{
  "id": "R44530",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R44530",
  "active": true,
  "source": "EveryCRSReport.com",
  "versions": [
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      "source": "EveryCRSReport.com",
      "id": 601667,
      "date": "2019-07-09",
      "retrieved": "2019-07-09T22:06:28.357914",
      "title": "Spending and Tax Expenditures: Distinctions and Major Programs",
      "summary": "Spending programs and tax expenditures are the two primary ways that the federal government provides benefits to the public. Each type of intervention represents a transfer from the government to individuals and firms, though differences in the budget process, saliency, and targeting may have ramifications for usage across different types of services. \nFederal expenditures (spending) are transfers from the federal government to individuals, firms, or institutions that do not draw directly from individual or corporate tax liability. Federal spending programs fall into three broad categories: (1) discretionary spending, (2) mandatory spending, and (3) net interest payments. The Congressional Budget Office (CBO) estimates that federal resources devoted to spending programs will total $4.407 trillion in FY2019, or 20.7% of annual gross domestic product (GDP).\nTax expenditures are revenue losses attributable to federal tax provisions. There are three main types of tax expenditures: (1) exclusions, exemptions, and deductions from gross personal or corporate income; (2) preferential tax rates for certain programs; and (3) refundable and nonrefundable tax credits. The Joint Committee on Taxation (JCT) estimates the revenue losses attributable to certain programs. As of October 2018, projected revenue losses due to tax expenditures in FY2017 summed to $1.485 trillion, or 7.0% of GDP.\nHolding other activities constant, an increase in spending programs or tax expenditures each increases net budget deficits. The characteristics and composition of spending and tax expenditures may have distinct implications for the way each is used across major sectors of the federal budget. Federal spending programs may more efficiently target groups that are unlikely to file federal tax returns, like low-income and elderly households. Tax expenditures may be more likely than spending programs to utilize targeting and enforcement services already undertaken by the federal government.\nDiscretionary spending and, in some cases, expiring tax expenditures typically involve more frequent legislative action than mandatory spending and permanent tax expenditure programs. Discretionary spending programs also provide increased budget certainty to Congress through the use of budget authority, while mandatory spending and tax expenditure resources depend on the participation and benefit choices of program recipients. \nThis report identifies the largest spending and tax expenditures across eight major categories of federal activity: (1) defense and international affairs; (2) general science, space and technology, natural resources and the environment, and agriculture; (3) commerce and housing, community and regional development, and transportation; (4) education, training, employment, and social services; (5) health, including Medicare; (6) income security; (7) Social Security and veterans\u2019 benefits; and (8) administration of justice and general governance.",
      "type": "CRS Report",
      "typeId": "REPORTS",
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      "topics": [
        {
          "source": "IBCList",
          "id": 4892,
          "name": "Fiscal Policy & the Budget"
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    },
    {
      "source": "EveryCRSReport.com",
      "id": 453507,
      "date": "2016-06-17",
      "retrieved": "2016-11-28T22:02:55.468406",
      "title": "Spending and Tax Expenditures: Distinctions and Major Programs",
      "summary": "Spending programs and tax expenditures are the two primary ways that the federal government provides benefits to the public. Though each type of intervention represents a transfer from the government to individuals and firms, differences in the budget process, saliency, and targeting may have ramifications for usage across different types of services. This report briefly describes spending programs and tax expenditures, observes a few ways that they differ, and discusses how those distinctions may inform the relative use of each policy across the government portfolio.\nFederal expenditures (spending) are transfers from the federal government to individuals, firms, or institutions that do not draw directly from individual or corporate tax liability. Federal spending programs fall into three broad categories: (1) discretionary spending, (2) mandatory spending, and (3) net interest payments. The Congressional Budget Office (CBO) estimates that federal resources devoted to spending programs will total $3.897 trillion in FY2016, or 21.1% of annual gross domestic product (GDP).\nTax expenditures are revenue losses attributable to federal tax provisions. There are three main types of tax expenditures: (1) exclusions, exemptions, and deductions from gross personal or corporate income; (2) preferential tax rates for certain programs; and (3) refundable and nonrefundable tax credits. The Joint Committee on Taxation (JCT) estimates the revenue losses attributable to certain programs. As of December 2015, projected revenue losses due to tax expenditures in FY2016 summed to $1.521 trillion, or 8.2% of GDP.\nHolding other activities constant, an increase in spending programs or tax expenditures will increase net budget deficits. However, differences in the characteristics and composition of spending and tax expenditures may have implications for the way each is used across major sectors of the federal budget. Federal spending programs may be better able to target groups that are unlikely to file federal tax returns, like low-income and elderly households. Tax expenditures may be more likely than spending programs to utilize targeting and enforcement services already undertaken by the federal government.\nOther differences important to federal usage occur within certain types of federal spending and tax expenditures. Discretionary spending and, in some cases, expiring tax expenditures typically involve more frequent legislative action than mandatory spending and permanent tax expenditure programs. Discretionary spending programs also provide increased budget certainty to Congress through the use of budget authority, while mandatory spending and tax expenditure resources depend on the participation and benefit choices of program recipients. \nThis report identifies the largest spending and tax expenditures across eight major categories of federal activity: (1) defense and international affairs; (2) general science, space and technology, natural resources and the environment, and agriculture; (3) commerce and housing, community and regional development, and transportation; (4) education, training, employment, and social services; (5) health, including Medicare; (6) income security; (7) Social Security and veterans\u2019 benefits; and (8) administration of justice and general governance.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": true,
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  ],
  "topics": [
    "Domestic Social Policy",
    "Economic Policy",
    "Foreign Affairs",
    "Legislative Process"
  ]
}