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The 1973 Federal Budget

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The 1973 Federal Budget NANCY H. TEETERS Brookings Institution The 1973 Federal Budget THE 1973 BUDGET sent to Congress in January proposed unified federal expenditures of $246.3 billion, an increase over fiscal 1971 of nearly $35 billion. Receipts are expected to total $220.8 billion, an increase over fiscal 1971 of somewhat more than $32 billion. The estimated expenditures and receipts have both been affected by the slower than anticipated recovery from the recession. The budget document provides additional information for the analysis of fiscal policy on a full employment basis. For the first time, estimates of full employment expenditures were presented in the official documents, while this was the second time that estimates of full employment receipts appeared.' The increases in expenditures and receipts between fiscal 1971 and 1973, when calculated on the full employment basis, are approximately the same-$35 billion and $31 billion respec- tively. Even so, the pattern of the annual increases in expenditures is almost opposite to that of receipts. Whereas full employment expenditures are esti- mate-d to rise by $24 billion in fiscal 1972 and then by a more modest $11 billion in fiscal 1973, receipts rise first by $11 billion and then by $20 bil- lion. The result, as can be seen in Table 1, is a planned shift from a full employment surplus of $4.9 billion in 1971 to a deficit of $8.1 billion in fiscal 1972, and then essentially to balance in 1973. 1. Budget outlays were adjusted only for unemployment insurance benefits and ex- penditures under the Emergency Employment Act. The possibility that some other ex- penditures might be lower and some (notably interest) higher was recognized, though they were not estimated. 221 222 Brookings Papers on Economic Activity, 1:1972 Table 1. Full Employment Receipts and Expenditures, Unified Budget, Fiscal Years 1971-73 Billions of dollars Budget item 1971 1972 1973 Full employment receipts 214.1 225.0 245.0

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