BPEA | 1972 No. 2

Outlook for Federal Fiscal Policy

Nancy H. Teeters
Nancy H. Teeters The Brookings Institution

1972, No. 2

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.