improve the medicaid program by some combination of additional benefits, expanded coverage or increased matching rates. The various improvements discussed by the Committee included mandatory dental benefits, coverage of low-income pregnant women, and mandatory coverage of children from low-income non-welfare eligible families. The Committee did not assume that all these changes would require expenditures for the full fiscal year 1979. Funds are also included for growth in such health service programs as community health centers, migrant health centers, and preventive care programs. The recommendation assumes reductions based on the enactment of a hospital cost containment proposal combining both voluntary and possible back-up Federal controls. Further savings are anticipated from improved administration of the medicaid program.
(2) Health Research.—The Committee recommends $3.1 billion in budget authority and $3.0 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $18.2 billion in budget authority and $17.4 billion in outlays over the FY 1979-83 period.
The Committee recommendation includes discretionary inflation allowances to keep the funding of research activities constant in real terms and anticipates that the President's initiatives for increases in basic research will be a top priority. The Committee notes its concern about the quality of the administration of certain research programs.
(3) Education and Training of the Health Care Work Force.—The Committee recommends $0.8 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $4.0 billion in budget authority and $4.1 billion in outlays over the FY 1979-83 period.
The Committee recommendation includes part of the President's requested reduction in funding for health professions educational assistance. The Committee notes that improvement of the geographical and specialty maldistribution, rather than increasing the total number of health care professionals, is the priority objectives for this mission.
(4) Consumer and Occupational Safety and Health.— The Committee recommends $0.9 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $5.0 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee's recommended target includes funds to support activities mandated by legislation passed by the Congress last year.
(600)INCOME SECURITY
National need and missions
The national need addressed by Income Security is the assurance of a minimum standard of living for individuals and families. Federal programs meet this need through: protection against loss of income due to the retirement, disability, unemployment, or death of a wage-earner; provision of income support for those unable to secure an adequate income for themselves; assistance in providing shelter for those without adequate housing; and provision of more nutritionally adequate diets for children and others.
The major mission areas in Income Security are: (1) general retirement and disability insurance,
(2) Federal employee retirement and disability, (3) unemployment compensation, (4) public assistance, (5) nutrition programs, (6) housing assistance, and (7) other income security programs.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Over the next five years, current law would cost a total of $1,186.1 billion in budget authority and $945.2 billion in outlays for Income Security, while current policy would cost an additional $35.3 billion in budget authority and $2.7 billion in outlays. The implications of current trends in the seven major mission areas are:
(1) General Retirement and Disability Insurance.— Current law would cost a total of $702.5 billion in budget authority and $663.3 billion in outlays over the FY 1979-83 period. This would provide for projected needs over the period for such programs as Social Security old-age and survivors benefits and disability benefits (collectively called OASDI). These programs now serve 15.6 percent of the total population, which would increase to 16.8 percent, or 38.8 million people, in FY 1983. Current policy would cost an additional $0.1 billion in budget authority and $0.6 billion in outlays, and would prevent declines in programs where inflation adjustments are not mandated by current law.
(2) Federal Employee Retirement and Disability.— Current law and current policy are essentially identical, and would cost a total of $124.5 billion in budget authority and $76.5 billion in outlays over the FY 1979-83 period. The largest component, the Civil Service retirement and disability system, now provides benefits to 1.5 million people, or 0.6 percent of the U.S. population; by FY 1983, this would increase to 1.8 million, or 0.8 per-cent of the U.S. population.
(3) Unemployment Compensation.— Current law would cost a total of $76.8 billion in budget authority and $53.1 billion in outlays over the FY 1979-83 period. This would provide continued benefits to unemployed workers, the number of which is expected to decline from the FY 1978 average of 2.4 million to 1.8 million in FY 1983, as the rate of unemployment responds to an improving economy. Current policy would cost an additional $0.4 billion in budget authority and $1.0 billion in outlays, for the Federal unemployment benefits and allowances (FUBA) program and for increases in State administrative costs, but would not affect the level of protection for most unemployed workers.
(4) Public Assistance.— Current law and current policy are the same, and would cost a total of $101.4 billion in both budget authority and outlays over the FY 1979-83 period. The number of recipients is expected to be lower in FY 1983 than at present, due to economic improvement and a declining birth rate. For example, a monthly average of about 16 million people, or 7.3 percent of the U.S. population, will receive food stamps in FY 1978; by FY 1983, this number is expected to decline to 14.6 million, or 6.4 percent of the population. Similar decreases are expected to occur in other programs, but costs will increase due to gradually rising benefits.
(5) Nutrition Programs.— Current law and current policy are essentially identical, and would cost a total of $20.5 billion in budget authority and $20.3 billion in outlays over the FY 1979-83 period. Eight percent more meals than at present are expected to be served in FY 1983 to children in 89 percent of all schools. Total school enrollment is expected to drop by 6 percent over the next five years.
(6) Housing Assistance.— Current law would cost a total of $159.0 billion in budget authority and $29.1 billion in outlays over the FY 1979-83 period. The number of persons receiving housing assistance would grow considerably by FY 1983; however, the number added each year would be increasingly constrained by declines in real program levels due to inflation, and would decline from about 380,000 in FY 1978 to 280,000 in FY 1983. The total Federal commitment would grow from 3.6 million families (9 percent of those eligible) in FY 1978 to 5.3 million families (12 percent of those eligible) in FY 1983. Current policy would cost an additional $34.7 billion in budget authority and $1.0 billion in outlays. This would provide assistance for an additional 300,000 families by FY 1983, thus raising the total Federal commitment to about 5.6 mil-lion families (about 12.7 percent of those eligible).
(7.) Other Income Security Programs.— Current law would cost a total of $1.4 billion in both budget authority and outlays over the FY 1979-83 period. Current policy would cost an additional $0.1 billion in both budget authority and outlays, and would prevent a gradual decline in real program levels due to inflation.
Future-year choices
(1) General Retirement and Disability Insurance: (a) Social Security Reforms.— Several developments are possible that would affect Social Security programs, including: more equitable treatment of female workers and their dependents and survivors; coverage for all workers, including Federal employees; changes in the earnings limitations for retirees; changes in eligibility requirements for disability benefits; and changes in the financing of the system. The impact of these reforms by FY 1983 could range from savings of $21 billion to additional costs of $30 billion.
(b) Expansion of Occupational Disease Disability Programs.— Legislation may be considered to provide benefits to victims of occupational diseases, such as "brown lung" benefits for textile workers, and benefits for workers exposed to radiation or asbestos particles. Depending on the scope and level of new benefits provided, additional costs by FY 1983 could be as much as $10 billion annually.
(3) Unemployment Compensation: Minimum Unemployment Benefits.— Since the States currently set their own benefit levels, the level of income protection offered to unemployed workers varies significantly. Legislation might be considered to establish a national minimum level, resulting in additional annual costs of $4 to $5 billion by FY 1983.
(4) Public Assistance: Welfare Reform.— Significant future-year costs may be incurred due to decisions made on welfare reform this year and in future years.
(8).Housing Assistance: Housing Allowances.— Legislation may be considered which would provide a housing allowance or other direct housing assistance to low income families. Such a program could reach 40 percent of the eligible population, compared to the approximately nine percent served under existing programs. Annual costs by FY 1983 could be as much as $8.0 billion.
Committee recommendations
The Committee recommends $192.5 billion in budget authority and $159.9 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $1,216.6 billion in budget authority and $967.3 billion in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations:
(1) General Retirement and Disability Insurance.—The Committee recommends $107.0 billion in budget authority and $109.2 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $702.5 billion in budget authority and $663.3 billion in outlays over the FY 1979-83 period.
The Committee recommendations permit continuation of spending at current law levels. The Committee recommends this policy without prejudice toward certain increases in railroad retirement benefits now pending before the Senate.
(2) Federal Employee Retirement and Disability.— The Committee recommends $20.3 billion in budget authority and $12.0 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $124.7 billion in budget authority and $76.7 billion in outlays over the FY 1979-83 period.
The Committee recommendation provides, in addition to current law, for several liberalizations of civil service retirement benefits suggested by the Governmental Affairs Committee in its March 15 report to the Budget Committee.
(3) Unemployment Compensation.— The Committee recommends $16.4 billion in budget authority and $11.1 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $76.8 billion in budget authority and $53.1 billion in outlays over the FY 1979-83 period. The Committee recommendation provides for a continuation of current law.
(4) Public Assistance.— The Committee recommends $18.9 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $118.1 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation assumes savings from increased targeting of public service jobs on low income people and from the standardization of the allowance provided to AFDC recipients for work related expenses in determining their benefit levels. Small additional costs are assumed for public assistance amendments now pending in the Senate. The Committee recommends an expansion of the earned income tax credit and treatment of the refundable portion of the credit as spending in this function rather than as a loss in revenues, which was the past practice. Other than the expanded earned income credit, the Committee recommendation does not assume any welfare reform costs for FY 1979, but does leave room for welfare reform initiatives in future years. While the allowance for welfare reform costs is reflected in fiscal years 1982 and 1983, the Committee recommendation is not intended to preclude earlier spending on welfare reform, should legislation be adopted and implemented.
The Committee recommendation does not assume enactment of legislation providing fiscal relief to State and local governments for part of their welfare costs. The Committee believes that possible shifts in the burdens of welfare costs among the Federal and State/local governments should be dealt with in the context of welfare reform.
(5) Nutrition Programs.— The Committee recommends $3.9 billion in budget authority and $3.7 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $21.1 billion in budget authority and $20.7 billion in outlays over the FY 1979-83 period.
The Committee recommendation permits expansion of the special supplemental food programs for women, infants and children (WIC) to the level proposed by the President and also assumes enactment of some reductions in other child nutrition programs.
(6) Housing Assistance.— The Committee recommends $25.5 billion in budget authority and $4.4 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $171.0 billion in budget authority and $33.0 billion in outlays over the FY 1979-83 period.
The Committee recommendation equals the President's budget request, the recommendation of the Appropriations Committee and the low range of the Banking Committee's March 15 recommendation to the Budget Committee. The Committee took into account the possible use of Housing Assistance funds for "troubled" housing projects.
(7) Other Income Security Programs.— The Committee recommends $0.5 billion in budget authority and $0.6 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $2.4 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation includes an allowance for continuation of the emergency assistance program for low income households with high fuel costs.
The estimated revenue losses resulting from tax expenditures related to this function are set forth in the following table:
(700)VETERANS BENEFITS AND SERVICES
National need and missions
The national need addressed by Veterans Benefits and Services is support for veterans in recognition of their service in their country's defense. Federal programs meet this need through: payments to compensate for lost earning capacity due to disabilities incurred in service; income assistance for needy, disabled, and aged wartime veterans and their families; training and education to assist veterans in finding civilian employment; medical care for veterans through a separate system of hospitals and other health care facilities; and other specialized benefits such as life insurance coverage and guaranteed housing loans.
The major mission areas in Veterans Benefits and Services are: (1) income security for veterans;
(2) veterans education, training, and rehabilitation; (3) hospital and medical care for veterans; and (4) other veterans benefits and services.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current Law and Current Policy for FY 1979-83
Over the next five years, current law would cost a total of $96.0 billion in budget authority and $94.7 billion in outlays for Veterans Benefits and Services, while current policy would cost an additional $15.2 billion in budget authority and $14.4 billion in outlays. The implications of current trends in the four major mission areas are:
(1) Income Security for Veterans.— Current law would cost a total of $52.7 billion in budget authority and $51.7 billion in outlays over the FY 1979-83 period to provide benefit payments for veterans, dependents, and survivors. However, since veterans income security programs, unlike most other income security programs, are not automatically adjusted by law to offset inflation, the real purchasing power of these benefits would be about one-third less by FY 1983 than at present. Current policy would cost an additional $8.6 billion in budget authority and $8.4 billion in outlays, and would provide for periodic increases to prevent an erosion in benefits due to rising prices.
(2) Veterans Education, Training, and Rehabilitation.— Current law would cost a total of $8.9 billion in both budget authority and outlays over the FY 1979-83 period. Annual costs would decline substantially, partly because the eligible population of veterans is expected to decline to one-third of the current level by FY 1983, and partly because real benefits to eligible veterans would decline substantially, since these benefits are not automatically adjusted by current .law to reflect inflation. Current policy would cost an additional $3.3 billion in budget authority and $3.2 billion in outlays, to provide periodic increases to compensate for rising prices.
(3) Hospital and Medical Care for Veterans.— Current law would cost a total of $30.9 billion in budget authority and $30.8 billion in outlays over the FY 1979-83 period. This would result in a reduction in health services by FY 1983 as real program levels decline due to inflation (current construction projects would not be affected, since funds already have been provided and obligated) . The primary focus of veterans health programs would continue to be on acute-care services. Current policy would cost an additional $3.1 billion in budget authority and $2.6 billion in outlays, and would prevent levels of health care from declining due to inflation.
(4) Other Veterans Benefits and Services.— Current law would cost a total of $3.5 billion in budget authority and $3.4 billion in outlays over the FY 1979-83 period. Current policy would cost an additional $0.2 billion in both budget authority and outlays, which should prevent a decline in services due to inflation in general operating expenses.
Future-year choices
(3) Hospital and Medical Care for Veterans: Health System Reform—There is a growing need for the Veterans Administration to reshape its health care system to better meet the needs of the aging veteran population. Necessary changes may include reducing or converting acute-care beds, building nursing homes and providing home health services. Although such reforms might eventually produce savings, their likely effect over the next Ave years would be to increase costs by as much as $1 billion in FY 1983.
Committee recommendations
The Committee recommends $21.0 billion in budget authority , and $20.8 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $108.1 billion in budget authority and $106.7 billion in outlays over the FY 1979-83period.
For the missions in this function, the Committee makes the following recommendations:
(1) Income Security for Veterans.— The Committee recommends $11.6 billion in budget authority and $11.3 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $61.0 billion in budget authority and $60.0 billion in outlays over the FY 1979-83 period.
The Committee recommendation includes funds for pension reform and improvements in the veterans and survivors service-connected compensation programs.
(2) Veterans Education, Training and rehabilitation — The Committee recommends $2.8 billion in budget authority and $2.9 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $10.6 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation permits modest increases above current law for cost-of-living increases or improvements in the GI bill program.
(3) Hospital and Medical Care for Veterans.— The Committee recommends $6.0 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $33.0 billion in budget authority and $32.7 billion in outlays over the FY 1979-83 period.
The Committee recommendation includes sufficient funds to cover new legislation expanding outpatient services of the veterans' medical system and includes an allowance for current policy costs of maintaining the current system, including medical research efforts. The Committee expresses its concern about the inefficient use of acute care facilities and notes that tighter administration coupled with a redirection of resources to outpatient and home health services will reduce future costs while better meeting the needs of the aging veteran population.
(4) Other Veterans Benefits and Services.— The Committee recommends $0.6 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $3.5 billion in budget authority and $3.4 billion in outlays over the FY 1979-83 period.
The Committee recommendation would continue funding at current law levels.
Tax expenditures related to this function
The estimated revenue losses resulting from tax expenditures related to this function are set forth in the following table:
(750) ADMINISTRATION OF JUSTICE
National need and missions
The national need addressed by Administration of Justice is the preservation of public order and the advancement of justice. Federal programs meet this need through: general investigative activities to safeguard the public interest in legal matters and to apprehend and prosecute criminals; fair and prompt trials to assure equal justice under law; detention and rehabilitation of persons convicted of violating Federal law; and financial assistance to State and local governments in controlling crime and improving criminal justice systems.
The major mission areas in Administration of Justice are: (1) Federal law enforcement activities, (2) criminal justice assistance, and (3) other administration of justice programs.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Over the next five years current law would cost a total of $21.7 billion in budget authority and $21.8 billion in outlays for Administration of Justice, while current policy would cost an additional $1.8 billion in budget authority and $1.7 billion in outlays. The implications of current trends in the three major mission areas are:
(1) Federal Law Enforcement Activities.— Current law would cost a total of $11.0 billion in budget authority and $10.9 billion in outlays over the FY 1979-83 period. This would continue current efforts to control organized crime, public corruption, drug trafficking, and illegal immigration, and to prevent racial and ethnic discrimination, but at gradually declining levels due to inflation. Current policy would cost an additional $0.6 billion in budget authority and $0.5 billion in outlays, and would sustain current real program levels.
(2) Criminal Justice Assistance.— Current law would cost a total of $3.3 billion in budget authority and $3.4 billion in outlays over the FY 1979-83 period. This would continue existing programs of assistance to State and local governments, but at levels declining from the present 3.5 percent of total State and local spending to about 3 percent in FY 1983. Current policy would cost an additional $0.5 billion in budget authority and $0.4 billion in outlays, permitting the Federal Government to sustain its 13.5 percent share of funding for State and local criminal justice activities.
(3) Other Administration of Justice Programs.— Current law would cost a total of $7.4 billion in budget authority and $7.5 billion in outlays over the FY 1979-83 period. Real program levels would decline gradually due to inflation. Current policy would cost an additional $0.8 billion in budget authority and $0.7 billion in outlays, and would sustain current real levels of program activity.
Future-year choices
(1) Federal Law Enforcement Activities: Drug Enforcement.— It is possible that a proposal will be considered to increase funding for the Drug Enforcement Administration (DEA) by 25 to 50 percent above current policy levels, to hire additional agents and other personnel so as to improve the control of drug abuse. This could increase annual costs by as much as $0.1 billion by FY 1983.
(2) Criminal Justice Assistance: Grants to State and Local Governments.— The current authorization for the Law Enforcement and Assistance Administration expires at the end of FY 1979. The Senate Judiciary Committee has suggested that higher funding may be needed to support State and local efforts to improve criminal justice systems and strengthen law enforcement, or to expand Federal support to include civil as well as criminal justice systems. Others have suggested reductions in LEAA grants. A change of 20 percent from current levels could reduce or increase annual costs by about $0.2 billion in FY 1983.
Committee recommendations
The Committee recommends $4.3 billion in budget authority and $4.2 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $23.6 billion in budget authority and $23.5 billion .in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations :
(1) Federal Law Enforcement Activities. The Committee recommends $2.1 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $11.7 billion in budget authority and $11.6 billion in outlays over the FY 1979-83 period.
The Committee recommendation for FY 1979 would generally support present levels of program activity by the Department of Justice and other agencies to control organized crime, public corruption, drug trafficking, illegal immigration, and to prevent racial and ethnic discrimination. In addition, it would permit funding of about three-fifths of the total proposed increases by the Senate authorizing committees for FBI salaries, new immigration controls, and increased anti-discrimination and enforcement.
The five-year total would support these activities at current law levels and would also provide for about three-fourths of the discretionary inflation adjustments needed to keep the programs at current real levels. The Committee also included funds for about three-fourths of the estimated cost of new initiatives which are included within its FY 1979 recommendation. The five year total would not fully fund new initiatives In FY 1980-83 unless reductions are made in other activities. The Committee recommendation assumes that greater program efficiencies can be achieved to hold down costs in this mission.
(2) Criminal Justice Assistance.—The Committee recommends $0.7 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $3.7 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation for FY 1979 would continue aid to State and local governments through the Law Enforcement Assistance Administration (LEAA) at about present levels of activity. The Committee rejects the Senate Judiciary Committee proposal to provide for additional LEAA prison construction as premature at this time. The Committee recommendation accepts current law funding levels and about half of the cost of new initiatives as recommended by the President, and the Senate authorizing and appropriation committees. These initiatives would provide additional funding for LEAA State planning grants, State and local antitrust grants, aid for juvenile delinquency, community anti-crime programs, and new assistance to victims of crime and to public safety officers.
The five-year total would support criminal justice assistance at about the present program level in budget authority, but at a slightly lower level in outlays. The Committee recommendation would not permit present programs to be funded at the same real dollar level if the FY 1979 new initiatives were also funded during FY 1980-83. This would require that the LEAA program be restructured to accommodate the new initiatives, or that the new initiatives be funded in lieu of some other LEAA assistance to State and local governments.
(3) Other Administration of Justice Programs.— The Committee recommends $1.5 billion in budget authority and $1.4 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $8.2 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation for FY 1979 would support Federal litigative, judicial, and correctional activities at about present program levels, and would also accommodate one-fourth of the total expenditures for new initiatives proposed by the President and the Senate authorizing and appropriations committees. These initiatives recommend higher levels of spending for Legal Services to indigents, some increases for U.S. Attorneys, U.S. Marshals, and new Federal judges. They also propose other increases for Federal bankruptcy reform, attorney fees in certain civil actions, and for speedy trial and pretrial services.
The five-year total assumes that greater program efficiencies can be achieved to hold down the costs in later years. The Committee included funds for about three-fourths of the estimated cost of the discretionary inflation adjustment needed to keep programs at constant real levels. The Committee assumes that these reductions in FY 1979-83 can be made without impairing program activities. However, if new initiatives recommended in FY 1979 result in higher program costs in later years comparable reductions are assumed to be made in other programs.
(800)GENERAL GOVERNMENT
National need and missions
The national need addressed by General Government is provision of certain centralized functions of the Federal Government. Federal programs meet this need through such services and activities as: the Legislative branch; the executive offices of the President; central fiscal and financial operations; and centralized property and personnel management activities.
The major mission areas in General Government are: (1) legislative functions, and (2) other general government programs.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Over the next five years, current law would cost a total of $21.0 billion in both budget authority and outlays for General Government, while current policy would cost an additional $1.6 billion in budget authority and $1.5 billion in outlays. The implications of current trends in the two major mission areas, are:
(1) Legislative Functions.— Current law would cost a total of $4.8 billion in budget authority and $4.9 billion In outlays over the FY 1979-83 period. Non-pay supporting assistance would decline by about 9 percent in real terms, due to rising prices, and would not be adequate to meet expected needs. Current policy would cost an additional $0.3 billion in both budget authority and outlays, and would sustain real levels of supporting activities.
(2) Other General Government Programs.— Current law would cost a total of $16.2 billion in budget authority and $16.1 billion in outlays over the FY 1979-83 period. Non-pay supporting assistance would decline by about 11 percent in real terms, due to inflation, and probably would not be adequate to meet expected needs. Current policy would cost an additional $1.2 billion in both budget authority and outlays, and would sustain real levels of supporting activities.
Future-year choices
(1) Legislative Function: (a) Congressional Services.— The increasing legislative workload has resulted in a 20 percent increase in Congressional staff over the past five years. If a similar increase is required over the next five years, additional annual costs of staff and supporting facilities would be about $0.1 to $0.2 billion in FY 1983.
(b) Congressional Campaign Financing.— There are several proposals before the Congress to provide Federal financing for Congressional as well as Presidential campaigns, up to a maximum of 50 percent of primary and general campaign spending ceilings, or about 20 cents per vote on a national average. This would cost about $0.1 billion in each election year.
(2) Other General Government Programs: Internal Revenue Service: An increase in funding for IRS may be recommended, to help the Service absorb an increasing workload, develop new automated processing systems, and increase the detection of unfiled returns and unpaid taxes. Based on experience over the past 5 years, a 2 percent annual increase in personnel, or 10,000 additional employees by FY 1983, might be necessary, at an annual cost in FY 1983 of up to $0.2 billion. .
Committee recommendations
The Committee recommends $4.1 billion in both budget authority and outlays for this function in FY 1979. The Committee anticipates that these figures will total $22.2 billion in budget authority and $22.3 billion in outlays over the FY 1979-83 period.
For the missions in this function, the Committee makes the following recommendations:
(1) Legislative Functions.— The Committee recommends $0.9 in both budget authority and outlays for this mission in FY1979. The Committee anticipates that these figures will total $5.1 billion in budget authority and $5.2 billion in outlays over the FY 1979-83 period.
The Committee recommendation for FY 1979 would generally support legislative activity at the same real level of activity as now exists. It would also permit funding of Sunset legislation and other small housekeeping expenditures at the levels recommended by the Senate Governmental Affairs Committee.
The five-year total generally would allow for the continuation of the same real level of legislative activity as now exists.
(2) Other General Government Programs.— The Committee recommends $3.2 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $17.1 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation for FY 1979 would generally support fundamental government activities for executive direction and management, central fiscal operation, property and records management, and certain other government activity at about present program levels. It would also permit additional funding for about one-third of the total increases above current law recommended in the President's budget and by the Senate authorizing committees for this mission. These optional spending proposals include additional funding for the Internal Revenue Service, the Bureau of Public Debt, and other central fiscal operations, additional funding for the Trust Territories; higher levels of funding for general property and other programs; and small amounts proposed for administrative law reform and for a new National Growth and Development Commission. The Committee makes no specific recommendation as to which new initiatives should be funded.
The five-year totals would generally result in a declining level of funding in support of the Executive Office of the President, the Treasury Department, the General Services Administration, and other independent agencies which oversee the general operation of the Federal Government. The Committee recommendation provides for three-fourths of the discretionary inflation adjustments needed to maintain present program levels over the next five years. This would require reduction of waste and greater efficiency in existing programs, or elimination of some programs over the next five years.
For the missions in this function, the Committee makes the following recommendations:
Tax expenditures related to this function
The estimated revenue losses resulting from the expenditures related to this function are set forth in the following table:
(850)GENERAL PURPOSE FISCAL ASSISTANCE
National need and missions
The national need addressed by General Purpose Fiscal Assistance is strengthening federalism through general fiscal assistance to State and local governments. Federal programs meet this need through: general fiscal assistance that may be used essentially without restriction to meet urgent State and local needs; special fiscal assistance to jurisdictions where Federal land holdings deprive governments of tax revenues or where Federal installations impose special burdens on local systems such as schools, roads, and other services; and "counter-cyclical"assistance to areas of high unemployment so that essential services can be maintained.
The major mission areas in General Purpose Fiscal Assistance are: (1) general revenue sharing, and (2) other general purpose fiscal assistance programs.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Over the next five years, current law would cost a total of $43.6 billion in both budget authority and outlays for General Purpose Fiscal Assistance, while current policy would cost an additional $2.9 billion in budget authority and $2.6 billion in outlays. The implications of current trends in the two major mission areas are:
(1) General Revenue Sharing.— Current law would cost a total of $34.3 billion in both budget authority and outlays over the FY 1979-83 period. The level of assistance would decline from its present 4 percent total of all State and local revenues, to about 2 percent in FY 1983. This could force some governments, particularly those with stagnant or declining tax bases, to impose sharp tax increases or reductions in services. Current policy would cost an additional $2.8 billion in budget authority and $2.5 billion in outlays, and would sustain the current level of assistance in real terms.
(2) Other General Purpose Fiscal Assistance Programs.— Current law would cost a total of $9.3 billion in both budget authority and outlays over the FY 1979-83 period. Essentially all programs would sustain their current levels in real terms, with anti-recession assistance phasing out as the economy continues to improve. Current policy would cost an additional $0.1 billion in both budget authority and outlays, which would sustain the real level of funding for Federal capital improvement loans to the District of Columbia.
Future-year choices
(1) General Revenue Sharing.— The current program expires at the end of FY 1980. Although the level of assistance may be changed at that time, it is not expected that the funding level would fall outside the range represented by current law and current policy. '
Committee recommendations
The Committee recommends $9.7 billion in budget authority and $9.6 billion in outlays for this function in FY 1979. The Committee anticipates that these figures will total $46.1 billion in budget authority and $46.0 billion in outlays over the FT 1979-83 period.
For the missions in this function, the Committee makes the following recommendations:
(1) General Revenue Sharing.— The Committee recommends $6.9 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $34.3 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation assumes funding of General Revenue Sharing at current levels through 1983, and is not meant to prejudice the action of the Congress when the general revenue sharing program is considered for reauthorization in fiscal year 1981.
(2) Other General Purpose Fiscal Assistance.— The Committee recommends $2.8 billion in budget authority and $2.7 billion in outlays for this mission in FY 1979. The Committee anticipates that these figures will total $11.8 billion in budget authority and $11.7 billion in outlays over the FY 1979-83 period.
The Committee recommendation would accommodate aid to distressed localities under a supplemental fiscal assistance program at levels requested in the President's urban initiative. The Committee assumes that such assistance would be provided only to local governments experiencing a high degree of fiscal distress. The recommendation also assumes funding of incentive grants to encourage States to provide fiscal assistance to distressed local governments.
Tax expenditures related to this function
The estimated revenue losses resulting from tax expenditures related to this function are set forth in the following table:
(900) INTEREST
National need and missions
The national need addressed by Interest is payment of interest on the public debt and miscellaneous other interest payments and collections by the Federal Government.
The major mission areas in Interest are: (1) interest on the public debt, and (2) other interest.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for fiscal years 1979-83
Current law and current policy are the same, and over the next five years would cost a total of $273.9 billion in both budget authority and outlays for interest. The implications of current trends in the two major mission areas are :
(1) Interest on the Public Debt.— Current law and current policy are the same, and would cost a total of $309.8 billion in both budget authority and outlays over the FY 1979-83 period. This would provide for interest payments on the existing public debt and on the additional debt associated with the fiscal policies projected by the Congressional Budget Office to be consistent with long-term economic assumptions, at estimated rates of interest that are consistent with such policies.
(2) Other Interest.— Current law and current policy are the same, and would result in total net interest collections, i.e., deductions from both budget authority and outlays, of —$35.9 billion over the FY 1979-83 period.
Future-year choices
Since interest requirements are determined by the level of the public debt and the interest rates that must be paid on borrowings, Congressional choices affecting interest essentially are limited to the fiscal policy decisions that affect the level of the debt and, especially interest rates. Interest rates also are significantly affected by monetary policy, which largely is not subject to direct control by the Congress.
It is not feasible at present to estimate the effect on interest of future-year Congressional choices.
Committee recommendations
The Committee recommends $46.8 billion In both budget authority and outlays for this function in FY 1979. The Committee anticipates that these figures will total $273.9 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee's recommended targets are the same as the current law/current policy estimates for both missions in this function, and are fully consistent with the Committee's economic assumptions and fiscal policy recommendations.
For the missions in this function, the Committee makes the following recommendation:
(1) Interest on the Public Debt.— The Committee recommends $53.2 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total $309.8 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation will provide for interest payments on the existing public debt and on the additional debt resulting from fiscal policies consistent with the Committee's economic assumptions, at interest rates that are consistent with these policies and assumptions.
(2) Other Interest.—The Committee recommends –$6.4 billion in both budget authority and outlays for this mission in FY1979. The Committee anticipates that these figures will total –$35.9 in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation will provide for miscellaneous other interest payments and for interest collections by the Federal Government.
Tax expenditures related to this function
The estimated revenue losses resulting from the tax expenditures related to this function are set forth in the following table:
(920) ALLOWANCES
National need and missions
The National need addressed by Allowances is providing the annual pay increases which permits employees of Federal agencies other than the Department of Defense to maintain pay comparability with their private sector counterparts (equivalent pay increases for Department of Defense employees are provided for in the National Defense function).
The single mission area in Allowances is civilian agency pay raises.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for FY 1979-83
Current law and current policy are the same, and over the next five years would cost a total of $7.0 billion in budget authority and $6.9 billion in outlays for allowances for civilian agency pay raises. This would provide annual pay increases of 6.4 percent in FY1979, 7.7 percent in FY 1980, 7.0 percent in FY1981, 6.6 percent in FY 1982 and 6.8 percent in FY 1983, the levels estimated by the Congressional Budget Office to be required to maintain comparability between Federal and private sector pay.
Future-year choices
The President recently proposed changes in the compensation procedures for senior Federal executives, and tentatively is considering a proposal to adopt a "full compensation" approach to determining comparability of Federal compensation with the private sector. Prospects for enactment of these proposals are uncertain, as are their budgetary impacts.
There also are the future-years' options of continuing the practice of past budget resolutions in requiring Federal agencies to absorb part of the costs of each year's pay raise through savings in other activities. This could produce savings of up to 80.4 billion in FY 1983.
Committee recommendations
The Committee recommends $0.7 billion in both budget authority and outlays for FY 1979. The Committee anticipates that these figures will total $5.4 billion in budget authority and $5.3 billion in ,outlays over the FY 1979-83 periods
The Committee recommendation reflects the Committee's assumption that the October 1978 comparability pay raise for Federal employees will be limited to 5 percent, and that agencies will be required to absorb 20 percent of the costs of that pay raise through savings in other activities.
The five-year totals assume that annual pay raises will occur for FY 1980-83 at the levels estimated by the Congressional Budget Office to be necessary to maintain the pay of Federal employees at levels comparable to those of their private sector counterparts, and assume that agency absorption of 20 percent of pay raise costs will be required in each of those years.
Tax expenditures related to this function
There are no tax expenditures related to this function.
(950)UNDISTRIBUTED OFFSETTING RECEIPTS
National need and missions
The national need addressed by Undistributed Offsetting Receipts is providing deductions from budget authority and outlays due to Federal receipts that cannot reasonably be assigned to other functions.
The major mission areas in Undistributed Offsetting Receipts are: (1) rents and royalties in the Outer Continental Shelf ("OCS receipts"),(2) employer share, employee retirement, and (3) interest received by trust funds.
Current trends
The following table shows the Committee recommendation for FY 1979 as compared to recent trends in the function and other alternatives presented to the Committee.
Current law and current policy for fiscal year 1979-83
Current law and current policy are the same, and over the next five years would result in total deductions of —$103.6 billion from both budget authority and outlays for Undistributed offsetting Receipts. The implications of current trends in the three major mission areas are:
(1) Rents and Royalties on the Outer Continental Shelf ("OCS Receipts").— Current law and current policy are the same, and would result in total deductions of —$17.3 billion from both budget authority and outlays. These estimates assume the revised OCS management procedures included in S. 9, the OCS Act Amendments, which would, inter alia, require increased use of "royalty" bidding, where payments are made to the Federal Government as production of oil and gas occurs, in lieu of "bonus" bidding, which requires initial payments before production, so as to assist smaller producers in obtaining OCS leases.
(2) Employer Share, Employee Retirement.— Current law and current policy are the same, and would result in total deductions of —$31.9 billion from both budget authority and outlays over the FY 1979-83 period. This would avoid double-counting the contributions that Federal agencies make toward retirement for their employees, which are included in personnel benefit costs in other functions.
(3) Interest Received by Trust Funds.— Current law and current policy are the same, and would result in total deductions of —$54.5 billion from both budget authority and outlays over the FY 1979-83 period. This would provide deductions for the intrabudgetary interest payments on U.S. securities held by trust funds; these payments are included in interest on the public debt in the Interest function.
Future-year choices
No major choices affecting Undistributed Offsetting Receipts are currently expected in the FY 1980-83 period.
Committee recommendations
The Committee recommends —$17.2 billion in both budget authority and outlays for this function in FY 1979. The Committee anticipates that these figures will total —$103.6 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation is the same as the current law/current policy estimate for all components of this function.
For the missions in this function, the Committee makes the following recommendations:
(1) Rents and Royalties on the Outer Continental Shelf ("OCS Receipts").— The Committee recommends —$2.8 billion in both budget authority outlays for this mission in FY 1979. The Committee anticipates that these figures will total —$17.3 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation assumes the revised OCS management procedures established by S. 9, the OCS Act Amendments.
(2) Employer Share, Employee Retirement.— The Committee recommends —$5.4 billion in both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total —$31.9 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation will provide amounts necessary to offset the intrabudgetary contributions made by Federal agencies to employee retirement systems, which are included as part of personnel both budget authority and outlays for this mission in FY 1979. The Committee anticipates that these figures will total —$54.5 billion in both budget authority and outlays over the FY 1979-83 period.
The Committee recommendation will provide amounts necessary to offset intrabudgetary payments of interest on U.S. securities held by the trust funds, which are included as part of interest on the public debt in the interest function.
Tax expenditures related to this junction There are no tax expenditures related to this function.