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Star The 1999 Clinton Administration Budget Guide - Page A3 Star

Tuesday, February 3, 1998

The 1999 Daily Republican Tax Payer's

Comprehensive guide to the
Budget of the United States government

Fiscal Year 1999

By Howard Hobbs, Daily Republican Contributing Editor

WASHINGTON DESK - Where does the Clinton administration spend the U.S. tax dollar? In a typical American household, a father and mother might sit around the kitchen table to review the family budget. They might discuss how much they expect to earn each year, how much they can spend on food, shelter, clothing, transportation, and perhaps a vacation, and how much they might be able to save for their future needs.

If the Clinton administration ends up with not enough money to make ends meet, he will not openly discuss how he can spend less, as the typical American family does. The president, instead, issues an executive order allocating Social Security trust fund money to cover the deficit.

Chart 1. Family Budgeting vs. Clinton Spending Power Chart 1  Family Budgeting
The Clinton administration only lays-out its ideal budget, and borrows against Social Security funds when the ideal budget fails to correctly estimate income vs. expenditires. This is the moral equivalent of an American family who just keeps on charging against its credit cards to maintain its standard of living during periods of unemployment or natural disaster. The president and Congress make a guesstimate of how much money they expect the government to receive from Social Security and income tax in each of the next several years.

They will also estimate how many tax dollars to spend to reach their goals—goals for national defense, foreign aid, social insurance for the elderly, health insurance for the elderly and poor, law enforcement, education, transportation, science and technology, and others.

The president wants the Congress to finance his initiatives through raising more taxes and by borrowing from Social Security funds that should be set-aside to pay future benefits. The Congress debates how to use the budget to help the economy grow without redistributing income and how to reduce spending in order to eliminate the deficit and balance the budget and reduce taxation.

Chart 2. Clinton Spending Initiatives vs. National Budgeting Priorities Chart 2  Clinton Spending Initiatives

The money that the Federal government uses to pay its bills—its revenues—comes mostly from taxes. In recent years, revenues have been lower than spending, and the government has borrowed from Social Security to finance the difference between tax revenues and Cltnton's budget deficit.

Chart 3. The Clinton 1999 Tax Dollar

Chart 3. The Clinton 1999 Tax Dollar

How Clinton looks at Tax Revenue Sources:

Table 1. Revenues By Source — Summary

Chart 4. Composition of Revenues

Chart 4.  Composition of Revenues

Between 1960 and 1997, payroll taxes have increased substantially as a percent of GDP , and corporate income taxes have declined, but individual income taxes have remained roughly constant.

Chart 5. Revenues as a Percent of GDP — Comparison With Other Countries

Chart 5.  Revenues as a Percent of
<I>GDP </I>—Comparison With Other Countries

The United States and Japan have the lowest revenues as a percent of GDP of the seven countries listed above.


As has been shown above, the Clinton administration wants to spend over $1.7 trillion in the year 1999. [See eight speending categories in Chart 6.]

Note: In calculating Clinton's spending initiatives, he deducts collections (revenues) generated by the Clinton administration's fee charging activities, such as entry-use fees to national parks. These collections will total an estimated $210 billion in 1999. Without them, spending would total an estimated $1.9 trillion in 1999, not $1.7 trillion.

Chart 6. The Clinton Administration Tax Dollar
Chart 6. The Clinton Administration Tax Dollar

Table 2.
Spending Summary

Table 3.
Spending by Function

Table 4.
Spending by Agency

On-Budget and Off-Budget

The Clinton administration keeps some spending programs off-budget, meaning that the the president categorizes them separately from other programs.

Specifically, the law requires that the spending and revenues of two Federal programs, Social Security and the Postal Service, be excluded from the budget totals—that is, categorized as off-budget. Therefore, the budget displays on-budget, off-budget and unified budget&totals to satisfy this legal requirement.

The unified budget is the most useful display of the Clinton administration’s finances; it is vital in calculating how much the Clinton administration must borrow from Social Security to cover his spending gaps.

The off-budget maipulation is designed to hide the fiscal effects of Social Security and other programs. Over the years, the government has placed numerous programs &off-budget then returned them to the unified budget. But the mere listing of programs as off-budget does not, by itself, protect them from the budget process, at all. The Clinton administration is carefully reviewing those programs fpr possible hidden cuts, and un-advertized hiring and procurement from non-competitive government contractors and friends.

Chart 7 illustrates the relationship between on-budget and off-budget items, and the unified budget.

Chart 7. On-Budget and Off-Budget Deficit Projections
Chart 7.  <I>On-Budget </I> and </I> Off-Budget </I> Deficit Projections

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