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BPEA Article

The 1973 Federal Budget

Abstract

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 respectively.
Even so, the pattern of the annual increases in expenditures is almost
opposite to that of receipts. Whereas full employment expenditures are estimate-
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 billion.
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. 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 respectively. Even so, the pattern of the annual increases in expenditures is almost opposite to that of receipts. Whereas full employment expenditures are estimated 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 billion. 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.

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