Outlook for Federal Fiscal Policy

Nancy H. Teeters

NHT

Nancy H. Teeters The Brookings Institution

THE 1972 BUDGET on the national income accounts basis (NIA) was
programmed in January 1972 to have a full employment deficit of $4.3 billion.
Instead, the fiscal year ended with a $4.9 billion full employment surplus.
The $9.2 billion shift from deficit to surplus occurred largely as a
result of two developments: (1) the unexpected increase in withheld individual
income taxes that resulted from the change in the withholding
schedules, and (2) the delay in the enactment of general revenue sharing.