[Budget of the United States Government, Fiscal Year 1998]
[Page 129-135]

[[Page 129]]

                      VI. INVESTING IN THE COMMON                      
                       GOOD: THE MAJOR FUNCTIONS                      
                      OF THE FEDERAL GOVERNMENT                      

[[Page 131]]

 
                              11.  OVERVIEW

   The President's determination to balance the budget--a determination 
that Congress shares--will continue to place a spotlight on every 
Federal agency and program, forcing each to justify its existence. As 
part of these efforts, the President will continue his practice of the 
past four years and work with Congress to eliminate or scale back 
unnecessary and lower-priority programs.
   Balancing the budget goes hand-in-hand with another of the 
President's major efforts--improving Government's performance. In an era 
of limited resources, the President wants to make sure that the programs 
the Government funds do, in fact, accomplish the goals set out for them.
   Led by Vice President Gore's National Performance Review (NPR), the 
Administration has made real progress in creating a Government that, in 
the words of the NPR, ``works better and costs less.'' We have 
eliminated layers of bureaucracy, cut paperwork burdens, scrapped 
thousands of pages of regulations and, most important, improved service 
to Government's customers--the American people.
  These efforts will continue. Federal departments and agencies are 
implementing the landmark 1993 Government Performance and Results Act, 
which will hold them more accountable for what their programs achieve. 
The Administration also will continue to look for ways to provide better 
service. (For a detailed discussion of the Administration's effort to 
improve performance, see Section IV.)
   All too often, however, the focus of political debate revolves almost 
exclusively around proposals for incremental change: How much more does 
the President want to spend on program X? How much less on program Y? 
How do his proposals compare to what Congress proposes to do?
   Such proposals capture only a portion of what the Federal Government 
does from year to year. The base of Federal activity--from Social 
Security to defense to interest on the Federal debt--does not change 
much, if at all. Nor does the base of activity include just the 
estimated $1.7 trillion that the Federal Government will spend in 1998. 
The Government provides hundreds of billions of dollars in benefits 
through the tax code, and it seeks to accomplish other goals through 
regulation.
   If we want to continue improving performance, to ensure that 
taxpayers get the high-quality Government they deserve, we have to 
understand the full range of Federal Government activities. This section 
provides a broad overview, categorizing the activities according to 
their budget ``function.''

[[Page 132]]

                                   Table 11-1.  FEDERAL RESOURCES BY FUNCTION                                   
                                            (In billions of dollars)                                            
----------------------------------------------------------------------------------------------------------------
                                                                               Estimate                         
                 Function                     1996   -----------------------------------------------------------
                                             Actual     1997      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
NATIONAL DEFENSE:                                                                                               
  Spending:                                                                                                     
    Discretionary Budget Authority........     265.0     263.1     266.0     269.8     275.5     282.0     289.8
    Mandatory Outlays:                                                                                          
      Existing law........................      -0.2      -0.8      -0.7      -0.7      -0.5      -0.5      -0.5
      Proposed legislation................  ........  ........  ........  ........  ........  ........      -0.2
  Credit Activity:                                                                                              
    Guaranteed loans......................       0.3         *       0.2       0.5       0.8       0.8       0.8
  Tax Expenditures:                                                                                             
    Existing law..........................       2.1       2.1       2.1       2.1       2.1       2.2       2.2
                                           ---------------------------------------------------------------------
INTERNATIONAL AFFAIRS:                                                                                          
  Spending:                                                                                                     
    Discretionary Budget Authority........      18.1      18.1      23.0      20.1      19.1      18.8      18.8
    Mandatory Outlays:                                                                                          
      Existing law........................      -4.8      -4.7      -4.4      -4.0      -3.8      -3.7      -3.5
      Proposed legislation................  ........  ........         *  ........  ........  ........  ........
  Credit Activity:                                                                                              
    Direct loan disbursements.............       1.7       2.2       1.9       2.2       2.2       2.0       2.0
    Guaranteed loans......................       8.4      12.7      12.1      13.1      13.7      13.7      14.0
  Tax Expenditures:                                                                                             
    Existing law..........................       6.5       7.0       7.6       8.2       8.8       9.4      10.1
    Proposed legislation..................  ........         *      -0.8      -1.4      -1.5      -1.7      -1.8
                                           ---------------------------------------------------------------------
GENERAL SCIENCE, SPACE, AND TECHNOLOGY:                                                                         
  Spending:                                                                                                     
    Discretionary Budget Authority........      16.7      16.6      16.4      16.4      16.2      16.2      16.2
    Mandatory Outlays:                                                                                          
      Existing law........................         *         *         *         *         *         *         *
  Tax Expenditures:                                                                                             
    Existing law..........................       0.8       0.9       1.5       0.8       0.8       0.8       0.8
    Proposed legislation..................  ........       0.4       0.8       0.5       0.2       0.1         *
                                           ---------------------------------------------------------------------
ENERGY:                                                                                                         
  Spending:                                                                                                     
    Discretionary Budget Authority........       4.9       4.3       4.7       4.9       4.6       4.5       4.4
    Mandatory Outlays:                                                                                          
      Existing law........................      -3.1      -2.9      -2.8      -3.7      -2.8      -3.0      -3.7
      Proposed legislation................  ........  ........  ........        -*        -*      -0.1      -1.2
  Credit Activity:                                                                                              
    Direct loan disbursements.............       1.0       2.5       2.1       1.7       2.7       1.8       1.7
  Tax Expenditures:                                                                                             
    Existing law..........................       2.2       2.3       2.2       2.4       2.5       2.5       2.5
    Proposed legislation..................  ........        -*      -0.1      -0.1      -0.1      -0.1      -0.1
                                           ---------------------------------------------------------------------
NATURAL RESOURCES AND ENVIRONMENT:                                                                              
  Spending:                                                                                                     
    Discretionary Budget Authority........      20.7      21.1      22.4      22.4      21.8      21.7      21.8
    Mandatory Outlays:                                                                                          
      Existing law........................       0.7       1.0       1.0       0.9       0.9       0.9       0.8
      Proposed legislation................  ........  ........       0.1       0.1       0.1       0.1       0.1
  Credit Activity:                                                                                              
    Direct loan disbursements.............         *         *         *         *         *         *         *
  Tax Expenditures:                                                                                             
    Existing law..........................       1.6       1.7       1.7       1.7       1.7       1.7       1.7
    Proposed legislation..................  ........        -*      -0.1      -0.1      -0.1      -0.1      -0.1
                                           ---------------------------------------------------------------------

[[Page 133]]

AGRICULTURE:                                                                                                    
  Spending:                                                                                                     
    Discretionary Budget Authority........       4.2       4.1       4.1       4.0       3.9       3.9       3.9
    Mandatory Outlays:                                                                                          
      Existing law........................       5.0       6.1       8.2       7.6       7.2       6.1       5.9
      Proposed legislation................  ........  ........         *         *         *         *         *
  Credit Activity:                                                                                              
    Direct loan disbursements.............       6.2       7.1       8.7       8.6       8.3       7.7       7.2
    Guaranteed loans......................       5.1       7.9       8.1       8.0       8.0       8.0       8.0
  Tax Expenditures:                                                                                             
    Existing law..........................       0.3       0.3       0.3       0.3       0.4       0.4       0.4
    Proposed legislation..................  ........        -*      -0.1      -0.1      -0.1      -0.1      -0.1
                                           ---------------------------------------------------------------------
COMMERCE AND HOUSING CREDIT:                                                                                    
  Spending:                                                                                                     
    Discretionary Budget Authority........       3.7       2.4       3.3       3.8       5.2       3.2       3.2
    Mandatory Outlays:                                                                                          
      Existing law........................     -13.8     -11.4       0.7       2.5       6.9       5.7       6.8
      Proposed legislation................  ........  ........      -0.7       0.1       0.3      -1.7      -1.9
  Credit Activity:                                                                                              
    Direct loan disbursements.............       1.6       8.8       5.0       1.7       1.9       2.3       2.4
    Guaranteed loans......................     181.3     169.0     161.6     161.5     163.4     166.2     169.2
  Tax Expenditures:                                                                                             
    Existing law..........................     182.4     188.9     195.9     204.8     213.5     222.0     229.7
    Proposed legislation..................  ........       0.1       0.2       0.2       0.2       0.2       0.1
                                           ---------------------------------------------------------------------
TRANSPORTATION:                                                                                                 
  Spending:                                                                                                     
    Discretionary Budget Authority........      13.6      13.8      13.5      14.6      14.7      15.0      15.2
    Mandatory Outlays:                                                                                          
      Existing law........................       2.5       2.4       2.4       2.3       2.2       2.0       2.0
      Proposed legislation................  ........  ........         *         *         *      -0.1      -0.7
  Credit Activity:                                                                                              
    Direct loan disbursements.............         *       0.2       0.6       0.8       0.9       0.9       0.9
    Guaranteed loans......................       0.8       1.1       0.5       0.5       0.5       0.5       0.5
  Tax Expenditures:                                                                                             
    Existing law..........................       1.3       1.4       1.4       1.5       1.5       1.6       1.6
                                           ---------------------------------------------------------------------
COMMUNITY AND REGIONAL DEVELOPMENT:                                                                             
  Spending:                                                                                                     
    Discretionary Budget Authority........      11.6       9.3      10.9       8.3       7.7       7.8       7.9
    Mandatory Outlays:                                                                                          
      Existing law........................       0.3       0.3      -0.1       0.1       0.1       0.3       0.1
      Proposed legislation................  ........       0.2         *         *  ........        -*        -*
  Credit Activity:                                                                                              
    Direct loan disbursements.............       2.0       2.3       2.5       1.9       2.1       2.2       2.1
    Guaranteed loans......................       0.8       1.5       1.9       2.1       2.1       2.2       2.0
  Tax Expenditures:                                                                                             
    Existing law..........................       2.6       2.7       2.7       2.7       2.7       2.6       2.4
    Proposed legislation..................  ........         *       0.4       0.6       0.6       0.5       0.5
                                           ---------------------------------------------------------------------
EDUCATION, TRAINING, EMPLOYMENT, AND                                                                            
 SOCIAL SERVICES:                                                                                               
  Spending:                                                                                                     
    Discretionary Budget Authority........      36.1      42.4      46.4      47.4      48.5      49.5      50.3
    Mandatory Outlays:                                                                                          
      Existing law........................      13.9      10.5      10.8      10.5      10.6      10.8      11.3
      Proposed legislation................  ........      -0.3       2.8       4.6       5.0       4.5       1.9

[[Page 134]]

  Credit Activity:                                                                                              
    Direct loan disbursements.............       9.1      12.0      14.5      17.6      20.2      21.7      23.1
    Guaranteed loans......................      19.8      21.0      21.3      20.5      20.5      21.5      22.9
  Tax Expenditures:                                                                                             
    Existing law..........................      25.2      27.0      27.9      29.2      30.5      31.9      33.3
    Proposed legislation..................  ........       0.2       4.9       7.2       8.9       9.0       9.5
                                           ---------------------------------------------------------------------
HEALTH:                                                                                                         
  Spending:                                                                                                     
    Discretionary Budget Authority........      23.3      25.0      25.1      25.1      25.1      25.2      25.2
    Mandatory Outlays:                                                                                          
      Existing law........................      96.8     103.5     109.6     116.3     124.8     134.6     145.1
      Proposed legislation................  ........         *       3.9       3.7       2.1      -0.2      -5.0
  Credit Activity:                                                                                              
    Direct loan disbursements.............         *         *  ........  ........  ........  ........  ........
    Guaranteed loans......................       0.2       0.3       0.1         *  ........  ........  ........
  Tax Expenditures:                                                                                             
    Existing law..........................      72.7      79.2      85.1      91.2      97.3     103.7     110.4
    Proposed legislation..................  ........         *         *         *         *         *         *
                                           ---------------------------------------------------------------------
MEDICARE:                                                                                                       
  Spending:                                                                                                     
    Discretionary Budget Authority........       2.9       2.6       2.8       2.8       2.7       2.7       2.7
    Mandatory Outlays:                                                                                          
      Existing law........................     171.3     191.6     208.6     228.2     248.8     271.1     295.1
      Proposed legislation................  ........  ........      -4.3     -11.4     -22.2     -27.8     -34.6
                                           ---------------------------------------------------------------------
INCOME SECURITY:                                                                                                
  Spending:                                                                                                     
    Discretionary Budget Authority........      27.8      26.0      32.6      36.1      38.9      40.4      41.8
    Mandatory Outlays:                                                                                          
      Existing law........................     188.0     197.4     203.6     212.4     222.2     225.6     235.4
      Proposed legislation................  ........       0.6       2.3       2.2       2.3       1.9       2.6
  Credit Activity:                                                                                              
    Direct loan disbursements.............       0.1       0.1       0.1         *  ........  ........  ........
    Guaranteed loans......................         *         *         *         *         *         *         *
  Tax Expenditures:                                                                                             
    Existing law..........................      83.0      84.8      86.3      87.9      89.5      91.3      93.0
    Proposed legislation..................  ........       0.7      11.3       7.3       9.3      11.5      12.0
                                           ---------------------------------------------------------------------
SOCIAL SECURITY:                                                                                                
  Spending:                                                                                                     
    Discretionary Budget Authority........       3.1       3.5       3.3       3.3       3.2       3.2       3.3
    Mandatory Outlays:                                                                                          
      Existing law........................     347.1     364.2     380.9     398.6     417.7     438.0     459.7
      Proposed legislation................  ........  ........  ........        -*         *         *         *
  Tax Expenditures:                                                                                             
    Existing law..........................      22.9      24.2      25.3      26.5      27.8      28.9      29.9
                                           ---------------------------------------------------------------------
VETERANS BENEFITS AND SERVICES:                                                                                 
  Spending:                                                                                                     
    Discretionary Budget Authority \1\....      18.4      18.9      18.8      18.7      18.7      18.7      18.7
    Mandatory Outlays:                                                                                          
      Existing law........................      18.8      20.6      21.7      22.8      24.4      21.5      23.2
      Proposed legislation................  ........  ........       0.6       0.3       0.7       1.1       1.5
  Credit Activity:                                                                                              
    Direct loan disbursements.............       1.4       1.9       2.2       2.2       2.3       2.3       2.3
    Guaranteed loans......................      28.7      30.2      28.9      25.5      25.0      24.6      24.1

[[Page 135]]

  Tax Expenditures:                                                                                             
    Existing law..........................       2.8       2.9       3.1       3.3       3.5       3.7       3.9
                                           ---------------------------------------------------------------------
ADMINISTRATION OF JUSTICE:                                                                                      
  Spending:                                                                                                     
    Discretionary Budget Authority........      20.7      22.8      24.4      25.2      24.4      24.8      25.5
    Mandatory Outlays:                                                                                          
      Existing law........................        -*       0.8       0.6       0.5       0.4       0.4       0.4
                                           ---------------------------------------------------------------------
GENERAL GOVERNMENT:                                                                                             
  Spending:                                                                                                     
    Discretionary Budget Authority........      11.5      11.8      12.8      12.5      12.1      11.8      11.8
    Mandatory Outlays:                                                                                          
      Existing law........................       0.1       0.9       0.8       0.8       0.9       0.7       0.7
      Proposed legislation................  ........  ........        -*       0.1       0.2       0.3       0.4
  Credit Activity:                                                                                              
    Direct loan disbursements.............       0.4       0.5  ........  ........  ........  ........  ........
  Tax Expenditures:                                                                                             
    Existing law..........................      46.7      48.1      49.5      50.8      52.1      53.6      55.1
    Proposed legislation..................  ........  ........         *         *         *       0.1       0.1
                                           ---------------------------------------------------------------------
NET INTEREST:                                                                                                   
  Spending:                                                                                                     
    Mandatory Outlays:                                                                                          
      Existing law........................     241.1     247.5     249.8     251.8     248.1     244.9     238.6
      Proposed legislation................  ........      -0.2         *       0.1       0.1       0.1       0.1
  Tax Expenditures:                                                                                             
    Existing law..........................       1.3       1.3       1.3       1.3       1.2       1.2       1.2
                                           ---------------------------------------------------------------------
UNDISTRIBUTED OFFSETTING RECEIPTS:                                                                              
  Spending:                                                                                                     
    Mandatory Outlays:                                                                                          
      Existing law........................     -37.6     -46.5     -52.9     -41.1     -41.6     -43.2     -45.3
      Proposed legislation................  ........  ........      -2.7      -2.4      -4.4      -6.9     -22.7
                                           =====================================================================
FEDERAL GOVERNMENT TOTAL:                                                                                       
  Spending:                                                                                                     
    Discretionary Budget Authority........     502.5     505.8     530.5     535.4     542.5     549.4     560.6
    Mandatory Outlays:                                                                                          
      Existing law........................   1,026.0   1,080.7   1,137.9   1,205.9   1,266.5   1,312.2   1,372.0
      Proposed legislation................  ........       0.3       2.1      -2.7     -16.0     -28.7     -59.5
  Credit Activity:                                                                                              
    Direct loan disbursements.............      23.6      37.6      37.5      36.8      40.5      40.9      41.7
    Guaranteed loans......................     245.4     243.6     234.7     231.7     234.0     237.5     241.5
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Notes:                                                                                                          
                                                                                                                
Revenue estimates for proposed legislation affecting tax expenditures are not directly comparable to estimates  
  for current law tax expenditures, because the current law estimates do not reflect behavioral effects.        
                                                                                                                
* $50 million or less.                                                                                          
                                                                                                                
\1\ Proposed legislation will supplement budget authority with receipts (estimated at $0.5 billion in 1998).