oversight

Terms Used in the Budgetary Process

Published by the Government Accountability Office on 1977-07-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

?F=mnsUsed
InThe
Budgetary
Process
JULY   1977




                   PAD-77-9




              --
                                 FOREWORD

      The Legislatrve Reorgankatron Act of 1970, as amended by trtle VIII
of the Congressional Budget Act of 1974, provides m sectron 202(a)(l). that
            “The Comptroller General of the Uruted Stdtes. m coopera-
     tron with the Secretary of the Treasury, the Director of the
     Office of Management and Budget, and the Director of the
     Congressional Budget Office, shall develop, estabbsh, maintain,
     and publish standard terminology, definrtions, classificatrons, and
     codes for Federal fiscal, budgetary, and program-related data and
     information. The authority contained in this section shall include,
     but not be limited to, data and information pertaining to Federal
     fiscal policy, revenues, receipts, expenditures, functions, pro-
     grams, projects, and activitres. Such standard terms. definrtions,
     classifications, and codes shall be used by all Federal agencies in
     supplying to the Congress fiscal, budgetary, and program-related
     data and informatron.”
      In accordance \kith thus requirement we published a glossary, “Budget-
ary Definitions” (OPA-76-8) in November 1975, whrch mcluded the initial
standard terms and definitions.
       This glossary, which supersedes OPA-76-8, is a compilation of those
terms previously published and additional terms that have been suggested by
various users. The glossary is divided into three sections. The first section is a
compilation of those terms that are of significance and importance in the
budget process. The second section contains proposed terms and definitions
applicable to zero-base budgeting that have been developed by the Office of
Management and Budget, but which have not been reviewed by GAO or
coordinated by us with the other agencies responsible for standard terms and
definitions. They are, therefore, included for informational purposes only.
The last section includes economic terms that are used in connection with the
budget, especially in discussions of the economic assumptrons underlying the
budget proposals and estimates.
     The terms and definitions in this glossary have been developed in
cooperation with the Department of the Treasury, the Office of Management
and Budget, and the Congressional Budget Office, except the zero-base
budgat terms. Suggestions and assistance were also obtained from various
congressional committees as well as other Federal agencies.
       We welcome any suggestions or recommendations for additional terms
or revisions to definitions by users of this publication.




                                                            Comptroller General
                                                            of the United States
                                      CONTENTS

Foreword                                          I

Budgetary   Terms   .md Drlmitl~ln~               I

Zero-base   Budgetmg    lermh   Jnd Delmltwns    30

Economic    Terms   and Delirutlons              37
               BUDGETARY      TERMS    AND   DEFINITIONS


   These terms are published under the authority of section 202(0]( 1)
   of the Legislutir;e Reorgarkotton Act of 1970. (IS amended by title
    VIII of the Corrgressional Budget Act of I9 74. The terms t~sdrfined
   in this section shall be used by all Federal agencies in submitting
   fiscal. budgetaty. and program-related data and information to the
   Congress.

ACCRUAL    BASIS   OF ACCOUNTING

     A method of accountmg m whrch revenues are recognized in the perrod
     earned and costs are recogmzed in the period mcurred, regardless of
     when payment rs received or made. (See also CASH BASIS OF
     ACCOUNTING.)

ACTIVITY

     Any project, task, or process required to carry out a program. A
     combination of several activities, such as research and development,
     training of personnel, and distrrbution of mformation, may be elements
     in a particular program. Activities constituting a program vary with the
     nature and purpose of the program.

ADVANCE    APPROPRIATION

     An appropriation provided by the congress for use in a fiscal year, or
     more, beyond the fiscal year for which the appropriation act is passed,
     e.g., the 1976 appropnation for use m fiscal year 1976 for the
     Washington Metropolitan Area .Transit Authority contained in the
     Department of Transportation and Related Agencies Appropriation
     Act, 1975, which was passed on August 28, 1974. Advance appropria-
     trons allow State and local governments and others sufficient time to
     develop plans with assurance of future Federal funding. An advance
     appropriation is sometimes mistakenly referred to as “forward funding”
     which permits an agency to obligate funds in the current year for the
     operation of programs in subsequent fiscal years. (See also ADVANCE
     FUNDING and FORWARD FUNDING.)

ADVANCE     FUNDING

      Authority provided in an appropriations act to obligate and disburse
      during a fiscal year from the succeeding year’s appropriation. The funds

                                                                             1
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    so obligated are added to the budget authority for the hscal year and
    deducted from the budget authortty of the succeeding fiscal year. The            amount p
    appropnatton language usually states the date after which the funds of           other stat1
    the succeedmg year may be obbgated. The “Public Asststance”
    approprtation account, HEW, ts an example. (See ADVANCE APPRO-              ALLOWANCES
    PRIATION and FORWARD FUNDlNC )
                                                                                     Amounts
AGENCY                                                                               cover posr
                                                                                     contingen
    Any department, office, commission, authority, administration, board,            ments. As
    Government-owned corporation, or other independent establishment of              represent
    any branch of the Government of the United States.                               to cover
                                                                                     contingent
AGENCY DEBT                                                                          applicable
                                                                                     classificati
    See FEDERAL DEBT.
                                                                               APPORTIONME
AGENCY MISSIONS
                                                                                    A distribu
    Those responsibilities for meeting national needs assigned to a specific        available
    agency. Agency missions are expressed in terms of the purpose to be             executive
    served by the programs authorized to carry out functions or subfunc-            basis of tit
    tions which, by law, are the responsibility of that agency and its              objects,   o
    component organizations. (See section 201 of the Budget and Account-            tended to,
    ing Act, 1921, as amended. See also ACTIVITY and NATIONAL
    NEEDS.)                                                                         Deficiency
                                                                                          A di
ALLOCATION                                                                                that
                                                                                          wc
    This term has two definitions: (1) For purposes of Government                         31
    accounting, an allocation is the amount of obligational authority                     wc
    transferred from one agency, bureau, or account to another agency,                    defic
    bureau, or account that is set aside in a transfer appropriation account
    to carry out the purposes of the parent appropriation or fund. For         APPROPRIATIC
    example, allocations are made when one or more agencies share the
    administration of a program for which appropriations are made to only            An authot
    one of the agencies or to the President. (2) For purposes of section            agencies tc
    302(a) of the Congressional Budget Act of 1974, an allocation is the            for specifit
    distribution of the total budget outlays or total new budget authority           authorkin,
    in a concurrent resolution on the budget to the various committees              means of T
    having spending responsibihties.                                                in some (
                                                                                    authority.
ALLOTMENT                                                                           represent (
                                                                                    in the app
    Authority delegated by the head or other authorized employee of an             agencies m
    agency to agency employees to incur obligations withm a specified              appropriat.
                                                                                   not counte
                                                                                   incur addit

2                                  BESTDOCUMENT
                                             AVAILABLE
    amount pursuant to OMB apportumment or reapportionment actron or
    other statutory authortty making funds available for obltgation.

ALLOWANCES

    Amounts Included in the Prestdent’s budget request or projections to
    cover posstble additional proposals, such as statutory pay increases and
    contingencies for relatively uncontrollable programs and other require-
    ments. As used in a concurrent resolution on the budget, allowances
    represent a special functronal clasufication designed to include amounts
    to cover possible requirements, such as civihan pay ratses and
    contingencies, until they occur or become firm, at whtch point
    applicable amounts are distributed to the appropriate other functional
    classification(s).

APPORTIONMENT

    A distribution by the Office of Management and Budget of amounts
    avarlabie for obligation in appropriation or fund accounts of the
    executive branch. The distribution makes amounts avadable on the
    basis of time periods (usually quarterly), programs, activities, projects,
    objects, or combinations thereof. The apportionment system is in-
    tended to achieve an effective and orderly use of funds.
     Deficiency   Apportionment
           A distributton of available budgetary resources for the fiscal year
           that antrcipates the need for supplemental budget authority Such
           apportionments may only be made under condtttons provtded in
           31 USC. 665(e) and 66Sa. The issuance of a deficiency
           apportionment does not authorize the agency head to incur a
           deficit.

APPROPRIATION

    An authorization by an act of the Congress that permits Federal
    agencies to incur obligations and to make payments out of the Treasury
    for specified purposes. An appropriation usually follows enactment of
    authorizing legislation. An appropriation act is the most common
    means of providing budget authority (see BUDGET AUTHORITY), but
    in some cases the authorizing legislation itself provides the budget
    authority. (See BACKDOOR AUTHORITY.) Appropriations do not
    represent cash actually set aside in the Treasury for purposes specified
    in the appropriation act; they represent limitattons of amounts which
    agencies may obligate durmg the time period spectfied m the respective
    appropriations acts. There are several types of appropriations that are
    not counted as budget authority, since they do not provide authorrty to
    mcur additional obligations:


                                                                            3
    - Appropriation 10 hquldate contract authority ~-congressionala&on        AUTHORIZING
      fo provide funds to pay obligations mcurred agamst contract
      authority.                                                                   A standing
    - Appropriation to reduce outstanding debt~&congrewonal actron to              subject m;
      provide funds for debt retuement.                                            the legal (
    - Approprration for refund of receipts.                                        of obligat
                                                                                   spending I
APPROPRIATION (OR FUND) ACCOUNT                                                    (“backdoc
                                                                                   legislation
    A summary account established m the Treasury for each appropriauon
    and/or fund showing transactions to such accounts.                        BACKDOOR        Al

APPROPRIATION ACT                                                                  Budget au
                                                                                   tions corn
    An act under the jurisdlctlon of the Committees on Approprlatlons              backdoor
    which provrdes funds for Federal programs. At the time these                   other case
    definitions were published, there were 13 regular appropriation acts.          tion is prc
    There are also enacted from time to time supplemental appropriation            the Congr
    acts.                                                                          specifies c
                                                                                   accounts
APPROPRIATION LIMITATION                                                           trust fund
                                                                                   and the so
    A statutory restriction in an appropriation act, which establishes the
    maximum amount which may be obligated and expended for specified
                                                                              BALANCED        BL
    purposes from an appropriation or other funds, such as special or trust
    funds.                                                                         A budget
                                                                                   BUDGET
AUTHORITY  TO BORROW       FROM THE TREASURY
AND THE PUBLIC                                                                BALANCES      OF
    See BORROWING AUTHORITY.                                                       Balances I

AUTHORIZATION     (AUTHORIZING      LEGISLATION)                                   Unexpend
                                                                                         The
    Basic substantive legislation enacted by Congress which sets up or                   con
    continues the legal operation of a Federal program or agency either                  and
    indefinitely or for a specific period of time or sanctions a particular
                                                                                   Obligated
    type of obligation or expenditure within a program. Such legislation is
                                                                                         The
    normally a prerequisite for subsequent appropriations or other kinds of
    budget authority to be contained III appropnation acts. It may hmit the              has
    amount of budget authority to be provided subsequently or may                        mdc
    authorize the appropriation of “such sums as may be necessary.” In             Unobligt
    some instances budget authority may be provided III the authonzatron                 The
    (see BACKDOOR AUTHORITY), which obviates the need for sub-                           In
    sequent appropriations or requrres only an appropriation to lIquIdate                avai
    contract authority or reduce outstandmg debt.                                        mu1
                                                                                         for\


4                                         BESTDOCUMENT
                                                    AVAILABLE
AUTHORIZING        COMMITTEE
    A standmg comm~rtee of the House or Senate Hrtti lurtsdrctron over the
    SubJect matter of those laws, or pdrts of laws, that set up or continue
    the legal operatrons of Federal programs, agencres. or particular types
    of obligatrons wrthm programs. The authorlrmg committee also has
    spending responsrbrhty m those rnstances where the budget authority
    (“backdoor authority”) ts also provtded m the basrc substantwe
    legislation.

BACKDOOR    AUTHORITY

    Budget authorrty provided m legislation outsrde the normal (approprra-
    tions commtttees) appropriations process. The most common forms of
    backdoor authority are borrowing authority and contract authortty. In
    other cases (e.g., Interest on the pubhc debt), a permanent appropria-
    tion is provided that becomes avarlable without any current action by
    the Congress. Sectron 401 of the Congressronal Budget Act of 1974
    specifies certain limtts on the use of backdoor authority. Examples of
    accounts that have backdoor authority are the Federal-aid hrghways
    trust fund, the Environmental Protection Agency‘s construction grants,
    and the social security trust funds.

BALANCED    BUDGET

    A budget m whrch recerpts are equal to or greater than outlays. (See
    BUDGET DEFICIT and BUDGET SURPLUS.)

BALANCES    OF BUDGET         AUTHORITY

     Balances may be classified as
     Unexpended     Balance
           The amount of budget authority unspent and still available for
           conversion into outlays in the future; the sum of the obligated
           and unobligated balances.
     Obligated Balance
           The amount of obligations already incurred for which payment
           has not yet been made. This balance can be carried forward
           mdefinitely until the obligations are paid.
     Unobligated    Balance
           The portion of budget authority that has not yet been obligated.
           In I-year accounts the unobligated balance expires (ceases to be
           available for obligatron) at the end of the ftscal year. In
           multiple-year accounts the unobligated balance may be carried
           forward and remam available for obhgatron for the period
          specified. In no-year accounts the unobhgated balanLt>IS Larrled
          forward indefinitely untd specifically rescinded by IN or until
          the purposes for which it was provided have been acc’mlplished.      by the pe
                                                                               timing of
BORROWING       AUTHORITY                                                      manner of
                                                                               PERIOD 0
    Statutory authority (substantive or appropriation) that permits a
    Federal agency to incur obligations and to make payments for specified     One-year (,
    purposes out of borrowed moneys. Section 401 of the Congressional                BudE
    Budget Act of 1974 limits new borrowing authority (except for certain            speci
    instances) to such extent or in such amounts as are provided in            Multiple-y4
    appropriation acts. Borrowing authority, also called “authority to                BudI
    borrow from the Treasury and the Public,” may be one of the following             exce’
    types:
                                                                               No-year AI
    Authority    To Borrow   From the Treasury                                       Budi
          The legislative authority to borrow funds from the Treasury that           indel
          are realized from the sale of public debt securities.                      the a
                                                                               TIMING     D
    Authority    To Borrow From the Public
           The legislative authority to sell agency debt securities            Current au
                                                                                     Bud[
    Authority    To Borrow   From the Treasury and the Public                        cedti
           A combination of the legislative authorities noted above.
                                                                               Permanent
BUDGET   ACTIVITY                                                                     Budj
                                                                                      viou!
    Categories included in the budget appendix for each appropriation and             priat
    fund account which identify the services to be performed under the                Con!
    appropriation or fund for which the budget estimate (or request) is               be ‘
    being made.                                                                       “per
                                                                                      betas
BUDGET   AMENDMENT                                                                    pub1
                                                                                      “Cot
    A formal request submitted to the Congress by the President, after his            shari
    formal budget transmittal but prior to completion of appropriation                it is I
    action by the Congress, that revises previous requests, such as the        DETERMI
    amount of budget authority.
                                                                               Definite A
BUDGET   AUTHORITY                                                                    Autl
                                                                                      auth
    Authority provided by law to enter into obligations which will result in          exce
    immediate or future outlays involving Government funds, except that         Indefinite
    such term does not include authority to insure or guarantee the                    Aud
    repayment of indebtedness incurred by another person or government.                 dete
    The basic forms of budget authority are appropriations, contract                    sour
    authority, and borrowing authority. Budget authority may be classified


6
                                                     BESTDOCUMENT
                                                               AVAILABLE
by the period u! avatlabthty (I-year, multrple-year, no-year), by the
timmg of congressional action (current or permanent), or by the
manner of determmmg the amount a&able (defimte or indefinite).
PERIOD        OF AVAILABILITY
One-year (Annual Authority)
       Budget authority that is available for obligatton only during a
       spectfied fiscal year and expires at the end of that ttme.
Multiple-year     Authority
       Budget authortty that is available for a spectfied period of time in
       excess of 1 fiscal year.
No-year Authority
     Budget authortty that remains available for obligation for an
     indefinite period to time, usually until the objectives for whrch
     the authorrty was made available are attained.
TIMING        OF CONGRESSIONAL          ACTION
Current authority
       Budget authority enacted by Congress in or immediately pre-
       ceding the ftscal year in which tt becomes available.
Permanent Authority
       Budget authority that becomes available as the result of pre-
       vtously enacted legislation (substantive legislation or prior appro-
       priation act) and does not require current action by the
       Congress. .4uthority created by such legtslation is considered to
       be “current” in the first year in which it is provided and
       “permanent” in succeeding years. It is possible to distinguish
       between “fully permanent” authority (such as interest on the
       public debt), where no subsequent action is required, and
       “conditionally permanent” authority (such as general revenue
       sharing), where authority expires after a set period of time unless
       it is reenacted.
 DETERMINATION              OF AMOUNT
 Definite Authority
         Authority which is stated as a spectfic sum at the time the
         authority is granted. This includes authority stated as “not to
         exceed” a specified amount.
 Indefinite     Authority
         Authority for which a specific sum ts not stated but is to be
         determined by other factors, such as the receipts from a certain
         source or obligations incurred.
                                                                                               ..._..




         BUDGET DEFICIT                                                                BUDGETARY

             The amount by wtuch the Government’s budget outlab, exieed Its                Portions
             budget receipts for any @ven perlad. Deficits are financed prnnarlly by       Antldefic
             Treasury borrowing from the pubk                                              Control
                                                                                           savings a
                                                                                           greater e
         BUDGET OUTLAYS
                                                                                           Control
             See OUTLAYS                                                                   and rea.1
                                                                                           DEFERF
         BUDGET RECEIPTS
                                                                                       CASH BASIS (
             Amounts received by the Federal Government from the pubhc that
             arise from.                                                                   A methc
                                                                                           payment
             - The exercise of governmental or sovereign power (consisting                 payment
               primarily of tax revenues, but also including receipts from premiums
               of compulsory social msurance programs, court fines, certam hcense      CHANGE IN S
               fees, and the hke).
             - Premiums from voluntary participants m Federal soCLa1msurance                An adju
               programs (such as deposits by States for unemployment Insurance              President
               and for social security for their employees) that are closely related        costs ant
               to compulsory social insurance programs.                                     those asr
             - Cifts and contributions.                                                     not yet t
             Excluded from budget receipts are OFFSETTING RECEIPTS, which                   Details f
             are counted as deductions from budget authority and outlays rather             sectlon 3
             than as budget receipts.
                                                                                       COLLECTION
         BUDGET SURPLUS                                                                     Any mar
             The amount by wtuch the Government’s budget receipts exceed Its                of the I
             budget outlays for any given perlad.                                           offsettin:
                                                                                            BUDGE
                                                                                            DEPOSI
         BUDGET UPDATE
                                                                                       CONCURREN
             A statement summartzing amendments to or revisions m budget
             authority requested, estimated outlays, and estimated receipts for a           A resolu
             fiscal year that has not been completed. The President may submit              signature
             updates at any time but is required by the Congressional Budget Act of         congress’
             19’74 to transmit such statements to the Congress by Aprd IO and July          year. The
             15 of each year.                                                               The first
                                                                                            congress1
         BUDGET YEAR                                                                        by Septe
                                                                                            for a fist

    II       See FISCAL YEAR

                                                BSI' DOCUMENT
                                                           AVAILABLE
         8




-
i,




                                ,-,..    ._




 BUDGETARY         RESERVES

         Portions of budget authortty set aside under authority of the
         Antideficrency Act (3 I U.S C. 665), as amended by the Impoundment
         Control Act of 1974, for contingenctes or to effect savings whenever
         savmgs are made possible by or through changes in requtrements or
         greater effictency of operations. Section 1002 of the Impoundment
         Control Act of 1974 restricts the establishment of budgetary reserves
         and requires that all reserves be reported to the Congress. (See
         DEFERRAL OF BUDGET AUTHORITY.)

     CASH BASIS OF ACCOUNTING

         A method of accountmg in which revenue IS recognized at the time
         payment is received and costs are considered incurred at the time
         payment is made. (See also ACCRUAL BASIS OF ACCOUNTING.)

     CHANGE   IN SELECTED     RESOURCES

         An adjustment m the program and financing schedules of the
         President’s budget appendix representing the bridge between program
         costs and obligations. It measures the aggregate increase or decrease in
         those assets and habilities that have entered into obligations but have
         not yet become costs, or vice versa. (See COST BASED BUDGETING.)
         Details for computing “change m selected resources” are included in
         section 32.3 of OMB Circular A-l I.

     COLLECTIONS

          Any moneys received by the Government. Depending upon the nature
          of the transaction, collections may be treated as budget receipts,
          offsetting collecttons, refunds, or credits to a deposit fund. (See
          BUDGET RECEIPTS, OFFSETTING COLLECTIONS. REFUNDS,
          DEPOSIT FUNDS.)

     CONCURRENT      RESOLUTION         ON THE BUDGET

          A resolution passed by both- Houses of Congress, but not requiring the
          stgnature of the President, setting forth, reaffirming, or revising the
          congressional budget for the United States Government for a fiscal
          year. There are two such resolutions required precedtng each fiscal year.
          The first required concurrent resolution, due by May 15, establishes the
          congressional budget. The second required concurrent resolution, due
          by September 15, reaffirms or revises it. Other concurrent resolutions
          for a fiscal year may be adopted at any time followmg the first required
          concurrent resolution for that fiscal year.



                                                                                 9
-,




                  .-      .-




                                                                                      CONTROLLABILI’
 CONGRESSIONAL             BUDGET
                                                                                           The ability u
          The budget as set forth by Congress in a concurrent resolutron on the            during a giver
          budget. These resolutions shall include                                          spending that
          (1) the appropriate level of total budget outlays and of total new               existing subst
              budget authority,                                                            of openende
                                                                                           veterans’ ben
          (2) an estimate of budget outlays and new budget authorrty for each              incurred durir
              major functional category, for contmgencies, and for undrstributed
              offsetting receipts based on allocations of the appropriate level of    COST-BASED    BUC
              total budget outlays and of total new budget authority,
                                                                                           Budgeting in
          (3) the amount, if any, of the surplus or deficit in the budget
                                                                                           consumed in
          (4) the recommended level of Federal revenues, and                               acquire the r
                                                                                           addition to I
          (5) the appropriate level of the public debt.                                    presents the
                                                                                           based budge1
     CONTINGENT        LIABILITY                                                           regardless of
                                                                                           the financing
          A conditional commitment which may become an actual liability
                                                                                           the “prograr
          because of a future event beyond the control of the Government.
                                                                                            required to z
          Contingent liabilities include such items as guaranteed loans and insured
                                                                                            RESOURCE!
          bank deposits.
                                                                                       CROSSWALK
     CONTINUING        RESOLUTION
                                                                                            The expressi
          Legislation enacted by the Congress to provide budget authority for
          specific ongoing activities in cases where the regular fiscal year                and another.
          appropriation for such activities has not been enacted by the beginning           legislation or
          of the fiscal year. The continuing resolution usually specifies a                 sional comm
          maximum rate at which the agency may incur obligations, based on the
          rate of the prior year, the President’s budget request, or an appropria-     CURRENT     AUTH
          tion bill passed by either or both Houses of the Congress.
                                                                                            See BULGE
     CONTRACT      AUTHORITY
                                                                                       CURRENT     POLIC
          A form of budget authority under which contracts or other obligations
                                                                                             Projections
          may be entered into in advance of an appropriation or in excess of
                                                                                             upcoming fi
          amounts otherwise available in a revolving fund. Contract authority
                                                                                             by enacted 2
          must be funded by a subsequent appropriation or the use of revolving
                                                                                             without pol
          fund collections to liquidate the obligations. Appropriations to liqui-
                                                                                             numbers ant
          date contract authority are not classrfied as budget authorrty smce they
                                                                                             continuatior
          are not available for obligation. Section 401 of the Congressional
          Budget Act of 1974 limits new contract authority, with few exceptions,
                                                                                        CURRENT    SERV
          to such extent or in such amounts as are provided in approprratron acts.
                                                                                             Estimated b
                                                                                             based on co
                                                   BESTDOCUMENT
                                                             AVAILABLE/
     10
CONTROLLABILITY

     The ablhty under exrstmg law to control budget authority or outlays
     during a gven fiscal year. “Relatively uncontrollable” usually refers to
     spending that cannot be increased or decreased without changes m
     existing substantive law. The largest parr of such spending is the result
     of openended programs and fixed costs, such as social secunty and
     veterans’ benefits, but also includes payments due under obhgations
     incurred durmg prior years.

COST-BASED     BUDGETING

     Budgeting in terms of costs to be incurred, i.e., the resources to be
     consumed in carrying out a program regardless of when the funds to
     acquire the resources were obhgated or pald. Cost-based budgeting, in
     addition to reflecting the obhgational requirements for the program,
     presents the cost of what is planned 10 be accomplished. (Obligation-
     based budgeting 1s expressed in terms of obhgations to be Incurred,
     regardless of when the resources acquired are to be consumed.) When
     the financing schedules in the appendix to the President’s budget state
     the “program by activities” in terms of costs, an adjusting entry is
     required to arrive at total obligations. (See CHANGE IN SELECTED
     RESOURCES.)

CROSSWALK

     The expression of the relationship between one set of classifications
     and another, such as between appropriation accounts and authorlring
     legislation or between the budget functIonal structure and the congres-
     sional committee spending jurisdictions.

CURRENT      AUTHORITY

      See BUDGET AUTHORITY.

CURRENT      POLICY   BUDGET

      Projections of the estimated budget authority and outlays for the
      upcoming fiscal year to operate Federal programs at the level implied
      by enacted appropriations and authorizations for the current fiscal year
      without policy changes, but adjusted for inflation, changes in the
      numbers and kinds of beneficiaries, and in some instances to reflect the
      continuation of certain programs scheduled to terminate.

 CURRENT     SERVICES    ESTIMATES

      Estimated budget authority and outlays for the upcoming fiscal year
      based on continuation of existing levels of Service. i.e., assuming that all

                                                                               11
                                                 -.    ,-,    -.. ,-.




     programs and actnrtres wtll be carrred on at the same level as rn the       DEOBLIGATIO
     fiscal year rn progress and without pohcy changes rn such programs and
     activities. These estrmates of budget Juthorrty and outlays. dccom-              A downw:
     panied by the underlymg economrc and programmsru dssumptrons                     be attribu
     upon which they are based (such as the rate of mflation, the rate of real        or correctr
     economic growth. the unemployment rate, program caseloads. and pay
     Increases), are requrred to be transmrtted by the Presrdent to the          DEPOSIT FUNC
     Congress by November 10 of each year.                                            Accounts 1
                                                                                      either (a)
CURRENT      YEAR                                                                     some oth,
     See FISCAL YEAR                                                                  determina
                                                                                      Covernme
                                                                                      of the def
DEBT HELD BY THE PUBLIC
                                                                                      and they
     See FEDERAL DEBT                                                                 they do pr

DEBT SUBJECT TO STATUTORY           LIMITATION                                   DIRECT   LOAN

     See FEDERAL DEBT                                                                 Outlays, :
                                                                                      without ir
DEFERRAL      OF BUDGET    AUTHORITY                                                  90 days’d

     Any actron or inactron by any officer or employee of the United States      DISBURSEMEF
     that withholds, delays, or effectively precludes the oblrgatron or
     expenditure of budget authority, including the establishment of                  In budget;
     reservesunder the Antideficiency Act as amended by the Impoundment               issued, ci
     Control Act. (See BUDGETARY RESERVES.) Section 1013 of the                       disbursem
     Impoundment Control Act of 1974 requires a special messagefrom the               credited
     President to the Congress reporting a proposed deferral of budget                received t
     authority. Deferrals may not extend beyond the end of the fiscal year            OUTLAY
     in which the message reporting the deferral is transmitted and may be
     overturned by the passage of an impoundment resolution by either            ENTITLEMEN
     House of Congress. (See IMPOUNDMENT RESOLUTION.)
                                                                                      Legislatio
DEFICIENCY     APPORTIONMENT                                                          governmel
                                                                                      social set
     See APPORTIONMENT.                                                               Congressi(
                                                                                      enactmen
DEFICIENCY     APPROPRIATION
                                                                                  EXPENDITURI
     An appropriation made to an expired account to cover obligations
     mcurred in excess of the available budget authority.                              A term gt
                                                                                       (At one r
DEFINITE     AUTHORITY                                                                 other beu

     See BUDGET AUTHORITY.
                                                       BESTDOCUMENT
                                                                 AVAILABLE
DEOBLIGATION
    A downward ad~ustmcnt of prevtously rccordcd \~hhgattons Thts may
    be dttributable to cancellation of ,I pro)ect or contract. prtce revtstons.
    or corr?;tions of~mounts previously recorded as ~~bbgattuns.

DEPOSIT FUNDS
    Accounts establtshed to facilitate the accoutttmg for collections that are
    etther (a) held tn suspense temporarily and later refunded or pard mto
    some other fund of the Government upon admmrstrative or legal
    determutation as to the proper disposition thereof or (b) held by the
    Government as banker or agent for others and paid out at the discretion
    of the depositor. These accounts are not mcluded ut the budget totals
    and they are not available for expenses of the Government. although
    they do provtde a means of financing the budger.

DIRECT LOANS
    Outlays, all or part of whtch are contracted to be repaid with or
    wtthout Interest. Sales of Federal assets on credtt terms of more than
    90 days’duration are also classified as dtrect loans

DISBURSEMENTS
    In budgetary usage, gross dtsbursements represent the amount of checks
    issued. cash. or other payments made, less refunds received. Net
    disbursements represent gross disbursements less mcome collected and
    credtted to the appropnation or fund account, such as amounts
    received for goods and services provtded. (See LXPENDITLJRES and
    OUTLAYS.)

ENTITLEMENT AUTHORITY
    Legislation that requires the payment of beneftts to any person or
    government meeting the requirements established by such law, e.g.,
    soctal securtty benefits and veterans’ pensions. Section 401 of the
    Congressional Budget Act of 1974 places certatn restrictions on the
    enactment of new entttlement authority.

EXPENDITURES
    A term generally used utterchangeably wtth outlays. (See OUTLAYS.)
    (At one ttme. the term was used to describe one form of outlays, the
    other brmg “net lendtng.” This usage ts now obsolete )




                                                                             13
EXPIRED APPROPRIATION
                                                                                    Debt Sub)
     An appropriation that 1s no longer available for obhgattiln but IS still            Defi
     available for payment of zxlsttng obhgattons. (See “M ” ACCOVUTS.)                  At I
                                                                                           age*
FEDERAL   DEBT
                                                                                FEDERAL   FUN
     Federal debt consists of pubhc debt and agency debt.
                                                                                    Accounts
     Public Debt                                                                    owns, and
           That portion of the Federal debr incurred when the Treasury              classes of
           Department or Federal Fmancing Bank (FFB) borrows funds                  fund recei
           directly from the public or another fund or account. To avoid            or fund ac
           double counting, FFB borrowing from Treasury is not included in          tions, pub
           public debt. (The Treasury borrowing required to obtam the
           money to lend FFB 1salready part of the public debt.)                    General FI
                                                                                          Accc
     Agency Debt                                                                           for a
           That portion of the Federal debt incurred when a Federal agency
           authorlted by law, other than Treasury or the Federal Fmancing            !Special Fu
           Bank (FFB), borrows funds directly from the public or another                   ACU
           fund or account. To avoid double counting, agency borrowing                     earn
           from Treasury or the FFB and Federal fund advances to trust               General FI
           funds are not included tn the Federal debt. (The Treasury or FFB                Accc
           borrowing required to obtain the money to lend to the agency is                 Con)
           already part of the public debt.) Agency debt may be incurred by                GOW
           agencies within the Federal budget (such as the TennesseeValley
           Authority) or by off-budget Federal entities (such as the Postal          Special Fu
           Service). Debt of Government-sponsored, privately owned                         Accc
           enterprises (such as the Federal National Mortgage Association) is              fund
           not included in the Federal debt.                                               with
     There are three basic concepts or tabulations of Federal debt: gross            Public Ent
     Federal debt, debt held by the public, and debt subject to statutory                  Funs
     limit.                                                                                prin-
                                                                                           to fi
     Gross Federal Debt
           The sum of all public and agency debt issues outstanding.                 lntregover
                                                                                            Accc
     Debt Held by the Public                                                                and
           That part of the gross Federal debt held by the public. (The                     intro
           Federal Reserve System is included in “the public” for this
           purpose.) Debt held by Government trust funds (e.g., Social               lntragover
           Security Trust Fund), revolving funds, and off-budget Federal                    Fun1
           entities is excluded from debt held by the public.                               men
                                                                                            Off%


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                 Debt Subject to Statutory     Limit
                       Defined by the Second Liberty Bond Act of 1917, as amended.
                       At present virtually all public debt, but only a small portion of
                       agency debt, is included in debt subject to statutory limit.

           FEDERAL     FUND ACCOUNTS

                 Accounts in which the Government credits receipts which it collects,
                 owns, and uses solely for its purposes. They are composed of two
                 classes of receipt accounts-general fund receipt accounts and special
                 fund receipt accounts-and four classesof appropriation (expenditure)
                 or fund accounts-general fund appropriations, special fund appropria-
                 tions, public enterprise revolving funds, and intragovernmental funds.
                 General Fund Receipt Accounts
                       Accounts credited with all receipts that are not earmarked by law
                       for a specific purpose.
                 Special Fund Receipt Accounts
                       Accounts credited with receipts from specific sources that are
                       earmarked by law for a specific purpose.
                 General Fund Appropriation       Accounts
                       Accounts established to record amounts appropriated by the
                       Congress to be expended for the general support of the
                       Government.
                 Special Fund Appropriation      Accounts
                       Accounts established to record appropriated amounts of special
                       fund receipts to be expended for special programs in accordance
                       with specific provisions of law.
                 Public Enterprise Revolving     Fund Accounts
                       Funds authorized by Congress to be credited with receipts,
                       primarily from the public, that are generated by, and earmarked
                       to finance, a continuing cycle of business-type operations.
                 Intragovernmental   Fund Accounts
                       Accounts established to facilitate financing transactions within
                       and between Federal agencies. These funds may be classified as
                       intragovernmental revolving funds or management funds.
                 Intragovernmental   Revolving     Fund Accounts
                       Funds authorized by law to carry out a cycle of intragovern-
                       mental business-type operations. These funds are credited with
                       offsetting collections from other agenciesand accounts.




                                                                                      15
         Management Fund Accounts
                Funds authorrzed by law to credit collectrons trorn two or more                Congress r
                approprrattons rn order to finance a common purpose or prqect                  FOREIGN
                not involvmg d contmumg cycle of burrness-type operatton\
                                                                                        FORWARD      FUf
    FEDERAL     INTRAFUND     TRANSACTIONS
                                                                                               The oblig;
         See OFFSETTING RECElPTS                                                               contract a
                                                                                               ongoing gr
    FISCAL POLICY                                                                              the “High
                                                                                               HEW, stuc
         Federal Government pohcres wrth respect to taxes, spending, and debt                  student lo
         management, intended to promote the Natron’s economrc goals,                          APPROPR
         particularly with respect to employment, gross national product, prrce
         level stability, and equilibrmm in balance of payments. The budget             FULL    EMPLOY
         process IS a major vehrcle for determinmg and implementmg Federal
         fiscal policy. The other major component of Federal economrc pohcy is                 The estrm
         MONETARY POLICY, defined in the section on economic terms.                            tf the ecoi
                                                                                               full capac
    FISCAL    YEAR                                                                             ment rate

         Any yearly accounting period, without regard to its relationship to a          FUNCTION      (FI
         calendar year. The fiscal year for the Federal Government begins on
         October 1 and ends on September 30. The fiscal year is destgnated by                  The Con!
         the calendar year in which it ends; e.g., fiscal year 1977 ts the fiscal              estrmate
         year ending September 30, 1977. (Prior to fiscal year 1977 the fiscal                 function.
         year began on July 1 and ended on June 30.)                                           authority.
                                                                                               purposes
         Budget Year                                                                           generally
                The fiscal year for which the budget IS bemg considered; the fiscal            that best
                year following the current year                                                admimste
         Current Year                                                                          narrower
                The fiscal year m progress
                                                                                        GENERAL       FUI
         Past Year
                The fiscal year immediately preceding the current year; the last                See FEDE
                completed fiscal year.
                                                                                        GOVERNMEN’
    FOREIGN     CURRENCY     ACCOUNT
                                                                                                Enterprm
         An account established in the Treasury for foreign currency that IS                    banks art
         acquired wrthout payment of United States dollars, primarrly m                         Federal C
         payment for commodities (such as through the Agricultural Trade                        are not ir
         Development Assistance Act, P.L. 480). These currenctes may be                         operatron
         expended without charge to dollar approprrattons. They may be                          President
         available for obligatron without further congressional actton. or



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       Congress may dpproprratr these forergn currencies. (Sez also SPECIAL
       FOREIGN CURREKCY PROGRAM APPROPRIATlON.r

FORWARD      FUNDING

       The obligatton of funds in one fiscal year (e.g., the awarding of a
       contract and estabhshment of a letter of credrt) for the financing of
       ongomg grantee programs during the succeedtng year. For example, m
       the “Higher Education” appropriation account, Office of Education,
       HEW, student loan funds are obhgated at the end of the fiscal year for
       student loans to be made in the following year (See also ADVANCE
       APPROPRIATION and ADVANCE FUNDING.)

FULL    EMPLOYMENT       BUDGET

       The esttmated recerpts, outlays, and surplus or deficrt that would occur
       if the economy were continually operating at a rate defined as being at
       full capacity (traditionally defined as a certain percentage unemploy-
       ment rate for the crvrhan labor force).

FUNCTION      (FUNCTIONAL      CLASSIFICATION)

       The Congresstonal Budget Act of 1974 requrres the Congress to
       esttmate outlays, budget authority, and tax expenditures for each
       function. The functional classtficatton is a means of presenting budget
       authority, outlay, and tax expenditure data in terms of the principal
       purposes that Federal programs are intended to serve. Each account is
       generally placed in the ungle function (e.g., national defense, heal,th)
       that best represents tts major purpose, regardless of the agency
       admmtstering the program. Functions are generally subdivtded into
       narrower categories called subfunctions.

GENERAL      FUND ACCOUNTS

        See FEDERAL FUND ACCOUNTS.

GOVERNMENT-SPONSORED              ENTERPRISES

        Enterprises with completely private ownership, such as Federal land
        banks and Federal home loan banks, established and chartered by the
        Federal Government to perform specialized functions. These enterprises
        are not included in the budget totals, but financial information on theu
        operations is published in a separate part of the appendix to the
        President’s budget.




                                                                             17
GRANTSIN.AID                                                                    INTRABUDGETd
      For purposes of the budget, grants-u-nd consist of budget outlays by          See OFFSE
      the Federal Government to support State or local programs of
      governmental service to the public. Grants do not include purchases       INTRAFUND     TF
      from State or local governments (I.e., payments for research or support
      of Federal prisoners).                                                        See OFFSE

GROSS FEDERAI.      DEBT                                                        INTRAGOVERh

      See FEDERAL DEBT                                                               See FEDEI

GUARANTEED       LOANS                                                          INTRAGOVERh

      Loans for which the Federal Government guarantees in whole or in part          See FEDEI
      the repayment of principal and/or interest.
                                                                                INTAAGOVERh
IDENTIFICATION      CODE
                                                                                     See OFFSE
      An 11-digit number assigned to each appropriation or fund account
      included in the budget, The identification code identifies the agency,    LIQUIDATION        ’
      the appropriation or fund account symbol, the timing of the transmittal
                                                                                     See APPR(
      (regular, supplemental), the type of fund (general, special), and the
      functional classification of each account (see FUNCTION).
                                                                                “M ” ACCOUNT
IMPOUNDMENT                                                                          Unliquidat
      Any action or inaction by an officer or employee of the United States          (merged in
      that precludes the obligation or expenditure of budget authority               following
      provided by the Congress. (See DEFERRAL OF BUDGET AUTHOR-                      payment
      ITY and RJZSCISSION.)                                                          appropriat

IMPOUNDMENT       RESOLUTION                                                     MANAGEMENT

      A resolution of the House of Representatives or the Senate disapprov-           See FEDE
      ing a deferral of budget authority set forth in a special message
      ordinarily transmitted by the President under section 1013 of the          MISSION
      Impoundment Control Act of 1974. Passage of an impoundment
                                                                                      See ACEb
      resolution by either House of Congresshas the effect of overturning the
      deferral and requires that such budget authority be made available for
      obligation.                                                                MULTIPLE-YEI

                                                                                      See BUDC
INDEFINITE     AUTHORITY

      See BUDGET AUTHORITY.                                                      NATIONAL      NE

                                                                                      Those Fee
                                                                                      by budge:
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INTRABUDGETARY         TRANSACTIONS

    See OFFSETTING RECEIPTS.

INTRAFUND     TRANSACTIONS

    See OFFSETTING RECEIPTS.

INTRAGOVERNMENTAL           FUND ACCOUNTS

     See FEDERAL FUND ACCOUNTS.

INTRAGOVERNMENTAL           REVOLVING     FUND ACCOUNTS

     See FEDERAL FUND ACCOUNTS.

INTRAGOVERNMENTAL           TRANSACTIONS

     See OFFSETTING RECEIPTS.

LIDUIDATION     OF CONTRACT        AUTHORITY

     See APPROPRIATION. CONTRACT AUTHORITY

‘W ’ ACCOUNT

     Unliquidated obligations under an appropriation are transferred to
     (merged into) an “M ” account at the end of the second full fiscal year
     following expiration. The “M ” account remains available for the
     payment of the unliquidated obligations charged to variousyear
     appropriation accounts.

MANAGEMENT       FUND ACCOUNTS

     See FEDERAL FUND ACCOUNTS.

MISSION

     See AGENCY MlSSlON.

MULTIPLE-YEAR     AUTHORITY

     See BUDGET       AUTHORITY.

NATIONAL      NEEDS

     Those Federal functions which describe the end purposes being served
     by budget authority, outlays, and tax expenditures, without regard to


                                                                         19
         the means that may be chosen to meet those purposes. Natlond needs,           OFFSETTING      RI
         in current budgetary usage. may be assumed to be synonymous with
         “function.”                                                                        All collecti’
                                                                                            budget autk
    NEW OBLIGATIONAL       AUTHORITY                                                        computing
                                                                                            tions not
         This term is now obsolete and has been replaced by the term “budget                receipts ant
         authority.” (At one time the term was u=,d to distinguish one of two               level. These
         types of budget authority-the other being “loan authority,” which is               as “offsettil
         also obsolete.)
                                                                                            Offsetting
    NO-YEAR   AUTHORITY                                                                     subfunctior
                                                                                            three cases
         See BUDGET AUTHORITY.                                                              interest ret
                                                                                            Continental
    OBJECT CLASSIFICATION                                                                   BUTED OF
                                                                                            than being (
         A uniform classification identifying the transactions of the Federal
         Government by the nature of the goods or services purchased (such as               Offsetting r
         personnel compensation, supplies and materials, or equipment) without              Proprietary
         regard to the agency involved or the purpose of the programs for which                     Thou
         they are used. (General instructions are provided in OMB Circular No.                      whid
         A-l 2).
                                                                                            lntragovern
    OBLIGATIONS                                                                                     All c
                                                                                                    Paw
         Amounts of orders placed, contracts awarded, services rendered. or                         trans;
         other commitments made by Federal agencies during a given period,                          BUD{
         which will require outlays during the same or some future period. (See                     Fedel
         3 1 U.S.C. 200.)                                                                           or II
                                                                                                    payin
    OFF.BUDGET    FEDERAL      ENTITIES                                                             lntral
                                                                                                    three
         Entities, federally owned m whole or in part, whose transactions have                      -Ink
         been excluded from the budget totals under provisions of law, e.g., the                      a tr
         Federal Financing Bank. The fiscal activities of these entities are not                    -Fed
         included in either budget authority or outlay totals, but are presented                      rect
         in a separate part of the budget appendix and as memorandum items in                       -Tru
         various tables in the budget.                                                                recc
    OFFSETTING    COLLECTIONS
                                                                                       ONE-YEAR      AU1
         Moneys received by the Government as a result of business-type
         transactions with the public (sale of goods and services) or as a result of        See BUDGI
         a payment from one Government account to another. Such collections
         are netted in determining budget outlays. (See OFFSETTISG RE-                 OPEN-ENDED          PI
         CEIPTS and REIMBURSEMENTS.)
                                                                                            Entitlemen


1
                                                                                            outlays arc
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     Of FSETTING     RECEIPTS

          All collections depostted into receipt accounts that are offset against
          budget authority and outlays rather than reflected as budget receipts in
          computing budget totals. Under current budgetary usage, cash collec-
          tions not deposited into receipt accounts (such as revolving fund
          receipts and reimbursements) are deducted from outlays at the account
          level. These transactions are offsetting collections but are not classified
          as “offsetting receipts.”
          Offsetting receipts are generally deducted at the budget function or
          subfunction level and from agency budget authority and outlays. In
          three cases-employer share of employee retirement. intragovernmental
          interest received by trust funds, and rents and royalties from the Outer
          Continental Shelf lands-the deductions, referred to as UNDISTRI-
          BUTED OFFSETTING RECEIPTS, are made from budget totals rather
          than being offset by function and subfunction and by agency.
          Offsetting receipts are subdivided into two major categories:
          Proprietary    Receipts From the Public
                Those collections from the public deposited in receipt accounts
                which arise from the conduct of business-type activities.
          Intragovernmental     Transections
                All collections or deposits into receipt accounts in which the
                payment is made by a Federal agency. Intragovernmental
                transactions may represent either RECtlFTS FKOM OFF-
                BUDGET FEDERAL ENTITIES. where a payment comes from a
                Federal enttty whose funds are excluded from the budget totals.
                or INTRABUDCETARY             TRANSACTIONS, where both the
                paying and the receiving accounts are within the budget.
                lntrabudgetary transactions in turn are further subdivided into
                three groups:
                -1nterfund transactions, where the payment ts from a Federal to
                  a trust fund or vice versa.
                --Federal intrafund transactions, where both the paying and
                  receiving accounts are Federal funds.
                -Trust intrafund transactions, where both the paying and
                  receiving accounts are trust funds.

     ONE-YEAR      AUTHORITY

          See BUDGET AUTHORITY,

     OPEN-ENDED         PROGRAMS

          Entitlement programs under which actual obligations and resultant
          outlays are limited only by the number of eligible persons meeting

                                                                                 ?I
                                                 .                _.




      eligibility requirements fixed by law who apply for benefit\ and the                           well-defined
      actual benefits received, e.g.. medicaid.                                                      has been u:
                                                                                                     activities. ser
OUTLAYS
                                                                                                PROJECTIONS
      The amount of checks issued, interest accrued on most public debt, or
      other payments; net of refunds and reimbursements. Total budget                                Estimates 01
      outlays consist of the sum of the outlays from appropriations and funds                        amounts thai
      included in the unified budget, less offsetting receipts. The outlays of                       are intended
      off-budget Federal entities are excluded from the unified budget under                         current or cc
      provisions of law, even though these outlays are part of total                                 period of tin
      Government spending. Federal outlays are recorded on the “cash basis                           and ranges o
      of accounting”-with the exceptionbf most interest on the public debt,                          regarded as I
      for which the “accrual basis of accounting” is used.                                           nor as recomi

OVERSIGHT      COMMITTEE                                                                        PROPRIETARY       R

      The congressional committee charged with general oversight of the                              See OFFSET
      operation of an agency or program. In some, but not all, cases the
      oversight committee for an agency also is the authorizing committee for                   PUBLIC   DEBT
      that agency’s programs. (See AUTHORIZING COMMITTEE.)
                                                                                                     See FEDERP
PAST YEAR
                                                                                                PUBLIC   ENTEAPF
      See FISCAL YEAR.
                                                                                                     See FEDERA
PERMANENT       AUTHORITY

      See BUDGET AUTHORITY.
                                                                                                     A revision b
PRESIDENT’S     BUDGET                                                                               apportionmel
                                                                                                     account. A n
      The budget for a particular fiscal year transmitted to the Congress by                         activity cove
      the President in accordance with the Budget and Accounting Act of                              MENT.)
      1921, as amended. Some elements of the budget, such as the estimates
      for the legislative branch and the judiciary, are required to be included                 REAPPROPRIATh
      without review by the Office of Management and Budget or approval
      by the President.                                                                              Congressiona
                                                                                                     the same or r
PROGRAM                                                                                              of budget au
                                                                                                     current accol
       Generally defined as an organized set of activities directed toward a                         act.
       common purpose, objective, or goal, undertaken or proposed by an
       agency in order to carry out responsibilities assigned to it. In practice,               RECEIPT ACCOUI
       however, the term “program” has many usagesand thus does not have a
                                                                                                     Accounts es
                                                                                                     Treasury for


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                                                                         ~..-    _..-..   . .
    well-defined standardized meaning in the legislative proces. “Program”
    has been used as a description for agency missions, “programs,”
    activities, services, projects, and processes.

PROJECTIONS

     Estimates of budget authority, outlays, receipts, or other budget
     amounts that extend several years into the future. Projections generally
     are intended to indicate the budgetary implications of continuing
     current or currently proposed programs and legislation for an indefinite
     period of time. These include alternative program and policy strategies
     and ranges of possible budget amounts. They generally should not be
     regarded as firm estimates of what actually will occur in future years
     nor as recommendations regarding future budget decisions.

PROPRIETARY     RECEIPTS    FROM THE PUBLIC

     See OFFSETTING RECEIPTS.

PUBLIC   DEBT

     See FEDERAL DEBT.

PUBLIC   ENTERPRISE    REVOLVING      FUND ACCOUNTS

     See FEDERAL FUND ACCOUNTS.

REAPPORTIONMENT

     A revision by the Office of Management and Budget of a previous
     apportionment of budgetary resources for an appropriation or fund
     account. A revision would ordinarily cover the same period, project, or
     activity covered in the original apportionment. (See APPORTION-
     MENT.)

REAPPROPRIATION

     Congressional action to restore the obligational availability, whether for
     the same or different purposes, of all or part of the unobligated portion
     of budget authority in an expired account. Obligational availability in a
     current account may also be extended by a subsequent appropriation
     act.

RECEIPT ACCOUNTS

     Accounts established for recording collections deposited into the
     Treasury for appropriation by the Congress. These accounts may be
     classified as general, special, or trust fund receipt accounts. (See        REIMBURSEMEl
     FEDERAL FUND ACCOUNTS and TRUST FUNDS.)
                                                                                     Sums recei
RECEIPTS   FROM OFF-BUDGET         FEDERAL   AGENCIES
                                                                                     furnished e
                                                                                     are authorh
     See OFFSETTING RECEIPTS                                                         and fund
                                                                                     obligations
RECONCILIATION        BILL                                                           outlays) for

     See RECONCILIATION         PROCESS                                          REPROGRAMMI

RECONCILIATION        PROCESS                                                        Utilization
                                                                                     than those
     A process used by the Congress to reconcile amounts determined by               is generally
     tax, spending, and debt legislation for a given fiscal year with the            agencies an,
     ceilings enacted in the second required concurrent resolution on the
     budget for that year. Section 310 of the Congressional Budget Act of        RESCISSION
     1974 provides that the second required concurrent resolution on the
     budget, which sets binding totals for the budget, may direct                    The conseq
     committees to determine and recommend changes to laws, bills, and               previously
     resolutions, as required to conform with the binding totals for budget          would othe
     authority, revenues, and the public debt. Such changes are incorporated         1012 of tl
     into either a reconciliation resolution or a reconciliation bill.               message frc
                                                                                     rescission c
     Reconciliation   Bill
                                                                                     whole or ir
           A bill, requiring enactment by both Houses of the Congress and
                                                                                     of Congress
           approval by the President, making changes to legislation that has
           been enacted or enrolled.
                                                                                 RESCISSION   811
     Reconciliation Resolution
           A concurrent resolution, requiring passage by both Houses of              A bill or jo
           Congress but not the approval of the President, directing the             part, of but
           Clerk of the House or the Secretary of the Senate to make                 Impoundmc
           specified changes in bills or resolutions that have not yet reached       rescission b
           the stage of enrollment.                                                  proposal, t
                                                                                     (See RESCI
RECONCILIATION        RESOLUTION
                                                                                 REVENUES
     See RECONCILIATION         PROCESS
                                                                                     A term cc
REFUND
                                                                                      BUDGET I

     The return of an advance or the recovery of an erroneous disbursement       REVOLVING      FI
     from an appropriation or fund account that is directly related to, and a
     reduction of, previously recorded outlays from the account. It is also          A fund est
     the return of excess collections deposited in receipt accounts that are         received b]
     treated as a reduction of receipts.                                             enterprise,
                                                                                     also FEDEl

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REIMBURSEMENTS

    Sums received by the Government for commodities sold or senxes
    furnished either to the public or to another Government account that
    are authorized by law to be credited directly to specific appropriation
    and fund accounts. These amounts are deducted from the total
    obligations incurred (and outlays) in determinmg net obligations (and
    outlays) for such accounts.

REPROGRAMMING

    Utilization of funds in an appropriation account for purposes other
    than those contemplated at the time of appropriation. Reprogramming
    is generally accomplished pursuant to consultation between the Federal
    agencies and the appropriate congressional committees.

RESCISSION

    The consequence of enacted legislation which cancels budget authority
    previously provided by Congress prior to the time when the authority
    would otherwise lapse (i.e., cease to be available for obligation). Section
    1012 of the Impoundment Control Act of 1974 requires a special
    message from the President to the Congress reporting any proposed
    rescission of budget authority. These proposals may be accepted in
    whole or in part through the passageof a rescission bill by both Houses
    of Congress.

RESCISSION   BILL

     A bill or joint resolution that provides for cancellation, in whole or in
     part, of budget authority previously granted by the Congress. Under the
     Impoundment Control Act of 1974, unless Congress approves a
     rescission bill within 45 days of continuous session after receipt of the
     proposal, the budget authority must be made available for obligation.
     (See RESCISSION.)

REVENUES

     A term commonly used interchangeably with budget receipts. (See
     BUDGET RECEIPTS.)

REVOLVING     FUND

     A fund established to finance a cycle of operations through amounts
     received by the fund. There are three types of revolving funds: public
     enterprise, intragovernmental revolving, and trust revolving funds. (See
     also FEDERAL FUND ACCOUNTS and TRUST FUNDS.)


                                                                            25
SCOREKEEPING                                                                     SPENDING   LEGISI

     A procedure used by the Congresstonal Budget Office for up-to-date              A term used
     tabulations and reports of congressional budget actions on bills and            provides bud)
     resolutions providing new budget authority and outlays and changing             tions leglslati~
     revenues and the public debt limit for a fiscal year. Such reports shall        without the
     include, but not be limited to, status reports on the effects of these          entitlement I
     congressional actions to date and of potential congressional actions, and       tions action,
     comparisons of these actions to targets and ceilings set by Congress in         authorization
     the budget resolutions. Periodic scorekeeping reports are required by           ments, when
     section 308(b) of the Congressional Budget Act of 1974.                         that funds ar

SPECIAL FOREIGN     CURRENCY      PROGRAM      APPROPRIATION                     SUCCESSOR AC0

     An appropriation made available to incur obligations for which                  See “M ” ACC
     payments must be made only in U.S.-owned foreign currencies that are
     declared in excess of the normal requirements of the United States by       SUPPLEMENTAL
     the Secretary of the Treasury. The appropriation is made in general
     fund dollar amounts which are credited to the account or fund                   An act apT
     generating the currency, or to miscellaneous receipts of the Treasury, as       appropriation
     appropriate. The appropriated dollars are thereby exchanged for excess          budget autht
     foreign currency (held in Treasury foreign currency fund accounts) that         (including n
     is used to make the necessary payments. (See also FOREIGN                       appropriation
     CURRENCY ACCOUNT.)                                                              postponed UI

SPECIAL FUND ACCOUNTS                                                            TAX EXPENDITL

     See FEDERAL FUND ACCOUNTS                                                       Losses of ta:
                                                                                     which allow
SPENDING AUTHORITY                                                                   income or H
                                                                                     deferral of 1;
     As defined by the Congressional Budget Act of 1974, a collective
     designation for borrowing authority, contract authority, and entitle-       TAX EXPENDIT
     ment authority, for which the budget authority is not provided in
     advance by appropriation acts. These are also commonly referred to as           An enumer:
     backdoor authority. (See BACKDOOR AUTHORITY.)                                   under existir
                                                                                     Budget Act
SPENDING COMMITTEES        (SPENDING     RESPONSIBILITY)                             be presentec

     The standing committees of the House and Senate with jurisdiction           TOTAL   OBLIGA’
     over legislation that permits the obligation of funds. For most
     programs, the Approptiations Committees are the spending committees.            The sum of
     For other programs, the authorizing legislation itself permits the              Congress in
     obligation of funds (backdoor authority), in which case the authorizing         specific fun
     committees are then the committees tith spending responsibility.                previous ye
                                                                                     term is user
                                                                                     but could bl


26
SPENDING LEGISLATION       (SPENDING     BILL)

    A term used in budget scorekeeping to indicate legislation that directly
    provides budget authority or outlays. The term includes (1) appropria-
    tions legislation, (2) legislation that provides budget authority directly
    without the need for subsequent appropriations action, and (3)
    entitlement legislation which, while requiring subsequent appropria-
    tions action, essentially “locks in” budget authority at the time of
    authorization (except legislation which establishes conditional entitle-
    ments, where recipients are entitled to payments only to the extent
    that funds are made available in subsequent appropriations legislation).

SUCCESSOR ACCOUNT

    See “M” ACCOUNT.

SUPPLEMENTAL     APPROPRIATION

     An act appropriating funds in addition to those in an annual
     appropriation act. Supplemental appropriations provide additional
     budget authority beyond original estimates for programs or activities
     (including new programs authorized ‘after the date of the original
     appropriation act) for which the need for funds is too urgent to be
     postponed until enactment of the next regular appropriation act.

TAX EXPENDITURES

     Losses of tax revenue attributable to provisions of the Federal tax laws
     which allow a special exclusion, exemption, or deduction from gross
     income or which provide a special credit, preferential rate of tax, or a
     deferral of tax liability.

TAX EXPENDITURES       BUDGET

     An enumeration of revenue losses resulting from “tax expenditures”
     under existing law for each fiscal year. Section 601 of the Congressional
     Budget Act of 1974 requires that estimated levels of tax expenditures
     be presented in the President’s budget.

TOTAL   OBLIGATIONAL      AUTHORITY       (TOA)

     The sum of (I) all budget authority granted (or requested) from the
     Congress in a given year, (2) amounts authorized to be credited to a
     specific fund, and (3) unobligated balances of budget authority from
     previous years which remain available for obligation. In practice, this
     term is used primarily in discussing the Department of Defense budget
     but could be applied to other agencies’budgets as well.


                                                                            27
TRANSFER     APPROPRIATION        ACCOUNT                                         UNIFIED   BUDGET
      A separate account established to receive and disburse allocatlons from          The present fo
      another appropriation or fund account to carry out the purposes of the           receipts and cn
      parent account or fund. The subsequent transactions of the transfer              dated. When I
      appropriation account are reported with the transactions of the parent           totals, transact
      account.                                                                         the other fund
                                                                                       double countir
TRANSITION     QUARTER     ITO)
                                                                                       included in th
      The )-month period (July 1 to September 30, 1976) between fiscal                 OFF-BUDGET
      year 1976 and fiscal year 1977 resulting from the change from a July 1
      through June 30 fiscal year to an October 1 through September 30            WARRANT
      fiscal year beginning with fiscal year 1977.
                                                                                       The official dc
                                                                                       Treasury that
TRUST FUNDS
                                                                                       withdrawn fro!
      Funds collected and used by the Federal Government for carrying out
      specific purposes and programs according to terms of a trust agree-         ZERO-BASE    BUDGI
      ment or statute, such as the social security and unemployment trust
                                                                                        A  budgeting
      funds. Trust funds are administered by the Government in a fiduciary
                                                                                        requests withc
      capacity and are not available for the general purposes of the
                                                                                        funding. Unde
      Government. Trust fund receipt accounts are credited with receipts                budgeted in a
      generated by the terms of the trust agreement or statute. Trust fund              on all propor
      receipts that are not anticipated to be used in the immediate future are          levels of 0~
      generally invested in interest-bearing Government securities and earn             activities are
      interest for the trust fund. Trust fund expenditure accounts record               performance i
      amounts appropriated from trust fund receipts to be expended in                   ranked in pric
      carrying out the specific purposes or programs under the trust                    at which each
       agreement or statute. A special category of trust funds called trust
       revolving funds is used to carry out a cycle of busmess-type operations,
      e.g., the Federal Deposit Insurance Corporation.

TRUST INTRAFUND        TRANSACTIONS

      See OFFSETTING RECEIPTS

TRUST REVOLVING        FUNDS

      See TRUST FUNDS and REVOLVING FUND

UNDISTRIBUTED       OFFSETTING      RECEIPTS

       See OFFSETTING RECEIPTS


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UNIFIED   BUDGET

     The present form of the budget of the Federal Government, in whtch
     receipts and outlays from Federal funds and trust funds are consoli-
     dated. When these fund groups are consolidated to display budget
     totals, transactions whtch are outlays of one fund group for payment to
     the other fund group (i.e., interfund transactions) are deducted to avoid
     double counting. Transactions of off-budget Federal entities are not
     included in the unified budget. (See OFFSETTING RECEIPTS and
     OFF-BUDGET FEDERAL ENTITIES.)

WARRANT

     The official document issued pursuant to law by the Secretary of the
     Treasury that establtshes the amount of money authorized to be
     withdrawn from the Treasury.

ZERO-BASE    BUDGETING

     A budgeting technique that generally attempts to analyze budget
     requests without an implicit commitment to sustaining past levels of
     funding. Under this system programs and activities are organized and
     budgeted in a detailed plan that focuses review, evaluation, and analysis
     on all proposed operations-rather than on increases above current
     levels of operations, as in incremental budgeting. Programs and
     activities are analyzed in terms of successively increasing levels of
     performance and funding, starting from zero, and then evaluated and
     ranked in priority order. The purpose is to determine the level, if any,
     at which each program or activity should be conducted.




                                                                            29
                                                                                           rankiig proc
                                                                                           package incr
                             ZERO-BASE BUDGETING                                           the benefits
                            TERMS AND DEFINITIONS                                          levels.

                                                                                       MINIMUM   LEVEI
          The Office of Management and Budget is prepating Govemment-
         wide guidelines for the development of zero-base budgeting for use                The progran
         in the fiscal year 1979 budget process. In this context, OMB has                  continue th
         prepared initial definitions for the following terms applicable to                contribution
         zero-base budgeting. These terms and defmitions have not been                     level:
         reviewed by GAO or coordinated by us with the agenciesresponsible
                                                                                            -may not I
         for the standard terminology and definitions for Fedeml fiscal,
                                                                                              perspective
          budgetary, and program-related data These terms and their initial
         definitions are therefore included for informational purposes only.                -may not r
          They will no doubt be revised several times as they are used in the                 unit.
          new zero-base budgeting process
                                                                                       CURRENT    LEVE

    DECISION    UNIT                                                                        The level tf
                                                                                            activities we
          The program or organizational entity for which budgets are prepared               major pohc:
          and for which a manager makes significant decisions on the amount of              nevertheless
          spending and the scope or quality of work to be performed.                        statutory at
                                                                                            other object
    DECISION    PACKAGE                                                                     Circular No.

j         A brief justification document that includes the information necessary
          for managers to make judgments on program or activity levels and
          resource requirements. A series of decision packages (a decision package
          set) is prepared for each decision unit and cumulatively represents the
I         total budget request for that unit.

I   CONSOLIDATED        DECISION   PACKAGES
I         Packages prepared at higher management levels that summarize and
          supplement information contained in decision packages received from
i         lower level units. Consolidated packages may reflect different priorities,
          including the addition of new programs or the abolition of existing
          ones.

    RANKING

           The process by which managers array program or activity levels (as
I          shown in decision packages) in decreasing order of priority. This



    30
                                                     BESTDOCUMENT
                                                               AVAILABLE
    ranking process identities the relative priority assigned to each decision
    package increment contained in the manager’s budget request, based on
    the benefits to be gamed at and the consequences of various spending
    levels.

MINIMUM   LEVEL

    The program, activity, or funding level below which it is not feasible to
    continue the program, activity, or entity because no constructive
    contribution can be made toward fulfilling its objective. The minimum
    level:
     -may not be a fully acceptable level from the program manager’s
       perspective; and
     -may not completely achieve the desired objectives of the decision
       unit.

CURRENT   LEVEL

    The level that would be reflected in the budget if Rscal year 1978
    activities were carried on at 1978 service or other output levels without
    major policy changes. A concept, not unlike current services, that
    nevertheless permits internal realignments of activities within existing
    statutory authorization. Estimates of personnel compensation and
    other objects of expenditure wiU be made in accordance with OMB
    Circular No. A-l 1.




                                                                           31
                                                                                CAPITAL
                                                                                    The designat
                  ECONOMIC TERMS AND DEFINITIONS                                    major factor!
                                                                                    can refer eitf
                                                                                    the financial
     This section contailrs economic terms and definitions that are used
     in connection with the budget, especially in discussions of the            CONSTANT DOLl
     economic assumptions underlying the budiet proposals and esti-
     mates These terms are not formally or directly in the budget, fiscal,          A dollar valu
     and program decision process; therefore, we are not suggesting that            derived by d
     they be considered stanakd definitions If we find that a term                  by appropria
     comes into regukr use in the budget, congressional budget resolu-              The result is
     tions, appropriation& or authorizations, we will recommend a                   same througt
     standmd definition.                                                            constant pur
                                                                                    only changer
                                                                                    figures are
ABILITY TO PAY                                                                      components.
      The principle that the tax burden should LX distributed according to a
      person’s income. It is based on the assumption that as a person’s         CONSUMER PRIG
      income increases, the person can and should contribute a larger
                                                                                     A statistical
      percentage of his income to support the Government. The progressive
                                                                                     services pun
      Federal income tax is an example of a tax based on this principle.
                                                                                     day-to-day I
                                                                                     about 400 “
A~TOMATICSTABILIZER           (BUILT-IN STABILIZER)
                                                                                     the same got
      A mechanism having a countercyclical effect that automatically                 Although th
      moderates changes in incomes and output in the economy without                 index, ” it ml
      specific decisions to change Government policy. Unemployment in-               important fi
      surance and the progressive income tax are among the most important            monthly bas
      of the automatic stabilizers in the United States.
                                                                                COUNTERCYCLI’
BALANCE OF PAYMENTS
                                                                                     Actions aims
      A statistical record of economic transactions between one country (the         cyclical actic
      United States) and the rest of the world. The balance of payments              as more dire
      accounts normally distinguish among transactions involving goods,              programs. A
      services, short-term capital, and long-term capital.                           without net
                                                                                     MATIC STA
BUSINESS CYCLES
                                                                                CROWDING OUT
      The recurrent phases of expansion and contraction in overall business
      activity, evidenced by fluctuations in measures of aggregate economic          Refers to tl
      activity, such as gross natimml product. Although business cycles are          competes in
      recurrent, both the duration and the magnitude of the individual cycles        required to
      vary greatly.                                                                  could raise i


32
.




        CAPITAL

             The designation applied in classical economic theory to one of the
             major factors of production, the others being land and labor. Capital
             can refer either to physical capital, such as plant and equipment, or to
             the financial capital resources required to purchase physical capital.

        CONSTANT    DOLLAR

             A dollar value adjusted for changes in prices. Constant dollar series are
             derived by dividing current dollar (see CURRENT DOLLAR) estimates
             by appropriate price indexes, a process generally known as deflating.
             The result is a series as it would presumably exist if prices were the
             same throughout as in the base year-in other words, as if the dollar had
             constant purchasing power. Any changes in such a series would reflect
             only changes in the real (physical) volume of output. Constant dollar
             figures are commonly used for gross national product and its
             components.

        CONSUMER     PRICE INDEX     (CPI)

             A statistical measure of the average change in prices of goods and
             services purchased by urban wage earners and clerical workers for
             day-to-day living. The index compares the price (including taxes) of
             about 400 “market basket” items at current levels with the price for
             the same goods and services expressed in terms of a selected base year.
             Although the consumer price index is often called the “cost-of-living
             index,” it measures only price changes, which is just one of the several
             important factors affecting living costs, The index is published on a
             monthly basis by the Bureau of Labor Statistics.

        COUNTERCYCLICAL

              Actions aimed at smoothing out swings In economic activity. Counter-
              cyclical action may take the form of monetary and fiscal policy, as well
              as more direct policies, such as countercyclical revenue sharing or jobs
              programs. Automatic (built-in) stabilizers have a countercyclical effect
              without necessitating changes in governmental policy. (See AUTO-
    .         MATIC STABILIZERS, STABILIZATION.)

        CROWDING     OUT

              Refers to the shortage of credit for business mvestment as business
              competes in the credit market against sales of Government securities
              required to fiance budgetary needs. If money were tight, such sales
              could raise interest rates sufficiently to “crowd out” private borrowing.


                                                                                    33
Y,-,-_.-                 -.-.-.    -.   -,.   _..,   -_.         _..              -   -.




                                                                                                                                                DISPOSABLE    PEP
CURRENT          DOLLAR
                                                                                                                                                    Personal inc
           The dollar value of a good or service in terms of prices current at the                                                                  Government.
           time the good or service was sold. This is opposed to the value of the                                                                   saving.
           good or service in constant dollars. (See CONSTA!!T DOLLAR.)
                                                                                                                                                ECONOMETRICS
DEBT MANAGEMENT
                                                                                                                                                     A subdiscipl
           Operations of the U.S. Treasury Department that determine the                                                                             techniques it
           composition of the Federal debt. Debt management consists primarily                                                                       theories. Ecc
           of manipulating the level of interest rates, the pattern of ownership of                                                                  economic vz
           debt, and the maturity structure of debt.                                                                                                 forecast fut
                                                                                                                                                     economic po
DEFICIT        FINANCING
                                                                                                                                                ECONOMIC     GAO\
           A situation in which the Government’s excess of expenditures over
           revenue for a given period of time is financed primarily by borrowing                                                                     An increase
           from the public.                                                                                                                          in the prod1
                                                                                                                                                     measured by
DEFLATION                                                                                                                                            national prot
           A decrease in the general price level usually accompanied by declining
                                                                                                                                                ECONOMIC     INDIt
           levels of output, increasing unemployment, and a contraction of the
           sup.ply of money and credit. A significant general price decline during                                                                   A set of stat
           the contraction phase of the business cycle no longer occurs in                                                                           business cyc
           advanced economies because of institutional barriers to downward                                                                          lagging, depe
           adjustments in wages and prices. Declines in output with increases in                                                                     of, coincide1
           unemployment, however, are sometimes themselves referred to as                                                                            Although no
           deflationary changes.                                                                                                                     predictor of
                                                                                                                                                     for identifyir
DEVALUATION

           The lowering of the value of a nation’s currency in relation to gold or                                                              ECONOMIC     MOD
           to the currency of other countries, when this value is set by government                                                                  A simplified
           intervention in the exchange market. It is normally used with reference                                                                   A model ca
           to futed exchange rates.                                                                                                                  mathematics
DISCOUNT          RATE                                                                                                                          EMPLOYMENT
           The interest rate that a commercial bank pays when it borrows from a                                                                      All persons
           Federal Reserve bank. The discount rate is one of the tools of monetary                                                                   taken, did a
           policy used by the Federal Reserve. The Federal Reserve customarily                                                                       more withot
           raises or lowers the discount rate to signal a shift toward restraining or                                                                the family.
           easing its money and credit policy. (See MONETARY POUCY.)
                                                                                                                                                     work but h
                                                                                                                                                     absent durin


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                                                           ---         _I^..__.            -..   .   .   .   .   .   .   .   .   .   .._.   .
I’




     DISPOSABLE    PERSONAL     INCOME

         Persona) income less personal taxes and nontax payments to the
         Government. It is the income available to persons for spending or
         saving.

     ECONOMETRICS

         A subdiscipline of economics that uses mathematical and statistical
         techniques in estimating economic relationships and testing economic
         theories. Econometric models attempt to measure the impact of one
         economic variable on another in order to explain past events, to
         forecast future events, or to evaluate the results of a particular
         economic policy.

     ECONOMIC GROWTH
          An increase in a nation’s productive capacity coupled with an increase
          in the production of goods and services. Economic growth usually is
          measured by the annual rate of increase in real (constant dollars) gross
          national product.

     ECONOMIC     INDICATORS

          A set of statistical series that have had a systematic relationship to the
          business cycle. Each indicator is classified as leading, coincident, or
          lagging, depending on whether it generally changesdirection in advance
          of, coincident with, or subsequent to changesin the overall economy.
          Although no one indicator or set of indicators is a wholly satisfactory
          predictor of the businesscycle, taken as a whole they are valuable tools
          for identifying and analyzing businesscycle movements.

     ECONOMIC     MODEL

          A simplified representation of relationships among economic variables.
          A model can be presented verbally, diagramaticafly, or as a set of
          mathematical equations.

     EMPLOYMENT

          All persons who, during the week when the employment survey was
          taken, did any work for pay or profit, or who worked for 15 hours or
          more without pay on a farm or in a businessoperated by a member of
          the family. Also included are persons who did not work or look for
          work but had a job or business from which they were temporarily
          absent during the week.



                                                                                 35
                                            ,_-       _-       .,..-




GROSS NATIONAL       PRODUCT     (GNP)                                             MACROECONOM

     The market value of all goods and services produced by labor, caprtal,            The branch
     and property supplied by residents of the United States in a given                analysis as
     period of time. Depreciation charges and other allowances for business            markets, or
     and institutional consumption of fvted capital goods are subtracted               study of the
     from GNP to get net national product. GNP comprises the purchases of              employment
     goods and services by persons and Government, gross private domestic              income and (
     investment (including the change in business inventories), and net
     exports (exports less imports) The GNP can be expressed in current or         MICRDECONOMI
     constant dollars.
                                                                                       The branch
GNP GAP
                                                                                       economic t
                                                                                       (macroeconr
     The difference between the economy’s output of goods and services                 output am0
     and its potential output at full employment, i.e., the difference                 resources ar
     between actual GNP and the potential GNP.                                         prices of par

IMPLICIT    PRICE DEFLATOR      (GNP DEFLATOR)                                     MONETARY     PO1

     A price index for all goods and services produced in the economy,                  Policies affi
     derived by calculating the ratio of the gross national product in current          ability, that
     prices to the gross national product in constant prices. It is a weighted          employmen
     average of the price indexes used to deflate the components of current             policy is pt
     dollar GNP, the implicit weights being expenditures in the current                 Reserve Sy
     period.                                                                            policy worl
                                                                                        This is acco
INFLATION                                                                               sale of secu
                                                                                        of reserves
     A persistent rise in the general price level which results rn a decline in         and change!
     the purchasing power of money.
                                                                                    MONEY   SUPPLI
LABOR      FORCE
                                                                                        The amoun
     Those persons who are employed plus those who are seeking work but                 of current:
     are unemployed. The total labor force includes members of the armed                accounts).
     forces stationed either in the United States or abroad (these are                  defined mc
     excluded from the civilian labor force).                                           savings de1
                                                                                        Ma include
LIDUIDITY
                                                                                    NATIONAL    INC
      The ease with which an asset can be converted to cash at prevailing
      prices. Demand deposits (checking accounts) are more hquid than time               Accounts ,
      (savings) deposits, but both are more liquid than real estate or plant and         the Depart
      equipment.                                                                         tion of th
                                                                                         terms the
                                                                                         distributio

                                             BESTDOCUMENTAVABABLE
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                                              ..---        -
MACROECONOMICS

    The branch of economics that 1s concerned wrth aggregate economic
    analysis as opposed to the analysis of individual economic units,
    markets, or industries (microeconomics). For example, it includes the
    study of the general price level, national output or income, and total
    employment, rather than the prices of individual commodities or
    income and employment of individual firms.

MICROECONOMICS

    The branch of economics concerned with analysis of individual
    economic units, markets, or industries as opposed to aggregates
    (macroeconomics). For example, it deals with the division of total
    output among industries, products, and firms; with the allocation of
    resources among competing uses; and with the determination of relative
    prices of particular goods.

MONETARY    POLICY

    Policies affecting the money supply, interest rates, and credit avail-
    ability, that are intended to promote national economic goals such as
    employment, economic growth, and price level stability. Monetary
    policy is primarily directed by the Board of Governors of the Federal
    Reserve System and the Federal Open Market Committee. Monetary
    policy works by influencing the cost and availability of bank reserves.
    This is accomplished through open-market operations (the purchase and
    sale of securities, primarily Government securities), changes in the ratio
    of reserves to deposits that commercial banks are required to maintain,
    and changes in the discount rate.

MONEY   SUPPLY

    The amount of money in the economy, variously defmed. Mr consists
    of currency (coin and paper money) plus demand deposits (checking
    accounts). Mr is also known as the “money stock” or “the narrowly
    defined money supply.” Ma is M, plus commercral bank time and
    savings deposits other than large certificates of deposits (CDs), while
    Ma includes large CDs as well.

NATIONAL   INCOME ACCOUNTS

    Accounts prepared and published on a quarterly and annual basis by
    the Department of Commerce, providing a detailed statistical descrip-
    tion of the United States economy. These accounts depict in dollar
    terms the composition and use of the Nation’s output and the
    distribution of national income to different recipients. The accounts

                                                                          37
                                                                                          of persons, r
         make it possible to trace long-term trends and current fluctuations in           less personal
         economic activity. The data that measure the Nation’s total output are
         estimated in two principal ways:                                             POTENTIAL    GRC
         -The value of the goods and services produced by the economy-                     An estimate
           referred to as the product side of the account. Thrs IS divided mto             utilization c
           the major uses for the output of the economy. consumer purchases,               utilization h
           business mvestment, exports, and Government purchases.                          about 4 pert
         -The costs Incurred and types of mcome earned in producmg those
           goods and services-referred to as the mcome side. This presents
                                                                                      PRIME RATE
           wages and salaries, profits, and other forms of income, tndirect
           taxes, and capital consumption allowances generated m the produc-               The rate of
           tion process.                                                                   to their mos
         Because the national income accounts offer a consistent picture of the
         economy, these accounts are basic tools used in analyzing past and           RECESSION
         current performance of the economy and also in forecasting future                 A decline ti
         economic developments. Furthermore, this quantitative framework                    of at least
         makes these accounts of great importance in the formulation of                     identified
         national economic policies.                                                        Economic I
                                                                                            consecutive
    NET NATIONAL     PRODUCT     (NNP)

         The net market value of the goods and services produced by labor and          RESERVE    REQL
         property supplied by residents of the United States. Net national
                                                                                            The percen
         product equals gross national product less capital consumption allow-
                                                                                            required to
         ances, which are estimates of the value of the capital goods “used up”
                                                                                            their vaults
         in producing the gross national product.
                                                                                            policy. The
                                                                                            of the bank
    OPEN-MARKET     OPERATIONS
                                                                                            of reserves
         The purchase and sale of various securities, chiefly marketable
         Government securities, by the Federal Reserve System in the open              STABI LI ZATIOI
         market for the purpose of implementing Federal Reserve monetary
                                                                                             The maintl
         policy. Open-market operations, one of the most flexible instruments
                                                                                             severe cycl
         of monetary policy, affects member bank reserves and thus the
                                                                                             of fluctuat
         availability and cost of credit.
                                                                                             economic i
    PERSONAL    INCOME
                                                                                        STAGFLATION
         The income received by persons (i.e., individuals, nonprofit institutions,          The simull
         private noninsured welfare funds, and private trust funds) from all
         sources. These sources include production; transfer payments from
         Government and business; and Government interest, which is treated
         like a transfer payment. Personal income is the sum of wage and salary
         disbursements, other labor income, proprietors’ income, rental income


I
,   38
                                                                                         ...




                                                                                   --.




     of persons, dividends, personal interest income, and transfer payments,
     less personal contributions for social insurance

POTENTIAL     GROSS NATIONAL       PRODUCT

     An estimate of how much the economy could produce with full
     utilization of its productive resources and existing technology. Full
     utilization has conventionally been defmed as an unemployment rate of
     about 4 percent.

PRIME RATE

     The rate of interest charged by commercial banks for short-term loans
     to their most creditworthy customers.

RECESSION

     A decline in overall business activity which is pervasive, substantial, and
     of at least several months duration. Historically, recessions have been
     identified by a private research groupthe           National Bureau of
     Economic Research-as a decline. in real gross national product for two
     consecutive quarters.

RESERVE     REOUIREMENTS

     The percentage of deposit liabilities that U.S. commercial banks are
     required to hold as a reserve at their Federal Reserve bank or as cash in
     their vaults. The reserve requirement is one of the tools of monetary
     policy. The Federal Reserve authorities can control the lending capa&y
     of the banks, and thus influence the money supply, by varying the ratio
     of reserves to deposits that commercial banks are required to maintain.

STABI Ll ZATION

     The maintenance of high-level economic activity with an absence of
     severe cyclical fluctuations. Stability is usually measured by an absence
     of fluctuations in production, employment, and prices, three aspects of
     economic activity that tend to fluctuate in a cyclical fashion.

STAGFLATION

     The simultaneous existence of high unemployment and high inflation.




                                                                             39
SlJBSIOY                                                                                                    WAGES AND SAI

     Generally, a payment by rhe (;overnmenr or another benerlt for Yhrch                                       Monetary rer
     no current service is rendered and which IS desrgned to support the                                        corporate off
     conduct of an economic enterprise or activity, such as shop operating                                      represent in0
     subsidies. It may also refer to provisions of the tax system that provide
     certain tax benefits (see TAX EXPENDITURES in the sectrun on terms                                     WHOLESALE    PRl’
     used in the budget process) and to the public provisions of loans, goods,
     services, etc., at lower prices than the recipients would have to pay in                                   A measure I
     the market, such as interest subsidy.                                                                      designed to
                                                                                                                volume at th
                                                                                                                the Bureau t
TRANSFER    PAYMENTS
                                                                                                                2,700 comm
     Government or business payments to individuals or organnations for                                         fmished appa
     which no current or future goods or services are required to be provided
     in return. Government transfer payments include social security
     benefits, unemployment insurance benefits, Government retirement
     and veterans benefits, and welfare payments. Business transfer pay-
     ments include corporate gifts to nonprofit institutions and bad debts
     incurred by customers.

TREASURY     BILLS

     The shortest term Federal security issued by the U.S. Government.
     Treasury bills have maturity dates varying from 3 to 12 months and are
     sold at a discount from face value rather than carrying an explicit rate
     of interest.

UNEMPLOYMENT

     Persons who, during a specified week, had no employment but were
     available for work and had sought employment within the past 4 weeks,
     were laid off from a Job, or were waiting to report to a new Job within
     30 days.

UNEMPLOYMENT         RATE

      The number of unemployed persons expressed as a percentage of the
      civilian labor force.

UNEMPLOYMENT         RATE, INSURED

      The number of insured unemployed as a percentage of covered
      employment, i.e.. those persons who are eligible to receive unemploy-
      ment compensation benefits.




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WAGES AND SALARIES

    Monetary remuneratron of employees, includmg rhe compensation of
    corporate officers, commissions, tips. bonuses, and recetpts in kind that
    represent income to the receipients.

WHOLESALE    PRICE INDEX

    A measure of producer prices in the United States. The index is
    designed to show changes in prices of commodnies sold in substantial
    volume at the primary market level. The index is compiled monthly by
    the Bureau of Labor Statistics and includes a representative group of
    2,700 commodities, ranging from crude rubber, cotton, and iron ore to
    finished apparel, tires, and machinery.




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