FEDERAL FUNDS AND TRUST FUNDS Mr. CARDWELL. As you know the budget is made up of a combination of Federal funds and trust funds. Federal funds consist primarily of direct appropriations. Mr. FLOOD. How do you use the term Federal funds vis-a-vis trust funds? Mr. CARDWELL. Federal funds are funds collected and used by the Federal Government, as owner. The major federally owned fund is the general fund, which is derived from general taxes and borrowing. Trust funds in this case represent the funds collected and used by the Federal Government, as trustee, for specified purposes, such as those administered by the Social Security Administration for old age and survivors and disability insurance and medicare. The appropriated portion of the budget would be $28.7 billion in 1973 compared to $27.4 billion in 1972 and $22 billion in 1971. Mr. FLOOD. What was that figure 10 years ago? Mr. CARDWELL. The Department's 1963 budget was $20 billion of which $5 billion was appropriated Federal funds. FEDERAL FUND OUTLAYS The other figure that is interesting I think with regard to Federal funds, is outlays-the cash that will go out of the Treasury against appropriations in 1973. It shows an increase of only $300 million from $26.1 billion to $26.4 billion, but I ought to tell you at the outset that that is quite a misleading figure. Mr. FLOOD. What is an outlay? Mr. CARDWELL. Outlays represent cash paid out of the Treasury against commitments made in current or prior years by HEW against authorities approved by the Congress. The item that distorts the picture involves the proposal in this year's budget to offer States in the last month of the current fiscal year (1972) cash advances equal to July's estimated public assistance requirements including medicaid. This would add up to about $1 billion. This would in effect add $1 billion to the 1972 figure and consequently lower the 1973 figure by $1 billion. The net difference turns out to be $2 billion. If it were not for that particular advance there would be a net increase in outlays of $2.3 billion rather than the $0.3 billion shown. We might talk about that item later. We had a meeting with the Ways and Means Committee staff Friday. They were very interested in the item-how it affected the budget and how it might affect the States. HEW BUDGET COMPARED WITH DEFENSE BUDGET There has been much said already this year about the fact that the HEW budget has this year grown beyond the level that is proposed for the Defense Department in both budget authority and outlays. HEW in terms of total budget authority would be $86.8 billion. The Defense Department comparable figure is $83.5 billion. In terms of outlays, the HEW budget would be $78.9 billion, and the Defense Department would be $77.7. The Defense Department budget increased about $6.5 billion and the HEW budget again in terms of budget authority increases $10.4 billion. Mr. FLOOD. That has particular significance to me. As you know I sit on the Subcommittee of the Appropriations Committee for the Defense Department, I have since the subcommittee was created. And sitting along side of me for the same number of years, until he became Secretary of Defense, was the gentleman from the great State of Wisconsin, Mel Laird. Mr. CARDWELL. I will be interested to see how he describes it this year. Mr. FLOOD. I might add Jerry Ford, the distinguished gentleman from Michigan and the minority leader of the House, also sat with Mr. Laird and me on Defense. Mr. CARDWELL. HEW's share of the total budget will have gone from 30.4 percent in 1972 to 32.1 percent in 1973. Defense will have gone from 32.4 percent in 1972 to 31.6 percent in 1973. So they are beginning to pass each other as ships in the night. Mr. FLOOD. I never thought I would live that long. BUDGET BY OPERATING AGENCIES Mr. CARDWELL. We might next take a quick look at the HEW budget by operating agency and from here on out until we get to the Social Security Administration I think it is best to talk in terms of budget authority. Mr. FLOOD. What do you mean by budget authority? It would be the amount approved by the Congress? Mr. CARDWELL. Budget authority is really the term that describes the action taken by the Congress to give the executive branch authority to incur obligations. Essentially it is appropriations but there are other forms. Largely for HEW it represents appropriations except in the case of Social Security Administration where budget authority is a function of the revenues collected from taxes by SSA. Mr. FLOOD. A good definition. FOOD AND DRUG ADMINISTRATION Mr. CARDWELL. The Food and Drug Administration will as you see go up considerably in 1973. This is the largest increase in the history of the Food and Drug Administration. While it is now heard by Chairman Whitten's Subcommittee on Agriculture-Environmental and Consumer Protection, we have included it in the presentation to give you some background, part of our perspective. Looking at the three health agencies together, the 1972 budget is $4,579 million, the 1973 budget is $4,591 million, a net increase of $12 million. But as you will see as we go through the health budget, that is made up of a lot of very large increases and some fairly large decreases. So there is a lot of activity in the health portion of the budget even though it doesn't show up in the small net difference. Education goes up $276 million to $6,144 million. I think the thing to point out though is the 1973 total of $86.8 billion for HEW as a whole, and the $76.5 billion Mr. FLOOD. What did you say? TWO-YEAR GROWTH IN HEW BUDGET Mr. CARDWELL. For HEW in its entirety for 1973 it is $86.8 billion. In 1972 it is $76.5 billion but just two budgets ago in 1971, which doesn't show on the chart, it was $66 billion. So that the growth is $20.6 billion over the 1971 budget which I think is remarkable. Mr. FLOOD. That is a careful understatement. |