Discretionary Budget Authority by
Subfunction: An Overview
D. Andrew Austin
Analyst in Economic Policy
March 29, 2011February 14, 2012
Congressional Research Service
7-5700
www.crs.gov
R41726
CRS Report for Congress
Prepared for Members and Committees of Congress
Discretionary Budget Authority by Subfunction: An Overview
Summary
President Obama’s FY2012FY2013 budget submission was released on February 14, 201113, 2012. This report
provides a graphical overview of historical trends in discretionary budget authority (BA) from
FY1976 through FY2010, estimates for FY2011FY2011, enacted levels for FY2012 spending, and the levels consistent with the
President’s proposals for FY2012 through FY2016.
Discussions about the appropriate levels of spending for various policy objectives of the federal
government have played an important role in congressional deliberations over funding measures
for FY2011, and are expected to play a central role as Congress considers decisions affecting the
FY2012 budget. As the 112th Congress considers funding levels for FY2011, FY2012, and
beyond, past spending trends may FY2013 through FY2017. Spending caps and budget enforcement
mechanisms established in the Budget Control Act of 2011 (P.L. 112-25; BCA) will probably
strongly affect the FY2013 budget cycle. The BCA was signed into law on August 2, 2011, after
months of intense negotiations over alternative plans to reduce the deficit and raise the debt limit.
As the 112th Congress considers funding levels for FY2013 and beyond, past spending trends may
prove useful in framing policy discussions. For example, rapid
growth in national defense and
other security spending in the past decade has played an important
role in fiscal discussions. The
sharp increases in federal spending on education, energy, and other
areas funded by the American
Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5) have
been noted in recent budget debates.
debates. Since FY2010, however, base defense discretionary spending has been held flat and nondefense discretionary spending has been reduced significantly. The base defense budget excludes
war funding (Overseas Contingency Operations).
This report may provide a starting point for discussions
about spending trends and federal
priorities, but it does not attempt to explain spending patterns
in each policy area. Other CRS
products, however, can provide insights into those spending
trends in specific functional areas.
Functional categories (e.g., national defense, agriculture, etc.) provide a means to compare federal
funding for activities within broad policy areas that often cut across several federal agencies.
Subfunction categories provide a finer division of funding levels within narrower policy areas.
Budget function categories are used within the budget resolution and for other purposes, such as
possible program cuts and tax expenditures.
The report includes a series of figures showing discretionary budget authority as a percentage of
gross domestic product (GDP), which compares spending levels in each functional category with
the size of the U.S. economy. Measuring spending as a percentage of GDP in effect controls for
inflation and population increases. A flat line on such graphs indicates that spending in that
category is increasing at the same rate as overall economic growth.
Three functions, however, are omitted. These are (1)
allowances, which contain items reflecting
technical budget adjustments; (2) net interest, which
by its nature is not discretionary spending;
and (3) undistributed offsetting receipts, which are
treated for federal budgetary purposes as
negative budget authority. Allowances in FY2013
include unspecified cuts to comply with BCA spending caps.
Spending in this report is measured and illustrated in terms of discretionary budget authority as a percentage of
GDP.
percentage of gross domestic product (GDP). Measuring spending as a percentage of GDP in
effect controls for inflation and population increases. A flat line on such graphs indicates that
spending in that category is increasing at the same rate as overall economic growth.
Discretionary spending is provided and controlled through appropriations acts, which fund
many many
of the activities commonly associated with such federal government functions as running
executive branch agencies, congressional offices and agencies, and international operations of the
government. Essentially all spending on federal wages and salaries is discretionary. Program
administration costs for entitlement programs such as Social Security, is generally funded by
discretionary spending, while mandatory spending generally funds the benefits provided through
those programs. Thus, the figures showing trends in discretionary budget authority presented
herein do not reflect the much larger expenditures on program benefits supported by mandatory
spending. For some federal agencies, such as the Departments of Veterans Affairs and
Transportation, the division of expenditures into discretionary and mandatory categories can be
complex. This report will not be updated.
Congressional Research Service
Discretionary Budget Authority by Subfunction: An Overview
Contents
Background on Functional Categories .............................................................................................2 6
Discretionary Spending in the FY2012FY2013 Budget ............................................................................6. 10
Historical Spending Trends ............................................................................................................6 11
Cold War, Peace Dividend, and the Global War on Terror ......................................................6 12
The Recovery Act .................................................................................................................... 127
Negative Budget Authority...................................................................................................... 13
Figures
Figure 1. Discretionary Defense and Non-Defense Spending, FY1976-FY2017.......................... 10
Figure 2. 8
Figures
Figure 1. National Defense (050) Subfunctions ...........................................................................9. 14
Figure 23. Education, Training, Employment, and Social Services (500) Subfunctions ................. 1015
Figure 34. Health Care Services (Subfunction 551) and Medicare (Subfunction 571) ................... 1116
Figure 45. Smaller Health Subfunctions .......................................................................................... 1217
Figure 56. Income Security (600) Subfunctions .............................................................................. 1318
Figure 67. Social Security (650) Subfunction .................................................................................. 1419
Figure 78. Veterans Benefits and Services (700) Subfunctions ....................................................... 20 15
Figure 89. Energy (270) Subfunctions ......................................................................................... 16.... 21
Figure 910. Natural Resources and Environment (300) Subfunctions. ............................................ 1722
Figure 1011. Commerce and Housing Credit Subfunctions ............................................................. 18. 23
Figure 1112. Transportation (400) Subfunctions ............................................................................... 1924
Figure 1213. Community and Regional Development (450) Subfunctions ....................................... 2025
Figure 1314. International Affairs (150) Subfunctions ...................................................................... 2126
Figure 1415. General Science, Space, and Technology (250) Subfunctions ..................................... 27 22
Figure 1516. Agriculture (350) Subfunctions .................................................................................... 2328
Figure 1617. Administration of Justice (750) Subfunctions ............................................................ 24.. 29
Figure 1718. General Government (800) Subfunctions ..................................................................... 2530
Tables
Table 1. Budget Function Categories by Superfunction ................................................................3.. 7
Contacts
Author Contact Information ....................................................................................................... 26.... 30
Congressional Research Service
Discretionary Budget Authority by Subfunction: An Overview
T
his report presents figures showing trends in discretionary budget authority as a percentage
of GDP by subfunction within each of 17 budget function categories, using data from
President Obama’s FY2012 budget submission.1 Discretionary spending is provided and
FY2013 budget submission.1 This report provides a graphical overview
of historical trends in discretionary budget authority from FY1976 through FY2011, enacted
levels for FY2012 spending, and the levels consistent with the President’s proposals for FY2013
through FY2017.2
Discretionary spending is provided and controlled through appropriations acts, which fund many
of the activities commonly associated
with such federal government functions as running
executive branch agencies, congressional
offices and agencies, and international operations of the
government. 23 Discretionary spending in
this report is measured in terms of budget authority.
Budget authority for an agency has been
compared to having funds in a checking account. Funds
are available, subject to congressional
restrictions, and can be used to enter into obligations such
as contracts or hiring personnel.
Outlays occur when the U.S. Treasury disburses funds to honor
those obligations. Measuring
spending as a percentage of GDP in effect controls for inflation and
population increases. A flat
line on such graphs indicates that spending in that category is
increasing at the same rate as
overall economic growth.
Discussions about the appropriate levels of spending for various policy objectives of the federal
government have played an important role in congressional deliberations over funding measures
for FY2011 and FY2012, and are expected to play a central role as Congress considers decisions
affecting the
FY2012 FY2013 budget.4 As the 112th Congress considers funding levels for FY2011, FY2012,FY2013 and
beyond, past spending trends may prove useful in framing policy discussions. Spending caps and
budget enforcement mechanisms established in the Budget Control Act of 2011 (P.L. 112-25;
BCA) will probably strongly affect the FY2013 budget cycle.5 The BCA was signed into law on
August 2, 2011, after months of intense negotiations over alternative plans to reduce the deficit
and raise the debt limit.
For example, rapid For example, rapid
growth in national defense and other security spending in the past decade has
played an important
role in fiscal discussions. The sharp increases in federal spending on
education, energy, and other
areas funded by The American Recovery and Reinvestment Act of
2009 (ARRA; P.L. 111-5) have
also played a significant role in recent budget debates.
This report provides a graphical overview of historical trends in discretionary budget authority
from FY1976 through FY2010, estimates for FY2011 spending, and the levels consistent with the
President’s proposals for FY2012 through FY2016.3 Budget data for FY2011 in the FY2012
budget documents represent annualized levels reflecting funding levels in the continuing
resolution (P.L. 111-242) that provided discretionary funding until March 4, 2011.4 Subsequent
adjustments to funding levels are not reflected in data or figures presented in this report.5 Trends
also played a significant role in recent budget debates.
Trends in net interest are excluded as federal interest expenditures have been automatically appropriated
appropriated since 1847. Allowances, which contain items reflecting technical budget
adjustments, and
undistributed offsetting receipts are also excluded. Allowances in FY2013
include unspecified cuts to comply with BCA spending caps.
Figures in this report are based on the Office of Management and Budget (OMB) Public Budget
Database accompanying the FY2012FY2013 budget release.6 Table 5.1 in the Historical Tables volume of
1
The President’s FY2012FY2013 budget was released on February 14, 201113, 2012, and is available at http://www.whitehouse.gov/
omb/budget/.
2
For a broader analysis of discretionary spending, see CRS Report RL34424, Trends in Discretionary Spending, by D.
Andrew Austin and Mindy R. Levit.
3
The start of the federal fiscal year was changed from July 1 to October 1 in 1976 to accommodate changes in the
congressional budget process. The figures omit data for the Transition Quartertransition quarter (July 1 to September 30, 1976).
4
OMB, FY2012 Budget, Analytic Perspectives volume, p. 131.
5
For details3
For a broader analysis of discretionary spending, see CRS Report RL30343, Continuing Resolutions: Latest Action and Brief Overview of Recent Practices,
by Sandy Streeter.
6
Data in the OMB Public Budget Database reconcile to information presented in the Historical Tables volume of the
FY2012 budget. The Public Budget Database itself is available here: http://www.whitehouse.gov/omb/budget/
Supplemental. For a further description and important caveats, see the Public Budget Database User Guide, available
at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/db_guide.pdf.
Congressional Research Service
1RL34424, Trends in Discretionary Spending, by D.
Andrew Austin and Mindy R. Levit.
4
CRS Report R41771, FY2011 Appropriations in Budgetary Context, by D. Andrew Austin and Amy Belasco.
5
CRS Report R41965, The Budget Control Act of 2011, by Bill Heniff Jr., Elizabeth Rybicki, and Shannon M. Mahan.
6
Data in the OMB Public Budget Database reconcile to information presented in the Historical Tables volume of the
(continued...)
Congressional Research Service
5
Discretionary Budget Authority by Subfunction: An Overview
the FY2012FY2013 budget reports budget authority by function and subfunction, but does not provide a
breakdown by discretionary and mandatory subcomponents.7
OMB is generally regarded as the official custodian of historical federal budget data. While OMB
has attempted to make these data consistent, changes in government accounting standards and
agency reorganizations, among other changes, may raise difficulties in comparing data from
different fiscal years. In addition, OMB data may not reflect certain zero-balance transfers among
funds, which may play an important role in the funding of some federal programs.
Background on Functional Categories
Functional categories provide a means to compare federal funding for activities within broad
policy areas that often cut across several federal agencies. 8 Because various federal agencies may
have closely related or overlapping responsibilities, and because some agencies have
responsibilities in diverse policy areas, budget data divided along functional categories can
provide a useful view of federal activities in support of specific national purposes.
Superfunction categories, which provide a higher level division of federal activities, are
•
National defense,
•
Human resources,
•
Physical resources,
•
Other functions,
•
Net interest,
•
Allowances, and
•
Undistributed offsetting receipts.
Superfunction categories for national defense, net interest, allowances, and undistributed
offsetting receipts coincide with function categories.
Budget function categories, grouped by superfunctions, are shown in Table 1. Subfunction
categories provide a finer division of funding levels within narrower policy areas.
Subsequent figures follow the ordering of functions in Table 1.
7
(...continued)
FY2012 budget. The Public Budget Database itself is available here: http://www.whitehouse.gov/omb/budget/
Supplemental. For a further description and important caveats, see the Public Budget Database User Guide, available
at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/db_guide.pdf.
7
Table 5.1 of the OMB Historical Tables is available at http://www.whitehouse.gov/sites/default/files/omb/budget/
fy2012/assets/hist05z1.xls.
8
For further background on functional categories, see CRS Report 98-280, Functional Categories of the Federal
Budget, by Bill Heniff Jr.
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Discretionary Budget Authority by Subfunction: An Overview
Table 1. Budget Function Categories by Superfunction
Superfunction
Code
Function (Subfunction)/ Subfunction
National Defense
50
National defense
51
Dept. of Defense-Military
53
Atomic energy defense activities
54
Defense-related activities
Human Resources
500
Education, training, employment, and social services
501
Elementary, secondary, and vocational educ.
502
Higher education
503
Research and general education aids
504
Training and employment
505
Other labor services
506
Social services
550
Health
551
Health care services
552
Health research and training
554
Consumer and occupational health and safety
570
571
600
Medicare
Medicare
Medicare
571
Medicare
600
Income security
601
Gen. retirement & disab.disability insurance (exc. Soc. Sec.)
602
Federal employee retirement and disability
603
Unemployment compensation
604
Housing assistance
605
Food and nutrition assistance
609
Other income security
650
651
700
Social security
Social security
700
Veterans benefits and services
701
Income security for veterans
702
Veterans education, training, & rehab.rehabilitation
703
Hospital and medical care for veterans
704
Veterans housing
705
Other veterans benefits and services
Physical Resources
270
Congressional Research Service
Energy
37
Discretionary Budget Authority by Subfunction: An Overview
Superfunction
Code
Function (Subfunction)/ Subfunction
271
Energy supply
272
Energy conservation
274
Emergency energy preparedness
276
Energy information, policy, and regulation
300
Natural resources and environment
301
Water resources
302
Conservation and land mgmt.
303
Recreational resources
304
Pollution control and abatement
306
Other natural resources
370
Commerce and housing credit
371
Mortgage credit
372
Postal service
373
Deposit insurance
376
Other advancement of commerce
400
Transportation
401
Ground transportation
402
Air transportation
403
Water transportation
407
Other transportation
450
Community and regional development
451
Community dev.
452
Area and regional dev.
453
Disaster relief and insurance
Other Functions
150
151
Intl. dev. and humanitarian assistance
152
Intl. security assistance
153
Conduct of foreign affairs
154
Foreign information & exchange activities
155
Intl. financial programs
250
General science, space, and technology
251
General science and basic research
252
Space flight, research & supporting activities
350
Congressional Research Service
International affairs
Agriculture
351
Farm income stabilization
352
Agricultural research and services
48
Discretionary Budget Authority by Subfunction: An Overview
Superfunction
Code
750
Function (Subfunction)/ Subfunction
Administration of justice
751
Federal law enforcement activities
752
Federal litigative and judicial activities
753
Federal correctional activities
754
Criminal justice assistance
800
General government
801
Legislative functions
802
Executive direction and mgmt.
803
Central fiscal operations
804
General property and records mgmt.
805
Central personnel mgmt.
806
General purpose fiscal assistance
808
Other general government
809
Deductions for offsetting receipts
Net Interest
900
Net interest
901
Interest on Treasury debt securities (gross)
902
Interest received by on-budget trust funds
903
Interest received by off-budget trust funds
908
Other interest
909
Other Investment and income
Allowances
920
Allowances
925
Future Disaster Costs
926
Offset to Medicare SGR Costs
929
Adjustment to reach FY2011 Bud Request
Undistributed Offsetting Receipts
921
Adjustment for BCA Cap on Security Spending
924
Adjustment for BCA Cap on Non-Security Spending
926
Offset to Medicare SGR Costs
929
Plug for Outyear War Costs
950
Undistributed offsetting receipts
Undistributed Offsetting Receipts
951
Employer share, employee retirement (on-budget)
952
Employer share, employee retirement (off-budget)
953
Rents & royalties on the Outer Continental Shelf
954
Sale of major assets
959
Other undistributed offsetting receipts
Source: CRS, based on OMB data.
Note: Allowances subfunctions may change from year to year.
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Discretionary Budget Authority by Subfunction: An Overview
Discretionary Spending in the FY2012 Budget
President Obama, in his FY2012 budget, proposed extending a three-year freeze in non-security
discretionary spending included in his FY2011 budget submission to five years.9 The Obama
Administration defines security spending as funding for Department of Defense-Military
(subfunction 051); the Department of Energy’s National Nuclear Security Administration;
International Affairs (function 150, which includes State Department and related agencies); the
Department of Homeland Security; and the Department of Veterans Affairs.10FY2013 Budget
Budget debates in recent years have reflected the dual challenge of a weak economy with
persistently high unemployment and output well below its potential level, and longer term
challenges of financing the baby boom generation’s retirement. Discretionary spending in the first
decade of the 21st century rose rapidly, but since FY2010, base defense discretionary spending
has been held flat and non-defense discretionary spending has been reduced significantly.9
Figure 1. Discretionary Defense and Non-Defense Spending, FY1976-FY2017
Budget authority as a percentage of GDP
Source: CRS analysis of OMB data.
Notes: Defense is defined as funding for the National Defense (050) budget function; non-defense is the
remainder. FY1976-FY2011 are historical data; FY2012 is estimated; FY2013-FY2017 reflect the President’s
FY2013 budget proposals. This figure assumes unspecified cuts to meet BCA caps are borne by non-defense
programs. See text for other important caveats.
In the decade FY2000-FY2009, both defense and non-defense spending (new budget authority;
BA) rose rapidly, as shown in Figure 1. In the wake of the attacks of September 11, 2001,
defense spending rose sharply after the start of the Afghan war in late 2001 and the Iraq war in
2003.10 Spending on non-defense security spending also rose as the federal government
overhauled airport security procedures, and then established the Department of Homeland
9
The base defense budget excludes war funding (Overseas Contingency Operations).
The Afghan and Iraq wars, along with other related activities, are often called the Global War on Terror (GWOT).
10
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Discretionary Budget Authority by Subfunction: An Overview
Security. Non-security spending also rose to fund new initiatives in education and in other areas.11
In 2007, a severe credit crunch affected global financial markets, which led to a fully fledged
financial crisis in 2008 and a severe economic recession. The American Recovery and
Reinvestment Act of 2009 (ARRA; P.L. 111-5), designed to stimulate the economy and prevent
further slowing of economic activity, sharply increased federal spending on education, energy,
and support for state and local governments. ARRA also included broad tax cuts through a
Making Work Pay credit and other provisions. The decline in federal revenues and the increase in
spending caused the deficit to treble from $459 billion in FY2008 to $1.4 trillion in FY2009.
The BCA, unless modified by Congress, will frame budget discussions in FY2013. Spending
limitations on discretionary spending are slated to make sharp reductions in defense and nondefense spending in FY2013 and FY2014. In later years, BCA caps would allow for modest
growth in nominal (i.e., not adjusted for inflation) terms. President Obama, in his FY2012 budget,
had proposed extending a three-year freeze in non-security discretionary spending included in his
FY2011 budget submission to five years.12
Discretionary spending, as noted above, is provided and controlled through appropriations acts,
which fund many of the activities commonly associated with such federal government functions
as running executive branch agencies, congressional offices and agencies, and international
operations of the government. Discretionary spending generally funds program administration
costs for entitlement programs such as Social Security, while mandatory spending generally funds
Social Security benefits. Thus, the figures showing trends in discretionary budget authority
presented below do not reflect the much larger expenditures on program benefits supported by
mandatory spending. For some departments, such as Veterans Affairs and Transportation, the
division of expenditures into discretionary and mandatory categories can be complex.
Trends in funding of health subfunctions are shown in two separate figures. Larger programs
(health care services/subfunction 551 and Medicare/function 570/subfunction 571) are shown in
Figure 34, and smaller programs (health research and training/subfunction 552 and consumer and
occupational health and safety/subfunction 554) are shown in Figure 45. Veterans’ health
programs, which fall under the veterans benefits and services function, are also shown in Figure
45 to make comparisons among those programs easier.
Historical Spending Trends
Federal spending trends in functional areas are affected by changing assessments of national
priorities, evolving international challenges, economic conditions, as well as changing social
characteristics and demographics of the U.S. population.
11
The Obama Administration defined security spending in its FY2012 budget as funding for Department of DefenseMilitary (subfunction 051); the Department of Energy’s National Nuclear Security Administration; International
Affairs (function 150, which includes State Department and related agencies); the Department of Homeland Security;
and the Department of Veterans Affairs. The BCA defined security similarly, except that it included all military
activities within the Department of Defense excluding war funding (i.e., defined by department rather than by
subfunction), and also included the Intelligence Community Management Account.
12
For details, see CRS Report R41174, Impact on the Federal Budget of Freezing Non-Security Discretionary
Spending, by Mindy R. Levit.
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Discretionary Budget Authority by Subfunction: An Overview
Some of the trends and events that have had dramatic effects on federal spending are outlined
below. Other CRS products provide background on more specific policy areas.
Cold War, Peace Dividend, and the Global War on Terror
Trends in Figure 12 reflect shifting national security challenges as well as evolving policy
decisions regarding the balance between domestic and defense priorities.
Relations between the United States and its allies on one hand, and the Union of Soviet Socialist
Republics (USSR) and its allies on the other was the dominant security concern in the half
9
For details, see CRS Report R41174, Impact on the Federal Budget of Freezing Non-Security Discretionary
Spending, by Mindy R. Levit.
10
For a discussion of the definition of security spending, see CRS Report RL34424, Trends in Discretionary Spending,
by D. Andrew Austin and Mindy R. Levit.
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Discretionary Budget Authority by Subfunction: An Overview
century following the Second World War. In the early 1970s, U.S. involvement in the Vietnam
War wound down, while the United States and the USSR moved towards detente, permitting a
thaw in cold war relations between the two superpowers and a reduction in defense spending
relative to the size of the economy. 1113
Following intervention by the USSR in Afghanistan in 1979, military spending increased
sharply.1214 Defense spending continued to increase until 1986, as concern shifted to domestic
priorities and the need to reduce large budget deficits. The collapse in 1989 of most of the
Warsaw Pact governments in central and eastern Europe and the 1990-1991 disintegration of the
Soviet Union was followed by a reduction in federal defense spending, allowing a “peace
dividend” that relaxed fiscal pressures. 1315
The attacks on the World Trade Center towers in New York City and on the Pentagon on
September 11, 2001, were followed by sharp increases in homeland security spending. Defense
spending also increased dramatically with the start of the Afghanistan war in October 2001 and
the Iraq war in March 2003.1416 While U.S. commitments in Iraq appear to be winding down, the
demands of returning troops on Department of Veterans Affairs facilities have grown
dramatically.
The Recovery Act
After the financial crisis of 2007-2008 plunged the United States in the deepest economic
recession in decades, Congress passed the American Recovery and Reinvestment Act of 2009
(ARRA; P.L. 111-5), often known as the Recovery Act. ARRA includes support for state and local
governments in the form of increased infrastructure, Medicaid, school funding, funding for health
care IT, extended unemployment benefits, as well as tax cuts and rebates among other
provisions.1517 According to initial CBO estimates, ARRA provisions were expected to total $787.2
billion in increased spending and reduced taxes over the FY2009-FY2019 period or just over 5%
of GDP in 2008, while a more recent CBO estimate put the total at $814 billion. 16
The effects of Recovery Act spending can be seen in Figure 2, where pronounced increases in
education, training, employment, and social services subfunctions can be seen for FY2009.
Smaller increases can be seen in Figure 8, which shows energy subfunctions, and in Figure 9,
which shows natural resources and environment subfunctions.
1113
For a history of deficit finance and American wars, see Robert D. Hormats, The Price of Liberty, (New York: Times
Books, 2007). Also see CRS Report RL31176, Financing Issues and Economic Effects of American Wars, by Marc
Labonte and Mindy R. Levit.
1214
For one view of budgetary politics in the early 1980s, see David Stockman, The Triumph of Politics, (New York:
Harper & Row, 1986).
1315
The Warsaw Treaty Organization, established in 1955, included Albania, Bulgaria, Czechoslovakia, the German
Democratic Republic, Hungary, Poland, Romania, and the Soviet Union.
1416
CRS Report RL33110, The Cost of Iraq, Afghanistan, and Other Global War on Terror Operations Since 9/11, by
Amy Belasco.
1517
For more information on the provisions of ARRA, see CRS Report R40537, American Recovery and Reinvestment
Act of 2009 (P.L. 111-5): Summary and Legislative History, by Clinton T. Brass et al.
16
For initial estimates, see U.S. Congressional Budget Office, Cost Estimate For the Conference Agreement For H.R.
1, February 13, 2009, available at http://cbo.gov/ftpdocs/99xx/doc9989/hr1conference.pdf. For a later assessment, see
CBO, Budget and Economic Outlook: An Update, August 2010, Box 1-2, available at http://www.cbo.gov/ftpdocs/
117xx/doc11705/08-18-Update.pdf.
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Discretionary Budget Authority by Subfunction: An Overview
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Discretionary Budget Authority by Subfunction: An Overview
billion in increased spending and reduced taxes over the FY2009-FY2019 period or just over 5%
of GDP in 2008, while a more recent CBO estimate put the total at $814 billion.18
The effects of Recovery Act spending can be seen in Figure 3, where pronounced increases in
education, training, employment, and social services subfunctions can be seen for FY2009.
Smaller increases can be seen in Figure 9, which shows energy subfunctions, and in Figure 10,
which shows natural resources and environment subfunctions.
Negative Budget Authority
Within the federal budget concepts, certain inflows such as offsetting receipts, offsetting
collections, some user fees, and “profits” from federal loan programs, are treated as negative
budget authority.1719 The federal government uses a modified form of accrual accounting for loan
and loan guarantee programs since passage of the Federal Credit Reform Act (FCRA) as well as
for certain federal retirement programs.1820 OMB calculates net subsidy rates according to FCRA
rules for loan and loan guarantee programs. In some cases, FCRA calculations yield negative net
subsidy levels, implying that the federal government appears to make a profit on those loans.
FCRA subsidy calculations, however, omit risk adjustments.1921 The true economic cost of federal
credit guarantees can be substantially underestimated when risk adjustments are omitted.2022 CBO
and OMB include risk adjustments in estimates of the costs associated with the TARP as
mandated by the Emergency Economic Stabilization Act of 2008 (EESA; P.L. 110-343).2123
For example, some Federal Housing Administration mortgage programs have been estimated to
yield negative net subsidies, as shown in Figure 10.
17
See OMB, FY201211.
18
For initial estimates, see U.S. Congressional Budget Office, Cost Estimate For the Conference Agreement For H.R.
1, February 13, 2009, available at http://cbo.gov/ftpdocs/99xx/doc9989/hr1conference.pdf. For a later assessment, see
CBO, Budget and Economic Outlook: An Update, August 2010, Box 1-2, available at http://www.cbo.gov/ftpdocs/
117xx/doc11705/08-18-Update.pdf.
19
See OMB, FY2013 Budget, Analytic Perspectives, ch. 12, “Budget Concepts.” In particular, pp. 122-129 cover these
topics.
1820
CRS Report RL30346, Federal Credit Reform: Implementation of the Changed Budgetary Treatment of Direct Loans
and Loan Guarantees, by James M. Bickley.
1921
While the FCRA calculations include estimates of default costs, they do not discount more volatile income flows, as
a private firm would.
2022
U.S. Congressional Budget Office, Estimating the Value of Subsidies for Federal Loans and Loan Guarantees,
August 2004, available at http://cbo.gov/doc.cfm?index=5751.
2123
U.S. Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2009 to 2019, January 7, 2009,
pp. 25-26, available at http://www.cbo.gov/ftpdocs/99xx/doc9957/01-07-Outlook.pdf; Testimony of Elizabeth Warren,
Chair of the Congressional Oversight Panel, in Congress, Senate Banking Committee, Pulling Back the TARP:
Oversight of the Financial Rescue Program, hearings, 111th Congress, 1st sess., February 5, 2009, available at
http://banking.senate.gov/public/_files/Warrentestimonyfinal2509.pdf.
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Figure 113
Discretionary Budget Authority by Subfunction: An Overview
Figure 2. National Defense (050) Subfunctions
Discretionary Budget Authority as a Percentagebudget authority as a percentage of GDP, FY1976-FY2016FY2017
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projectedFY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Figure 2Congressional Research Service
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Discretionary Budget Authority by Subfunction: An Overview
Figure 3. Education,Training, Employment, and Social Services (500) Subfunctions
Discretionary Budget Authority as a Percentagebudget authority as a percentage of GDP, FY1976-FY2016FY2017
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projectedFY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Figure 3Congressional Research Service
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Discretionary Budget Authority by Subfunction: An Overview
Figure 4. Health Care Services (Subfunction 551) and Medicare (Subfunction 571)
Discretionary Budget Authority as a Percentagebudget authority as a percentage of GDP, FY1976-FY2016FY2017
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projectedFY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats. Discretionary BA for Medicare funds program administration, and does not
generally fund
program benefits. See OMB budget documents for further caveats.
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Figure 4Congressional Research Service
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Discretionary Budget Authority by Subfunction: An Overview
Figure 5. Smaller Health Subfunctions
Discretionary Budget Authority as a Percentagebudget authority as a percentage of GDP, FY1976-FY2016FY2017
Source: CRS, based on OMB data from the FY2012 BudgetFY2013 budget submission.
Notes: Hospital and medical care for veterans (703) presented here for comparison, and also appears in Figure 7. FY2011 are annualized levels from P.L. 111-242;
FY2012-FY2016 levels projected
8. FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Figure 5Congressional Research Service
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Discretionary Budget Authority by Subfunction: An Overview
Figure 6. Income Security (600) Subfunctions
Discretionary Budget Authority as a Percentagebudget authority as a percentage of GDP, FY1976-FY2016FY2017
Source: CRS, based on OMB data from the FY2012 BudgetFY2013 budget submission.
Notes: Discretionary funding for income security programs supports program administration; most income
security benefits are generally funded by mandatory spending,
which is not shown here. FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Figure 6 which is not shown here. FY2013-FY2017 levels
reflect Administration proposals and projections. See OMB budget documents for further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Figure 7. Social Security (650) Subfunction
Discretionary Budget Authority as a Percentagebudget authority as a percentage of GDP, FY1976-FY2016FY2017
Source: CRS, based on OMB data from the FY2012 BudgetFY2013 budget submission.
Notes: Discretionary funding for Social Security supports program administration; Social Security benefits are
generally funded by mandatory spending, which is not shown
here. FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Figure 7 here. FY2013-FY2017 levels reflect Administration
proposals and projections. See OMB budget documents for further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Figure 8.Veterans Benefits and Services (700) Subfunctions
Discretionary Budget Authority as a Percentagebudget authority as a percentage of GDP, FY1976-FY2016FY2017
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projectedFY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats. Note that mandatory Veterans
Affairs expenditures are not reflected here.
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Figure 8Congressional Research Service
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Discretionary Budget Authority by Subfunction: An Overview
Figure 9. Energy (270) Subfunctions
Discretionary Budget Authority as a Percentagebudget authority as a percentage of GDP, FY1976-FY2016FY2017
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projectedFY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Figure 9Congressional Research Service
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Discretionary Budget Authority by Subfunction: An Overview
Figure 10. Natural Resources and Environment (300) Subfunctions
Discretionary Budget Authority as a Percentagebudget authority as a percentage of GDP, FY1976-FY2016FY2017
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projectedFY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Figure 10Congressional Research Service
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Discretionary Budget Authority by Subfunction: An Overview
Figure 11. Commerce and Housing Credit Subfunctions
Discretionary Budget Authority as a Percentage of GDP, FY1976-FY2016
Source: CRS, based on OMB data from FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Figure 11.Transportation (400) Subfunctions
Discretionary Budget Authority as a Percentage of GDP, FY1976-FY2016
Source: CRS, based on OMB data from FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Figure 12. Community and Regional Development (450) Subfunctions
Discretionary Budget Authority as a Percentage of GDP, FY1976-FY2016
Source: CRS, based on OMB data from FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Figure 13. International Affairs (150) Subfunctions
Discretionary Budget Authority as a Percentage of GDP, FY1976-FY2016
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Figure 14. General Science, Space, and Technology (250) Subfunctions
Discretionary Budget Authority as a Percentage of GDP, FY1976-FY2016
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Figure 15. Agriculture (350) Subfunctions
Discretionary Budget Authority as a Percentage of GDP, FY1976-FY2016
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Figure 16. Administration of Justice (750) Subfunctions
Discretionary Budget Authority as a Percentage of GDP, FY1976-FY2016
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Figure 17. General Government (800) Subfunctions
Discretionary Budget Authority as a Percentage of GDP, FY1976-FY2016
Source: CRS, based on OMB data from the FY2012 Budget submission.
Notes: FY2011 are annualized levels from P.L. 111-242; FY2012-FY2016 levels projected. See OMB budget documents for further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Author Contact Information
D. Andrew Austin
Analyst in Economic Policy
aaustin@crs.loc.gov, 7-6552
Congressional Research Service
26budget authority as a percentage of GDP, FY1976-FY2017
0.14
0.12
Mortgage credit
Postal service
Deposit insurance
Other advancement of commerce
Budget Authority as % of GDP
0.10
0.08
0.06
0.04
0.02
0.00
−0.02
−0.04
−0.06
76 978 980 982 984 986 988 990 992 994 996 998 000 002 004 006 008 010 012 014 016
1
1
1
1
1
1
1
1
1
1
1
2
2
2
2
2
2
2
2
2
19
Source: CRS, based on OMB data from FY2012 Budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Figure 12. Transportation (400) Subfunctions
Discretionary budget authority as a percentage of GDP, FY1976-FY2017
Source: CRS, based on OMB data from FY2012 Budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Figure 13. Community and Regional Development (450) Subfunctions
Discretionary budget authority as a percentage of GDP, FY1976-FY2017
0.65
Community dev.
0.60
Area and regional dev.
0.55
Disaster relief and insurance
Budget Authority as % of GDP
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
−0.05
−0.10
76 978 980 982 984 986 988 990 992 994 996 998 000 002 004 006 008 010 012 014 016
1
1
1
1
1
1
1
1
1
1
1
2
2
2
2
2
2
2
2
2
19
Source: CRS, based on OMB data from FY2012 Budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Figure 14. International Affairs (150) Subfunctions
Discretionary budget authority as a percentage of GDP, FY1976-FY2017
Source: CRS, based on OMB data from the FY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Figure 15. General Science, Space, and Technology (250) Subfunctions
Discretionary budget authority as a percentage of GDP, FY1976-FY2017
Source: CRS, based on OMB data from the FY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Figure 16. Agriculture (350) Subfunctions
Discretionary budget authority as a percentage of GDP, FY1976-FY2017
Source: CRS, based on OMB data from the FY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Figure 17. Administration of Justice (750) Subfunctions
Discretionary budget authority as a percentage of GDP, FY1976-FY2017
Source: CRS, based on OMB data from the FY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
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Discretionary Budget Authority by Subfunction: An Overview
Figure 18. General Government (800) Subfunctions
Discretionary budget authority as a percentage of GDP, FY1976-FY2017
Source: CRS, based on OMB data from the FY2013 budget submission.
Notes: FY2013-FY2017 levels reflect Administration proposals and projections. See OMB budget documents for
further caveats.
Author Contact Information
D. Andrew Austin
Analyst in Economic Policy
aaustin@crs.loc.gov, 7-6552
Congressional Research Service
30