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ANALYSIS OF THE
DOMENICI BUDGET RESOLUTION
May 11, 1995
Overview
The budget resolution that Senate Budget Chairman Domenici released this
week is designed to balance the budget by 2002 with $961 billion in savings over
7 years. That includes $806 billion in programmatic changes and $155 in interest
savings.
Domenici would cut Medicare and Medicaid, cut such other entitlements as
farm and veterans' programs, cut about 30 percent from domestic discretionary
spending, and raise taxes on working Americans by rolling back some enacted
expansions of the EITC. For defense, he also relies on the President's 1995
enacted defense plan through 2000, with approximately a freeze in 2001 and
2002 at the 2000 level.
Domenici does not explicitly include a tax cut in his budget resolution. But
he includes a procedural tool that would allow Congress to pay for a tax cut by
allocating the assumed "fiscal dividend" of lower interest rates that would result
from a balanced budget.
Domenici's cuts in Medicare and Medicaid account for 45 percent of his
savings. But he does not provide details on how he plans to make those cuts. Nor
does he provide much programmatic detail about cuts in other entitlements or in
domestic discretionary programs.
Previously, Domenici was expected to need $1.4 trillion in savings to reach
balance by 2002. The reason the cuts now add to $961 billion is not because
they are smaller, but because he has lowered the baseline by assuming a non-
defense discretionary freeze.
For the most part, Domenici uses CBO estimates of baseline spending on
entitlements, deposit insurance, other mandatory programs, and economic
assumptions. His baseline for non-defense discretionary spending removes all
inflation. This presentation disguises the level of cuts to non-defense discretionary
programs; he freezes all programs at 1995 levels and then applies cuts below the
freeze.
Domenici proposes to save a total of $961 billion in the following ways:
$256 billion from Medicare;
$175 billion from Medicaid;
$209 billion from other entitlements;
$190 billion from non-defense discretionary spending (as measured from a
1995 freeze extended through 2002; defense is increased by $25 billion);
and
$155 billion from reduced debt service.
The following is a more detailed analysis of what the cuts mean in the major
programmatic categories:
1. Medicare -- $256 billion
Depending on the mix of policies, the $256 billion in savings could amount
to a 19 percent cut by 2002 from Domenici's baseline. He assumes an annual
growth of 7.2 percent over the next 7 years, compared to his baseline of 9.8
percent. But he would not impose the cut uniformly each year; he would reduce
the rate of growth to 5.2 percent in 1996 and 5.5 percent in 1997 -- much more
than the average 7.2 percent.
Domenici does not provide specific policies to generate $256 billion in
savings. He calls for a "special bipartisan commission" to address the long-term
solvency of Medicare by reviewing the program's financing, benefit provisions, and
delivery mechanisms. Without specific policies, one way to view these savings is
to treat them as asking each of the 39.8 million Medicare beneficiaries to bear part
of the burden. Using this analysis, the cuts are equivalent to $6,415 per Medicare
beneficiary over fiscal 1996-2002.
Press reports indicate that Domenici assumes $163 billion of Part A savings.
This figure appears close to CBO's estimates of savings needed to comply with the
Trustees' solvency standards. To achieve these savings would require deep
reductions in the hospital annual update, hospital capital payments,
disproportionate share and graduate medical education payments. Lower Medicare
payments to hospitals, physicians, and other providers could disproportionately
harm rural hospitals.
Press reports also indicate that Domenici's plan assumes beneficiaries in Part
2
B will continue to pay 31.5 percent of program costs from fiscal 1996-2002,
rather than 25 percent under current law, saving a reported $60 billion. Assuming
Domenici saves $163 billion from Part A and $60 billion from the Part B premium,
he needs to save only $33 billion more from Part B. He could find these savings
through physician payment or outpatient department reductions, among other
sources.
II.
Medicaid -- $175 billion
The Medicaid cuts are even more devastating than Medicare's, and would hit
the most vulnerable of Americans. The $175 billion figure implies a cut of 30
percent off of his baseline in 2002. These savings result from an average annual
growth rate of 4.5 percent over the next 7 years, compared to his baseline of 10.2
percent.
Savings from higher enrollment in managed care and "traditional" savings
proposals (e.g., CBO options for deficit reduction) do not reach $175 billion. For
example, since the CBO baseline projections already assume a growing number of
mothers and children on Medicaid will be in managed care plans, there are little
additional savings available.
To find savings of this size would require more dramatic steps. Domenici's
plan suggests two approaches. The first is to cut each State's Medicaid matching
rate by 18.7 percent across-the-board. The only other way is to turn the program
into a block grant, with a cap on growth phased down from 8 percent in 1996 to 4
percent in 2000 and thereafter. To offset the cut in Federal funding, States that
wanted to maintain their current services would have to absorb most of these cuts
or reduce coverage and benefits.
Even accounting for some managed care savings, the reductions could mean
deep cuts in eligibility, benefits, and payments to doctors, hospitals, nursing
homes, and other health care providers. Using the projections in the President's
budget, if Federal Medicaid spending were cut $160-$190 billion over 7 years, and
those cuts were split evenly between eliminating eligibility for elderly and disabled
beneficiaries, eliminating eligibility for children, cutting services, and cutting
provider payments, in the year 2002 alone:
5 to 7 million children would lose coverage;
800,000 to 1 million elderly and disabled would lose coverage;
All 45 million beneficiaries would lose benefits: all preventive and
diagnostic screening services for children, home health care, and
hospice services would be eliminated (and dental care if one assumes
$190 billion in savings); and
3
Already low payments to health care providers would be cut between
$10.7 and $12.8 billion.
III. Other Entitlements -- $209 billion
Domenici's plan calls for $209 billion in savings from entitlements other than
Medicare and Medicaid, in the following categories:
Welfare:
Domenici's budget includes $47 billion in welfare-related cuts over 5 years --
about $15 billion less than the House-passed welfare reform bill -- and $80
billion over 7 years.
AFDC and JOBS. The size of the savings assumed from block
granting AFDC is unclear. Were it capped at levels in the House-
passed bill, poor families might face benefit cuts of up to 14 percent
because capped spending levels would not cover current benefits.
Poor families would fall further below the poverty level. Due to the
cap, people in States with economic downturns or recessions could
lose even more help as more people lose jobs, join the welfare rolls
and compete for the same fixed dollars.
Food Stamps and Child Nutrition: While the amount of cuts is
unclear, they could reach $20 billion over 5 years. Domenici has said
he will hold School Lunch and School Breakfast harmless, while
instituting a geographic income test for Family Day Care Homes in the
Child and Adult Care Feeding Program. He proposes to maintain "the
safety net of Food Stamps" while better targeting it to lower income
beneficiaries (perhaps meaning he would not turn it into a block
grant).
EITC:
Domenici would raise $13 billion over 5 years by rolling back part of the
President's 1993 expansion, which sought to ensure that working
Americans need not raise their children in poverty. These changes would
raise taxes on over 12 million families.
The cut would eliminate the EITC for 4.4 million low-income working
families without children, raising their taxes by up to $324 each in 1996. In
total, their taxes would go up by $3.3 billion over five years, and $5 billion
over seven years.
4
A repeal of the 1996 changes would raise taxes on 7.8 million low-income
working families with two or more children; their taxes would rise by up to
$354 per family. This would raise taxes on families with two or more
children by $8.9 billion over 5 years, $13.8 billion over 7.
Farm Programs:
Domenici would reduce mandatory outlays (including the CCC programs,
crop insurance, and the farm loan program's liquidating account) by $14
billion over 7 years, or 16 percent. The plan includes no specific
recommendations to achieve the mandatory reductions. Rather, it states
that "the spending reductions could be accommodated under the 1995 farm
bill when reauthorized."
Student Loans:
Domenici calls on the Labor and Human Resources Committee to find $9.2
billion in savings over 5 years, some of which would come from increasing
student loan debt burden. He would:
eliminate Federal in-school interest subsidies for graduate and
professional students, saving $2.25 billion and affecting 2.4 million
borrowers; and
eliminate the reduction in borrower interest rates scheduled to take
place for loans made in 1998 and thereafter, producing no net
savings.
Civil Service Retirement:
Federal Employee Health Benefits: Domenici's proposal for FEHB sets an
annual dollar amount that the Federal government would contribute for
Federal employee/annuitant health benefits and adjusts the amount annually
by inflation. Because premiums are expected to rise faster than inflation,
CBO estimates mandatory savings of $2.2 billion over 5 years; 7 years
should yield about $4.6 billion. (In addition, discretionary savings of $2.3
billion over 5 years reflect lower agency contributions for active employees
than under current law.)
Civil Service Retirement: Domenici would change the base used to compute
retirement annuities from the highest 3-year average to the highest 5-year
average salary, producing savings of $570 million over 5 years and $1.2
billion over 7 years. The proposal also conforms Congressional pensions to
those of regular civilian employees, reducing their benefits and contributions
5
for future service.
Veterans Affairs Entitlements:
Domenici proposes to cut VA's mandatory spending by $6.3 billion by:
adopting the OBRA savings provisions in the President's budget;
proposing legislation to overturn the Supreme Court case which
mandates compensation for adverse medical situations not resulting
from VA malpractice;
increasing the veterans' contribution rate for GI Bill education
benefits;
increasing the co-payment for prescription drugs for higher-income
veterans; and
limiting future disability compensation awards to only those
applicants whose disabilities were incurred in the performance of
duty, not merely in the military.
The last provision in particular will be very controversial.
IV. Non-defense discretionary spending -- $190 billion
Domenici would cut non-defense discretionary programs $190 billion below
a 1995 freeze, the equivalent to a $301 billion cut below the non-defense
discretionary levels in the President's budget.
Domenici proposes to kill the Commerce Department, Office of Personnel
Management, and Interstate Commerce Commission; end the Americorps and
Learn and Serve America programs; cut deeply into School-to-Work and other
education and training programs; privatize FAA air traffic control services; cut the
Community Development Block Grant in half; cut the National Endowments for the
Arts and Humanities by half; phase out EPA's wastewater and drinking water grant
programs over three years; freeze Head Start; fully fund law enforcement programs
of the Violent Crime Reduction Trust Fund; and add major funds for WIC.
The specific proposals include:
6
Education
Domenici would require significant cuts in most of the Education
Department's discretionary programs. He "protects" several important
programs, including Pell Grants and Title I, by freezing them at the 1995
level.
Cuts would fall hard on such remaining programs as Goals 2000 and
education for disabled students, requiring the equivalent of a 20 percent cut
across the board.
National Service and VISTA
Domenici would eliminate AmeriCorps and the Learn and Serve America
programs, saving more than $4 billion over 5 years. For 1996, 40,000
young Americans would not be able to devote a full year to making their
communities a better place to live, and 550,000 students in American
schools would not get service learning opportunities in and out of the
classroom.
Domenici would maintain current-law funding for VISTA, a reduction of
almost $50 million below the President's request, or $240 million over 5
years.
Labor
Domenici would consolidate and cut by 25 percent Labor Department job
training programs, wiping out 170,000 jobs in 1996 for the Summer Jobs
Program and 8,300 training slots under the Job Corps for 12,200 severely
disadvantaged youth.
Domenici would cut School-to-Work by 53 percent, from $400 million to
$188 million (including both Education and Labor Department funding),
stopping progress toward reaching all States with implementation "seed
capital" grants in 1997.
Domenici would cut funding for OSHA and MSHA each by half. This would
slash OSHA's compliance assistance to help businesses have safe
workplaces, matching funds to the 25 state-run OSHA programs, and
enforcement activities; and it would impede MSHA's congressionally
mandated inspections -- quarterly for underground mines, and semi-annually
for surface mines.
7
WIC
Domenici adds $1.9 billion to WIC, though it is unclear whether that's over
5 or 7 years.
Head Start
Domenici freezes Head Start at the 1995 level.
Justice
Domenici fully funds the law enforcement programs within the Violent Crime
Reduction Trust Fund. He also:
provides $7.8 billion for Federal law enforcement activities in 1996,
compared to $8 billion in the President's budget;
cuts funds for the Legal Services Corporation by 65 percent; and
provides $2 billion less for the Administration of Justice than in the
President's budget for 1996, and $10.5 billion less over the next 5
years.
Transportation
Domenici would terminate the Interstate Commerce Commission, consolidate
transportation programs, and eliminate highway demonstration programs;
these proposals are either the same as or similar to the Administration's
proposals.
But he would phase out operating assistance for Amtrak and mass transit,
likely bankrupting Amtrak and reducing bus and transit services in smaller
cities. And he would privatize the FAA's air traffic control services, saving
$14.7 billion over 5 years.
Housing
Domenici assumes a 50 percent cut in the $4.6 billion Community
Development block grant. Though he claims that he can find the savings by
ending aid to non-distressed places, cuts of this size also would affect many
cities under fiscal stress.
Domenici also assumes $6.7 billion in efficiency savings through new block
grants for public housing and other assisted housing. Such cuts likely will
8
mean reductions in level of assistance, numbers of households served, or
both.
International Affairs
Domenici would cut State Department operational accounts and drastically
reduce funding for U.S. international broadcasting, which would terminate
language broadcasts. He also would cut arms control funding and assume
that the Arms Control and Disarmament Agency would be merged into the
State Department.
In addition, Domenici would cut funds to pay assessed contributions to
United Nations peacekeeping operations back to 1991 levels, and cut funds
for Aid for International Development (AID) programs by $3.9 billion over 7
years. Cuts in AID's operating expense budget would reduce the direct-hire
workforce by close to 1,000 (more than 25 percent) in the next year.
Veterans Affairs
Domenici proposes to cut discretionary spending by $3.2 billion. He would
freeze VA Medical Care at the 1995 level and cut other programs by more
than $1.1 billion over 5 years. In particular, he would virtually eliminate
construction by 1999.
Natural Resources and the Environment
Domenici would cut natural resources and environmental programs by 30
percent by 2002.
He would:
phase out EPA's wastewater and drinking water grant programs
over three years;
cut funds for NOAA Fisheries and Species Protection programs by 5
percent;
accept most of the President's proposed cuts for the Corps of
Engineers;
reduce and freeze operations at National Parks by 10 percent
through 2002;
dissolve the National Biological Service; and
9
eliminate lower priority and duplicative programs.
Commerce
Domenici proposes to eliminate the Commerce Department, saving over $1
billion a year but shifting about two-thirds of the department (e.g., Patent
and Trademark Office, Census Bureau, National Oceanic and Atmospheric
Administration, and parts of Bureau of Export Administration) to other
agencies.
He would eliminate the National Institute of Standards and Technology,
including the Advanced Technology Program and the Manufacturing
Extension Partnership, and Commerce's export promotion efforts that have
helped U.S. companies capture $25 billion in foreign contracts over 1993
and 1994.
Office of Personnel Management
Domenici would "devolve" OPM down to a Civil Service Commission,
keeping employee benefit and retirement functions centralized while
delegating most other functions to the agencies.
Treasury
Domenici would repeal the $405 million annual IRS allowance provided in
the 1995 budget resolution, reducing resources available to IRS by that
amount.
USDA
Domenici would cut Agriculture programs by 11 percent by 2002.
Specifically, he would:
Cut Agricultural Research Service and Cooperative State Research,
Education, and Extension Service by 10 percent;
Eliminate the Foreign Agriculture Service cooperator program and Cochran
fellowship program.
Centralize servicing of rural housing loan program, either by centralizing
within USDA or contracting out; and
Create rural development program block grant.
10
Public Health and Health Research
Domenici would cut Public Health Service and other health spending by $2.8
billion in 1996 and $15.1 billion over 5 years. The plan assumes "full-
funding" of the Food and Drug Administration; Centers for Disease Control;
Indian Health Service; Substance Abuse and Mental Health Services
Administration; and all HIV/AIDS-related programs.
He does not list NIH and several other programs as "fully-funded."
Achieving the $2.8 billion cut in 1996 could require a cut of roughly 17
percent in non-HIV portions of NIH and health service programs for the
disadvantaged, including Community and Migrant Health Centers and the
National Health Service Corps.
Science
Domenici would cut science and space technology programs by about 10
percent between fiscal 1995 and 2002. These cuts roughly parallel the
President's budget by the year 2000, but are deeper in the earlier years.
Although his budget document is vague, the cuts seem to come mostly in
NASA and the Energy Department, with few reductions in the National
Science Foundation.
11
P02
FY 1996
Balanced Budget Resolution
CHAIRMAN'S MARK
UNITED D STATES S
=
:
SENATE
Prepared by the
05-09-95 01:03 PM FROM HCFA/AAP
Republican Staff of the
U.S. Senate Budget Committee
May 1995
PU3
Summary of Chairman's Mark
Concurrent Resolution on the Budget for Fineal Year 1996
Balancing the Budget- Preserving the Future
May 9, 1995
The Chairman's Mark provides a fiscal blueprint that would for the first time in three decades result in a balanced federal
budget. The Chairman's Mark in based on the unequivocal goal expressed by the American public and by a majority of the members of
the 104th Congress - balance the federal budget early in the next century, specifically by the year 2002. The Chairman's Mark is based
on the simple proposition, by meeting our requirement to fiscal responsibility we will insure a better future for our children and a better
future for our country.
Under the assumptions of the Chairman's Mark total federal spending will increase from $1.5 trillion this year to nearly $1.9
trillion in 2002. For the first time in nearly three decades, wages and salaries will be growing faster than the rate of growth in federal
spending - 5 percent versus 3 percent anounlly. The federal deficit, left unchanged would grow from $175 billion this year to nearly
$230 billion in 2002, and the debt burden on the public would increase from $3.8 trillion to over $5.4 trillion in 2002. Under the
Chairman's Mark a real, no-smoke and mirrors budget, fully implemented and enforceable, results in the deficit declining to zero in the
year 2002. Debt held by the public would reach $4.4 trillion in 2002 before declining thereafter.
05-09-95 04:03 PM FROM HCFA/AAP
Under the assumptions of the Chairman's Mark annual expenditures for appropriated accounts will decline from $278 billion
this year to $250 billion in 2002. Annual expenditures for appropriated defense programs, as requested by President Clinton, would
decline slightly from the current spending level ($270 billion) throughout the remainder of the century, before returning to an musual
level of $270 billion in 2002.
Under the assumptions of the Chairman's Mark, social security expenditures will continue to grow from $334 billion this year to
over $480 billion in 2002. The Chairman's Mark does not change any social security benefit or any social security COLA.
P01
Under the assumptions of the Chairman's Mark, the Medicare program will remain the fastest growing program in the federal
budget, increasing at an annual rate of about 7.1 percent. Federal mandatory medicare spending would growi from $178 billion this
year to $283 billion in 2002. The Chairman's mark, as amended, will recommend the establishment of n special Medicare Commission,
similar to that recommended by the Social Security and Medicare Trustees in April, to make recommendations addressing the
insolvency of the program. In two steps, the Commission would make recommendations to the committees of jurisdiction. The first
step would occur prior to those committees meeting the Mark's reconciliation instructions. In this first step, the Commission would
address the current short-term insolvency of the Medicare program carly this summer. In the second step, the Commission would
address the long-term insolvency of the account early next year. However, with or without the Commission's recommendations, the
committees of jurisdiction must meet the reconciliation instructions specified in the Chairman's Mark.
Under the Chainnan's Mark, the federal Medicaid program would be converted into n block grant program to the states, and its
annual growth rate would be reduced from nearly 10 percent annually to as average of 5 percent over the next seven years. Im total,
federal and state Medicaid spending would increase from about $160 billion this year to over $220 billion in 2002. Federal spending
for Medicaid would increase from nearly $89 billion this year to over $125 billion in 2002.
The Chairman's Mark is designed to achieve the goal of fiscal solvency while building on the following themes:
-
Protect and preserve programs that provide income security for our senior citizens. Again, no changes
are recommended to the social security program. No changes to any COLA are assumed for any federal
pension program.
-
Begin deficit reduction in our own backyard. The Chairman's Mark assuence a seven year freeze on all
members pay, federal judges, and SES employees. The Mark assumes a 15 percent reduction in Senate
Committee staff, a 12.5 percent reduction in Senate support staff, a 25 percent reduction in GAO, and the
05-09-95 01:03 PM FROM HCFA/AAP
termination of OTA. The mark assumes rank and file federal workers would receive current law pay
adjustments.
Devolve federal programs to states. Move power and money out of Washington and back to citizens in
their states and communities. The Chairman's Mark assumes consolidation of federal health,
transportation, education and other social service programs. The Chairman's Mark assumes federal
2
PU5
assistance would be returned to states in the form of various block grants.
-
Reduce the size of the federal government. Terminate, eliminate, reduce duplication and modernize
programs that were created for the 1960's - not the 21st century. The Chairman's Mark assumes the termination of more than 1
assumes the orderly termination of the Department of Commerce and the Office of Personael Management.
-
Public programs that could better be run as commercial endeavors should be privatized. The Chairman's
Mark assumes the creation of a private air traffic control system, privatization of Sallie Mac, privatize
the naval petroleum reserve and the uranium enrichment corporation, close GSA supply depots, repeal of
the Davis-Bacon Act and other proposals discussed later.
-
Protect national security and people's security. The Chairman's Mark assumes President Clinton's defense
request in his 1996 budget submission. The Chairman's Mark assumes that the Crime Trust Fund would
be funded and that the FBI, DEA, and INS funding would increase.
-
Reform federal assistance programs The Chairman's Mark assumes welfare reform savings over the next
five years that will total $47 billion. The food stamp program would be reformed and benefits would be
tied to the rate of growth in food inflation. The school lunch and school breakfast program would not be
changed but the Chairman's Mark assumes targeting the Child Adult Care Feeding Program on low-
income families The Chairman's Mark assumes funding for the WIC program will increase. The
Chairman's Mask assumes an expansion of the Child Support Enforcement Program.
-
Control the growth of public health care expenditures, The Chairman's Mark assumes that unsustainable
growth in federal health care costs must be cusbed to insure the solvency of the Medicare trust fund and
to guarantee it's survival for future recipients.
05-09-95 01:03 PM FROM HCFA/AAP
-
Reduce spending on corporate subsidies, The Chairman's Mark reduces federal corporate subsidies for
agriculture, trade, energy, and transportation industries.
The Chairman's Mark does not assume any net changes in revenues from that which would result from a continuation of current
3
P06
tax policies. However, a special reserve fund would provide, after spending restraint is estimated to achieve balance in 2002 and the
estimate is certified by the Congressional Budget Office, any resulting "fiscal dividend" would be made available to the tax writing
committees of Congress for tax reductions not to exceed the fiscal dividend estimate. Balance must first be achieved by reducing the
rate of growth in federal spending before tax reductions could be considered.
Finally, the Chairman's Mark would enforce the assumptions of the budget resolution through tough and disciplined provisions
governing the consideration of eascting legislation. First, discretionary spending caps would be consistent with the assumptions of the
Chairman's mark and extended through 2002. Defense and nondefense discretionary firewalls would be reestablished to protect
President Clinton's requested defense mark. The Chairman's Mark would enforce the mandatory spending assumptions through the
process of reconciling spending savings. Reconciled committees would be required to meet the Chairman's assumptions of direct
spending savings in the first year, the cumulative five year sum, and the cumulative seven year sum. The Chairman's Mark would
require emergency spending outside the spending caps to secure 60 votes - true emergency speading would have no difficulty meeting
this test. And finally, the Chairman's Mark would extend the Budget Act's 60 vote enforcement and pay-as-you-go provisions through
the year 2002. A 10 year point-of-order, adopted in the last two budget resolutions would be continued in the Chairman's Mark.
The Chairman's Mark is real, enforceable, and achieves the fiscal policy goal of a unified balanced budget in 2002. B is a
budget blueprint that will guide the country into a successful and prosperous 21st Century.
05-09-95 01:03 PM FROM HCFA/AAP
4
CHAIRMAN'S MARK
(Dollars in billions)
PUT
1996
1997
1998
1999
2000
5-yr total
2001
2002
Grand total
Current Law Deficit
197
214
209
223
236
224
227
Discretionary:
Defense
4
0
-2
2
6
10
6
8
25
Nondefense
-13
-27
-29
-30
-29
-128
-31
-31
-190
Mandatory:
Social Security
-
-
-
-
-
-
-
-
-
Medicare
-12
-22
-27
-36
-44
-141
-53
-62
-256
Medicaid
-4
do
-15
-23
-32
-81
-42
-53
-175
Other mandatory
-14
-25
-29
-31
-34
-133
-37
-39
-209
Revenues
1
1
1
-1
-1
b
-
-
0
Total policy changes
-38
-81
-101
-118
-134
-472
-156
-177
-806
Debt service
-1
-5
-11
-19
-28
-65
-39
-52
-155
Total deficit reduction
-40
-86
-112
-137
-162
-537
-195
-229
-961
Resulting deficit/surplus..
157
128
97
86
74
29
-2
05-09-95 01:03 PM FROM HCFA/AAP
NOTE: Details may not add to totals due to ronading. All totals shown on a unified budget basis.
5
CHAIRMAN'S MARK
(Comparison to 1995 levels, dollars in billions)
P08
1996
1997
1998
1999
2000
2001
2002
Total
Discretionary:
Defense
-8
-13
-15
-9
-2
-2
-0
-48
Nondefense
-10
-24
-28
-30
-28
-30
-30
-180
Subtotal discretionary
-19
-36
-43
-39
-30
-31
-30
-228
Mandatory:
Social Security
18
37
57
78
99
122
146
557
Medicare
9
20
35
50
66
84
105
368
Medicaid
6
13
18
23
27
32
36
155
Other mandatory
6
10
13
27
36
39
51
183
Net interest
23
29
31
37
42
43
44
249
Total outlays
44
72
112
175
240
288
352
1283
Revenues
63
121
192
262
342
434
529
1944
05-09-95 01:03 PM FROM HOFA/AAP
NOTE: Details many not add to totals due le reanding. AB totals shown on a unified budget basis.
6
CHAIRMAN'S MARK
(Dollars in billions)
PUY
1995
1996
1997
1998
1999
2000
2001
2002
Discretionary:
Defense
270
262
257
255
261
268
268
270
Nondefeuse
278
268
254
250
248
250
248
248
Subtotal discretionary
548
529
512
505
509
518
517
518
Mandatory:
Social Security
334
352
371
391
411
433
456
480
Medicare
178
187
198
213
228
244
262
283
Medicaid
89
96
102
107
112
116
121
125
Other mandatory
146
152
156
159
172
181
185
197
Net interest
235
258
264
267
273
277
278
279
Total outlays
1530
1574
1602
1642
1705
1770
1818
1882
Revenues
1355
1418
1476
1547
1617
1697
1789
1884
05-09-95 01:03 PM FROM HOFA/AAP
Resulting deficit/surplus
-175
-157
-128
-97
-86
-74
-29
2
NOTE: Details may not add to totals due to rounding, AS totals shown on a mified budget basis.
7
CHAIRMAN'S MARK
(Dollars in billions)
P10
1995
1996
1997
1998
1999
2000
2001
2002
050: National Defense
BA
261.4
257.7
253.4
259.6
266.2
276.0
275.9
275.9
OT
269.6
261.1
257.0
254.5
259.6
267.8
267.7
269.2
150: International Affairs
BA
18.9
15.4
14.3
13.5
12.6
14.1
14.3
14.2
OT
18.9
16.9
15.1
14.3
13.5
13.1
13.4
13.3
250: Science, Space and Technology
BA
17.2
16.7
16.3
16.1
16.0
15.8
15.8
15.8
oT
17.5
16.7
16.6
16.3
16.0
15.9
15.9
15.9
270: Energy
BA
6.3
2.9
1.7
3.3
4.2
4.1
4.0
4.0
oT
4.9
27
1.0
2.6
3.1
2.8
2.9
2.9
300: Natural Resources and
BA
22.3
19.5
183
15.6
16.8
16.4
15.1
15.8
Environment
OT
21.7
20.4
20.1
17.9
18.4
17.4
15.9
16.6
350: Agriculture
BA
14.0
13.1
12.2.
11.8
11.7
11.7
10.5
10.1
OT
12.7
11.9
10.9
10.6
10.4
10.6
9.4
9.1
370: Commerce and Housing Credit
BA
8.9
6.6
8.3
1.8
3.0
1.5
0.5
0.2
OT
-13.5
-7.0
-6.2
-8.4
-5.2
-3.9
-3.2
-3.4
400: Transportation
BA
42.5
36.5
38.8
39.4
40.2
41.2
41.0
40.8
05-09-95 01:03 PM FROM HCFA/AAP
OT
39.3
38.3
32.8
31.8
31.3
31.1
31.1
31.1
450: Community and Regional
BA
9.2
5.8
5.4
5.1
5.1
5.0
4.5
4.4
Development
OT
11.6
9.8
73
5.6
5.1
5.1
5.0
5.0
500: Education, Training, Employment
BA
58.3
48.1
47.3
47.2
47.4
47.8
47.3
47.4
and Social Services
OT
54.7
51.7
47.9
47.0
46.8
47.3
46.8
46.9
550: Health
BA
116.6
120.1
126.6
132.1
137.0
141.1
145.2
149.6
OF
1150
120.6
126.5
132.2
136.9
140.9
1430
1494
8
CHAIRMAN'S MARK
(Dollars in billions)
P11
1995
1996
1997
1998
1999
2000
2001
2002
570: Medicare
BA
162.6
171.9
180.5
193.1
207.4
221.4
238.9
258.9
OT
161.1
169.5
178.9
191.4
204.8
219.5
236.9
256.7
600: Income Security
BA
219.9
226.3
233.7
253.0
256.0
272.6
277.7
2924
OT
222.2
225.9
235.6
246.1
257.9
272.6
277.6
2922
650: Social Security
BA
336.9
354.3
374.0
394.3
415.0
436.7
459.6
483.7
oT
336.2
354.2
373.1
393.1
413.7
435.6
458.3
482.2
700: Veterans Benefits
BA
37.7
37.4
37.4
37.5
37.7
37.6
38.3
38.7
OT
37.4
36.9
37.6
37.6
37.9
39.1
40.1
40.4
750: Administration of Justice
BA
18.5
19.9
20.6
21.2
22.2
22.2
21.7
21.7
oT
17.1
19.5
21.1
22.3
23.0
23.6
23.2
23.1
800: General Government
BA
13.3
12.5
12.4
12.2
12.1
12.0
11.6
11.6
OT
13.4
13.0
12.4
12.3
12.0
11.9
11.7
11.6
900: Net Interest
BA
235.4
258.5
264.3
266.9
272.6
277.6
278.1
279.1
OT
235.3
258.5
264.3
266.9
272.6
277.6
278.1
279.1
920: Allowances
BA
--
-8.6
-B.4
-7.4
-6.9
-5.8
-5.7
-5.7
05-09-95 01:03 PM FROM HOFA/AAP
or
--
-6.5
-8.5
-7.6
-7.2
-6.2
-6.1
-6.1
950: Undistributed Offsetting Receipts
BA
-46.2
-39.9
-40.9
-43.9
-45.8
-48.5
-50.8
-52.8
OT
-46.2
-39.4
-40.2
-43.1
-46.7
-49.7
-50.8
-52.8
Total Spending
BA
1553.6
1574.6
1616.3
1672.5
1730.6
1800.6
1843.7
1905.8
OT
1529.9
1574.6
1603.1
1643.3
1704.2
1772.0
1818.8
1882.3
Revenues
1355.2
1417.1
1474.8
1545.6
1619.3
1699.4
1789.4
1883.6
Deficit
174.7
157.5
-128.3
97.7
-$4.9
72.6
-29.5
1.3
9
CURRENT LAW BASELINE
(Dollars in billions)
P12
1995
1996
1997
1998
1999
2000
2001
2002
050: National Defense
BA
261.4
255.0
251.7
258.3
264.9
271.6
271.5
271.5
oT
269.6
257.4
256.8
256.1
257.9
261.5
261.4
261.4
150: International Affairs
BA
18.9
17.9
17.3
17.0
16.5
18.4
18.5
18.5
oT
18.9
17.5
16.7
16.7
16.5
16.6
16.8
16.8
250: Science, Space and Technology
BA
17.2
17.2
17.2
17.2
172
17.2
17.2
17.2
oT
17.5
16.9
17.2
17.2
17.1
17.2
17.2
17.2
270: Energy
BA
6.3
5.6
5.3
5.3
5.6
5.5
5.5
5.5
OT
4.9
4.7
4.0
4.1
4.3
4.2
4.2
4.2
300: Natural Resources and
BA
22.3
22.0
22.0
21.6
21.4
21.2
20.9
20.8
Environment
OT
21.7
21.4
21.9
21.9
21.8
21.6
21.1
21.0
350: Agriculture
BA
14.0
14.5
14.2
14.0
13.9
13.7
12.6
12.6
OT
12.7
13.1
12.8
12.8
12.6
12.5
11.5
11.5
370: Commerce and Housing Credit
BA
8.9
8.0
10.2
4.0
5.5
2.2
2.5
26
oT
-13.5
-6.1
-4.6
-6.3
-2.7
-3.1
-1.2
-1.0
400: Transportation
BA
42.5
38.2
44.6
45.6
46.6
47.6
47.4
47.1
05-09-95 01:03 PM FROM HCFA/AAP
OT
39.3
39.6
39.7
39.7
39.8
40.0
40.0
40.0
450: Community and Regional
BA
9.2
9.1
9.1
9.1
9.1
9.0
8.6
8.5
Development
oT
11.6
10.3
8.9
8.5
8.6
8.9
8.8
8.8
500: Education, Training, Employment
BA
58.3
56.4
56.0
56.5
57.2
58.0
57.5
57.8
and Social Services
oT
54.7
55.7
55.7
55.8
56.4
57.1
56.7
56.9
550: Health
BA
116.6
126.6
137.8
150.2
163.4
177.1
1921
207.7
-
103.4
177.0
191.9
207.6
10
CURRENT LAW BASELINE
(Dollars in billions)
P13
1995
1996
1997
1998
1999
2000
2001
2002
570: Medicare
BA
162.6
184.1
202.0
220.6
242.9
265.7
291.7
320.6
oT
161.1
181.7
200.4
218.9
240.4
263.8
289.7
318.4
600: Income Security
BA
219.9
228.2
242.9
254.2
266.6
281.8
289.0
306.0
OT
222.2
231.4
247.5
257.1
268.9
284.9
292.1
308.9
650: Social Security
BA
336.9
354.3
374.0
394.3
415.0
436.7
459.6
483.7
OT
336.2
354.2
373.1
393.1
413.7
435.6
458.3
482.2
700: Veterans Benefits
BA
37.7
38.2
38.6
39.1
40.4
40.B
41.5
42.1
oT
37.4
37.2
38.5
39.1
40.4
42.3
43.0
43.7
750: Administration of Justice
BA
18.5
18.5
18.5
18.6
18.6
18.6
18.2
18.1
oT
17.1
18.2
18.3
18.6
18.6
18.5
18.2
18.1
800: General Government
BA
13.3
13.2
13.2
13.3
13.3
13.3
12.9
12.9
oT
13.4
13.5
13.1
13.2
13.1
13.3
12.9
12.8
900: Net Interest
BA
235.4
259.9
269.8
278.3
291.5
305.5
316.9
330.7
oT
235.3
259.9
269.8
278.3
2915
305.5
316.9
330.7
920: Allowances
BA
-
-
--
-
--
-
-
-
05-09-95 01:03 PM FROM HCFA/AAP
oT
-
-
--
-
--
-
-
-
950: Undistributed Offsetting Receipts
BA
-46.2
-38.1
-38.3
-39.5
-40.9
-43.5
-45.6
-47.7
OT
-46.2
-38.1
-38.3
-39.5
-40.9
-43.5
-45.6
-47.7
Total Spending
BA
1553.6
1628.7
1706.2
1777.5
1868.8
1960.5
2038.5
2136.1
oT
1529.9
1614.5
1689.2
1755.7
1841.3
1933.7
2013.8
2111.2
Revenues
1355.2
1417.7
1475.5
1546.4
1618.4
1698.2
1789.4
1883.6
Deficit
174.7
196.8
213.7
209.3
222.9
235.5
224.4
-227.6
11
CHAIRMAN'S MARK COMPARED TO CURRENT LAW BASELINE
(Dollars in billions)
P11
1996
1997
1998
1999
2000
2001
2002
Total
050: National Defense
BA
2.7
1.6
1.3
1.4
4.4
4.4
4.4
20.2
OT
3.7
0.2
-1.6
1.7
6.3
6.3
7.9
24.5
150: International Affairs
BA
-2.5
-3.0
-3.5
-4.0
-4.3
-4.3
-4.3
-25.8
OT
-0.6
-1.7
-2.4
-3.0
-3.5
-3.5
-3.5
-18.1
250: Science, Space and Technology
BA
-0.5
-0.9
-1.0
-1.2
-1.4
-1.4
-1.4
-7.6
OT
-0.2
-0.6
-0.9
-1.1
-1.3
-1.3
-1.3
-6.6
270: Energy
BA
-2.7
-3.6
-2.0
-1.4
-1.5
-1.5
-1.5
-14.1
OT
-2.0
-3.0
-1.4
-1.1
-1.4
-1.3
-1.2
-11.5
300: Natural Resources and
BA
-2.5
-3.7
-6.0
-4.6
-4.8
-5.8
-5.0
-32.4
Environment
oT
-1.0
-1.8
-4.0
-3.3
-4.2
-5.2
-4.3
-23.7
350: Agriculture
BA
-1.3
-2.0
-2.3
-2.2
-1.9
-2.1
-2.4
-14.3
OT
-1.2
-2.0
-2.2
-2.2
-1.9
-2.1
-2.4
-14.0
370: Commerce and Housing Credit
BA
-1.4
-1.8
-2.2
-2.5
-0.7
-2.0
-2.3
-13.0
OT
-0.9
-1.6
-2.1
-2.5
-0.8
-2.0
-23
-12.4
400: Transportation
BA
-1.7
-5.9
-6.1
-6.3
-6.4
-6.4
-6.4
-39.2
05-09-95 01:03 PM FROM HCFA/AAP
oT
-1.3
-6.9
-7.9
-8.6
-8.9
-8.9
-8.9
-51.5
450: Community and Regional
BA
-3.3
-3.6
-4.0
-4.0
-4.0
-4.0
-4.1
-27.0
Development
oT
-0.5
-1.7
-2.9
-3.5
-3.8
-3.8
-3.8
-20.1
500: Education, Training, Employment
BA
-8.3
-8.8
-9.3
-9.8
-10.2
-10.2
-10.4
-66.9
and Social Services
oT
-4.0
-7.8
-8.9
-9.6
-9.9
-9.9
-10.0
-60.0
550: Health
BA
-6.5
-11.2
-18.)
-26.4
-36.0
-46.8
-58.1
-203.1
OT
-55
-11.2
-18.1
-26.4
36.1
46.9
58.2
202.5
12
CHAIRMAN'S MARK COMPARED TO CURRENT LAW BASELINE
(Dollars in billions)
P15
1996
1997
1998
1999
2000
2001
2002
Total
570: Medicare
BA
-12.2
-21.5
-27.5
-35.6
-44.3
-52.8
-61.7
-255.6
OT
-12.2
-21.5
-27.5
-35.6
-44.3
-52.8
-61.7
-255.6
600: Income Security
BA
-1.9
-9.2
-1.2
-10.7
-9.2
-11.3
-13.6
-57.1
OT
-5.4
-11.9
-11.1
-11.0
-12.3
-14.4
-16.7
-82.9
650: Social Security
BA
--
-
-
--
-
-
-
-
OT
-
-
-
-
-
-
-
-
700: Veterans Benefits
BA
-0.8
-1.2
-1.6
-2.7
-3.2
-3.2
-3.5
-16.2
OT
-0.4
-0.9
-1.5
-2.6
-3.2
-2.9
-3.3
-14.8
750: Administration of Justice
BA
1.4
2.1
2.6
3.6
3.6
3.6
3.6
20.4
oT
1.3
2.8
3.8
45
5.0
5.0
5.0
27.3
800: General Government
BA
-0.7
-0.8
-1.0
-1.2
-1.3
-1.3
-1.3
-7.5
oT
-0.5
-0.7
-0.8
-1.0
-1.4
-1.2
-1.2
-6.8
900: Net Interest
BA
-1.4
-5.4
-11.4
-18.9
-27.9
-38.7
-51.6
-155.4
or
-1.4
-5.4
-11.4
-18.9
-27.9
-38.7
-51.6
-155.4
920: Allowances
BA
-8.6
-8.4
-7.4
-6.9
-5.8
-5.7
-5.7
-48.6
05-09-95 01:03 PM FROM HCFA/AAP
OT
-6.5
-8.5
-7.6
-7.2
-6.2
-6.1
-6.1
-48.1
950: Undistributed Offsetting Receipts
BA
-1.8
-2.6
-4.3
-4.8
-5.0
-5.2
-5.2
-28.9
oT
-1.3
-1.9
-3.5
-5.7
-6.2
-5.2
-5.2
-28.9
Total Spending
BA
-54.1
-89.9
-104.9
-138.2
-159.8
-194.8
-230.3
-972.0
or
-39.8
-86.0
-112.3
-137.1
-161.8
-194.9
-228.9
-961.0
Revenues
-0.6
-0.7
-0.8
0.9
1.2
0.0
-0.0
0.0
Deficit.
-39.3
-85.3
-111.6
-138.1
-163.0
-194.9
-228.9
-961.0
13
CHAIRMAN'S MARK COMPARED TO 1995
(Dollars in billions)
P16
1996
1997
1998
1999
2000
2001
2002
Total
050: National Defense
BA
-3.7
-8.1
-1.8
4.8
14.6
14.5
14.5
34.7
OT
-8.5
-127
-15.1
-10.0
-1.B
-1.9
-0.4
-50.4
150: International Affairs
BA
-3.4
-4.5
-5.3
-63
-4.7
-4.6
-4.6
-33.6
or
-2.0
-3.8
-4.6
-5.4
-5.8
-5.5
-5.5
-32.6
250: Science, Space and Technology
BA
-0.5
-0.8
-1.0
-1.2
-1.3
-1.4
-1.4
-7.5
or
-0.8
-0.9
-1.3
-1.5
-1.6
-1.6
-1.6
-9.4
270: Energy
BA
-3.4
-4.6
-3.1
-2.1
-2.3
-2.3
-2.4
-20.1
OT
-22
-3.9
-23
-1.8
-2.1
-2.1
-20
-16.5
300: Natural Resources and
BA
-2.8
-3.9
-6.7
-5.5
-5.9
-7.2
-6.5
-38.6
Environment
OT
-1.3
-1.6
-3.8
-3.3
-4.4
-5.8
-5.1
-25.4
350: Agriculture
BA
-0.8
-1.7
-2.2
-2.3
-2.2
-3.5
-3.8
-16.6
OT
-0.8
-1.8
-21
-2.3
-2.2
-3.3
-3.6
-16.1
370: Commerce and Housing Credit
BA
-2.3
-0.6
-7.1
-6.0
-7.4
-8.4
-8.7
-40.5
oT
6.5
73
5.1
8.3
9.6
10.3
10.1
57.4
400: Transportation
BA
-6.0
-3.8
-3.1
-2.3
-1.3
-1.5
-1.8
-19.7
05-09-95 01:03 PM FROM HCFA/AAP
oT
-1.0
-6.5
-7.6
-8.1
-8.3
-8.3
-8.3
-48.1
450: Community and Regional
BA
-3.4
-3.7
-4.1
-4.1
-4.1
-4.6
-4.8
-28.8
Development
oT
-1.8
-4.3
-6.0
-6.5
-6.5
-6.6
-6.6
-38.3
500: Education, Training, Employment
BA
-10.2
-11.0
-11.1
-10.9
-10.5
-11.0
-10.9
-75.6
and Social Services
oT
-3.0
-6.B
-7.8
-7.9
-7.5
-7.9
-7.9
-48.7
550: Health
BA
3.5
10.0
15.5
20.4
24.5
28.6
33.0
135.6
OT
4.8
10.7
16.4
21.2
25.1
29.2
396
14
CHAIRMAN'S MARK COMPARED TO 1995
(Dollars in billions)
P17
1996
1997
1998
1999
2000
2001
2002
Total
570: Medicare
BA
9.2
17.8
30.4
44.7
58.7
76.3
96.3
333.5
OT
8.5
17.9
30.4
43.7
58.5
75.8
95.6
330.3
600: Income Security
BA
63
13.8
33.1
36.0
527
57.8
72.5
272.1
oT
3.7
13.4
23.8
35.7
50.4
55.4
69.9
252.3
650: Social Security
BA
17.4
37.2
57.4
78.2
99.8
122.7
146.8
559.6
oT
17.9
36.8
56.9
77.5
99.4
122.1
146.0
556.6
700: Veterans Benefits
BA
-03
-0.2
-0.2
0.1
-0.0
0.6
1.0
1.0
oT
-0.5
0.2
0.2
0.5
1.8
2.7
3.0
7.7
750: Administration of Justice
BA
1.4
2.1
2.7
3.7
3.6
3.2
3.1
19.8
oT
23
3.9
5.2
5.9
6.4
6.1
6.0
35.8
800: General Government
BA
-0.7
-0.9
-1.0
-1.1
-1.3
-1.6
-1.7
-83
oT
-0.4
-1.0
-1.1
-1.3
-1.5
-1.7
-1.8
-8.9
900: Net Interest
BA
23.1
29.0
31.5
37.3
42.2
42.8
43.8
249.6
oT
23.1
29.0
31.5
37.3
42.2
42.8
43.8
249.7
920: Allowances
BA
-8.6
-8.4
-7.4
-6.9
-5.8
-5.7
-5.7
-48.6
05-09-95 01:03 PM FROM HCRA/AAP
OT
-6.5
-8.5
-7.6
-7.2
-6.2
-6.1
-6.1
-48.1
950: Undistributed Offsetting Receipts
BA
63
5.3
2.3
0.4
-22
-4.5
-6.6
09
oT
6.9
6.0
3.1
-0.5
-3.4
-4.5
-6.6
0.9
Total Spending
BA
21.0
62.7
119.0
177.0
247.0
290.1
352.2
1269.0
OT
44.8
73.3
113.5
174.3
242.1
289.0
352.5
1289.4
Revenues
61.9
119.6
190.4
264.1
344.2
434.2
528.4
1942.7
15
CHAIRMAN'S MARK
Discretionary Totals
P18
(Dollars in billions)
1995
1996
1997
1998
1999
2000
2001
2002
050: National Defense
BA
262.3
258.4
254.0
260.3
266.9
276.6
276.6
276.6
oT
270.3
262.0
257.7
255.2
260.3
268.5
268.5
270.0
150: International Affairs
BA
20.4
17.9
17.4
16.9
16.5
16.2
16.2
16.2
or
21.1
20.5
192
18.1
17.4
16.9
16.9
16.9
250: Science, Space and Technology
BA
17.1
16.6
16.3
16.1
15.9
15.8
15.8
15.8
oT
17.5
16.7
16.6
16.2
16.0
15.9
15.9
15.9
270: Energy
BA
6.3
5.8
5.3
4.9
5.2
5.2
5.2
5.2
or
6.6
6.5
5.8
5.4
5.4
5.3
5.3
5.3
300: Natural Resources and
BA
22.0
19.1
18.0
17.1
17.0
16.9
16.9
16.9
Environment
oT
21.5
20.3
19.8
19.4
18.7
18.0
18.0
18.0
350: Agriculture
BA
4.0
3.6
3.6
3.6
3.6
3.6
3.6
3.6
OT
4.2
3.8
3.7
3.7
3.7
3.7
3.7
3.7
370: Commerce and Housing Credit
BA
33
2.1
1.7
1.3
1.1
2.9
1.6
13
oT
3.1
2.4
1.8
1.3
1.1
2.8
1.6
13
05-09-95 01:03 PM FROM HCFA/AAP
400: Transportation
BA
15.5
14.3
10.2
10.0
9.7
9.7
9.7
9.7
OT
38.9
38.3
32.8
31.8
31.3
31.1
31.1
31.1
450: Community and Regional
BA
8.9
5.9
5.5
5.2
5.2
5.2
5.2
5.2
Development
oT
11.6
10.2
7.5
6.3
5.8
5.5
5.5
5.5
500: Education, Training, Employment
BA
42.0
36.6
36.4
36.1
35.9
35.6
35.6
35.6
and Social Services
oT
39.3
39.4
36.9
36.2
35.7
35.6
35.6
35.6
16
CHAIRMAN'S MARK
Discretionary Totals
P19
(Dollars in billions)
1995
1996
1997
1998
1999
2000
2001
2002
550: Health
BA
22.8
20.0
20.1
19.9
19.6
19.3
19.0
18.7
OT
22.4
20.5
19.9
19.8
19.5
19.3
19.0
18.7
570: Medicare
BA
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
oT
3.0
3.0
3.0
3.0
3.0
3.0
3.0
3.0
600: Income Security
BA
34.0
37.7
38.0
47.3
39.7
43.1
43.1
43.1
OT
38.7
39.7
42.5
42.9
44.2
45.2
45.2
45.2
650: Social Security
BA
-
-
-
-
--
-
-
-
oT
2.5
2.6
2.5
2.5
25
2.5
25
2.5
700: Veterans Benefits
BA
18.3
17.9
17.8
17.7
17.4
17.2
17.2
172
oT
18.0
18.9
18.1
17.8
17.5
17.3
173
17.3
750: Administration of Justice
BA
18.1
19.7
20.4
20.9
21.8
21.8
21.8
21.8
oT
16.8
19.3
20.9
22.0
22.7
23.3
23.3
23.3
800: General Government
BA
12.3
11.7
11.6
11.4
11.3
11.2
11.2
11.2
oT
12.4
12.1
11.6
11.5
11.2
11.0
11.0
11.0
05-09-95 01:03 PM FROM HCFA/AAP
920: Allowances
BA
--
-8.6
-8.4
-7.3
-6.8
-5.7
-5.7
-5.7
oT
--
-6.5
-8.5
-7.6
-7.1
-6.1
-6.1
-6.1
Total Discretionary
BA
510.4
481.8
470.7
484.4
483.1
497.5
496.0
495.4
oT
547.9
529.9
512.0
505.7
508.9
518.6
517.2
518.1
Defense.
BA
262.3
258.4
254.0
260.3
266.9
276.6
276.6
276.6
oT
270.3
262.0
257.7
255.2
260.3
268.5
268.5
270.0
Nondefense
BA
248.1
223.4
216.7
224.0
216.2
220.9
219.4
218.8
OT
277.6
267.8
254.3
250.5
248.6
250.1
248.7
248.1
17
CHAIRMAN'S MARK
Mandatory Totals
P20
(Dollars in billions)
1995
1996
1997
1998
1999
2000
2001
2002
050: National Defense
BA
-0.9
-0.7
-0.7
-0.7
-0.7
-0.7
-0.7
-0.8
OT
-0.7
-0.9
-0.7
-0.7
-0.7
-0.7
-0.7
-0.8
150: International Affairs
BA
-1.5
-2.5
-3.1
-3.4
-3.9
-2.0
-1.9
-1.9
OT
-2.3
-3.7
-4.1
-3.8
-3.9
-3.7
-3.5
-3.5
250: Science, Space and Technology
BA
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
oT
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
270: Energy
BA
0.0
-2.9
-3.6
-1.6
-1.0
-1.1
-1.1
-1.2
OT
-1.6
-3.8
-4.8
-2.8
-2.3
-2.5
-2.4
-2.4
300: Natural Resources and
BA
0.3
0.4
0.4
-1.5
-0.2
-0.5
-1.9
-1.1
Environment
OT
0.2
0.1
0.3
-1.5
-0.3
-0.6
-2.1
-1.4
350: Agriculture.
BA
10.0
9.5
8.6
8.1
8.0
8.1
6.8
6.5
oT
8.5
8.0
7.1
6.9
6.7
6.9
5.7
5.4
370: Commerce and Housing Credit
BA
5.6
4.5
6.7
0.5
1.9
-1,4
-1.1
-1.0
or
-16.6
-9.4
-8.0
-9.8
-6.3
-6.7
-4.8
-4.6
05-09-95 04:03 PM FROM HCFA/AAP
400: Transportation
BA
27.1
22.2
28.6
29.5
30.5
31.5
31.3
31.0
oT
0.5
-0.0
-0.0
-0.1
-0.0
0.0
0.0
0.0
450: Community and Regional
BA
0.3
-0.1
-0.1
-0.1
-0.1
-0.2
-0.7
-0.8
Development
oT
-0.1
-0.4
-0.3
-0.7
-0.7
-0.4
-0.5
-05
500: Education, Training, Employment
BA
16.3
11.5
10.9
11.1
11.5
12.2
11.7
11.8
and Social Services
OT
15.4
12.3
11.0
10.8
11.1
11.6
11.1
11.2
18
CHAIRMAN'S MARK
Mandatory Totals
P21
(Dollars in billions)
1995
1996
1997
1998
1999
2000
2001
2002
550: Health
BA
93.8
100.1
106.5
112.3
117.5
121.8
126.2
130.9
OT
93.4
100.0
106.6
112.4
117.4
121.6
126.0
130.7
570: Medicare
BA
159.6
168.9
177.5
190.1
204.4
218.4
235.9
255.9
OT
158.1
166.5
175.9
188.4
201.8
216.5
233.9
253.7
600: Income Security
BA
185.9
188.6
195.8
205.7
216.3
229.5
234.7
249.4
oT
183.5
186.2
193.1
203.1
213.7
227.3
232.4
246.9
650: Social Security
BA
336.9
354.3
374.0
394.3
415.0
436.7
459.6
483.7
oT
333.7
351.6
370.6
390.7
411.3
433.1
455.8
479.7
700: Veterans Benefits
BA
19.3
19.5
19.6
19.8
20.3
20.4
21.1
21.5
OT
19.4
18.0
19.5
19.8
20.3
21.8
22.7
23.1
750: Administration of Justice
BA
0.4
0.2
0.2
0.4
0.4
0.3
-0.1
-0.2
OT
0.3
0.2
0.2
0.3
0.3
03
-0.1
-0.2
800: General Government
BA
1.0
0.8
0.8
0.8
0.8
0.8
0.5
0.4
OT
1.0
0.9
0.7
0.8
0.8
0.8
0.6
0.6
05-09-95 01:03 PM FROM HCFA/AAP
900: Net Interest
BA
235.4
259.9
269.8
278.3
291.5
305.5
278.1
279.1
OT
235.3
259.9
269.8
278.3
291.5
305.5
278.1
279.1
950: Undistributed Offsetting Receipts
BA
-46.2
-39.9
-40.9
-43.9
-45.8
-48.5
-50.8
-52.8
OT
-46.2
-39.9
-40.9
-43.9
-45.8
-48.5
-50.8
-52.8
Total Spending
BA
1043.2
1094.3
1151.0
1199.6
1266.4
1331.0
1347.7
1410.4
OT
981.9
1045.6
1095.9
1148.2
1215.1
1282.5
1301.7
1364.2
19
SENATE COMMITTEE RECONCILIATION INSTRUCTIONS
P22
(Dollars in millions)
Committee
:
1996
Five-year Total
Seven-year Total
Agriculture, Nutrition and Forestry
BA
-2,505
-28,058
-45,880
OT
-2,490
-27,973
-45,804
Armed Services
BA
-21
-338
-649
OT
-21
-338
-649
Banking, Housing and Urban Affairs
DR
-373
:
-5,742
-6,690
Commerce, Science and Transportation
BA
-2,464
-21,937
-33,685
OT
-2,464
-21,937
-33,685
Energy and Natural Resources
BA
-1,903
-4,635
-4,785
oT
-1,771
-4,775
-5,001
:
Environment and Public Works
BA
-106
-1,290
-2,236
OT
-106
-1,290
-2,236
Finance
BA
-23,412
-344,511
-675,194
OT
-23,089
-343,895
-674,462
05-09-95 04:03 PM FROM HCFA/AAP
Governmental Affairs
BA
-118
-3,023
-6,871
oT
-118
-3,023
-6,871
Judiciary
BA
-119
-923
-1,483
oT
-119
-923
-1,483
Labor and Human Resources
BA
-1,622
-9,883
-14,573
OT
-1,141
-9,165
-13,795
20
SENATE COMMITTEE RECONCILIATION INSTRUCTIONS
P23
(Dollars in millions)
Committee
1996
Five-year Total
Seven-year Total
Rules and Administration
BA
-2
-247
-422
OT
-2
-280
-319
-
Veterans' Affairs
BA
-311
-5,726
-10,124
OT
-301
-5,760
-10,002
Total reconciliation instructions.
BA
-32,583
-420,571
-795,902
OT
-31,995
-425,101
-800,997
:
05-09-95 01:03 PM FROM HCFA/AAP
21
P21
FUNCTION 550: HEALTH
($ Billions)
5-year
7-year
1995
1996
1997
1998
1999
2000
Total
2001
2002
Total
Chairman's Mark
BA
116.6
120.1
126.6
132.1
137.0
141.1
657.0
145.2
149.6
951.9
oT
115.8
120.6
126.5
132.2
137.0
140.9
657.0
144.9
149.5
951.4
Current Law
BA
116.6
126.6
137.8
150.2
163.4
177.1
755.2
192.1
207.7
1155.0
OT
115.8
126.1
137.7
150.3
163.4
177.0
754.4
191.7
207.6
1153.7
President's Budget
BA
116.6
127.5
137.9
149.9
163.0
176.5
754.8
NA
NA
NA
OT
115.7
126.3
138.1
150.4
163.3
176.6
754.7
NA
NA
NA
Chairman's Mark compared to:
Current Law
BA
-
-6.5
-11.2
-18.1
-26.4
-36.0
-98.2
05-09-95 01:03 PM FROM HCFA/AAP
-46.8
-58.1
-203.1
oT
-
-5.5
-11.2
-18.1
-26.4
-36.1
-97.4
-46.8
-58.1
-202.3
President's Budget
BA
-
0.0
-7.3
-11.3
-17.7
-26.0
-35.4
-97.8
NA
NA
NA
oT
0.0
-5.7
-11.6
-18.2
-26.3
-35.8
-97.6
NA
NA
I
NA
i
97.1
FUNCTION 550: HEALTH
Major Programs in Function
Function 550 includes mandatory spending for Medicaid and the retiree portion of the Federal Employees Health Benefits
(FEHB) program. On the discretionary side, this function includes health services, health education and training, the National Institutes
of Health, the Center for Disease Control and Prevention, the Indian Health Service, and consumer and occupational health and safety
programs administered by several agencies. Function 550 comprises all Federal health spending, with two major exceptions: Medicare
and health benefits for Federal civilian and military employees.
Summary of Chairman's Mark
The Chairman's Mark assumes $120.1 billion in budget authority and $120.6 billion in outlays in 1996 for programs and
activities in Function 550. Spending would increase by 29% over the 1996-2002 period, rising to $149.6 billion in budget authority and
$149.5 billion in outlays by 2002. Over the seven-year period 1996-2002, $951.9 billion in budget authority and $951.4 billion in
outlays would be spent in function 550, compared to $1.155 trillion in budget authority and $1.154 trillion in outlays in the current law
baseline. Over the five year period 1996-2000, $657.0 billion in budget authority and outlays would be spent compared to the $754.8
billion in BA and $754.7 billion that the President recommends.
Major Discretionary Assumptions in the Chairman's Mark
The Chairman's Mark assumes discretionary spending levels of $20.0 billion in budget authority and $20.5 billion in outlays in
1996, a decrease of $2.8 billion in budget authority and $1.8 billion in outlays from the 1995 level. This spending would decline to
05-09-95 01:03 PM FROM HOFA/AAP
$18.8 billion in budget authority and outlays in 2002.
The Chairman's Mark assumes full funding for the Center for Disease Control and Prevention and the Food and Drug
Administration (except for new construction). The Chairman's Mark assumes full funding for the Indian Health Service, for the
Substance Abuse and Mental Health Services Administration, and for all AIDS and HIV-related programs.
550-2
97.1
FUNCTION 550: HEALTH
The Chairman's Mark assumes the following major policy options to achieve the recommended funding levels:
Consolidate 19 Public Health Service programs into a State Health Block grant.
Terminate the Office of the Assistant Secretary for Health in the Department of Health and Human Services. The Mark assumes
that the $1.7 million for HIV program coordination would not be terminated, and that this function would be transferred
elsewhere within the Department.
Reduce funding for the Agency for Health Care Policy and Research by 75%. This agency was to be the primary administrator
of comprehensive health reform. Many of its functions are duplicated within the Federal government. Other functions are more
appropriately performed by the private sector.
Reduce funding for the Occupational Safety & Health Administration (OSHA) and the Mine Safety & Health Administration
(MSHA) by 50%, and terminate the outdated OSHA/MSHA Review Commissions.
Terminate construction of the new Food and Drug Administration campus.
Federal agencies would follow the lead of the private sector by contributing a fixed dollar amount to Federal employees' health
plans, thus encouraging Federal employees to make more cost-effective decisions in the allocation of their compensation. This
fixed dollar amount would be indexed to inflation. Federal agencies would no longer provide extra subsidies to those Federal
employees who choose more expensive health plans.
05-09-95 04:03 PM FROM HCFA/AAP
Major Mandatory Assumptions in the Chairman's Mark
The Chairman's Mark assumes mandatory spending levels of $100.1 billion in budget authority and $100.0 billion in outlays in
1996, an increase of $5.6 billion in budget authority and $6.0 billion in outlays from the 1995 level. This spending would increase by
550-3
P27
FUNCTION 550: HEALTH
39% to $130.9 billion in budget authority and $130.7 billion in outlays in 2002 The Chairman's Mark assumes the following major
policy options to achieve the recommended funding levels:
As for current Federal employees (see above), the Federal government would follow the lead of the private sector by
contributing a fixed dollar amount to Federal retirees' health plans, thas encouraging Federal retirees to make more cost-
effective decisions in the allocation of their compensation. This fixed dollar amount would be indexed to inflation. The Federal
government would no longer provide extra subsidies to those Federal retirees who choose more expensive health plans.
Medicaid Assumption in the Chairman's Mark
Over the seven-year period 1996-2002, the Chairman's Mark assumes total Federal Medicaid spending of $780.0 billion,
compared to $954.8 billion in outlays in the current law baseline. Over the seven years, total Federal Medicaid outlays would
grow at an average of 5.0 percent per year. The Chairman's Mark assumes that Federal Medicaid spending would grow faster
than 5 percent in the first few years, and would grow 4 percent per year in the last few years. The Chairman's Mark assumes
that the Federal Medicaid baseline after 2002 would grow 4 percent per year.
These Medicaid outlay levels could be achieved in several ways, including:
A restructuring of Medicaid, in which Federal payments to states grew at the following rates from the 1995 Federal base level:
05-09-95 01:03 PM FROM HOFA/AAP
1996
1997
1998
1999
2000
2001
2002
after 2002
benefits & admin
8%
7%
6%
5%
4%
4%
4%
4%
DSH
0%
0%
0%
0%
0%
0%
0%
0%
550-4
874
FUNCTION 550: HEALTH
An across-the-board 18.7 percent reduction of each state's matching rate would achieve the necessary savings over seven years.
Further programmatic reforms would be needed to slow the growth rate in the later years.
The Chairman's Mark makes no assumption about individual entitlement, eligibility groups, benefits, payment rates, financing structures,
or the distribution of Federal funds among the states within the total Federal funding levels specified.
The Chairman's Mark assumes that the current aggregate ratio of Federal to state funding (57% Federal, 43% State) would continue.
The Chairman's Mark is designed to be compatible with a wide range of Medicaid restructuring proposals.
05-09-95 01:03 PM FROM HCFA/AAP
550-5
P29
FUNCTION 570: MEDICARE
($ Billions)
5-year
7-year
1995
1996
1997
1998
1999
2000
Total
2001
2002
Total
Chairman's Mark
BA
162.6
171.9
180.5
193.1
207.4
221.4
974.1
238.9
258.9
1471.9
oT
161.1
169.5
178.9
191.4
204.8
219.5
964.2
236.9
256.7
1457.7
Current Law
BA
162.6
184.1
202.0
220.6
242.9
265.7
1115.2
291.7
320.6
1727.6
OT
161.1
181.7
200.4
218.9
240.4
263.8
1105.3
289.7
318.4
1713.3
President's Budget
BA
162.6
184.2
201.6
219.9
239.6
259.4
1104.7
NA
NA
NA
OT
161.0
181.8
200.1
218.3
237.0
257.6
1094.7
NA
NA
NA
Chairman's Mark compared to:
Current Law
BA
-
-12.2
-21.5
-27.5
-35.6
-44.3
-141.1
-52.8
05-09-95 01:03 PM FROM HCFA/AAP
-61.7
-255.6
oT
-
-12.2
-21.5
-27.5
-35.6
-44.3
-141.1
-52.8
-61.7
-255.6
President's Budget
BA
0.0
-12.3
-21.1
-26.9
-32.2
-38.0
-130.5
NA
NA
NA
OT
0.0
-12.3
-21.1
-26.9
-32.2
-38.1
-130.5
NA
NA
NA
Y30
FUNCTION 570: MEDICARE
Major Programs in Function
Function 570 includes only the Medicare program. This entitlement programs pays to health care providers for health services
provided to senior citizens and disabled beneficiaries. Medicare is divided into two parts: Hospital Insurance (Part A) and
Supplementary Medical Insurance (Part B). Medicare Part A is financed by a 2.9 percent payroll tax on current workers, by the 1993
increases in income tax on Social Security benefits, and by general revenue payments denoted as interest on trust fund assets.
Medicare Part B is financed 31 percent by premium payments from current beneficiaries, and 69 percent by payments from general
revenues.
Projected Medicare Insolvency
In their 1995 Annual Report to the Congress, the Medicare Trustees recently announced that the Medicare Hospital Insurance Trust
Fund will be insolvent seven years from now, in the year 2002. The Trustees conclude that "the HI program is severely out of
financial balance and the the Trustees believe that the Congress must take timely action to establish long-term financial stability for
the program."
The Chairman's Mark has been strongly influenced by current and past Trustees' reports, by recent testimony of the Public Trustees,
and by the statement of the two Public Trustees.
The Public Trustees have issued their own bipartisan statement each year. This statement is attached to the full Board of Trustees'
annual report. The Public Trustees have a different recommendation than the full Board of Trustees. The full text of the Medicare
05-09-95 01:03 PM FROM HCFA/AAP
portion of their statement is included here.
Both the Hospital Insurance Trust Fund and the Supplementary Medical Insurance Trust Fund show alarming
funancial results. The HI Trust Fund continues to be severely out of financial balance and is projected to be exhausted
in about 7 years. The SMI Trust Fund, while in balance on an annual basis, shows a rate of growth of costs which is
570-2
P31
FUNCTION 570: MEDICARE
clearly unsustainable. Moreover, this fund is projected to be 75 percent or more fmanced by general revenues, so that
given the general budget deficit problem, is is a major contributor to the larger fiscal problems of the nation.
The Medicare program is clearly unsustainable in its present form. We had hoped for several years that
comprehensive health care reform would include meaningful Medicare reforms. However, with the results of the last
Congress, it is now clear that Medicare reform needs to be addressed urgently as a distinct legislative initiative. We
also strongly believe that Medicare reform should be included as an integral part of any broader health care reform
initiative which may be considered in the future."
There are basic questions with the scale, structure, and administration of the Medicare program that need 10 be
addressed For example, is il appropriate to have a Part A and Part B today, or should this legacy of the political
process that enacted Medicare in the mid- 1960s be revised to create a unified program? L is appropriate to combine
participants' social insurance tax contributions for Part A and premium payments for approximately one-quarter of
Part B with general revenues? If so, what should be the proper combination of beneficiary premiums, taxpayer social
insurance contributions, and general revenues? How are each of these kinds of revenue sources to be justified and
what rights to benefits and responsibilities to pay benefits are thereby established? How can the program become
more cost-effective? How can fraud, abuse and waste be better controlled?
We feel strongly that comprehensive Medicare reforms should be undertaken to make this program financially sound
now and over the long term. The idea that reductions in Medicare expenditures should be available for other purposes,
including even other health care purposes, is mistaken The focus should be on making Medicare itself rustainable,
05-09-95 01:03 PM FROM HCFA/AAP
making it compatible with OASDI, and making both Social Security and Medicare financially sound in the long term.
We strongly recommend that the crisis presented by the financial condition of the Medicare Trust Funds be urgently
addressed on a comprehensive basis including a review of the program's financing methods, benefit provisions. and
delivery mechanisms. Various groups should be consulted and reform plans developed that will not be disruptive to
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FUNCTION 570: MEDICARE
beneficiaries, will be fair to current taxpayers who will in the future become beneficiaries, and will be compatible with
government finances overall. (emphasis in the original)
The Chairman's Mark is based on the recommendations of the Public Trustees. Specifically, the Chairman's mark addresses both the
short and long-term insolvency of the entire Medicare program. Based on the recommendations of the Public Trustees and experts, the
Chairman urges the Congress to think about Medicare in its entirety, and not to be bound by historical distinctions between parts A
and B.
The Chairman's Mark assumes that:
Medicare reform will be addressed urgently as a distinct legislative initiative;
comprehensive Medicare reforms will be undertaken this year to make the program financially sound now;
reductions in the rate of growth of Medicare expenditures will be focused on making Medicare itself sustainable;
a special bipartisan commission will be created to address the long-term solvency of Medicare;
this commission will address the questions raised by the Public Trustees; and
this commission will review the program's financing methods, benefit provisions, and delivery mechanisms.
05-09-95 01:03 PM FROM HCFA/AAP
Summary of Chairman's Mark
The Chairman's Mark assumes $171.9 billion in budget authority and $169.5 billion in outlays in 1996 for Medicare. Spending
570-4
P33
FUNCTION 570: MEDICARE
would increase by 59% over the 1996-2002 period, rising to $258.9 billion in budget authority and $256.7 billion in outlays by 2002.
Over the seven year period 1996-2002, Medicare would grow at an average annual rate of 6.9%. Over the seven-year period, $1.472
trillion in budget authority and $1.458 trillion in outlays would be spent on Medicare, compared to $1.728 trillion in budget authority
and $1.713 trillion in outlays in the current law baseline. Over the five year period 1996-2000, $974.1 billion in budget authority and
$964.2 billion in outlays would be spent, compared to the $1.105 trillion in BA and $1.095 trillion in outlays that the President
recommends.
Major Discretionary Assumptions in the Chairman's Mark
The Chairman's Mark assumes discretionary spending levels of $3.0 billion in budget authority and outlays in 1996, the same
as the 1995 level. This spending would remain constant for the next seven years.
Discretionary spending in function 570 is entirely for the administration of Medicare. The Chairman's Mark assumes no
changes to discretionary spending in Medicare.
Major Mandatory Assumptions in the Chairman's Mark
The Chairman's Mark assumes mandatory spending levels of $168.9 billion in budget authority and $166.5 billion in outlays in
05-09-95 01:03 PM FROM HCFA/AAP
1996, an increase of $10.7 billion in budget authority and $10.2 billion in outlays from the 1995 level. Spending would increase by
62% over the 1996-2002 period, rising to $255.9 billion in budget authority and $253.7 billion in outlays by 2002.
570-5