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1 Uncontrollable Federal Budget Outlays 1 (1976)

handle is hein.tera/utrolletay0001 and id is 1 raw text is: Uncontrollable Federal Budget Outlays This is a summary of a 36-pago study by the above title prepared by Tax Founda- tion. The study (Research Publication No. 32) is available at a price of $1.50 per copy (member's price, $1.00 per copy) from the Foundation's office, 50 Rockefeller Plaza, New York, N.Y. 10020. Almost three-fourths ($261 billion) of the expenditures projected in the origi- nal Federal budget for the year ending June 30, 1976 were classified by budget officials as relatively uncontrollable - i.e., not subject to annual control by either Congress or the Executive Branch. The budget has become not so much a financial plan, but a forecast of the consequences of program decisions made in earlier years. To a substantial degree the enormous growth in uncon- trollable spending also impedes the. budget adoption (Congress) and execu- tion (Executive Branch) processes. It has other implications as well. Congress and/or the Executive may be limited in the consideration of future program initiatives - though there are those who would surely suggest this has not proved to be a restraint in the 1960's or 1970's. More importantly, fiscal policy flexibility is restricted, with the major burden falling on the revenue side. In periods when expenditure restraint may be con- sidered desirable, the burden must fall on that one-fourth of the outlay total which is controllable. This controllability problem is by no means a recent phenomenon. How- ever, the growth in so-called uncon- trollable outlays has accelerated dra- matically in recent years, to the point where such spending has been rising at a faster rate than Federal receipts, and more rapidly than the rate of growth of the whole economy. As shown in Table 1, the proportion of total outlays classified as relatively uncontrollable has increased dramatic- ally over the past decade, from 59 per- cent in 1967 to 721/2 percent in 1974, and to an estimated 75 percent in 1976. What Are Relatively Uncontrollable Outlays? In the context of the budget the term relatively uncontrollable is applied to those budget outlays over which neither the Executive nor Congress can exercise effective control during the year ahead under existing law. The word relatively is used because there is a certain degree of latitude in the budget classification. In some pro- grams classified as uncontrollable, a portion of the outlays (such as adminis- 1

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