C S^./'^-.StA -/^P-5 
 
 GOVERNMENT 
 TRANSACTIONS 
 
 e, Gross National Product in Current and Constant Dollars 
 
 (iross national product.. 
 
 I,^ Personal consumption expenditures. 
 
 Durable goods 
 
 < Nondurable goods.. 
 V Services 
 
 Gross private domestic investment. 
 
 1983 
 
 3.304.8 
 
 2.155.9 
 
 279.8 
 801.' 
 
 3.66 
 2 t-. 
 
 
 
 Fixed investment ,, .^ ,^ t, .(, ., 
 
 Nonresidential ^ 'V , %5!''' '% *'a/ ' . ' ■ 
 
 <f Structures '*/•„ '«x ^a., «/>* **'• ' ' 
 
 Producers' durable equipment- 
 Residential 
 
 .!^e<v^.-- ^.-- Residential :...:. :::::::::::::::;i::::' ^ ;%. 'v 
 
 '*^.<^< ■■■<5*^#'' Nonfarm structures 'K> ^''r. 'a ^< 
 
 JVVVS\.<1 F'a™ structures ^^ %^ .. ^<^U^o^ 
 
 <}'^\^V]s> e Producers' durable equipment ^Mf ^ ■';■.■*' ^ H 
 
 W< X O^ ft r® . iv.wui.iria uuiauic c^uipiiiciii, H'/^*/ 
 
 "9 eP<y^ \o .^ , Change in business inventories y^ 'J/^'i 
 
 ^-.s^-^' Nonfarm Pa_ Q^ 
 
 
 Farnr:;:;:::::;::::::::;::;;::;;::;::::::;:::;;::;::;:::: /J. x ^"^ ■•■ " 
 
 ^. Net exports of goods and services '>■» ^«/ . 'oi.. ^, 
 
 o<r*< 
 
 V, 
 
 ^<^ V Exports %*V 
 
 ^ Imports ^ /O; -«? % 
 
 '"r 
 
 Government purcha.ses of goods ar t, 'j}.^y>'<s ''«. '^o 
 Federal ,%>^;V «,. '^...^ 
 
 Natiormi defense:::::::;::- i^^^^^XS!^./ '^^ 
 
 Nondeiense.. 
 State and local 
 
 Nondefen^".!'.'";:.:::::;::" <V>>7''^?f^^>oj, ■""''''''^y %„ '/ '^ 
 
 ^^ l^^^. ■ : • •.:^' 
 
 
 c^ '*$$*S?' '^ , 
 
 METHODOLOGY PAPERS: 
 
 US. National Income and 
 Product Accounts 
 
 
 2!^. 
 
 •^i^res 0» •• 
 
 / 
 
 /^ 
 
 \ 
 
 U.S. DEPARTMENT OF COMMERCE 
 Bureau of Economic Analysis 
 
 November 1988 
 BEA-MP-5 
 
/-- 
 
 / 
 
 r -__ 
 
I/) 
 
 a 
 
 Cis^.r^ ;B6A-rrjp-i: 
 
 GOVERNMENT 
 TRANSACTIONS 
 
 METHODOLOGY PAPERS: 
 
 US. National Income and 
 Product Accounts 
 
 November 1988 
 
 U.S. DEPARTMENT OF COMMERCE 
 C. William Verity, Secretary 
 § Robert Ortner 
 
 % Under Secretary for Economic Affairs 
 
 BUREAU OF ECONOMIC ANALYSIS 
 
 Allan H. Young, Director 
 
 Carol S. Carson, Deputy Director 
 
 For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 
 
Acknowledgments 
 
 This paper was prepared by Helen Stone Tice and the staff of the Government Division, 
 Joseph C. Wakefield, Chief David T. Dobbs, Karl D. Galbraith, Robert T. Mangan, and 
 Richard C. Ziemer contributed to the Federal Government section; David J. Levin contributed 
 to the State and local government section. Tracy R. Tapscott provided editorial assistance, 
 and Katherine Dent and Teresa A. Williams provided secretarial assistance. 
 
 The papers in this series on the methodology of the national income and product accounts 
 are planned and coordinated by Helen Stone Tice. Allan H. Young, Robert P. Parker, and 
 Carol S. Carson provide direction and guidance. 
 
 Comments about the paper are invited. Comments, as well as questions about the material 
 in the paper, should be directed to: Government Division, (BE-57), Bureau of Economic 
 Analysis, U.S. Department of Commerce, Washington, DC 20230. 
 
 Suggested Citation 
 
 U.S. Department of Commerce. Bureau of Economic Analysis. Govern- 
 ment Transactions. Methodology Paper Series MP-5. Washington, DC: 
 U.S. Government Printing Office, November 1988. 
 
 u 
 
CONTENTS 
 
 Page 
 PART I. INTRODUCTION 
 
 Conceptual basis and framework 1 
 
 Recording of government transactions in the NIPA's: Overview 1 
 
 The NIP account 1 
 
 Personal income and outlay account 4 
 
 Government receipts and expenditures account 4 
 
 Foreign transactions account 4 
 
 Gross saving and investment account 4 
 
 Recording of government transactions: Special features 4 
 
 Social insurance funds 5 
 
 Receipts other than taxes and social insurance contributions 5 
 
 Purchases of structures and durable goods by government 5 
 
 Subsidies 6 
 
 Government enterprises 6 
 
 Government enterprises: An illustration 6 
 
 Relation of NIPA government receipts and expenditures to financial statements 8 
 
 Coverage 8 
 
 Netting and grossing 8 
 
 Fiscal year 8 
 
 Timing 8 
 
 Definitions 9 
 
 Presentation of the estimates 10 
 
 NIPA tables 10 
 
 Schedule 10 
 
 Appendix I-A. Articles Related to Govemmient Transactions 13 
 
 Tables 
 
 I-l. Summary National Income and Product Accounts, 1982 2 
 
 1-2. Economic Accounts for Three Entities 7 
 
 1-3. Location of Government Transactions in the NIPA Tables 11 
 
 111 
 
Page 
 PART II. FEDERAL GOVERNMENT TRANSACTIONS 
 
 Overview of estimating procedures 15 
 
 Differences between receipts 15 
 
 Coverage of transactors 15 
 
 Coverage of transactions 18 
 
 Netting and grossing 18 
 
 Timing 18 
 
 Differences between outlays and expenditures 18 
 
 Coverage of transactors 18 
 
 Coverage of transactions 18 
 
 Netting and grossing 19 
 
 Timing 19 
 
 Intragovernmental transactions 19 
 
 Derivation of receipts 19 
 
 Derivation of expenditures 19 
 
 Constant-dollar estimates of purchases 20 
 
 Derivation of receipts 20 
 
 Personal tax and nontax receipts 21 
 
 Income taxes 21 
 
 Withheld income taxes 21 
 
 Declarations and final settlements less refunds 21 
 
 Estate and gift taxes 24 
 
 Personal nontaxes 24 
 
 Corporate profits tax accruals 24 
 
 Indirect business tax and nontax accruals 24 
 
 Excise taxes 24 
 
 Alcohol excise taxes 24 
 
 Tobacco excise taxes 24 
 
 Windfall profit tax 24 
 
 Other excise taxes 25 
 
 Customs duties 25 
 
 Indirect business nontaxes 25 
 
 Contributions for social insurance 25 
 
 Old-age, survivors, and disability insurance 25 
 
 Employer and employee contributions 25 
 
 Self-employed contributions 26 
 
 Hospital and supplementary medical insurance 26 
 
 Unemployment insurance 27 
 
 State unemployment tax 27 
 
 Federal unemployment tax 27 
 
 Railroad employees 28 
 
 Federal employees 28 
 
 Federal employee retirement 28 
 
 Civilian retirement 28 
 
 Military retirement 28 
 
 Railroad retirement 28 
 
 Veterans life insurance 29 
 
 Workers' compensation 29 
 
 Military medical insurance 29 
 
 IV 
 
Page 
 
 Derivation of expenditures 29 
 
 Purchases of goods and services 29 
 
 National defense purchases 34 
 
 Aircraft 35 
 
 Directly priced purchases 35 
 
 Ratio purchases 35 
 
 Missiles 35 
 
 Ships 35 
 
 Directly estimated purchases 35 
 
 Vehicles 39 
 
 Electronic equipment 39 
 
 Other equipment 39 
 
 Other durable goods 39 
 
 Petroleum products 39 
 
 Ammunition 39 
 
 Other nondurable goods 39 
 
 Military compensation 40 
 
 Wages and salaries 40 
 
 Supplements to wages and salaries 40 
 
 Civilian compensation 40 
 
 Wages and salaries 40 
 
 Supplements to wages and salaries 40 
 
 Contractual research and development 40 
 
 Installation support 41 
 
 Weapons support 41 
 
 Personnel support 41 
 
 Transportation of materiel 41 
 
 Travel of persons 41 
 
 Other services 41 
 
 Military facilities 41 
 
 Other structures 42 
 
 Nondefense purchases 42 
 
 Commodity Credit Corporation 42 
 
 Transfer payments to persons 43 
 
 Old-age, survivors, and disability insurance 43 
 
 Hospital and supplemental medical insurance 43 
 
 State unemployment insurance 44 
 
 Railroad unemployment insurance 44 
 
 Federal employees unemployment compensation 44 
 
 Special unemployment benefits 44 
 
 Federal civilian employee retirement 44 
 
 Military retirement 45 
 
 Railroad retirement 45 
 
 Veterans life insurance 45 
 
 Workers' compensation 45 
 
 Military medical insurance 46 
 
 Veterans pension and disability 46 
 
 Veterans readjustment 46 
 
 Food stamp benefits 46 
 
 Black lung benefits 46 
 
 Supplemental security income 47 
 
 Earned income credit 47 
 
 Other transfer payments to persons 47 
 
 Transfer payments to foreigners 47 
 
 Grants-in-aid to State and local governments 47 
 
Page 
 
 Net interest paid 48 
 
 Interest paid to persons and business 48 
 
 Interest paid to foreigners 48 
 
 Monetary interest received from persons and business 48 
 
 Monetary interest received from foreigners 48 
 
 Imputed interest received 48 
 
 Subsidies less current surplus of government enterprises 49 
 
 Subsidies 49 
 
 Current surplus of government enterprises 49 
 
 Wage accruals less disbursements 49 
 
 Surplus or deficit (-), national income and product accounts 49 
 
 Constant-dollar purchases of goods and services 50 
 
 National defense purchases 50 
 
 Durable goods 54 
 
 Aircraft 54 
 
 Missiles 54 
 
 Ships 54 
 
 Vehicles 57 
 
 Electronic equipment 57 
 
 Other equipment 57 
 
 Other durable goods 57 
 
 Nondurable goods 57 
 
 Petroleum products 57 
 
 Ammunition 57 
 
 Other nondurable goods 57 
 
 Compensation of employees 58 
 
 Military compensation 58 
 
 Civilian compensation 58 
 
 Other services 58 
 
 Contractual research and development 58 
 
 Installation support 59 
 
 Weapons support 59 
 
 Personnel support 59 
 
 Transportation of materiel 59 
 
 Travel of persons 59 
 
 Other services 59 
 
 Structures 59 
 
 Military facilities 59 
 
 Other 60 
 
 Nondefense purchases 60 
 
 Durable goods 60 
 
 Nondurable goods 60 
 
 Compensation 64 
 
 Other services 64 
 
 Structiires 64 
 
 Sources 65 
 
 Appendix II-A. Definitions of the Major Types of National Defense Purchases of 
 
 Goods and Services 73 
 
 Appendix II-B. Federal Government Enterprises 75 
 
 VI 
 
Page 
 Tables 
 
 II-l. Relation of Federal Government Receipts in the National Income and Product 
 
 Accounts to the Budget, Fiscal Year 1982 16 
 
 II-2. Relation of Federal Government Expenditures in the National Income and Product 
 
 Accounts to the Budget, Fiscal Year 1982 17 
 
 II-3. Special Supplemental Food Program: Fiscal Year Analysis 20 
 
 II-4. Federal Government Receipts: Sources of Estimates 22 
 
 II-5. Federal Government Expenditures: Sources of Estimates 30 
 
 II-6. Relation of National Defense Purchases in the National Income and Product Accounts 
 to National Defense Outlays in the Budget, Calendar Year 1982 34 
 
 II— 7. National Defense Purchases: Sources of Estimates 36 
 
 II— 8. Constant-Dollar Federal Government Purchases of Goods and Services: Sources of 
 
 Estimates 51 
 
 II-9. Methods Used in the Derivation of Constant-Dollar National Defense Purchases of 
 
 Goods and Services 55 
 
 11-10. Price Indexes Used in the Derivation of Constant-Dollar Federal Government 
 
 Nondefense Purchases of Goods and Services 61 
 
 PART III. STATE AND LOCAL GOVERNMENT TRANSACTIONS 
 
 Overview of estimating procedures 77 
 
 Annual estimates 77 
 
 Derivation of receipts 80 
 
 Replacement of COG data with alternative source data 80 
 
 Adjustments 80 
 
 Distribution of the adjusted data into NIPA receipts components 80 
 
 Derivation of expenditures 81 
 
 Replacement of COG data with alternative source data 81 
 
 Adjustments 81 
 
 Distribution of the adjusted data into NIPA expenditures components 82 
 
 Quarterly estimates 82 
 
 Constant-dollar estimates of purchases 82 
 
 Derivation of receipts and expenditures 82 
 
 Receipts 82 
 
 Taxes and nontaxes 83 
 
 Personal tax and nontax receipts 87 
 
 Corporate profits tax accruals 87 
 
 Indirect business tax and nontax accruals 87 
 
 Contributions for social insurance 88 
 
 Federal grants-in-aid 88 
 
 Vll 
 
Page 
 
 Expenditures 88 
 
 Purchases of goods and services 92 
 
 Compensation of employees 92 
 
 Structures 92 
 
 Financial services 93 
 
 Durable goods, nondurable goods, and other services 93 
 
 Transfer payments to persons 94 
 
 Benefits from social insurance funds 94 
 
 Public assistance 94 
 
 Education 97 
 
 Employment and training 97 
 
 Other transfer payments 97 
 
 Net interest paid 98 
 
 Dividends received 98 
 
 Subsidies 99 
 
 Current surplus of government enterprises 99 
 
 Wage accruals less disbursements 99 
 
 Surplus or deficit (-), national income and product accounts 99 
 
 Constant-dollar purchases of goods and services 100 
 
 Compensation of employees 100 
 
 Structures 103 
 
 New construction 103 
 
 Net purchases of existing structures 103 
 
 New construction force-account compensation 103 
 
 Financial services 103 
 
 Durable goods, nondurable goods, and other services 103 
 
 Sources 105 
 
 Appendix III-A. Analysis of Charges and Miscellaneous General Revenue, COG, 
 
 1982 109 
 
 Appendix III-B. State and Local Government Functions Ill 
 
 Tables 
 
 III— 1. Derivation of State and Local Government Receipts in the National Income and 
 Product Accounts (NIPA's) from Census of Governments and Other Sources, 
 FY1982 78 
 
 III-2. Derivation of State and Local Government Expenditures in the National Income and 
 Product Accounts (NIPA's) from Census of Governments and Other Sources, 
 FY1982 79 
 
 III-3. State and Local Government Receipts: Sources of Estimates 84 
 
 III-4. State and Local Government Expenditures: Sources of Estimates 89 
 
 III-5. Derivation of State and Local Government Purchases of Goods and Other Services, 
 FY 1982 95 
 
 III-6. Price Indexes Used in the Deflation of State and Local Government Purchases of 
 
 Goods and Services 101 
 
 III-A-1. Distribution of Current Charges and Miscellaneous General Revenues Among 
 
 Categories of Receipts and Expenditures, FY 1982 109 
 
 VUl 
 
Part I. 
 Introduction 
 
 This paper presents the conceptual basis and frame- 
 work of government transactions in the national in- 
 come and product accounts (NIPA's), describes the pre- 
 sentation of the estimates, and describes the sources 
 and methods used to prepare annual, quarterly, and 
 monthly estimates of government transactions. Part 
 I, the introduction, discusses the recording of govern- 
 ment transactions in the NIPA's and the relation of 
 the NIPA measures of government receipts and ex- 
 penditures to analogous measures from government 
 financial statements. It also defines the measures of 
 government transactions that appear in the NIPA ta- 
 bles and indicates the tables in which they can be 
 found. Parts II and III describe in detail the sources 
 and methods used in the derivation of Federal Govern- 
 ment transactions and of State and local government 
 transactions, respectively. 
 
 Conceptual Basis and 
 Framework 
 
 As described in "An Introduction to National Eco- 
 nomic Accounting" in the March 1985 Survey of 
 Current Business, the national economic accounts can 
 be viewed as aggregations of accounts belonging to the 
 individual transactors in the economy.^ The basic ap- 
 proach used in national economic accounting is (1) to 
 group into sectors economic transactors engaged in the 
 same types of transactions and affected by, and re- 
 sponding to, economic developments in a similar man- 
 ner and (2) to set up uniform types of accounts that 
 show the broad categories of economic transactions in 
 which these sectors engage. Four sectors are com- 
 monly distinguished: Business, household, govern- 
 ment, and foreign. For each sector, a set of three ac- 
 counts is created: A production account, which records 
 the production attributable to that sector; an appro- 
 priation account, which records the sources of the sec- 
 tor's income, its current outlays, and its saving; and a 
 saving-investment account, which records the sector's 
 gross saving, net increase in assets, and net increase 
 in liabilities. Taken together, these sector accounts 
 constitute a double-entry system in which an outlay 
 
 1. This article, by Allan H. Young and Helen Stone Tice, is reprinted as 
 Methodology Paper Series MP-1 (Washington, DC: U.S. Government Printing 
 Office, March 1985). 
 
 recorded in one account for one sector is also recorded 
 as a receipt in another account, either for the same 
 sector or for another sector. 
 
 The NIPA's, which are designed to display the value 
 and composition of national output and the distri- 
 bution of incomes generated in its production, are a 
 combination of the sector accounts just described. In 
 summary form, the U.S. NIPA's consist of five ac- 
 counts: (1) The national income and product (NIP) 
 account, which is a consolidation of the four sector 
 production accounts and the business appropriation 
 account; (2) the personal income and outlay account, 
 which is the household appropriation account; (3) the 
 government receipts and expenditures account, which 
 is the government appropriation account; (4) the for- 
 eign transactions account, which is a consolidation 
 of the foreign appropriation account and the foreign 
 saving-investment account; and (5) the gross saving 
 and investment account, which is a consolidation of 
 the saving-investment accounts of the business, house- 
 hold, and government sectors. The five accounts, with 
 entries for 1982, are shown in table I-l. 
 
 Recording of government transactions 
 in the NIPA's: Overview 
 
 Government consists of those bodies and units, sup- 
 ported mainly by taxes, that implement public pol- 
 icy. The government receipts and expenditures ac- 
 count, shown as account 3 in the five-account sum- 
 mary, records transactions of government with other 
 U.S. residents and with foreigners. On the left side, 
 the transactions are the several categories of govern- 
 ment expenditures and saving, where saving is the 
 surplus or deficit. On the right side, the transactions 
 are government receipts, including taxes and contribu- 
 tions to social insurance funds, such as social security. 
 
 Each entry in the government receipts and expendi- 
 tures account has a counterentry in one of the other ac- 
 counts. (In table I-l, the numbers in parentheses fol- 
 lowing the entries identify the account and line num- 
 ber of the counterentries.) The government receipts 
 and expenditures entries in account 3 and their coun- 
 terentries are shown in boldface in the discussion that 
 follows. 
 
 The NIP account. — Transactions between govern- 
 ment and the other sectors enter the NIP account 
 through the production accounts of the business and 
 government sectors. The business production account 
 
Government Transactions. 
 
 JSlovember 1988 
 
 Table I-l.— Summary National Income and Product Accounts, 1982 
 
 IBillionit oI'dollarHJ 
 Account 1,— National Income and Product Account 
 
 Line 
 
 I-ine 
 
 10 
 
 11 
 12 
 
 i;) 
 
 14 
 15 
 16 
 
 17 
 
 18 
 
 19 
 
 20 
 21 
 22 
 
 23 
 
 24 
 
 25 
 
 2R 
 
 Compensation of employees 
 
 Wanes and salaries 
 
 Disbursements (2-7) 
 
 Wage accruals less disbursements (l)-12) and (5-4) . 
 Supplements to wages and salaries 
 
 Employer contributions for social insurance (.'i-20) 
 
 Other labor income (2-8) 
 
 Proprietors' income with inventory valuation and capital 
 consumption adjustments (2-9) 
 
 Rental income of persons with capital consumption 
 
 adjustment (2-10) 
 
 Corporate profits with inventory valuation and capital 
 
 consumption adjustments 
 
 Profits before tax 
 
 Profits tax liability (;M7) 
 
 Profits after tax 
 
 Dividends (2-12) 
 
 Undistributed profits (5-6) 
 
 Inventory valuation adjustment (5-7) 
 
 Capital consumption adjustment (5-8) 
 
 1.907.0 
 
 27 
 
 1.586.1 
 
 28 
 
 1.586.1 
 
 29 
 
 
 
 30 
 
 320.9 
 
 
 157.3 
 
 31 
 
 163.6 
 
 32 
 
 
 33 
 
 
 34 
 
 175.5 
 
 35 
 
 
 36 
 
 
 37 
 
 13.6 
 
 
 
 38 
 
 
 39 
 
 150.0 
 
 40 
 
 169.6 
 
 
 63.1 
 
 41 
 
 106,5 
 
 42 
 
 66.9 
 
 43 
 
 ,39.6 
 
 44 
 
 -10.4 
 
 45 
 
 -9.2 
 
 
 Personal consumption expenditures (2-3). 
 
 Durable goods 
 
 Nondurable goods 
 
 Services 
 
 Gross private domestic investment (5-1) 
 
 Fixed investment 
 
 Nonresidential 
 
 Structures 
 
 Producers' durable equipment 
 
 Residential 
 
 Change in business inventories 
 
 Net exports of goods and services , 
 
 Exports (4-1) 
 
 Imports (4-3) 
 
 Government purchases of goods and services (3-1) 
 Federal 
 
 National defense 
 
 Nondefense 
 
 State and local 
 
 2.050.7 
 252.7 
 771.0 
 
 1,027.0 
 
 447.3 
 471.8 
 366.7 
 143.3 
 223.4 
 105.1 
 -24.5 
 
 26.3 
 361.9 
 335.6 
 
 641.7 
 272.7 
 193.8 
 78.9 
 369.0 
 
 Net interest (2-15) 
 
 272.3 
 
 National income 2,518.4 
 
 Business transfer payments (2-20) 
 
 Indirect business tax and nontax liability (3-18) .... 
 Less: Subsidies less current surplus of government 
 enterprises (3-1 1) 
 
 14.3 
 258.8 
 
 Charges against net national product 2,782.9 
 
 Capital consumption allowances with capital 
 consumption adjustment (5-9) 
 
 383.2 
 
 Charges against gross national product 3,166.1 
 
 Statistical discrepancy (5-12) —.1 
 
 GROSS NATIONAL PRODUCT 3,166.0 
 
 GROSS NATIONAL PRODUCT 3,166.0 
 
 Account 2. — Personal Income and Outlay Account 
 
 Personal tax and nontax payments (3-16). 
 
 409.3 
 
 Personal outlays 2,107.5 
 
 Personal consumption expenditures (1-27) 2,050.7 
 
 Interest paid by consumers to business (2-18) 55.5 
 
 Personal transfer payments to foreigners (net) (4-5) 1.3 
 
 Personal saving (5-3) . 
 
 153.9 
 
 PERSONAL TAXES, OUTLAYS, AND SAVING 2.670.8 
 
 7 
 8 
 9 
 
 10 
 
 II 
 12 
 13 
 
 14 
 15 
 16 
 
 IH 
 
 19 
 20 
 21 
 
 22 
 
 Wage and salary disbursements (1-3) 
 Other labor income (1-7) 
 
 Proprietors' income with inventory valuation and capital 
 consumption adjustments (1-8) 
 
 Rental income of persons with capital consumption 
 adjustment (1-9) 
 
 Personal dividend income 
 
 Dividends (1-14) 
 
 Less: dividends received by government (3-10) 
 
 Personal interest income 
 
 Net interest (1-18) 
 
 Interest paid by government to persons 
 
 and business (3-7) 
 
 Less: Interest received by government (3-9)... 
 Interest paid by consumers to business (2-4) 
 
 Transfer payments to persons 
 
 From business (1-20) 
 
 From government (3-3) 
 
 Less; Personal contributions for social insurance (.3-21) 
 
 PERSONAL INCOME. 
 
 1,. 586.1 
 163.6 
 
 175.5 
 
 13.6 
 
 63.9 
 
 66.9 
 
 2.9 
 
 369.7 
 272.3 
 
 110.0 
 68.1 
 55.5 
 
 410.6 
 
 14.3 
 
 396.2 
 
 112.3 
 2,670.8 
 
Government Transactions. 
 
 .November 1988 
 
 Table I-l. — Summary National Income and Product Accounts, 1982 — Con. 
 
 [Billions of dollars] 
 Account 3.— Government Receipts and Expenditures Account 
 
 Line 
 
 Line 
 
 Purchases of goods and services (1-41). 
 
 9 
 10 
 11 
 
 12 
 
 13 
 
 14 
 15 
 
 Transfer payments 
 
 To persons (2-21) 
 
 To foreigners (net) (4-6). 
 
 Net interest paid 
 
 Interest paid 
 
 To persons and business (2-16) 
 
 To foreigners (4-7) 
 
 Less: Interest received by government (2-17) 
 
 Less: Dividends received by government (2-13) 
 
 Subsidies less current surplus of government 
 enterprises (1-22) 
 
 641.7 
 
 404.0 
 396.2 
 
 60.1 
 
 128.3 
 
 110.0 
 
 18.3 
 
 68.1 
 
 2.9 
 
 16 
 
 17 
 
 18 
 
 19 
 20 
 21 
 
 Personal tax and nontax payments (2-1) 
 
 Corporate profits tax liability (1-12) 
 
 Indirect business tax and nontax liability (1-21) 
 
 Contributions for social insurance . 
 
 Employer (1-6) 
 
 Personal (2-22) 
 
 409.3 
 63.1 
 
 258.8 
 
 269.6 
 157.3 
 112.3 
 
 Less: Wage accruals less disbursements (1-4) 
 
 
 
 Surplus or deficit ( — ). national income and 
 
 product accounts (5-10) — 110.8 
 
 Federal -145.9 
 
 State and local 35.1 
 
 GOVERNMENT EXPENDITURES AND SURPLUS 1,000.8 
 
 GOVERNMENT RECEIPTS 1,000.8 
 
 Account 4. — Foreign Transactions Account 
 
 Exports of goods and services (1-39) 
 
 Capital grants received by the United States (net) (5-11) 
 
 361.9 
 
 
 RECEIPTS FROM FOREIGNERS 
 
 361.9 
 
 Imports of goods and services (1-40). 
 
 Transfer payments to foreigners (net) . 
 
 From persons (net) (2-5) 
 
 From government (net) (3-4) 
 
 Interest paid by government to foreigners (3-8) 
 Net foreign investment (5-2) 
 
 PAYMENTS TO FOREIGNERS 
 
 335.6 
 
 9.0 
 1.3 
 
 7.8 
 
 18.3 
 -1.0 
 
 361.9 
 
 Account 5. — Gross Saving and Investment Account 
 
 Gross private domestic investment (1-31). 
 Net foreign investment (4-8) 
 
 447.3 
 -1.0 
 
 GROSS INVESTMENT 
 
 446.3 
 
 10 
 
 11 
 12 
 
 Personal saving (2-6) 
 
 Wage accruals less disbursements (1-4) . 
 
 Undistributed corporate profits with inventory valuation 
 
 and capital consumption adjustments 
 
 Undistributed corporate profits (1-15) 
 
 Inventory valuation adjustment (1-16) 
 
 Capital consumption adjustment (1-17) 
 
 Capital consumption allowances with capital 
 consumption adjustment (1-24) 
 
 Government surplus or deficit ( — ), national income 
 and product accounts (3-13) 
 
 Capital grants received by the United States (net) (4-2) 
 Statistical discrepancy (1-26) 
 
 GROSS SAVING AND STATISTICAL 
 DISCREPANCY 
 
 153.9 
 
 20.0 
 
 39.6 
 
 -10.4 
 
 -9.2 
 
 383.2 
 
 -110.8 
 
 -.1 
 
 446.3 
 
 NOTE. — Numbers in parentheses indicate accounts and items of counterentry 
 disbursements, (2-7) is in account 2, line 7. 
 
 in the accounts. For example, the counterentry for wage and salary 
 
4 Government Transactions. 
 
 Jslovember 1988 
 
 covers government purchases of goods and nonfactor 
 ser\-ices from business and the components of factor 
 and nonfactor charges against business product that 
 business pays to government. The government pro- 
 duction account covers government purchases of fac- 
 tor ser\aces, specifically, the services of government 
 employees. 
 
 In the business production account, business output 
 is recorded both in terms of goods and services (on the 
 right side) and in terms of income payments and other 
 costs arising from production (on the left side). Out- 
 put in terms of goods and services produced is recorded 
 as the sum of purchases by final users — business (on 
 capital account), households (persons), foreigners, and 
 government — plus the change in business inventories. 
 Government purchases of business output is the only 
 one of these entries that is a government transaction. 
 Output in terms of income payments and other costs 
 is recorded as the sum of factor charges — labor and 
 property income — and nonfactor charges. The factor 
 charges that are paid by business to government are 
 employer contributions for social insurance, which 
 is a component of business labor cost, and corporate 
 profits tax liability, which is shown under corporate 
 profits. The nonfactor charges in which the govern- 
 ment is a party to the transaction are indirect busi- 
 ness tax and nontax liability, subsidies, and cur- 
 rent surplus of government enterprises. 
 
 In the government production account, government 
 output also is recorded both in terms of goods and 
 services produced (on the right side) and in terms of 
 income payments and other costs arising from pro- 
 duction (on the left side). In both cases, government 
 output is measured by the value of the inputs, ex- 
 clusively the services of government employees. On 
 the right side of the account, the sale of the ser- 
 vices of government employees is entered as a gov- 
 ernment purchase of a factor service; on the left 
 side of the account, the compensation paid to govern- 
 ment employees — including wage accruals less dis- 
 bursements and employer contributions for social 
 insurance — is entered as a factor cost. Government 
 interest payments, although included elsewhere in the 
 NIPA's, are not considered to be a payment for factor 
 services; they, therefore, are not recorded in the gov- 
 ernment production account. 
 
 The consolidation of the business and government 
 sector production accounts with those for the house- 
 hold and foreign sectors yields a measure of total out- 
 put, gross national product (GNP) and of the factor 
 and nonfactor charges against GNP. On the right side 
 of the NIP account, government purchases of goods 
 and services includes the services of government em- 
 ployees as well as goods and services purchased from 
 business. On the left side, the components of factor 
 and nonfactor charges against GNP include the por- 
 tions that accrue to government. In addition, compen- 
 sation of employees includes that paid to government 
 employees. 
 
 Personal income and outlay account. — ^This ac- 
 count records the income, outlays, and saving of in- 
 dividuals and the nonprofit institutions serving them. 
 The income that persons receive from government con- 
 sists of wages and salaries and other labor income paid 
 to government employees, transfer payments, and in- 
 terest. The outlays that persons make to government 
 are taxes and social insurance contributions. On the 
 left side, the only entry recorded for government trans- 
 actions is personal tax and nontax payments. On the 
 right side, transfer payments to persons from gov- 
 ernment and interest paid by government to per- 
 sons and business are recorded as components of per- 
 sonal income. (Interest paid by government to busi- 
 ness is included for computational reasons; it is offset 
 by a negative entry for interest received by business 
 from government in the entry "net interest.") In addi- 
 tion, personal contributions for social insurance is 
 deducted on the right side rather than being an entry 
 on the left side. (Dividends and interest received by 
 government are also shown in the personal income and 
 outlay account, but only for the purpose of deriving the 
 entries for personal dividend income and personal in- 
 terest income.) 
 
 Government receipts and expenditures ac- 
 count. — ^This account records all transactions of gov- 
 ernment with other U.S. residents and with foreign- 
 ers. On the left side, these government transactions — 
 purchases of goods and services, transfer payments 
 to persons and to foreigners, net interest paid, 
 subsidies less current surplus of government en- 
 terprises, and surplus or deficit (— ), national in- 
 come and product accounts less dividends received 
 by government and wage accruals less disburse- 
 ments — sum to government expenditures and surplus. 
 On the right side, personal tax and nontax pay- 
 ments, corporate profits tax liability, indirect busi- 
 ness tax and nontax liability, and employer and 
 personal contributions for social insurance sum to 
 government receipts. 
 
 Foreign transactions account. — In this account, 
 both transfer payments to foreigners from govern- 
 ment and interest paid by government to foreigners 
 
 are components of payments to foreigners, on the right 
 side. 
 
 Gross saving and investment account. — In this 
 account, government surplus or deficit (— ), national 
 income and product accounts is a component of gross 
 saving, on the right side. 
 
 Recording of government transactions: 
 Special features 
 
 This section provides a more complete description of 
 the recording of several types of government trans- 
 actions than that provided in the previous section. 
 Specifically, it discusses social insurance funds, gov- 
 ernment receipts other than taxes and social insurance 
 
Government Transactions. 
 
 ^November 1988 
 
 contributions, purchases of structures and durable 
 goods by government, and payments of subsidies to 
 business by government. In addition, the treatment 
 of government enterprises, which is not apparent from 
 the entries in the NIPA's, is laid out in detail. 
 
 In what follows, it is useful at times to distinguish 
 between government agencies that are part of gen- 
 eral government and those that are government en- 
 terprises. General government consists of those gov- 
 ernment agencies that provide goods and services fi- 
 nanced largely by taxes and not through normal price 
 transactions. Government enterprises, on the other 
 hand, sell their goods and services directly to the pub- 
 lic for a price and recover part or all of their operating 
 costs. The term "government" refers to the sum of 
 general government and government enterprises. 
 
 Social insurance funds. — Social insurance funds, 
 which are part of general government, are funds ad- 
 ministered by Federal and by State and local gov- 
 ernments to provide retirement, health, unemploy- 
 ment, disability, and similar benefits to individu- 
 als. The main resources of these funds are de- 
 rived from compulsory payments — called contributions 
 in the NIPA's — ^by other sectors and other govern- 
 mental units. The benefits paid from these funds 
 are generally related to the income of individuals 
 from employment and/or to the contributions made on 
 their account, whether made by themselves or their 
 employers. 
 
 Because most social insurance funds are trust funds 
 with resources that cannot be used for pui"poses other 
 than those specified by statute or trust agreement, 
 contributions to these flinds are not classified as taxes 
 in the NIPA's. Similarly, because individuals have no 
 choice in the disposition of this part of their labor in- 
 come, personal contributions are not included in per- 
 sonal income. In addition, the excess of contributions 
 to these funds and their investment earnings over the 
 benefits paid by them is part of the saving of gen- 
 eral government, although the saving of social insur- 
 ance funds is distinguished and recorded separately. 
 (This treatment contrasts with that of private retire- 
 ment plans, where the saving of these plans is part of 
 personal saving.) 
 
 Receipts other than taxes and social insurance 
 contributions. — Most government receipts are com- 
 pulsory payments by other sectors — taxes and social 
 insurance contributions — that are not directly related 
 to a specific good or service. Government, however, 
 does receive some revenues from the public that rep- 
 resent payments for goods or services. In the NIPA's, 
 some of these revenues are called "nontax payments" 
 and treated as if they were taxes, others are called 
 government sales and deducted from government pur- 
 chases, and still others are called enterprise revenue 
 and accounted for in the treatment of government en- 
 terprises described below. 
 
 A payment will be treated as a nontax and in- 
 cluded in government receipts if it is for a good or 
 
 service that is administrative or regulatory in nature 
 or for a good or service (such as education or hospitals) 
 that frequently is provided in the private sector by a 
 nonprofit institution. Examples of nontaxes include 
 fines, fees paid for U.S. Department of Agriculture 
 meat and poultry inspection, and tuition paid to State 
 universities. 
 
 A payment will be treated as a sale by general gov- 
 ernment and deducted from government purchases if 
 it is for a good or service that is similar to those sold 
 by private business, but the provision of the good or 
 service is ancillary to the primary function of the gov- 
 ernment unit. Examples of government sales include 
 school lunch sales and charges for the services of U.S. 
 Department of Agriculture meat graders and fees re- 
 ceived by the National Aeronautics and Space Admin- 
 istration for launching services. 
 
 A payment will be treated as enterprise revenue if it 
 is for a good or service that is similar to those sold by 
 private business, the provision of the good or service 
 is the primary function of the government unit, and 
 such payments cover a substantial part of the operat- 
 ing costs of the government unit providing the good 
 or service. Examples of enterprise revenue include 
 charges for electricity generated by municipally owned 
 utilities and sales of stamps by the U.S. Postal Service. 
 
 The treatment of nontaxes extends the definition of 
 government receipts to include, in addition to compul- 
 sory payments, payments by other sectors for goods 
 and services unlike those sold by business. The treat- 
 ment of government sales preserves this notion of 
 government receipts; in addition, recording govern- 
 ment sales as negative purchases allows the other ex- 
 penditure components in the NIP account to include 
 business-like goods and services sold by government 
 as well as those produced by business. For example, 
 school district purchases of food for student meals from 
 business are recorded in government purchases; the 
 subsequent sale of school lunches is recorded in per- 
 sonal consumption expenditures, and a corresponding 
 deduction is entered in government purchases. Sub- 
 stantially the same result is obtained from the treat- 
 ment of government enterprises described below. 
 
 Purchases of structures and durable goods by 
 government. — In the NIPA's, there is no capital ac- 
 counting for government. All goods and services 
 purchased by government are treated in the same 
 way — that is, as if consumed in the period in which 
 purchased. Government purchases, therefore, make 
 no distinction between consumption and investment; 
 structures and durable goods purchased by govern- 
 ment, which would be classified as investment if pur- 
 chased by business, are recorded on current account. 
 No charges for the use of capital are recorded in the 
 government production account; the entries for inter- 
 est and for capital consumption allowances on the left 
 side of the NIP account contain entries only for do- 
 mestic business (and for the rest of the world, in the 
 case of interest). Finally, gross investment in the gross 
 
Government Transactions. 
 
 JSlovember 1988 
 
 saN-ing and investment account includes only private 
 domestic and net foreign investment, and government 
 saNang — that is, the surplus or deficit — includes only 
 sa\dng in financial form. 
 
 Subsidies. — Subsidies are monetary payments by 
 government to business that enable goods or services 
 to be sold at prices below the factor cost of production, 
 which is defined to include a normal return on capital 
 employed. These payments are included in business 
 income from current production. Subsidies have been 
 used to keep down prices of particular goods and ser- 
 vices to consumers, to assist producers to meet com- 
 petition from imported goods, or to maintain the ex- 
 istence of particular industries. In the NIP account, 
 subsidies are deducted from the sum of factor costs 
 so that output measured on the left side in terms of 
 income payments and other costs arising from produc- 
 tion is valued at market prices and, therefore, is equal 
 to output measured on the right side in terms of goods 
 and services, also valued at market prices. 
 
 Government enterprises. — Government enter- 
 prises are government agencies that cover a substan- 
 tial proportion of their operating costs by selling goods 
 and services to the public and that maintain their own 
 separate accounts. A "mixed" treatment of govern- 
 ment enterprises is used in the NIPA's, in which some 
 types of transactions are recorded as if they were part 
 of the general government sector and others as if they 
 were part of the business sector. This treatment is de- 
 signed to provide a consolidated surplus or deficit for 
 the government sector — which includes the surplus or 
 deficit of enterprises — that is useful for many types of 
 economic analysis and to combine the output of gov- 
 ernment enterprises with that of business firms in the 
 business sector. 
 
 Government enterprises are treated like other busi- 
 nesses and included in the NIPA business sector in 
 that (1) their sales to final users are recorded in the 
 business production accoiuit; (2) their outlays for ma- 
 terials and business services are considered intermedi- 
 ate rather than final and, therefore, are eliminated in 
 the consolidation of the business sector production ac- 
 count; and (3) both their wage, salary, and other com- 
 pensation payments and their income are considered 
 charges against business product rather than charges 
 against government product. Within the business sec- 
 tor, government enterprises are classified as noncor- 
 porate business. This classification determines how 
 their income is recorded. Specifically, for noncorpo- 
 rate business, none of the owner's net income is shown 
 as saving in the business sector; all saving is consol- 
 idated with that of the owning sector. For a govern- 
 ment enterprise, this means that the saving is con- 
 solidated with that of its owner, general government. 
 (For other noncorporate business, such as sole propri- 
 etorships and partnerships, the saving is consolidated 
 with that of households.) 
 
 Government enterprises are treated like other gov- 
 ernment agencies and included in the NIPA govern- 
 
 ment sector in that (1) their interest payments are 
 combined with those of general government rather 
 than those of business; (2) their purchases of equip- 
 ment and structures and their inventory change are 
 combined with general government purchases rather 
 than with business purchases in gross private domes- 
 tic investment; and (3) as a consequence of (2), no en- 
 tries are recorded for depreciation charges and other 
 charges for the use of capital. 
 
 The current surplus of government enterprises is the 
 profit-like income of these businesses that accrues to 
 general government. The surplus, however, may not 
 be an accurate measure of factor cost; an enterprise 
 may follow a policy of setting prices at a level at which 
 the proceeds will not cover the full cost of current pro- 
 duction. Consequently, this income is considered to be 
 a nonfactor charge against gross product rather than 
 a factor charge. (It is included in charges against GNP 
 but not in national income.) 
 
 In recording the current surplus of government en- 
 terprises and subsidy payments to business as nonfac- 
 tor charges in the NIP account, the two entries are 
 combined. The current surplus of government enter- 
 prises is subtracted fi^-om subsidies, and the combined 
 entry "subsidies less current surplus of government 
 enterprises" is entered with a negative sign to remove 
 subsidies fi-om charges against GNP and to add the 
 current surplus of government enterprises to charges 
 against GNP. In addition, since the same public pur- 
 pose can be served either by a direct subsidy or by 
 government enterprise sales at a below-market price, 
 combining the two entries gives a measure that is the 
 same, regardless of how policy is implemented. 
 
 Government enterprises: An illustration. — 
 
 Table 1-2 shows how the transactions of government 
 enterprises are recorded in the NIPA's. This table 
 shows the economic accovmts for a government enter- 
 prise and, for comparison, shows the same accounts 
 for a private corporation and for general government, 
 which owns the government enterprise. 
 
 For the private corporation, the economic accounts 
 are the production, the appropriation, and the saving- 
 investment accounts. For the government enterprise, 
 the economic accounts are the production and the ap- 
 propriation accounts. The production account of the 
 government enterprise is similar to that of the pri- 
 vate corporation except that (1) charges against out- 
 put exclude capital consumption allowances and inter- 
 est paid and received and (2) the item "profits" in the 
 business production account is replaced by the entry 
 "current surplus." The appropriation account of the 
 government enterprise is very different fi-om that of 
 the private corporation, however, because the current 
 surplus is transferred to general government. The en- 
 terprise does not have a separate saving-investment 
 account. 
 
 For general government, the existence of its enter- 
 prise is not reflected in the production account; as in 
 the government sector production account mentioned 
 
Government Transadions- 
 
 .November 1988 
 
 Table 1-2. — Economic Accounts for Three Entities 
 
 Private Corporation 
 
 Government Enterprise 
 
 General Government 
 
 Production Account 
 
 Production Account 
 
 Production Account 
 
 Wages and salaries 
 Contributions for social 
 
 insurance 
 Indirect taxes 
 Capital consumption 
 
 allowances 
 Interest paid 
 Less: Interest received 
 Profits 
 Less: Subsidies 
 
 Change in inventories 
 Sales 
 
 Less: Purchased materials ano 
 services 
 
 Wages and salaries 
 Contributions for social 
 
 insurance 
 Indirect taxes 
 Current surplus 
 
 Change in inventories 
 Sales 
 
 Less: Purchased materials and 
 services 
 
 Wages and salaries 
 Contributions for social 
 insurance 
 
 Sales to government 
 
 Charges against output 
 
 Output 
 
 Charges against output 
 
 Output 
 
 Charges against output 
 
 Output 
 
 Appropriation Account 
 
 Appropriation Account 
 
 Appropriation Account 
 
 Profits taxes 
 Dividends paid 
 Less: Dividends received 
 Undistributed profits 
 
 Profits 
 
 Transfer of surplus to 
 government 
 
 Surplus 
 
 Purchases 
 From business 
 Enterprise 
 Inventories 
 Fixed investment 
 Other 
 From government 
 Transfer payments 
 Interest paid 
 Subsidies 
 Less: Surplus of government 
 
 enterprises 
 Surplus or deficit (-). NIPA's 
 
 Indirect business taxes 
 Profits taxes 
 Personal taxes 
 Interest received 
 Contributions for social 
 insurance 
 
 Distribution of profits and 
 saving 
 
 Profits 
 
 Distribution of current surplus 
 
 Current surplus 
 
 Government expenditures and 
 surplus or deficit (-) 
 
 Government receipts 
 
 Saving-Investment Account 
 
 Saving-Investment Account 
 
 Saving-Investment Account 
 
 Plant and equipment 
 
 purchases 
 Purchases of land 
 Less: Sales of plant and 
 
 equipment 
 Less: Sales of land 
 Change in business 
 
 inventories 
 Net acquisitions of financial 
 
 assets 
 Less: Net increase in liabilities 
 
 Undistributed profits 
 Capital consumption 
 allowances 
 
 n.a. 
 
 n.a. 
 
 Net acquisition of financial 
 
 assets 
 Less: Net increase in liabilities 
 
 Surplus or deficit, NIPA's 
 
 Gross investment 
 
 Gross saving 
 
 
 
 Gross investment 
 
 Gross saving 
 
 n.a. Not applicable. 
 
 Note. — The illustration in table 1-2 is based on the economic accounting framework presented 
 in An Inlroduction to National Economic Accounting, Methodology Paper Series lv1P-1. The 
 saving-investment accounts, therefore, include entries for certain transactions that are not shown 
 in the NIPA's because they cancel when the accounts of all domestic sectors are consolidated. 
 These transactions are purchases and sales of land (which cancel when the business sector is 
 consolidated), net acquisitions of financial assets, and net increase in liabilities. 
 
8 Government Transactions. 
 
 .November 1988 
 
 earlier, government output is measured by the com- 
 pensation paid to general government — not govern- 
 ment enterprise — employees. The appropriation ac- 
 count reflects the fact that government purchases from 
 business include the change in enterprise inventories 
 and enterprise purchases of plant and equipment. The 
 current surplus of government enterprises is recorded 
 on the left side as a deduction from government ex- 
 penditures rather than as an addition to receipts. The 
 enterprise surplus is consolidated with the surplus of 
 general government. 
 
 Relation ofNIPA government receipts 
 and expenditures to financial 
 statements 
 
 The government receipts and expenditures account 
 is derived primarily from financial statements for the 
 Federal and the State and local governments; these 
 statements record payments to and from government 
 in a given time period. The focus of these statements 
 is the summarization of individual government finan- 
 cial transactions — taxing, spending, borrowing, and 
 lending — into statistics useful for the conduct of gov- 
 ernment. These financial statements differ from those 
 required for the NIPA's in several respects: The cover- 
 age of both transactors and transactions, the extent to 
 which transactions are shown net or gross, the fiscal 
 years used, and the timing with which transactions 
 are recorded. Consequently, several types of adjust- 
 ment are necessary to conform these financial state- 
 ments to the NIPA concepts. Also, for some State 
 and local government transactions, data from other 
 sources are substituted for that from the financial 
 statements because they are consistent with estimates 
 of similar transactions elsewhere in the NIPA's, they 
 provide more detail on types of transactions, or they 
 provide monthly or quarterly observations that permit 
 a more precise assignment of transactions to a given 
 time period. 
 
 Coverage. — Coverage adjustments are required for 
 two categories of transactors in the Federal Govern- 
 ment accounts. (1) Federal financial statements in- 
 clude transactions with residents of the U.S. territo- 
 ries and Puerto Rico as U.S. residents; NIPA govern- 
 ment transactions do not include them. (2) From time 
 to time, generally under provisions of law. Federal fi- 
 nancial statements exclude certain entities that per- 
 form governmental functions; the NIPA's include the 
 receipts and expenditures of these entities in order to 
 provide a comprehensive and consistent measure of 
 government activity. 
 
 Coverage adjustments are required for three cate- 
 gories of transactions. (1) Financial statements in- 
 clude transactions in financial assets and transac- 
 tions in land, including oil bonuses — that is, payments 
 for drilling rights on public land that are capitalized 
 by business; the NIPA's exclude these transactions. 
 
 (2) State and local financial statements classify \m- 
 employment insurance as a State program; in the 
 NIPA's it is classified as a Federal program. (3) Fi- 
 nancial statements include only actual transactions; 
 the NIPA's also include certain imputed transactions. 
 
 Netting and grossing. — Netting and grossing ad- 
 justments are required because, in financial state- 
 ments, certain transactions are either recorded in a 
 way that is not consistent with the NIPA classifica- 
 tions or not recorded at all. Because the same amount 
 is added to or subtracted from both receipts and expen- 
 ditures from financial statements, these adjustments 
 have no effect on the surplus or deficit, but they make 
 NIPA receipts and expenditures differ from their coim- 
 terparts in financial statements. 
 
 These adjustments are necessary for three rea- 
 sons. (1) Financial statements net some revenue items 
 against expenditures that the NIPA's classify as re- 
 ceipts; an example of such grossing adjustments is 
 medicare (supplementary medical insurance) premi- 
 ums. (2) Financial statements classify some revenue 
 items as receipts that the NIPA's net against expendi- 
 tures; examples of netting adjustments are the wind- 
 fall profit tax on Federal sales of crude petroleum 
 from Federal land and local government school limch 
 sales. (3) Financial statements reflect only transac- 
 tions between government and other sectors, elimi- 
 nating transactions between parts of the same level 
 of government. The NIPA's show some of these trans- 
 actions on a gross basis, however, by means of a gross- 
 ing adjustment. For example, employer contributions 
 made by government as employer to government em- 
 ployee retirement systems at the same level of govern- 
 ment are considered intragovernmental expenditures 
 and excluded from both receipts and expenditures in 
 financial statements; in the NIPA's, however, both a 
 receipt and a payment are recorded — the payment as 
 a component of compensation of employees in the gov- 
 ernment production account and the receipt as part of 
 the revenue of social insurance funds in the govern- 
 ment income and outlay account. 
 
 Fiscal year. — Financial statements for State and 
 local governments report data on a fiscal year basis 
 that is not uniform for all governments. In the NIPA's, 
 these reported data are placed on a calendar year basis 
 and on a common fiscal year basis. 
 
 Timing. — Financial statements for government 
 generally record receipts and expenditures on a cash 
 basis: Receipts are recorded when payments are re- 
 ceived by government, and expenditures are recorded 
 when checks are issued by government. The only ex- 
 ception is interest on the public debt, which is recorded 
 on an accrual basis — that is, when the liability is in- 
 curred. In the NIPA's, the timing basis for government 
 transactions with other sectors maintains consistency 
 with the timing basis used for the other transactions of 
 these sectors. Thus, receipts from business generally 
 
Government Transactions. 
 
 J^ovember 1988 
 
 are recorded on a liability, or accrual, basis; purchases 
 of goods and services from business are recorded on a 
 delivery basis, that is, when the goods or services are 
 delivered to government. Net interest paid, nonfarm 
 subsidies, and current surplus of government enter- 
 prises are recorded on an accrual basis. Receipts from 
 persons £md transfer payments to persons are recorded 
 on a cash basis. Farm subsidies are also on a cash 
 basis. 
 
 Definitions 
 
 Government consists of those bodies and units, sup- 
 ported mainly by taxes, that implement public policy 
 through the provision of services and the redistribu- 
 tion of resources. The governmental structure of the 
 United States includes the Federal Government, the 
 governments of the fifty States, and local governments. 
 
 The Federal Government consists of the executive 
 and legislative branches, and the Judiciary. The ex- 
 ecutive branch comprises the Office of the President, 
 the executive departments, and a number of indepen- 
 dent agencies, smaller offices, and the trust funds that 
 some of them administer. Federally sponsored credit 
 agencies are not included. These specialized lending 
 institutions, such as the Federal National Mortgage 
 Association and the Federal home loan banks, were 
 originally created and owned by the Government but 
 are now privately owned. 
 
 State and local governments comprise all political 
 subdivisions of the United States, including the trust 
 funds and enterprises that some of them administer. 
 Local governments consist of counties, municipalities, 
 townships, school districts, numerous kinds of "special 
 districts," and the District of Columbia. 
 
 Until now, this paper has referred to personal tax 
 and nontax payments, corporate profits tax liability, 
 and indirect business tax and nontax liability because 
 the perspective used in the five-account summary pre- 
 sentation is that of the taxpayer. In the definitions 
 that follow and in the remainder of this paper, the 
 names of these three categories of taxes are replaced 
 by terms that reflect the perspective of the government 
 accounts — that is, personal tax and nontax receipts, 
 corporate profits tax accruals, and indirect business 
 tax and nontax accruals, respectively. 
 
 The definitions are in the order shown in the sum- 
 mary government receipts and expenditures table 
 (NIPA table 3.1). Because that table is a consolida- 
 tion of the Federal Government and of the State and 
 local governments, an entry for Federal grants-in-aid 
 does not appear. These grants are defined last. 
 
 Personal tax and nontax receipts: Tax payments 
 by persons that are not chargeable to business ex- 
 pense and certain other personal payments to gov- 
 ernment agencies (except government enterprises) 
 that are treated like taxes. Personal taxes in- 
 clude taxes on income, including realized net cap- 
 ital gains; on transfers of estates and gifts; and 
 
 on personal property. Nontaxes include tuitions 
 and fees paid to schools and hospitals operated by 
 government; fees, fines, and forfeitures; and dona- 
 tions. Personal contributions for social insurance 
 are not included. 
 
 Corporate profits tax accruals: The sum of Fed- 
 eral, State, and local income taxes on all corpo- 
 rate earnings, including realized net capital gains. 
 These taxes are net of refunds and applicable tax 
 credits. 
 
 Indirect business tax and nontax accruals: Tax 
 
 liabilities that are chargeable to business ex- 
 pense in the calculation of profit-type incomes and 
 certain other business liabilities to government 
 agencies (except government enterprises) that are 
 treated like taxes. Indirect business taxes include 
 taxes on sales, property, and production. Em- 
 ployer contributions for social insurance are not 
 included. Taxes on corporate incomes are not in- 
 cluded; these taxes cannot be calculated until prof- 
 its are known, and in that sense they are not a 
 business expense. Nontaxes include regulatory 
 and inspection fees, special assessments, fines and 
 forfeitures, rents and royalties, and donations. 
 
 Contributions for social insurance: Employer and 
 personal contributions for social insurance. Em- 
 ployer contributions include employer payments 
 under the following programs: Old-age, survivors, 
 and disability insurance (social security); hospital 
 insurance; unemployment insurance; government 
 employee retirement; railroad retirement; mili- 
 tary medical insurance; and publicly administered 
 workers' compensation. Personal contributions in- 
 clude payments by employees, the self-employed, 
 and other individuals who participate in the fol- 
 lowing programs: Old-age, survivors, and disabil- 
 ity insurance (social security); hospital insurance; 
 supplementary medical insurance; unemployment 
 insurance; government employee retirement; rail- 
 road retirement insurance; veterans life insur- 
 ance; and temporary disability insurance. 
 
 Government purchases of goods and services: 
 
 Purchases from business (including net purchases 
 of used goods), compensation of government em- 
 ployees, and purchases from foreigners. The 
 change in inventories and purchases of plant 
 and equipment by government enterprises are in- 
 cluded, but their current-account purchases are 
 not. Purchases, a category of expenditures, does 
 not include transfer payments, interest paid by 
 government, and subsidies. (These are separate 
 categories of expenditures.) Transactions in finan- 
 cial assets and land are not included in either pur- 
 chases or expenditures. 
 
 Transfer payments to persons: Income payments 
 to persons for which they do not render current 
 services. Transfer payments include benefits from 
 the social insurance funds and payments under 
 
10 Giwemment Transactions. 
 
 J^ovember 1988 
 
 certain other programs. Included are old-age, sur- 
 vivors, and disability insurance (social security); 
 hospital insurance; supplementary medical insur- 
 ance; medicaid; unemployment insurance; govern- 
 ment employee retirement; workers' compensa- 
 tion; veterans benefits; food stamps; black lung; 
 supplemental security income; and public assis- 
 tance. Government payments to nonprofit insti- 
 tutions, other than for work under research and 
 development contracts, are also included. 
 
 Transfer payments to foreigners: U.S. Government 
 nonmilitar^' grants to foreign governments in cash 
 and in kind and U.S. Government transfer pay- 
 ments, mainly retirement benefits, to former res- 
 idents of the United States. 
 
 Net interest paid: Interest paid to persons and busi- 
 ness and to foreign businesses, governments, and 
 persons, less interest received from business and 
 from foreigners. Interest paid consists of mone- 
 tary interest paid on public debt and other finan- 
 cial obligations. Interest received consists of mon- 
 etary and imputed interest received on loans and 
 investments, including the balances of State and 
 local social insurance funds. 
 
 Dividends received: Dividends received by State 
 and local general government, primarily by their 
 social insurance funds. 
 
 Subsidies less current surplus of government en- 
 terprises: Subsidies are the monetary grants 
 paid by government to business, including govern- 
 ment enterprises at another level of government. 
 The current surplus of government enterprises is 
 their current operating revenue and subsidies re- 
 ceived from other levels of government less their 
 current expenses. In the calculation of their cur- 
 rent surplus, no deduction is made for deprecia- 
 tion charges and net interest paid. The current 
 surplus of government enterprises is not counted 
 as a profit-type income and, accordingly, not as 
 a factor charge. Subsidies and current surplus 
 are shown as a combined entry because deficits in- 
 curred by government enterprises may result fi*om 
 selling goods to business at below-market prices in 
 lieu of giving them subsidies. 
 
 Wage accruals less disbursements: Wages and 
 salaries earned less wages and salaries paid. 
 This difference occurs when there are retroactive 
 changes in wages and salaries; it is subtracted in 
 deriving total government expenditures, which re- 
 flect wages and salaries on a cash basis. 
 
 Surplus or deficit (-), national income and prod- 
 uct accounts: The sum of government receipts 
 less the sum of government expenditures. It may 
 also be viewed as the sum of net acquisitions of 
 financial assets by government and government 
 
 enterprises and net government purchases of land 
 and of rights to government-owned land includ- 
 ing oil resources, less net borrowing. The sur- 
 plus or deficit of social insurance funds is shown 
 separately. 
 
 Federal grants-in-aid: Net payments from the Fed- 
 eral Government to State and local governments 
 to help finance State and local government activ- 
 ities in areas such as public assistance, highway 
 construction, and education. 
 
 Presentation 
 of the Estimates 
 
 NIPA tables 
 
 The estimates of government transactions are pub- 
 lished in the NIPA tables, which appear in the Survey 
 (and reference volumes cited therein). Table 1-3 indi- 
 cates the location, by NIPA table number, of the var- 
 ious annual and quarterly estimates of government 
 transactions and, where applicable, of estimates in 
 constant dollars and the corresponding price indexes. 
 Annual estimates generally cover 1929 to the present; 
 quarterly estimates in current dollars generally cover 
 the first quarter of 1946 to the present; and quarterly 
 estimates in constant dollars generally cover the first 
 quarter of 1947 to the present. 
 
 In addition to the NIPA tables, additional detail on 
 government transactions within the NIPA framework 
 is presented in several special articles annually in the 
 Survey. These include "Federal Fiscal Programs," gen- 
 erally in the February Survey, and "Receipts and Ex- 
 penditures of State Governments and of Local Govern- 
 ments." Other Survey articles on government transac- 
 tions are listed in appendix I-A. 
 
 Schedule 
 
 With two exceptions, the advance quarterly NIPA 
 estimates of government transactions are prepared in 
 the first month after the end of the quarter, revised 
 a month later (the preliminary estimates), and re- 
 vised again the following month (the final estimates). 
 The exceptions are corporate profits tax liability, to- 
 tal receipts, and the government surplus or deficit, 
 for which no advance estimates are prepared because 
 of lags in the availability of information on corporate 
 profits. No further revisions are made in the quarterly 
 estimates until the annual revisions, which usually oc- 
 cur each July and cover the 3 most recent years. Fol- 
 lowing the third annual revision, no further revisions 
 are made in the estimates until the comprehensive re- 
 visions, which usually occur every 5 years. 
 
Government Transactions. 
 
 November 1988 
 
 11 
 
 Table 1-3. — Location of Government Transactions in the NIPA Tables 
 
 Item 
 
 Total 
 
 Federal 
 
 State and local 
 
 Current-dollar estimates 
 
 Receipts . 
 
 Personal tax and nontax receipts ' . 
 By category 
 
 Corporate profits tax accruals ' 
 
 Indirect business tax and nontax accruals ' 
 
 By category 
 
 Contributions for social insurance 
 
 Employer contributions 
 
 By category of social insurance fund .. 
 
 Personal contributions 
 
 By category of social insurance fund .. 
 
 Federal grants-in-aid 
 
 Expenditures 
 
 By type and/or function 
 
 Purchases of goods and services . 
 
 Durable goods 
 
 By category 
 
 Nondurable goods 
 
 By category 
 
 Services 
 
 Compensation of employees.. 
 Wages and salaries 
 
 Supplements to wages and salaries 
 
 By type 
 
 Employer contributions for social insurance . 
 
 Other labor income 
 
 Other services 
 
 By category 
 
 Structures 
 
 By type 
 
 Transfer payments. 
 
 To persons 
 
 By category 
 
 To foreigners 
 
 Grants-in-aid to State and local governments. 
 
 Net interest paid 
 
 Interest paid 
 
 To persons and business 
 
 To foreigners 
 
 Less: Interest received by government 
 
 Less: Dividends received by government 
 
 Subsidies less current surplus of government enterprises . 
 Subsidies 
 
 By category 
 
 Current surplus of government enterprises . 
 
 By category 
 
 Less: Wage accruals less disbursements . 
 
 Surplus or deficit (-), national income and product 
 accounts. 
 
 Social insurance funds 
 
 Other 
 
 Social insurance funds receipts and expenditures , 
 
 Relation of NIPA estimates to source data 
 
 Employment: 
 
 Number of employees 
 
 Persons engaged in production 
 
 Hours worked by employees 
 
 Gross national product originating in government.. 
 
 Net national product originating in government 
 
 National income originating in government 
 
 3.1* 
 
 2.1.2.7, 3.1*, 3.4*. 8.9* 
 
 1.14, 1.16, 3.r, 6.20B*, 8.13*, 9.6 
 
 1.9, 1.21* (farm), 1.23* (housing), 
 3.1*, 3.5\8.9* 
 
 1.9, 3.1*, 3.6* 
 
 1.14, 3.6*, 6.12*, 8.5*, 8.9* 
 
 8.5* 
 
 2.1, 2.6, 3.6*, 8.14* 
 
 3.1* 
 3.14* 
 
 1.1, 1.17 (autos), 1.19 (trucks), 3.1' 
 3.7B, 8.1, 8.9*, 9.1t 
 
 1.15*, 3.1*, 6.4B* 
 
 1.14, 1.15*, 2.1, 2.6, 6.5B*, 6.8B* 
 
 (per empl.) 
 1.15* 
 
 (see receipts) 
 6.13* 
 
 5.4*2 
 5.4*2 
 
 3.1* 
 
 1.9, 3.1*, 3.1*, 8.9* 
 
 2.1 
 
 3.1*, 4.1,9.5t 
 
 3.1*, 3.14* 
 3.1*, 8.8* 
 
 3.1*, 
 3.1*, 
 
 8.8* 
 
 4.1, 4.5*, 9.5t 
 
 3.1*, 8.8*, 8.9* 
 
 3.1*, 8.7* 
 
 1.9, 1.23* (housing), 3.1*, 3.12*, 8.9* 
 1.21* (farm), 3.1*, 8.9* (nonfarm 
 housing) 
 
 3.1* 
 
 1.9,3.1* 
 3.1*, 5.1 
 
 3.1* 
 3.1* 
 
 6.6B*, 6.7B* 
 
 6.10B* 
 
 6.11* 
 
 1.7,6.1* 
 
 1.12* 
 
 1.12*, 1.15*, 6.3B* 
 
 3.2, 9.3t 
 
 3.2, 3.4*, 9.3t 
 3.2, 3.4* 
 
 3.2, 9.3t 
 
 3.2, 3.5*, 9.3t 
 
 3.2, 3.5* 
 
 3.2, 3.13*, 9.3t 
 3.6*, 3.13* 
 3.6*, 8.9* 
 3.6*, 3.13* 
 3.6* 
 
 3.2, 9.3t 
 3.15* 
 
 1.1, 3.2, 3.7B, 3.9 (defense), 
 
 8.1, 9.1t, 9.3t 
 3.7B, 3.9 (defense) 
 3.9 (defense) 
 3.7B, 3.9 (defense) 
 3.9 (defense) 
 3.7B, 3.9 (defense) 
 3.7B, 3.9 (defense), 6.4B* 
 6.5B*, 6.8B* (per empl.) 
 
 8.5* 
 
 (see receipts) 
 
 3.7B, 3.9 (defense) 
 3.9 (defense) 
 3.7B, 3.9 (defense) 
 
 3.2, 9.3t 
 
 3.2, 3.11*, 3.13*, 9.3t 
 
 3.11* 
 
 3.2, 9.3t 
 
 3.2, 9.3t 
 
 3.2, 9.3t 
 3.2, 8.8*, 9.3t 
 3.2, 9.3t 
 3.2. 8.8*, 9.3t 
 3.2. 8.8*. 9.3t 
 
 3.2, 3.12*, 9.3t 
 3.2, 3.12*, 9.3t 
 
 3.12* 
 
 3.2, 3.12*, 9.3t 
 
 3.12* 
 
 3.2, 9.3t 
 
 3.2, 5.1,9.3t 
 
 3.2 
 3.2 
 
 313* 
 
 3J 78,3.19* 
 
 6.6B*, 6.7B* 
 6.10B* 
 
 1.7, 6.1* 
 
 3.3, 9.4t 
 
 3.3, 3.4*, 9.4t 
 3.3, 3.4* 
 
 3.3. 9.4t 
 
 3.3, 3.5*, 9.4t 
 
 3.3, 3.5* 
 
 3,3, 3.13*, 9.4t 
 
 3.6*, 3.13* 
 
 3.6* 
 
 3.6*, 3.13* 
 
 3.6* 
 
 3.3, 9.4t 
 
 3.3, 9.4t 
 
 3.16* 
 
 1.1, 3.3, 3.7B, 8.1, 9. It, 9.4t 
 
 3.7B 
 
 3.7B 
 
 3.7B 
 
 3.3, 3.7B, 6.4B* 
 
 6.5B*, 6.8B* (per empl.) 
 
 8.5* 
 
 (see receipts) 
 
 3.7B 
 3.7B 
 
 3.3, 3.11*, 3.13*, 9.4t 
 3.11* 
 
 3.3, 9.4t 
 3.3, 8.8*, 9.4t 
 
 3.3, 8.8*, 9.4t 
 
 3.3, 8.7*. 9.4t 
 
 3.3, 3.12*, 9.4t 
 3.3, 3.12*, 9.4t 
 
 3.3, 3.12*. 9. 4t 
 
 3.12* 
 
 3.3, 9.4t 
 
 3.3, 5.1, 9.4t 
 
 3.3 
 3.3 
 
 3.13* 
 3.18* 
 
 6.6B*, 6.7B* 
 6.10B* 
 
 1.7, 6.1* 
 
 See footnotes at end of table. 
 
12 Government Transactions. 
 
 J^ovemher 1988 
 
 Table 1-3. — Location of Government Transactions in the NIPA Tables — Continued 
 
 Item 
 
 Total 
 
 Federal 
 
 State and local 
 
 Constant-dollar estimates 
 
 Purchases of goods and services. 
 
 Durable goods 
 
 By category 
 
 Nondurable goods . 
 By category 
 
 Services 
 
 Compensation of employees . 
 Other services 
 
 Structures 
 
 By type 
 
 Gross national product originating in government. 
 
 Net national product originating in government 
 
 National income originating in government 
 
 1.2, 1.18 (autos), 1.20 (trucks), 3.8B, 
 8.1 (defense), 8.1 
 
 5.5* i 
 5.5* » 
 
 1.8,6.2* 
 
 1.13* 
 
 1.13* 
 
 1.2,3.88,3.10 
 
 3.8B, 3.10 (defense) 
 3.10 
 
 3.8B, 3.10 (defense) 
 3.10 
 
 3.8B, 3.10 (defense) 
 3.8B, 3.10 (defense) 
 3.8B, 3.10 (defense) 
 
 3.8B, 3.10 (defense) 
 
 1.8,6.2* 
 
 1.2, 3.8B, 8.1 
 
 3.8B 
 
 3.8B 
 
 3.8B 
 3.8B 
 3.8B 
 
 3. SB 
 1.8,6.2* ■" 
 
 Price indexes 
 
 Purchases of goods and services. 
 
 Durable goods . 
 By category .. 
 
 Nondurable goods , 
 By category 
 
 Services 
 
 Compensation of employees . 
 
 Other services 
 
 By category 
 
 Structures 
 
 By type 
 
 Gross national product originating in government. 
 
 7.1, 7.4t, 7.16, 8.1 
 
 7.12*^ 
 7.12* i 
 
 7.6* 
 
 7.1, 7At, 7.16, 8.1 
 
 7.16,7.17 (defense) 
 7.17 
 
 7.16,7.17 (defense) 
 7.17 
 
 7.16, 7.17 (defense) 
 7.16, 7.17 (defense) 
 7.16, 7.17 (defense) 
 7.17 
 
 7.16,7.17 (defense) 
 
 7.6t 
 
 7.1, 7.4t, 7.16, 8.1 
 7.16 
 
 7.16 
 
 7.16 
 7.16 
 7.16 
 
 7.16 
 7.6* 
 
 * Annual estimates only. 
 
 t Quarterly, not seasonally adjusted estimates only. 
 
 ? Implicit price deflator. 
 
 1. In tables where perspective is that of the taxpayer rather than government, receipts are 
 shown as payments and accruals are shown as liabilities. 
 
 2. In these tables, purchases of structures include compensation ol government employees en- 
 gaged in new force-account construction. In other tables showing government purchases, this 
 compensation is classified as a sen/ice and is included as part of government compensation ot 
 employees. 
 
 Notes. — (1) Except as noted, these tables contain both annual estimates and quarterly esti- 
 mates seasonally adjusted at annual rates. (2) Except as noted, price indexes are fixed-weighted 
 price indexes with 1982 weights. (3) Tables 3.7, 3.8. 3.17, 6.4-6.10, and 6.14-6.24 are published 
 in two parts: 3.7A and 3.8A (for 1929-71). 3.17A (for 1952-67). 6.4A-6.10A, 6.14A, and 6.19A 
 (for 1929-48). and 6.15A-6.18A and 6.20A-6.24A (for 1929-47); and 3.78 and 3.8B (for 1972 
 and later years). 3.17B (for 1968 and later years). 6.4B-6.10B. 6.14B, and 6.19B (for 1949 and 
 later years), and 6.15B-6.18B and 6.20B-6.24B (for 1948 and later years). 
 
Appendix I- A 
 
 Articles Related to Government Transactions 
 
 The following is a list of selected articles related to government transactions that have 
 appeared in the Survey of Current Business in the last decade. 
 
 "Federal Farm Programs for 
 IGSfr-GO." April 1986 (pages 
 31-35). 
 
 Includes a discussion of the national income and 
 product account treatment of the Commodity Credit 
 Corporation. 
 
 "Federal Fiscal Programs." 
 
 February 1988 (pages 19-24). 
 
 Presents the annual "translation" of the Federal bud- 
 get receipts and expenditures into the national income 
 and product account estimates. 
 
 "Federal Personal Income Taxes: 
 Liabilities and Payments, 
 1977-81." January 1983 (pages 
 27-30). 
 
 Presents Federal personal income taxes on a liabil- 
 ity basis and compares them with the payments ba- 
 sis used in the accounts; includes a brief methodology. 
 Subsequently updated. 
 
 "Implicit Price Deflators for 
 Military Construction." 
 November 1983 
 (pages 14-18). 
 
 Discusses construction prices in general and the devel- 
 opment of price indexes for military construction. 
 
 "Special Note. — National Defense 
 Purchases." November 1982 
 (pages 4-6). 
 
 Discusses the various measures of spending — expend- 
 itures, purchases, and outlays — for national defense, 
 focusing on the defense buildup in the early 1980's; 
 includes some methodology. 
 
 "National Defense Purchases: A 
 Review of Appropriations 
 and Real Purchases." 
 November 1984 
 (pages 11-16). 
 
 Reviews the national defense appropriations and 
 constant-dollar buildup in terms of both budget na- 
 tional defense purchases of goods and services. 
 
 "Receipts and Expenditures of 
 State Governments and of 
 Local Governments: Revised 
 and Updated Estimates, 
 1984-87." September 1988 
 (pages 23-25). 
 
 Presents a deconsolidation of the receipts and expen- 
 ditures account for State and local governments into 
 separate accounts for the two levels of government. 
 
 "Sources of Change in Federal 
 Government Transfer 
 Payments to Persons, 
 1970-81." October 1982 (pages 
 25-32). 
 
 Discusses the growth in the level and relative size of 
 transfer payments to persons in terms of three major 
 sources: (1) automatic cyclical effects, (2) automatic 
 inflation effects, and (3) legislation and other sources. 
 
 13 
 
14 Government Transactions. 
 
 J^ovember 1988 
 
 ^Sources of Change in the 
 
 Federal Government Deficit, 
 1970-86." May 1985 (pages 
 25-32). 
 
 Discusses the change in the Federal deficit (on the na- 
 tional income and product accounting basis) by exam- 
 ining trends in receipts and expenditures, their compo- 
 sition, and their automatic responsiveness to the busi- 
 ness cycle and inflation. 
 
 "Sources of Growth in Selected 
 State Local Go vemment Tax 
 Receipts." February 1982 
 (pages 15-18). 
 
 Discusses the growth of selected tax receipts in terms 
 of legislative actions, on the one hand, and events out- 
 side the reach of legislative actions (mainly economic 
 activity and inflation), on the other. 
 
 "Tax Reform Act of 1986." March 
 1987 (pages 18-25). 
 
 Presents a brief history of Federal tax legislation in 
 the 1980's and discusses in detail the provisions of the 
 Tax Reform Act of 1986. Presents the impact of those 
 provision on a national income and product accounting 
 basis. 
 
 "The State and Local 
 
 Government Fiscal Position: 
 An Alternative Measure." 
 March 1984 (pages 23-25). 
 
 Discusses the characteristics of the State and local gov- 
 ernment surplus or deficit on the national income and 
 product account basis that must be considered when 
 using it to analyze the fiscal position of these govern- 
 ments and presents an alternative measure of the fis- 
 cal position. Subsequently updated. 
 
Part II. 
 Federal Government Transactions 
 
 Overview of Estimating 
 Procedures 
 
 The NIPA estimates of Federal Government receipts 
 and expenditures are based on the Federal budget, 
 published by the Office of Management and Budget 
 (0MB), on financial reports published by the Depart- 
 ment of the Treasury, and on reports of other Federal 
 Government agencies. 
 
 The budget is published as a set of documents, in- 
 cluding the Budget of the United States Government 
 (Budget) [4A-1], the Budget of the United States Gov- 
 ernment: Appendix (Budget: Appendix) [4A-2], and the 
 Budget of the United States Government: Special Anal- 
 yses (Special Analyses) [4A-3]. The Treasury also pre- 
 pares a set of documents, including the United States 
 Government Annual Report: Appendix [80], Monthly 
 Treasury Statement of Receipts and Outlays of the 
 United States Government (MTS) [77], and the Trea- 
 sury Bulletin [78]. The appendixes to the budget and 
 to the Treasury's annual report provide the most de- 
 tailed and complete fiscal year data on receipts, out- 
 lays, balances, and other cash-basis information cov- 
 ering all Federal Government entities. (The data fi-om 
 the 0MB and Treasury documents will be referred to 
 collectively as "budget data" when the context is a gen- 
 eral description of methodology.) The documents are 
 keyed to the fiscal year, which begins on October 1, 
 ends the following September 30, and is designated by 
 the calendar year in which it ends. 
 
 Tables II- 1 and II-2 show the relation of receipts and 
 outlays in the Federal budget to NIPA estimates of 
 receipts and expenditures. The tables are regroup- 
 ings, with detail by major receipt category or agency, 
 of NIPA table 3.17B. The first column shows receipts 
 by category or outlays by agency as shown in the bud- 
 get. The next several columns show the differences 
 between the budget data and NIPA estimates, and the 
 remaining columns show the estimates of total NIPA 
 receipts or expenditures and the distribution of the to- 
 tals among NIPA categories. 
 
 Tables II- 1 and II-2 have two major roles at differ- 
 ent points in the cycle of estimating NIPA receipts and 
 expenditures. In their first role, the tables provide 
 a structured format for the "translation" of the Fed- 
 
 eral budget into the NIPA receipts and expenditures. 
 This translation — which is based largely on data from 
 the Budget — provides a framework, or a benchmark, 
 for the current quarterly estimates. For example, the 
 translation of the fiscal year 1989 budget as it was 
 transmitted to Congress in early 1988 provided var- 
 ious expenditures relationships for fiscal years 1988 
 and 1989 (discussed in detail later) needed to pre- 
 pare the current quarterly estimates for calendar year 
 1988. 
 
 In their second role, the tables provide the same 
 structured format for the fiscal year analysis carried 
 out after the fiscal year is over. V.Tiile this role is sim- 
 ilar to the first role, the analysis of receipts and ex- 
 penditures is much more detailed, the data are actual 
 rather than budget estimates, and the source data — 
 especially for receipts — are different than those used 
 in the budget translation. This fiscal year analysis 
 provides the framework for the quarterly estimates 
 prepared for annual revisions, which usually occur 
 each July. For example, the 1987 fiscal year analy- 
 sis provided the basis for the estimates prepared as 
 part of the July 1988 revision. 
 
 As used in both roles, the tables also provide a rec- 
 onciliation between the NIPA estimates and the bud- 
 get. The total receipts and expenditures of the Federal 
 Government are known, and the NIPA estimates must 
 reconcile to the budget totals. 
 
 Differences between receipts 
 
 Columns 2-6 in table II-l show the differences in 
 coverage, netting and grossing, and timing between 
 receipts in the budget and NIPA receipts. 
 
 Coverage of transactors. — The budget includes re- 
 ceipts from persons in the U.S. territories (including 
 American Samoa, Guam, and the Virgin Islands of 
 the United States) and the Commonwealth of Puerto 
 Rico. In the NIPA's, residents of the U.S. territo- 
 ries and Puerto Rico are considered residents of the 
 rest of the world, rather than U.S. residents. The re- 
 ceipts, largely contributions for social insurance, are 
 not, however, treated as receipts from the rest-of- 
 the-world sector; instead, they are excluded from the 
 NIPA's. 
 
 The budget does not include receipts of certain en- 
 tities that are part of the NIPA government sector. 
 These receipts include those of the Tennessee Valley 
 
 15 
 
16 Government Transactions. 
 
 Jslovemher 1988 
 
 Table 11-1. — Relation of Federal Government Receipts in the National Income and Product Accounts to the Budget, Fiscal Year 1982 
 
 [Billions of dollars] 
 
 Line 
 
 Budget category 
 
 Budget 
 receipts 
 
 (1) 
 
 Coverage diHerences 
 
 Transactors 
 
 Less; U.S. 
 territories 
 
 and 
 Puerto 
 
 Rico 
 
 (2) 
 
 Plus: 
 
 Receipts 
 
 of entities 
 
 not in 
 
 budget 
 
 0) 
 
 Transac- 
 tions 
 
 Plus: 
 Imputa- 
 tions 
 
 (4) 
 
 Plus: 
 Netting 
 
 and 
 grossing 
 
 differ- 
 
 (5) 
 
 Plus: 
 Timing 
 differ- 
 ences 
 
 (6) 
 
 Equals: Federal Government receipts, national income and 
 product accounts 
 
 Total 
 
 (7) 
 
 Personal 
 tax and 
 nontax 
 receipts 
 
 (8) 
 
 Corporate 
 proms tax 
 accruals 
 
 (9) 
 
 Indirect 
 business 
 tax and 
 
 nontax 
 accruals 
 
 (10) 
 
 Contribu- 
 tions for 
 
 social 
 insurance 
 
 (11) 
 
 10 
 
 13 
 
 16 
 17 
 18 
 
 19 
 
 Individual income taxes 
 
 Corporation income taxes 
 
 Social insurance taxes and contributions: 
 
 Social security trust funds 
 
 Railroad retirement accounts 
 
 Unemployment insurance 
 
 Federal employees retirement contributions 
 
 Other retirement contributions 
 
 Excise taxes 
 
 Estate and gift taxes 
 
 Customs duties 
 
 Miscellaneous receipts: 
 Deposits of earnings by Federal Reserve banks 
 All otfier 
 
 Subtotal 
 
 Not allocated to budget categories: 
 
 Receipts of entities not in budget 
 
 Inputalions 
 
 Receipts from budget expenditures: 
 Employer contributions for employee retirement . 
 
 Meciicare insurance premiums 
 
 Otfier 
 
 Total 
 
 298.1 
 49.2 
 
 177.5 
 
 3.2 
 
 16.2 
 
 4.1 
 
 .1 
 
 36.3 
 
 8.0 
 
 8.9 
 
 15.2 
 1.0 
 
 617.8 
 
 
 
 
 
 617.8 
 
 
 
 
 1.0 
 
 
 .2 
 
 
 
 
 
 
 
 
 
 .1 
 1.2 
 
 
 
 
 
 1.2 
 
 -.2 
 
 
 16.9 
 
 
 
 
 
 16.9 
 
 -0.6 
 -1.2 
 
 2.0 
 
 
 
 
 
 
 8.7 
 3.9 
 5.9 
 
 18.7 
 
 4.5 
 -11.2 
 
 -1.8 
 
 -.1 
 
 .4 
 
 
 
 
 
 
 
 
 .1 
 
 
 -8.8 
 
 
 
 
 
 
 .2 
 
 -8.6 
 
 30Z0 
 36.8 
 
 176.7 
 
 3.2 
 
 16.5 
 
 4.1 
 
 .1 
 
 35.6 
 
 8.0 
 
 8.9 
 
 15.3 
 .9 
 
 607.9 
 
 -.2 
 16.9 
 
 8.7 
 3.8 
 6.1 
 
 643.3 
 
 302.0 
 
 
 -.3 
 
 
 
 
 
 
 
 
 
 .1 
 
 8.0 
 
 
 
 
 .2 
 
 310.0 
 
 
 
 
 310.0 
 
 
 36.8 
 
 15.3 
 
 
 52.1 
 
 
 
 
 
 52.1 
 
 
 
 
 
 
 
 
 
 35.5 
 
 8.9 
 
 
 .7 
 
 45.0 
 
 
 
 5.3 
 
 50.0 
 
 177.0 
 
 3.2 
 
 16.5 
 
 4.1 
 
 .1 
 
 200.8 
 
 .1 
 16.9 
 
 8.7 
 
 3.8 
 
 .8 
 
 231.1 
 
Government Transactions. 
 
 J^ovemher 1988 
 
 17 
 
 Table 11-2.— Relation of Federal Government Expenditures in the National Income and Product Accounts to tine Budget, Fiscal Year 1982 
 
 [Billions of dollars] 
 
 Line 
 
 Agency 
 
 Budg- 
 et 
 
 out- 
 lays 
 
 (1) 
 
 Coveraee differences 
 
 Transactors 
 
 Less: 
 U.S. 
 
 territo- 
 ries 
 and 
 
 Puerto 
 Rico 
 
 (2) 
 
 Plus: 
 Expen- 
 ditures 
 
 of 
 entities 
 
 not in 
 budget 
 
 (3) 
 
 Transcations 
 
 Less: 
 
 Net 
 lend- 
 ing 
 
 (4) 
 
 Net 
 pur- 
 chases 
 of land 
 
 (5) 
 
 Otfier 
 financial 
 transac- 
 tions ' 
 
 (6) 
 
 Pius: 
 
 Impu- 
 tations 
 
 (7) 
 
 Plus: 
 Netting 
 
 and 
 gross- 
 ing 
 differ- 
 
 (8) 
 
 Plus: 
 Timing 
 diHer- 
 ences 
 
 (9) 
 
 Less: 
 Intra- 
 gov- 
 ern- 
 mental 
 trans- 
 actions 
 
 (10) 
 
 Equals: Federal government expenditures, national income and 
 product accounts ' 
 
 Total 
 
 (11) 
 
 Purchases of 
 
 goods and 
 
 services 
 
 De- 
 fense 
 
 (12) 
 
 Nonde- 
 fense 
 
 (13) 
 
 Transfer 
 payments 
 
 To 
 per- 
 
 (14) 
 
 To 
 for- 
 eigners 
 
 (15) 
 
 Grants- 
 in-aid to 
 
 Stale 
 and local 
 govern- 
 ments 
 
 (16) 
 
 Net 
 inter- 
 est 
 paid 
 
 (17) 
 
 Subsi- 
 dies 
 less 
 current 
 surplus 
 
 of 
 govern- 
 ment 
 enter- 
 prises 
 
 (18) 
 
 I 
 
 2 
 3 
 
 4 
 5 
 6 
 7 
 8 
 9 
 10 
 11 
 
 12 
 
 13 
 14 
 15 
 16 
 17 
 18 
 19 
 20 
 21 
 
 22 
 
 23 
 24 
 
 25 
 
 26 
 
 27 
 
 28 
 
 Legislative Branch 
 
 The Judiciary 
 
 Executive Office of the President 
 
 Funds Appropriated to the President 
 
 Department of Agriculture 
 
 Department of Commerce 
 
 Department of Defense — Military 
 
 Department of Defense— Cfvil 
 
 Department of Education 
 
 Department of Energy 
 
 Department of Health and Hunnan 
 
 Services. 
 Department of Housing and Urban 
 
 Development. 
 
 Department of the Interior 
 
 Department of Justice 
 
 Department of Labor 
 
 Department of State 
 
 Department of Transportation 
 
 Department of the Treasury 
 
 Environmental Protection Agency 
 
 General Services Administration 
 
 National Aeronautics and Space 
 
 Administration. 
 
 Office of Personnel Management 
 
 Veterans' Administration 
 
 Other independent agencies 
 
 Undistributed offsetting receipts: 
 
 Errployer share, enployee 
 retirement. 
 
 Interest received by trust funds 
 
 Other 
 
 Subtotal 
 
 Not allocated to agencies: 
 
 Expenditures of entities not in 
 budget. 
 
 Imputations 
 
 Total. 
 
 1.4 
 
 .7 
 
 .1 
 
 6.1 
 
 36.2 
 
 ZO 
 
 182.9 
 
 3.0 
 
 14.1 
 
 7.7 
 
 251.3 
 
 14.5 
 
 3.8 
 
 Z6 
 
 30.7 
 
 2.2 
 
 19.9 
 
 110.5 
 
 5.0 
 
 2 
 
 6.0 
 
 20.0 
 23.9 
 12.9 
 
 -7.0 
 
 -16.0 
 -6.2 
 
 728.4 
 
 
 728.4 
 
 
 
 
 
 
 
 
 
 1.3 
 
 
 
 .1 
 
 
 .2 
 
 1.8 
 
 .1 
 .3 
 .1 
 
 
 
 
 
 .1 
 .3 
 
 5.0 
 
 
 5.0 
 
 17.2 
 
 
 17.2 
 
 
 
 
 
 
 1.8 
 
 -.4 
 
 .1 
 
 
 
 .4 
 
 
 
 
 
 
 
 .7 
 -.1 
 
 
 
 
 
 
 -.1 
 2.1 
 
 
 
 
 5.1 
 
 14.3 
 
 
 19.4 
 
 
 -2.4 
 
 -2.2 
 
 
 -2.2 
 
 
 
 
 
 .7 
 -.1 
 
 
 
 
 
 
 
 1.3 
 
 
 
 
 
 
 
 
 
 
 
 -.8 
 
 
 
 
 
 
 
 16.9 
 16.9 
 
 
 
 
 
 
 
 
 .2 
 .1 
 .1 
 
 
 
 
 
 -.5 
 
 3.9 
 
 1.6 
 
 
 .1 
 
 -1.6 
 
 
 
 
 3.4 
 .5 
 
 
 
 6.2 
 
 
 3.6 
 
 17.6 
 
 1.1 
 
 
 18.7 
 
 
 
 
 .1 
 -.8 
 
 -1.8 
 
 
 -2.6 
 
 
 
 
 
 
 
 
 .5 
 
 
 
 
 
 
 .1 
 .1 
 .1 
 
 1.6 
 
 -.1 
 
 
 .3 
 
 
 .2 
 
 -15.8 
 
 
 
 
 
 
 
 
 
 1.2 
 
 -.3 
 -12.9 
 
 12.9 
 
 
 
 
 1.4 
 
 .7 
 
 .1 
 
 3.6 
 
 34.4 
 
 ZO 
 
 182.2 
 
 3.0 
 
 13.4 
 
 7.2 
 
 253.2 
 
 10.9 
 
 5.1 
 
 2.6 
 
 30.2 
 
 2,3 
 
 19.1 
 
 125.4 
 
 4.9 
 
 .3 
 
 6.0 
 
 23.9 
 
 24.4 
 
 9.7 
 
 -16.0 
 
 
 749.9 
 
 -10,8 
 
 16.9 
 755.9 
 
 
 
 
 .3 
 
 
 166.3 
 
 
 
 3.3 
 
 
 
 
 
 
 
 
 
 
 
 
 1.8 
 
 .2 
 
 172.0 
 
 15.4 
 187.3 
 
 1.4 
 .7 
 .1 
 
 
 12.9 
 
 1.5 
 
 
 
 3.0 
 .8 
 
 2.4 
 
 8.7 
 
 3.8 
 2.4 
 1.9 
 1.1 
 5.3 
 4.2 
 .9 
 .2 
 5.9 
 
 2.3 
 
 8.1 
 4.5 
 
 
 
 
 72.7 
 
 3.4 
 
 1.0 
 77.1 
 
 
 
 
 
 
 9.6 
 
 
 
 15.8 
 
 
 
 5.0 
 
 207.6 
 
 
 
 .1 
 
 22.9 
 .2 
 
 .4 
 1.2 
 
 
 
 
 19.2 
 
 16.2 
 
 6.4 
 
 
 
 
 304.7 
 
 .1 
 
 .9 
 305.6 
 
 
 
 
 3.7 
 
 .6 
 
 
 .1 
 
 
 
 1.0 
 
 .2 
 
 
 
 
 
 1.0 
 
 
 
 
 
 
 
 
 
 
 
 7.1 
 
 
 7.2 
 
 
 
 
 
 
 .4 
 
 5.2 
 .5 
 .2 
 
 -.1 
 
 7.7 
 
 1.8 
 35.8 
 
 4.2 
 
 1.3 
 .2 
 
 5.3 
 
 
 10.8 
 
 4.6 
 
 4.0 
 
 
 .1 
 
 
 .1 
 1.3 
 
 83.4 
 
 
 83.4 
 
 -.9 
 .6 
 
 -.1 
 
 
 
 
 
 -.1 
 
 
 
 
 
 -.9 
 
 -.2 
 
 
 
 
 115.4 
 
 .1 
 
 
 -16.0 
 
 
 96.8 
 
 -14.2 
 
 -.4 
 82.2 
 
 
 
 
 
 
 
 
 
 5.5 
 
 
 
 -.3 
 
 
 
 
 
 -.3 
 
 
 
 7.1 
 
 C 
 
 
 .2 
 
 
 2.5 
 
 
 
 
 
 .4 
 
 -1.9 
 
 
 
 
 13.2 
 
 -.1 
 
 
 13.0 
 
 1. Also includes "Less: Wage accruals less disbursements," which were -$16 million in 1982. 
 
 2. Includes capital gains and losses, and transactions of certain Federal employee benefit funds. 
 
18 Governynent Transactions. 
 
 J^ovemher 1988 
 
 Authority retirement fund, the Federal Reserve Board 
 retirement fund, and several deposit funds held by the 
 Ti-easur>'. 
 
 Coverage of transactions. — The budget refers to 
 actual transactions; the NIPA's include imputations. 
 In receipts, imputations are made for the Federal Gov- 
 ernment's contributions as an employer to the follow- 
 ing programs: Military retirement, workers' compen- 
 sation, military medical insurance, unemployment in- 
 surance for former Federal employees, and several 
 small unfunded Federal retirement programs. (In 
 each case, an equal imputation is made in expendi- 
 tures; the surplus or deficit is not affected.)^ 
 
 Netting and grossing. — ^The "netting and grossing 
 differences" in table II-l reflects three kinds of diflFer- 
 ences in the way a transaction is recorded. For all 
 three, the surplus or deficit is not affected because 
 equal adjustments are made in receipts and expen- 
 ditures. 
 
 First, the budget nets certain receipts against out- 
 lays, and the NIPA's record a receipt. This difference 
 occurs, for example, in the case of medicare supple- 
 mentary medical insurance premiums, where the pre- 
 miums are netted against outlays in the budget. The 
 budget's netting reflects the view that the proceeds are 
 income from a business-type transaction and are thus 
 not included in receipts. The NIPA's record a contri- 
 bution for social insurance. The grossing adjustments 
 raise NIPA receipts and expenditures relative to their 
 budget coiinterparts. 
 
 Second, in some cases the budget records a re- 
 ceipt, and the NIPA's record an offset against expen- 
 ditures. This difference occurs, for example, in the 
 case of the windfall profit tax on Federal sales of crude 
 petroleum; the taxes are recorded in the budget as ex- 
 cise taxes, but they are netted against expenditures in 
 the NIPA's. The netting adjustments lower NIPA re- 
 ceipts and expenditures relative to their budget coun- 
 terparts. 
 
 Third, for some transactions between agencies, the 
 budget does not record a receipt; instead, it records 
 an outlay and an offset against outlays. The NIPA's 
 record both an expenditure and a receipt. This differ- 
 ence in recording occurs for contributions made by the 
 Federal Government to social insurance funds for Fed- 
 eral employees. In the budget, each agency records its 
 outlays for this purpose and then, before total outlays 
 are calculated, the employer contributions are sub- 
 tracted as an "undistributed offsetting receipt." This 
 offsetting pair of entries reflects the budget view of 
 these transactions as intragovernmental transactions. 
 The grossing adjustments in receipts and in expendi- 
 tures raise the NIPA measures relative to their budget 
 counterparts. 
 
 Timing. — Receipts are recorded in the budget on a 
 cash — that is, when-received — ^basis. NIPA receipts 
 
 are recorded on either a payments — that is, when- 
 paid — basis or on an accrual basis. In general, the 
 NIPA's record receipts from the personal sector on a 
 payments basis and from the business sector on an 
 accrual basis. Consequently, personal taxes and non- 
 taxes and personal contributions for social insurance 
 are recorded on a payments basis. Corporate profits 
 taxes, indirect business taxes and nontaxes, and em- 
 ployer contributions for social insurance are recorded 
 on an accrual basis. Because of lags between when 
 a liability (accrual) is incurred or a payment is made 
 and when the payment is received, receipts recorded 
 in the budget for one period may be after the period 
 needed for the NIPA's. 
 
 Differences between outlays and 
 expenditures 
 
 Columns 2-9 in table II-2 show the differences in 
 coverage, netting and grossing, and timing between 
 outlays in the budget and NIPA expenditures. Column 
 10, as will be explained, ensures that all transactions 
 between agencies have been accounted for. 
 
 Coverage of transactors. — ^A geographic difference 
 of the same type as discussed for receipts exists for 
 expenditures. In principle, the expenditures that are 
 excluded from the NIPA's — largely transfer payments, 
 grants-in-aid, and subsidies to U.S. territories and 
 Puerto Rico — could be treated as payments to the rest- 
 of-the-world sector; however, this treatment is not im- 
 plemented. 
 
 In addition, differences relating to a number of other 
 transactors existed prior to 1986. Various entities 
 were considered "off-budget" under provisions of law. 
 For example, the Federal Financing Bank, the Postal 
 Service, the Synthetic Fuels Corporation, and the 
 lending activities of the Rural Electrification Admin- 
 istration were off-budget until their status changed in 
 1986.2 
 
 Coverage of transactions. — ^The budget includes 
 net lending (new loans less repayments) and net 
 transactions in land (purchases less sales) as outlays. 
 (Bonuses paid from drilling rights on the Outer Con- 
 tinental Shelf are considered sales of land.) NIPA ex- 
 penditures do not include these transactions because 
 they are an exchange of existing assets rather than 
 current income or production. In addition, the budget 
 includes certain other financial transactions such as 
 capital gains and losses of the Exchange Stabilization 
 Fund; the NIPA's do not include them. 
 
 As explained in describing the differences between 
 budget and NIPA receipts, the budget refers to actual 
 transactions and does not include imputations. The 
 column labeled "imputations" in table II-2 accounts 
 for the imputations discussed under receipts; tables 
 
 1. In NIPA table 3.17B, these imputations are included as a netting and 
 groesing difFerence. 
 
 2. The Balanced Budget and Emergency Deficit Control Act of 1985 — 
 better known as the Gramm-Rudman-Hollings Act — places social security 
 "off-budget" to exempt social security from sequestration. Social security, 
 however, is included in the budget for purposes of estimating the deficit. 
 
Government Transactions. 
 
 November 1988 
 
 19 
 
 II- 1 and II-2 show identical amoiints for these ac^ust- 
 ments. In addition, expenditures include imputations 
 for services furnished without payment by depository 
 institutions (that is, financial intermediaries except 
 life insurance carriers and private noninsured pen- 
 sion funds), food furnished to employees, and standard 
 clothing issued to military personnel. These three im- 
 putations, however, do not affect total expenditures 
 because an offsetting imputation is also made. For ex- 
 ample, in the case of the imputation for services by 
 depository institutions, an imputed purchase of ser- 
 vices offsets an imputation for interest received from 
 the deposits. In the cases of food and clothing, the 
 imputation included in compensation of employees (in 
 purchases) offsets an imputed offsetting sale by the 
 government (also in purchases). 
 
 Netting and grossing. — ^These differences were 
 discussed under receipts. Tables II-l and II-2 show 
 identical amounts for this adjustment. 
 
 Timing. — ^The budget records outlays, except inter- 
 est on the public debt, on a cash — that is, when-paid — 
 basis; interest on the public debt is on an accrual ba- 
 sis. In the NIPA's, expenditures are to be recorded as 
 follows: 
 
 Expenditure category Timing basis 
 
 Purchases: 
 
 Compensation accrual 
 
 Other delivery 
 
 Transfer payments payment 
 
 Grants-in-aid payment 
 
 Net interest paid accrual 
 Subsidies: 
 
 Agricultural pajrment 
 
 Other accrual 
 
 Current surplus of government accrual 
 enterprises 
 
 For purchases other than compensation, as the timing 
 basis implies, the NIPA's record the expenditure when 
 the goods or services are delivered rather than when 
 they are paid for. 
 
 In table II-2, the difference labeled "timing" occurs 
 in purchases, certain subsidies, and the current sur- 
 plus of government enterprises. The largest timing 
 difference is for national defense purchases. This dif- 
 ference usually involves long-term production items, 
 such as missiles and aircraft, for which the work in 
 progress is considered as part of business inventories 
 until the item is completed and delivered to the Gov- 
 ernment. 
 
 Intragovemmental transactions. — ^The budget 
 records certain transactions as an expenditure of one 
 agency and as a receipt deducted from the expendi- 
 tures of the receiving agency. For example, agencies 
 pay interest to the Department of the Treasury as the 
 result of their borrowing from the Treasury. This col- 
 umn in table II-2 is not, therefore, a difference between 
 NIPA expenditures and the budget; instead, it ensures 
 
 that all intragovemmental transactions have been ac- 
 counted for in an agency -by-agency derivation of NIPA 
 expenditures. 
 
 Derivation of receipts 
 
 Receipts estimates are prepared by kind-of-receipt 
 category as shown in the budget. For most categories, 
 the estimates are not based directly on budget data; 
 instead, to achieve the required timing basis, they are 
 based largely on other information from Federal agen- 
 cies. The most widely used source of other informa- 
 tion is from tabulations of tax returns prepared by the 
 Internal Revenue Service (IRS) and other administer- 
 ing agencies. For example, tabulations of corporate 
 income tax returns are used in the derivation of cor- 
 porate profits tax accruals; tabulations of excise tax 
 returns are used in the derivation of excise taxes; and 
 tabulations of returns filed by employers for many so- 
 cial insurance programs, such as social security, are 
 used in the derivation of contributions for social in- 
 surance. Budget data are used for personal tax and 
 nontax receipts (including estate and gift taxes), for 
 customs duties, and for smaller social insurance pro- 
 grams, such as supplementary medical insurance. In 
 addition, imputed NIPA receipts, such as employer 
 contributions for military retirement, are prepared in 
 conjunction with the expenditure estimates. 
 
 Budget data are available monthly, usually in the 
 MTS [77]; tax return data are available quarterly for 
 certain taxes, such as excise taxes, and for the cal- 
 endar year for other taxes, such as corporate taxes. 
 These data — which are available in time for the first 
 July revision — are used to prepare quarterly — and for 
 some receipts, monthly — not seasonally adjusted es- 
 timates; for taxes for which only annual data are 
 available, the quarterly and monthly not season- 
 ally adjusted estimates are derived by interpolation. 
 The quarterly not seasonally adjusted estimates are 
 summed to obtain calendar year estimates. For es- 
 timates that show seasonality, the Census X-11 sea- 
 sonal adjustment procedure is usually used. 
 
 Current quarterly and monthly estimates for most 
 receipts are extrapolations of the most recent data us- 
 ing NIPA income estimates and other relevant data as 
 indicators. For the rest, such as nonwithheld income 
 taxes and nontaxes, the estimates are judgmental ex- 
 trapolations. 
 
 Derivation of expenditures 
 
 Expenditure estimates are prepared by program — 
 that is, by activity for which there is a line item in the 
 budget, of which about 570 are analyzed separately 
 for the NIPA estimates. These analyses draw on data 
 from the Budget and related documents supplemented 
 by data from Treasury financial reports and reports of 
 the agencies administering the programs. For most 
 programs, the fiscal year analysis begins by adjusting 
 budget outlays for coverage and for netting and gross- 
 
20 Government Transactions. 
 
 Jslovember 1988 
 
 Table 11-3. — Special Supplemental Food Program: Fiscal Year 
 
 Analysis 
 
 [Millions of dollars] 
 
 Line 
 
 
 Fiscal 
 year 
 1982 
 
 1981 
 
 1982 
 
 Source 
 
 IV 
 
 1 
 
 II 
 
 III 
 
 1 
 
 
 929.8 
 
 191.7 
 
 242.0 
 
 248.0 
 
 248.1 
 
 MTS. 
 
 ? 
 
 less; U.S. terrrtories 
 
 25.1 
 
 5.2 
 
 6.5 
 
 6.7 
 
 6.7 
 
 Federal Aid to 
 
 
 
 States. Fiscal Year 
 1982 (Treasury). 
 
 3 
 
 Equals: Total NIP A 
 expenditures. 
 
 904.7 
 
 186.5 
 
 235.5 
 
 241.3 
 
 241.4 
 
 
 4 
 
 Less. Grants-in-aid to 
 State and local 
 governnnents. 
 
 881.0 
 
 181.6 
 
 229.3 
 
 235.0 
 
 235.1 
 
 Unpublished detail 
 supporting Budget 
 of the Ur)ited 
 States 
 
 Government: 
 Special Analyses, 
 Fiscal Year 1984. 
 Adjusted for grants 
 to territories. 
 
 5 
 
 Equals: Nondefense 
 purchases. 
 
 23.7 
 
 4.9 
 
 6.2 
 
 6.3 
 
 6.3 
 
 
 ing differences between these outlays and NIPA expen- 
 ditures. The expenditures total (as adjusted) for a pro- 
 gram is then classified by type of NIPA expenditure — 
 that is, transfer payments, interest paid, etc. — with 
 nondefense purchases determined residually. 
 
 This procedure is illustrated in table II-3, using the 
 Department of Agriculture's special supplemental food 
 program. As shown in the table. Budget outlays were 
 $929.8 million for fiscal year 1982. A Treasury report. 
 Federal Aid to States [75], showed that $25.1 million 
 was paid to U.S. territories, which are excluded fi:-om 
 the NIPA's, as grants-in-aid. Thus, total NIPA expen- 
 ditures were $904.7 million. Unpublished budget data 
 fi*om 0MB show that $881.0 million was grants-in-aid 
 to State and local governments. Because budget de- 
 scriptions of the program did not indicate any other 
 types of expenditure, the remaining $23.7 million was 
 recorded as nondefense purchases of goods and ser- 
 vices. 
 
 When a fiscal year analysis is completed, that de- 
 tailed array of NIPA expenditures by program and by 
 type of expenditure serves as a set of control totals 
 for the quarterly estimates. The method most fi*e- 
 quently used to derive quarterly estimates by type of 
 expenditure for a program is to prorate the quarterly 
 MTS outlays by the fiscal year relationships developed 
 for that program. For example, in table II-3, grants- 
 in-aid for the fiscal year are 94.8 percent of outlays. 
 That percentage is applied to each quarter of the fis- 
 cal year to estimate quarterly grants-in-aid; nonde- 
 fense purchases are the residual. Proration is not used 
 when outlays are dominated by a fluctuating element, 
 such as lending, that is not included in the NIPA's or 
 when information that is a significant improvement 
 over proration, such as for the Commodity Credit Cor- 
 poration (CCC), is available from the operating agency. 
 In the first case, the NIPA expenditure estimates are 
 judgmental extrapolations. In the second case, a de- 
 
 tailed analysis is performed using the agency data to 
 derive the NIPA estimates. 
 
 With few exceptions, the data for a fiscal year analy- 
 sis are available in time for the first July revision. For 
 quarterly estimates that show seasonality, the Census 
 X-11 seasonal adjustment procedure is usually used. 
 
 For the current quarterly estimates, the advance 
 estimates of nondefense purchases except the CCC 
 are based on 2 months of MTS outlays in conjunction 
 with relationships derived in the fiscal year analysis; 
 3 months of MTS outlays are available for the pre- 
 liminary and final estimates. Parts of the advance 
 estimate of defense purchases are extrapolations us- 
 ing MTS outlays, other indicators, or judgment; the 
 other parts are based on data underlying the budget 
 and agency data. By the final estimate, the bulk of 
 defense purchases except compensation is based on 
 agency data. CCC inventory change is based on agency 
 data supplemented by judgment. For transfer pay- 
 ments, most advance estimates are judgmental extrap- 
 olations; by the preliminary and final estimates, some 
 data become available. For grants-in-aid, MTS out- 
 lays are used in the same way as for most nondefense 
 purchases. For net interest, subsidies, and the current 
 surplus, the estimates are largely judgmental extrap- 
 olations. 
 
 Constant-dollar estimates of purchases 
 
 Constant-dollar estimates of purchases of goods and 
 services are prepared either by deflation, by extrapola- 
 tion of base-year values, or by direct pricing. The data 
 used for deflation include information on prices paid 
 by the Federal Government, producer and consumer 
 price indexes published by the Bureau of Labor Statis- 
 tics (BLS) [59, 62], construction cost indexes compiled 
 by the Census Bureau [37], agricultural prices fi-om 
 the Department of Agriculture [22, 26], and average 
 hourly earnings from BLS [60]. Employment data are 
 used to extrapolate base-year compensation and ser- 
 vices furnished without payment by depository insti- 
 tutions. Quantities of agricultural commodities, cer- 
 tain petroleum transactions, and a variety of military 
 goods and some services are directly priced. 
 
 Derivation of Receipts 
 
 The NIPA categories of Federal receipts, as indi- 
 cated earlier, are derived fi^om budget data and other 
 information from Federal agencies as part of the fis- 
 cal year analysis. These data are adjusted for cover- 
 age and for netting and grossing differences, as shown 
 in table II- 1, to put them on a basis consistent with 
 NIPA concepts. The sources and methods used to de- 
 rive NIPA receipts yield the required timing basis; the 
 timing difference shown in table II- 1 is calculated as 
 
Government Transactions. 
 
 J^ovember 1988 
 
 21 
 
 the difference between budget receipts and NIPA re- 
 ceipts. 
 
 Within the control totals derived from the fiscal year 
 analysis, estimates of receipts are prepared using the 
 sources shown in table II-4. The table shows, for de- 
 tailed receipts categories, the source data for the first 
 July revision and for the current estimates. The col- 
 umn for the first July revision describes calendar year 
 and quarterly estimates. The column for current es- 
 timates describes quarterly estimates for all the re- 
 ceipts categories and monthly estimates for those in 
 the personal income and outlay account. When the 
 source data are listed as monthly, it is to be assumed 
 that monthly estimates are summed to quarterly and 
 calendar year estimates. Similarly, when the source 
 data are listed as quarterly, it is to be assumed that 
 the quarterly estimates are summed to calendar year 
 estimates. When the source data are listed as annual 
 (either calendar or fiscal year), the method used to 
 obtain quarterly (or monthly) estimates is also listed. 
 The table also indicates the seasonal adjustment pro- 
 cedure. 
 
 The seasonally adjusted estimates of receipts are 
 prepared using one of three procedures. For each, the 
 initial effects of tax law changes, when significant, are 
 estimated separately and added to the seasonally ad- 
 justed estimates. The three procedures are as follows: 
 (1) For taxes and contributions for which the quar- 
 terly (or monthly) pattern of payments or liabilities 
 reflects fluctuations in the tax or contributions base, 
 the seasonally adjusted estimates are prepared by in- 
 terpolating and extrapolating the annual estimates us- 
 ing a measure of the base as an indicator. An ex- 
 ample of the use of this approach is personal with- 
 held income taxes, which are interpolated and extrap- 
 olated using as the indicator the monthly seasonally 
 adjusted NIPA wages and salaries less those of farm 
 and private household workers. (2) For taxes or con- 
 tributions for which the quarterly (or monthly) pattern 
 reflects less specific sources of variation or for which 
 the choice of an indicator is less straightforward, the 
 seasonally adjusted estimates are prepared using the 
 Census X-11 seasonal adjustment procedure to adjust 
 the quarterly (or monthly) data directly. An example 
 of the use of this approach is estate and gift taxes. 
 (3) For taxes for which quarterly (or monthly) obser- 
 vations show no seasonality and for receipts for which 
 there are no quarterly (or monthly) data, the season- 
 ally adjusted estimates are prepared by interpolating 
 the annual estimates without an indicator and extrap- 
 olating the current quarterly estimates judgmentally. 
 Examples of the use of this approach are personal non- 
 withheld income taxes (that is, declarations and final 
 settlements less refunds) and all nontaxes. 
 
 Personal tax and nontax receipts 
 
 Personal tax and nontax receipts are estimated at 
 the level of detail shown in table II-4. 
 
 Income taxes 
 
 Income taxes are estimated in two parts: Withheld 
 taxes, and declarations and final settlements less re- 
 funds. Withheld income taxes are directly withheld 
 at the source, largely by employers, from wages and 
 salaries. Declarations (that is, estimated tax pay- 
 ments) are paid quarterly, largely on income not sub- 
 ject to withholding. Final settlements are any addi- 
 tional taxes paid with the filing of tax returns and 
 from audits. Refunds are the return to the taxpayer 
 of excess taxes paid, including excess social security 
 contributions for individuals holding more than one 
 job, and any interest paid on the refunds. 
 
 Withheld income taxes. — ^Withheld taxes are from 
 the MTS [77] and are the sum of three pieces: With- 
 held individual income taxes, withheld social security 
 taxes (including employer taxes), and the employer so- 
 cial security tax for Federal employees (included in 
 undistributed offsetting receipts). Monthly data are 
 summed to derive a quarterly estimate of cash-basis 
 withheld social security and income taxes. 
 
 An estimate of combined NIPA social security and 
 income tax payments is derived by lagging approxi- 
 mately 9 percent of each quarter's cash-basis receipts 
 to the prior quarter. The percentage to be lagged is ad- 
 justed when legislation changes the payment schedule 
 required of employers. 
 
 An estimate of withheld social security taxes is sub- 
 tracted from the combined estimate to obtain an es- 
 timate of NIPA withheld income taxes. The estimate 
 of withheld social security taxes (including those for 
 Federal employees) is from Social Security Adminis- 
 tration (SSA) tabulations of tax returns filed by em- 
 ployers [57]. (Until 1987 the MTS data mentioned ear- 
 lier did not include social security contributions from 
 State and local governments. The data from SSA for 
 years prior to 1987 are adjusted to provide an estimate 
 of contributions conforming to coverage of the MTS.) 
 
 The estimate of withheld income taxes is prepared 
 quarterly; quarterly not seasonally adjusted estimates 
 are summed to calendar year estimates. 
 
 Monthly and quarterly seasonally adjusted esti- 
 mates of withheld income taxes are prepared by in- 
 terpolating the calendar year estimates using NIPA 
 seasonally adjusted wages and salaries less those of 
 farm and private household workers as the indicator. 
 Allowance is made for changes in the withholding rate 
 schedule. Current estimates are extrapolations using 
 the same indicator. 
 
 Declarations and final settlements less 
 refunds. — Declarations and final settlements are to- 
 gether often referred to as nonwithheld income taxes. 
 Monthly NIPA nonwithheld taxes are from the MTS 
 [77] and are the sum of three pieces: Other in- 
 come taxes, presidential election campaign fund col- 
 lections, and social security taxes vmder the Self- 
 Employment Contributions Act (SECA). Monthly esti- 
 mates are summed to obtain quarterly estimates. An 
 
22 Government Transactions. 
 
 JSlovemher 1988 
 
 Table 11-4. — Federal Government Receipts: Sources of Estimates 
 
 Line 
 
 Category 
 
 Calen- 
 dar year 
 
 1982 
 (billions 
 
 of 
 dollars) 
 
 Procedure used to prepare 
 seasonally adjusted estimates 
 
 First July revision: Quarterly 
 and calendar year estimates' 
 
 Current quarterly and, when 
 applicable, monthly estimates 
 
 8 
 
 9 
 
 10 
 
 11 
 
 12 
 13 
 
 14 
 
 15 
 16 
 
 17 
 
 18 
 19 
 
 20 
 21 
 22 
 
 23 
 24 
 
 25 
 
 26 
 27 
 
 28 
 
 29 
 
 Receipts . 
 
 Personal tax and nontax 
 receipts. 
 
 Income taxes 
 
 Withheld 
 
 Declarations and final 
 settlements less refunds. 
 
 Estate and gift taxes , 
 
 Nontaxes ■ 
 
 Corporate profits tax accruals 
 
 Federal Reserve banks 
 
 Other. 
 
 Indirect business tax and 
 nontax accruals. 
 
 Excise taxes 
 
 Alcohol 
 
 Tobacco . 
 
 Windfall profit tax . 
 Gasoline 
 
 Telephone and telegraph. 
 
 Coal 
 
 Nuclear fuel 
 
 Diesel fuel.... 
 Air transport. 
 Other^ 
 
 Customs duties 
 Nontaxes" 
 
 635.3 
 304.5 
 
 296.5 
 265.6 
 
 30.9 
 7.6 
 
 49.0 
 15.2 
 
 33.8 
 48.1 
 
 32.7 
 5.4 
 
 2.5 
 
 15.7 
 4.1 
 
 Contributions for social 
 insurance. 
 
 Employer contributions 
 
 Old-age, survivors, disability, 
 ana hospital insurance. 
 Old-age, survivors, and 
 
 disability insurance. 
 Hospital insurance 
 
 .6 
 1.4 
 2.0 
 
 8.6 
 
 6.8 
 
 233.7 
 
 130.8 
 86.0 
 
 69.2 
 
 16.8 
 
 Interpolated and extrapolated 
 using W&S as indicator. 
 
 Interpolated without indicator 
 and extrapolated 
 judgmentally. 
 
 Multiplicative X-1 1 for quarters 
 and interpolated without 
 indicator for months. 
 
 Interpolated without indicator 
 and extrapolated 
 judgmentally. 
 
 See corporate profits 
 methodology paper. 
 
 See corporate profits 
 methodology paper. 
 
 Multiplicative X-11; 
 interpolated without 
 indicator or extrapolated 
 judgmentally. 
 
 Multiplicative X-11 
 
 NSA = SA 
 
 Multiplicative X-11 
 
 Interpolated using personal 
 consumption expenditures 
 for telephone services as 
 indicator. 
 
 NSA = SA 
 
 NSA = SA 
 
 NSA = SA 
 
 NSA = SA 
 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 
 Multiplicative X-11 
 
 Interpolated without indicator 
 and extrapolated 
 judgmentally. 
 
 Interpolated and extrapolated 
 usmg W&S as indicator. 
 
 MTS data less SSA withheld 
 
 social security. 
 MTS data less SSA 
 
 nonwithheld social security 
 
 and IRS refunds. 
 
 MTS gross receipts less IRS 
 refunds. 
 
 Budget data; FY estimates 
 interpolated using MTS 
 receipts as indicator or 
 interpolated without 
 indicator. 
 
 See corporate profits 
 methodology paper. 
 
 See corporate profits 
 methodology paper. 
 
 IRS FY receipts, interpolated 
 using withdrawals from 
 bonded warehouses. 
 
 IRS FY receipts, interpolated 
 using withdrawals from 
 bonded warehouses. 
 
 SO/ liabilities 
 
 IRS quarterly liabilities; 
 calendar year interpolated 
 using DOE gasoline 
 production as indicator. 
 
 IRS quarterly liabilities 
 
 IRS quarterly liabilities 
 
 Unpublished detail supporting 
 the MTS. 
 
 IRS quarterly liabilities 
 
 IRS quarterly liabilities 
 
 IRS quarterly liabilities 
 
 MTS receipts 
 
 Budget data; FY estimates 
 interpolated using MTS 
 receipts as indicator or 
 interpolated without 
 indicator. 
 
 SSA quarterly taxable W&S 
 multiplied by tax rate. 
 
 SSA quarterly taxable W&S 
 multiplied by tax rate for 
 those covered by OASDI. 
 
 Extrapolated using W&S as 
 
 indicator. 
 Extrapolated judgmentally, 
 
 guided by budget projection. 
 
 MTS, when available, 
 DTS. 
 
 and 
 
 Extrapolated judgmentally, 
 guided by budget projection. 
 
 See corporate profits 
 methodology paper. 
 
 See corporate profits 
 methodology paper. 
 
 Extrapolated using 
 withdrawals, when 
 available, or judgmentally. 
 
 Extrapolated using 
 
 withdrawals, when 
 
 available, or judgmentally. 
 No taxes are currently paid. 
 Extrapolated using DOE 
 
 gasoline production as 
 
 indicator. 
 
 Extrapolated using personal 
 consumption expenditures 
 for telephone services as 
 indicator. 
 
 Extrapolated judgmentally. 
 
 Unpublished detail supporting 
 the MTS, when available, 
 and extrapolated 
 judgmentally. 
 
 Extrapolated judgmentally. 
 
 Extrapolated judgmentally. 
 
 Extrapolated judgmentally. 
 
 MTS, when available, and 
 DTS. 
 
 Extrapolated judgmentally, 
 guided by budget projection. 
 
 Extrapolated using W&S as 
 indicator. 
 
Government Transactions. 
 
 Jslovember 1988 23 
 
 Table 11-4. — Federal Government Receipts: Sources of Estimates — Continued 
 
 Line 
 
 Category 
 
 Calen- 
 dar year 
 
 1982 
 (billions 
 
 of 
 dollars) 
 
 Procedure used to prepare 
 seasonally adjusted estimates 
 
 First July revision: Quarterly 
 and calendar year estimates' 
 
 Current quarterly and, when 
 applicable, monthly estimates 
 
 30 
 31 
 
 Unemployment insurance 
 
 State tax 
 
 17.0 
 12.8 
 
 3.7 
 
 .2 
 
 .3 
 
 24.3 
 9.0 
 
 15.4 
 2.0 
 
 
 
 .9 
 .5 
 
 102.9 
 92.9 
 
 86.1 
 
 69.3 
 
 16.9 
 
 6.8 
 
 3.9 
 
 .1 
 
 4.3 
 .8 
 
 .7 
 
 Interpolated and extrapolated 
 using W&S as indicator. 
 
 Interpolated and extrapolated 
 using W&S as indicator. 
 
 Interpolated and extrapolated 
 using W&S as indicator. 
 
 Imputation using benefits; see 
 table 11-5. 
 
 Regular: Interpolated and 
 extrapolated using W&S as 
 indicator; Additional: NSA = 
 SA. 
 
 Imputation using benefits; see 
 
 table 11-5. 
 Interpolated and extrapolated 
 
 using W&S as indicator. 
 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmen tally. 
 Imputation using benefits; see 
 
 table 11-5. 
 Imputation using benefits; see 
 
 table 11-5. 
 
 Interpolated and extrapolated 
 using W&S as indicator. 
 
 UIS collections, lagged 
 
 Extrapolated using W&S as 
 
 indicator. 
 Extrapolated using W&S as 
 
 indicator. 
 
 Extrapolated using W&S as 
 indicator. 
 
 Imputation using benefits; see 
 table 11-5. 
 
 Regular: Extrapolated using 
 
 W&S as indicator; 
 
 Additional: Extrapolated 
 
 ludqmentally, guided by 
 
 budget projection. 
 Imputation using benefits; see 
 
 table 11-5. 
 
 Extrapolated using W&S as 
 indicator. 
 
 Extrapolated judgmentally. 
 
 Imputation using benefits; see 
 
 table 11-5. 
 Imputation using benefits; see 
 
 table 11-5. 
 
 32 
 
 Federal tax 
 
 UIS annual taxable wages, 
 multiplied by tax rates; 
 interpolated over quarters 
 using State unemployment 
 insurance taxable wages. 
 
 RRB annual taxable wages, 
 multiplied by tax rate; 
 interpolated over quarters 
 using MTS receipts. 
 
 Imputation using benefits; see 
 table 11-5. 
 
 Regular: MTS receipts; 
 Additional: OPM 
 contributions. 
 
 Imputation using benefits; see 
 
 table 11-5. 
 Regular: RRB annual taxable 
 
 wages, multiplied by tax 
 
 rate;. 
 Supplemental: FY receipts 
 
 adjusted to annual estimate. 
 
 Total interpolated over 
 
 quarters based on MTS 
 
 receipts. 
 
 VA financial reports 
 
 33 
 
 Railroad employees 
 
 34 
 
 Federal employees 
 
 35 
 36 
 
 Federal employee retirement.. 
 Civilian 
 
 37 
 
 Military 
 
 38 
 
 Railroad retirement 
 
 39 
 
 Veterans life insurance 
 
 40 
 
 Workers' compensation 
 
 Imputation using benefits; see 
 
 table 11-5. 
 Imputation using benefits; see 
 
 table 11-5. 
 
 41 
 42 
 
 Military medical insurance 
 
 Personal contributions 
 
 43 
 
 44 
 
 Old-aae, survivors, disability, 
 ana hospital insurance. 
 Employees 
 
 Extrapolated using W&S as 
 indicator. 
 
 45 
 
 Old-age, survivors, and 
 disability insurance.. 
 Hospital insurance 
 
 SSA quarterly taxable W&S 
 multiplied by tax rate. 
 
 SSA quarterly taxable W&S 
 multiplied by tax rate for 
 those covered by OASDI. 
 
 SSA annual taxable earnings 
 multiplied by tax rale andf 
 allocated to quarter of 
 payment. 
 
 MTS receipts 
 
 4fi 
 
 
 
 47 
 
 Self-employed 
 
 Calendar year divided by 12 
 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmen tally. 
 Interpolated and extrapolated 
 
 using W&S as indicator. 
 
 Interpolated and extrapolated 
 using W&S as indicator. 
 
 Interpolated and extrapolated 
 using W&S as indicator. 
 
 Interpolated without indicator 
 and extrapolated 
 judgmen tally. 
 
 Extrapolated judgmentally, 
 guided by budget projection. 
 
 Extrapolated judgmentally. 
 
 48 
 
 Supplementary medical 
 insurance. 
 
 State unemployment 
 insurance. 
 
 Federal civilian employee 
 
 retirement. ^ 
 Railroad retirement 
 
 49 
 
 UIS taxable earnings from 
 States, multiplied by tax 
 rate. 
 
 MTS receipts 
 
 guided by budget projection. 
 
 Extrapolated using W&S as 
 indicator. 
 
 Extrapolated using W&S as 
 
 indicator. 
 Extrapolated using W&S as 
 
 indicator. 
 
 Extrapolated judgmentally. 
 
 51 
 
 RRB annual taxable wages, 
 
 multiplied by tax rate; 
 
 interpolated over quarters 
 
 using MTS receipts. 
 VA premium payments 
 
 5? 
 
 Veterans life insurance 
 
 
 
 
 1. Except as noted, the estimates for later revisions have the sanoe sources. 
 
 2. Inclucjes passport ancj immigration fees, certain other fees, fines, migratory bird-hunting 
 stamps, and gifts to U.S. government funds. 
 
 3. Includes the use tax on certain vehicles and excise taxes on trucks, buses, trailers, tires, 
 inner tubes, tread rubber, certain sporting goods, firearms, production of the chemical and oil in- 
 dustries ("Superfund"). and wagering. 
 
 4. Includes royalties from petroleum production on the Outer Continental Shelf, other royalties, 
 rents, fees to various regulatory agencies, fines, penalties, forfeitures, and donations to govern- 
 ment funds. 
 
 DOE 
 DTS 
 
 U.S. Department of Energy. 
 Daily Treasury Statement. 
 
 IRS Internal Revenue Service, U.S. Department of the Treasury. 
 
 MTS Monthly Treasury Statement. 
 
 NSA Not seasonally adjusted. 
 
 RRB Railroad Retirement Board. 
 
 SA Seasonally adjusted. 
 
 SOI Statistics of Income Bulletin. 
 
 SSA Social Security Administration, U.S. Department of Health and Human Services. 
 
 UIS Unemployment Insurance Sen/ice, U.S. Department of Labor. 
 
 VA Veterans' Administration. 
 
 W&S Wages and salaries. 
 
 X-11 Census Bureau seasonal adjustment proc»dure. 
 
24 Government Transactions. 
 
 Jslovemher 1988 
 
 estimate of SECA taxes based on tax return tabula- 
 tions from SSA [57] is subtracted from the combined 
 estimate. An excise tax on private foundations — a tax 
 on the income of such institutions — is then added; the 
 tax on private foundations is based on collections re- 
 ported in IRS excise tax data [81]. The resulting quar- 
 terly not seasonally adjusted estimates are summed to 
 obtain calendar year estimates of nonwithheld income 
 taxes. 
 
 The IRS provides monthly data for refunds of in- 
 come taxes and excess social security withholdings 
 [82]; these data differ from the MTS data because they 
 include interest on refunds. Monthly data are summed 
 to obtain quarterly not seasonally adjusted estimates, 
 and the latter are summed to obtain calendar year es- 
 timates. 
 
 For the monthly and quarterly seasonally adjusted 
 estimates, the combined estimate of declarations and 
 settlements less refunds is interpolated without an 
 indicator, with allowance for tax law changes. Cur- 
 rent estimates are judgmental extrapolations guided 
 by budget projections, with allowance for tax law 
 changes. 
 
 Estate and gift taxes 
 
 Estate and gift taxes (gross) are from the MTS [77], 
 and refunds (including interest) are from IRS data 
 [82]. Monthly data are summed to obtain quarterly 
 not seasonally adjusted estimates, and the latter are 
 summed to obtain calendar year estimates. 
 
 The gross receipts and refunds are seasonally ad- 
 justed separately using the Census X-11 procedure, 
 with allowance for tax law changes. The resulting 
 quarterly series are interpolated over months without 
 an indicator, with allowance for tax law changes. 
 
 For the current quarterly estimates, the advance es- 
 timate is based on 2 months of data from the MTS and 
 a preliminary third-month estimate from the Daily 
 Treasury Statement (DTS) [76]. Three months of MTS 
 data are available for the preliminary estimate. All 
 monthly estimates are interpolated without an indica- 
 tor from the quarterly estimates. 
 
 Personal nontaxes 
 
 Personal nontaxes consist of a wide variety of small 
 payments from individuals to the Federal Govern- 
 ment. Among them are passport and immigration 
 fees, fines paid by persons, and migratory bird-hunting 
 stamps. 
 
 Nontaxes for the fiscal year are from budget data 
 [4A-2, 79, 80], largely data on miscellaneous receipts 
 and proprietary receipts (which, in the budget data, 
 are offsets to expenditures). For nontaxes included in 
 budget proprietary receipts, the fiscal year estimate 
 is interpolated over quarters using the pattern of the 
 collecting agency's proprietary receipts from the MTS 
 as the indicator; for nontaxes included in budget mis- 
 cellaneous receipts, quarterly estimates are interpo- 
 lations without an indicator. For the nontaxes not 
 
 included in budget proprietary and miscellaneous re- 
 ceipts, quarterly estimates are interpolations without 
 an indicator. Quarterly not seasonally adjusted esti- 
 mates are summed to obtain calendar year estimates. 
 Monthly and quarterly seasonally adjusted estimates 
 are interpolations without an indicator and, for the 
 current estimates, judgmental extrapolations guided 
 by budget projections. 
 
 Corporate profits tax accruals 
 
 See Corporate Profits: Profits Before Tax, Profits Tax 
 Liability, and Dividends, BEA Methodology Paper Se- 
 ries MP-2 [40], for a discussion of the sources and 
 methods for deriving corporate profits tax accruals. 
 
 Indirect business tax and nontax 
 accruals 
 
 Excise taxes 
 
 Alcohol excise taxes. — ^The IRS tabulates alcohol 
 excise tax receipts for the fiscal year [81]; these data 
 are used as the NIPA fiscal year estimate. Quarterly 
 not seasonally adjusted estimates are prepared by pro- 
 rating the fiscal year data using taxable withdrawals 
 from bonded warehouses as the indicator. The with- 
 drawal data are from the Bureau of Alcohol, Tobacco, 
 and Firearms (BATE) [72, 73]. Estimates are prepared 
 separately for domestic distilled spirits, for domestic 
 beer, and for all other categories of alcohol. Quar- 
 terly not seasonally adjusted estimates are summed 
 to obtain calendar year estimates. Excise taxes for do- 
 mestic distilled spirits and for domestic beer are sea- 
 sonally adjusted using the Census X-11 procedure; for 
 all other alcohol excise taxes, the quarterly season- 
 ally adjusted estimates are interpolations without an 
 indicator. Current quarterly estimates are extrapola- 
 tions using taxable withdrawals as the indicator, when 
 available, or judgmental extrapolations; data on tax- 
 able withdrawals are available 60 days after the end 
 of the month. 
 
 Tobacco excise taxes. — The IRS tabulates tobacco 
 excise tax receipts for the fiscal year [81]; these data 
 are used as the NIPA fiscal year estimate. Quarterly 
 not seasonally adjusted estimates are prepared by pro- 
 rating the fiscal year data using taxable withdrawals 
 of small cigarettes from bonded warehouses as the in- 
 dicator. The withdrawal data are from the BATE [74]. 
 Quarterly not seasonally adjusted data are summed 
 to obtain calendar year estimates. Quarterly season- 
 ally adjusted estimates are prepared using the Cen- 
 sus X-11 procedure. Current quarterly estimates are 
 extrapolations using taxable withdrawals as the indi- 
 cator, when available, or judgmental extrapolations; 
 data on taxable withdrawals are available 60 days af- 
 ter the end of the month. 
 
 Windfall profit tax. — The windfall profit tax, in 
 effect from 1980 to 1988, was a per-barrel tax on 
 petroleum production. The Federal Government also 
 
Government Transactions. 
 
 Jslovemher 1988 25 
 
 "taxed" the royalties it received on the production of oil 
 on the Outer Continental Shelf and on sales from the 
 Naval petroleum reserve; these "taxes" are not consid- 
 ered taxes in the NIPA's. In the NIPA's, the wind- 
 fall profit tax records liabilities only on private and on 
 State and local government petroleum production. 
 
 The IRS tabulated the windfall profit tax liability 
 from quarterly tax returns filed by producers [83]. 
 These data, less Federal liability, are used as the NIPA 
 quarterly liability estimate. Quarterly not seasonally 
 adjusted data are used as the seasonally adjusted es- 
 timates. Quarterly estimates are summed to obtain 
 calendar year estimates. No taxes are currently paid. 
 
 Other excise taxes. — The IRS tabulates liabilities 
 for all of the other types of excise taxes from tax re- 
 turns that are filed in the quarter following the lia- 
 bility [81]. With two exceptions, the NIPA quarterly 
 not seasonally adjusted estimates are derived by lag- 
 ging the IRS data one quarter. Refunds, on a cash 
 basis, are from IRS [82] and include interest; they are 
 subtracted from the "other" excise tax category. Quar- 
 terly estimates are summed to obtain calendar year 
 estimates. The two exceptions to this procedure are 
 for the excise taxes on gasoline and on nuclear fuel. 
 The quarterly gasoline excise tax is interpolated from 
 the calendar year estimate using data from the En- 
 ergy Information Administration, Department of En- 
 ergy (DOE), for gasoline production [53] as the indica- 
 tor, and the excise tax on nuclear fuel is from unpub- 
 lished detail supporting the MTS. 
 
 Quarterly seasonally adjusted estimates of the gaso- 
 line excise tax are derived using the Census X-11 pro- 
 cedure. Quarterly seasonally adjusted estimates of the 
 telephone and telegraph excise tax are interpolated 
 from the calendar year estimate using personal con- 
 sumption expenditxires (PCE) for telephone services 
 as the indicator. For most of the other types of ex- 
 cise taxes, quarterly not seasonally adjusted data are 
 used as the seasonally adjusted estimates. 
 
 Current quarterly estimates for gasoline excise 
 taxes are extrapolations using DOE gasoline produc- 
 tion as the indicator. Telephone and telegraph excise 
 taxes are extrapolations using PCE for telephone ser- 
 vices as the indicator. Current quarterly estimates for 
 most of the other types of excise taxes are judgmental 
 extrapolations. 
 
 Customs duties 
 
 MTS data on gross customs duties less refrinds [77] 
 are used as the NIPA liability estimate. Quarterly not 
 seasonally adjusted data are summed to obtain cal- 
 endar year estimates. Quarterly seasonally adjusted 
 estimates of gross receipts and refunds are prepared 
 using the Census X-11 procedure. 
 
 For the current quarterly estimates, the advance es- 
 timate is based on 2 months of MTS data and a prelim- 
 inary third month from the DTS [76]. Three months of 
 MTS data are available for the preliminary estimate. 
 
 Indirect business nontaxes 
 
 Indirect business nontaxes consist of a wide variety 
 of payments by business to the Federal Government. 
 Among them are royalties from petroleum production 
 on the Outer Continental Shelf and fines. 
 
 Nontaxes for the fiscal year are from budget data 
 [4A-2, 79, 80], largely data on miscellaneous receipts 
 and proprietary receipts (which, in the budget data, 
 are offsets to expenditures). For nontaxes included in 
 budget proprietary receipts, the fiscal year estimate 
 is prorated over quarters using the collecting agency's 
 proprietary receipts from the MTS as the indicator; for 
 nontaxes included in budget miscellaneous receipts, 
 quarterly estimates are interpolations without an indi- 
 cator. For most of the nontaxes not included in budget 
 proprietary and miscellaneous receipts, quarterly esti- 
 mates are interpolations without an indicator. Quar- 
 terly not seasonally adjusted estimates are summed 
 to obtain calendar year estimates. Quarterly season- 
 ally adjusted estimates are interpolations without an 
 indicator and, for the current estimates, judgmental 
 extrapolations guided by budget projections. 
 
 Contributions for social insurance 
 
 Table II-4 lists contributions by program for the 
 various social insurance programs, separately for em- 
 ployer contributions and for personal contributions, as 
 they are shown in NIPA table 3.6. The descriptions 
 that follow are by program only, because the method- 
 ology is the same for employer and personal contribu- 
 tions in programs that have both. 
 
 Old-age, survivors, and disability insurance 
 (OASDI) 
 
 Employer and employee contributions. — ^The 
 old-age and survivors insurance (OASI) trust fund 
 makes benefit payments to eligible retired workers 
 and to their survivors. The disability insurance (DI) 
 trust fund makes benefit payments to eligible disabled 
 workers. These funds, which are better known as so- 
 cial security, are financed by contributions based on 
 taxable wages and salaries and on the taxable earn- 
 ings of the self-employed. (Contributions by the self- 
 employed are discussed next.) Workers covered by 
 OASDI are subject to taxes on all wages and salaries 
 until they reach a "maximum taxable earnings" for the 
 year. In most cases, the employer and the employee 
 pay identical taxes into the trust funds. Employees 
 who work for more than one employer may have too 
 much OASDI tax withheld. If the combined earnings 
 from all employers exceed the maximum for the year, 
 the employee is entitled to a refund, which is claimed 
 on the tax return for individual income taxes. Budget 
 data record these refunds as an offset to OASDI taxes; 
 the NIPA's treat the refunds as an offset to personal in- 
 come taxes. Calendar year data on wages and salaries 
 subject to OASDI taxes are from SSA tabulations of 
 tax returns filed by employers and published in the So- 
 
26 Government Transactions. 
 
 JsJovemher 1988 
 
 cial Security Bulletin: Annual Statistical Supplement 
 [57]. These data are adjusted to exclude U.S. terri- 
 tories and Puerto Rico, based on data from the same 
 source. The remaining taxable wages and salaries are 
 multiplied by the tax rate (including that for hospi- 
 tal insurance, which is discussed later), separately for 
 the employee and employer, to derive calendar year 
 estimates of OASDI contributions (including those for 
 hospital insurance). 
 
 The SSA also provides unpublished calendar year 
 data for tips, which are subject to the employee tax. 
 The estimate of taxable tips is multiplied by that tax 
 rate and added to the employee contributions previ- 
 ously calculated. 
 
 The SSA also provides quarterly not seasonally ad- 
 justed taxable wages and salaries, which are multi- 
 plied, as described for the calendar year data, by the 
 tax rate to derive quarterly not seasonally adjusted 
 OASDI contributions. The calendar year estimate of 
 contributions from the territories and Puerto Rico is 
 interpolated using total quarterly contributions as the 
 indicator. The resulting estimate is subtracted from 
 total OASDI contributions to derive quarterly not sea- 
 sonally adjusted NIPA contributions (including those 
 for hospital insurance). 
 
 Monthly and quarterly seasonally adjusted esti- 
 mates are interpolations of the calendar year esti- 
 mates using a seasonally adjusted variant of NIPA 
 wages and salaries as the indicator. The effects of 
 changes in the tax rate and the maximum taxable 
 earnings, which historically have taken effect in Jan- 
 uary, are estimated separately and added to the sea- 
 sonally adjusted estimates. 
 
 Current monthly and quarterly estimates are ex- 
 trapolations using the variant of NIPA wages and 
 salaries as the indicator, with allowance for changes 
 in the tax rate or the maximum taxable earnings. 
 
 Employer contributions paid by government — which 
 are needed to estimate compensation of government 
 employees, a component of government purchases — 
 are based on SSA unpublished calendar year estimates 
 of taxable wages and salaries for military. Federal 
 civilian, and State and local government employees. 
 The employer contributions are derived by multiply- 
 ing these wages and salaries by the employer tax rate 
 (including that for hospital insurance). Quarterly and 
 monthly estimates are interpolations without indica- 
 tor of the calendar year estimates, modified for pay 
 raises and changes in the tax rate or maximum taxable 
 earnings. Employer contributions for military employ- 
 ees are allocated to general government, and contri- 
 butions for Federal civilian employees are allocated 
 to civilian general government and enterprises by the 
 relationship of wages and salaries in Federal civilian 
 general government and in Federal enterprises. Em- 
 ployer contributions for State and local employees are 
 allocated to general government and enterprises in the 
 same manner using the relationship of State and local 
 wages. Current quarterly and monthly estimates are 
 
 judgmental extrapolations using the variant of wages 
 and salaries as the indicator, modified for pay raises 
 and for changes in the tax rate or the maximum tax- 
 able earnings. 
 
 Self-employed contributions. — ^The SSA provides 
 calendar year estimates of taxable earnings from self- 
 employment [57], and these are multiplied by the tax 
 rate (including those for hospital insurance). The re- 
 sulting estimates of contributions are allocated to the 
 quarter of pajmient. Beginning in 1966, the liability 
 for each year is assumed to be paid as follows: (1) 
 30 percent in quarterly declarations, with equal pay- 
 ments made in April, June, and September of the tax 
 year and in January of the following year; and (2) 70 
 percent in final settlements in the following year, with 
 25 percent of the final settlements in the first quarter 
 and 75 percent in the second quarter. Monthly season- 
 ally adjusted estimates are the calendar year estimate 
 divided by 12. Current monthly estimates are judg- 
 mental extrapolations guided by budget projections. 
 Prior to 1966, when the form for estimated income tax 
 payments did not include self-employed contributions, 
 it was assumed that these liabilities were paid with 
 income tax returns in the following year. 
 
 Hospital and supplementary medical 
 insurance 
 
 The hospital insurance (HI) and the supplementary 
 medical insurance (SMI) trust funds provide what is 
 better known as medicare. HI covers care provided 
 by hospitals, skilled nursing facilities, home health 
 agencies, and hospices and is financed by contributions 
 based on taxable wages and salaries. HI is manda- 
 tory for all workers covered by OASDI and for certain 
 groups of workers not covered by OASDI — ^railroad em- 
 ployees, some Federal civilian employees, and some 
 State and local employees hired afl^er March 1986. 
 SMI, which is optional, covers physician services, hos- 
 pital outpatient and laboratory services, treatment for 
 end-stage renal disease, and medical equipment. The 
 SMI fund is financed by a monthly premium and by 
 general revenues. 
 
 All wages and salaries taxable for OASDI (discussed 
 earlier) are also taxable for HI. Calendar year and 
 quarterly not seasonally adjusted HI contributions are 
 derived using the HI tax rate in the same manner as 
 described for the OASDI estimates. Of the gi-oups of 
 workers not covered by OASDI, the SSA provides cal- 
 endar year and quarterly not seasonally adjusted es- 
 timates of taxable wages and salaries for Federal and 
 for State and local government employees [57]. The 
 quarterly taxable wages and salaries are multiplied 
 by the HI tax rate to obtain quarterly not seasonally 
 adjusted estimates of employer and personal contri- 
 butions. The Railroad Retirement Board (RRB) pro- 
 vides unpublished calendar year estimates for railroad 
 wages and salaries taxable for HI; the calendar year 
 estimate is divided by four to obtain quarterly not sea- 
 sonally adjusted estimates. 
 
Government Transactions. 
 
 Jslovember 1988 
 
 27 
 
 Monthly and quarterly seasonally adjusted HI con- 
 tributions for those subject to OASDI taxes are derived 
 in combination with the OASDI estimates described 
 earlier. Monthly and quarterly seasonally adjusted 
 HI contributions for the other groups are prepared by 
 interpolating the calendar year estimates without an 
 indicator and by extrapolating judgmentally. The ini- 
 tial effects of changes in the tax rate or the maximum 
 taxable earnings are estimated separately and added 
 to the seasonally adjusted estimates. 
 
 Employer HI contributions paid by government on 
 wages and salaries subject to OASDI taxes — needed 
 to estimate compensation of employees — are estimated 
 using the same methods as the corresponding OASDI 
 contributions discussed earlier. Employer HI contri- 
 butions for Federal employees not subject to OASDI 
 are allocated to civilian general government and enter- 
 prises by the relationship of wages and salaries in Fed- 
 eral civilian general government and in enterprises. 
 Employer contributions for State and local employees 
 not subject to OASDI are allocated in the same man- 
 ner using the relationship of State and local wages. 
 
 Supplementary medical insurance premiums are 
 from the MTS [77]. SSA provides calendar year pre- 
 miums from U.S. territories and Puerto Rico. These 
 premiums are interpolated over months using total 
 premiums as the indicator and subtracted from total 
 premiums to yield NIPA monthly not seasonally ad- 
 justed estimates. The monthly estimates are summed 
 to calendar year estimates. 
 
 Monthly and quarterly seasonally adjusted esti- 
 mates are interpolations of the calendar year estimate 
 without an indicator, allowing for increases in the 
 monthly premium. Current estimates are judgmen- 
 tal extrapolations, guided by budget projections and 
 allowing for increases in the premium. 
 
 Unemployment insurance 
 
 Contributions to the unemployment insurance trust 
 fund are generated by a State and a Federal tax im- 
 posed on wages and salaries paid by most private em- 
 ployers and a special Federal tax for the railroad in- 
 dustry. Most taxes are on employers; a few States tax 
 employees. In the NIPA's, an employer contribution is 
 imputed for unemployed former Federal military and 
 civilian employees. 
 
 State unemployment tax. — ^The State tax consists 
 of (1) taxes paid by most private employers and a few 
 State and local governments on wages and salaries 
 up to a maximum, (2) taxes paid by employees in 
 a few States, and (3) a reimbursement of benefits 
 by certain employers — some State and local govern- 
 ments and some nonprofit organizations — in lieu of 
 paying the regular tax. The maximum taxable earn- 
 ings varies from State to State, but cannot be lower 
 than the maximum taxable earnings for the Federal 
 tax. 
 
 The Unemployment Insurance Service (UIS), Em- 
 ployment and IVaining Administration, provides un- 
 
 published data on quarterly taxes paid; these taxes do 
 not include the reimbursable amounts. The data are 
 lagged one quarter to approximate the liability timing 
 used in the NIPA's and summed to a calendar year es- 
 timate. An estimate of taxes paid by employers in the 
 U.S. territories and Puerto Rico, also based on UIS 
 data [63, 65], is subtracted to derive the NIPA es- 
 timate. A portion of the NIPA estimate is allocated 
 to personal contributions using information from the 
 States that tax employees. The reimbursable amoimt 
 is an estimate of reimbursable unemployment insur- 
 ance benefits discussed in the derivation of expendi- 
 tures (see page 44). 
 
 Quarterly seasonally adjusted estimates of employer 
 contributions are interpolations of the calendar year 
 estimates using seasonally adjusted private wages 
 and salaries less those of railroad, farm, and private 
 household workers as the indicator. The seasonally 
 adjusted reimbursable amount is based on the esti- 
 mate of the seasonally adjusted reimbursable benefits. 
 The monthly seasonally adjusted estimates of personal 
 contributions are interpolations of the calendar year 
 using the wages and salaries indicator just mentioned. 
 Changes in the tax rate or the maximum taxable earn- 
 ings, which regularly occur in January, are estimated 
 separately and added to the seasonally adjusted esti- 
 mates. 
 
 Current monthly and quarterly estimates of em- 
 ployer and personal contributions are extrapolations 
 using the private wages and salaries mentioned above 
 as the indicator, with allowance for tax changes. The 
 current estimate of the reimbursable amount is based 
 on the estimate of seasonally adjusted reimbursable 
 benefits. 
 
 The regular employer contributions paid by State 
 and local governments — needed to estimate compen- 
 sation of employees — are based on a BEA tabulation 
 of data from UIS and are allocated between general 
 government and government enterprises by the rela- 
 tionship of State and local wages and salaries in gen- 
 eral government and in government enterprises. Most 
 of the reimbursable amount paid by State and local 
 governments is allocated to general government. 
 
 Federal unemployment tax. — The Federal unem- 
 ployment tax has two parts: A national tax at a uni- 
 form rate and a State-specific surtax at varying rates. 
 All covered employers are subject to the uniform tax 
 rate. In addition, in some States that have borrowed 
 funds from the Federal Government to finance ben- 
 efits, covered employers are subject to a surtax that 
 depends on the amount and duration of the State's in- 
 debtedness. 
 
 Calendar year estimates are based on unpublished 
 taxable wages and salaries, by State, compiled by UIS 
 from annual tax returns filed by employers. The tax- 
 able wages and salaries are multiplied by the uniform 
 tax rate and, for States with a surtax, the taxable 
 wages and salaries from that State are multiplied by 
 the surtax rate. Information for the individual State 
 
28 Government Transactions. 
 
 JNovember 1988 
 
 surtaxes is from UIS. Quarterly not seasonally ad- 
 justed estimates are interpolations using wages and 
 salaries taxable for State unemployment insurance as 
 the indicator. 
 
 Quarterly seasonally adjusted estimates are inter- 
 polations of the calendar year estimates using season- 
 ally adjusted private wages and salaries less those of 
 railroad, farm, and private household workers as the 
 indicator. Current estimates are extrapolations using 
 the same indicator. Changes in the tax rate or the 
 maximum taxable earnings are estimated separately 
 and added to the seasonally adjusted estimates. 
 
 Railroad employees. — Calendar year estimates 
 are based on taxable wages and salaries compiled by 
 the RRB [91]. These wages and salaries are multi- 
 plied by the Federal railroad unemployment tax rate 
 to derive employer contributions for railroad employ- 
 ees. Quarterly not seasonally adjusted estimates are 
 interpolations using MTS receipts [77] for this pro- 
 gram as the indicator. QuEirterly seasonally adjusted 
 estimates are interpolations and, for the current esti- 
 mates, extrapolations using seasonally adjusted NIPA 
 railroad wages and salaries as the indicator. Changes 
 in the tax rate or the maximum taxable earnings are 
 estimated separately and added to the seasonally ad- 
 justed estimates. 
 
 Federal employees. — The estimates of contribu- 
 tions are the equivalent of unemployment benefits for 
 former Federal employees discussed in the derivation 
 of expenditures (see page 44). This imputation is an 
 employer contribution and is allocated to civilian gen- 
 eral government and government enterprises by the 
 relationship of wages and salaries in Federal civilian 
 general government and in Federal government enter- 
 prises. 
 
 Federal employee retirement 
 
 Civilian retirement. — Federal civilian retirement 
 contributions are made to the following: The civil ser- 
 vice retirement and disability fund, the foreign ser- 
 vice retirement and disability fund, the judicial sur- 
 vivors fiind, the Federal Reserve Board fund, and the 
 Tennessee Valley Authority (TVA) program. In addi- 
 tion, contributions, equivalent to retirement benefits, 
 are imputed for the following: Former commissioned 
 officers of the Public Health Service, retired Federal 
 judges, former lighthouse service personnel and sur- 
 vivors, and certain former employees of the National 
 Oceanic and Atmospheric Administration. 
 
 Calendar year and quarterly not seasonally adjusted 
 estimates of employer and employee regular contribu- 
 tions to the civil service fund are from the MTS [77]. 
 Additional employer contributions, due at the end of 
 the fiscal year to cover certain unfunded liabilities, are 
 based on unpublished data from the Office of Person- 
 nel Management (0PM) [13K]. These additional con- 
 tributions are allocated equally to the four quarters of 
 the fiscal year and then summed to calendar year es- 
 timates. Calendar year and quarterly not seasonally 
 
 adjusted estimates of employer and employee regular 
 contributions to the foreign service fund and to the ju- 
 dicial survivors fund are from the MTS [77]. An addi- 
 tional contribution to the foreign service fund, from the 
 Budget Appendix [4A-2], is similar to that described for 
 the civil service fund and is treated in the same man- 
 ner. Calendar year contributions for the Federal Re- 
 serve Board fund are available from the Board [2], and 
 contributions for the TVA program are available from 
 the agency [20]; quarterly not seasonally adjusted esti- 
 mates for both are interpolations without an indicator. 
 Calendar year and quarterly not seasonally adjusted 
 estimates for all imputed retirement contributions are 
 equivalent to the estimates of benefits for the various 
 retirement programs as discussed in the derivation of 
 expenditures (see page 45). 
 
 Seasonally adjusted estimates of the regular con- 
 tributions are interpolations of the calendar year es- 
 timates using seasonally adjusted Federal civilian 
 wages and salaries as the indicator. The not sea- 
 sonally adjusted additional employer contributions are 
 used as the seasonally adjusted estimates. Cur- 
 rent monthly and quarterly estimates of the regu- 
 lar contributions are extrapolations using the wages 
 and salaries series as the indicator; the additional 
 employer contributions are judgmental extrapolations 
 guided by budget projections. 
 
 The estimates of contributions to the civil service 
 retirement fund include contributions for some em- 
 ployees of the District of Columbia. Contributions 
 for these employees are from the MTS [77] and are 
 divided equally as employer and employee contribu- 
 tions. A portion of the District of Columbia contribu- 
 tion is allocated to State and local general government 
 and government enterprises in the same manner as 
 for the State unemployment tax. Federal Government 
 employer regular contributions are allocated to civil- 
 ian general government and enterprises in the same 
 manner as for the unemployment contribution. The 
 additional Federal employer contribution is allocated 
 to civilian general government and government enter- 
 prises on the basis of the unpublished data from 0PM. 
 The imputations, like the cash contributions to retire- 
 ment funds, are a part of Federal employee compensa- 
 tion and are allocated to civilian general government 
 and enterprises in the same manner described for un- 
 employment contributions. 
 
 Military retirement. — Estimates of contributions 
 for military retirement, including those for the Coast 
 Guard, are imputations based on estimates of retire- 
 ment benefits discussed in the derivation of expendi- 
 tures (see page 45). All contributions are employer 
 contributions by general government. 
 
 Railroad retirement 
 
 Railroad retirement contributions consist of em- 
 ployer and employee taxes paid on monthly maximum 
 taxable earnings and a separate "supplemental" em- 
 ployer contribution based on hours worked. Railroad 
 
Government Transactions. 
 
 J\Iovember 1988 
 
 29 
 
 retirement contributions include contributions for HI. 
 The RRB calculates the required annual HI contribu- 
 tion and transfers it to the HI trust fund. 
 
 Calendar year estimates of the combined retirement 
 and HI contributions are based on wages and salaries 
 subject to railroad retirement and HI taxes from the 
 RRB [91]. Taxable wages and salaries are multiplied 
 by tax rates to derive employer and employee contri- 
 butions for combined retirement and HI. The HI tax- 
 able wages are multiplied by the HI tax rate, and this 
 estimate is subtracted from the combined estimates 
 to obtain the annual estimates for retirement contri- 
 butions. Calendar year estimates of the supplemen- 
 tal employer contribution are derived by dividing fis- 
 cal year estimates from the Budget Appendix [4A-2] 
 by four and summing the appropriate quarterly esti- 
 mates. 
 
 Monthly and quarterly not seasonally adjusted es- 
 timates are interpolations of the calendar year esti- 
 mates using the MTS railroad retirement contribu- 
 tions data as the indicator. The quarterly not season- 
 ally adjusted HI estimates are prepared by dividing 
 the calendar year estimate by four; this series is sub- 
 tracted from the not seasonally adjusted railroad re- 
 tirement contributions and added to HI contributions. 
 
 Monthly and quarterly seasonally adjusted esti- 
 mates are interpolations and, for the current esti- 
 mates, extrapolations using seasonally adjusted NIPA 
 railroad wages and salaries as the indicator. Changes 
 in the tax rate or the maximum taxable earnings are 
 estimated separately and added to the seasonally ad- 
 justed estimates. 
 
 Veterans life insurance 
 
 There are five veterans life insurance programs: Na- 
 tional Service Life Insurance, United States Govern- 
 ment Life Insurance, the service-disabled insurance 
 fund, the veterans special life insurance fund, and the 
 veterans reopened insurance fund. The programs are 
 funded by premiums paid by veterans and by Federal 
 Government payments. 
 
 The Veterans' Administration provides data for 
 monthly insurance premiums paid by veterans for all 
 programs [93], which are treated as personal contri- 
 butions for social insurance. Quarterly not seasonally 
 adjusted and calendar year NIPA estimates are the 
 sum of the monthly estimates. 
 
 Government payments on behalf of servicemen are 
 treated as employer contributions. Currently, these 
 payments are small, but were large in the period just 
 after World War II. Employer contributions are from 
 the Veterans' Administration financial reports [93]. 
 Quarterly not seasonally adjusted and calendar year 
 NIPA estimates are the sum of the monthly data. All of 
 these payments are employer contributions by general 
 government. Monthly seasonally adjusted estimates 
 are interpolations without indicator and, for the cur- 
 rent estimates, judgmental extrapolations. 
 
 Workers' compensation 
 
 The Federal Government pays workers' compensa- 
 tion benefits to Federal employees injured on the job. 
 All estimates of workers' compensation contributions 
 are imputations based on estimates of benefits dis- 
 cussed in the derivation of expenditures (see page 45). 
 The contributions are employer contributions and are 
 allocated judgmentally to general government and en- 
 terprises; current allocations are extrapolations. 
 
 Military medical insm*ance 
 
 The Civilian Health and Medical Program of the 
 Uniformed Services (CHAMPUS) provides medical 
 treatment for dependents of active duty military per- 
 sonnel and for military retirees and their dependents. 
 Benefits paid are included in transfer payments to per- 
 sons. Benefits for dependents of active duty military 
 personnel are comparable to health benefits provided 
 for civilian employees and their families, which are 
 part of other labor income in the NIPA's and therefore 
 part of Federal employee compensation. In order to 
 make the measure of military compensation compara- 
 ble to that of civilian compensation, a social insurance 
 contribution is imputed for the portion of CHAMPUS 
 providing benefits for dependents of active duty per- 
 sonnel. The estimates are imputations based on esti- 
 mates of benefits discussed in the derivation of expen- 
 ditures (see page 46). The contributions are employer 
 .contributions by general government. 
 
 Derivation of Expenditures 
 
 The NIPA categories of Federal expenditures, as in- 
 dicated earlier, are derived from budget data supple- 
 mented by other information from Federal agencies. 
 These data are adjusted for coverage and for netting 
 and grossing differences, as shown in table II-2, to 
 put them on a basis consistent with NIPA concepts. 
 The sources and methods used to derive NIPA expen- 
 ditures yield the required timing basis; the timing dif- 
 ference shown in table II-2 is calculated as the differ- 
 ence between budget outlays and NIPA expenditures. 
 Table II-5 shows the sources of estimates for Federal 
 Government expenditures. In general, the level of de- 
 tail shown is that at which the estimates are prepared; 
 where footnoted, the level of detail has been aggre- 
 gated to an "other" or "all other" category because the 
 methodology is the same for the detailed estimates. 
 
 Purchases of goods and services 
 
 Federal Government purchases of goods and ser- 
 vices are estimated for two major categories: National 
 defense, and nondefense. The national defense cate- 
 gory consists of the purchases of goods and services 
 for the activities covered by the national defense func- 
 tion in the budget — military activities of the Depart- 
 
30 Government Transactions. 
 
 Jslovember 1988 
 
 Table li-5.— Federal Government Expenditures: Sources of Estimates 
 
 Line 
 
 6 
 
 7 
 8 
 
 9 
 10 
 11 
 12 
 13 
 14 
 15 
 16 
 17 
 18 
 19 
 20 
 21 
 22 
 23 
 24 
 25 
 26 
 27 
 28 
 29 
 30 
 31 
 
 32 
 33 
 
 34 
 
 35 
 
 36 
 37 
 
 38 
 39 
 
 40 
 41 
 
 42 
 
 43 
 44 
 
 45 
 
 46 
 
 Category 
 
 Expenditures . 
 
 Purchases of goods and 
 services. 
 
 National defense 
 
 Nondefense. 
 
 Commodity Credit 
 Corporation inventory 
 change. 
 Acquisitions 
 
 Barley 
 
 Butter 
 
 Cheese 
 
 Corn 
 
 Upland cotton 
 
 Grain sorghum 
 
 Dried milk 
 
 Rough rice 
 
 Soybeans 
 
 Wheat 
 
 All other crops 
 
 Accounting adjustment. 
 Less; Dispositions 
 
 Barley 
 
 Butter 
 
 Cheese 
 
 Corn 
 
 Upland cotton 
 
 Grain sorghum 
 
 Dried milk 
 
 Rough rice 
 
 Soybeans 
 
 Wheat 
 
 All other crops 
 
 Accounting adjustment. 
 National Aeronautics and 
 Space Administration. 
 Imputed financial services... 
 
 Other 2 . 
 
 Transfer payments 
 
 To persons 
 
 Benefits from social 
 insurance funds. 
 Old-age, sun/ivors, and 
 disability insurance. 
 
 Hospital and 
 
 supplementary medical 
 
 insurance. 
 Unemployment insurance . 
 
 State 
 
 Calendar 
 year 
 1982 
 
 (Billions 
 of 
 
 dollars) 
 
 Railroad employees. 
 
 Federal employees 
 
 Special unemployment 
 benefits. 
 Federal employee 
 retirement. 
 Civilian 
 
 781.2 
 272.7 
 
 193.8 
 
 78.9 
 9.2 
 
 15.2 
 .2 
 .6 
 .9 
 
 4.2 
 
 1.9 
 .6 
 .8 
 .6 
 
 2.2 
 
 2.1 
 .8 
 .3 
 
 6.0 
 .1 
 .5 
 .5 
 
 1.1 
 .9 
 .1 
 .4 
 .2 
 
 1.1 
 .5 
 .6 
 
 
 
 5.8 
 
 63.5 
 
 324.1 
 
 316.3 
 273.6 
 
 153.7 
 
 50.8 
 
 25.2 
 23.4 
 
 .3 
 1.1 
 
 35.2 
 
 19.9 
 
 Procedure used to prepare 
 seasonally adjusted estimates 
 
 See table 11-7 for sources of 
 estimates. 
 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 NSA = SA 
 Additive X-1 1 
 Additive X-1 1 
 
 NSA = SA 
 NSA = SA 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 NSA = SA 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 NSA = SA 
 Multiplicative X-1 1 , 
 
 Interpolated using flow of 
 funds holdings as indicator. 
 
 Multiplicative X-1 1 except for 
 compensation. 
 
 Multiplicative X-11 
 
 Interpolated without indicator 
 and extrapolated 
 judgmentally. 
 
 Multiplicative X-11 for regular 
 and reimbursable benefits; 
 NSA = SA for extended 
 benefits. 
 
 Multiplicative X-11 
 
 Multiplicative X-11 
 
 NSA = SA 
 
 Multiplicative X-1 1 for civil 
 service retirement and NSA 
 = SA for all other. 
 
 First July revision: Quarterly 
 and calendar year estimates ' 
 
 See table 11-7 for sources of 
 estimates. 
 
 Cun-ent quarterly and, when 
 applicable, monthly estimates 
 
 See table 11-7 for sources of 
 estimates. 
 
 For each commodity, the following sources are used: 
 
 ASCS for information about quantities and trans- 
 action prices for CCC activities 
 NASS for nondairy market price information 
 AMS for dairy market price information 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 FDIC and Federal Reserve 
 Board data on bank income 
 and on deposits. 
 
 MTS outlays and fiscal year 
 analysis relationships 
 except for compensation. 
 
 SSA monthly payments. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 UIS annual benefits, prorated 
 usinq gross UIS monthly 
 regular and extended 
 benefits. 
 
 AfTS outlays 
 
 UIS benefits 
 
 UIS 
 
 MTS outlays for civil service 
 and foreign service 
 retirement; aqency or 
 budget data for all other. 
 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 Extrapolated judgmentally. 
 
 MTS outlays and fiscal year 
 analysis relationships 
 except for compensation. 
 
 Extrapolated judgmentally; 
 
 SSA monthly payments, 
 
 when available. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 
 Extrapolated judgmentally, 
 guided by cash withdrawals 
 and unemployment rates. 
 
 Extrapolated judgmentally; 
 
 MTS outlays when 
 
 available. 
 Extrapolated judgmentally. 
 No benefits are currently paid. 
 
 Extrapolated judgmentally; 
 civil service and foreign 
 service from MTS when 
 available. 
 
Government Transactions. 
 
 J^ovemher 1988 
 
 31 
 
 Table 11-5. — Federal Government Expenditures: Sources of Estimates — Continued 
 
 Line 
 
 Category 
 
 Calendar 
 
 year 
 
 1982 
 
 (Billions 
 
 of 
 dollars) 
 
 Procedure used to prepare 
 seasonally adjusted estimates 
 
 First July revision; Quarterly 
 and calendar year estimates ' 
 
 Current quarterly and, when 
 applicable, monthly estimates 
 
 47 
 48 
 49 
 50 
 51 
 
 52 
 53 
 
 54 
 
 55 
 
 56 
 57 
 
 58 
 
 59 
 60 
 
 61 
 62 
 63 
 
 64 
 
 65 
 
 66 
 67 
 68 
 69 
 70 
 71 
 72 
 73 
 74 
 75 
 
 Military. 
 
 Railroad retirement . 
 
 Veterans life insurance . 
 
 Workers' compensation 
 
 Military medical 
 insurance '. 
 
 Veterans benefits 
 
 Pension and disability . 
 
 Readjustment. 
 
 Food stamp benefits. 
 
 Black lung benefits 
 
 Supplemental security 
 income. 
 
 Earned income credit .. 
 
 Other 
 
 Aid to students ■* . 
 
 Payments to nonprofit 
 institutions. 
 
 Military medical 
 insurance ^ 
 
 All other 5 
 
 To foreigners. 
 
 Grants-in-aid to State and 
 local governments. 
 
 Highways 
 
 Medicaid 
 
 Public assistance 
 
 Education 
 
 Urban renewal 
 
 Revenue sharing 
 
 Public service jobs 
 
 Community development 
 
 Urban mass transit 
 
 Water and sewage treatment 
 
 15.4 
 
 5.8 
 
 1.4 
 
 14.9 
 13.3 
 
 1.6 
 
 9.9 
 
 1.7 
 6.9 
 
 1.2 
 
 8.2 
 
 4.5 
 
 2.6 
 
 7.8 
 
 83.9 
 
 7.7 
 
 17.9 
 
 2.6 
 
 7.7 
 
 .1 
 4.6 
 
 .1 
 4.0 
 2.6 
 3.4 
 
 Multiplicative X-11 
 
 NSA = SA. 
 
 Multiplicative X-11 in most 
 years; NSA = SA in others. 
 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmen tally. 
 NSA = SA 
 
 Multiplicative X-11 
 
 Interpolated using judgmental 
 indicator and extrapolated 
 judgmen tally. 
 
 Multiplicative X-11 
 
 NSA = SA 
 
 NSA = SA 
 
 Calendar year divided by 12 .. 
 NSA = SA 
 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 NSA = SA 
 
 NSA = SA for most programs; 
 Alaskan native claims 
 interpolated without 
 indicator. 
 
 NSA = SA for most programs; 
 calendar year divided by 4 
 for contributions to 
 international organizations. 
 
 Multiplicative X-11 
 
 NSA = SA 
 
 NSA = SA 
 
 Multiplicative X-11 
 Multiplicative X-11 
 
 NSA = SA 
 
 NSA = SA 
 
 Multiplicative X-11 
 Multiplicative X-11 
 Multiplicative X-11 
 
 wrs outlays 
 
 Mrs outlays 
 
 VA reports 
 
 ESA reports 
 
 DOD reports 
 
 MTS outlays and VA reports 
 
 MTS outlays and VA reports 
 FNS reports 
 
 SSA and ESA reports 
 
 SSA reports 
 
 MTS outlays 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 DOD reports. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 BPA data. 
 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 
 Extrapolated judgmentally; 
 
 MTS outlays when 
 
 available. 
 Extrapolated judgmentally; 
 
 MTS outlays when 
 
 available. 
 Extrapolated judgmentally; 
 
 payments data when 
 
 available. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection; M7i outlays 
 
 when available. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projections; FNS benefits 
 
 data when available. 
 SSA and ESA benefits. 
 Extrapolated judgmentally; 
 
 SSA benefits data when 
 
 available. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 
 VA 
 
 Extrapolated 
 guided by 
 projection. 
 
 Extrapolated 
 guided by 
 projection. 
 
 Extrapolated 
 guided by 
 projection. 
 
 Extrapolated 
 guided by 
 projection. 
 
 judgmentally, 
 budget 
 
 judgmentally, 
 budget 
 
 judgmentally, 
 budget 
 
 judgmentally, 
 budget 
 
 BPA projection; BPA data 
 when available. 
 
 /WrS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 MTS outlays and fiscal year 
 
 analysis relationships. 
 
32 Government Transactions. 
 
 J<Jovemher 1938 
 
 Table 11-5.— Federal Government Expenditures: Sources of Estimates — Continued 
 
 Line 
 
 Category 
 
 Calendar 
 
 year 
 
 1982 
 
 (Billions 
 
 of 
 dollars) 
 
 Procedure used to prepare 
 seasonally adjusted estimates 
 
 First July revision: Quarterly 
 and calendar year estimates ' 
 
 Current quarterly and, when 
 applicable, monthly estimates 
 
 76 
 77 
 78 
 
 79 
 
 80 
 81 
 
 82 
 
 83 
 
 84 
 85 
 
 86 
 87 
 
 88 
 
 89 
 90 
 
 91 
 92 
 
 93 
 94 
 
 95 
 96 
 97 
 
 98 
 99 
 
 100 
 
 101 
 102 
 
 103 
 104 
 
 105 
 
 Food and nutrition. 
 
 Health care 
 
 Other' 
 
 Net interest paid 
 
 Interest paid 
 
 To persons and business. 
 
 To foreigners , 
 
 Less: Interest received by 
 government. 
 
 From persons and business. 
 Monetary 
 
 Imputed financial services 
 
 From foreigners . 
 
 Subsidies less current surplus 
 of government enterprises.. 
 
 Subsidies 
 
 Agricultural 
 
 Housing 
 
 HUD, "Section 8" program 
 
 HUD, other low-rent public 
 housing. 
 
 HUD, rent suppL, 
 
 homeownership, and 
 
 rental housing 
 
 assistance. 
 HUD, other housing 
 
 programs. 
 
 Farmers Home Admin., 
 
 interest supplement 
 
 programs. 
 Farmers Home Admin., 
 
 other rural housing 
 
 programs. 
 
 Maritime 
 
 Maritime construction 
 
 Maritime operating 
 
 Railroad 
 
 Amtrak 
 
 Other 
 
 Air carriers 
 
 Other' 
 
 4.3 
 
 2.9 
 
 18.0 
 
 84.6 
 
 101.1 
 82.9 
 
 18.3 
 
 16.6 
 
 13.0 
 12.5 
 
 3.6 
 
 16.0 
 
 15.0 
 2.7 
 
 9.8 
 4.1 
 
 3.0 
 1.2 
 
 .1 
 1.5 
 
 
 .1 
 .1 
 
 1.1 
 
 Multiplicative X-11 , 
 Multiplicative X-11 , 
 
 Multiplicative X-11 and 
 interpolated without 
 indicator. 
 
 Multiplicative X-11 
 
 NSA = SA. 
 
 NSA = SA. 
 
 Interpolated using flow of 
 funds holdings as indicator. 
 
 Multiplicative X-11, NSA = SA, 
 and interpolated without 
 indicator. 
 
 NSA = SA. 
 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 
 Multiplicative X-11 , 
 NSA = SA 
 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 NSA = SA 
 
 NSA = SA. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships; a few 
 are fiscal year outlays 
 divided by 4. 
 
 Fiscal year estimates 
 interpolated using MTS 
 interest. 
 
 BPAdata 
 
 Fiscal year estimate 
 
 interpolated without 
 
 indicator. 
 FDIC and Federal Reserve 
 
 Board data on bank income 
 
 and on deposits. 
 BPAdata 
 
 Interpolated without indicator 
 and extrapolated 
 judgmentally. 
 
 ASCS payments data for 
 CCC; Mrs outlays and 
 fiscal year relationships for 
 others. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 Budget data, interpolated 
 without indicator. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 Budget data, interpolated 
 without indicator. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships. 
 
 MTS outlays and fiscal year 
 analysis relationships; a few 
 are fiscal year outlays 
 divided by 4. 
 
 Fiscal year estimates 
 extrapolated using MTS 
 interest. 
 
 BPA projection; BPA data 
 when available. 
 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 Extrapolated judgmentally. 
 
 BPA projection; BPA data 
 when available. 
 
 ASCS payments data for 
 CCC; extrapolated 
 judgmentally for all others. 
 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 
 No subsidies are currently 
 
 paid. 
 Extrapolated judgmentally; 
 
 MTS outlays when 
 
 available. 
 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 No subsidies are currently 
 
 paid. 
 Extrapolated judgmentally, 
 
 guided by budget 
 
 projection. 
 
 Extrapolated judgmentally, 
 guided by budget 
 projection. 
 
Government Transactions. 
 
 .November 1988 
 
 33 
 
 Table 11-5. — Federal Government Expenditures: Sources of Estimates — Continued 
 
 Category 
 
 Calendar 
 
 year 
 
 1982 
 
 (Billions 
 
 of 
 dollars) 
 
 Procedure used to prepare 
 seasonally adjusted estimates 
 
 First July revision: Quarterly 
 and calendar year estimates ' 
 
 Current quarterly and, when 
 applicable, monthly estimates 
 
 Less: Current surplus of 
 government enterprises. 
 
 Postal Service 
 
 Commodity Credit 
 Corporation. 
 Regular 
 
 Valuation adjustment 
 
 Acquisitions 
 
 Barley 
 
 Butter 
 
 Cheese 
 
 Corn 
 
 Upland cotton 
 
 Grain sorghum... 
 
 Dried milk 
 
 Rough rice 
 
 Soybeans 
 
 Wheat 
 
 All other crops.... 
 
 Less: Dispositions . 
 
 Barley 
 
 Butter 
 
 Cheese 
 
 Corn 
 
 Upland cotton 
 
 Grain sorghum... 
 
 Dried milk 
 
 Rough rice 
 
 Soybeans 
 
 ~ Wheat 
 
 All other crops.... 
 Other 
 
 Federal Housing 
 Administration. 
 
 Tennessee Valley 
 Authority. 
 
 Another' 
 
 Less: Wage accruals less 
 disbursements. 
 
 Surplus or deficit (-), 
 national income and 
 product accounts. 
 
 Social insurance funds . 
 Other 
 
 -.9 
 
 ^.5 
 
 -2.1 
 
 -1.4 
 -.9 
 
 
 
 -.1 
 -.7 
 
 .1 
 -.1 
 
 
 
 .2 
 -.3 
 
 
 .4 
 
 
 
 
 
 .1 
 
 
 
 
 .2 
 
 .1 
 
 3.1 
 
 1.2 
 1.4 
 
 -145.9 
 
 -30.8 
 -115.0 
 
 Interpolated without indicator 
 and extrapolated 
 judgmentally. 
 
 Interpolated without indicator 
 and extrapolated 
 judgmentally. 
 
 Additive X-1 1 
 NSA = SA 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 NSA = SA 
 NSA = SA 
 Additive X-1 1 
 Additive X-1 1 
 Additive X-1 1 
 NSA = SA 
 
 NSA = SA 
 
 NSA = SA 
 
 Additive X-1 1 
 
 Additive X-1 1 
 
 Additive X-1 1 
 
 NSA = SA 
 
 NSA = SA 
 
 Additive X-1 1 
 
 Additive X-1 1 
 
 NSA = SA 
 
 NSA = SA 
 
 Interpolated without indicator 
 
 and extrapolated 
 
 judgmentally. 
 
 NSA = SA. 
 
 Postal Service reports . 
 
 ASCS 
 
 Extrapolated judgmentally, 
 guided by budget 
 projection. 
 
 Extrapolated judgmentally, 
 guided by budget 
 projection. 
 
 For each commodity, the following sources are used: 
 
 ASCS for information about quantities and trans- 
 action prices for CCC activities 
 NASS for nondairy market price information 
 AMS for dairy market price information 
 
 Federal Housing 
 
 Administration reports, 
 
 interpolated without 
 
 indicator. 
 Tennessee Valley Authority 
 
 reports, interpolated without 
 
 indicator. 
 Budget data, interpolated 
 
 without indicator. 
 
 Postal Service data 
 
 Extrapolated judgmentally, 
 guided by budget 
 projection. 
 
 Postal Service data. 
 
 1. Except as noted, the estimates for later revisions have the same sources. 
 
 2. The sources for compensation of errployees are described in table 11-7. 
 
 3. Benefits to dependents of active duty personnel are treated as social insurance benefits; 
 those to retired military personnel and their dependents are included in other transfer payments. 
 
 4. Includes higher education student assistance (Pell grants) and interest payments on guaran- 
 teed student loans. 
 
 5. Includes payments to native Americans, payments to former employees of railroads com- 
 bined to form Conrail. special benefits for workers rendered unemployed by the expansion of 
 Redwood National Park, trade adjustment assistance, stipends to Job Corps trainees, and bene- 
 fits for disabled tongshoremen and harbor workers. 
 
 6. Includes grants for training and employment sen/ices. State administratbn of unenployment 
 insurance, low income home energy assistance, Head Start and services for the aging, research 
 and development funded by the Department of Energy, refugee assistance, assistance rendered 
 by States to the SSA in determining eligibility for disability benefits, and payments to States under 
 the Mineral Leasing Act. 
 
 7. Includes mass transit, surface mining, and disaster subsidies. 
 
 8. Includes Federal Deposit Insurance Corporation, Federal Savings and Loan Insurance Cor- 
 poration, National Credit Union Administration Share Insurance Fund, Bonneville Power Adminis- 
 tration, Southeastern Power Administration, Southwestern Power Administration, and Pension 
 Benefit Guaranty Corporation. 
 
 AMS Agricultural Marketing Service. U.S. Department of Agriculture. 
 
 ASCS Agricultural Stabilization and Conservation Service, U.S. Department of 
 
 Agriculture. 
 
 BPA Balance of Payments Accounts. 
 
 CCC Commodity Credit Corporation. 
 
 DOD U.S. Department of Defense. 
 
 ERS Economic Research Sen/ice. U.S. Department of Agriculture. 
 
 ESA Employment Security Administration, U.S. Department of Leibor. 
 
 FDIC Federal Deposit Insurance Corporation. 
 
 FNS Food and Nutrition Service, U.S. Department o< Agriculture. 
 
 HUD U.S. Department of Housing and Urban Development. 
 
 MTS Monthly Treasury Statement. 
 
 NASS National Agricultural Statistics Service, U.S. Department of Agriculture. 
 
 NSA Not seasonally adjusted. 
 
 SA Seasonally adjusted. 
 
 SSA Social Security Administration. 
 
 UIS Unemployment Insurance Service, U.S. Department of Labor. 
 
 VA Veterans' Administration. 
 
 X-11 Census Bureau seasonal adjustment procedure. 
 
34 Government Transactions. 
 
 J^ovember 1988 
 
 Table 11-6. — Relation of National Defense Purchases in the National 
 Income and Product Accounts to National Defense Outlays in the 
 Budget, Calendar Year 1982 
 
 [Billions of dollars] 
 
 National defense outlays in the unified budget. 
 
 Department of Defense, military... 
 Atomic energy defense activities.. 
 Defense-related activities ' 
 
 Plus: Military assistance purcfiases.. 
 
 tess; Grants-in-aid to State and local governments. 
 
 Timing difference 
 
 Other adjustments 
 
 Equals: National defense purchases, NIPA's. 
 
 193.6 
 
 188.7 
 
 4.5 
 
 .4 
 
 1.1 
 -.3 
 -.5 
 
 193.8 
 
 1. Consists of the emergency management planning and assistance function of the Federal 
 Emergency Management Agency, property resources activities of the General Services Adminis- 
 tration, the Selective Service System, the Intelligence Community Staff, and a payment to the 
 retirement fund of the Central Intelligence Agency. 
 
 ment of Defense, defense-related atomic energy activi- 
 ties of the Department of Energy, and defense-related 
 activities of other agencies — plus those for military 
 assistance. The nondefense category consists of the 
 purchases of goods and services for all the remaining 
 activities of the Federal Government. Purchases for 
 each category are also estimated by type of purchase: 
 Durable goods, nondurable goods, compensation of em- 
 ployees, services other than compensation, and struc- 
 tures. 
 
 National defense purchases 
 
 Total national defense purchases, as indicated ear- 
 lier, are derived from budget outlays as part of the 
 fiscal year analysis. Outlays are adjusted for timing, 
 coverage, and other differences, as shown in table II- 
 6, to put them on a basis consistent with NIPA pur- 
 chases. 
 
 Within the budget-based control total, estimates of 
 national defense purchases by type, except compen- 
 sation of employees, are prepared using one of three 
 methods and summed to the detail shown in the first 
 column of table II-7 and published in NIPA table 3.9. 
 (Appendix II-A provides definitions of the components 
 at this level of detail.)^ When data are available, 
 the estimates are prepared as the product of a de- 
 livered quantity and a price paid. This method, re- 
 ferred to in table II-7 as the "directly priced" method, 
 is preferred because it allows the development of corre- 
 sponding constant-dollar estimates by using the deliv- 
 ered quantity — the same as used with ciurent-dollar 
 estimates — with the base-year price. The method is 
 described for aircraft, the first component listed. Data 
 to implement the method for a variety of goods and 
 for some services are available from the Department 
 of Defense (DOD). Two sources of price and quantity 
 data are widely used: 
 
 • Contract Control Documentation Reports 
 (CCDR's): Data on prices paid by DOD for compo- 
 
 3. Prior to 1972, a breakdown of national defense purchases by type was 
 not available. Many of the source data for the breakdown were identified in 
 a major project undertaken with DOD [44]. 
 
 nents of major weapons systems are available in 
 contract control documentation reports [7]. For 
 example, "Contract Cost Data Reports" (CCDR, 
 DD Form 1921-1) [7A] provides current prices for 
 items listed in a contract. These reports are pre- 
 pared monthly and are usually available by the 
 final quarterly estimate. 
 
 • Production Control Reports (PCR's): Data on the 
 quantities of major components accepted by DOD 
 are available for weapons systems in a number 
 of production control reports [18]. For example, 
 the "Monthly Aircraft Acceptance Report" [18G] 
 provides quantity data for aircraft accepted by 
 the Navy. The reports are prepared monthly and 
 are generally available by the final quarterly es- 
 timate. 
 
 When data on prices and quantities are not avail- 
 able, current-dollar estimates of purchases of most 
 components are derived from DOD financial reports 
 (see below), using what is referred to in table II-7 as 
 the "ratio" method, and from budget outlays [77, 9K], 
 using what is referred to as the "directly estimated" 
 method. The ratio method is described for aircraft, and 
 the directly estimated method is described for ships. 
 Two sets of the DOD reports are widely used in imple- 
 menting these methods: 
 
 • Contract Awards (CA): Data on contract awards 
 by four-digit Federal Supply Class are available 
 in several reports [6]. For example, Department 
 of Defense Prime Contract Awards [6A] contains 
 data on type-of-service purchases for some service 
 subcategories, such as education services, within 
 the personnel support category. It is published 
 on a fiscal year basis and is generally available 
 by the first July revision following the end of the 
 fiscal year. 
 
 • Financial Reports (FR's): Detailed data on dis- 
 bursements (and in some cases, obligations) are 
 available as part of the DOD financial reports se- 
 ries [9]. The disbursements data are reported 
 monthly by each department of DOD in (DD 
 COMP (M) 1002)— for example, by the Air Force 
 in "Appropriation Status by Fiscal Year Program 
 and Subaccounts" [9A] — and are generally avail- 
 able by the final quarterly estimate. 
 
 Most estimates of purchases by type are developed 
 quarterly; quarterly not seasonally adjusted data are 
 summed to obtain calendar year estimates. For a few 
 types of purchases, estimates are developed for fiscal 
 years and the quarters are interpolated without an 
 indicator. The second column of table II-7 indicates 
 which of the three general methods is used. The third 
 column shows the 1982 value at a summary level of 
 detail for the methods of estimation; the estimates are 
 prepared at a much greater level of detail. The fourth 
 column shows the procedure used to prepare the sea- 
 sonally adjusted estimates. The fifth column describes 
 
Government Transactions. 
 
 J<!ovemher 1988 
 
 35 
 
 the source data with which these methods are imple- 
 mented for the first July revision, and the last three 
 columns describe the source data for current quarterly 
 estimates at the three stages of the estimating cycle. 
 
 Aircraft. — Most purchases of aircraft are directly 
 priced; the others are derived using the ratio method. 
 The difference between the estimate of purchases de- 
 rived using the two methods and budget outlays for 
 aircraft is the timing adjustment. 
 
 Directly priced purchases. — ^An aircraft system, 
 such as the F-15, is usually purchased by DOD as 
 components. The components — such as engines, air- 
 frame, guns, and various electronic subsystems — 
 are supplied as government-furnished equipment to 
 the airframe contractor who performs the final in- 
 tegration and assembly. Component estimates are 
 obtained using the quantity delivered to DOD in a 
 quarter as the quantity and the price paid by DOD 
 as the price. The estimates for each component, in- 
 cluding integration and assembly, are summed. For 
 most components of major weapons systems, data on 
 quantities delivered to DOD are available in PCR's 
 [18A, B, C, F, G], and data on prices paid by DOD 
 are available in CCDR's [7]. Quarterly not season- 
 ally adjusted data are used as the seasonally ad- 
 justed estimates. Quarterly estimates are summed 
 to calendar year estimates. 
 
 For the advance quarterly estimate, quantities de- 
 livered and prices paid are based largely on sched- 
 uled deliveries and prices from unpublished data un- 
 derlying the budget [4B-2, -5, -15]. Data from PCR's 
 and CCDR's are incorporated in the estimates as 
 they become available. If PCR's or CCDR's are not 
 available for a given estimate, the appropriate of- 
 fice in DOD is contacted to determine if there are 
 any known changes from the scheduled deliveries 
 or prices. 
 
 Ratio purchases. — Delivery schedules or prices are 
 not available for some aircraft components, parts, 
 equipment, and associated items. Estimates of 
 current-dollar purchases for these items are derived 
 indirectly. An indirect pricing factor (IPF) — the ra- 
 tio of funds that are not directly priced to total funds 
 available to be spent for a major group — is derived 
 from FR's [9 A, F, L, Q] for major groups of aircraft 
 systems, such as for Air Force combat aircraft. The 
 IPF is applied to quarterly disbursements from FR's 
 [9A, B, F, G, Q, T] to derive purchases. Quarterly 
 not seasonally adjusted data are used as the sea- 
 sonally adjusted estimates. Quarterly estimates are 
 summed to calendar year estimates. 
 
 For the advance quarterly estimate, the IPF is 
 judgmental and is applied to a quarterly estimate 
 based on 2 months of outlays from the MTS [77]; for 
 the final estimate, the IPF is applied to quarterly 
 disbursements from FR's. More refined estimates of 
 
 the IPF are made as data on the directly priced pur- 
 chases and total obligated funds become established. 
 
 Missiles. — Purchases of missiles are derived using 
 the directly priced method, v/ith quantity data from 
 PCR's [18A, B, C, D] and price data from CCDR's [7], 
 and the ratio method, with disbursements from FR's 
 [9A, B, F, G, Q, T]. The sum of purchases derived us- 
 ing the two methods is the estimate of missiles pur- 
 chases for the quarter. Quarterly not seasonally ad- 
 justed data are used as the seasonally adjusted esti- 
 mates. Quarterly estimates are summed to calendar 
 year estimates. The difference between the estimate of 
 purchases and total outlays for missiles in the quarter 
 is the timing adjustment. 
 
 The current quarterly estimates of missiles are pre- 
 pared in the same manner as aircraft, using — for 
 the advance estimate — scheduled deliveries and prices 
 from unpublished data underlying the budget [4B-3, 
 -6, -12, -13]. 
 
 Ships. — Purchases of ships are derived using the di- 
 rectly priced method, with quantity data from PCR's 
 [18E] and price data from CCDR's [7]; the ratio 
 method, with disbursements from FR's [9Q, T]; and a 
 directly estimated method for private shipyards. (The 
 directly estimated method is described in the next 
 paragraph.) The quarterly estimates of directly priced 
 purchases and of ratio purchases are seasonally ad- 
 justed using the Census X-11 procedure. Quarterly 
 estimates are summed to calendar year estimates. 
 The sum of purchases derived using the directly es- 
 timated purchases from private shipyards and the di- 
 rectly priced and ratio methods is the estimate of ship 
 purchases for the quarter. The difference between this 
 sum and total outlays for ship construction and con- 
 version in the quarter is the timing adjustment. 
 
 The current quarterly estimates of ships other than 
 those that are directly estimated are prepared in 
 the same manner as aircraft, using — ^for the advance 
 estimate — scheduled deliveries and prices from un- 
 published data underlying the budget [4B-16]. 
 
 The source data include ships that are sold to foreign 
 countries under the foreign military sales program. 
 When the ship is exported, the value is subtracted — 
 based on balance of payments accounts data [46] — to 
 derive net purchases and to offset the inclusion of the 
 ship in exports so that GNP is not affected. (The ship 
 is included in defense purchases and in GNP as it is 
 constructed.) 
 
 Directly estimated purchases. — Navy ship con- 
 struction and conversion performed in private ship- 
 yards is included in the NIPA purchases on a work- 
 put-in-place basis rather than a delivery basis. This 
 work consists of construction of the hull and super- 
 structure and the assembly and integration of com- 
 ponents and subsystems provided to the shipyard as 
 government-furnished equipment. Disbursements 
 by the Navy correspond closely to work done (that 
 is, purchases) in a given quarter. Quarterly data on 
 
36 Government Transactions. 
 
 JSlovemher 1988 
 
 Table 11-7.— National Defense Purchases: Sources of Estimates 
 
 Category 
 
 Method 
 
 Calendar 
 
 year 1982 
 
 (Billions of 
 
 dollars) 
 
 Procedure 
 used to 
 prepare 
 
 seasonally 
 adjusted 
 
 estimates 
 
 July revision 
 
 Current quarterly estimates 
 
 Advance 
 
 Preliminary 
 
 Final 
 
 National 
 defense. 
 
 Durable goods. 
 
 Aircraft 
 
 Missiles 
 
 Ships . 
 
 Vehicles. 
 
 Electronic 
 equipment. 
 
 Other equipment , 
 
 Other durable 
 goods. 
 
 Sum of detail.. 
 
 Sum of detail.. 
 
 Directly priced 
 Quantities... 
 
 Prices 
 
 Ratio 
 
 Directly priced 
 Quantities... 
 
 Prices 
 
 Ratio 
 
 Directly priced 
 Quantities... 
 
 Prices 
 
 Ratio 
 
 Directly 
 estimated. 
 
 Directly priced 
 Quantities... 
 
 Prices 
 
 Ratio 
 
 Directly 
 estimated. 
 
 Directly 
 estimated. 
 
 Directly 
 estimated. 
 
 193.8 
 
 49.2 
 
 7.4 
 
 9.4 
 
 2.0 
 
 3.7 
 
 2.8 
 
 3.0 
 
 1.6 
 
 1.3 
 
 3.1 
 
 5.8 
 
 8.9 
 
 NSA=SA. 
 
 NSA=SA. 
 
 NSA=SA. 
 
 NSA=SA. 
 
 Multiplicative 
 X-11. 
 
 Multiplicative 
 X-11. 
 
 NSA=SA. 
 
 NSA=SA. 
 
 NSA=SA. 
 
 NSA=SA. 
 
 NSA=SA. 
 
 NSA=SA. 
 
 PCR's.... 
 CCDR's. 
 
 FR quarteriy 
 disburse- 
 ments. 
 
 PCR's.... 
 CCDR's. 
 
 FR quarteriy 
 disburse- 
 ments. 
 
 PCR's. 
 
 CCDR's. 
 
 FR quarteriy 
 disburse- 
 ments. 
 
 FR quarterly 
 disburse- 
 ments, BPA 
 data. 
 
 PCR's. 
 
 CCDR's. 
 
 FR quarteriy 
 disburse- 
 ments. 
 
 FR quarteriy 
 disburse- 
 ments. 
 
 FR quarteriy 
 disburse- 
 ments. 
 
 FR quarteriy 
 disburse- 
 ments, CA, 
 and BPA 
 data. 
 
 Budget or, when 
 
 available, 
 
 PCR's. 
 Budget or, when 
 
 available, 
 
 CCDR's. 
 Extrapolated 
 
 using MTS 
 
 outlays as 
 
 indicator. 
 
 Budget or, when 
 
 available, 
 
 PCR's. 
 Budget or, when 
 
 available, 
 
 CCDR's. 
 Extrapolated 
 
 using MTS 
 
 outlays as 
 
 indicator. 
 
 Budget or, when 
 
 available, 
 
 PCR's. 
 Budget or, when 
 
 available, 
 
 CCDR's. 
 Extrapolated 
 
 using MTS 
 
 outlays as 
 
 indicator. 
 Extrapolated 
 
 using MTS 
 
 outlays as 
 
 indicator, BPA 
 
 data. 
 
 Budget data or, 
 
 when available, 
 
 PCR's. 
 Budget data or, 
 
 when available, 
 
 CCDR's. 
 Extrapolated 
 
 using MTS 
 
 outlays as 
 
 indicator. 
 
 Extrapolated 
 using MTS 
 outlays as 
 indicator. 
 
 Extrapolated 
 using MTS 
 outlays as 
 indicator. 
 
 Extrapolated 
 judgmentally. 
 
 More PCR's.... 
 More CCDR's . 
 
 Extrapolated 
 using MTS 
 outlays as 
 indicator. 
 
 More PCR's.... 
 More CCDR's. 
 
 Extrapolated 
 using MTS 
 outlays as 
 indicator. 
 
 More PCR's. 
 
 More CCDR's. 
 
 Extrapolated 
 
 using MTS 
 
 outlays as 
 
 indicator. 
 Extrapolated 
 
 using MTS 
 
 outlays as 
 
 indicator, BPA 
 
 data. 
 
 More PCR's. 
 
 More CCDR's. 
 
 Extrapolated 
 using MTS 
 outlays as 
 indicator. 
 
 Extrapolated 
 using MTS 
 outlays as 
 indicator. 
 
 Extrapolated 
 using MTS 
 outlays as 
 indicator. 
 
 Extrapolated 
 judgmentally. 
 
 Many PCR's. 
 Many CCDR's. 
 
 FR quarterly 
 disbursements. 
 
 Many PCR's. 
 
 Many CCDR's. 
 
 FR quarterly 
 disbursements. 
 
 Many PCR's. 
 Many CCDR's. 
 
 FR quarteriy 
 disbursements. 
 
 FR quarterly 
 disbursements, 
 BPA data. 
 
 Many PCR's. 
 Many CCDR's. 
 
 FR quarteriy 
 disbursements. 
 
 FR quarteriy 
 disbursements. 
 
 FR quarteriy , 
 
 disbursements. , 
 
 FR quarteriy | 
 
 disbursements, , 
 
 extrapolated j 
 
 judgmentally, i 
 
 and, when ' 
 
 available, BPA ' 
 
 data. j 
 
 See footnotes at end of table. 
 
Government Transactions. 
 
 ^November 1988 
 
 37 
 
 Table 11-7.— National Defense Purchases: Sources of Estimates — Continued 
 
 
 
 Calendar 
 
 Procedure 
 used to 
 
 
 Current quarteriy estimates 
 
 
 
 
 
 
 
 Category 
 
 Method 
 
 year 1982 
 
 (Billions of 
 
 dollars) 
 
 prepare 
 
 seasonally 
 
 adjusted 
 
 estimates 
 
 July revision ' 
 
 Advance 
 
 Preliminary 
 
 Final 
 
 Nondurable goods... 
 
 Sum of detail.... 
 
 13.6 
 
 
 
 
 
 
 Petroleum 
 
 Directly priced... 
 
 8.1 
 
 NSA=SA 
 
 PPR'S 
 
 Extrapolated 
 judgmentally 
 
 PPR'S 
 
 PPR'S. 
 
 products. 
 
 
 
 
 
 
 
 
 
 
 
 or, when 
 
 
 
 
 
 
 
 
 available. 
 
 
 
 
 
 
 
 
 PPR'S. 
 
 
 
 
 Directly 
 
 1.1 
 
 NSA=SA 
 
 FR quarteriy 
 disburse- 
 
 Extrapolated 
 judgmentally. 
 
 Extrapolated 
 judgmentally. 
 
 FR quarterly 
 disbursements. 
 
 
 estimated. 
 
 
 
 
 
 
 
 ments. 
 
 
 
 
 Ammunition 
 
 Directly priced: 
 Quantities 
 
 .3 
 
 NSA=SA 
 
 
 
 
 
 
 
 
 Budget data 
 
 Budget data or. 
 
 Budget data 
 
 Budget data. 
 
 
 
 
 
 
 when available. 
 
 
 
 
 
 
 
 PCR's. 
 
 
 
 
 Prices 
 
 
 
 CCDR's 
 
 Budget data or, 
 when available, 
 
 More CCDR's 
 
 Many CCDR's. 
 
 
 
 
 
 
 
 
 
 
 
 
 CCDRs. 
 
 
 
 
 Directly 
 
 2.0 
 
 NSA=SA 
 
 FR quarteriy 
 disburse- 
 
 Extrapolated 
 using MTS 
 
 Extrapolated 
 using MTS 
 
 FR quarterly 
 disbursements. 
 
 
 estimated. 
 
 
 
 
 
 
 
 ments. 
 
 outlays as 
 indicator. 
 
 outlays as 
 indicator. 
 
 
 Other nondurable 
 
 Directly 
 
 2.1 
 
 Multiplicative 
 
 FR quarterly 
 
 Extrapolated 
 
 Extrapolated 
 
 FR quarterly 
 
 goods. 
 
 estimated. 
 
 
 X-11. 
 
 disburse- 
 ments, CA, 
 and BPA 
 
 judgmentally. 
 
 judgmentally. 
 
 disbursements, 
 extrapolated 
 judgmentally, 
 and, when 
 
 
 
 
 
 data. 
 
 
 
 
 
 
 
 
 
 
 available, BPA 
 
 
 
 
 
 
 
 
 data. 
 
 Services 
 
 Sum of detail 
 
 Sum of detail 
 
 127.1 
 56.6 
 
 
 
 
 
 
 Military 
 
 
 compensation. 
 
 
 
 
 
 
 
 
 Wages and 
 
 
 39.1 
 
 Interpolated 
 
 Budget wages 
 
 Extrapolated 
 
 Extrapolated 
 
 Extrapolated 
 
 salaries. 
 
 
 
 and 
 
 and salaries. 
 
 using 
 employment as 
 
 using 
 employment as 
 
 using 
 employment as 
 
 
 
 
 extrapolated 
 
 
 
 
 
 using 
 employment 
 
 
 indicator and 
 
 indicator and 
 
 indicator and 
 
 
 
 
 
 judgment. 
 
 judgment. 
 
 judgment. 
 
 
 
 
 as indicator. 
 
 
 
 
 
 Supplements: 
 Employer 
 
 
 
 
 
 
 
 
 
 17.5 
 
 See table 11-4 
 
 See table 11-4 
 
 See table 11-4 for 
 
 See table 11-4 for 
 
 See table 11-4 for 
 
 contribu- 
 
 
 
 for sources 
 
 for sources 
 
 sources of 
 
 sources of 
 
 sources of 
 
 tions for 
 
 
 
 of estimates. 
 
 of estimates. 
 
 estimates. 
 
 estimates.. 
 
 estimates. 
 
 social 
 
 
 
 
 
 
 
 
 insurance. 
 
 
 
 
 
 
 
 
 Civilian 
 
 Sum of detail 
 
 27.4 
 
 
 
 
 
 
 compensation. 
 
 
 
 
 
 
 
 
 Wages and 
 
 
 22.7 
 
 Interpolated 
 
 0PM wages 
 and salaries. 
 
 Extrapolated 
 
 Extrapolated 
 
 Extrapolated 
 
 salaries. 
 
 
 
 without 
 
 judgmentally. 
 
 judgmentally. 
 
 judgmentally. 
 
 
 
 
 indicator and 
 
 
 
 
 
 
 
 
 extrapolated 
 
 
 
 
 
 
 
 
 judgmentally. 
 
 
 
 
 
 Supplements: 
 Employer 
 
 
 
 
 
 
 
 
 
 3.5 
 
 See table 11-4 
 
 See table 11-4 
 
 See table 11-4 for 
 
 See table 11-4 for 
 
 See table 11-4 for 
 
 contribu- 
 
 
 
 for sources 
 
 for sources 
 
 sources of 
 
 sources of 
 
 sources of 
 
 tions for 
 
 
 
 of estimates. 
 
 of estimates. 
 
 estimates. 
 
 estimates. 
 
 estimates. 
 
 social 
 
 
 
 
 
 
 
 
 insurance. 
 
 
 
 
 
 
 
 
 Other labor 
 
 
 1.1 
 
 Interpolated 
 
 OPM 
 
 Interpolated 
 
 Interpolated 
 
 Interpolated 
 
 income. 
 
 
 
 without 
 
 employee 
 
 without 
 
 without 
 
 without 
 
 
 
 
 indicator and 
 
 benefits. 
 
 indicator and 
 
 indicator and 
 
 indicator and 
 
 
 
 
 extrapolated 
 
 
 extrapolated 
 
 extrapolated 
 
 extrapolated 
 
 
 
 
 judgmentally. 
 
 
 judgmentally. 
 
 judgmentally. 
 
 judgmentally. 
 
 See footnotes at end of table. 
 
38 Government Transactions. 
 
 JsJovember 1988 
 
 Table 11-7.— National Defense Purchases: Sources of Estimates— Continued 
 
 
 
 Calendar 
 
 year 1982 
 
 (Billions of 
 
 dollars) 
 
 Procedure 
 used to 
 prepare 
 
 seasonally 
 adjusted 
 
 
 Current quarterly estimates 
 
 Category 
 
 Method 
 
 July revision ' 
 
 Advance 
 
 Preliminary 
 
 Final 
 
 
 
 
 estimates 
 
 
 
 
 
 Services — 
 
 
 
 
 
 
 
 
 Continued 
 
 
 
 
 
 
 
 
 Other services 
 
 Sum of detail 
 
 43.2 
 
 
 
 
 
 
 Contractual 
 
 Directly 
 
 16.3 
 
 Multiplicative 
 
 MTS outlays 
 adjusted by 
 NSF data. 
 
 Extrapolated 
 
 MTS outlays 
 adjusted by 
 NSF data. 
 
 MTS outlays 
 adjustea by 
 NSF data. 
 
 research and 
 
 estimated. 
 
 
 X-11. 
 
 using MTS 
 
 development. 
 
 
 
 
 outlays as 
 
 
 
 
 
 
 indicator. 
 
 
 
 Installation 
 
 Directly 
 
 12.0 
 
 Multiplicative 
 
 FR quarterly 
 
 Extrapolated 
 
 Extrapolated 
 
 Extrapolated 
 
 support. 
 
 estimated. 
 
 
 X-1 1 and 
 
 interpolated 
 
 without 
 
 indicator and 
 
 extrapolated 
 
 judgmentally. 
 
 disburse- 
 ments and 
 CA. 
 
 judgmentally. 
 
 judgmentally. 
 
 judgmentally 
 and FR 
 quarterly 
 disbursements. 
 
 Weapons 
 
 Directly 
 
 5.5 
 
 Multiplicative 
 
 FR quarterly 
 
 Extrapolated 
 
 Extrapolated 
 
 Extrapolated 
 
 support. 
 
 estimated. 
 
 
 X-1 1 and 
 
 interpolated 
 
 without 
 
 disburse- 
 ments and 
 CA. 
 
 judgmentally. 
 
 judgmentally. 
 
 judgmentally 
 and FR 
 Quarterly 
 disbursements. 
 
 
 
 
 indicator and 
 
 
 
 
 
 
 
 extrapolated 
 
 
 
 
 
 
 
 
 judgmentally. 
 
 
 
 
 
 Personnel 
 
 Directly 
 
 3.6 
 
 Multiplicative 
 
 CA and BPA 
 
 Extrapolated 
 
 Extrapolated 
 
 Extrapolated 
 
 support. 
 
 estimated. 
 
 
 X-1 1 and 
 
 interpolated 
 
 without 
 
 indicator and 
 
 extrapolated 
 
 judgmentally. 
 
 data. 
 
 judgmentally. 
 
 judgmentally. 
 
 judgmentally 
 and, when 
 available, BPA 
 data. 
 
 Transportation 
 
 Directly 
 
 3.2 
 
 Multiplicative 
 
 FR quarterly 
 
 Extrapolated 
 
 Extrapolated 
 
 FR Quarterly 
 ob igations and 
 
 of materiel. 
 
 estimated. 
 
 
 X-11. 
 
 obligations 
 
 judgmentally. 
 
 judgmentally 
 
 
 
 
 
 and various 
 
 
 or, when 
 
 various DOD 
 
 
 
 
 
 DOD reports 
 
 
 available, FR 
 
 reports as 
 
 
 
 
 
 as available. 
 
 
 quarterly 
 obligations. 
 
 available. 
 
 Travel of 
 
 Directly 
 
 2.6 
 
 NSA=SA 
 
 FR Quarterly 
 ob igations 
 
 Extrapolated 
 judgmentally. 
 
 Extrapolated 
 judgmentally 
 
 FR quarterly 
 obligations and 
 
 persons. 
 
 estimated. 
 
 
 
 
 
 
 
 and various 
 
 
 or, when 
 
 various DOD 
 
 
 
 
 
 DOD reports 
 
 
 available, FR 
 
 reports as 
 
 
 
 
 
 as available. 
 
 
 quarterly 
 obligations. 
 
 available. 
 
 Other 
 
 Directly 
 
 (*) 
 
 NSA=SA 
 
 MTS outlays 
 and BPA 
 
 Extrapolated 
 using MTS 
 
 MTS outlays and 
 extrapolated 
 
 MTS outlays and 
 extrapolated 
 
 
 estimated. 
 
 \ / 
 
 
 
 
 
 
 data. 
 
 outlays as 
 indicator. 
 
 judgmentally. 
 
 judgmentally 
 or, when 
 available, BPA 
 data. 
 
 Structures 
 
 Sum of detail 
 
 Directly pric«d... 
 
 3.9 
 
 .7 
 
 NSA=SA 
 
 CPR's 
 
 Extrapolated 
 
 More CPR's 
 
 
 Military facilities 
 
 Many CPR's. 
 
 
 
 
 
 
 judgmentally 
 
 
 
 
 
 
 
 
 or, when 
 
 
 
 
 
 
 
 
 available, 
 
 
 
 
 
 
 
 
 CPR's. 
 
 
 
 
 Directly 
 
 1.6 
 
 NSA=SA 
 
 FR quarterly 
 
 Extrapolated 
 
 Extrapolated 
 
 FR quarterly 
 
 
 estimated. 
 
 
 
 disburse- 
 ments. 
 
 using MTS 
 outlays as 
 indicator. 
 
 using MTS 
 outlays as 
 indicator. 
 
 disbursements. 
 
 Other structures 
 
 Directly 
 
 1.6 
 
 Multiplicative 
 
 FR quarterly 
 
 Extrapolated 
 
 Extrapolated 
 
 FR quarterly 
 
 
 estimated. 
 
 
 X-11. 
 
 disburse- 
 
 using MTS 
 
 using MTS 
 
 disbursements 
 
 
 
 
 
 ments and 
 
 outlays as 
 
 outlays as 
 
 and CCR. 
 
 
 
 
 
 CCR. 
 
 indicator and 
 CCR. 
 
 indicator and 
 CCR. 
 
 
 ' Less than $0.05 billion. 
 
 1. The estimates for later revisions have the same sources. 
 
 BPA Balance of Payments Accounts. 
 
 CA Contratrt awards. 
 
 CCDR Contract control documentation report. 
 
 CCR Current Coristrudion Reports. 
 
 CPR Construction project report. 
 
 FR Financial reports. 
 
 MTS Monthly Treasury Statement. 
 
 NSA Not seasonally adjusted. 
 
 NSF National Science Foundation. 
 
 0PM Office of Personnel Management. 
 
 PCR Production control report. 
 
 PPR Petroleum products report. 
 
 SA Seasonally adjusted. 
 
 X-11 Census Bureau seasonal adjustment prcx»cJure. 
 
Government Transactions. 
 
 J^ovemher 1988 
 
 39 
 
 disbursements are available in PR's [9Q, T]. Quar- 
 terly not seasonally adjusted data are used as the 
 seasonally adjusted estimates. Quarterly estimates 
 are summed to calendar year estimates. 
 
 The advance quarterly estimate is an extrapola- 
 tion using 2 months of MTS outlays as the indica- 
 tor. FR disbursements data are used as they become 
 available, generally by the final estimate. 
 
 Vehicles. — Purchases of vehicles are derived using 
 the directly priced method, with quantitj' data from 
 PCR's [18C] and price data from CCDR's [7], and the 
 ratio method, with disbursements from FR's [9A, B, 
 F, G, Q, T]. The sum of purchases derived using the 
 two pricing methods is the estimate of vehicles pur- 
 chases for the quarter. Quarterly not seasonally ad- 
 justed data are used as the seasonally adjusted esti- 
 mates. Quarterly estimates are summed to calendar 
 year estimates. The difference between the estimate of 
 purchases and total outlays for vehicles in the quarter 
 is the timing adjustment. 
 
 The current quarterly estimates of vehicles are pre- 
 pared in the same manner as aircraft, using — ^for 
 the advance estimate — scheduled deliveries and prices 
 from unpublished data underlying the budget [4B-4, 
 -7, -8, -9, -10, -11]. 
 
 Electronic equipment. — Purchases of electronic 
 equipment, such as radio sets and radar systems that 
 are not initially installed as components of a weapons 
 system, are directly estimated. Quarterly data on dis- 
 bursements are available in FR's [9A, B, F, G, L, O, 
 Q, T]. Quarterly not seasonally adjusted data are used 
 as the seasonally adjusted estimates. Quarterly esti- 
 mates are summed to calendar year estimates. 
 
 The advance quarterly estimate is an extrapolation 
 using 2 months of MTS outlays as the indicator. FR 
 disbursements data are used as they become available, 
 generally by the final estimate. 
 
 Other equipment. — Purchases of other equipment, 
 such as portable pontoon bridges and other military- 
 specific items that are not initially installed as com- 
 ponents of a weapons system, are directly estimated. 
 Quarterly data on disbursements are available in FR's 
 [9A, B, F, G, L, 0, Q, T]. Quarterly not seasonally ad- 
 justed data are used as the seasonally adjusted esti- 
 mates. Quarterly estimates are summed to calendar 
 year estimates. 
 
 The advance quarterly estimate is an extrapolation 
 using 2 months of MTS outlays as the indicator. FR 
 disbursements data are used as they become available, 
 generally by the final estimate. 
 
 Other durable goods. — Purchases of other durable 
 goods — such as pumps, hand tools, general purpose 
 computers [6A] and goods for the foreign military 
 assistance program that are not military-specific in 
 nature — are directly estimated. Quarterly data on dis- 
 bursements for most other durable goods are avail- 
 able in FR's [9B C, D, G, H, I, M, N, 0, R, S, T]. 
 Quarterly data for the foreign military assistance pro- 
 
 gram are from BEA's balance of payments accounts 
 [46]. Quarterly not seasonally adjusted data from both 
 sources are used as the seasonally adjusted estimates. 
 Quarterly estimates are summed to calendar year es- 
 timates. 
 
 The advance quarterly estimate is a judgmental ex- 
 trapolation. FR disbursements and balance of pay- 
 ments accounts data are used as they become avail- 
 able, generally by the final estimate. 
 
 Petroleum products. — Most purchases of petro- 
 leum are directly priced using the number of gallons 
 delivered and price paid per gallon from invoices sum- 
 marized in monthly petroleum product reports (PPR's) 
 [17]; the other purchases are directly estimated us- 
 ing disbursements data from FR's [90]. The sum of 
 purchases derived using the two methods is the es- 
 timate of petroleum purchases for the quarter. For 
 both methods, not seasonally adjusted data are used 
 as the seasonally adjusted estimates. Quarterly esti- 
 mates are summed to calendar year estimates. 
 
 For the advance quarterly estimate of directly priced 
 petroleum, quantities delivered and prices paid are 
 judgmental extrapolations or, when available, based 
 on PPR data. As the information becomes available, 
 generally by the preliminary estimate, the quantity 
 and price data are from the PPR's. For directly esti- 
 mated petroleum, the advance estimate is a judgmen- 
 tal extrapolation. As the data become available, gen- 
 erally by the final estimate, estimates are based on FR 
 disbiorsements data. 
 
 Ammunition. — Purchases of ammvmition are de- 
 rived using the directly priced method, with quan- 
 tity data from unpublished data underlying the bud- 
 get [4B-14] and price data from CCDR's [7], and the 
 directly estimated method, with disbursements from 
 FR's [9A, B, F, G, Q, T]. The sum of purchases derived 
 using the two methods is the estimate of ammunition 
 purchases for the quarter. For both methods, quar- 
 terly not seasonally adjusted data are used as the sea- 
 sonally adjusted estimates. Quarterly estimates are 
 summed to calendar year estimates. 
 
 The advance quarterly estimate of directly priced 
 ammunition is based largely on scheduled deliveries 
 and prices from supporting data to the budget [4B-14]. 
 As they become available, CCDR data are used. The 
 advance quarterly estimate of directly estimated am- 
 munition is an extrapolation using 2 months of MTS 
 outlays as the indicator. FR disbursements data are 
 used as they become available, generally by the final 
 estimate. 
 
 Other nondurable goods. — Purchases of other 
 nondurable goods — such as food, drugs, and clothing — 
 are directly estimated. For all except printing and 
 for the foreign military assistance program, quarterly 
 data on disbursements are in FR's [9B, G, 0, TJ. 
 Quarterly estimates are summed to calendar year es- 
 timates. The quarterly estimates are seasonally ad- 
 justed using the Census X-11 procedure. The advance 
 
40 Government Transactions. 
 
 Jslovember 1988 
 
 quarterly estimate is a judgmental extrapolation. FR 
 disbui'sements data are used as they become available, 
 generally by the final estimate. 
 
 Printing purchases are based on annual CA data 
 [6A], which are available by the first July revision. 
 Purchases of other nondurable goods for the foreign 
 military assistance program are from BEA's balance of 
 payments accounts 46]. Quarterly seasonally adjusted 
 estimates of printing and foreign military assistance 
 purchases are interpolations without an indicator and, 
 for the current estimates, judgmental extrapolations; 
 the balance of payments accounts data are generally 
 available by the final estimate. 
 
 Military compensation. — Compensation for active 
 duty military personnel and for reserve personnel is 
 estimated as the sum of two components: Wages 
 and salaries, and supplements to wages and salaries. 
 Coast Guard compensation is estimated as part of mil- 
 itary compensation and is then removed from national 
 defense and added to nondefense. 
 
 Wages and salaries. — Fiscal year estimates of 
 wages and salaries for active duty and reserve per- 
 sonnel are derived from budget data [4A-2, 4B-1, 
 and 13B, C, D, F, G], generally by the first July revi- 
 sion. Monthly estimates are intei*polations of the fis- 
 cal year estimates using monthly not seasonally ad- 
 justed data on the number of personnel [13E] as the 
 indicator for active duty personnel and using judg- 
 mental estimates of reserve wages and salaries as 
 the indicator for reserve personnel. The estimates 
 are then adjusted for pay raises. Monthly estimates 
 are summed to quarterly and calendar year esti- 
 mates. 
 
 Cuirent monthly estimates of wages and salaries 
 for active duty military personnel are extrapolations 
 using the number of active duty military person- 
 nel as the indicator. Current monthly estimates of 
 wages and salaries for reserve personnel are judg- 
 mental extrapolations. The estimates are then ad- 
 justed for pay raises. 
 
 Supplements to wages and salaries. — Supple- 
 ments to military wages and salaries consist of the 
 following employer contributions for social insur- 
 ance: Old-age, survivors, hospital, and disability 
 insurance; military retirement; veterans life insur- 
 ance; workers' compensation; and military medical 
 insurance for dependents of active duty military per- 
 sonnel. A description of the methodology used to es- 
 timate these employer contributions is discussed in 
 the contributions for social insurance section of the 
 receipts derivation. There are no other labor income 
 items, such as health and life insurance, for military 
 personnel. 
 
 Civilian compensation. — Civilian compensation is 
 estimated as the sum of two components: Wages and 
 salaries, and supplements to wages and salaries. Esti- 
 mates of these components are made for the total Fed- 
 eral Government sector (excluding enterprises) and 
 
 then allocated to national defense and nondefense pur- 
 chases. 
 
 Wages and salaries. — Calendar year estimates of 
 civilian wages and salaries are primarily from Office 
 of Personnel Management (0PM) data [13J], gener- 
 ally by the first July revision. These are supple- 
 mented by data from other agencies, such as the 
 Department of Agriculture for county agricultural 
 agents. Monthly seasonally adjusted estimates are 
 interpolations without an indicator, with allowance 
 for pay raises. Monthly estimates are summed to 
 quarterly and calendar year estimates. 
 
 Current monthly estimates of Federal civilian 
 wages and salaries are judgmental extrapolations, 
 adjusted for pay raises. Monthly estimates are 
 summed to qusuterly estimates. Quarterly esti- 
 mates are allocated to national defense and nonde- 
 fense purchases using estimates of full- and part- 
 time employment from 0PM [13H, I] as the indica- 
 tor. 
 
 Supplements to wages and salaries. — Supple- 
 ments to civilian wages and salaries consist of em- 
 ployer contributions for social insurance and other 
 labor income. Employer contributions for social in- 
 surance consist of the following: Old-age, survivors, 
 disability, and hospital insurance, imemployment 
 insurance, civilian employee retirement, and work- 
 ers' compensation. A description of the methodol- 
 ogy used to estimate these employer contributions 
 is discussed in the contributions for social insurance 
 section of the receipts derivation. Employer contri- 
 butions are allocated to national defense and nonde- 
 fense purchases in proportion to wages and salaries. 
 
 The other labor income component of supple- 
 ments consists of the following: Health insurance, 
 life insurance, judicial fees, payments to prison in- 
 mates, and the thrift plan. Annual estimates of 
 other labor income are based largely on 0PM data. 
 Monthly seasonally adjusted estimates are interpo- 
 lations without an indicator and judgmental extrap- 
 olations, with allowance for rate changes or other 
 special factors. Civilian other labor income is allo- 
 cated to national defense and nondefense purchases 
 in direct proportion to wages and salaries. 
 
 Contractual research and development. — 
 
 Purchases of contractual research and development 
 (R&D) are directly estimated. Monthly outlays are 
 available in the MTS for DOD activities and for De- 
 partment of Energy atomic energy activities [77]. The 
 data are adjusted to exclude grants-in-aid for research, 
 which are not considered to be government purchases. 
 In addition, expenditures for R&D performed in-house 
 by DOD are excluded based on data from the National 
 Science Foundation (NSF) [15]. (R&D performed in- 
 house by DOD appears as purchases of employee com- 
 pensation, equipment, materials, etc. — the items DOD 
 buys from the private sector.) The seasonally adjusted 
 
Government Transactions. 
 
 J^ovember 1988 41 
 
 estimates are prepared using the Census X-11 proce- 
 dure. 
 
 The advance quarterly estimate is an extrapolation 
 using 2 months of MTS outlays as the indicator. For 
 the final estimate, 3 months of MTS outlays are ad- 
 justed by NSF data. 
 
 Installation support. — Purchases of installation 
 support services are estimated directly for 14 subcat- 
 egories including electricity, natural gas, telephone, 
 postage, housekeeping, and maintenance of real prop- 
 erty and eqviipment. Quarterly expenditures for 
 postage are available from the U.S. Postal Service [89] 
 and for communications services from DOD's Commu- 
 nication Services Industrial Fund [47, 48]. 
 
 Fiscal year reports [27, 36, 52] are available from 
 DOD on expenditures for electricity, natural gas, 
 steam, and water and sewerage and from the General 
 Services Administration on leases on property [85, 86]. 
 Fiscal year CA data [6A] are available for property 
 maintenance, equipment maintenance, housekeeping 
 services, and other types of support services. Sea- 
 sonally adjusted estimates for other installation sup- 
 port purchases are interpolations without an indicator. 
 Quarterly estimates are summed to the calendar year 
 estimates. 
 
 The advance quarterly estimate is a judgmental ex- 
 trapolation. FR disbursements data [9L, 0] are used 
 as they become available, generally by the final esti- 
 mate. 
 
 Weapons support. — Purchases of weapons support 
 services are directly estimated for 11 subcategories of 
 depot maintenance and services for new weapons sys- 
 tems. Quarterly estimates of services for new weapons 
 systems are derived as a percentage of disbursements 
 for each major weapons system from FR data [9A, B, F, 
 G, Q, T]. Quarterly estimates are summed to the calen- 
 dar year estimates and are seasonally adjusted using 
 the Census X-11 procedure. Fiscal year estimates for 
 depot maintenance services are based on CA data [6A] 
 and FR disbursements data [9D, I, R]. Quarterly sea- 
 sonally adjusted estimates are interpolations without 
 an indicator. 
 
 The advance quarterly estimate is a judgmental ex- 
 trapolation. FR disbursements data are used as they 
 become available, generally by the final estimate. 
 
 Personnel support. — Purchases of personnel sup- 
 port services are directly estimated for three 
 subcategories — direct hire of foreign nationals, train- 
 ing and education, and consulting. Quarterly esti- 
 mates for direct hire of foreign nationals are available 
 from a survey conducted by DOD for BEA's balance 
 of payments accounts. The quarterly estimates are 
 summed to calendar year estimates and are seasonally 
 adjusted using the Census X-11 procedure. Estimates 
 of purchases for training and education services and 
 for consulting are based on fiscal year CA data [6A]. 
 Quarterly seasonally adjusted estimates are interpo- 
 lations without an indicator. 
 
 The advance quarterly estimate generally is a judg- 
 mental extrapolation. BPA data on the hire of foreign 
 nationals outside of the United States are used as they 
 become available, generally by the final estimate. 
 
 Transportation of materiel. — Purchases of trans- 
 portation services are directly estimated. Quarterly 
 data on disbursements are available in various reports 
 from the Military Sealift Command [66] and the Mil- 
 itary Traffic Management Command [35]. Quarterly 
 obligations incurred by other DOD agencies with re- 
 sponsibility for the transportation of materiel, which 
 are assumed to equal disbursements, are available in 
 FR's [9E, J, P, U]. Quarterly estimates are summed 
 to the calendar year estimates and are seasonally ad- 
 justed using the Census X-11 procedure. 
 
 The advance quarterly estimate is a judgmental ex- 
 trapolation. FR obligations data are used as they be- 
 come available, generally by the final estimate. 
 
 Travel of persons. — Purchases of travel, including 
 per diem expenses, are directly estimated. Quarterly 
 data on disbursements are available in various reports 
 from the Military Airlift Command [29]. Quarterly 
 obligations incurred by other DOD agencies with re- 
 sponsibilities for the travel of persons, which are as- 
 sumed to equal disbursements, are available in FR's 
 [9E, J, P, U]. Not seasonally adjusted data are used as 
 the seasonally adjusted estimates, and quarterly esti- 
 mates are summed to calendar year estimates. 
 
 The advance quarterly estimate is a judgmental ex- 
 trapolation. FR obligations data are used as they be- 
 come available, generally by the preliminary estimate. 
 
 Other services. — Purchases of other services — 
 largely services purchased for foreign military as- 
 sistance, such as the training of foreign military 
 personnel — are directly estimated. Quarterly esti- 
 mates for foreign military assistance are from the bal- 
 ance of payments accounts [46]. Not seasonally ad- 
 justed data are used as the seasonally adjusted esti- 
 mates, and quarterly estimates are summed to calen- 
 dar year estimates. 
 
 The advance quarterly estimate is an extrapolation 
 using 2 months of MTS outlays [77] as the indicator. 
 The balance of pajonents accounts data are used as 
 they become available, generally by the final estimate. 
 
 Military facilities. — Purchases of military facili- 
 ties, such as troop housing and hangars, are recorded 
 in the NIPA's on a work-put-in-place basis using the 
 directly priced and directly estimated methods. For 
 the directly priced purchases, data on the number of 
 square feet and cost per square foot (as well as length 
 of construction period) are available from construction 
 project reports (CPR's) [5] submitted by contractors at 
 the beginning and end of each contract. For the di- 
 rectly estimated purchases, quarterly disbursements 
 are available in FR's [9A, B, F, G, L, O, Q, T]. Not sea- 
 sonally adjusted data are used as the seasonally ad- 
 justed estimates, and quarterly estimates are summed 
 to calendar year estimates. 
 
42 Government Transactions. 
 
 J^ovemher 1988 
 
 The advance quarterly estimate for directly priced 
 purchases is lai-gely a judgmental extrapolation; CPR 
 data are used as they become available. The advance 
 estimate for directly estimated purchases is an extrap- 
 olation using 2 months of MTS outlays as the indica- 
 tor. FR disbursements data are used as they become 
 available, generally by the final estimate. 
 
 Other structures. — Purchases of other structures, 
 which includes family housing and nuclear weapon 
 factories, are recorded in the NIPA's on a work-put-in- 
 place basis using the directly estimated method. Quar- 
 terly disbursements for family housing are available in 
 FR's [9A, B, F, G, L, O, Q, T], and value put in place 
 for other structures is from the Census Bureau Cur- 
 rent Construction Reports [37]. Quarterly estimates 
 are summed to calendar year estimates and are sea- 
 sonally adjusted using the Census X-11 procedure. 
 
 The advance quarterly estimate for family housing 
 is an extrapolation using 2 months of MTS outlays as 
 the indicator; FR disbursements data are used as they 
 become available, generally by the final estimate. The 
 advance estimate for other structures is an extrapola- 
 tion using 2 months of value-put-in-place data as the 
 indicator; 3 months of data are available for the pre- 
 liminary estimate. 
 
 Nondefense purchases 
 
 Total nondefense purchases of goods and services are 
 derived by program fi-om budget outlays as a part of 
 the fiscal yesu* analysis (see page 19). For most pro- 
 grams, nondefense purchases are derived as a resid- 
 ual after identiiying all other tj^pes of expenditui'es. 
 Quarterly net seasonally adjusted estimates are then 
 derived on the basis of this fiscal year analysis; the fis- 
 cal year relationship of types of expenditures to total 
 expenditures for a program is used to prorate quar- 
 terly budget outlays for that program as published in 
 the MTS. The sum of the residual expenditures by pro- 
 gram accounts for the bulk of nondefense purchases; a 
 description of the procedure for the exception, the in- 
 ventory change of the Commodity Credit Corporation 
 (CCC), follows. These quarterly unadjusted estimates 
 of nondefense purchases are summed to calendar year 
 estimates. 
 
 Nondefense pxirchases other than CCC inventory 
 change are seasonally adjusted at the level of de- 
 tail shown in table II-5. Purchases for the strategic 
 petroleum reserve, the decennial census, and a few 
 other programs show no seasonality, and not season- 
 ally adjusted data are used as the seasonally adjusted 
 estimates. For estimates that show seasonality, the 
 Census X-11 seasonal adjustment procedure is used. 
 Pay raises are removed from the "all other purchases" 
 category before seasonal adjustment and added back 
 to the seasonally adjusted estimate in the same quar- 
 ter as they occurred in the unadjusted data. 
 
 For the current quarterly estimates of nondefense 
 purchases other than CCC inventory change, the ad- 
 vance estimates, with the exception of the estimates 
 
 of imputed financial services and compensation of em- 
 ploj^ees, are based on 2 months of MTS outlays in con- 
 junction with relationships derived in the fiscal year 
 analysis. Three months of MTS outlays are available 
 in time for the preliminary estimates. 
 
 The annual and quarterly seasonally adjusted es- 
 timates of nondefense purchases other than CCC in- 
 ventory change are allocated to type of purchase — 
 durable goods, nondurable goods, compensation, other 
 services, and structures. This allocation is an essen- 
 tial step in the deflation of nondefense purchases and, 
 therefore, will be discussed in that section. 
 
 Commodity Credit Corporation. — The nonde- 
 fense purchases of the CCC consist of the CCC inven- 
 tory change.^ The CCC inventory change is defined in 
 the NIPA's to consist of direct purchases, sales, and 
 donations of commodities plus the net change in com- 
 modity loans. ^ The CCC inventory change has two 
 parts — a "regular" inventory change, reflecting CCC 
 transaction prices, and a valuation adjustment to take 
 CCC transaction prices to market prices. The regular 
 inventory change is based on fiscal year and monthly 
 data from the Agricultural Stabilization and Conser- 
 vation Service (ASCS), U.S. Department of Agricul- 
 ture [23]. The prices used to estimate CCC loan and 
 inventory transactions at current market prices are 
 from Agricultural Prices [26] and from Dairy Market 
 Statistics: Annual Summary [22]. The valuation ad- 
 justment is the difference between the CCC inventory 
 change valued at transaction prices and CCC inven- 
 tory change valued at current market prices. 
 
 For each of the 10 commodities shown in table II- 
 5, the end-of-quarter quantities of collateral pledged 
 for loans outstanding and of inventory are from the 
 ASCS. The two quantities are summed to the total 
 quantity for the commodity. The quarter-to-quarter 
 quantity change is calculated and multiplied by the 
 c\.irrent market price for the commodity to obtain the 
 CCC inventory change at market value for the com- 
 modity. For all other crops, the change in CCC trans- 
 action value is used as the CCC inventory change at 
 market value. 
 
 An adjustment is made for the lag in posting trans- 
 actions in the detailed records, using ASCS data on 
 transactions not yet posted. The sum of the inventory 
 change for each commodity, the inventory change for 
 the all other crops portion, and the accounting adjust- 
 ment is the total CCC inventory change. 
 
 4. In NIPA table 3.19, nondefense purchases of the CCC also include an 
 imputation for donations of agricultural commodities to private domestic orga- 
 nizations. This imputation offsets the effect of the donation on the inventory 
 change and yields the appropriate measure of CCC expenditures. The pro- 
 grams of the CCC and the NIPA treatment of those programs are discussed 
 in "Special Note. — The CCC in the National Income and Product Accounts," 
 SURVEY OF CURRENT BUSINESS 62 (January 1982): 6-7 and in "Federal Farm 
 Programs for 1986-90," SURVEY OF CURRENT BUSINESS 66 (April 1986): 31- 
 35. 
 
 5. Because they have a long history of being repaid, tobacco loans are not 
 treated as purchases and CCC generally carries no tobacco inventory. 
 
Government Transactions. 
 
 ^November 1988 
 
 43 
 
 Estimates of CCC inventory change are prepared 
 quarterly; the quarterly not seasonally adjusted es- 
 timates are summed to calendar year estimates. 
 
 For the quarterly seasonally adjusted estimates, a 
 procedure is used that takes advantage of the com- 
 modity detail available. For the commodities shown 
 in table II-5, the inventory change is derived as ac- 
 quisitions less dispositions (with associated accounting 
 adjustments). 
 
 Acquisitions are estimated first. For each commod- 
 ity, the quantities associated with new loans and di- 
 rect purchases made during the quarter are obtained 
 from ASCS. The two quantities are summed to the 
 total quantity of the commodity acquired during the 
 quarter. This quantity is multiplied by the current 
 market price for the commodity to obtain CCC acqui- 
 sitions at market value for the quarter. For most com- 
 modities, the estimates of acquisitions are seasonally 
 adjusted using the Census X-11 procedure. For all 
 other crops, the CCC transaction value is used as the 
 market value of acquisitions. The sum of the acquisi- 
 tions developed for each commodity, for all other crops, 
 and the accounting adjustment for commodity loans 
 made and direct commodity purchases is the season- 
 ally adjusted total of CCC commodity acquisitions. 
 
 The disposition of each CCC commodity is prepared 
 by subtracting the inventory change for each com- 
 modity from the acquisition of the commodity. This 
 method is also used to prepare the disposition for all 
 other crops. Estimates of dispositions for most CCC 
 commodities are seasonally adjusted using the Cen- 
 sus X-11 procedure; for the other commodities and the 
 accounting adjustments, quarterly not seasonally ad- 
 justed data are used as the seasonally adjusted esti- 
 mates. The sum of these dispositions and the account- 
 ing adjustment for loan repayments and sales is the 
 seasonally adjusted total of CCC commodity disposi- 
 tions. 
 
 The seasonally adjusted estimates of CCC inventory 
 change are derived by subtracting the seasonally ad- 
 justed total dispositions from the seasonally adjusted 
 total acquisitions. 
 
 For the current quarterly estimates, the amount of 
 ASCS data available varies from quarter to quarter, 
 particularly for the third quarter, which is the close 
 of the fiscal year. For the ASCS data that are not 
 available, judgmental estimates are prepared. 
 
 Transfer payments to persons 
 
 Among the categories of expenditures, transfer pay- 
 ments to persons is the only category for which 
 monthly as well as quarterly estimates are prepared. 
 Thus, the second and third columns of table II-5 re- 
 fer to source data for monthly estimates, which are 
 summed to quarterly estimates. Two recurring fea- 
 tures in the methodology for transfer payments to per- 
 sons may be noted. First, source data generally in- 
 clude payments to all eligible recipients, regardless 
 
 of their residency. Thus, adjustments are generally 
 needed to exclude transfer payments to persons liv- 
 ing outside the United States from transfer payments 
 to persons. Payments to eligible individuals living in 
 foreign countries are included in transfer payments to 
 foreigners, and payments to residents of U.S. territo- 
 ries and the Commonwealth of Puerto Rico, as noted 
 earlier, are excluded from the NIPA's. Quarterly data 
 for the adjustment for transfer payments to eligible 
 individuals living in foreign countries are from BEA's 
 balance of pa3Tnents accounts; data for the adjustment 
 of transfer payments to residents of territories and 
 Puerto Rico are from a variety of sources. For these ad- 
 justments, data that are not monthly are prorated over 
 the months by total benefit payments of that type. The 
 second recurring feature is that many of the programs 
 have cost-of-living adjustments (COLA's). Typically, 
 these adjustments are tied to a specified change in the 
 Consumer Price Index and mandated to be paid at the 
 beginning of the calendar year. The effect of COLA's 
 is excluded from the source data before seasonal ad- 
 justment and added back to the seasonally adjusted 
 estimates. 
 
 Old-age, survivors, and disability insurance 
 
 The monthly total OASDI benefits are from the SSA 
 [56]. These benefits include regular and retroactive 
 payments (that is, payments resulting from the recal- 
 culation of the earnings base underlying benefits for 
 recent retirees). Estimates of benefits to eligible indi- 
 viduals living in foreign countries and to residents of 
 U.S. territories and Puerto Rico are subtracted. Quar- 
 terly estimates of benefits to foreigners are from BEA's 
 balance of payments accounts [46]. Calendar year data 
 on benefits to residents of U.S. territories and Puerto 
 Rico are from the Social Security Bulletin: Annual 
 Statistical Supplement [57]. Monthly estimates are 
 summed to calendar year estimates. 
 
 Monthly estimates — except COLA's and retroactive 
 payments — are seasonally adjusted using the Census 
 X-11 procedure. 
 
 For the current monthly estimates, the first esti- 
 mate is based on monthly data on payments from the 
 SSA, when available; otherwise, the estimate is a judg- 
 mental extrapolation. Following estimates are based 
 on the SSA payments data. 
 
 Hospital and supplementary medical 
 insurance 
 
 Hospital and supplementary medical insurance ben- 
 efits are the sum of monthly benefit outlays from the 
 Mrs for the two programs [77]. Estimates of benefits 
 going to residents of U.S. territories and Puerto Rico 
 are subtracted; the Health Care Financing Adminis- 
 tration, Department of Health and Human Services, 
 provides unpublished calendar year data on these ben- 
 efits. Monthly estimates are summed to calendar year 
 estimates. 
 
44 Government Transactions. 
 
 JNovember 1988 
 
 Monthly seasonally adjusted estimates are interpo- 
 lations of the calendar year estimates without an in- 
 dicator. 
 
 Current monthly estimates are judgmental extrap- 
 olations guided by budget projections. 
 
 State unemployment insvirance 
 
 State vmemployment insurance programs provide 
 three types of benefits — ^regular, extended, and re- 
 imbursable. In most States, regular benefits cover 
 the first 26 weeks of unemployment. Extended ben- 
 efits provide continued coverage — in most cases, for 
 an additional 13 weeks — for qualified individuals who 
 have exhausted regular benefits. Extended benefits 
 are available only when a "triggering" formula acti- 
 vates the program for the particular State or when a 
 national formula activates the program for the entire 
 country. Regular and extended benefits are paid to 
 eligible former employees of employers paying unem- 
 ployment insurance contributions. Reimbursable ben- 
 efits are paid under an alternative program available 
 to State and local governments and to private non- 
 profit organizations. Instead of paying unemployment 
 insurance taxes, these employers may choose to re- 
 imburse the unemployment insurance trust fund for 
 benefits paid to former employees. 
 
 Calendar year data on the three types of benefits are 
 available from the Unemployment Insurance Service 
 (UIS), Employment and Training Administration [63, 
 65]. Benefits to residents of U.S. territories and Puerto 
 Rico, also fi-om UIS, are subtracted from each type of 
 benefit before the three are combined. Unpublished 
 monthly data on benefits paid are provided by the UIS 
 for both regular and extended benefits. These data in- 
 clude checks never cashed and count twice some bene- 
 fits funded from more than one State. These data are 
 used as an indicator to prorate the calendar year esti- 
 mate (which excludes checks never cashed and double 
 counting) for regular and extended benefits. Reliable 
 monthly data on reimbursable benefits are not avail- 
 able; the calendar year reimbursable estimate is pro- 
 rated over months by regular unemployment benefits. 
 
 The not seasonally adjusted data are affected by the 
 weekly schedule of processing unemployment benefit 
 checks and the occurrence of a holiday at the end of 
 a month, when the processing of some checks is post- 
 poned until the next month. Adjustments are made to 
 standardize the number of working days and to put 
 benefits paid following an end-of-the-month holiday 
 back into the preceding month. After these adjust- 
 ments are made, the estimates are seasonally adjusted 
 using the Census X-11 procedure. This approach is 
 taken for regular and for reimbursable benefits; for ex- 
 tended benefits, not seasonally adjusted data are used 
 as the seasonally adjusted estimates. 
 
 Current monthly regular and extended benefits 
 are judgmental extrapolations, guided by cash with- 
 drawals by States from the unemployment insurance 
 trust fund (published in the MTS) and by unemploy- 
 
 ment rates published by the Employment and Training 
 Administration [64] and the Bureau of Labor Statis- 
 tics [60]. Reimbursable benefits are extrapolated us- 
 ing seasonally adjusted regular benefits as the indica- 
 tor. 
 
 Railroad unemployment insurance 
 
 Monthly outlays for railroad unemployment insur- 
 ance benefits are from the MTS [77]. Monthly esti- 
 mates are summed to calendar year estimates. The 
 estimates — except COLA's — are seasonally adjusted 
 using the Census X-11 procedure. 
 
 For the current monthly estimates, the first esti- 
 mate is a judgmental extrapolation and following es- 
 timates are based on MTS outlays. 
 
 Federal employees unemployment 
 compensation 
 
 Federal employees unemployment compensation in- 
 cludes benefits for ixnemployed former civilian employ- 
 ees and for unemployed, newly discharged servicemen. 
 Each program has benefits comparable to the regular 
 and extended State unemployment insurance benefits. 
 Estimates are made separately for the two programs 
 using the same procedures and sources. 
 
 A fiscal year estimate of total benefits is provided 
 by the 0MB from details supporting the Budget Ap- 
 pendix [4A-2]; unpublished monthly benefit data are 
 available from UIS. Estimates of benefits to residents 
 of U.S. territories and Puerto Rico are subtracted; un- 
 published monthly data for payments to residents of 
 U.S. territories and Puerto Rico are available from the 
 UIS. Monthly data are summed to calendar year esti- 
 mates. 
 
 The estimates are seasonally adjusted using the 
 Census X-11 procedure. Current monthly estimates 
 are judgmental extrapolations. 
 
 Special unemployment benefits 
 
 Special unemployment benefits were paid from 1975 
 to 1978 and from 1982 to 1985. These temporary ben- 
 efits, authorized by legislation during periods of high 
 unemployment, were paid to former employees of State 
 and local governments and some unemployed farm and 
 household workers, whose former employment was not 
 covered under the unemployment insurance system, 
 and to jobless workers who had exhausted their regu- 
 lar and extended benefits. 
 
 Unpublished monthly data for total benefits and for 
 benefits paid to residents of U.S. territories and Puerto 
 Rico are from the UIS. The latter are subtracted from 
 total benefits. Monthly estimates are summed to cal- 
 endar year estimates. Not seasonally adjusted data 
 are used as the seasonally adjusted estimates. 
 
 Federal civilian employee retirement 
 
 Federal civilian employee retirement benefits are 
 paid from the civil service retirement and disabil- 
 ity fund, the foreign service retirement and disabil- 
 ity fund, the judicial survivors fund, the Federal Re- 
 
Government Transactions. 
 
 J^ovemher 1988 45 
 
 serve Board retirement fund, and the Tennessee Val- 
 ley Authority (TVA) retirement program. In addition, 
 retirement benefits are paid to the following: Former 
 commissioned officers of the Public Health Service, re- 
 tired Federal judges, former lighthouse service person- 
 nel and survivors, and certain former employees of the 
 National Oceanic and Atmospheric Administration. 
 
 Monthly total outlays for civil service retirement 
 and disability are from the MTS [77]. Nonbenefit out- 
 lays must be subtracted: Unpublished monthly out- 
 lays for administrative costs are available from the 
 Fiscal Management Division, Office of Personnel Man- 
 agement (0PM); transfers to the foreign service retire- 
 ment and disability trust fund are from the MTS [77]; 
 and monthly estimates for other nonbenefit outlays are 
 fiscal year totals from the Budget Appendix [4A-2] di- 
 vided by 12. Estimates of benefits going to eligible in- 
 dividuals in foreign countries and to residents of U.S. 
 territories and Puerto Rico are subtracted. Quarterly 
 estimates of benefits to foreigners are from BEA's bal- 
 ance of payments accounts [46]. 0PM provides tm- 
 published annual data on benefits to residents of U.S. 
 territories and Puerto Rico. 
 
 Foreign service retirement benefits are from the 
 MTS [77]; monthly data are summed to calendar year 
 estimates. Calendar year benefits for the Federal Re- 
 serve Board and the TVA are from the agencies [2 and 
 20, respectively]. Fiscal year estimates of the other 
 retirement benefits are derived from budget data as 
 part of the fiscal year analysis. Monthly estimates are 
 interpolations of the fiscal year estimates without an 
 indicator. 
 
 Estimates of civil service retirement benefits — 
 except cola's — are seasonally adjusted using the 
 Census X-11 procedure. For the other benefit pay- 
 ments, not seasonally adjusted data are used as the 
 seasonally adjusted estimates. 
 
 For the current monthly estimates, the first esti- 
 mate is a judgmental extrapolation and following esti- 
 mates are based on MTS outlays data for civil service 
 and foreign service. 
 
 Military retirement 
 
 Military retirement benefits consist of payments to 
 retired military and Coast Guard personnel; data for 
 both are from the MTS [77]. Estimates of benefits go- 
 ing to residents of foreign countries, U.S. territories, 
 and Puerto Rico are subtracted. For military retirees, 
 quarterly estimates of benefits to foreigners are from 
 BEA's balance of payments accounts [46], and bene- 
 fits to residents of U.S. territories and Puerto Rico are 
 from sample information published by DOD [49]. For 
 Coast Guard retirees, quarterly estimates of benefits 
 to foreigners are from BEA's balance of payments ac- 
 counts [46]. 
 
 Estimates of benefits for military retirees — except 
 cola's — are seasonally adjusted using the Census X- 
 11 procedure. For Coast Guard retirees, not season- 
 
 ally adjusted data are used as the seasonally adjusted 
 estimates. 
 
 For the current monthly estimates, the first esti- 
 mate is a judgmental extrapolation and following es- 
 timates are based on MTS outlays data. 
 
 Railroad retirement 
 
 Monthly total outlays for railroad retirement bene- 
 fits are from the MTS [77]. Estimates of benefits going 
 to eligible individuals living in foreign countries and 
 to residents of U.S. territories are subtracted. Quar- 
 terly estimates of railroad retirement benefits to for- 
 eigners are from BEA's balance of payments accounts 
 [46]. Calendar year estimates of railroad retirement 
 benefits to residents of U.S. territories and Puerto Rico 
 are from the Railroad Retirement Board. 
 
 Not seasonally adjusted data are used as the sea- 
 sonally adjusted estimates. 
 
 For the current monthly estimates, the first esti- 
 mate is a judgmental extrapolation and following es- 
 timates are based on MTS outlays data. 
 
 Veterans life insurance 
 
 Unpublished monthly and calendar year payments 
 data are provided by the Office of Budget and Finance 
 in the Veterans' Administration (VA) for each of five 
 programs [93]: National Service Life Insurance, U.S. 
 Government Life Insurance, Service-disabled Veterans 
 Life Insurance, Veterans Special Life Insurance, and 
 Veterans Reopened Insurance. Transfer payments in- 
 clude claims paid by the funds and dividend payments 
 to policyholders. Estimates of benefits going to el- 
 igible individuals living in foreign countries and to 
 residents of U.S. territories and Puerto Rico are sub- 
 tracted. Quarterly estimates of payments to foreign- 
 ers are from BEA's balance of payments accounts [46]. 
 Fiscal year estimates of payments to residents of U.S. 
 territories and Puerto Rico are from the VA's Annual 
 Report [92]. 
 
 In most years, dividends are paid to policyholders 
 in the month of their policy anniversary. In a few 
 years, however, all dividends due in a calendar year 
 have been paid early in the calendar year. When div- 
 idends are paid throughout the year, the seasonally 
 adjusted estimates of the total of claims and dividends 
 are prepared using the Census X-11 procedure. When 
 dividend payments are accelerated, not seasonally ad- 
 justed data are used as the seasonally adjusted esti- 
 mates. 
 
 For the current monthly estimates, the first esti- 
 mate is a judgmental extrapolation and following es- 
 timates are based on VA payments data. 
 
 Workers' compensation 
 
 Unpublished monthly data for workers' compensa- 
 tion benefits are provided by the Employment Stan- 
 dards Administration, Department of Labor. Monthly 
 estimates are summed to a calendar year estimate. 
 Seasonally adjusted estimates are prepared by inter- 
 polation of the calendar year estimate — except benefit 
 
46 Government Transactions. 
 
 J^ovember 1988 
 
 increases — without indicator; the benefit increases are 
 then added back to the appropriate month. The cur- 
 rent monthly estimates are judgmental extrapolations 
 guided by budget projections. 
 
 Military medical insurance 
 
 The Civilian Health and Medical Program of the 
 Uniformed Ser\'ices (CHAMPUS) pays for medical care 
 provided at nonmilitary facilities to retired military 
 personnel and to dependents of active duty and retired 
 military personnel. Benefits to dependents of active 
 duty personnel are treated as benefits from social in- 
 surance funds. Benefits to retired military personnel 
 and their dependents are included in other transfer 
 payments to persons, but are discussed in the follow- 
 ing paragraph. 
 
 The benefits to dependents of active duty person- 
 nel are treated as paid by a social insurance fund in 
 order to make the compensation of military person- 
 nel comparable to the compensation of other govern- 
 ment and private sector employees. A social insurance 
 contribution — equal to the benefits paid — is imputed 
 to the military employer. The imputed contribution 
 is included in government receipts and in government 
 expenditures; in the latter, it is included as compen- 
 sation of military personnel in national defense pur- 
 chases. Monthly benefits data are provided by DOD 
 [50, 51], separately for retired personnel and their de- 
 pendents and for dependents of active duty personnel. 
 Monthly data are summed to quarterly and calendar 
 year estimates. 
 
 Quarterly not seasonally adjusted data are used as 
 the seasonally adjusted estimates. Monthly estimates 
 are interpolations of the quarterly estimates without 
 an indicator. 
 
 Current monthly estimates are judgmental extrap- 
 olations guided by budget projections. 
 
 Veterans pension and disability 
 
 Monthly total outlays for pension and disability ben- 
 efits are from the MTS [77]. Benefits are usually paid 
 on the first of the month, but when the first of the 
 month is a weekend or holiday, the checks are paid 
 on the previous working day. An adjustment is made 
 to treat these early checks as if they had been paid in 
 the following month. Unpublished data for the adjust- 
 ment is provided by the Office of Budget and Finance 
 in the VA. Benefits for wives, widows, and children of 
 veterans, which are included in readjustment benefits 
 in the budget data, are added to pension and disability 
 benefits. Unpublished quarterly data for these smaller 
 programs are provided by the Office of Budget and Fi- 
 nance; these quarterly data are divided by 3 to obtain 
 monthly data. Estimates of benefits to eligible individ- 
 uals living in foreign countries and to residents of U.S. 
 territories and Puerto Rico are subtracted. Quarterly 
 estimates of benefits to foreigners are from BEA's bal- 
 ance of payments accounts [46]. Fiscal year estimates 
 of benefits to residents of U.S. territories and Puerto 
 
 Rico are from the VA's Annual Report [92]. Monthly 
 data are summed to calendar year estimates. 
 
 Estimates — except COLA's — are seasonally ad- 
 justed using the Census X-11 procedure. 
 
 For the current monthly estimates, the first esti- 
 mate is a judgmental extrapolation guided by budget 
 projections and following estimates are based on MTS 
 outlays data for veterans pensions and disability. 
 
 Veterans readjustment 
 
 Monthly total outlays for veterans readjustment 
 benefits are from the MTS [77]. Benefits are usually 
 paid on the first of the month, but when the first of 
 the month is a weekend or holiday, the checks are 
 paid on the previous working day. An adjustment is 
 made to treat these early checks as if they had been 
 paid in the following month. Unpublished data for the 
 adjustment is provided by the Office of Budget and 
 Finance in the VA. The previously discussed benefits 
 for wives, widows, and children of veterans are sub- 
 tracted. Unpublished quarterly data for these smaller 
 programs are provided by the Office of Budget and Fi- 
 nance; these quarterly data are divided by 3 to obtain 
 monthly data. Estimates of benefits to eligible individ- 
 uals living in foreign countries and to residents of U.S. 
 territories and Puerto Rico are subtracted. Quarterly 
 estimates of benefits to foreigners are from BEA's bal- 
 ance of payments accounts [46]. Fiscal year estimates 
 of benefits to residents of the territories and Puerto 
 Rico are from the VA's Annual Report [92]. Monthly 
 data are summed to calendar year estimates. 
 
 Calendar year estimates are interpolations using a 
 judgmental indicator that reflects COLA's and trends 
 in the number of beneficiaries. 
 
 Current monthly estimates are judgmental extrap- 
 olations guided by budget projections. 
 
 Food stamp benefits 
 
 Unpublished monthly total food stamp benefits and 
 fiscal year benefits paid to residents of U.S. territo- 
 ries are provided by the Food and Nutrition Service 
 (FNS), U.S. Department of Agriculture [24]. The fiscal 
 year data on benefits paid to residents of U.S. territo- 
 ries are prorated over the months by total food stamp 
 benefits and subtracted from the total. Monthly data 
 are summed to calendar year estimates. Estimates — 
 except COLA's — are seasonally adjusted using the 
 Census X-11 procedure. 
 
 For the current monthly estimates, the first esti- 
 mate is a judgmental extrapolation guided by budget 
 projections and following estimates are based on data 
 for total benefits from FNS. 
 
 Black lung benefits 
 
 Black lung benefits consist of payments by the SSA 
 to persons who began receiving benefits before July 
 1, 1973, and payments made by the Department of 
 Labor to persons who qualified after that date. For 
 the SSA component, unpublished monthly benefits are 
 provided by the Office of the Actuary, SSA; monthly 
 
Government Transactions. 
 
 JMovember 1988 47 
 
 data are summed to a fiscal year total. This total is 
 compared with a more accurate total from the Bud- 
 get Appendix [4A-2], and the months are adjusted if 
 necessary. The same procedure is followed for the La- 
 bor Department payments using unpublished monthly 
 benefits from the Employment Standards Administra- 
 tion. 
 
 Not seasonally adjusted data are used as the sea- 
 sonally adjusted estimates. 
 
 For the current monthly estimates, the first esti- 
 mate is based on the monthly benefits data, when 
 available; otherwise, the estimate is a judgmental ex- 
 trapolation guided by budget projections. Following 
 estimates are based on the monthly data. 
 
 Supplemental security income 
 
 Fiscal year supplemental security income (SSI) ben- 
 efits are from the Budget Appendix [4A-2] and monthly 
 benefits are from the SSA Monthly Benefit Statistics 
 [56]. The fiscal year total is prorated over months by 
 the SSA monthly benefits. Monthly data are summed 
 to calendar year estimates. 
 
 In 1974, when a number of grant-in-aid programs 
 were replaced by the SSI program, the Federal Gov- 
 ernment established a State-by-State benefit level and 
 guaranteed that State costs would not be increased 
 by implementation of the new benefit level. This re- 
 sult was accomplished by an additional Federal "hold- 
 harmless" transfer payment that was to be phased 
 out; the last such payments were in 1984. Fiscal 
 year 'Tiold-harmless" benefits were from the Budget 
 Appendix [4A-2]. Monthly estimates were obtained by 
 dividing the fiscal year estimate by 12; monthly esti- 
 mates were summed to calendar year estimates. 
 
 Not seasonally adjusted data are used as the sea- 
 sonally adjusted estimates. 
 
 For the current monthly estimates, the first esti- 
 mate is a judgmental extrapolation and following es- 
 timates are based on benefits data from the SSA. 
 
 Earned income credit 
 
 Monthly outlays for the earned income credit are 
 from the MTS [77] and are summed to calendar year 
 estimates. Monthly seasonally adjusted estimates are 
 prepared by dividing the calendar year total by 12. 
 Current monthly estimates are judgmental extrapola- 
 tions guided by budget projections. 
 
 Other transfer pajrments to persons 
 
 Other transfer payments include payments under 
 numerous programs, such as to nonprofit institutions 
 (exclusive of payments for research and development 
 carried out by these institutions), educational aid to 
 students, annuity payments, and trade adjustment as- 
 sistance. 
 
 For payments to nonprofit institutions, the fiscal 
 year payments are derived from budget data as part 
 of the fiscal year analysis; quarterly estimates are de- 
 rived from MTS data [77] using fiscal year relation- 
 
 ships. Quarterly estimates are summed to calendar 
 year estimates. 
 
 For trade a(^ustment assistance, a fiscal year total is 
 from the Budget Appendix [4A-2]. The fiscal year total 
 is prorated over months by unpublished monthly ben- 
 efit data from the Employment and Training Admin- 
 istration. The monthly estimates are summed to cal- 
 endar year estimates. For Alaska native claims, fiscal 
 year payments are derived from budget data as part 
 of the fiscal year analysis. Quarterly estimates are 
 derived from MTS data [77] using fiscal year relation- 
 ships. Quarterly estimates are summed to calendar 
 year estimates. For all others, fiscal year payments 
 are derived from budget data as part of the fiscal year 
 analysis. Monthly benefits for these programs are pre- 
 pared by interpolating fiscal year estimates without an 
 indicator. Monthly estimates are summed to quarterly 
 and calendar year estimates. 
 
 For payments to nonprofit institutions, seasonally 
 adjusted estimates are interpolations of the calendar 
 year estimates without an indicator. 
 
 For Alaska native claims, monthly seasonally ad- 
 justed estimates are derived by dividing the calendar 
 year total by 12. For all others, not seasonally ad- 
 justed data are used as the seasonally adjusted esti- 
 mates. 
 
 For the current monthly estimates, the first esti- 
 mate of other transfer payments is a judgmental ex- 
 trapolation guided by budget projections and following 
 estimates are based on unpublished trade adjustment 
 assistance data from the Employment and Training 
 Administration. 
 
 Transfer payments to foreigners 
 
 Federal Government transfer payments to for- 
 eigners are discussed in Foreign Transactions, BEA 
 Methodology Paper Series MP-3 [41]. 
 
 Grants-in-aid to State and local 
 governments 
 
 Quarterly estimates are prepared for about 180 
 grant programs: Most are prepared using MTS out- 
 lays in conjunction with relationships derived from the 
 fiscal year analysis; a few are fiscal year estimates 
 divided by 4. Grants-in-aid to U.S. territories and 
 Puerto Rico are subtracted, using information from the 
 Department of Treasury [75], the Bureau of the Cen- 
 sus [38], and administering agencies. Quarterly esti- 
 mates, grouped as shown in table II-5, are summed to 
 calendar year estimates. 
 
 Seasonally adjusted quarterly estimates for most 
 groups of programs are prepared using the Census 
 X-11 procedure or using not seasonally adjusted data 
 as the seasonally adjusted estimates, as shown in ta- 
 ble II-5. For a few programs with sporadic payment 
 patterns, seasonally adjusted estimates are prepared 
 by interpolating the calendar year totals over quar- 
 
48 Government Transactions. 
 
 ^November 1988 
 
 ters w-ithout an indicator. This procedure is used, for 
 example, for the Federal payment to the District of 
 Columbia; the payment is usually paid out in one or 
 two installments, but the timing varies widely from 
 year to year. 
 
 For the current quarterly estimates, the advance es- 
 timates are based on 2 months of MTS outlays [77] 
 in conjunction with relationships derived in the fiscal 
 year analysis. Three months of data are available for 
 the preliminary estimates. 
 
 Net interest paid 
 
 Net interest paid is derived as interest paid less in- 
 terest received, including imputed interest received. 
 Interest paid consists of interest paid on public debt 
 securities and other interest paid, largely for agency 
 borrowings. The interest paid on public debt securi- 
 ties, as presented in the MTS [77], is in two parts: (1) 
 Accrued interest on "public issues," and (2) cash inter- 
 est paid on "special issues." The public issues interest 
 is largely paid to the public, including foreigners, but 
 is paid also to Federal funds such as the social secu- 
 rity trust fund. The special issues interest is largely 
 paid to Federal funds, but is also paid to the public, 
 including foreigners. (As noted in discussing taxes, in- 
 terest paid on tax refunds is included in NIPA taxes 
 rather than in interest paid.) Interest received con- 
 sists largely of interest on direct loans made by a large 
 number of Federal agencies, such as the Department 
 of Agriculture, Agency for International Development, 
 and the Department of Housing and Urban Develop- 
 ment. 
 
 Interest paid to persons and business 
 
 Interest paid to persons and business is derived from 
 budget data as part of the fiscal year analysis.^ Data 
 are not available to implement the methodology for the 
 fiscal year analysis on a calendar year or quarterly ba- 
 sis. The approach used to derive quarterly estimates is 
 to interpolate with an indicator a fiscal year estimate 
 of public debt (public issues and special issues) inter- 
 est paid to persons and business. The indicator is the 
 MTS [77] public issues interest less interest paid to 
 foreigners, the latter from BEA's balance of payments 
 accoiints [46]. A fiscal year estimate of other interest 
 paid, derived as part of the fiscal year analysis, is in- 
 terpolated over quarters without indicator. Quarterly 
 estimates are summed to calendar years. 
 
 Quarterly seasonally adjusted estimates are pre- 
 pared using the Census X-11 procedure. 
 
 For the current quarterly estimates, the advance es- 
 timate is based on 2 months of MTS data for pub- 
 lic issues interest and a projection of foreign interest 
 
 paid. For public issues interest, the third month of 
 MTS data is available for the preliminary estimate. 
 For foreign interest, data are available for the final 
 estimate. 
 
 Interest paid to foreigners 
 
 This estimate comes from BEA's balance of pay- 
 ments accounts, tables 1 and 2, line 29 [46]. The 
 methodology is discussed in Foreign Transactions, 
 BEA Methodology Paper Series MP-3 [41]. 
 
 Monetary interest received from persons and 
 business 
 
 Monetary interest received from persons and busi- 
 ness is derived from budget data as part of the fiscal 
 year analysis. The fiscal year estimates are interpo- 
 lated quarterly without an indicator; quarterly esti- 
 mates are summed to calendar year estimates. Not 
 seasonally adjusted data are used as the seasonally 
 adjusted estimates. Current quarterly estimates are 
 judgmental extrapolations guided by budget projec- 
 tions. 
 
 Monetary interest received from foreigners 
 
 The starting point for this estimate is tables 1 and 
 2, line 14, from the balance of pa^onents accounts [46]. 
 It consists of interest received by the U.S. Government 
 and the Federal Reserve banks. Unpublished data on 
 the Federal Reserve banks' portion is subtracted from 
 the published total to derive the NIPA estimates. 
 
 For the current quarterly estimates, the advance 
 and preliminary estimates are projections. Data are 
 available for the final estimate. 
 
 Imputed interest received 
 
 The estimate of imputed interest paid to the Fed- 
 eral Government is prepared as part of the estimates 
 of imputed interest and associated service charges for 
 the other sectors. It is the Federal Government share 
 of imputed interest paid by commercial banks and by 
 Federal Reserve banks. The share of imputed inter- 
 est is based on the share of Federal deposits in total 
 deposits at commercial banks and at Federal Reserve 
 banks; the data on deposits are from the Federal De- 
 posit Insurance Corporation [8] and the Board of Gov- 
 ernors of the Federal Reserve System [1].'' Quarterly 
 seasonally adjusted estimates are derived by interpo- 
 lation, using seasonally adjusted flow of funds account 
 data on holdings as the indicator [3]. Current esti- 
 mates are judgmental extrapolations. 
 
 6. The fiscal year estimate is the sum of interest paid on public issues 
 and special issues; less foreign interest paid; less interest paid to Federal 
 funds, using interest received by those funds as a proxy; plus other interest 
 paid to persons and business. Data, except for foreign interest paid, are 
 from budget documents; the foreign interest paid is from BEA's balance of 
 payments accounts [46]. 
 
 7. For commercial banks, total payments of im.puted interest equal the 
 sum of monetary interest received on depoeitxjrs' funds, dividends received, 
 income received on direct lease financing, and imputed interest received ftx)m 
 Federal Reserve banks less interest paid on deposits. For the Federal Reserve 
 banks, total payments of imputed interest equal monetary interest received 
 less current net earnings (after deduction of assessments for the Board of 
 Governors) less dividends paid. 
 
Government Transactions. 
 
 JNovemher 1988 
 
 49 
 
 Subsidies less the current surplus of 
 government enterprises 
 
 Subsidies 
 
 Federal Government subsidy payments are mainly 
 in support of agriculture, housing, maritime shipping, 
 railroads, air carriers, and mass transit. For all ex- 
 cept agricultural subsidies, fiscal year estimates are 
 derived from budget data as part of the fiscal year 
 analysis. Most quarterly estimates are prorations of 
 fiscal year estimates using MTS outlays as the indi- 
 cator and, for the current estimates, judgmental ex- 
 trapolations guided by budget projections. Quarterly 
 estimates are summed to calendar year estimates. 
 
 Most agricultural subsidies are paid by the CCC; a 
 few are paid by the Agricultural Stabilization and Con- 
 servation Service (ASCS). Fiscal year CCC subsidies 
 are from subsidy detail in the Repori of Financial Con- 
 dition and Operations of the Commodity Credit Corpo- 
 ration [23]; quarterly estimates are from unpublished 
 data from the ASCS, which administers the CCC pro- 
 grams. For other agricultural subsidies, fiscal year es- 
 timates are derived from budget data as part of the fis- 
 cal year analysis; quarterly estimates are derived from 
 MTS outlays [77]. Quarterly estimates are summed to 
 calendar years. 
 
 Subsidies are seasonally adjusted at the level of de- 
 tail shown in table II-5. Seasonally adjusted estimates 
 for most subsidies are prepared by interpolating with- 
 out indicator and extrapolating judgmentally. Mar- 
 itime construction subsidies are seasonally adjusted 
 using the Census X-11 procedure. For the remaining 
 subsidies, not seasonally adjusted data are used as the 
 seasonally adjusted estimates. 
 
 The current quarterly estimates of CCC subsidies 
 are based on payments data from the ASCS. Current 
 estimates of most other subsidy payments are judg- 
 mental extrapolations guided by budget projections. 
 
 Current surplus of govenrment enterprises 
 
 As of 1988, there are 20 Federal Government en- 
 terprises (Appendix II-B). Table II-5 shows the level 
 of detail at which their current surplus is estimated 
 quarterly. For the Postal Service, the Federal Hous- 
 ing Administration, and the Tennessee Valley Author- 
 ity, fiscal year estimates are derived using agency fi- 
 nancial reports [88, 90, 58, 19, respectively] as part 
 of the fiscal year analysis. For all others, except the 
 CCC, fiscal year estimates are derived from budget 
 data as part of the fiscal year analysis. Quarterly es- 
 timates are interpolations without an indicator and, 
 for the current estimates, judgmental extrapolations 
 guided by budget projections; quarterly estimates are 
 summed to calendar year estimates. 
 
 The current suit)1us of the CCC has two parts — a 
 "regular" current surplus and a valuation adjustment 
 to deal with the pricing of CCC inventory transactions. 
 The fiscal year estimate of the "regular*" current sur- 
 plus is from detailed data on income and expenses 
 
 [23]. Quarterly estimates are interpolations without 
 indicator and judgmental extrapolations, and they are 
 summed to calendar year estimates. The valuation 
 adjustment offsets the adjustment in nondefense pur- 
 chases so that total expenditures are recorded, as re- 
 quired, at transaction prices. The derivation of mar- 
 ket value inventory change is discussed in detail in 
 the nondefense purchases section; the valuation ad- 
 justment is calculated at every step of the procedure 
 described there. 
 
 Current surpluses are seasonally adjusted at the 
 level of detail shown in table II-5. For the Postal 
 Service, the calendar year estimate — except pay raises 
 and postal rate increases — is interpolated over quar- 
 ters without indicator; pay raises and postal rate 
 increases are added to the seasonally adjusted esti- 
 mates. The current surplus of other government en- 
 terprises except the CCC valuation adjustment is also 
 interpolated without indicator. For the CCC valu- 
 ation adjustment, seasonally adjusted estimates are 
 prepared for acquisitions and dispositions of each com- 
 modity, either using the Census X-11 procedure or us- 
 ing not seasonally adjusted data as the seasonally ad- 
 justed estimate. 
 
 Current quarterly estimates of the CCC valuation 
 adjustment are derived from the information used to 
 estimate the CCC inventory change component of non- 
 defense purchases. Current estimates of all other cur- 
 rent surpluses are judgmental extrapolations guided 
 by budget projections. 
 
 Wage accruals less disbursements 
 
 The estimates of wage accruals less disbursements, 
 which convert wages and salaries from the accrual ba- 
 sis used in purchases and in current surplus of govern- 
 ment enterprises to a pa5mients basis in total expen- 
 ditures, are prepared along with the other compensa- 
 tion estimates. Differences between accruals and dis- 
 bursements arise because of retroactive pay raises — 
 especially in recent years for Postal Service employees. 
 Information on the amounts of retroactive pay raises 
 is from affected agencies. 
 
 Surplus or deficit (—), national income 
 and product accounts 
 
 This measure is the excess of total receipts over total 
 expenditures; it represents the contribution of the Fed- 
 eral Government sector to sources of funds for other 
 sectors. 
 
 The NIPA surplus or deficit measure is divided into 
 two parts; the surplus or deficit generated by the ex- 
 cess of social insurance system receipts over the out- 
 lays of the systems, and the surplus or deficit resulting 
 from all other government transactions. To accomplish 
 this division, the part of purchases that represents 
 administrative expenses of social insurance systems 
 that are paid from system revenues must be identi- 
 
50 Government Transactions. 
 
 Jslovember 1988 
 
 fied. Data for administrative expenses are from the 
 fiscal year analysis and the MTS [77] using relation- 
 ships from the fiscal year analysis. These data are 
 summed to quarters and calendar years. Quarterly 
 seasonally adjusted estimates are interpolations of the 
 annual estimates without an indicator; current quar- 
 terly estimates are judgmental extrapolations guided 
 by budget projections. 
 
 The social insurance fund surplus is calculated as 
 the sum of contributions and interest received by so- 
 cial insurance systems (the latter from the MTS [77]), 
 less the sum of social insurance benefits and adminis- 
 trative expenses. 
 
 The other funds surplus or deficit equals the NIPA 
 surplus or deficit minus the social insurance fund sur- 
 plus. 
 
 Constant-Dollar Purchases of 
 Goods and Services 
 
 Constant-dollar estimates of Federal Government 
 purchases of goods and services are prepared using 
 one of three methods. For compensation of employ- 
 ees and imputed financial services, base-year values 
 are extrapolated by quantity indicators. For national 
 defense purchases of a variety of goods and some ser- 
 vices, for Commodity Credit Corporation purchases of 
 farm commodities, and for certain purchases and sales 
 of petroleum, quantities are directly priced (or val- 
 ued). For other purchases, current-dollar estimates 
 are deflated by (that is, divided by) suitable price in- 
 dexes. For a substantial portion of national defense 
 purchases of goods and services, the price indexes are 
 prepared by BEA using information on prices paid by 
 the Department of Defense (DOD).'* For other goods 
 and sej^vices, the price indexes include those taken 
 from the Census Bureau Current Construction Reports 
 [37], BLS CPI Detailed Report [59], and BLS Producer 
 Prices and Price Indexes [62] or constructed from aver- 
 age hourly earnings from BLS Employment and Earn- 
 ings [60]. 
 
 Table II-8 indicates which of the three methods is 
 used for the components and provides an overview 
 of the source data used. The source data shown for 
 the July revision provide both annual and quarterly 
 estimates; the source data for the current quarterly 
 estimates are often less complete and less detailed. 
 Tests are made for seasonality and in the relatively 
 few cases where seasonality is present, the Census X- 
 11 procedure is used. 
 
 8. As noted for current-dollar national defense purchases, many of the data 
 sources were identified in a major project undertaken with DOD [44]. Prior to 
 1972, constant-dollar purchases were estimated at the total Federal Govern- 
 ment level only; there was no distinction made between national defense and 
 nondefense purchases. At the total level, 15 types of purchases — including 
 mihtary compensation, Commodity Credit Corporation inventory change, and 
 structures — were extrapolated or deflated. 
 
 National defense purchases 
 
 As noted earlier, the "directly priced" method of 
 preparing current-dollar estimates is preferred. For 
 the pieces of constant-dollar purchases that are di- 
 rectly priced, the quantity data are the same as 
 that used for current-dollar estimates. The appropri- 
 ate base-year price is one that ensures that changes 
 in quality are reflected in constant-dollar series as 
 changes in quantity. The primary technique used to 
 separate quality change from price change is specifi- 
 cation pricing. 
 
 Specification pricing, as implemented for defense 
 goods and services, consists of determining the rele- 
 vant physical characteristics of an item and holding 
 them constant over time. (For a more detailed dis- 
 cussion, see Price Changes of Defense Purchases of the 
 United States [44].) As long as these characteristics 
 are unchanged, any change in the amount paid for 
 an item is a price change. When the characteristics 
 change, the change is evaluated to determine the per- 
 formance and cost effects. If the performance is en- 
 hanced, the associated quality increase is measured 
 by the cost change. 
 
 Four principal procedures are used to calculate the 
 amount by which the reported price for the base year 
 must be adjusted to take into account changes in qual- 
 ity: Linking, direct comparison, producer cost, and 
 overlap pricing. These procedures are described in 
 terms of their use in the direct pricing method, but 
 comparable procedures are also used to construct in- 
 dexes of DOD prices that are used in deflation. 
 
 The linking procedure is used when the character- 
 istics change and the entire difference in price (before 
 and after the characteristic change) is assumed to be 
 a quality difference. The adjustment is calculated as 
 the ratio of the "new" to the "old" price. This procedure 
 makes the value of the quality change in base-period 
 prices directly proportional to the value of the quality 
 change in current-period prices. 
 
 The direct comparison procedure is used when the 
 characteristics change but there is no impact on per- 
 formance so the entire difference in price is a price 
 change. The adjustment is defined to be 1.0, and the 
 ratio of the "new" to the "old" price is fully reflected as 
 a price change. 
 
 The producer cost procedure consists of evaluat- 
 ing each characteristic change to an item to determine 
 if it is a quality change. If it is a quality change, the 
 cost to the producer of making the change is deter- 
 mined. The value of the quality change is defined as 
 the cost to the producer of making the change in the 
 current period. The adjustment is calculated as the ra- 
 tio of the unreconfigured item plus the cost of quality 
 changes to the unreconfigured item. Any difference in 
 the price of an item, other than the cost of producing 
 a quality change, is defined as a price change. 
 
 The overlap pricing procedure is essentially the 
 same as linking, but "new" and "old" prices may have 
 to be adjusted before the link is made. This technique 
 
Government Transactions. 
 
 Jslovember 1988 
 
 51 
 
 Table 11-8. — Constant-Dollar Federal Government Purchases of Goods and Services: Sources of Estimates 
 
 Category 
 
 Method 
 
 Calendar 
 
 year 1982 
 
 (Billions of 
 
 dollars) 
 
 July revision ' 
 
 Current quarterly estimates 
 
 Advance 
 
 Preliminary 
 
 Final 
 
 National defense 
 
 Durable goods 
 
 Aircraft 
 
 Missiles 
 
 Ships 
 
 Vehicles. 
 
 Electronic equipment. 
 
 Other equipment . 
 
 Other durable goods . 
 
 Nondurable goods 
 
 Petroleum products.... 
 
 Ammunition . 
 
 Other nondurables . 
 
 Sum of detail 
 
 Sum of detail 
 
 Directly priced: 
 Quantities 
 
 Prices 
 
 Deflation: DOD 
 prices. 
 
 Directly priced: 
 Quantities 
 
 Prices 
 
 Deflation: DOD 
 prices. 
 
 Deflation: 
 
 Shipyard prices 
 
 for "frozen 
 
 ship". 
 Directly priced: 
 
 Quantities 
 
 Prices 
 
 Deflation: Proxy 
 prices. 
 
 Directly priced: 
 Quantities 
 
 Prices 
 
 Deflation: DOD 
 prices. 
 
 Deflation: DOD 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 
 Deflation: DOD 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 
 Deflation: DOD 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 
 Sum of detail... 
 Directly priced . 
 
 Deflation: DOD 
 prices. 
 
 Directly priced: 
 
 Quantities 
 
 Prices 
 
 Deflation: DOD 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 
 Deflation: DOD 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 
 193.8 
 49.2 
 
 7.4 
 
 9.4 
 2.0 
 
 3.7 
 3.4 
 
 2.3 
 
 1.7 
 
 1.2 
 
 .6 
 2.5 
 
 3.4 
 2.4 
 
 3.5 
 5.4 
 
 13.6 
 
 8.1 
 
 1.1 
 .2 
 
 1.8 
 .3 
 
 1.0 
 1.1 
 
 PCR's 
 
 CCDR's 
 
 ICS and aircraft 
 IPD's. 
 
 PCR's 
 
 CCDR's 
 
 ICS and missiles 
 IPD's. 
 
 Shipyard prices 
 
 PCR's 
 
 CCDR's 
 
 PPI's 
 
 PCR's 
 
 CCDR's 
 
 ICS and vehicles 
 IPD's. 
 
 ICS 
 
 PPI's 
 
 ICS 
 
 PPI's 
 
 ICS 
 
 PPI's/BEA computer 
 price index. 
 
 PPR's 
 
 Petroleum IPD's 
 
 Budget data 
 
 CCDR's 
 
 ICS 
 
 PPI's 
 
 ICS 
 
 PPI's 
 
 Budget or, when 
 available, PCR's. 
 
 Budget or, when 
 available, CCDR's. 
 
 Aircraft IPD's 
 
 Budget or, when 
 available, PCR's. 
 
 Budget or, when 
 available, CCDR's 
 
 Missiles IPD's 
 
 Extrapolated 
 judgmentally or, 
 when available, 
 shipyard prices. 
 
 Budget or, when 
 available, PCR's. 
 
 Budget or, when 
 available, CCDR's 
 
 2 mos. PPI's 
 
 Budget or, when 
 available, PCR's. 
 
 Budget or, when 
 available, CCDR's 
 
 Vehicles IPD's 
 
 2 mos. PPI's 
 
 2 mos. PPI's 
 
 2 mos. PPI's 
 
 2 mos. PPI's 
 
 2 mos. PPI's 
 
 2 mos. PPI's/BEA 
 computer price 
 index. 
 
 Extrapolated 
 judgmentally or, 
 when available, 
 PPR's. 
 
 Petroleum IPD's 
 
 Budget data 
 
 Budget or, when 
 
 available, CCDR's 
 2 mos. PPI's 
 
 2 mos. PPI's 
 
 2 mos. PPI's 
 
 2 mos. PPI's 
 
 More PCR's 
 
 More CCDR's 
 
 Aircraft IPD's 
 
 More PCR's 
 
 More CCDR's 
 
 Missiles IPD's 
 
 Extrapolated 
 judgmentally or, 
 when available, 
 shipyard prices. 
 
 More PCR's 
 
 More CCDR's 
 
 3 mos. PPI's 
 
 More PCR's 
 
 More CCDR's 
 
 Vehicles IPD's 
 
 3 mos. PPI's 
 
 3 mos. PPI's 
 
 3 mos. PPI's 
 
 3 mos. PPI's 
 
 3 mos. PPI's 
 
 3 mos. PPI's/BEA 
 computer price 
 index.. 
 
 More PPR's 
 
 Petroleum IPD's.. 
 
 Budget data 
 
 More CCDR's 
 
 3 mos. PPI's 
 
 3 mos. PPI's 
 
 3 mos. PPI's 
 
 3 mos. PPI's 
 
 Many PCR's. 
 Many CCDR's. 
 Aircraft IPD's. 
 
 Many PCR's. 
 Many CCDR's. 
 Missiles IPD's. 
 
 Extrapolated 
 judgmentally or, 
 when available, 
 shipyard prices. 
 
 Many PCR's. 
 
 Many CCDR's. 
 
 3 mos. PPI's. 
 
 Many PCR's. 
 Many CCDR's. 
 Vehicles IPD's. 
 
 3 mos. PPI's. 
 3 mos. PPI's. 
 
 ICS. 
 
 3 mos. PPI's. 
 
 3 mos. PPI's. 
 
 3 mos. PPI's/BEA 
 computer price 
 index. 
 
 PPR's. 
 
 Petroluem IPD's. 
 
 Budget data. 
 Many CCDR's. 
 
 3 mos. PPI's. 
 
 3 mos. PPI's. 
 
 3 mos. PPI's. 
 3 mos. PPI's. 
 
 See footnotes at end of table. 
 
52 Government Transactions. 
 
 Jslovember 1988 
 
 Table 11-8.— Constant-Dollar Federal Government Purchases of Goods and Services: Sources of Estimates- 
 Continued 
 
 
 Method 
 
 Calendar 
 
 year 1 982 
 
 (Billions of 
 
 dollars) 
 
 July revision ■ 
 
 Current quarterly estimates 
 
 Category 
 
 Advance 
 
 Preliminary 
 
 Final 
 
 Services 
 
 Sum of detail 
 
 127.1 
 
 84.0 
 
 55.0 
 
 1.6 
 
 27.4 
 
 43.2 
 
 16.3 
 
 3.2 
 8.8 
 3.0 
 2.5 
 2.0 
 1.6 
 3.2 
 2.6 
 
 (*) 
 
 3.9 
 
 .7 
 
 1.6 
 1.6 
 
 Employment by rank 
 and length of 
 service from MR. 
 
 Compensation 
 report. 
 
 OPM employment 
 (by grade and 
 step) and average 
 hours worked. 
 
 R&D contractor 
 prices/3 mos. 
 
 3PI'S. 
 
 Contracts 
 
 2 mos. employment 
 from MR. 
 
 Compensation 
 report. 
 
 OPM employment 
 
 Extrapolated 
 
 judgmentally and 
 
 2 mos. PPI's. 
 Contracts 
 
 3 mos. employment 
 from MR. 
 
 Compensation 
 report. 
 
 OPM employment 
 
 R&D contractor 
 
 prices/3 mos. 
 
 PPI's. 
 Contracts 
 
 
 Compensation 
 
 Sum of detail 
 
 
 Military 
 compensation. 
 
 Civilian 
 compensation. 
 
 Other services 
 
 Extrapolation 
 
 Deflation: DOD 
 
 prices. 
 Extrapolation 
 
 Sum of detail 
 
 Deflation: DOD 
 
 and proxy 
 
 prices. 
 Deflation: DOD 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 Deflation: DOD 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 Deflation: DOD 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 Deflation: DOD 
 
 prices. 
 
 Deflation: DOD 
 
 and proxy 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 
 Sum of detail 
 
 Directly priced 
 
 Deflation: DOD 
 prices. 
 
 Deflation: Proxy 
 prices. 
 
 3 mos. employment 
 from MR. 
 
 Compensation 
 report. 
 
 OPM employment. 
 
 Contractual 
 research and 
 development. 
 
 Installation support . 
 
 Weapons support... 
 
 R&D contractor 
 prices/3 mos. 
 PPI's. 
 
 Contracts 
 
 3 mos. CPI's/PPI's/ 
 AHE's/ER's. 
 
 Contracts 
 
 2 mos. CPI's/PPI's/ 
 AHE's/ER's. 
 
 Contracts 
 
 3 mos. CPI's/PPI's/ 
 
 AHE's/ER's. 
 Contracts 
 
 3 mos. CPI's/PPI's/ 
 AHE's/ER's. 
 
 Contracts. 
 
 AHE's 
 
 2 mos. AHE's 
 
 3 mos. AHE's 
 
 3 mos AHE's 
 
 Personnel support.. 
 
 Contracts/ER's 
 
 Contracts/foreign 
 
 wage rates/ER's. 
 2 mos. AHE 
 
 Contracts/foreign 
 
 wage rates/ER's. 
 3 mos. AHE 
 
 Contracts/foreign 
 
 wage rates/ER's. 
 3 mos. AHE. 
 
 AHE 
 
 Transportation of 
 
 materiel. 
 Travel of persons.... 
 
 Other 
 
 MSC/MTMC 
 
 MSC/MTMC 
 
 MSC/MTMC 
 
 MSC/MTMC. 
 
 MTMC/GSA/CPI's 
 
 3 mos. AHE's 
 
 MTMC/GSA/2 mos. 
 CPI's. 
 
 2 mos. AHE's 
 
 MTMC/GSA/3 mos. 
 CPI's. 
 
 3 mos. AHE's 
 
 MTMC/GSA/3 mos. 
 CPI's. 
 
 3 mos. AHE's. 
 
 Structures 
 
 CPR's 
 
 Judgmentally and 
 
 Military facility lPD/2 
 mos. ER's. 
 
 Private-sector cost 
 indexes/Federal 
 Highway Admin./2 
 mos. ER's. 
 
 More CPR's 
 
 
 Military facilities 
 
 Many CPR's. 
 
 Other structures 
 
 Military facility IPD/ 
 ER's. 
 
 Private-sector cost 
 indexes/Federal 
 Highway Admin./ 
 ER's. 
 
 Military facility lPD/3 
 mos. ER's. 
 
 Private-sector cost 
 indexes/Federal 
 Highway Admin. /3 
 mos. ER's. 
 
 Military facility IPD/3 
 mos. ER's. 
 
 Private-sector cost 
 indexes/Federal 
 Highway Admin./3 
 mos. ER's. 
 
 See footnotes at end of table. 
 
Government Transactions. 
 
 JNovember 1988 53 
 
 Table 11-8. — Constant-Dollar Federal Government Purchases of Goods and Services: Sources of Estimates- 
 Continued 
 
 
 Method 
 
 Calendar 
 year 1982 
 (Billions of 
 
 dollars) 
 
 July revision ' 
 
 Current quarterly estimates 
 
 Category 
 
 Advance 
 
 Preliminary 
 
 Final 
 
 Nondefense 
 
 Sum of detail 
 
 78.9 
 3.1 
 
 (*) 
 
 3.1 
 
 14.9 
 
 9.0 
 
 .2 
 
 5.7 
 2.2 
 
 -1.6 
 5.1 
 
 54.3 
 
 33.1 
 
 21.2 
 1.1 
 
 .4 
 
 19.7 
 
 6.6 
 
 ICS 
 
 2 mos PPI's 
 
 3 mos PPI's 
 
 
 Durable goods 
 
 Sum of detail 
 
 
 Medical equipment 
 
 Other durable goods .. 
 
 Nondurable goods 
 
 Commodity Credit 
 Corporation. 
 
 Deflation: VA 
 prices. 
 
 Deflation: Proxy 
 prices. 
 
 Sum of detail 
 
 3 mos PPI's 
 
 PPI's/BEA computer 
 price index. 
 
 ASCS 
 
 2 mos. PPI's/BEA 
 computer price 
 index. 
 
 1 mo. ASCS 
 
 3 mos. PPI's/BEA 
 computer price 
 index. 
 
 2 mos. ASCS ... 
 
 3 mos. PPI's/BEA 
 computer price 
 index. 
 
 Directly priced: 
 Quantities 
 
 3 mos ASCS 
 
 
 Prices 
 
 NASS/AMS 
 
 1 mo. NASS/AMS 
 
 2 mos. PRF. 
 
 2 mos. NASS/AMS... 
 
 3 mos PRF 
 
 3 mos NASS/AMS 
 
 
 Deflation: Proxy 
 prices. 
 
 Sum of detail 
 
 PRF 
 
 3 mos PRF 
 
 Other nondurable 
 
 DOE 
 
 2 mos. DOE 
 
 3 mos DOE 
 
 
 goods. 
 Strategic 
 
 petroleum 
 
 reserve 
 
 purchases. 
 Naval petroleum 
 
 reserve sales. 
 Other 
 
 Directly priced 
 
 Directly priced 
 
 Deflation: Proxy 
 prices. 
 
 Sum of detail 
 
 Extrapolation 
 
 3 mos DOE 
 
 DOE 
 
 2 mos. DOE 
 
 3 mos. DOE 
 
 3 mos. DOE. 
 
 PPI's 
 
 2 mos. PPI's 
 
 3 mos. PPI's 
 
 3 mos. PPI's. 
 
 Services 
 
 OPM employment 
 (by grade and 
 step) and average 
 hours worked. 
 
 National defense 
 
 IPD's. 
 Extrapolated by paid 
 
 employee hours. 
 CPI's/PPPs/AHE's 
 
 Private-sector cost 
 indexes/Federal 
 Hiqhway Admin./ 
 
 OPM employment 
 
 National defense 
 
 IPD's. 
 Extrapolated by paid 
 
 employee hours. 
 2 mos. CPI's/PPI's/ 
 
 AHE's. 
 
 Private-sector cost 
 indexes/Federal 
 Highway Admin./ 
 
 OPM employment 
 
 National defense 
 
 IPD's. 
 Extrapolated by paid 
 
 employee hours. 
 3 mos. CPI's/PPI's/ 
 
 AHE's. 
 
 Private-sector costs 
 indexes/Federal 
 Highway Admin./ 
 
 
 Compensation 
 
 OPM employment. 
 
 Other services . 
 
 Sum of detail 
 
 Deflation: Proxy 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 Deflation: Proxy 
 
 prices. 
 
 Deflation: Proxy 
 prices. 
 
 Travel and 
 
 transportation. 
 Financial services... 
 
 Other 
 
 National defense 
 
 IPD's. 
 Extrapolated by paid 
 
 employee hours. 
 3 mos. CPI's/PPI's/ 
 
 Structures 
 
 AHE's. 
 Private-sector cost 
 
 
 indexes/Federal 
 Highway Admin./ 
 
 • Less than $0.05 billion. 
 
 1. The estimates for later revisions have the same sources. 
 
 AHE Average hourly earnings of production workers. 
 
 AMS Agricultural Marketing Sen/ice, U.S. Department of Agriculture. 
 
 ASCS Agricultural Stabilization and Conservation Service, U.S. Department of 
 
 Agriculture. 
 
 CCDR Contract control documentation reports. 
 
 CPI Consumer price index. 
 
 CPR Construction project reports. 
 
 DOE U.S. Department of Energy. 
 
 ER Exchange rate. 
 
 GSA GeneralServices Administration. 
 
 ICS Inventory control system. 
 
 IPD Implicit price deflator. 
 
 MR U.S. Department of Defense manpower reports. 
 
 MSC Military Sealift Command. 
 
 MTMC Military Traffic Management Command. 
 
 NASS National Agricultural Statistics Sen/ice, U.S. Department of Agriculture. 
 
 OPM Office of Personnel Management. 
 
 PCR Production control report. 
 
 PPI Producer price index. 
 
 PPR Petroleum products report. 
 
 PRF Index & prices received by fafmors for crops. 
 
 R&D Research and development. 
 
54 Government Transactions. 
 
 Jslovember 1988 
 
 is used primarily for new weapons systems, for which 
 the effects of the progress curve of "old" and "new" are 
 pronounced; the progress, or learning, curve depicts 
 the high prices of a new system that are associated 
 with low initial labor productivity and the subsequent 
 rapid price decline as productivity increases. The over- 
 lap pricing procedure uses the price of the new com- 
 ponent at a point on the learning curve when price 
 change due to learning does not influence the differ- 
 ence in relative prices. (For example, it is assumed 
 that learning has ceased to be a major influence by 
 the 100th unit of fighter aircraft.) As the price for the 
 old component, it uses a point from the last normal 
 production run — that is, before production shutdown 
 costs are a major influence on the price of the old com- 
 ponent. The price change from the overlap point for 
 the old component to the designated unit of the new 
 component is then removed from the price of the new 
 unit. The adjusted price for the new unit can then be 
 linked to the overlap price for the old unit. Any dif- 
 ference in price between the old and new components 
 is a quality difference and is used to calculate the ad- 
 justment factor as in a regular link. 
 
 Two DOD sources of data are widely used in con- 
 structing base-year prices and price indexes. CCDR's 
 were described in the section on current dollars. The 
 other is the inventory control system: 
 
 • Inventory Control System (ICS): Data on quan- 
 tities and prices of items purchased by govern- 
 ment supply centers — that is, the organizations 
 charged with centralized purchasing and supply- 
 ing of goods needed by the civilian and mili- 
 tary agencies — are available from several machine 
 readable files [12]. For example, "Procurement 
 History File" (J041) [12 A] provides quantities and 
 prices for items purchased by the Air Force Logis- 
 tics Command. Items in the ICS are coded by a 
 13-digit National Stock Number (NSN), which— as 
 a unique identifier for each item purchased by the 
 Federal Government — is based on extremely de- 
 tailed specifications. The data are quarterly and 
 are generally available by the first July revision. 
 
 Table II-9 shows the price indexes or extrapolators 
 at the level of detail at which the constant-dollar esti- 
 mates are prepared. The level of detail often reflects 
 the DOD agency making the purchase as well as the 
 type of good or service. 
 
 Durable goods 
 
 Aircraft. — Constant-dollar purchases of aircraft are 
 prepared using two methods, both with DOD prices. 
 Most are prepared by direct pricing; the others are 
 prepared by deflation using indexes constructed from 
 DOD prices. 
 
 For the estimates that are directly priced, data on 
 the average price paid for a component delivered dur- 
 ing 1982 are from CCDR's [7]. This price is adjusted 
 to reflect the cost (in 1982 dollars) of all configuration 
 
 changes deemed to be quality changes. The adjust- 
 ment, following the producer cost procedure, draws on 
 information in the CCDR's on the cost of implementing 
 an engineering change order (ECO), which is required 
 for any configuration change to an aircraft system. 
 
 For the estimates that are deflated (that is, for 
 the current-dollar estimates prepared using the ra- 
 tio method), data from the ICS are available for 
 many other aircraft components and related equip- 
 ment [12A, B]. The data are used to construct price 
 indexes for purchases by military service. Because 
 the specifications for a NSN, which is the code used 
 in the ICS, are extremely detailed, adjustments to the 
 base-year price are not needed for a given NSN; a link- 
 ing procedure is used for NSN items that are not pur- 
 chased in the base year but are purchased in at least 2 
 other years. For the purchases for which ICS data are 
 not available, IPD's derived from the directly priced 
 estimates are used. 
 
 For the advance quarterly estimates, quantities and 
 prices (including estimates of ECO costs) for the di- 
 rectly priced estimates are based largely on scheduled 
 deliveries and prices from unpublished data underly- 
 ing the budget [4B-2, -5, -15]. Data fi-om PCR's [18A, 
 B, C, F, G] and CCDR's are incorporated in the esti- 
 mates as they become available. The aircraft IPD'S 
 derived from the directly priced estimates are used for 
 the estimates that are deflated. 
 
 Missiles. — Constant-dollar purchases of missiles 
 are prepared using two methods, both with DOD 
 prices. Most are prepared by direct pricing; the base- 
 year price is constructed in the same way as for air- 
 craft. The others are prepared by deflation using in- 
 dexes constructed from DOD prices for missiles; the 
 price indexes used are a combination of those con- 
 structed, in the same way as for aircraft, from ICS 
 data [12 A, B] and from IPD's derived from the directly 
 priced estimates. 
 
 For the advance quarterly estimates, quantities and 
 prices (including estimates of ECO costs) for the di- 
 rectly priced estimates are based largely on scheduled 
 deliveries and prices from unpublished data underly- 
 ing the budget [4B-3, -6, -12, -13]. Data from PCR's 
 [18A, B, C, D] and CCDR's [7] are incorporated as they 
 become available. The missiles IPD's derived from the 
 directly priced estimates are used for the estimates 
 that are deflated. 
 
 Ships. — Constant-dollar purchases of ships are pre- 
 pared using three methods. Estimates of a small part 
 of government-furnished equipment are prepared by 
 direct pricing; estimates of the rest of this equipment 
 are prepared by deflation using seven PPI's [62]. Es- 
 timates of ship construction and conversion (includ- 
 ing the ships exported under the foreign military sales 
 program) by private shipyards are prepared by defla- 
 tion. The index is constructed using what is called 
 the "frozen ship method." The design of a specific 
 ship (usually the second ship) in a class — for example, 
 the design of a nuclear submarine in the Los Angeles 
 
Government Transactions. 
 
 J\Icrve'.vber 1988 55 
 
 Table 11-9.— Methods Used In the Derivation of Constant-Dollar National Defense 
 
 Purchases of Goods and Services 
 
 Category 
 
 Method for July revision 
 
 1982 
 
 weight 
 
 (percent) 
 
 Category 
 
 Method for July revision 
 
 1982 
 
 weight 
 
 (percent) 
 
 National defense 
 purchases. 
 
 Durable goods . 
 
 Military equipment., 
 
 Aircraft 
 
 Army new 
 
 Army other 
 
 Air Force new .. 
 Air Force other. 
 
 Navy new 
 
 Navy other 
 
 Missiles 
 
 Army new 
 
 Army other 
 
 Air Force new . 
 
 Air Force other... 
 Air Force space . 
 Air Force other 
 
 programs. 
 Navy new 
 
 Navy other 
 
 Marine Corps . 
 
 Ships 
 
 Private shipyards . 
 
 Government-furnished 
 ship equipment. 
 
 Foreign military sales... 
 Vehicles 
 
 Army combat 
 
 Army noncombat 
 
 Air Force noncombat.... 
 
 Navy noncombat 
 
 Marine Corps combat. 
 Marine Corps 
 noncombat. 
 
 Electronic equipment, 
 
 Air Force 
 
 Army, Navy, and 
 Marine Corps. 
 
 Other equipment . 
 
 Army 
 
 Air Force 
 
 Army small arms 
 
 Navy and Marine 
 
 Corps small arms, j 
 Other I Deflation by 13 PPI's 
 
 IPD calculated from the 
 detail below. 
 
 IPD calculated from the 
 detail below. 
 
 IPD calculated from the 
 detail below. 
 
 IPD calculated from the 
 detail below. 
 
 Direct pricing 
 
 Deflation; DOD prices ... 
 
 Direct pricing 
 
 Deflation: DOD prices ... 
 
 Direct pricing 
 
 Deflation: DOD prices ... 
 
 Direct pricing 
 
 Deflation: DOD prices .... 
 
 Direct pricing 
 
 Deflation: DOD prices ,.., 
 
 Direct pricing 
 
 Deflation: DOD prices 
 
 IPD calculated from the 
 detail below. 
 
 Direct pricing 
 
 Deflation: DOD prices ... 
 
 Direct pricing 
 
 Deflation: DOD prices ... 
 
 Direct pricing 
 
 Deflation: DOD prices ... 
 Deflation: DOD prices ... 
 Deflation: DOD prices ... 
 Deflation: DOD prices ... 
 
 Direct pricing 
 
 Deflation: DOD prices 
 Deflation: DOD prices 
 Deflation: DOD prices 
 
 IPD calculated from the 
 
 detail below. 
 Shipyard prices for "frozen 
 
 snip". 
 Direct pricing 
 
 Deflation by 7 PPI's 
 
 Deflation: Frozen ship IPD. 
 
 IPD calculated from the 
 detail below. 
 
 Direct pricing 
 
 Deflation: DOD prices 
 
 Direct pricing 
 
 Deflation: DOD prices 
 
 Direct pricing 
 
 Deflation: DOD prices 
 
 Deflation: DOD prices 
 
 Deflation: DOD prices 
 
 Deflation: DOD prices 
 
 IPD calculated from the 
 
 detail below. 
 Deflation: DOD prices ... 
 Deflation by 4 PPI's 
 
 IPD calculated from the 
 
 detaii below. 
 
 Deflation: DOD prices ... 
 
 Deflation: DOD prices ... 
 
 Deflation: DOD prices ... 
 
 Deflation bv 1 PPI 
 
 100.000 
 25.371 
 20.758 
 
 8,663 
 
 .248 
 
 .128 
 
 ,007 
 
 .289 
 
 2.188 
 
 .189 
 
 .022 
 
 2.824 
 
 1.301 
 
 .535 
 
 .052 
 
 .880 
 
 2.923 
 
 .306 
 .162 
 .001 
 .145 
 .234 
 .199 
 .118 
 ,270 
 ,606 
 
 .474 
 .338 
 .057 
 .013 
 
 3.080 
 
 1.914 
 
 .103 
 
 1.198 
 -.135 
 
 1.498 
 
 .807 
 .419 
 .043 
 .078 
 .006 
 .085 
 .013 
 .019 
 .028 
 
 1.596 
 
 .330 
 1 .266 
 
 2.998 
 
 .337 
 
 1.321 
 
 .118 
 
 .096 
 
 1.126 
 
 Other durable goods 
 
 Army stock fund 
 
 Air Force stock fund 
 
 Navy stock fund 
 
 Defense stock fund 
 
 General-purpose 
 
 Other^ 
 
 Nondurable goods 
 
 Petroleum products 
 
 Jet fuels 
 
 Gasoline 
 
 Diesel and heating oil.... 
 Other fuels 
 
 Ammunition 
 
 Army 
 
 Air Force 
 
 Torpedoes 
 
 Navy, except torpedoes 
 Marine Corps 
 
 Other nondurable goods.. 
 
 Clothing and textiles 
 
 Subsistence 
 
 Other defense stock 
 
 fund. 
 
 Army stock fund 
 
 Printing 
 
 Military assistance 
 
 program. 
 
 Services 
 
 Compensation of 
 employees. 
 Military 
 
 Civilian. 
 
 Other sen/ices. 
 
 Contractual research 
 and development. 
 
 Department of 
 Defense. 
 
 Department of Energy , 
 
 Installation support 
 
 Utilities 
 
 Electricity 
 
 Natural gas 
 
 Water and sewage... 
 
 Steam and hot 
 water. 
 Communication 
 
 Postage 
 
 Local telephone 
 
 Other 
 
 IPD calculated from the 
 detail below. 
 
 Deflation: DOD prices 
 
 Deflation: DOD prices 
 
 Deflation: DOD prices 
 
 Deflation: DOD prices 
 
 BEA computer price index 
 
 Deflation by 13 PPI's 
 
 IPD calculated from the 
 detail below. 
 
 IPD calculated from the 
 detail below. 
 
 Direct pricing 
 
 Direct pricing 
 
 Direct pricing 
 
 Deflation: DOD prices 
 
 IPD calculated from the 
 detail below. 
 
 Deflation: DOD prices 
 
 Deflation: DOD prices 
 
 Direct pricing 
 
 Deflation by 8 PPI's 
 
 Deflation by 8 PPI's 
 
 IPD calculated from the 
 detail below. 
 
 Deflation by 4 PPI's 
 
 Deflation by 6 PPI's 
 
 Deflation: DOD prices 
 
 Deflation: DOD prices 
 
 Deflation: DOD prices 
 
 Deflation by 25 PPI's 
 
 IPD calculated from the 
 detail below. 
 
 IPD calculated from the 
 detail below. 
 
 Base-year value extrapolated 
 by active duty personnel 
 by rank (10 for officers, 4 
 for warrant officers, and 9 
 for enlisted), by cadets, 
 and by reserves. 
 
 Deflation: DOD prices 
 
 Base-year value extrapolated 
 by employment by grade 
 and step and by hours 
 worked. 
 
 IPD calculated from the 
 detail below. 
 
 IPD calculated from the 
 
 detail below. 
 Deflation: DOD and proxy 
 
 prices. 
 Deflation: DOD and proxy 
 
 prices. 
 
 IPD calculated from the 
 
 detail below. 
 IPD calculated from the 
 
 detail belovi/. 
 Deflation by 15 PPI's and 2 
 
 ER's, 
 
 Deflation by 1 CPl 
 
 Deflation by 1 CPl and 3 
 
 ER's. 
 Deflation bv 1 CPl and 2 
 
 ER's. 
 IPD calculated from the 
 
 detail below. 
 
 Deflation by 20 PPI's 
 
 Deflation by 1 PPi 
 
 Deflation: DOD prices 
 
 4.613 
 
 .840 
 ,852 
 ,066 
 .050 
 .296 
 2.510 
 
 7,018 
 
 4,749 
 
 2,566 
 202 
 
 1.390 
 .591 
 
 1,190 
 
 .631 
 .235 
 .191 
 .091 
 .042 
 
 1.079 
 
 .392 
 .112 
 .343 
 
 .068 
 .106 
 .058 
 
 65.592 
 
 43,319 
 28.389 
 
 ,814 
 14,116 
 
 22.273 
 
 8.405 
 7,127 
 1,278 
 
 6.202 
 
 1.132 
 
 ,801 
 
 ,237 
 073 
 
 ,021 
 
 .754 
 
 .104 
 .378 
 ,272 
 
56 Government Transactions. 
 
 JSIovember 1988 
 
 Table 11-9.— Methods Used in the Derivation of Constant-Dollar National Defense 
 
 Purchases of Goods and Services — Continued 
 
 Category 
 
 Method for July revision 
 
 1982 
 
 weight 
 
 (percent) 
 
 Category 
 
 Method for July revision 
 
 1982 
 
 weight 
 
 (percent) 
 
 Other 
 
 IPD calculated from the 
 
 detail below. 
 Deflation by 1 AHE and 1 ER . 
 Deflation bv 1 AHE 
 
 4.316 
 
 .424 
 .669 
 
 1.365 
 
 .163 
 
 .263 
 
 1.242 
 
 .190 
 
 2.835 
 
 2.188 
 
 .191 
 
 .657 
 
 1.340 
 
 .647 
 
 .335 
 .098 
 .119 
 .095 
 
 1.856 
 
 .156 
 
 .850 
 .850 
 
 Transportation of 
 materiel. 
 Air 
 
 IPD calculated from the 
 
 detail below. 
 Deflation: DOD prices 
 
 1.651 
 
 Housekeeolna 
 
 .076 
 
 Equipment 
 mAJntpnancp 
 
 Sea 
 
 Deflation: DOD prices 
 
 .540 
 
 Deflation: DOD prices and 3 
 
 ER's. 
 Deflation by 1 AHE 
 
 Rail 
 
 Deflation: DOD prices 
 
 .101 
 
 Property 
 
 maintpnancp 
 
 Truck 
 
 Deflation' DOD prices 
 
 897 
 
 Terminal services 
 
 Travel of persons 
 
 Deflation: DOD prices 
 
 037 
 
 Rental of property 
 
 Leased equipment .... 
 Contractor-operated 
 facilities. 
 
 Othor 
 
 IPD calculated from the 
 
 detail below. 
 Deflation: DOD prices 
 
 
 Dpflation bv 1 AHF 
 
 1.348 
 
 Deflation by 7 AHE's 
 
 Air 
 
 
 Deflation by 5 AHE's and 1 
 ER. 
 
 IPD calculated from the 
 
 detail below. 
 IPD calculated from the 
 
 detail below. 
 Deflation: DOD prices 
 
 .628 
 
 Bus and rail 
 
 Deflation: DOD prices 
 
 .031 
 
 Weapons support 
 
 Reimbursable travel 
 
 Other^ 
 
 Deflation: DOD, OPM, and 
 proxy prices. 
 
 Deflation by 1 AHE 
 
 .689 
 
 
 -.024 
 
 Depot maintenance 
 
 Structures 
 
 IPD calculated from the 
 detail below. 
 
 IPD calculated from the 
 
 detail below. 
 Direct pricing 
 
 2 019 
 
 Army 
 
 Militarv facilities 
 
 
 Air Force 
 
 Deflation by 4 AHE's 
 
 1 209 
 
 Navy 
 
 Deflation: DOD prices 
 
 Domestic new 
 construction. 
 Other 
 
 
 Procurement services... 
 
 IPD calculated from the 
 
 cietail below. 
 Deflation by 2 AHE's 
 
 .298 
 
 Aircraft 
 
 Deflation: DOD prices and 3 
 ER's. 
 
 IPD calculated from the 
 
 detail below. 
 Deflation by Census Bureau 
 
 index tor one-family 
 
 houses sold and 3 ER's. 
 Deflation by a composite of 3 
 
 construction cost indexes. 
 Deflation: IPD for new 
 
 nonresidential construction. 
 
 911 
 
 Missiles 
 
 Deflation by 2 AHE's 
 
 Other structures 
 
 
 Navy ships 
 
 Deflation by 2 AHE's 
 
 
 Armv weaoons 
 
 Deflation bv 2 AHE's 
 
 .810 
 
 Personnel support 
 
 IPD calculated from the 
 
 detail below. 
 Deflation: DOD prices 
 
 Familv housina 
 
 467 
 
 Training and 
 education. 
 
 Nuclear facilities 
 
 
 Deflation by 1 AHE 
 
 .344 
 
 Consultina . . . 
 
 Net purchases of used 
 structures. 
 
 
 Foreign nationals 
 
 Deflation: DOD prices and 
 10 ER's. 
 
 -001 
 
 
 
 1. The estimates for later revisions have the same sources. 
 
 2. Other durable goods and other services include purchases under the military assistance pro- 
 gram. 
 
 Note. — Weights may not sum to category totals because of rounding. A list of the price indexes 
 used is available upon request from BEA. 
 
 AHE Average hourly earnings. 
 
 CPI Consumer price index. 
 
 DOE U.S. Department of Energy. 
 
 ER Exchange rate. 
 
 GSA General Services Administration. 
 
 IPD Implicit price deflator. 
 
 OPM Office of Personnel Management. 
 
 PPI Producer price index. 
 
Government Transactions. 
 
 Jslovember 1988 
 
 57 
 
 class — is frozen. A shipyard that has produced this 
 class of ship is then asked to re-price the design us- 
 ing the current-period wage structure and technology. 
 Any change in the price calculated for the ship is a 
 price change. These estimates are used to construct 
 a price index. Currently, five frozen ships are in the 
 sample. 
 
 For the advance quarterly estimates, quantities 
 and prices (including estimates of ECO costs) for the 
 directly priced government-furnished equipment are 
 based largely on scheduled deliveries and prices from 
 unpublished data underlying the budget [4B-16]. Data 
 from PCR's [18E] and CCDR's [7] are incorporated 
 as they become available. Two months of PPI's are 
 available for the other government-furnished equip- 
 ment; the third month is available for the preliminary 
 estimate. For the part that is estimated using the 
 frozen ship method, all current quarterly estimates of 
 prices are judgmental extrapolations or, when avail- 
 able, based on shipyard prices. 
 
 The current-dollar estimates of foreign military 
 sales are deflated using the IPD calculated using the 
 frozen ship method. 
 
 Vehicles. — Constant-dollar purchases of vehicles 
 are prepared using two methods, both with DOD 
 prices. Most are prepared by direct pricing; the base- 
 year price is constructed in the same way as for air- 
 craft. The others are prepared by deflation using in- 
 dexes constructed from DOD prices; the price indexes 
 used are a combination of those constructed, in the 
 same way as for aircraft, from ICS data [12A, B, C] 
 and from IPD's derived from the directly priced esti- 
 mates. 
 
 For the advance quarterly estimates, quantities and 
 prices (including estimates of ECO costs) for the di- 
 rectly priced estimates are based largely on scheduled 
 deliveries and prices from unpublished data underly- 
 ing the budget [4B-7, -8, -9, -10, -11]. Data from PCR's 
 [18C] and CCDR's [7] are incorporated as they become 
 available. The vehicles IPD's derived from the directly 
 priced indexes are used for the estimates that are de- 
 flated. 
 
 Electronic equipment. — Constant-dollar pur- 
 chases of electronic equipment are prepared by de- 
 flation. Some are deflated using indexes constructed 
 from DOD prices available in the ICS [12A, B]; most 
 are deflated using four PPI's [62]. 
 
 For the current quarterly estimates, all pvirchases 
 of electronic equipment are deflated using four PPI's. 
 Two months of PPI's are available for the advance esti- 
 mate; the third month is available for the preliminary 
 estimate. 
 
 Other equipment. — Constant-dollar purchases of 
 other equipment, such as training equipment, are pre- 
 pared by deflation. Some are deflated using indexes 
 constructed from DOD prices in the ICS [12A, B]; the 
 rest are deflated using 14 PPI's [62]. 
 
 For the current quarterly estimates, all purchases 
 of other equipment are deflated using 14 PPI's. Two 
 months of PPI's are available for the advance estimate; 
 the third month is available for the preliminary esti- 
 mate. 
 
 Other durable goods. — Constant-dollar purchases 
 of other durable goods are prepared by deflation. 
 Some-i- are deflated using indexes constructed from 
 DOD prices from the ICS [12A, B, D]. Over one-half are 
 deflated using 13 PPI's [62]. Finally, general-purpose 
 computers are deflated using the BEA computer price 
 index [43, 45]. 
 
 For the current quarterly estimates, all purchases 
 of other durable goods except computers are deflated 
 using 13 PPI's. Two months of PPI's are available for 
 the advance estimate; the third month is available for 
 the preliminary estimate. For computers, the BEA 
 computer price index is used. 
 
 Nondurable goods 
 
 Petroleum products. — Constant-dollar purchases 
 of petroleum are prepared using two methods. Most 
 are prepared by direct pricing; the prices, as well as 
 the quantities, are from monthly petroleum product 
 reports (PPR's) [17], which use the NSN codes. The 
 others are prepared by deflation using indexes con- 
 structed from DOD prices — specifically, the combined 
 IPD derived from the directly priced estimates. 
 
 For the advance quarterly estimates, quantities and 
 prices for the estimates that are directly priced are 
 judgmental or, when available, from PPR's. PPR's are 
 available for the preliminary estimate. The combined 
 petroleum IPD derived from the directly priced esti- 
 mates is used for the estimates that are deflated. 
 
 Ammunition. — Constant-dollar piarchases of am- 
 munition are prepared using two methods. A small 
 portion are prepared by direct pricing; the base-year 
 price is constructed in the same way as for aircraft. 
 Most are prepared by deflation using indexes con- 
 structed from DOD prices, in the same way as for air- 
 craft, from ICS data [12A, B]. The rest are deflated 
 using eight PPI's [62]. 
 
 For the advance quarterly estimates, quantities and 
 prices (including estimates of ECO costs) for the di- 
 rectly priced estimates are based largely on scheduled 
 deliveries and prices from iinpublished data underly- 
 ing the budget [4B-14]. Data from CCDR's [7] are 
 incorporated as they become available. For the es- 
 timates that are deflated, eight PPI's are used. Two 
 months of PPI's are available for the advance estimate; 
 the third month is available for the preliminary esti- 
 mate. 
 
 Other nondurable goods. — Constant-dollar pur- 
 chases of other nondurable goods are prepared by de- 
 flation. A substantial portion are deflated using in- 
 dexes constructed from DOD prices available in the 
 ICS [12A, B, D, E]; the rest are deflated using four 
 PPI's for clothing and textiles and six PPI's for subsis- 
 tence (mostly food) [62]. 
 
58 Government Transactions. 
 
 IJovember 1988 
 
 For the current quarterly estimates, all purchases of 
 other nondurable goods are deflated using PPI's. Two 
 months of PPI's are available for the advance estimate; 
 the third month is available for the preliminary esti- 
 mate. 
 
 As explained in describing current-dollar purchases, 
 the source data include goods pui'chased and given to 
 foreign countries under foreign assistance programs. 
 The current-dollar estimates are deflated using 25 
 PPI's, reflecting the wide range of these goods. 
 
 Compensation of employees 
 
 Except for one type of pay, constant-dollar estimates 
 of the compensation of employees are prepared by ex- 
 trapolating base-year compensation by an index of em- 
 ployment or by an index of employee hours. The ex- 
 trapolators are adjusted, to the extent possible, for 
 changes in experience and education — that is, in the 
 quality of the workforce. This procedure is designed 
 to approximate specification pricing for output by gen- 
 eral government employees. It assumes that, for a 
 given type of employee, output per hour worked does 
 not change over time and that productivity changes 
 occur for the workforce only because of changes in the 
 mix of employees with respect to their level of experi- 
 ence and education. The constant-dollar estimates for 
 a small part of military compensation are prepared by 
 deflation using pay rates. 
 
 Military compensation. — ^The constant-dollar esti- 
 mates of military compensation are derived using ex- 
 trapolation and deflation methods. Extrapolation is 
 used for the types of compensation that are based on 
 rank or length of service, such as basic pay, or are 
 based on a percentage of pay, such as reenlistment 
 bonuses. Deflation is used for special pays, such as 
 flight pay and dentist pay, that are paid to military 
 personnel who meet special requirements and train- 
 ing. 
 
 As mentioned, in the extrapolation method the qual- 
 ity of a unit of labor purchased is defined in terms of 
 education and experience. Changes in these character- 
 istics are treated as quality changes; all other changes 
 are price changes. For the military pay system, rank 
 and length of service are assumed to represent the ed- 
 ucation and experience criteria. Twenty-three ranks — 
 10 for officers, 4 for warrant officers, and 9 for en- 
 listed personnel — and cadets are identified [13B, C, 
 F, G]. The 1982 compensation (excluding the special 
 pays) per employee for a given rank and length of ser- 
 vice is the base-year price. Employment by rank and 
 length of service for the current period is multiplied 
 by this base-year price to obtain this part of constant- 
 dollar military compensation. The difference between 
 the constant-dollar average salary in a given year and 
 the base-year average salary represents the shift in 
 the composition of employment with respect to educa- 
 tional attainment and experience. 
 
 Special pays represent a higher level of educational 
 attainment and experience. Any change in the spe- 
 
 cial pay rate, therefore, is a price change. Information 
 on changes in special pays is available fi^om the mil- 
 itary compensation report [13A, D]. A price index is 
 constructed for each of the special pays and is used to 
 deflate the current-period expenditures for these pays. 
 For the advance quarterly estimates, 2 months of 
 employment data are available from DOD manpower 
 reports [13E] for the extrapolation method; the third 
 month is available for the preliminary estimate. 
 
 Civilian compensation. — The constant-dollar es- 
 timates of civilian employee compensation are derived 
 by extrapolation and then divided between national 
 defense and nondefense purchases in proportion to 
 employment. The basic unit of purchase — and the 
 extrapolator — is an hour worked; an hour paid is not 
 used because it would reflect changes in holidays and 
 annual leave usage as well as hours worked; the for- 
 mer are considered to be price changes. The quality 
 of an hour worked is defined in terms of the education 
 and experience of the employee. Changes in educa- 
 tional attainment and experience are considered qual- 
 ity changes; all other changes are price changes. 
 
 There are several different Federal civilian pay 
 plans — ^for example, General Schedule and the Wage 
 Grade. All are based on skill level (grade) and length 
 of service (step), which are assumed to represent the 
 education and experience criteria. Average 1982 com- 
 pensation per hour worked (within a pay plan) for each 
 grade is the base-year price. 
 
 Employment data by grade and step for each pay 
 plan for civilian personnel are available from 0PM 
 [13H, J], generally by the first July revision, and are 
 adjusted to reflect changes in the index of average 
 hours worked. These data are multiplied by the base- 
 year price to obtain constant-dollar civilian compensa- 
 tion. 
 
 For the advance quarterly estimates, the change 
 in total civilian employment is used to estimate the 
 change in constant-dollar compensation. 
 
 Other services 
 
 Contractual research and development. — 
 
 Constant-dollar purchases of contractual research and 
 development (R&D) are prepared by deflation. An in- 
 dex of input costs from a sample of companies doing 
 R&D for DOD and Department of Energy (DOE) is con- 
 structed using weights from the BEA sample of R&D 
 contractors data. The sample of 25 contractors, se- 
 lected on a probability basis, report quarterly on the 
 cost of three R&D inputs: Direct labor, direct mate- 
 rial, and indirect costs. The price of direct labor is 
 represented by the hourly wage rate, by standard job 
 classification title (for example, supe-visory electronic 
 engineer), of employees engaged in R&D. The price of 
 direct material is represented by a sample of PPI's [62] 
 selected in consultation with each participating com- 
 pany. These two indexes are weighted together (with 
 1982 weights) to calculate a price index for direct costs. 
 A price index for indirect costs is constructed as the 
 
Government Transactions. 
 
 ^November 1988 59 
 
 product of the price index of direct costs and an index 
 of the indirect cost rate (the negotiated rate of over- 
 head costs). In turn, the indexes of the prices of direct 
 and indirect costs are combined (with 1982 weights) to 
 construct the price index for a company. 
 
 For the advance quarterly estimate, 2 months of 
 PPI's are available for the parts of the index based 
 on those indexes; judgment is used for the rest. Con- 
 tractor information and the third month of PPI's are 
 available for the preliminary estimate. 
 
 Installation support. — Constant-dollar purchases 
 of installation support services are prepared by de- 
 flation. Some are deflated using indexes constructed 
 from DOD contract information [5A, F, G], some using 
 PPI's or CPI's [62, 59], and some using average hourly 
 earnings [60]. For services purchased overseas, ad- 
 justments are made for the exchange rate [10] between 
 the U.S. dollar and currencies of countries where sub- 
 stantial purchases are made (usually Germany, Japan, 
 South Korea, and the United Kingdom). 
 
 For communication other than postage and local 
 telephone and for property maintenance, information 
 from DOD contracts provides the basis for construct- 
 ing price indexes [47, 48]. The costs of implement- 
 ing changes in the contracts' detailed work statements 
 that are deemed to be quality changes are used to ad- 
 just the price indexes derived from changes in contract 
 value. 
 
 For the utility categories, postage, and local tele- 
 phone service, PPI's and CPI's [62 and 59, respec- 
 tively] are used. 
 
 For the remaining six categories, price indexes are 
 constructed on the basis of average hourly earnings 
 of production workers in related industries [60]. For 
 example, the price index used to deflate housekeeping 
 services is constructed from the average hourly earn- 
 ings for workers providing services to buildings on the 
 assumption that the price of these services moves like 
 the wage of the employees performing the work. 
 
 For the advance quarterly estimate, contract infor- 
 mation and 2 months of PPI's, CPI's, average hourly 
 earnings, and exchange rates are available. The third 
 month is available for the preliminary estimate. 
 
 Weapons support. — Constant-dollar purchases of 
 weapons support services are prepared by deflation. 
 Some are deflated using indexes constructed from 
 DOD contract information and some using average 
 hourly earnings [60]. 
 
 For the advance quarterly estimate, contract infor- 
 mation and 2 months of average hourly earnings are 
 available; the third month is available for the prelim- 
 inary estimate. 
 
 Personnel support. — Constant-dollar purchases of 
 personnel support services are prepared by deflation. 
 Training and education is deflated using a sample of 
 tuition prices paid by DOD, and consulting is deflated 
 using average hourly earnings [60]. For the services of 
 foreign nationals, wage rates paid by DOD [16, 21] are 
 
 adjusted for the exchange rate [10] between the U.S. 
 dollar and currencies of countries where substantial 
 purchases are made. 
 
 For the advance quarterly estimate, contract infor- 
 mation and 2 months of average hourly earnings are 
 available; the third month is available for the prelimi- 
 nary estimate. For the services of foreign nationals, 
 the current quarterly estimates are judgmental ex- 
 trapolations. 
 
 Transportation of materiel. — Constant-dollar 
 purchases of services for the transportation of materiel 
 are prepared by deflation using indexes constructed 
 from DOD prices available in reports from the Mili- 
 tary Sealift Command [66, 67, 68, 69, 70, 71] and Mil- 
 itary Traffic Management Command [30, 31, 32, 34, 
 35]. Samples of trips from each of four categories — 
 air, sea, rail, and truck — and of terminal sei-vices are 
 priced each quarter to construct price indexes for each 
 category. This information is available for the advance 
 quarterly estimate. 
 
 Travel of persons. — Constant-dollar purchases of 
 services for the travel of persons are prepared by de- 
 flation. Indexes constructed from DOD prices avail- 
 able in reports from the Military Traffic Management 
 Command, the Military Airlift Command, and a trade 
 source are used to deflate air travel and travel by bus 
 and rail [11, 28, 29, 33]. These indexes are constructed 
 using a sample of trips from the two categories that 
 is priced each quarter. Indexes constructed from in- 
 formation from the General Services Administration 
 on reimbursement rates for per diem, dislocation al- 
 lowances, and mileage for privately owned vehicles 
 [87] and from CPI's for taxi fares and car rental fees 
 [59] are used to deflate reimbursable travel expenses. 
 With the exception of the CPI's, for which 2 months 
 of data are available, this information is available for 
 the advance quarterly estimate; the third month of the 
 CPI's is available for the preliminary estimate. 
 
 Other services. — Constant-dollar purchases of 
 other services are prepared by deflation with an in- 
 dex constructed from average hourly earnings in the 
 miscellaneous services industry [60]. For the advance 
 quarterly estimate, 2 months of average hourly earn- 
 ings data are available; the third month is available 
 for the preliminary estimate. 
 
 Structures 
 
 Military facilities. — Constant-dollar purchases of 
 military facilities are prepared using two methods. 
 The estimate of domestic new construction is prepared 
 by direct pricing; the rest is prepared by deflation us- 
 ing the combined IPD derived from the directly priced 
 estimates. For facilities that are constructed over- 
 seas, adjustments are made for the exchange rate [10] 
 between the U.S. dollar and currencies of countries 
 where substantial construction takes place (usually 
 Germany, Japan, and South Korea). 
 
 The estimates that are directly priced use the num- 
 ber of square feet constructed (or other physical unit 
 
60 Government Transactions. 
 
 ^November 1988 
 
 measure) and the base-year cost per square foot, by 
 detailed DOD construction category, derived from in- 
 foiTnation contained in construction project reports 
 (CPR's) [5]. The categories are set up on the basis of 
 end use and other characteristics that serve as pricing 
 specifications. The cost per square foot is adjusted to 
 reflect the cost (in 1982 dollars) of any changes in the 
 specification of the construction category. (For more 
 detail, see "Implicit Price Deflators for Military Con- 
 struction" [42].) 
 
 For the current quarter, the estimates that are di- 
 rectly priced are prepared in two parts: For new 
 projects, the number of square feet constructed and 
 prices are judgmental; for ongoing projects, the num- 
 ber of square feet constructed and prices are from 
 CPR's [5]. The military facilities IPD derived from 
 the directly priced estimates is used for the estimates 
 that are deflated. Two months of exchange rates are 
 available for the advance estimate; the third month is 
 available for the preliminary estimate. 
 
 Other. — Constant-dollar purchases of two cate- 
 gories of other structures are prepared by deflation. 
 The price indexes used for new construction are from 
 Current Construction Reports [37]. These indexes in- 
 clude the Turner Construction Company building cost 
 index, the Federal Highway Administration compos- 
 ite highway construction index, and the Bureau of the 
 Census index for one-family houses sold. The indexes 
 are smoothed by a three-quarter moving average or 
 are seasonally adjusted using the Census X-11 proce- 
 dure. (Prior to 1985, the Census Bureau index was 
 used with seasonal adjustment.) The availability of 
 the price data varies for each index, and BEA pre- 
 pares judgmental estimates to supplement the avail- 
 able data. 
 
 Family housing is deflated using a three-quarter 
 moving average of the Census Bureau index for new 
 one-family houses sold (excluding lot) adjusted for ex- 
 change rates [10]. DOE construction of nuclear facil- 
 ities is deflated using a composite index consisting of 
 the Census Bureau index for one-family houses sold, 
 the Turner Construction Company building cost in- 
 dex, and the Federal Highway Administration high- 
 way structures construction index (a component of the 
 composite). 
 
 Net purchases of used structures are deflated using 
 the IPD for new nonresidential structures; these es- 
 timates are prepared along with other components of 
 gross private domestic fixed investment. For facilities 
 that are constructed overseas, adjustments are made 
 for the exchange rate between the U.S. dollar and 
 currencies of countries where substantial construction 
 takes place. 
 
 For the current quarterly estimates of other struc- 
 tures, the advance estimate is based on the follow- 
 ing data: 2 months of the Census Bureau index for 
 new one-family houses sold, a quarterly estimate of 
 the Turner Construction Company building cost in- 
 dex and of the Federal Highway Administration high- 
 
 way structures construction index, and 2 months of 
 exchange rates. For the monthly measures, 3 months 
 of data are available for the preliminary estimate. 
 
 Nondefense purchases 
 
 As previously discussed, current-dollar nondefense 
 purchases are derived in two pieces: CCC inventory 
 change and all other purchases. All other purchases 
 are then classified by type of purchase — durable goods, 
 nondurable goods, compensation, other services, and 
 structures. Compensation is derived from total Fed- 
 eral civilian compensation as described in the na- 
 tional defense section. Purchases of structures are 
 from the Census Bureau Current Construction Re- 
 ports [37]. The remaining purchases are allocated to 
 durable goods, to nondurable goods except CCC, and 
 to other services based on annual estimates of expen- 
 ditures by object class from the Treasury Bulletin [78], 
 the MTS [77], the Budget Appendix [4A-2], contract 
 awards [6C], and other agency reports [12E, 14, 25, 
 39, 52, 54, 55]. Quarterly current-dollar estimates of 
 this group are interpolations without an indicator and, 
 for the current estimates, judgmental extrapolations. 
 
 As indicated earlier, table II-8 indicates which 
 of the three methods of preparing constant-dollar 
 estimates — deflation, extrapolation, or direct pricing — 
 is used for the components and provides an overview of 
 the source data. Table 11-10 shows in detail the price 
 indexes or extrapolators used to derive constant-dollar 
 estimates. The expenditures by object class discussed 
 above are used to weight the price indexes.^ 
 
 Durable goods 
 
 Constant-dollar purchases of durable goods are de- 
 rived by deflation. Data on prices paid by the Veterans' 
 Administration (VA) for equipment and supplies are 
 available from inventory control systems (ICS) [12E]. 
 ICS data from the VA are used as they become avail- 
 able, generally by the first July revision. The BEA 
 price index is used for computers [43, 45]. PPI's are 
 used for all other durable goods [62]. For the ad- 
 vance quarterly estimate, all price indexes — except for 
 computers — are based on 2 months of PPI's. Three 
 months of PPI's are available for the preliminary esti- 
 mate. 
 
 Nondurable goods 
 
 Constant-dollar CCC inventory change is derived 
 using a procedure that parallels the current-dollar es- 
 timating procedure described earlier. For each agri- 
 cultural commodity where the not seasonally adjusted 
 estimates are the product of a quantity and a mar- 
 ket price, the constant-dollar not seasonally adjusted 
 estimate is the product of the same quantity and 
 the 1982 average market price from Department of 
 Agriculture (USDA) data [22, 26]. Other agricultural 
 commodities — and the accounting adjustments — are 
 
 9. The current-dollar estimates of nondefense purchases by type for the 
 relevant year are used in BEA's benchmark input-output tables. 
 
Government Transactions. 
 
 J-Jovember 1988 
 
 61 
 
 Table 11-10. — Price Indexes Used in the Derivation of Constant-Dollar Federal Government Nondefense 
 
 Purchases of Goods and Services 
 
 Category 
 
 Price index or extrapolator for July revision 
 
 1982 
 
 weight 
 
 (Percent) 
 
 Nondefense purchases 
 
 Durable goods 
 
 Computer equipment 
 
 Aircraft 
 
 Aircraft components 
 
 Tractors 
 
 Motor vetiicles 
 
 Motor vefiicle parts 
 
 Internal combustion engines 
 
 Diesel engines 
 
 Machine shop products 
 
 Tires and tubes 
 
 Mechanical power transmission equipment 
 
 Ball and roller bearings 
 
 Metalworking machinery and equipment 
 
 Special industry machinery and equipment 
 
 Construction machinery and equipment 
 
 Industrial material handling equipment 
 
 Refrigeration equipment 
 
 Pumps, compressors, and equipment 
 
 Heating equipment 
 
 Hand and edge tools 
 
 Precision measuring tools 
 
 Hardware 
 
 Structural, architectural, and pre-engineering metal products 
 
 Communications equipment 
 
 Radio receivers 
 
 Television receivers 
 
 Fans and blowers 
 
 Metal valves 
 
 Pipe fittings and flanges 
 
 Electncal machinery and equipment 
 
 Motors, generators, motor generator sets 
 
 Electric lamps, bulbs, and parts 
 
 Medical, surgical, and personal aid devices 
 
 Medical equipment 
 
 Scientific and engineering instruments 
 
 Optical instruments and lenses 
 
 Electronic components 
 
 Photographic equipment 
 
 Household furniture 
 
 Commercial furniture 
 
 Cooking equipment 
 
 Utensils 
 
 Tableware, kitchenware, and other pottery 
 
 Calculating and accounting machines 
 
 Office machines 
 
 Nonferrous metals 
 
 Iron and steel 
 
 Miscellaneous metal products 
 
 Miscellaneous products 
 
 Sales of timber 
 
 IPD calculated from detail below 
 
 IPD calculated from detail below 
 
 BEA computer price index 
 
 PPI for civilian aircraft 
 
 Index of AHE for aircraft and parts industry 
 
 PPI tor tractors, other than farm 
 
 PPI for motor vehicles 
 
 PPI for motor vehicle parts 
 
 PPI for internal combustion engines 
 
 PPI for diesel, semidiesel, and dual fuel, nonauto internal combustion 
 engines. 
 
 PPI for machine shop products 
 
 PPI for tires, tubes, tread and repair materials 
 
 PPI for mechanical power transmission equipment 
 
 PPI for ball and roller bearings 
 
 PPI for metalworking machinery and equipment 
 
 PPI for special industry machinery and equipment 
 
 PPI for construction machinery and equipment 
 
 PPI for industrial material handling equipment 
 
 PPI for refrigeration equipment 
 
 PPI for pumps, compressors, and equipment 
 
 PPI for heating equipment 
 
 PPI for hand and edge tools 
 
 PPI for precision measuring tools 
 
 PPI for hardware 
 
 PPI for structural, architectural, pre-engineering metal products 
 
 PDE IPD for communications equipment 
 
 PPI for radio receivers 
 
 PPI for television receivers 
 
 PPI for fans and blowers, except portable 
 
 PPI for metal valves, except fluid power 
 
 PPI for metal pipe fittings, flanges, and unions 
 
 PPI for electrical machinery and equipment 
 
 PPI for motors, generators, and motor generator sets 
 
 PPI for electric lamps, bulbs, and parts 
 
 PPI for medical, surgical, and personal aid devices 
 
 IPD calculated from VA data 
 
 PDE IPD for scientific and engineering instruments 
 
 Index of AHE for optical instruments and lenses industry 
 
 PPI for electronic components and accessories 
 
 PPI for photographic equipment and supplies 
 
 PPI for household furniture 
 
 PPI for commercial furniture 
 
 PPI for cooking equipment 
 
 PPI for household flatware 
 
 PPI for tableware, kitchenware, and other pottery 
 
 PPI for calculating and accounting machines 
 
 PPI for office and store machines 
 
 PPI for nonferrous metals 
 
 PPI for iron and steel 
 
 PPI for miscellaneous metal products 
 
 PPI for miscellaneous products 
 
 PPI for lumber 
 
 100.000 
 
 3.899 
 
 .792 
 .055 
 .015 
 .006 
 .314 
 .069 
 .001 
 .034 
 
 .008 
 .014 
 .013 
 .007 
 .054 
 .200 
 .020 
 .034 
 ,030 
 .018 
 .010 
 .098 
 .005 
 .023 
 .019 
 .800 
 .005 
 .005 
 .002 
 .013 
 .004 
 .194 
 .078 
 .036 
 .021 
 .104 
 .438 
 .032 
 .018 
 .140 
 .078 
 .271 
 .001 
 .001 
 .035 
 .001 
 .241 
 .009 
 .012 
 .006 
 .032 
 -.517 
 
62 
 
 Government Transactions. 
 
 ^November 1988 
 
 Table 11-10.— Price Indexes Used in the Derivation of Constant-Dollar Federal Governmen; Nondefense 
 
 Purchases of Goods and Services— Continued 
 
 Category 
 
 Price index or extrapolator for July revision 
 
 1982 
 
 weight 
 
 (Percent) 
 
 Nondurable goods 
 
 Commodity Credit Corporation (CCC) inventory change 
 
 CCC donations 
 
 Strategic petroleum reserve 
 
 Naval petroleum reserve 
 
 Petroleum products 
 
 Paper 
 
 Printed materials 
 
 Small arms ammunition 
 
 Containers and packaging 
 
 Plywood 
 
 Other nonmetallic minerals 
 
 Medical supplies 
 
 Other agricultural chemicals 
 
 Office supplies and accessories 
 
 Soap and synthetic detergents 
 
 Miscellaneous chemical products and preparations 
 
 Luggage and small leather goods 
 
 Sanitary papers and health products 
 
 Mixed fertilizers 
 
 Processed foods and feeds 
 
 Refractories 
 
 Apparel findings 
 
 Services 
 
 Compensation of employees 
 
 Civilian compensation 
 
 Coast Guard compensation 
 
 Other services 
 
 Travel 
 
 Air transportation of things 
 
 Rail transportation of things 
 
 Sea transportation of things 
 
 Truck transportation of things 
 
 Parcel post service 
 
 Rental sen/ices 
 
 Communications services 
 
 Water, sewerage, and sanitation services 
 
 Electricity 
 
 Electrical repair services 
 
 Other repair services 
 
 Business services 
 
 Sen/ices to aircraft and aerospace equipment 
 
 Ship services 
 
 Other communications services 
 
 Real estate services 
 
 Engineering and architectural services 
 
 Painting and decorating services 
 
 Other trade contractors sen/ices 
 
 Highway services 
 
 Equipment inputs purchased for other services 
 
 Equipment inputs purchased for modification and maintenance 
 of equipment services. 
 
 Imputed financial services 
 
 IPD calculated from detail below 
 
 For most commodities, market prices from Agricultural Prices and 
 Dairy Market Statistics: Annual Summary. For other crops, prices 
 received by farmers from USDA data. 
 
 Composite index of prices received by farmers 
 
 DOE prices 
 
 DOE prices 
 
 Composite index of PPI's for middle distillates, gasoline, and residual 
 fuels. 
 
 PPI for paper 
 
 Index or AHE for commercial printing industry 
 
 PPI for small arms and ammunition 
 
 PPI for other miscellaneous metal products 
 
 PPI for plywood 
 
 PPI for other nonmetallic minerals 
 
 IPD calculated from VA data 
 
 PPI for other agricultural chemicals 
 
 PPI for office supplies and accessories 
 
 PPI for soap and synthetic detergents 
 
 PPI for miscellaneous chemical products and preparations 
 
 PPI for luggage and small leather goods 
 
 PPI for sanitary papers and health products 
 
 PPI for mixed fertilizers 
 
 PPI for processed foods and feeds 
 
 PPI for refractories 
 
 PPI for buttons, button blanks, and parts 
 
 IPD calculated from detail below 
 
 IPD calculated from detail below 
 
 Base-year value extrapolated by employment (by grade and step) and 
 
 by hours worked. 
 Base-year value extrapolated by employment (by grade and step) and 
 
 by hours worked. 
 
 IPD calculated from detail below 
 
 National defense purchases IPD for travel of persons 
 
 National defense purchases IPD for air transportation 
 
 National defense purchases IPD for rail transportation 
 
 National defense purchases IPD for sea transportation 
 
 National defense purchases IPD for truck transportation 
 
 IPD for parcel post service 
 
 CPI for residential rent 
 
 CPI for telephone services 
 
 CPI for water, sewerage and sanitation services 
 
 PPI tor electric power 
 
 Index of AHE tor electrical repair shops industry 
 
 Index of AHE for miscellaneous repair services industry 
 
 Index of AHE for miscellaneous business services industry 
 
 Index of AHE for aircraft and parts industry 
 
 Index of AHE for ship and boat building and repairing industry 
 
 Index of AHE for communications services industry 
 
 Index of AHE for real estate operators and lessors industry 
 
 Index of AHE for engineering and architectural services industry 
 
 Index of AHE for painting, paper hanging, and decorating industry 
 
 Index of AHE for special trade contractors industry 
 
 Index of AHE for highway and street construction industry 
 
 IPD for nondefense durable goods less timber sales and computer 
 
 equipment). 
 Composite index of PDE IPD's for aircraft, for ships and boats, and for 
 
 communications equipdiwui, and PPI's for photographic equipment 
 
 and supplies and for construction machinery and equipment. 
 Base-year value extrapolated by paid employee hours of relevant 
 
 financial institutions. 
 
 18.845 
 1 1 .629 
 
 .899 
 
 2.759 
 
 -2.065 
 
 .642 
 
 .220 
 .594 
 .001 
 .421 
 .099 
 .137 
 .053 
 .251 
 1.602 
 .533 
 .501 
 .160 
 
 .265 
 .014 
 .006 
 .094 
 .030 
 
 68.842 
 
 41.914 
 40.546 
 
 1.368 
 
 26.928 
 1.080 
 .041 
 .072 
 .027 
 .188 
 .014 
 .702 
 .814 
 .056 
 534 
 .228 
 .162 
 .108 
 .513 
 .324 
 .060 
 .088 
 
 1 1 .635 
 
 .169 
 
 2.013 
 
 .144 
 
 1.999 
 
 1. 
 
 1.417 
 
 .540 
 
 See footnotes at end of table. 
 
Government Transactions^ 
 
 J^Iovember 1988 
 
 63 
 
 Table 11-10. — Price Indexes Used in the Derivation of Constant-Dollar Federal Government Nondefense 
 
 Purchases of Goods and Services — Continued 
 
 Category 
 
 Price index or extrapolator for July revision • 
 
 1982 
 
 weight 
 
 (Percent) 
 
 Structures 
 
 IPD calculated from detail below 
 
 8.415 
 
 New construction out-in-olace 
 
 IPD calculated from detail below 
 
 8.485 
 
 Industrial buildings 
 
 Average of Turner Construction Company building cost index, Bureau 
 of the Census price index of new one-family houses sold (excluding 
 lot), and Federal Highway Administration highway structures 
 construction index. 
 
 Average of Turner Construction Company building cost index and 
 Bureau of the Census price index of new one-family houses sold 
 (excluding lot). 
 
 Turner Construction Company building cost index 
 
 1.142 
 
 Education buildings 
 
 Hospitals and health facilities 
 
 .028 
 519 
 
 Other buildings 
 
 Highways and streets 
 
 Average of Turner Construction Company building cost index and 
 Bureau of the Census price index of new one-family houses sold 
 (excluding lot). 
 
 Federal Highway Administration composite highway construction index.. 
 
 Bureau of Reclamation composite construction cost index 
 
 .661 
 .657 
 
 Conservation and development of resources 
 
 5.222 
 
 Coast Guard construction 
 
 Composite of Turner Construction Company building cost index, 
 Bureau of the Census price index of new one-family houses sold 
 (excluding lot), and Federal Highway Administration composite 
 highway construction index. 
 
 Average of the Bureau of Reclamation composite construction cost 
 index and Highway Administration composite highway construction 
 index. 
 
 IPD for purchases of new private nonresidential structures 
 
 028 
 
 Miscellaneous nonbuilding construction 
 
 .228 
 
 Net purchases of existing nonresidential structures 
 
 -.024 
 
 Net purchases of existing residential nonfarm structures 
 
 IPD for purchases of new private residential nonfarm structures 
 
 .066 
 
 Government force-account construction compensation 
 
 Bureau of Reclamation composite construction cost trends index 
 
 -.112 
 
 
 
 
 1. The estimates for later revisions use the same indexes or extrapolators . 
 Note. — Weights rray not sum to category totals because of rounding. 
 
 AHE Average hourly earnings. 
 
 CPI Consumer price index. 
 
 DOE U.S. Department of Energy. 
 
 IPD Implicit phce deflator. 
 
 PDE Producers' durable equipment. 
 
 PPI Producer price index. 
 
 USDA U.S. Department of Agriculture. 
 
 VA Veterans' Administration. 
 
64 Government Transactions. 
 
 JSlovember 1988 
 
 deflated by a price index for average prices received 
 by farmers [26]. Seasonally adjusted estimates are 
 derived in the same manner as for the current-dollar 
 series. 
 
 For the advance quarterly estimates of CCC pur- 
 chases, 1 month of USDA price data is available for 
 the directly priced estimates and 2 months of prices 
 received by farmers are available for the deflated esti- 
 mates. Additional price data become available for the 
 preliminary and final estimates. 
 
 Constant-dollar purchases of other nondurables are 
 derived using a directly priced method and deflation. 
 The directly priced method is used with prices and 
 quantities from DOE for purchases of petroleum for 
 the strategic petroleum reserve [55] and for sales from 
 the naval petroleum reserve [54]. PPI's are used for 
 most other nondurable goods [62]. For the advance 
 quarterly estimates, 2 months of DOE prices and PPI's 
 are available; 3 months of data are available for the 
 preliminary and final estimates. 
 
 Compens ation 
 
 Constant-dollar purchases of Federal civilian com- 
 pensation are derived by extrapolation using hours 
 worked and base-period compensation. The final re- 
 sult is split between defense and nondefense in pro- 
 portion to employment. This procedure is described in 
 the constant-dollar compensation section of national 
 defense piirchases. Constant-dollar compensation of 
 Coast Guard personnel is derived in the same man- 
 ner as military personnel and added to the estimate 
 for civilian nondefense personnel to yield total nonde- 
 fense purchases of compensation in constant dollars. 
 
 Other services 
 
 Constant-dollar purchases of other services, except 
 imputed financial services, are derived by deflation. 
 Constant-dollar estimates of the services rendered 
 without payment to the Federal Government by de- 
 
 pository institutions are prepared by extrapolating the 
 base-year value using BEA estimates of the paid em- 
 ployee hours in commercial banks and Federal Reserve 
 banks, based on BLS tabulations of employment and 
 wages [1, 60, 61]. 
 
 The IPD's for some defense purchases are used for 
 nondefense purchases. For example, per diem rates 
 and air fares are the same for all civilian employees; 
 therefore, the IPD for defense travel of persons is di- 
 rectly applicable to nondefense purchases of travel of 
 persons. Defense IPD's for transportation by mode are 
 also used. CPI's and PPI's are used for some pur- 
 chases, such as telephone service and electric power 
 [59, 62]. For many purchased services, such as main- 
 tenance services and engineering services, price in- 
 dexes are not available. An index is estimated us- 
 ing a combination of average hourly earnings [60] and 
 equipment IPD's to represent the labor and capital in- 
 puts to the services being purchased. 
 
 For the current quarterly estimates, the estimates 
 of imputed financial services are judgmental extrap- 
 olations. For the other services, 2 months of price 
 data are available for the advance estimates; the third 
 month of data is available for the preliminary esti- 
 mates. 
 
 Structures 
 
 Constant-dollar purchases of structures are derived 
 by deflation. The indexes used are the same as those 
 described for other national defense structures (see 
 page 60). Net purchases of existing structures are 
 deflated using BEA's IPD's for new private nonfarm 
 residential structures and for new private nonresiden- 
 tial structures. These estimates are prepared along 
 with other components of gross private domestic fixed 
 investment. New construction force-account compen- 
 sation is deflated using the IPD for conservation and 
 development construction. 
 
Sources 
 
 This is a list of information sources used in preparing current- and constant-dollar estimates of Federal 
 Government transactions in the national income and product accounts. Many of the sources shown are un- 
 published internal recordkeeping documents and files. In some cases, the information used is more detailed 
 than that available in the listed source, which is the publication most accessible to the public. 
 
 1. Board of Governors of the Federal Reserve Sys- 
 tem. Annual Report. Washington, DC: Board of 
 Governors, annually. 
 
 2. Board of Governors of the Federal Reserve Sys- 
 tem. Retirement Plan for Employees of the Federal 
 Reserve System. New York, NY: Board of Gover- 
 nors, annually. 
 
 3. Board of Governors of the Federal Reserve Sys- 
 tem. Sector Tables. Flow of Funds Accounts. (Sta- 
 tistical Release Z.l.) Washington, DC: Board of 
 Governors, quarterly. 
 
 4. Budget documents 
 
 A. Basic 
 
 1. U.S. Executive Office of the President. 
 Office of Management and Budget. Bud- 
 get of the United States Government. 
 Washington, DC: U.S. Government Print- 
 ing Office, annually. 
 
 2. U.S. Executive Office of the President. 
 Office of Management and Budget. Bud- 
 get of the United States Government: Ap- 
 pendix. Washington, DC: U.S. Govern- 
 ment Printing Office, annually. 
 
 3. U.S. Executive Office of the President. 
 Office of Management and Budget. Bud- 
 get of the United States Government: Spe- 
 cial Analyses. Washington, DC: U.S. 
 Government Printing Office, annually. 
 
 B. Supporting 
 
 1. U.S. Executive Office of the President. 
 Office of Management and Budget. "Pay 
 Raise Impacts." Washington, DC, annu- 
 ally, unpublished. 
 
 2. U.S. Department of the Air Force. "Com- 
 mittee Staff Procurement Backup Book, 
 Aircraft Procurement, Air Force." Wash- 
 ington, DC, annually, unpublished. 
 
 3. U.S. Department of the Air Force. "Com- 
 mittee Staff Procurement Backup Book, 
 Missile Procurement, Air Force." Wash- 
 ington, DC, annually, unpublished. 
 
 4. U.S. Department of the Air Force. "Com- 
 mittee Staff Procurement Backup Book, 
 
 Other Procurement, Air Force." Wash- 
 ington, DC, annually, unpublished. 
 
 5. U.S. Department of the Army. "Procure- 
 ment Programs, Committee Staff Pro- 
 curement Backup Book, Aircraft Procure- 
 ment, Army." (DD-COMP (AR) 1092). 
 Washington, DC, annually, unpublished. 
 
 6. U.S. Department of the Army. "Procure- 
 ment Programs, Committee Staff Pro- 
 curement Backup Book, Missile Procure- 
 ment, Army." (DD-COMP (AR) 1092). 
 Washington, DC, annually, unpublished. 
 
 7. U.S. Department of the Army. "Procure- 
 ment Programs, Committee Staff Pro- 
 curement Backup Book, Other Procure- 
 ment, Army." (DD-COMP (AR) 1092). 
 Washington, DC, annually, unpublished. 
 
 8. U.S. Department of the Army. "Pro- 
 curelent Programs, Committee Staff Pro- 
 curement Backup Book, Weapons and 
 Tracked Combat Vehicle Procurement, 
 Army." (DD-COMP (AR) 1092). Wash- 
 ington, DC, annually, unpublished. 
 
 9. U.S. Department of the Navy. "Other 
 Procurement, Navy, Budget Activity 5, 
 Civil Engineering Support Equipment, 
 Committee Staff Procurement Backup 
 Book." Washington, DC, annually, un- 
 published. 
 
 10. U.S. Department of the Navy. "Procure- 
 ment, Marine Corps, Budget Activity 5, 
 Support Vehicles, Committee Staff Pro- 
 curement Backup Book." Washington, 
 DC, annually, unpublished. 
 
 11. U.S. Department of the Navy. "Procure- 
 ment, Marine Corps, Budget Activity 2, 
 Weapons and Tracked Combat Vehicles, 
 Committee Staff Procurement Backup 
 Book." Washington, DC, annually, un- 
 published. 
 
 12. U.S. Department of the Na^/y. "Weapons 
 Procurement, Navy, Budget Activity 1, 
 Ballistic Missiles, Committee Staff Pro- 
 curement Backup Book." Washington, 
 DC, annually, unpublished. 
 
 13. U.S. Department of the Navy. "Weapons 
 Procurement, Navy, Budget Activity 2, 
 
 65 
 
66 Government Transactions. 
 
 Jsfovemher 1988 
 
 Other Missiles, Committee Staff Procure- 
 ment Backup Book." Washington, DC, 
 annually, unpublished. 
 
 14. U.S. Department of the Navy. "Weapons 
 Procurement, Navy, Budget Activity 4, 
 Other Weapons, Committee Staff Pro- 
 curement Backup Book." Washington, 
 DC, annually, unpublished. 
 
 15. U.S. Department of the Navy. Naval Air 
 Systems Command. "Aircraft Procure- 
 ment, Navy, Committee Staff Procure- 
 ment Backup Book." Washington, DC, 
 annually, unpublished. 
 
 16. U.S. Department of the Navy. Naval 
 Sea Systems Command. "Justification 
 of Estimates for Fiscal Years Submitted 
 to Congress, Procurement, Shipbuilding 
 and Conversion, Navy." Washington, DC, 
 annually, unpublished. 
 
 5. Construction project reports 
 
 A. U.S. Department of the Army. Corps of Engi- 
 neers. "Construction Cost Estimate Code C." 
 (Engineering Form 150.) Corps of Engineer 
 District Offices in Baltimore, MD; Kansas 
 City, MO; Mobile, AL; Norfolk, VA, periodi- 
 cally, unpublished. 
 
 B. U.S. Department of the Army. Corps of 
 Engineers. "Report of Cost and Analysis — 
 Buildings." (DD Form 813.) Washington, DC, 
 periodically, unpublished. 
 
 C. U.S. Department of the Army. Corps of Engi- 
 neers. "Report of Cost and Analysis — Liquid 
 Fueling and Dispensing Facilities and Liquid 
 Fuel Storage." (DD Form 813-1.) Washing- 
 ton, DC, periodically, unpublished. 
 
 D. U.S. Department of the Army. Corps of 
 Engineers. "Report of Cost and Analysis — 
 Paving." (DD Form 813-2.) Washington, DC, 
 periodically, unpublished. 
 
 E. U.S. Department of Defense. Office of the 
 Assistant Secretary of Defense, Comptroller. 
 "Construction Programs (C-1), Department of 
 Defense Budget." Washington, DC, annually, 
 unpublished. 
 
 F. U.S. Department of the Navy. Naval Facil- 
 ities Engineering Command. "Schedule of 
 Prices." (NAVFAC Report 4330/4.) NAVFAC 
 Commands in Norfolk, VA; Washington, DC; 
 Philadelphia, PA; Charleston, SC; and San 
 Bruno, CA, periodically, unpublished. 
 
 G. U.S. Department of the Navy. Naval Fa- 
 cilities Engineering Command, Atlantic Di- 
 vision. "Summary Sheets for Jobs Awarded 
 by LANTDIV." Norfolk, VA, annually, unpub- 
 lished. 
 
 6. Contract awards 
 
 A. U.S. Department of Defense. Office of the 
 Secretary of Defense (Comptroller). De- 
 partment of Defense Prime Contract Awards. 
 Washington, DC: National Technical Infor- 
 mation Service, annually. 
 
 B. U.S. Department of Defense. Office of the 
 Secretary of Defense (Comptroller). 500 Con- 
 tractors Receiving the Largest Dollar Volume 
 of Prime Contract Awards for RDT&E. Wash- 
 ington, DC: National Technical Information 
 Service, annually. 
 
 C. U.S. General Services Administration. Fed- 
 eral Procurement Data Center. Federal Pro- 
 curement Data System, Special Analysis II. 
 Arlington, VA: GSA, quarterly. 
 
 D. U.S. General Services Administration. Fed- 
 eral Prociorement Data Center. Federal Pro- 
 curement Data System, Standard Report. Ar- 
 lington, VA: U.S. Government Printing Office, 
 annually. 
 
 E. U.S. General Services Administration. Office 
 of Procurement. "Procurement by Commod- 
 ity Groups." Arlington, VA, annually, vmpub- 
 lished. 
 
 7. Contract control documentation reports 
 
 A. U.S. Department of Defense. Assistant Sec- 
 retary of Defense (Comptroller). "Contract 
 Cost Data Reports." (DD Form 1921-1.) 
 Washington, DC, monthly, unpublished. 
 
 B. U.S. Department of Defense. Assistant Sec- 
 retary of Defense (Comptroller). "Cost Funds 
 Status Report." Washington, DC, monthly, 
 unpublished. 
 
 C. U.S. Department of Defense. Assistant Sec- 
 retary of Defense (Comptroller). "Cost Per- 
 formance Report." Washington, DC, monthly, 
 unpublished. 
 
 D. U.S. Department of Defense. Assis- 
 tant Secretary of Defense (Comptroller). 
 "Cost/Schedule Status Reports." Washington, 
 DC, monthly, unpublished. 
 
 8. Federal Deposit Insurance Corporation. Annual 
 Report. Washington, DC: FDIC, annually. 
 
 9. Financial reports 
 
 A. U.S. Department of the Air Force. Head- 
 quarters, Air Force Accounting and Finance 
 Center. "Appropriation Status by Fiscal Year 
 Program and Subaccounts." (DD-COMP (M) 
 1002.) Denver, CO, monthly, unpublished. 
 
 B. U.S. Department of the Air Force. Head- 
 quarters, Air Force Accounting and Finance 
 
T 
 
 Government Transactions. 
 
 J-^ovember 1988 67 
 
 Center. "Report on Budget Execution." (DD- 
 COMP (M) 1125.) Denver, CO, monthly, un- 
 published. 
 
 C. U.S. Department of the Air Force. Headquar- 
 ters, Air Force Accounting and Finance Cen- 
 ter. "Air Force Stock Fund." (DD-COMP (M) 
 1303.) Denver, CO, monthly, unpublished. 
 
 D. U.S. Department of the Air Force. Headquar- 
 ters, Air Force Accounting and Finance Cen- 
 ter. "Air Force Industrial Fund, Annual Re- 
 port for the Department of Defense." (DD- 
 COMP (AR) 1307.) Denver, CO, annually, 
 unpublished. 
 
 E. U.S. Department of the Air Force. Headquar- 
 ters, Air Force Accounting and Finance Cen- 
 ter. "Treasury Department Report on Obli- 
 gations." (SF 225.) Denver, CO, quarterly, 
 unpublished. 
 
 F. U.S. Department of the Army. Finance and 
 Accounting Center. "Appropriation Status by 
 Fiscal Year Program and Subaccounts." (DD- 
 COMP (M) 1002.) Indianapohs, IN, monthly, 
 unpublished. 
 
 G. U.S. Department of the Army. Finance and 
 Accounting Center. "Report on Budget Ex- 
 ecution, Obligation Basis." (DD-COMP (M) 
 1125.) Indianapolis, IN, monthly, unpub- 
 lished. 
 
 H. U.S. Department of the Army. Finance and 
 Accounting Center. "Army Stock Fund." 
 (DD-COMP (M) 1303.) Indianapolis, IN, an- 
 nually, unpublished. 
 I. U.S. Department of the Army. Finance and 
 Accounting Center. "Army Industrial Fund, 
 Annual Report to the Department of De- 
 fense." (DD-COMP (AR) 1307.) Indianapohs, 
 IN, annually, unpublished. 
 
 J. U.S. Department of the Army. Finance and 
 Accounting Center. "Report on Obligations." 
 (SF 225.) Indianapolis, IN, quarterly, unpub- 
 lished. 
 
 K U.S. Department of Defense. Assistant Sec- 
 retary of Defense, (Comptroller). "Depart- 
 ment of Defense Net Monthly Outlays by Ap- 
 propriation Title." (FAD 727.) Washington, 
 DC, monthly, unpublished. 
 
 L. U.S. Department of Defense. Washington 
 Headquarters Service. "Appropriation Status 
 by Fiscal Year Program and Subaccounts." 
 (DD-COMP (M) 1002.) Washington, DC, 
 monthly, unpublished. 
 
 M. U.S. Department of Defense. Washington 
 Headquarters Service. "Defense Industrial 
 Fund." (DD-COMP (AR) 1307.) Alexandria, 
 VA, annually, unpublished. 
 
 N. U.S. Department of Defense. Washington 
 Headquarters Service. "Defense Logistic 
 Agency Stock Funds." (DD-COMP (M) 1303.) 
 Alexandria, VA, monthly, unpublished. 
 
 O. U.S. Department of Defense. Washington 
 Headquarters Service. "Report on Budget 
 Execution, Obligation Basis." (DD-COMP 
 (M) 1125.) Washington, DC, monthly, unpub- 
 lished. 
 
 P. U.S. Department of Defense. Washington 
 Headquarters Service. "Report on Obliga- 
 tions." (SF 225.) Washington, DC, monthly, 
 unpublished. 
 
 Q. U.S. Department of the Navy. Office of the 
 Navy Comptroller. "Appropriation Status by 
 Fiscal Year Program and Subaccounts." (DD- 
 COMP (M) 1002.) Arlington, VA, monthly, 
 unpublished. 
 
 R. U.S. Department of the Navy. Office of the 
 Navy Comptroller. "Navy Industrial Fund." 
 (DD-COMP (AR) 1307.) Arlington, VA, annu- 
 ally, unpublished. 
 
 S. U.S. Department of the Navy. Office of the 
 Navy Comptroller. "Navy Stock Fund." (DD- 
 COMP (M) 1303.) Arlington, VA, monthly, 
 unpublished. 
 
 T. U.S. Department of the Navy. Office of the 
 Navy Comptroller. "Report on Budget Ex- 
 ecution, Obligation Basis." (DD-COMP (M) 
 1125.) Arlington, VA, monthly, unpublished. 
 
 U. U.S. Department of the Navy. Office of the 
 Navy Comptroller. "Report on Obligations." 
 (SF 225.) Arlington, VA, monthly, unpub- 
 lished. 
 
 10. International Monetary Fund. Bureau of Statis- 
 tics. International Financial Statistics. Washing- 
 ton, DC: IMF, monthly. 
 
 11. International Thomson Transport Press. The Of- 
 ficial Railway Guide, Travel Edition. New York, 
 NY: International Thomson Transport Press, bi- 
 monthly. 
 
 12. Inventory control systems 
 
 A. U.S. Department of the Air Force. Air Force 
 Logistics Command. "Procurement History 
 File." (J041.) Warner Robbins AFB, Atlanta, 
 GA; McClelland AFB, Sacramento, CA; Kelly 
 AFB, San Antonio, TX; Tinker AFB, Okla- 
 homa City, OK; Hill AFB, Ogden, UT, quar- 
 terly, unpublished. 
 
 B. U.S. Department of the Army. "MILSCAP 
 SPNDCOM Computer Tapes." Armament, 
 Munitions, and Chemical Command (AMC- 
 COM), Rock Island, IL; Troop Support Com- 
 mand (TROSCOM), St. Louis, MO; Aviation 
 Systems Command (AVSCOM), St. Louis, 
 MO; Missile Command (MICOM), Redstone 
 Arsenal, AL; Communication-Electronics 
 Command (CECOM), Fort Monmouth, NJ, 
 quarterly, unpublished. 
 
 C. U.S. General Services Administration. Auto- 
 motive Commodity Center. Customer Agency 
 Repori. Arlington, VA: GSA, monthly. 
 
6S Government Transactions. 
 
 J^ovember 1388 
 
 D. U.S. General Services Administration. 
 "Schedules Tape." Arlington, VA, quarterly, 
 unpublished. 
 
 E. U.S. Veterans' Administration. Operations 
 Di\asion. "Stock Fund Tape." Austin, TX, 
 quarterly, unpublished. 
 
 13. Manpower reports 
 
 A. Army Times Publishing Company. At Your 
 Service Report. Washington, DC: Army 
 Times Publishing Company, periodically. 
 
 B. U.S. Department of the Air Force. "Justifica- 
 tion of Estimates for Military Personnel, Air 
 Force." Washington, DC, annually, unpub- 
 hshed. 
 
 C. U.S. Department of the Army. "Justification 
 of Estimates for Military Personnel, Army." 
 Washington, DC, annually, unpublished. 
 
 D. U.S. Department of Defense. Office of the 
 Secretary of Defense. Military Compensa- 
 tion Background Papers, Compensation El- 
 ements and Related Manpower Cost Items, 
 Their Purposes and Legislative Backgrounds. 
 Washington, DC: U.S. Government Printing 
 Office, quadrennially. 
 
 E. U.S. Department of Defense. Washington 
 Headquarters Services. Military Manpower 
 Statistics. Washington, DC: U.S. Govern- 
 ment Printing Office, quarterly. 
 
 F. U.S. Department of the Navy. "Justification 
 of Estimates for Military Personnel, Marine 
 Corps." Washington, DC, annually, unpub- 
 lished. 
 
 G. U.S. Department of the Navy. "Justification 
 of Estimates for Military Personnel, Navy." 
 Washington, DC, annually, unpublished. 
 
 H. U.S. Office of Personnel Management. Office 
 of Workforce Information. "Current Status 
 Report." Washington, DC, quarterly, unpub- 
 lished. 
 
 I. U.S. Office of Personnel Management. Of- 
 fice of Workforce Information. Federal Civil- 
 ian Workforce Statistics, Employment and 
 Trends. Washington, DC: U.S. Government 
 Printing Office, bimonthly. 
 
 J. U.S. Office of Personnel Management. Of- 
 fice of Workforce Information. Federal Civil- 
 ian Workforce Statistics, Pay Structure of the 
 Federal Civil Service. Washington, DC: U.S. 
 Government Printing Office, annually. 
 K. U.S. Office of Personnel Management. Office 
 of the Actuary. "Unfiinded Liabilities Data." 
 Washington, DC, annually, unpublished. 
 
 14. National Aeronautics and Space Administration. 
 Financial Management Division. "NASA R&D Re- 
 port." Washington, DC, quarterly, unpublished. 
 
 15. National Science Foundation. Division of Sci- 
 ence Resources Studies. Federal Funds for Re- 
 
 search and Development, Detailed Historical Ta- 
 bles. Washington, DC: National Science Fovmda- 
 tion, annually. 
 
 16. Organization for Economic Cooperation and De- 
 velopment. Department of Economics and Statis- 
 tics. Main Economic Indicators. Paris, France: 
 Organization for Economic Cooperation and De- 
 velopment, monthly. 
 
 17. Petroleum product reports 
 
 A. U.S. Department of Defense. Defense Lo- 
 gistics Agency. "Contract Status Obligation 
 Summary by NSN, for Posts, Camps and Sta- 
 tions." Cameron Station, Alexandria, VA, 
 monthly, unpublished. 
 
 B. U.S. Department of Defense. Defense Logis- 
 tics Agency. "FIA Month End Reports, Fi- 
 nancial Status Report NSN Summary, Bulk 
 Products." Cameron Station, Alexandria, VA, 
 monthly, unpublished. 
 
 C. U.S. Department of Defense. Defense Logis- 
 tics Agency. "FIA Month End Reports, Fi- 
 nancial Status Report NSN Summary, Into 
 Plane." Cameron Station, Alexandria, VA, 
 monthly, unpublished. 
 
 18. Production control reports 
 
 A. U.S. Department of the Air Force. Air Force 
 Systems Command. "Production & Produc- 
 tion Difficulty Summary Report, Aircraft, 
 Guided Missiles, Aircraft Engines." (RCS: 
 HAF-RDX (M).) Andrews AFB, Suitland, MD, 
 monthly, unpublished. 
 
 B. U.S. Department of the Air Force. Air Force 
 Systems Command. "Reports on Production 
 of Aircraft, Missiles and Engines." (RCS: 
 HAF-AQX (Q) 7102.) Andrews AFB, Suit- 
 land, MD, monthly, unpublished. 
 
 C. U.S. Department of the Army. Headquarters, 
 U.S. Army Materiel Command. "End Item 
 Actual Delivery Schedule." Alexandria, VA, 
 monthly, unpublished. 
 
 D. U.S. Department of the Navy. Naval Air 
 Systems Command. "Missile Acceptance Re- 
 port." Washington, DC, monthly, unpub- 
 lished. 
 
 E. U.S. Department of the Na\^. Naval Sea Sys- 
 tems Command. "Ship Acceptance Report." 
 Washington, DC, monthly, unpublished. 
 
 F. U.S. Department of the Navy. Naval 
 Weapons Engineering Support Activity. "Air- 
 craft Engines Acceptance Report." Washing- 
 ton, DC, monthly, unpublished. 
 
 G. U.S. Department of the Na^ry. Naval 
 Weapons Engineering Support Ac- 
 tivity. "Monthly Aircraft Acceptance Report." 
 Washington, DC, monthly, unpublished. 
 
Government Transactions- 
 
 J^ovember 1988 69 
 
 19. Tennessee Valley Authority. Office of the Inspec- 
 tor General. Semi-Annual Report. Knoxville, TN: 
 TVA, semi-annually. 
 
 20. Tennessee Valley Authority. TVA Retirement Sys- 
 tem Board of Directors. TVA Retirement System 
 Annual Report. Knoxville, TN: TVA, annually. 
 
 21. United Nations. Department of International 
 Economic and Social Affairs. Monthly Bulletin 
 of Statistics. New York, NY: United Nations, 
 monthly. 
 
 22. U.S. Department of Agriculture. Agricultural 
 Marketing Service. Dairy Market Statistics: An- 
 nual Summary. Washington, DC: U.S. Govern- 
 ment Printing Office, annually. 
 
 23. U.S. Department of Agriculture. Agricultural Sta- 
 bilization and Conservation Service. Report of 
 Financial Condition and Operations of the Com- 
 modity Credit Corporation. Washington, DC: U.S. 
 Government Printing Office, annually. 
 
 24. U.S. Department of Agriculture. Food and Nutri- 
 tion Service. "Food Program Update." Washing- 
 ton, DC, monthly, unpublished. 
 
 25. U.S. Department of Agriculture. Forest Service. 
 "Timber Harvested Under Sales and Land Ex- 
 changes by Regions." Washington, DC, quarterly, 
 unpublished. 
 
 26. U.S. Department of Agriculture. National Agri- 
 cultural Statistics Service. Agricultural Prices. 
 Washington, DC: Agricultural Statistics Board of 
 Publications, monthly. 
 
 27. U.S. Department of the Air Force. Air Force Engi- 
 neering and Services Center. "Historical Air Force 
 Facility Costs." Tyndall Air Force Base, FL, an- 
 nually, unpublished. 
 
 28. U.S. Department of the Air Force. Headquarters, 
 Air Force Logistics Command. "Logair Commer- 
 cial Expenditure Data." Wright Patterson AFB, 
 Da)d;on, OH, quarterly, unpublished. 
 
 29. U.S. Department of the Air Force. Military Air- 
 lift Command. "Commercial Augmentation Ex- 
 penses." Scott Air Force Base, Belleville, IL, quar- 
 terly, unpublished. 
 
 30. U.S. Department of the Army. Military Traf- 
 fic Management Command. "Category Z." Falls 
 Church, VA, quarterly, unpublished. 
 
 31. U.S. Department of the Army. Military Traffic 
 Management Command. "Contract Longshore- 
 man's Extra Labor Rate." Falls Church, VA, quar- 
 terly, unpublished. 
 
 32. U.S. Department of the Army. Military Traffic 
 Management Command. "Defense Price Index Re- 
 port: Inland Traffic Price Data." Falls Church, 
 VA, quarterly, unpublished. 
 
 33. U.S. Department of the Army. Military Traffic 
 Management Command. "Fares Published in Of- 
 ficial North American Tariff." Falls Church, VA, 
 quarterly, unpublished. 
 
 34. U.S. Department of the Army. Military Traf- 
 fic Management Command. "Personal Property 
 Rates Per Hundred Weight." Falls Church, VA, 
 quarterly, unpublished. 
 
 35. U.S. Department of the Army. Military Traf- 
 fic Management Command. "Traffic Management 
 Progress Report." Falls Church, VA, quarterly, 
 unpublished. 
 
 36. U.S. Department of the Army. Office of the Chief 
 of Engineers. "Facilities Engineering and Hous- 
 ing Annual Summary of Operations." Washing- 
 ton, DC, annuall}', unpublished. 
 
 37. U.S. Department of Commerce. Bureau of the 
 Census. Current Construction Reports: Value of 
 New Construction Put In Place (C-30). Wash- 
 ington, DC: U.S. Government Printing Office, 
 monthly. 
 
 38. U.S. Department of Commerce. Bureau of the 
 Census. Federal Expenditures by State for Fiscal 
 Years. Washington, DC: U.S. Government Print- 
 ing Office, annually. 
 
 39. U.S. Department of Commerce. Bureau of the 
 Census. Shipments to Federal Government Agen- 
 cies. Washington, DC: U.S. Government Printing 
 Office, annually. (Last published in 1985.) 
 
 40. U.S. Department of Commerce. Bureau of Eco- 
 nomic Analysis. Corporate Profits: Profits Before 
 Tax, Profits Tax Liability, and Dividends. (BEA 
 Methodology Paper Series MP-2.) Washington, 
 DC: U.S. Government Printing Office, May 1985. 
 
 41. U.S. Department of Commerce. Bureau of Eco- 
 nomic Analysis. Foreign Transactions. (BEA 
 Methodology Paper Series MP-3.) Washington, 
 DC: U.S. Government Printing Office, May 1987. 
 
 42. U.S. Department of Commerce. Bureau of Eco- 
 nomic Analysis. "Implicit Price Deflators for Mil- 
 itary Construction." Survey of Current Business 
 63 (November 1983): 14-18. 
 
 43. U.S. Department of Commerce. Bureau of Eco- 
 nomic Analysis. "Improved Deflation of Purchases 
 of Computers." Survey of Current Business 66 
 (March 1986): 7-10. 
 
 44. U.S. Department of Commerce. Bureau of Eco- 
 nomic Analysis. Price Changes of Defense Pur- 
 chases of the United States. Washington, DC: U.S. 
 Government Printing Office, March 1979. 
 
 45. U.S. Department of Commerce. Bureau of Eco- 
 nomic Analysis. "Quality-Adjusted Price Indexes 
 for Computer Processors and Selected Peripheral 
 Equipment." Survey of Current Business 66 (Jan- 
 uary 1986): 41-50. 
 
 46. U.S. Department of Commerce. Bureau of Eco- 
 nomic Analysis. "U.S. International Transac- 
 tions." Quarterly in March, June, September, and 
 December issues of Survey of Current Business. 
 
70 Government Transactions. 
 
 ^November 1988 
 
 Washington, DC: U.S. Government Printing Of- 
 fice, monthly. 
 
 47. U.S. Department of Defense. Defense Communi- 
 cations Agency. "Communication Services Indus- 
 trial Fund." (H 670.) Washington, DC, quarterly, 
 unpublished. 
 
 48. U.S. Department of Defense. Defense Communi- 
 cations Agency. "Communication Services Indus- 
 trial Fund." Scott Air Force Base, Belleville, IL, 
 quarterly, unpublished. 
 
 49. U.S. Department of Defense. Office of the Actu- 
 ary. DOD Statistical Report on the Military Re- 
 tirement System. (DDM (A) 1375.) Arlington, VA: 
 U.S. Department of Defense, annually. 
 
 50. U.S. Department of Defense. Office of Civilian 
 Health and Medical Programs of the Uniformed 
 Services. "CHAMPUS Drug Phaseback Report." 
 (OCHM-065.) Aurora, CO, monthly, unpublished. 
 
 51. U.S. Department of Defense. Office of Civilian 
 Health and Medical Programs of the Uniformed 
 Services. "CHAMPUS Statistical Phaseback Re- 
 port." (OCHM-055.) Aurora, CO, monthly, un- 
 published. 
 
 52. U.S. Department of Energy. Energy Information 
 Administration. "Federal Agency Quarterly En- 
 ergy Use Report." Washington, DC, quarterly, un- 
 published. 
 
 53. U.S. Department of Energy. Energy Informa- 
 tion Administration. Monthly Energy Review. 
 Washington, DC: U.S. Government Printing Of- 
 fice, monthly. 
 
 54. U.S. Department of Energy. Office of Naval 
 Petroleum and Oil Shale Reserves. "Monthly 
 Sales Distribution of NPR Production." Washing- 
 ton, DC, monthly, unpublished. 
 
 55. U.S. Department of Energy. Office of the Strategic 
 Petroleum Reserve. "SPR Report." Washington, 
 DC, monthly, unpublished. 
 
 56. U.S. Department of Health and Human Services. 
 Social Security Administration. Monthly Benefit 
 Statistics: Summary Program Data. Washington, 
 DC: U.S. Government Printing Office, monthly. 
 
 57. U.S. Department of Health and Human Services. 
 Social Security Administration. Social Security 
 Bulletin: Annual Statistical Supplement. Wash- 
 ington, DC: U.S. Government Printing Office, 
 monthly. 
 
 58. U.S. Department of Housing and Urban Develop- 
 ment. Office of Housing. Financial Statements 
 and Program Highlights of the Federal Housing 
 Administration. Washington, DC: U.S. Depart- 
 ment of Housing and Urban Development, annu- 
 ally. 
 
 59. U.S. Department of Labor. Bureau of Labor 
 Statistics. CPI Detailed Report. Washington, DC: 
 U.S. Government Printing Office, monthly. 
 
 60. U.S. Department of Labor. Bureau of Labor 
 Statistics. Employment and Earnings. Wash- 
 
 ington, DC: U.S. Government Printing Office, 
 monthly. 
 
 61. U.S. Department of Labor. Bureau of Labor 
 Statistics. Employment and Wages. Washington, 
 DC: U.S. Government Printing Office, annually. 
 
 62. U.S. Department of Labor. Bureau of Labor 
 Statistics. Producer Prices and Price Indexes. 
 Washington, DC: U.S. Government Printing Of- 
 fice, monthly. 
 
 63. U.S. Department of Labor. Employment and 
 Training Administration. Unemployment Insur- 
 ance Financial Data 1938-1982. (ETA Handbook 
 394.) Washington, DC: U.S. Department of Labor, 
 1984. 
 
 64. U.S. Department of Labor. Employment and 
 Training Administration. "Unemployment Insur- 
 ance Weekly Claim Report." Washington, DC, 
 weekly, unpublished. 
 
 65. U.S. Department of Labor. Employment and 
 Training Administration. "Update to ETA Hand- 
 book 394." Washington, DC, annually, unpub- 
 lished. 
 
 66. U.S. Department of the Navy. Military Sealifl; 
 Command. "MSC Commercial Payments." Wash- 
 ington, DC, quarterly, unpublished. 
 
 67. U.S. Department of the Navy. MiHtary Sealifi; 
 Command. "Shipping Agreement^Contract Cost 
 Per M/T for Ocean Transportation, Breakbulk." 
 Washington, DC, quarterly, unpublished. 
 
 68. U.S. Department of the Navy. Military Sealifl 
 Command. "Shipping Agreement/Contract Cost 
 Per M/T for Ocean Transportation, Container." 
 Washington, DC, quarterly, unpublished. 
 
 69. U.S. Department of the Navy. Military Sealift 
 Command. "Statistical Report, Part 2." (MSC Re- 
 port 7700-2.) Washington, DC, annually, unpub- 
 lished. 
 
 70. U.S. Department of the Navy. Military Sealift 
 Command. "Summary of Time Chartered and 
 Contract Operated Ships." Washington, DC, quar- 
 terly, unpublished. 
 
 71. U.S. Department of the Navy. Navy Materiel 
 Transportation Office. "QuickTrans Cost Data." 
 Norfolk, VA, quarterly, unpublished. 
 
 72. U.S. Department of the Treasury. Bureau of Al- 
 cohol, Tobacco, and Firearms. Monthly Statistical 
 Release: Beer. Washington, DC: U.S. Department 
 of the Treasury, monthly. 
 
 73. U.S. Department of the Treasury. Bureau of Al- 
 cohol, Tobacco, and Firearms. Monthly Statistical 
 Release: Distilled Spirits. Washington, DC: U.S. 
 Department of the Treasury, monthly. 
 
 74. U.S. Department of the Treasury. Bureau of Al- 
 cohol, Tabacco, and Firearms. Monthly Statistical 
 Release: Tobacco Products. Washington, DC: U.S. 
 Department of the Treasury, monthly. 
 
 75. U.S. Department of the Treasury. Bureau of Gov- 
 ernment Financial Operations. Federal Aid to 
 
Government Transactions. 
 
 J^ovember 1988 
 
 71 
 
 States. (Comparable data is now included in Fed- 
 eral Expenditures by State for Fiscal Years, [ref. 
 38].) Washington, DC: U.S. Government Printing 
 Office, annually through 1982. 
 
 76. U.S. Department of the Treasury. Financial 
 Management Service. Daily Treasury Statement. 
 Washington, DC: U.S. Government Printing Of- 
 fice, daily. 
 
 77. U.S. Department of the Treasury. Financial Man- 
 agement Service. Monthly Treasury Statement of 
 Receipts and Outlays of the United States Govern- 
 ment (and unpublished detail). Washington, DC: 
 U.S. Government Printing Office, monthly. 
 
 78. U.S. Department of the Treasury. Financial Man- 
 agement Service. Treasury Bulletin. Washington, 
 DC: U.S. Government Printing Office, quarterly. 
 
 79. U.S. Department of the Treasury. Financial Man- 
 agement Service. Treasury Combined Statement 
 of Receipts, Expenditures, and Balances of the 
 United States. Washington, DC: U.S. Government 
 Printing Office, annually. (For fiscal years prior 
 to 1984.) 
 
 80. U.S. Department of the Treasury. Financial Man- 
 agement Service. United States Government An- 
 nual Report: Appendix. Washington, DC: U.S. 
 Government Printing Office, annually. (For fiscal 
 years after 1983.) 
 
 81. U.S. Department of Treasury. Internal Revenue 
 Service. Internal Revenue Report of Excise Taxes. 
 Washington, DC: Department of the Treasury, 
 quarterly. 
 
 82. U.S. Department of Treasury. Internal Revenue 
 Service. "Net Tax Refund Report: Nationwide 
 Consolidated Report." Washington, DC, monthly, 
 unpublished. 
 
 83. U.S. Department of Treasury. Internal Revenue 
 Service. Statistics of Income Bulletin. Washing- 
 ton, DC: U.S. Government Printing Office, quar- 
 terly. 
 
 84. U.S. Department of the Treasury. "Report on For- 
 eign Currencies Held by the U.S. Government." 
 Washington, DC, semi-annually, unpublished. 
 
 85. U.S. General Services Administration. Public 
 Buildings Service. Management Planning and 
 Evaluation Office. Summary Report of Real Prop- 
 erty Leased by the United States Throughout the 
 World. Washington, DC: U.S. Government Print- 
 ing Office, annually. 
 
 86. U.S. General Services Administration. Public 
 Buildings Service. Management Planning and 
 Evaluation Office. Summary Report of Real Prop- 
 erty Owned by the United States Throughout the 
 World. Washington, DC: U.S. Government Print- 
 ing Office, annually. 
 
 87. U.S. General Services Administration. Trans- 
 portation and Public Utilities Service. "Federal 
 Travel Regulations." Washington, DC, periodi- 
 cally, unpublished. 
 
 88. U.S. Postal Service. Department of the Con- 
 troller. Summary Financial and Operating State- 
 ments. Washington, DC: U.S. Postal Service, ev- 
 ery 4 weeks. 
 
 89. U.S. Postal Service. Postal Data Center. "Invoice 
 and Statement." (PS Form 1903-DZ.) Washington, 
 DC, quarterly, unpublished. 
 
 90. U.S. Postal Service. Postmaster General. Annual 
 Report of the Postmaster General. Washington, 
 DC: U.S. Postal Service, annually. 
 
 91. U.S. Railroad Retirement Board. Annual Report. 
 Chicago, IL: U.S. Railroad Retirement Board, an- 
 nually. 
 
 92. U.S. Veterans' Administration. Administrator of 
 Veterans Affairs. Annual Report. Washington, 
 DC: U.S. Government Printing Office, annually. 
 
 93. U.S. Veterans' Administration. Office of Budget 
 and Finance. "Statement of Ledger Assets, In- 
 come, and Disbursements, Veterans Life Insur- 
 ance." Washington, DC, monthly, unpublished. 
 
Appendix II-A 
 
 Definitions of the Major Types of 
 National Defense Purchases of Goods and Services 
 
 Following are brief definitions of the BEA categories of defense purchases. These categories fall uniquely into 
 one of the four major product types of final demand: Durable goods, nondurable goods, services, and structures. 
 These categories differ from the similarly named appropriation categories because the latter may include more 
 than one of the major product types. For example, the Department of Defense (DOD) appropriation for aircraft 
 contains some purchases of engineering services that BEA classifies in services rather than in durable goods. 
 
 Durable goods 
 
 Aircraft: New aircraft, both fixed-wing and rotary 
 wing, as well as spare and repair parts, modifi- 
 cation kits, and support equipment. 
 
 Missiles: New missiles, launching devices, guidance 
 radars, and shelters, as well as space devices such 
 as satellites, boosters, and the space shuttle. Also 
 included are spare and repair parts, modification 
 kits, and support equipment. 
 
 Ships: New ship construction and conversion. This 
 category also includes foreign military sales of 
 ships during their period of construction. 
 
 Vehicles: New combat and noncombat vehicles as well 
 as spare and repair parts, and modification kits. 
 
 Electronic equipment: Nonairborne communication 
 and electronic equipment. Items include en- 
 cryption equipment, handheld radios, radar sys- 
 tems, satellite ground stations, tactical communi- 
 cations equipment, sonars, reconnaissance equip- 
 ment, and base communication and electronic 
 equipment. 
 
 Other military equipment: Other items of equip- 
 ment that are uniquely military in nature. Among 
 the items included are airfield lights, photo- 
 graphic equipment, electronic test equipment, bio- 
 logical and chemical defense equipment, night vi- 
 sion goggles, sonobuoys, and small arms. 
 
 Other durable goods: Durable goods that are not 
 uniquely military in nature. This category in- 
 cludes purchases of general purpose computers 
 and related equipment. Also included in this cat- 
 egory are purchases of durable goods for the mili- 
 tary assistance program, sales of durable goods by 
 DOD, and purchases of durable goods for defense 
 by agencies except DOD. 
 
 Nondurable goods 
 
 Petroleum products: Refined petroleum products 
 such as jet fuels and heating oil. 
 
 Ammunition: Bombs, cartridges, torpedoes, mines, 
 demolition materials, and other nonnuclear ex- 
 plosive products. Also included are the various 
 
 load, assemble, and pack services performed on 
 purchased components. 
 
 Other nondurable goods: Food, clothing, printing, 
 medical supplies, cleaning supplies, and other 
 nondurable goods. Also included are sales of non- 
 durable goods by DOD and purchases of non- 
 durable goods for the military assistance program. 
 
 Compensation of employees 
 
 Military compensation: Wages and salaries and 
 supplements to wages and salaries paid to mil- 
 itary employees of DOD. This category also in- 
 cludes pay of the military reserve but does 
 not include the Coast Guard and the National 
 Oceanic and Atmospheric Administration except 
 in wartime. 
 
 Civilian compensation: Wages and salaries and 
 supplements to wages and salaries paid to civil- 
 ian employees of DOD. This category also includes 
 employees in defense activities of non-DOD agen- 
 cies; it excludes employees of DOD civil functions 
 such as the Corps of Engineers. The direct and in- 
 direct hire of foreign nationals are excluded from 
 this category and are included in the personnel 
 support category. 
 
 Other services 
 
 Contractual research and development (R&D): 
 
 Research, development, and test and evaluation 
 performed by the private sector under contract to 
 DOD. Also included are atomic energy R&D for de- 
 fense funded by the Department of Energy (DOE) 
 and Federal research centers operated by the pri- 
 vate sector, such as the Jet Propulsion Laboratory. 
 R&D performed by DOD employees is excluded. 
 
 Installation support: Services related to the op- 
 eration and maintenance of military installa- 
 tions. Among these services are communications, 
 postage, utilities, equipment maintenance and 
 rental, property maintenance, housekeeping ser- 
 vices, and contractor-operated installations. 
 
 73 
 
74 Government Transactions. 
 
 Jsfovember 1988 
 
 Weapons support: Depot maintenance, weapons 
 modification services, engineering support, sys- 
 tem management, and production base support. 
 Spare parts and modification kits are included in 
 purchases of goods; only purchases of services are 
 included in this category. 
 
 Personnel support: Consulting services, training, 
 education, and direct and indirect hire of foreign 
 nationals. 
 
 Transportation of materiel: Care and movement of 
 goods by water, rail, truck, and air. Also included 
 are the rental of trucks and other transportation 
 equipment and warehousing fees. 
 
 Travel of persons: Care and movement of DOD mil- 
 itary and civilian employees. Included are tickets 
 for all modes of travel, per diem, taxi fares, au- 
 
 tomobile rental, and mileage allowances for pri- 
 vately owned vehicles. 
 Other: Services for the military assistance program, 
 sales of services by DOD, and purchases of defense 
 services by non-DOD agencies. 
 
 Structures 
 
 Military facilities: New construction of facilities 
 built to assist, enhance, or house the activities of 
 the military services. 
 
 Other structures: Family housing construction, net 
 purchases of existing structures, and atomic en- 
 ergy defense construction funded by the Depart- 
 ment of Energy. 
 
Appendix II-B 
 
 Federal Government Enterprises 
 
 Commodity Credit Corporation 
 
 U.S. Postal Service 
 
 Insurance enterprises: 
 
 Credit Union Share Insurance Fund 
 
 Federal Deposit Insurance Corporation 
 
 Federal Home Loan Bank Board Revolving Fund 
 
 Federal Housing Administration Fund 
 
 Federal Savings and Loan Insurance Corporation 
 
 Overseas Private Investment Corporation 
 
 Pension Benefit Guaranty Corporation 
 
 Electric power enterprises: 
 
 Bonneville Power Administration 
 
 Lower Colorado River Basin Development Fund 
 
 Southeastern Power Administration 
 
 Southwestern Power Administration 
 
 Tennessee Valley Authority 
 
 Upper Colorado River Basin Fund 
 
 Western Area Power Administration Marketing Fund 
 
 All other enterprises: 
 
 Veterans Canteen Service 
 Government Printing Office Sales Fund 
 Military Post Exchanges and Restaurants 
 Panama Canal Commission 
 
 Note. — The titles used in this list of enterprises are those used in the Budget of the United 
 States Government: Appendix. 
 
 75 
 
Part III. 
 State and Local Government Transactions 
 
 Overview of Estimating 
 Procedures 
 
 Annual estimates 
 
 The annual NIPA estimates of State and local gov- 
 ernment receipts and expenditures are based primar- 
 ily on compilations of data on the finances of State 
 and local governments. These compilations are pre- 
 pared by the Bureau of the Census from the quinquen- 
 nial census of governments, annual surveys of govern- 
 ment finances and employment, annual surveys of the 
 finances of public employee retirement systems, and 
 quarterly surveys of tax revenues. Other sources in- 
 clude the construction statistics prepared by the Bu- 
 reau of the Census, data on transfer payments from 
 various agencies of the U.S. Department of Health 
 and Human Services (HHS), and the employment and 
 wage and salary statistics prepared by the Bureau of 
 Labor Statistics (BLS). 
 
 The derivation of the annual estimates of State and 
 local government receipts and expenditures on a NIPA 
 basis starts with the financial data in the Census of 
 Governments [24], for years ending in 2 or 7, and in 
 Governmental Finances [29] for other years. Here- 
 after, these publications are cited as COG IGF when 
 the context is a general description of methodology and 
 as COG or GF when information specific to only one 
 of the publications is referenced. 
 
 Data from GF are available with a 2-year lag and are 
 incorporated in the third annual — or July — revision of 
 the NIPA estimates. Data from COG are available 
 with a 3-year lag and replace the GF data for cen- 
 sus years in the NIPA comprehensive revisions. Esti- 
 mates for the second annual revision incorporate both 
 preliminary tabulations of unpublished GF data and 
 BEA extrapolations of the GF components used; esti- 
 mates for the first annual revision incorporate BEA 
 extrapolations of the GF components used. In all in- 
 stances, the procedure for using the COG IGF data is 
 the same. 
 
 Tables III-l and III-2 illustrate the steps involved 
 in deriving the NIPA estimates of receipts and expen- 
 ditures, respectively, from these reports. The tables 
 are an amplification of NIPA table 3.18, which relates 
 
 the NIPA estimates of total receipts and expenditures 
 to the COG IGF data. Like NIPA table 3.18, tables 
 III-l and III-2 are for a fiscal year, the basis on which 
 the COG IGF data are tabulated. For the purposes of 
 these tables, the other source data, which are quar- 
 terly and monthly, are placed on a fiscal year basis. 
 In the actual derivation of the NIPA estimates, which 
 is described in the next section, the COG IGF data are 
 placed on a calendar year basis. ^ 
 
 In tables III-l and III-2, the first eight columns il- 
 lustrate the major steps in the derivation of total re- 
 ceipts and expenditures on a NIPA basis. The first 
 column shows the major categories of the COG IGF 
 data as published.^ The next two columns record the 
 replacement of certain of the COG IGF data with alter- 
 native source data that are more appropriate for the 
 NIPA's; the fourth column shows the result of this re- 
 placement. The next four columns record adjustments 
 made to the source data used for the NIPA's; these ad- 
 justments are for coverage, netting and gi'ossing, fiscal 
 year, and timing and other reasons. The ninth column 
 shows the estimates of total NIPA receipts and expen- 
 ditures that result from this process. The remaining 
 columns show the distribution of these totals among 
 the NIPA components of receipts and expenditures. 
 The year used for illustration in these tables is 1982, 
 the most recent year for which the census of govern- 
 ments is available; therefore, COG data are shown in 
 the first column. For a noncensus year, GF data would 
 be shown in the first column; the derivation would be 
 the same. 
 
 1. The data included in the COG IGF report for a given year are for fiscal 
 years ending at various dates during the 12 months ending June 30 of the 
 year specified. 
 
 Because most State governments and State and local government enter- 
 prises have fiscal years ending on June 30, for these entities the conversion 
 of the COGIGF data to a calendar year basis is accomplished by a 2-year 
 average. 
 
 Because local governments have fiscal years ending at various dates during 
 the year, for these entities the conversion of the COG IGF data to a calendar 
 year basis involves weights based on periodic Census Bureau tabulations by 
 ending month of the fiscal year. Denoting the fiscal year running from July 1 
 of calendar year t — 1 to June 30 of calendar year t as FY{t) and the calendar 
 year t as CY(t), then 
 
 CY{t) - ,33Fy(«) + .65Fy(« -I- 1) + .02FY{t + 2). 
 
 For 1962 and earlier years, the COGIGF data on local governments cover 
 fiscal years ending during the calendar year and are assumed to be on a 
 calendar year basis, except for school districts, which are lagged six months. 
 
 2. Lines 10 through 16 of column 1 of table III-l are BEA groupings of 
 COGIGF detail. The derivation of the entries in these lines is shown in 
 Appendix III-A. 
 
 77 
 
78 Government Transactions. 
 
 J<iovemher 1988 
 
 Table III-1.— Derivation of State and Local Government Receipts in the National Income and Product Accounts (NIPA's) from Census of 
 
 Governments and Other Sources, FY 1982 
 
 [Billions of dollars] 
 
 
 Census of Governments (COG) categories 
 
 
 
 
 Replacement 
 
 with 
 
 
 
 Adjustments 
 
 
 
 Reve- 
 nues 
 
 (1) 
 
 
 Equals: 
 Used for 
 NIPA's 
 
 (4) 
 
 Coverage 
 (5) 
 
 Netting 
 
 and 
 grossing 
 
 (6) 
 
 Fiscal 
 year 
 
 (7) 
 
 Timing 
 and other 
 
 (8) 
 
 Equals: 
 
 NIPA 
 
 receipts 
 
 (9) 
 
 Line 
 
 ex 
 
 .ess: 
 COG 
 :lusions 
 
 (2) 
 
 Plus: 
 Replace- 
 ments 
 
 (3) 
 
 1 
 
 Total 
 
 547.7 
 
 266.4 
 50.7 
 15.0 
 
 78.8 
 14,8 
 82.1 
 24.9 
 
 104.0 
 13.0 
 .7 
 15.0 
 25.8 
 .1 
 49.4 
 
 34.0 
 
 56.0 
 n.a. 
 18.8 
 2.5 
 34.7 
 
 87.3 
 
 n.a. 
 
 335.4 
 
 248.1 
 50.7 
 15.0 
 
 78,8 
 
 
 82,1 
 21.5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 87.3 
 
 
 
 338.7 
 
 248.5 
 51.0 
 14.0 
 
 78.8 
 
 
 83,6 
 21.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 90.2 
 
 
 
 551.0 
 
 266.8 
 
 51.0 
 14.0 
 
 78.8 
 14.8 
 83.5 
 24,7 
 
 104,0 
 13.0 
 
 .7 
 15.0 
 25.8 
 
 .1 
 49.4 
 
 34.0 
 
 56,0 
 
 
 18,8 
 
 2,5 
 34.7 
 
 90.2 
 
 
 
 -18.6 
 
 
 
 
 
 
 
 
 
 
 -1.7 
 
 
 
 -.4 
 
 
 
 
 
 
 -1.3 
 
 
 
 -16.9 
 
 
 
 '-1.1 
 
 
 
 '-15.8 
 
 
 
 
 
 -94.7 
 
 
 
 
 
 
 
 
 
 
 -54.2 
 -13.0 
 
 -.3 
 -15.0 
 -25.8 
 
 -.1 
 
 
 
 -34,0 
 
 -5.5 
 
 14.8 
 
 -17.7 
 
 -2.5 
 
 
 
 -5.8 
 
 M.7 
 
 0.7 
 
 .3 
 
 
 
 
 
 
 .2 
 
 
 .1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 .5 
 
 
 
 
 
 -0.9 
 
 -.4 
 
 437.5 
 
 266.7 
 51 
 
 2 
 
 Taxes 
 
 3 
 
 Individual income 
 
 4 
 
 Corporation net income 
 
 -.4 
 
 
 13.6 
 
 78,8 
 15,0 
 83 5 
 
 5 
 
 Sales and gross receipts: 
 State 
 
 6 
 
 Local 
 
 7 
 
 Property 
 
 
 8 
 
 O^her 
 
 
 24 8 
 
 9 
 
 Charges and miscellaneous general revenue 
 
 -.5 
 
 47.6 
 
 
 10 
 
 Government sales 
 
 11 
 
 Sale of property 
 
 
 
 
 12 
 
 Enterprise revenue 
 
 
 
 
 13 
 
 Interest earnings 
 
 
 
 
 14 
 
 Dividends received 
 
 
 
 
 15 
 
 Other 
 
 -.5 
 
 47.6 
 
 16 
 
 Utility and liquor store revenue 
 
 17 
 
 Insurance trust revenue 
 
 
 34 1 
 
 18 
 
 Employer contributions for government employee retirement funds 
 
 
 14 8 
 
 19 
 
 Interest received 
 
 
 
 
 20 
 
 Dividends received 
 
 
 
 
 21 
 
 Other 
 
 
 19 4 
 
 22 
 
 Intergovernmental revenue 
 
 
 84 4 
 
 23 
 
 Medical vendor payments to public hospitals 
 
 
 4 7 
 
 
 
 
 
 
 Census of Governments (COG) categories 
 
 NIPA 
 receipts 
 
 (9) 
 
 NIPA components in which classified 
 
 Line 
 
 Personal tax and nontax receipts 
 
 Corporate 
 profits tax 
 accruals 
 
 (13) 
 
 Indirect 
 business 
 tax and 
 
 nontax 
 accruals 
 
 (14) 
 
 Contribu- 
 tions for 
 
 social 
 insurance 
 
 (15) 
 
 Federal 
 grants-in- 
 aid 
 
 (16) 
 
 Total 
 (10) 
 
 Income 
 taxes 
 
 (11) 
 
 Other taxes 
 
 and 
 
 nontax es 
 
 (12) 
 
 1 
 
 Total 
 
 437.5 
 
 266.7 
 51.0 
 13.6 
 
 78.8 
 15.0 
 83.5 
 24,8 
 
 47.6 
 
 
 
 
 
 
 47.6 
 
 100.1 
 
 59.5 
 
 50,0 
 
 
 
 
 
 
 1.3 
 8.1 
 
 35.9 
 
 
 
 
 
 
 
 
 
 
 35.9 
 
 50.0 
 
 50,0 
 50.0 
 
 50.1 
 
 9.5 
 
 14.5 
 
 14.5 
 
 1.0 
 
 13.6 
 
 204.4 
 19^7 
 
 34.1 
 
 
 
 84.4 
 
 2 
 
 Taxes 
 
 
 
 3 
 
 
 
 4 
 
 
 
 
 
 
 5 
 
 Sales and gross receipts: 
 State 
 
 
 
 78.8 
 15.0 
 82.2 
 16.7 
 
 11.7 
 
 
 
 6 
 
 
 
 
 
 
 
 7 
 
 
 
 1.3 
 8.1 
 
 35.9 
 
 
 
 
 8 
 
 Other 
 
 
 
 
 
 9 
 
 
 
 
 
 
 
 
 10 
 
 Government sales 
 
 
 
 
 11 
 
 Sale of property . . 
 
 
 
 
 
 
 
 12 
 
 
 
 
 
 
 
 
 13 
 
 Interest earnings ... . 
 
 
 
 
 
 
 
 14 
 
 
 
 
 
 
 
 
 15 
 
 Other 
 
 
 35.9 
 
 
 11.7 
 
 
 
 16 
 
 
 
 
 
 
 17 
 
 
 34.1 
 
 14.8 
 
 
 
 
 
 19.4 
 
 84.4 
 
 4 7 
 
 
 
 
 
 
 
 
 
 4.7 
 
 
 
 
 
 34.1 
 14.8 
 
 
 18 
 
 
 
 
 
 
 
 19 
 
 interest received 
 
 
 
 
 
 
 
 
 
 20 
 
 
 
 
 
 
 
 21 
 
 Other 
 
 
 
 
 19.4 
 
 
 22 
 
 
 
 
 
 84,4 
 
 23 
 
 Medical vendor payments to public hospitals 
 
 
 4.7 
 
 
 
 
 
 
 
 
 _ 
 
 
 . 
 
 
 
 
 
 
 
 
 1. Receipts of the unerrployment insurance system, which are treated in Census data as re- 
 ceipts to Slates, but as Federal receipts in the NIPA's, 
 
 2. Inclusion of payments to public hospitals on behalf of indigents through medicaid and similar 
 
 programs. Such payments are excluded from Census receipts and expenditures, but are included 
 in fJ^lPA receipts and expenditures. 
 
 Note. — Governmental Finances (GF) data are used in noncensus years. 
 
Government Transactions. 
 
 JNovemher 1988 
 
 79 
 
 Table III-2. — Derivation of State and Local Government Expenditures in the National Income and Product Accounts (NIPA's) from Census of 
 
 Governments and Otfier Sources, FY 1982 
 
 [Billions of dollars] 
 
 
 Census of Governments {COG) categories 
 
 Expendi- 
 tures 
 
 (1) 
 
 Replacement with 
 other sources 
 
 Equals: 
 Used for 
 NIPA's 
 
 (4) 
 
 Adjustments 
 
 Equals: 
 NIPA 
 
 expendi- 
 tures 
 
 (9) 
 
 
 Coverage 
 (5) 
 
 Netting 
 
 and 
 grossing 
 
 (6) 
 
 Fiscal 
 year 
 
 (7) 
 
 Timing 
 and other 
 
 (8) 
 
 Line 
 
 tess. 
 COG 
 
 exclusions 
 
 (2) 
 
 Plus: 
 Replace- 
 ments 
 
 (3) 
 
 1 
 
 Total 
 
 524.8 
 
 375.1 
 
 ' 190.3 
 
 184.8 
 
 66.8 
 53.7 
 13.1 
 
 17.3 
 
 24.3 
 
 39.5 
 
 1.8 
 
 n.a. 
 
 n.a. 
 n.a. 
 n.a. 
 n.a. 
 
 n.a. 
 n.a. 
 
 n.a. 
 n.a. 
 n.a. 
 
 248.2 
 
 178.0 
 
 178.0 
 
 
 
 53.7 
 
 53.7 
 
 
 
 14.7 
 
 
 
 
 
 1.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 238.7 
 
 177.5 
 
 177.5 
 
 
 
 44.0 
 
 44.0 
 
 
 
 15.1 
 
 
 
 
 
 2.1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 515.3 
 
 374.6 
 189.8 
 184.8 
 
 57.1 
 44.0 
 13.1 
 
 17.8 
 
 24.3 
 
 39.5 
 
 2.1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 -20.3 
 
 3.0 
 
 
 
 '3.0 
 
 -2.7 
 
 
 -2.7 
 
 
 
 
 
 -18.1 
 
 
 
 
 
 
 
 
 
 
 
 --.5 
 
 
 '3.0 
 
 
 
 
 
 94.7 
 
 14.8 
 
 
 
 14.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 '4.7 
 
 13.0 
 
 .3 
 
 15.0 
 
 34.0 
 
 17.7 
 25.8 
 
 2.5 
 
 .1 
 
 5.8 
 
 1.2 
 
 .6 
 
 .6 
 
 -.1 
 
 
 
 -.1 
 
 
 .6 
 .3 
 
 
 
 
 
 
 
 
 
 
 .9 
 -.6 
 
 
 
 
 
 0.4 
 
 .8 
 .8 
 
 
 
 -.1 
 
 -.1 
 
 
 401.9 
 
 2 
 
 
 393.8 
 
 3 
 
 Salaries and wages 
 
 190 6 
 
 4 
 
 Other current operation 
 
 203.2 
 
 5 
 
 Capital outlay 
 
 54 3 
 
 6 
 
 
 43.9 
 
 7 
 
 Equipment, land, and existing structures 
 
 10 4 
 
 8 
 
 Assistance and subsidies 
 
 17 8 
 
 9 
 
 Interest on debt 
 
 
 24 9 
 
 10 
 
 Insurance trust benefits and repayments 
 
 
 21 7 
 
 11 
 
 
 
 2 1 
 
 12 
 
 Plus' Medical vendor payments to public hospitals 
 
 
 4 7 
 
 13 
 
 Less: COG revenue reclassified as NIPA expenditures: 
 
 .1 
 
 13 1 
 
 14 
 
 Sale of properly 
 
 3 
 
 15 
 
 Enterprise revenue 
 
 
 15 
 
 16 
 
 
 .1 
 
 33 6 
 
 17 
 
 Interest recerved: 
 Insurance trust 
 
 18 6 
 
 18 
 
 Other 
 
 
 28 2 
 
 19 
 
 Dividends received: 
 Insurance trust 
 
 
 2 5 
 
 20 
 
 Other 
 
 
 .1 
 
 21 
 
 Intergovernmental revenue (housing and transit subsidies) 
 
 
 5 8 
 
 
 
 
 
 
 Census ot Governments {COG) categories 
 
 Equals: 
 NIPA 
 
 expendi- 
 tures 
 
 (9) 
 
 
 
 NIPA 
 
 components 
 
 in which classified 
 
 
 
 Line 
 
 Purchases of goods and services 
 
 Transfer 
 payments 
 
 (14) 
 
 Net 
 
 interest 
 paid 
 
 (15) 
 
 Less: 
 Dividends 
 received 
 
 (16) 
 
 Subsidies 
 
 
 Total 
 (10) 
 
 Compen- 
 sation 
 
 (11) 
 
 Structures 
 (12) 
 
 Other 
 (13) 
 
 surpl. of 
 govt. ent. 
 
 (17) 
 
 1 
 
 Total 
 
 401.9 
 
 393.8 
 190.6 
 203.2 
 
 54.3 
 43.9 
 10.4 
 
 17.8 
 
 24.9 
 
 21.7 
 
 2.1 
 
 4.7 
 
 13.1 
 
 .3 
 
 15.0 
 
 33.6 
 
 18.6 
 28.2 
 
 2.5 
 
 .1 
 
 5.8 
 
 356.3 
 
 315.4 
 177.5 
 137.9 
 
 54.3 
 43.9 
 10.4 
 
 218.2 
 
 218.2 
 
 177.5 
 
 40.7 
 
 
 
 45.1 
 
 
 
 93.0 
 
 97.2 
 
 76.4 
 
 30.2 
 
 21.9 
 
 
 
 -2.7 
 
 
 
 -6.1 
 
 2 
 
 Current operation 
 
 48.2 
 
 3 
 
 
 13.1 
 
 4 
 
 
 
 97.'2 
 
 8.9 
 
 30.2 
 
 
 
 
 35.1 
 
 5 
 
 
 45.4 
 43.9 
 
 1.5 
 
 
 
 
 
 
 
 6 
 
 
 
 7 
 
 
 
 8.9 
 
 
 
 
 
 8 
 
 Assistance ar)d subsidies 
 
 
 17.8 
 
 
 
 
 9 
 
 
 
 
 
 
 24.9 
 
 
 
 10 
 
 Insurance trust benefits and reoavments 
 
 
 
 
 
 21.7 
 2.1 
 4.7 
 
 
 
 11 
 
 Intergovernmental expenditures 
 
 
 
 
 
 
 
 
 
 12 
 
 
 
 
 
 
 
 
 
 
 13 
 
 Less: COG revenue reclassified as NIPA expenditures: 
 Government sales 
 
 13.1 
 .3 
 
 
 
 13.1 
 
 
 
 
 14 
 
 Sale of property 
 
 
 .3 
 
 
 
 
 
 15 
 
 Enterprise revenue 
 
 
 
 
 
 
 150 
 
 16 
 
 Utility and liquor store revenue 
 
 
 
 
 
 
 
 
 33 6 
 
 17 
 
 Interest received: 
 
 
 
 
 
 
 18.6 
 28.2 
 
 
 
 18 
 
 Other 
 
 
 
 
 
 
 
 
 19 
 
 Insurance trust 
 
 
 
 
 
 
 2.5 
 .1 
 
 
 20 
 
 Other 
 
 
 
 
 
 
 
 
 21 
 
 
 
 
 
 
 
 
 
 5.8 
 
 
 
 
 
 
 
 
 
 
 
 1. The wages and salaries exhibit is $191.6 billion. However, COG excludes from current oper- 
 ations force-account wages and salaries for new construction. BEA estimates the force-account 
 component of the exhibit is $1.3 billion, leaving $190.3 billion within current operations. 
 
 2. An imputation by BEA of interest earnings and an equal payment for services rendered by 
 financial institutions. 
 
 3. Benefit payments by the Unemployment Insurance System, which are treated in Census data 
 as State payments, but as Federal payments in the NIPA's. 
 
 4. A BEA estimate of nonoperating receipts included in Census electric utility income. 
 
 5. Inclusion of payments to public hospitals on behalf of indigents through Medicaid and similar 
 programs. Such payments are excluded from Census expenditures and receipts, but are included 
 in NIPA expenditures and receipts. 
 
 Note. — Governmental Finances {GF) data are used in noncensus years. 
 
80 Government Transactions. 
 
 JNovember 1988 
 
 Derivation of receipts 
 
 Replacement of COG data with alternative 
 source data. — For several components of COG rev- 
 enue in table III-l, alternative source data are more 
 appropriate for the NIPA estimates either because 
 they are consistent with estimates of similar trans- 
 actions elsewhere in the NIPA's, because they provide 
 more detail on types of receipts, or because they pro- 
 vide monthly or quarterly observations that permit a 
 more precise assignment of receipts to a given time 
 period. The COG revenue data that are replaced and 
 their replacements are shown in the second and third 
 columns of table III-l. The fourth column of the ta- 
 ble shows the resulting data — the starting point for 
 the NIPA estimates. 
 
 Most COG taxes are replaced by tax data from the 
 Quarterly Summary of Federal, State, and Local Tax 
 Revenue {Quarterly Summary) [31] because the latter 
 are for a specific quarter and can be summed to a stan- 
 dard fiscal or calendar year (lines 3, 4, 5, 7, and 8). 
 A replacement is not made for local taxes other than 
 property taxes and income taxes because these taxes 
 are not well covered in the Quarterly Summary. COG 
 intergovernmental revenues, which are largely Fed- 
 eral Government payments to State and local govern- 
 ments, are replaced by an estimate of Federal grants- 
 in-aid derived from Federal budget documents [57] 
 (line 22). 
 
 Adjustments. — Adjustments to the source data 
 used for the NIPA's for coverage, for netting and 
 grossing, for fiscal year, and for other reasons (pri- 
 marily timing), are shown in the next four columns 
 of table III-l. Coverage adjustments arise because 
 COG includes, but the NIPA's exclude, transactions 
 in financial assets, transactions in land (including oil 
 bonuses), and the transactions of the unemployment 
 insurance system (a State program in COG but a Fed- 
 eral program in the NIPA's). Netting and grossing 
 adjustments are made for two types of transactions: 
 Those COG revenue items that are recorded as offsets 
 to expenditures in the NIPA's (netting) and those in- 
 tragovernmental items that COG excludes from both 
 revenues and expenditures (grossing). For this table, 
 adjustments are needed to place the COG data for lo- 
 cal governments on a common fiscal year ending June 
 30. In addition, there are several other adjustments 
 to the source data used for the NIPA's; for the most 
 part, they reflect timing. 
 
 Coverage adjustments, shown in the fifth column of 
 table III-l, are made to the following categories of COG 
 revenues: (1) Revenue from the sale of land (including 
 oil bonuses) and revenue from financial transactions 
 are subtracted from COG charges and miscellaneous 
 general revenue (lines 11 and 15), and (2) the interest 
 receipts of the unemployment insurance system and 
 unemployment taxes collected by the States are sub- 
 tracted from insurance trust revenues (lines 19 and 
 21). 
 
 Netting adjustments, shown in the sixth column of 
 table III-l, are made to the following categories of 
 COG revenues for items that are recorded as offsets 
 to expenditures in the NIPA's: (1) Government sales, 
 sale of property, enterprise revenue, interest earn- 
 ings, and dividends received are subtracted from COG 
 charges and miscellaneous general revenue Gines 10- 
 14); (2) COG utility and liquor store revenue, which 
 also are enterprise revenue, are subtracted (line 16); 
 
 (3) interest and dividends received are subtracted from 
 COG insurance trust revenue (lines 19 and 20); and 
 
 (4) subsidies — Federal housing and transit subsidies 
 paid to State and local government enterprises — are 
 subtracted from intergovernmental revenue (line 22). 
 These items are also subtracted from expenditures in 
 table III-2. 
 
 Grossing adjustments, shown in the sixth column 
 of table III-l, are made in the NIPA's for items that 
 COG excludes from revenues (and expenditures) as in- 
 tragovernmental: (1) Certain employer contributions 
 to State and local employee retirement systems (line 
 18) are added to COG insurance trust revenue, and 
 (2) intragovemmental payments to public hospitals for 
 medical assistance on behalf of indigents — medicaid — 
 (line 23) are added to receipts. These items are also 
 added to expenditures in table III-2. 
 
 Fiscal year adjustments are shown in the seventh 
 column of table III-l for local sales and gross receipts 
 taxes (line 6), local other taxes (line 8), and other in- 
 surance trust revenue (line 21). 
 
 Timing and other adjustments to the source data 
 used for the NIPA's are shown in the eighth column of 
 table III-l. In the Quarterly Summary, which replaces 
 COG data, taxes paid by corporations are recorded on 
 a cash basis. In the NIPA's, corporate profits taxes 
 are recorded on an accrual basis, and the difference be- 
 tween the two bases is entered as a timing adjustment 
 in column 8 (line 4). Similar adjustments are made for 
 State general sales and motor fiael taxes, which are 
 also from the Quarterly Summary, to put them on the 
 appropriate NIPA timing basis (line 5). In addition, 
 because the quarterly interpolation is carried out be- 
 tween calendar year totals in the actual preparation of 
 the NIPA estimates, the estimates for the four quar- 
 ters of the fiscal year may not sum to the entry in col- 
 umn 4. Thus, an adjustment for these differences is 
 required for table III-l; it is entered in column 8. The 
 only entry is that for other charges and miscellaneous 
 general revenue (line 15). 
 
 Distribution of the adjusted data into NIPA 
 receipts components. — The NIPA estimates of total 
 State and local government receipts that result from 
 this process are shown in the ninth column of table III- 
 1. The distribution of total NIPA receipts into the ap- 
 propriate NIPA components is shown in the remaining 
 columns. 
 
 Most individual income taxes are distributed to per- 
 sonal tax and nontax receipts. A small part is recorded 
 as corporate profits taxes because the Quarterly Sum- 
 
Government Transactions. 
 
 J^ovember 1988 
 
 81 
 
 mary includes local corporate profits taxes in local in- 
 dividual income taxes. Property taxes, other taxes, 
 and other charges and miscellaneous general revenue 
 are distributed between personal tax and nontax re- 
 ceipts and indirect business tax and nontax accruals. 
 Insurance trust revenue and intergovernmental rev- 
 enue become contributions for social insurance and 
 Federal grants-in-aid, respectively. 
 
 Derivation of expenditures 
 
 Replacement of COG data with alternative 
 source data. — ^As was the case for receipts, several 
 components of COG expenditures are replaced by al- 
 ternative source data. The COG expenditures data 
 that are replaced and their replacements are shown 
 in the second and third columns of table III-2. The 
 fourth column of the table shows the data that are the 
 starting point for the NIPA estimates. 
 
 The salaries and wages component of COG expen- 
 ditures for current operation (line 3) is replaced with 
 data from BLS tabulations of employment and wages 
 reported by employers covered by State unemployment 
 insurance programs [50, 51] because the BLS tabu- 
 lations are consistent with the wage and salary esti- 
 mates used elsewhere in the NIPA's. In COG capital 
 outlay, expenditures for new construction (line 6) are 
 replaced with monthly data on new construction from 
 Census Bureau Current Construction Reports [26] and 
 annual Department of Transportation data on high- 
 way construction [54]. These data are available by 
 type of construction and are on a put-in-place basis, 
 the timing basis used in the NIPA's, unlike the COG 
 construction expenditures, which are reported on an 
 expenditures basis. In COG assistance and subsidies 
 expenditures (line 8), the estimates for various assis- 
 tance programs are replaced with data from the HHS 
 [40, 41, 42, 44, 45]; these data are available monthly 
 rather than annually, and (for Federally assisted pro- 
 grams) are a complete count rather than a sample 
 survey. For the same reasons, COG State intergov- 
 ernmental payments to the Federal Government (line 
 11), which are largely payments of supplemental se- 
 curity income, are replaced by HHS data [46]. 
 
 Adjustments. — ^Adjustments to the source data 
 used for the NIPA's for coverage, for netting and gross- 
 ing, for fiscal year, and for other reasons, primarily 
 timing, are shown in the next four columns of table III- 
 2. For most of them, the nature of the adjustment and 
 the reason for it has already been discussed. In addi- 
 tion to the types of coverage adjustments mentioned 
 for receipts (land, financial assets, and the unemploy- 
 ment insurance system), the NIPA's include imputa- 
 tions for certain transactions not present in COG. The 
 specific imputations are the imputed interest paid by 
 depository institutions to State and local governments 
 (as interest received) and purchases by State and local 
 governments of services furnished without payment by 
 depository institutions — that is, financial intermedi- 
 
 aries except life insurance carriers and private non- 
 insured pension funds. The imputations arise because 
 depository institutions provide services for which the 
 intermediaries implicitly compensate themselves, by 
 paying depositors less interest on their deposits than 
 the interest that the intermediaries earn from lending 
 or investing the funds. Because an interest receipt of 
 equal value is imputed and added to the monetary in- 
 terest receipts of State and local governments, which 
 are subtracted from interest payments in the NIPA's, 
 the net effect of the imputation on government expen- 
 ditures is zero. 
 
 Coverage adjustments, shown in the fifth column 
 of table III-2, are made to the following categories of 
 expenditures: (1) Imputed bank service charges are 
 added to COG current operation expenditures (line 4). 
 (2) Purchases of land are subtracted from COG capital 
 outlay (line 7). (3) Unemployment insurance benefits 
 are subtracted from COG insurance trust expenditures 
 (line 10). (4) In years after 1979, certain electric utility 
 receipts that do not represent payments for current 
 services are subtracted from COG utility and liquor 
 store enterprise revenue (line 17). (5) Imputed interest 
 received is added to COG interest received (line 19). 
 
 Netting adjustments to expenditures, shown in the 
 sixth column of table III-2, are made to subtract the 
 following groups of revenue items in COG that are 
 recorded as offsets to expenditures in the NIPA's: (1) 
 Government sales (line 14); (2) sale of property (line 
 15); (3) utility, liquor store, and other enterprise rev- 
 enue (lines 16 and 17); (4) interest and dividends re- 
 ceived (lines 18-21); and (5) housing and transit sub- 
 sidies received by enterprises (line 22). All were sub- 
 tracted from receipts in table III-l. 
 
 Grossing adjustments, shown in the sixth column 
 of table III-2, are made in the NIPA's for items that 
 COG excludes from expenditures (and revenues) as in- 
 tragovernmental: (1) Certain employer contributions 
 to State and local employee retirement systems are 
 added to COG expenditures for current operation (line 
 4), and (2) payments to public hospitals for medical 
 assistance on behalf of indigents (medicaid) are added 
 to expenditures (line 12). All were added to receipts 
 in table III-l. 
 
 Fiscal year adjustments are shown in the seventh 
 column of table III-2 for expenditures for current op- 
 eration (line 4), capital outlay for equipment (line 7), 
 interest on debt (line 9), insurance trust benefits (line 
 10), and interest received (lines 18 and 19). 
 
 Timing and other adjustments are shown in the 
 eighth column of table III-2. In addition, because the 
 quarterly interpolation is carried out between calendar 
 year totals in the actual preparation of the NIPA esti- 
 mates, the estimates for the four quarters of the fiscal 
 year may not sum to the entry in column 4. Thus, 
 an adjustment for these differences is required for ta- 
 ble III-l; it is entered in column 8. Entries are made 
 for the salaries and wages component of current op- 
 eration (line 3), for construction (line 6), for govern- 
 
82 Government Transactions. 
 
 ^November 1988 
 
 ment sales (line 14), and for utility and liquor store 
 enterprise revenue (line 17). (For years immediately 
 preceding or following a census of governments, this 
 column could also include entries to adjust the GF data 
 to levels established in that census; a new GF sample 
 based on the most recent census is not drawn until the 
 second year after the census is taken.) 
 
 Distribution of the adjusted data into NIPA ex- 
 penditures components. — ^The NIPA estimates of to- 
 tal State and local government expenditures that re- 
 sult from this process are shown in the ninth column 
 of table III-2. The distribution of NIPA expenditures 
 into the appropriate NIPA components is shown in the 
 remaining columns. 
 
 Those parts of expenditures for current operation 
 that reflect transfer payments, subsidies, or enter- 
 prise outlays — including compensation of enterprise 
 employees — are recorded in the appropriate NIPA cat- 
 egories; the remainder of expenditures for current op- 
 eration, the largest part, is distributed to NIPA gov- 
 ernment purchases of goods and services. Capital 
 outlays are distributed to NIPA purchases of goods 
 and services; interest on debt, to NIPA net interest; 
 and assistance and subsidies, insurance trust bene- 
 fits, and intergovernmental payments to the Federal 
 Government, to NIPA transfer pajonents. Of the ad- 
 justment items shown in lines 12-22, medical vendor 
 payments to public hospitals is allocated to transfer 
 payments; housing and transit subsidies and utility, 
 liquor store, and other enterprise revenue to NIPA 
 subsidies less current surplus of government enter- 
 prises; interest and dividends received, to NIPA net 
 interest paid and dividends received, respectively; and 
 other government sales, to NIPA purchases of goods 
 and services. 
 
 Quarterly estimates 
 
 For the annual revisions, quarterly source data are 
 available and are used for the following: Construction, 
 the major components of compensation, certain trans- 
 fer payments, grants-in-aid from the Federal Govern- 
 ment, and most taxes. For the other components, 
 there are no quarterly source data; the quarterly es- 
 timates are prepared by interpolation of the annual 
 estimates. 
 
 For most components of the current estimates, judg- 
 mental extrapolations are used. The major exceptions 
 are the wages and salaries component of compensation 
 of State and local government employees, new con- 
 struction put in place, and certain transfer payments; 
 for these components, 1 month of source data are avail- 
 able for the advance quarterly estimates, 2 months for 
 the preliminary estimates, and 3 months for the final 
 estimates. In addition, for many taxes, current data 
 on the tax base and information on changes in tax law 
 are available. 
 
 Constant-dollar estimates of purchases 
 
 For the most part, constant-dollar estimates of State 
 and local government purchases of goods and services 
 are prepared by deflation, using price indexes taken, 
 for the most part, from Current Construction Reports 
 [26], BLS Producer Prices and Price Indexes (PPI) [52], 
 and BLS CPT Detailed Report [49]. The exceptions, 
 both of which are estimated by extrapolating base- 
 year values using quantity indicators, are compensa- 
 tion and services furnished without payment by de- 
 pository institutions (that is, financial intermediaries 
 except life insurance carriers and private noninsured 
 pension plans). 
 
 Constant-dollar estimates of purchases of structures 
 and of other goods and services are prepared by deflat- 
 ing the current-dollar estimates, by commodity (that 
 is, by type of good or service), by appropriate price 
 indexes. For structures, the current-dollar commod- 
 ity detail is provided in the source data. For other 
 goods and services, the commodity detail is estimated 
 by BEA from input-output (I-O) benchmark informa- 
 tion on the commodity composition of expenditures, by 
 function, and annual Census Bureau data on State and 
 local government expenditures, by function. 
 
 Constant-dollar estimates of compensation are the 
 product of average base-year compensation, current- 
 year employment, and the percentage change in aver- 
 age weekly hours from the base year. Constant-dollar 
 estimates of services furnished without payment by 
 depository institutions are obtained by extrapolating 
 the base-year value using employee hours in banking 
 as the indicator. 
 
 Derivation of Receipts and 
 Expenditures 
 
 Receipts 
 
 The primary source data for the estimates of re- 
 ceipts are COG IGF — Governmental Finances [29], 
 State Government Finances [32] and, in years end- 
 ing in 2 or 7, the census of governments volumes [24], 
 all from the Census Bureau. In addition. Finances of 
 Employee-Retirement Systems of State and Local Gov- 
 ernments {Retirement Systems) [27], a specialized pub- 
 lication in the COG IGF series, provides the basic data 
 on social insurance funds for all years after 1959, and 
 the Quarterly Summary [31] provides data on many 
 types of taxes for all years after 1962. 
 
 Before 1952, for State governments, State Govern- 
 ment Finances and its predecessors provide the basic 
 data for receipts for all years, except 1933-36, when 
 these reports were suspended; estimates for these 
 years are based on Tax Yields [22], from the Tax Policy 
 League, a publication that was based on data compiled 
 mainly from questionnaires sent to State tax officials. 
 
Government Transactions. 
 
 J\Iovember 1988 83 
 
 For local governments, estimates of receipts for 1942 
 to 1952 are prepared from annual Census Bureau esti- 
 mates of city and county revenues. Estimates for years 
 before 1942 were prepared by extrapolation, using es- 
 timates prepared by the National Industrial Confer- 
 ence Board from fragmentary Census Bureau mate- 
 rial [18], reports of tax commissions or similar agen- 
 cies, correspondence with public officials, information 
 obtained from sample surveys, and a variety of other 
 sources. 
 
 Table III-3 presents the derivation of the estimates 
 ^ for the receipts categories shown in the NIPA tables, 
 I at the level of detail presented annually. Because the 
 sources of information for States and localities differ. 
 States are distinguished from local governments in ta- 
 ble III-3, although this detail is not presented in the 
 NIPA tables. As previously noted, data from GF are 
 available with a 2-year lag and are incorporated in the 
 third annual revision of the estimates. Estimates for 
 the second annual revision are based on preliminary 
 tabulations of unpublished GF data on State govern- 
 ments and BEA extrapolations of the GF data on local 
 governments. Estimates for the first annual revision 
 are based on BEA extrapolations of the GF data on 
 both State and local governments. Table III-3 lists 
 the sources of the estimates, indicating any differences 
 among the various revisions. Also as previously noted, 
 the COG IGF data are placed on a calendar year basis 
 using the procedures described earlier in footnote 1, 
 and several of the components have timing and other 
 adjustments as well. 
 
 Table III-3 also indicates the procedure by which 
 the quarterly estimates of the major types of taxes 
 and nontaxes and contributions are derived. Quar- 
 terly seasonally adjusted estimates of taxes and non- 
 taxes and contributions are prepared in one of three 
 ways. (1) For those taxes and contributions for which 
 the quarterly pattern of payments or liabilities reflects 
 fluctuations in the tax or contribution base, the quar- 
 terly seasonally adjusted estimates are prepared by in- 
 terpolating the annual estimates, using the seasonally 
 adjusted measure of the tax base as the indicator; the 
 initial effects of new legislative actions are estimated 
 separately, where available and significant, and added 
 in. An example of the use of this approach is per- 
 sonal income taxes, which are interpolated and extrap- 
 olated using as the indicator the seasonally adjusted 
 monthly BEA wages and salaries less those of farm 
 and private household workers. (2) For those taxes 
 and contributions for which the quarterly pattern re- 
 flects less specific sources of variation or for which 
 the choice of an indicator is less straightforward, the 
 quarterly seasonally adjusted estimates are prepared 
 by using the Census X-11 seasonal adjustment proce- 
 dure to adjust the quarterly data directly; the initial 
 effects of new legislative actions are estimated sepa- 
 rately, where available and significant, and added in. 
 An example of the use of this approach is severance 
 taxes. (3) For taxes for which the quarterly obser- 
 
 vations show no seasonal variation, and for all taxes 
 and nontaxes and contributions for which no quarterly 
 data are available, the quarterly seasonally adjusted 
 estimates are prepared by interpolating the annual to- 
 tals quarterly without an indicator and extrapolating 
 the current quarterly estimates judgmentally. Exam- 
 ples of the use of this approach are motor vehicle li- 
 censes, property taxes, nontaxes, and most taxes for 
 which the source is COG IGF. 
 
 Quarterly unadjusted estimates also are prepared 
 in one of three ways: (1) Where quarterly unadjusted 
 data are available, they are the quarterly unadjusted 
 estimates. (2) Where quarterly source data are un- 
 available, the quarterly unadjusted estimates are the 
 same as the quarterly seasonally adjusted estimates 
 described above. (3) In one case — corporate profits tax 
 accruals — quarterly unadjusted estimates are interpo- 
 lated from the annual estimates using an unadjusted 
 measure of the tax base as the indicator. 
 
 In addition to the annual and quarterly estimates, 
 monthly estimates are prepared for personal tax and 
 nontax receipts and for personal contributions for so- 
 cial insurance because they are components of the per- 
 sonal income and outlay account (which is prepared on 
 a monthly basis); although these estimates are pre- 
 sented in the NIPA tables, they are not covered in ta- 
 ble III-3. 
 
 Taxes and nontaxes 
 
 For years after 1962, estimates for most taxes are 
 prepared using data from the Census Bureau's Quar- 
 terly Summary and underlying unpublished detail; for 
 these taxes, the annual estimates are the sum of four 
 quarters of collections data, except for two taxes for 
 which timing adjustments are necessary. The esti- 
 mates for the remaining taxes — all local — are not well 
 covered in the Quarterly Summary and thus are pre- 
 pared on the basis of COG IGF data, as are the esti- 
 mates of nontaxes. Before 1963, estimates of taxes and 
 nontaxes consist of annual data on local taxes (with 
 school district property taxes lagged 6 months) and the 
 State Finances fiscal year State tax data converted to 
 a calendar year basis by a simple average. 
 
 Although many of the tax and nontax items in the 
 NIPA's are taken directly from the Census Bureau 
 sources, others are distributed among several NIPA 
 categories on the basis of other information. Local 
 income taxes in the Quarterly Summary (and, until 
 1982, in COGIGF) include both individual and corpo- 
 rate income taxes; data from local jurisdictions that 
 account for most of local corporate profits tax accruals 
 are used to separate local corporate profits taxes from 
 personal income taxes. Census Bureau data contain 
 a category "property tax," with no distinction made 
 with respect to the tax base — residential real prop- 
 erty, other realty, business inventory or equipment, 
 or personal property, such as furniture, personal au- 
 tos, or pleasure boats. Using data from quinquen- 
 
84 Government Transactions. 
 
 J^ovemher 1988 
 
 Table III-3. — State and Local Government Receipts: Sources of Estimates 
 
 Category 
 
 1982 estimates 
 
 (Billions of 
 
 dollars) 
 
 Fiscal 
 
 Calen- 
 dar 
 
 Sources 
 
 Annual and quarterly unadjusted ■ 
 
 Quarterly seasonally adjusted 
 
 Receipts 
 
 Personal tax and nontax receipts. 
 
 Income taxes 
 
 State 
 
 437.5 
 
 100.1 
 50.0 
 
 Local. 
 
 Other taxes 
 
 Estate and gift taxes , 
 
 9.5 
 
 State , 
 
 Local 
 
 Motor vehicle licenses. 
 State 
 
 Local. 
 
 Property taxes . 
 State 
 
 Local. 
 
 Other taxes. 
 State 
 
 Local , 
 
 Nontaxes.. 
 State 
 
 40.6 
 
 Local. 
 
 Addenda: 
 Tuition and related educational 
 
 charges. 
 Hospital and health charges 
 
 Fines . 
 Other. 
 
 Corporate profits tax accruals. 
 
 State 
 
 14.5 
 
 Local 
 
 449.4 
 
 104.9 
 
 51.9 
 47.0 
 
 4.9 
 
 9.8 
 2.6 
 2.5 
 
 .1 
 
 4.6 
 4.3 
 
 1.4 
 .4 
 
 1.0 
 
 1.3 
 .6 
 
 43.2 
 15.6 
 
 27.6 
 
 9.3 
 
 24.6 
 
 3.4 
 
 5.9 
 
 14.0 
 13.1 
 
 1.0 
 
 QS^. 
 
 QS. ^ Modified to remove corporate profits 
 tax. 
 
 QS. 
 
 5 percent of State estimate . 
 
 QS. Allocation between personal and 
 business based on registrations. 
 
 QS. Equally divided between personal 
 and business. 
 
 QS. Allocation between personal and 
 
 business based on COG. 
 QS. Allocation between personal and 
 
 business based on COG. 
 
 QS. 90 percent of hunting and fishing 
 licenses plus miscellaneous licenses. 
 
 QS. 10 percent of local less income, 
 sales, property, and motor vehicle. 
 
 3rd July: COG/GF-CCMGR. 
 1st and 2nd July: Extrapolated 
 
 judg mentally'. 
 3rd July: COG/GF—CCMGR. 
 1st and 2nd July: Extrapolated 
 
 judgmental ly^ 
 
 COG/GF— CCMGR. Annual estimates 
 
 only. 
 COG/GF— CCMGR. Annual estimates 
 
 only. 
 COG/GF— CCMGR. Annual estimates 
 
 only. 
 COG/GF— CCMGR. Annual estimates 
 
 only. 
 
 QS. Collections related to liability for 2nd 
 and 3rd July; estimated as function of 
 PBTfor 1st July ■». 
 
 City reports gathered by BEA for 2nd and 
 3rd July; estimated as function of PBT 
 for 1st July". 
 
 Interpolated and extrapolated using 
 wages and salaries as indicator. 
 
 Interpolated and extrapolated using 
 wages and salaries as indicator. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 5 percent of State estimate. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 Historical: Interpolated without inaicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 Historical: Interpolatea without inaicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: OS— X-11. 
 Current: Extrapolated judgmentally. 
 Historical: Interpolatea without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Annual estimates only. 
 Annual estimates only. 
 Annual estimates only. 
 Annual estimates only. 
 
 Interpolated and extrapolated using 
 domestic PBT (less Federal Reserve 
 bank profits), seasonally adjusted, as 
 indicator. 
 
 Interpolated and extrapolated using 
 domestic PBT (less Federal Reserve 
 bank profits), seasonally adjusted, as 
 indicator. 
 
 See footnotes at end of table 
 
Government Transactions. 
 
 JMovember 1988 
 
 85 
 
 Table III-3.— State and Local Government Receipts: Sources of Estimates— Continued 
 
 Category 
 
 1982 estimates 
 
 (Billions of 
 
 dollars) 
 
 Fiscal 
 
 Calen- 
 dar 
 
 Sources 
 
 Annual and quarterly unadjusted ' 
 
 Quarterly seasonally adjusted 
 
 Indirect business tax and nontax 
 accruals. 
 
 Sales taxes 
 
 State 
 
 General 
 
 204.4 
 
 78.8 
 
 Gasoline. 
 
 Liquor 
 
 Tobacco. 
 
 Public utilities 
 
 Insurance receipts 
 Other 
 
 Local 
 
 General . 
 
 15.0 
 
 Public utilities. 
 Other 
 
 Property taxes. 
 State 
 
 82.2 
 
 Local. 
 
 Other taxes 
 
 Motor vehicle licenses. 
 State 
 
 Local . 
 
 Severance taxes (State). 
 
 Stock transfer and documentary 
 
 (State). 
 Other 
 
 State 
 
 Local . 
 
 Nontaxes. 
 State.... 
 
 11.7 
 
 Local. 
 
 Addenda: 
 Rents and royalties. 
 
 Special assessments. 
 
 Fines 
 
 Other 
 
 210.8 
 
 96.2 
 80.3 
 51.2 
 
 10.5 
 
 2.7 
 
 4.1 
 
 5.4 
 3.5 
 3.0 
 
 15.9 
 10.8 
 
 3.2 
 1.8 
 
 85.3 
 2.8 
 
 82.5 
 
 29.3 
 2.1 
 1.9 
 
 7.8 
 
 6.5 
 3.6 
 
 2.8 
 
 12.4 
 5.5 
 
 6.8 
 
 7.5 
 1.6 
 1.1 
 2.2 
 
 
 OS. ^ Retimed to transactions basis by 
 
 monthly retail sales. 
 OS. 2 Retimed to transactions basis by 
 
 DOT highway fuel use. 
 QS^ 
 
 QS^ 
 
 OS 
 
 OS 
 
 OS 
 
 3rd July: COG/GF. 
 
 1st and 2nd July: Extrapolated using 
 
 retail sales as indicator ^ ' \ 
 3rd July: COG/GF. 
 1st and 2nd July: Extrapolated using 
 
 State public utility taxes as indicator ^ '. 
 3rd July: COG/GF and OS. 
 1st ana 2nd July: Extrapolated 
 
 judgmentally, some OS^ '. 
 
 OS. Allocation between personal and 
 
 business based on COG. 
 OS. Allocation between personal and 
 
 business based on COG. 
 
 OS. Allocation between personal and 
 business based on registrations. 
 
 OS. Equally divided between personal 
 and business. 
 
 OS 
 
 OS 
 
 OS' 
 
 3rd July: COG/GF 
 1st and 2nd July: Extrapolated 
 judgmentally ^ 
 
 3rd July: COG/GF^CCMGR. 
 1st and 2nd July: Extrapolated 
 judgmentally f 
 
 3rd July: COG/GF— CCMGR. 
 1st and 2nd July: Extrapolated 
 judgmentally ^ 
 
 COG/GF— CCMGR. Annual estimates 
 
 only. 
 COG/GF— CCMGR. Annual estimates 
 
 only. 
 COG/GF— CCMGR. Annual estimates 
 
 only. 
 COG/GF— CCMGR. Annual estimates 
 
 only. 
 
 Interpolated and extrapolated using 
 
 monthly retail sales as indicator. 
 Interpolated and extrapolated using DOT 
 
 highway fuel use as indicator. 
 Interpolated and extrapolated using 
 
 monthly liquor store sales as indicator. 
 Interpolated and extrapolated using 
 
 monthly 1982-dollar PCE for tobacco 
 
 as indicator. 
 Historical: OS— X-11. 
 Current: Extrapolated judgmentally. 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 Historical: OS— X-11 separately for 
 
 parimutuel and miscellaneous and 
 
 amusement. 
 Current: Extrapolated judgmentally. 
 
 Interpolated and extrapolated using 
 seasonally adjusted retail sales as 
 indicator. 
 
 Historical: Interpolated without indicator. 
 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 
 Current: Extrapolated judgmentally. 
 
 Historical: OS— X-11. 
 
 Current: Extrapolated judgmentally. 
 
 Historical: OS— X-11. 
 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Annual estimates only. 
 Annual estimates only. 
 Annual estimates only. 
 Annual estimates only. 
 
 See footnotes at end of table 
 
86 Government Transactions. 
 
 JNovember 1988 
 
 Table III-3.— State and Local Government Receipts: Sources of Estimates— Continued 
 
 
 1982 estimates 
 
 (Billions of 
 
 dollars) 
 
 Sources 
 
 Category 
 
 Annual and quarterly unadjusted • 
 
 
 
 Fiscal 
 
 Calen- 
 dar 
 
 Quarterly seasonally adjusted 
 
 Contributions for social insurance 
 
 34.1 
 
 35.8 
 
 26.4 
 23.2 
 
 .1 
 3.1 
 
 9.4 
 8.6 
 
 .9 
 83.9 
 
 3rd July: Ret. Sys.. 
 1st and 2nd July: Extrapolated 
 judgmentally '. 
 
 SSB^ 
 
 
 Employer contributions 
 
 
 State and local employee retirement ... 
 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 Interpolated and extrapolated using 
 wages and salaries as indicator. 
 
 Temporary disability insurance 
 
 
 Workers' compensation 
 
 
 3rd July: COG/GF. 
 1st and 2nd July: Extrapolated using 
 wages salaries as indicator ' '. 
 
 3rd July: Ret. Sys.. 
 
 1st and 2nd July: Extrapolated using 
 
 State and local wages and salaries as 
 
 indicator '. 
 
 SSB^ 
 
 Personal contributions 
 
 
 State and local employee retirement ... 
 
 
 Historical: Interpolated using State and 
 local wages and salaries as indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 MTS. 
 
 Temporary disability insurance 
 
 
 Federal grants-in-aid 
 
 
 Budget of the U.S. Government 
 
 
 
 
 
 1. Except as noted, quarterly unadjusted estimates have the same source as the annual esti- 
 mates. 
 
 2. Effects of legislative actions separately calculated, on the basis of contact with State revenue 
 officials or from publications recording changes in State (and sometimes local) tax law. 
 
 3. Quarterly unadjusted estimates equal quarterly seasonally adjusted estimates. 
 
 4. Quarterly unadjusted estimates are interpolated and extrapolated using domestic profits 
 before tax (less Federal Reserve bank profits) as indicator. See Corporate Profits: Profits Before 
 Tax, Profits Tax Liability, and Dividends, Methodology Paper Series MP-2, for a description of the 
 indicator. 
 
 5. The annual estimate for the earliest year in a July revision is prepared as a weighted aver- 
 age of COG/QF reports for adjacent years. 
 
 6. Quarterly Summary provides data on minor local sales taxes (gasoline, tobacco, liquor) ac- 
 counting for $0.2 billion of the $1.8 billion. 
 
 7. Consists of the following taxes; Occupation and business licenses not elsewhere classified, 
 corporate licenses-in-general, alcoholic beverage licenses, public utilities licenses, amusement li- 
 censes, miscellaneous taxes, and 10 percent of State hunting and fishing licenses. 
 
 8. Estimates are prepared separately for (1) coverage of Slate and local employees, with State 
 and local wages and salaries as indicator, and (2) coverage of other workers, with private wages 
 
 and salaries as indicator. 
 
 Note. — "3rd July" and "1st and 2nd July" refer to the third annual revision and the first and 
 second annual revisions, respectively. 
 
 CCf^GR 
 
 COG/GF 
 
 l\/ITS 
 PBT 
 
 as 
 
 Ret Sys. 
 SSB 
 
 Current charges and miscellaneous general revenue. These, in COG/GF, are a 
 set of receipts data. Here, CCMGR includes both data published by Census 
 and the results of BEA analysis of underlying unpublished data. See appendix 
 lll-A. 
 
 Governmental Finances and (in years ending in 2 or 7) Census of Governments 
 volumes, both from Census Bureau. This includes not only the basic GF 
 volume, but also State Govemment Finances and County Finances. 
 
 Montfily Treasury Statement. 
 
 Profits before tax. 
 
 Quarterly Summary. State quarterly data are unpublished detail; local data are 
 derived residualfy. 
 
 Finances of Ervployee-Retirement Systems of Slate and Local Governments, a 
 specialized publication in the COG/GF series. 
 
 Social Security Bulletin. 
 
Government Transactions. 
 
 Jslovember 1988 
 
 87 
 
 nial COG reports on types of property subject to tax, 
 the NIPA's distinguish between property taxes paid 
 by persons and those paid by business. (The latter 
 include all taxes paid on real property, including res- 
 idential property, because owner-occupied dwellings 
 are treated as a business in the NIPA's.) Census Bu- 
 reau data for motor vehicle license taxes do not dis- 
 tinguish between those paid on business-owned vehi- 
 cles and those paid on personal vehicles; the NIPA 
 distinction is based on data from inventory estimates 
 for business-used vehicles, based on motor vehicle reg- 
 istrations [54]. Census Bureau data on hunting and 
 fishing licenses are allocated 90 percent to personal 
 and 10 percent to business, the latter on the premise 
 that businesses buy licenses for the purpose of enter- 
 taining clients. Both personal and business nontaxes 
 are derived from COG IGF current charges and mis- 
 cellaneous general revenue. The principles governing 
 the distribution of these receipts into nontaxes, gov- 
 ernment sales, and enterprise revenue were explained 
 in the Part I; the details of the derivation are shown 
 in appendix table III-A-1. 
 
 Personal tax and nontax receipts. — From 1963 
 forward, the annual estimates of most personal taxes 
 are prepared as the sum of four quarters of tax col- 
 lections data from the Quarterly Summary and its 
 underlying unpublished detail. Those that are not 
 prepared from the Quarterly Summary are prepared 
 from COG IGF. The annual estimates of personal non- 
 taxes are prepared from unpublished data underlying 
 COG IGF current charges and miscellaneous general 
 revenue and, in addition, include the grossing adjust- 
 ment discussed above for medicaid payments to public 
 hospitals [42]. 
 
 From 1963 forward, quarterly seasonally adjusted 
 estimates of personal taxes and nontaxes are prepared 
 using the approaches to seasonal adjustment already 
 described: Personal income taxes are interpolated and 
 extrapolated using NIPA wages and salaries as the in- 
 dicator. State other personal taxes are seasonally ad- 
 justed directly, and the remaining taxes and nontaxes 
 are interpolated without indicator. Current quarterly 
 estimates of all but personal income taxes are judg- 
 mental extrapolations. For 1959-62, quarterly sea- 
 sonally adjusted estimates of all personal taxes and 
 nontaxes are interpolated from the annual estimates, 
 without an indicator. 
 
 Estimates are prepared monthly, as well as quar- 
 terly and annually, because they are a component of 
 the personal income and outlay account. For personal 
 income taxes, monthly estimates are prepared by in- 
 terpolation using NIPA wages and salaries as the in- 
 dicator; the impact of legislative actions is estimated 
 on a monthly basis to complete the estimates. For 
 all other personal taxes and nontaxes, the monthly 
 estimates are interpolated without indicator from the 
 quarterly seasonally adjusted series and extrapolated 
 judgmentally. 
 
 Corporate profits tax accruals. — ^The basic source 
 of annual data on State corporate profits tax accruals 
 is unpublished State detail on collections data under- 
 lying the Census Bureau's Quarterly Summary. To 
 relate collections to calendar year liabilities, the quar- 
 terly data are lagged on the basis of a 1977-78 BEA 
 study of certain features of State corporate laws — 
 when estimated taxes were due, settlements made, 
 etc. This study, based on the Commerce Clearing 
 House State Tax Guide [11], provided information on 
 the relationship between t£ix collection and tax liabil- 
 ity; for each annual revision, the relationship between 
 tax collections and liabilities is modified as required 
 to reflect changes in tax laws. 
 
 Data for local corporate profits taxes are not avail- 
 able from any single source. In recent years, data ob- 
 tained from New York City [10] and information from 
 the tax office of Washington, DC, have been incor- 
 porated; since about 1970, these two cities have ac- 
 counted for almost all of local profits taxes. For earlier 
 years, the estimates are based on Tax Foundation [21] 
 estimates prepared for several years around 1965. 
 
 Quarterly estimates of total State and local corpo- 
 rate profits tax accruals, seasonally adjusted and un- 
 adjusted, are prepared from the annual liability to- 
 tals by interpolation and extrapolation using NIPA es- 
 timates of domestic corporate profits before tax (less 
 Federal Reserve profits), as the indicator. (See Corpo- 
 rate Profits: Profits Before Tax, Profits Tax Liability, 
 and Dividends, Methodology Paper Series MP-2, for a 
 description of these estimates.) 
 
 Indirect business tax and nontax accruals. — 
 
 From 1963 forward, indirect business tax data are 
 from the Quarterly Summary and underlying unpub- 
 lished detail, with a few exceptions. Annual data 
 for most State taxes are the sum of four quarters of 
 Quarterly Summary collections data. For State gen- 
 eral sales taxes and State gasoline taxes, however, 
 the quarterly collections data are lagged 1 month in 
 proportion to retail sales [25, with some BEA mod- 
 ification] and fuel consumption [54], respectively, to 
 derive the appropriate NIPA liability measure. 
 
 The annual estimates of local sales taxes, local mo- 
 tor vehicle licenses, local miscellaneous indirect busi- 
 ness taxes, and all nontaxes are based primarily on 
 COG IGF. Quarterly seasonally adjusted estimates are 
 prepared by interpolation without an indicator, except 
 for local general sales taxes, which are interpolated 
 using retail sales as the indicator. Current quarterly 
 estimates are extrapolated judgmentally. 
 
 Quarterly seasonally adjusted estimates are pre- 
 pared using the three approaches already described. 
 State and local general sales and use taxes and State 
 taxes on gasoline, liquor, and tobacco are interpo- 
 lated and extrapolated from the annual estimates us- 
 ing the tax base as the indicator; estimates of the 
 effects of legislative action are estimated separately 
 and added. Unadjusted quarterly data for State pub- 
 lic utilities gross receipts taxes, other State sales taxes 
 
88 Government Transactions. 
 
 J^ovemher 1988 
 
 (parimutuel taxes, miscellaneous gross receipts taxes, 
 and amusement sales taxes), State severance taxes, 
 and State documentary and transfer taxes are season- 
 ally adjusted directly, using the Census X-11 proce- 
 dure. For property taxes and all remaining taxes, the 
 quarterly seasonally adjusted estimates are interpo- 
 lated from the annual estimates without indicator, and 
 cun-ent estimates are extrapolated judgmentally. The 
 last procedure is also used for quarterly estimates of 
 both State and local indirect business nontaxes. 
 
 Contributions for social insurance 
 
 Annual estimates of contributions for social insur- 
 ance are prepared at the level of detail shown in ta- 
 ble III-3. Estimates are prepared monthly, as well as 
 quai'terly and annually, because they are a component 
 of the personal income and outlay account. 
 
 The source for annual estimates of both employer 
 and personal contributions to State and local employee 
 retirement funds is the Census Bureau publication Re- 
 tirement Systems. To derive calendar year estimates, 
 the annual data for individual retirement fiinds are 
 grouped by the ending month of their fiscal years and 
 then weighted by the number of months that fall into 
 each calendar year. Monthly seasonally adjusted esti- 
 mates of employer contributions are interpolated from 
 the annual estimates without indicator. Monthly sea- 
 sonally adjusted estimates of personal contributions 
 are interpolated using State and local government em- 
 ployee wages and salaries as the indicator. For both 
 employer and personal contributions, current monthly 
 estimates are extrapolated judgmentally. Quarterly 
 estimates are summed from the monthly estimates. 
 
 Data for employer and personal contributions to 
 temporary disability insurance funds are ft'om the So- 
 cial Security Bulletin: Annual Statistical Supplement, 
 published by the Social Security Administration (SSA) 
 [45]. Monthly seasonally adjusted estimates are inter- 
 polated from the annual estimates without indicator; 
 the current monthly estimates are extrapolated judg- 
 mentally. Quarterly estimates are summed from the 
 monthly estimates. 
 
 Fiscal year data for employer contributions — there 
 are no personal contributions — to State-administered 
 workers' compensation funds are from State Finances 
 and are averaged to estimate calendar year totals. 
 Monthly estimates are interpolated from the annual 
 estim.ates using State and local government employee 
 wages and salaries as the indicator for contributions 
 for State and local government employees and pri- 
 vate wages and salaries for the remainder; the cur- 
 rent monthly estimates are extrapolated judgmen- 
 tally. Quarterly estimates are summed from the 
 monthly estimates. 
 
 Federal grants-in-aid 
 
 See Part II, Federal Government Transactions. 
 
 Expenditures 
 
 The primary source data for the estimates of expen- 
 ditures are COG IGF — Governmental Finances [29], 
 State Government Finances [32] and, in years ending 
 in 2 or 7, the census of governments volumes [24], all 
 from the Census Bureau. In addition. Retirement Sys- 
 tems [27], a specialized publication in the COG IGF 
 series, provides the basic data on employee retire- 
 ment funds for all years after 1959. Other sources in- 
 clude the construction statistics prepared by the Cen- 
 sus Bureau [26], data on transfer payments from HHS 
 [40, 41, 42, 44, 45], and the employment and wage 
 and salary statistics prepared by the Bureau of Labor 
 Statistics (BLS) [50, 51]. 
 
 Estimates of expenditures for years before 1952 are 
 based on State Finances and the available Census 
 Bureau estimates of local expenditures, the Census 
 Bureau construction statistics, information on trans- 
 fer payments from HHS, and the BLS employment 
 and earnings statistics. For the years before 1942 for 
 which the data are fragmentary, the estimates of pur- 
 chases other than construction and compensation are 
 prepared by interpolation, using State and local com- 
 pensation as the indicator. 
 
 Table 111-4 presents the derivation of the estimates 
 for the expenditure categories shown in the NIPA ta- 
 bles, at the level of detail presented annually. Al- 
 though the sources of information for States and lo- 
 calities differ, States are not distinguished from local 
 governments in table III-4 or in the NIPA tables. As 
 previously noted, data from GF are available with a 
 2-year lag and are incorporated in the third annual 
 revision of the estimates. Estimates for the second an- 
 nual revision are based on preliminary tabulations of 
 unpublished GF on State governments data and BEA 
 extrapolations of the GF data on local governments. 
 Estimates for the first annual revision are based on 
 BEA extrapolations of the GF data for both State and 
 local governments. Table III-4 lists the sources of the 
 estimates, indicating any differences among the vari- 
 ous revisions. Also as previously noted, the COG IGF 
 data are placed on a calendar year basis using the pro- 
 cedures described earlier in footnote 1, and several of 
 the components have timing and other adjustments as 
 well. 
 
 Table III-4 also indicates the procedure by which 
 the quarterly estimates of the major types of expen- 
 ditures are derived. Quarterly (and, where neces- 
 saiy, monthly) seasonally adjusted estimates of expen- 
 ditures are prepared using one of three approaches: 
 (1) For those expenditures for which quarterly data 
 are available, the quarterly seasonally adjusted esti- 
 mates are prepared by using the Census X-11 seasonal 
 adjustment procedure to adjust the quarterly data di- 
 rectly. (2) For those expenditures for which only an- 
 nual data are available but for which the quarterly 
 pattern of outlays may be assumed to reflect fluctu- 
 ations in another expenditure component or in some 
 other related series, the quarterly seasonally adjusted 
 
Government Transactions. 
 
 J^ovember 1988 
 
 89 
 
 Table III-4. — State and Local Government Expenditures: Sources of Estimates 
 
 
 1982 estimates 
 
 (Billions of 
 
 dollars) 
 
 Sou 
 
 rces 
 
 
 Annual 
 
 
 Category 
 
 Fiscal 
 year 
 
 Calen- 
 dar 
 year 
 
 Quarterly ' 
 
 Expenditures 
 
 401.9 
 
 356.3 
 218.3 
 
 414.3 
 
 369.0 
 
 226.9 
 183.8 
 
 23.2 
 
 3.2 
 
 16.7 
 
 43.7 
 
 43.6 
 
 1.2 
 
 1.1 
 
 3.3 
 95.1 
 
 79.9 
 
 23.0 
 19.3 
 
 1.0 
 2.7 
 
 51.8 
 31.7 
 
 13.3 
 
 2.1 
 1.9 
 
 1.6 
 
 1.2 
 
 BLS tabulations 
 
 
 Purchases of goods and services 
 
 
 Compensation of employees ^ 
 
 
 Wages and salaries 
 
 Historical: Interpolated using preliminary 
 
 estimates as indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated using preliminary 
 
 estimates as indicator. 
 Current: Extrapolated judgmentally. 
 Interpolated and extrapolated using State 
 
 and local wages and salaries as 
 
 indicator. 
 
 Historical: Interpolated using preliminary 
 
 estimates as indicator. 
 Current: Extrapolated judgmentally. 
 
 Employer contributions for social 
 insurance: 
 State or locally administered 
 
 
 3rd July: Ret. Sys.. 
 1st and 2nd July: Extrapolated 
 judgmental ly. 
 
 system. 
 Federally administered system 
 
 
 Othier labor income 
 
 
 3rd July: COG/GF, insurance carrier 
 
 reports. 
 1st and 2nd July: Extrapolated 
 
 judgmentally, insurance carrier reports. 
 
 Census C-30, Highway Statistics 
 
 Structures 
 
 45.1 
 
 New 
 
 Census C-30— X-1 1 , Highway Statistics. ^ 
 Historical: Interpolated without indicator. 
 
 Existing (net) 
 
 
 COG/GF; CCMGR 
 
 Less: Force-account compensation 
 
 
 I-O benchmarks interpolated and 
 extrapolated using highway, education, 
 and all other new construction as 
 indicators. 
 
 FDIC and FRB data on ownership of 
 deposits and property income receipts 
 of commercial banks. 
 
 3rd July: COG/GF SF COG/GF— 
 
 CCN4gR, Bowker. 
 1st and 2nd July: Extrapolated 
 
 judgmentally, Bowker. 
 
 3rd July: Ret. Sys.. 
 1st and 2nd July: Extrapolated 
 judgmentally. 
 
 SSB 
 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated and extrapolated 
 using hospital, education, and all other 
 new construction as indicators. 
 
 Current: Extrapolated using highway new 
 construction as indicator. 
 
 Historical: Interpolated using FFA State 
 and local holdings of demand and time 
 deposits as indicator. 
 
 Current: Extrapolated judgmentally. 
 
 Historical; Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Financial services furnished without 
 payment by financial institutions 
 except life insurance carriers and 
 private noninsured pension plans. 
 
 Other goods and services 
 
 3.0 
 90.0 
 
 76.4 
 
 Transfer payments to persons 
 
 Benefits from social insurance funds 
 
 
 State and local employee retirement ... 
 
 
 Historical: Interpolated without indicator. 
 Current; Extrapolated judgmentally. 
 
 Historical' Interpolated without indicator '' 
 
 Temporary disability insurance 
 
 
 Workers' compensation 
 
 
 3rd July; SF 
 
 1st anc: 2nd July: Extrapolated 
 judgmentally. 
 
 HCFA 
 
 Current: Extrapolated judgmentally. 
 Historical: Interpolated without indicator. 
 
 Public assistance 
 
 
 Current: Extrapolated judgmentally. 
 
 Medical care ' 
 
 
 Historical: Interpolated without indicator ' 
 
 Aid to families with dependent 
 
 children (AFDC).. 
 Supplemental security income 
 
 
 OFA 
 
 Current: Extrapolated judgmentally. 
 OFA (monthly)— X-1 1.3 
 
 ORS-SSA (monthly)— X1 1. 3 
 Historical: Interpolated without indicator 
 Current: Extrapolated judgmentally. 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 Historical: OFA ORS-SSA— X-1 1 ^ 
 
 
 ORS-SSA 
 
 General assistance ' 
 
 
 State reports 
 
 Energy assistance 
 
 
 Federal grants; SSB 
 
 Other'' 
 
 
 OFA; ORS-SSA 
 
 
 
 
 Current: Extrapolated judgmentally. 
 
 See footnotes at end of table 
 
90 Government Transactions. 
 
 JMovember 1988 
 
 Table III-4.— State and Local Government Expenditures: Sources of Estimates — Continued 
 
 Category 
 
 1982 estimates 
 
 (Billions of 
 
 dollars) 
 
 Fiscal 
 year 
 
 Calen- 
 dar 
 year 
 
 Sources 
 
 Annual 
 
 Quarterly ' 
 
 Transfer payments to persons- 
 Continued 
 
 Education ' 
 
 Employment and training '. 
 
 Other. 
 
 Net interest paid. 
 
 Interest paid 
 
 Less: Interest received by government. 
 
 Monetary 
 
 Other funds 
 
 -21.9 
 24.9 
 
 46.8 
 43.8 
 
 Social insurance funds: 
 Workers' compensation. 
 
 Temporary disability insurance '" . 
 
 Retirement systems , 
 
 Imputed , 
 
 Less: Dividends received by 
 government. 
 
 Retirement systems 
 
 3.0 
 
 2.7 
 
 Government. 
 
 2.7 
 
 1.1 
 
 1.3 
 
 -24.4 
 27.1 
 
 51.5 
 48.2 
 26.2 
 
 1.2 
 
 .1 
 
 20,8 
 
 3.3 
 
 2.9 
 2.8 
 
 3rd July: SF. 
 
 1st and 2nd July: Extrapolated 
 judg mentally. 
 
 3rd July: Federal grants. 
 1st and 2nd July: Extrapolated 
 judgmentally. 
 
 3rd July: SF, OFA, Department of Justice, 
 
 State of Alaska. 
 1st and 2nd July: Extrapolated 
 
 judgmentally, State of Alaska. 
 
 3rd July: COG/GF 
 1st and 2nd July: Extrapolated 
 judgmentally. 
 
 3rd July: COG/GF CCIVIGR. 
 1st and 2nd July: Extrapolated 
 judgmentally. 
 
 3rd July: SF 
 
 1st and 2nd July: Extrapolated 
 
 judgmentally. 
 3rd July: SF. 
 1st and 2nd July: Extrapolated 
 
 judgmentally. 
 3rd July: Ret. Sys.. 
 1st and 2nd July: Extrapolated 
 
 judgmentally. 
 
 FDIC and FRB data on ownership of 
 deposits and property income receipts 
 of commercial banks. 
 
 Sum of quarters. 
 
 3rd July: SF 
 1st and 2nd July: 
 judgmentally. 
 
 Extrapolated 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator, 
 
 Stateof Alaska— XII. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated using FFA State 
 and local government holdings of 
 demand and time deposits as as 
 indicator. 
 
 Current: Extrapolated judgmentally. 
 
 Historical: Selected Retirement; Standard 
 
 & Poor's dividend/price ratioSee text. 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 See footnotes at end of table 
 
Government Transactions. 
 
 November 1988 91 
 
 Table III-4.— State and Local Government Expenditures: Sources of Estimates— Continued 
 
 Category 
 
 1982 estimates 
 
 (Billions of 
 
 dollars) 
 
 Fiscal 
 year 
 
 Calen- 
 dar 
 year 
 
 Sources 
 
 Annual 
 
 Quarterly 
 
 Subsidies less current surplus of 
 government enterprises. 
 
 Subsidies 
 
 -6.1 
 
 Less: Current surplus of government 
 enterprises. 
 
 Current operating receipts 
 
 -7.3 
 
 .5 
 
 7.8 
 57.1 
 
 Current operating outlays. 
 
 49.4 
 
 Addenda: 
 
 Water and sewerage 
 
 Gas and electricity 
 
 Toll facilities 
 
 Liquor stores 
 
 Air and water terminals 
 
 Housing and urban renewal. 
 
 Public transit 
 
 Other 
 
 Less: Wage accruals less 
 disbursements. 
 
 Surplus or deficit (-), national income 
 and product accounts. 
 
 Social insurance funds 
 
 
 
 35.6 
 
 Otfier. 
 
 2.3 
 3.5 
 1.1 
 .5 
 1.1 
 1.3 
 -3.5 
 1.5 
 
 35.1 
 
 36.9 
 -1.7 
 
 Assoc, of Amer. Railroads: 1983 estimate 
 extrapoextrapolated judgmentally. 
 
 3rd July: COG/GF, COG/GF— CCMGR, 
 MTS, Highway Statistics, "Gaming and 
 Wagering Business," State reports on 
 off -track betting. 
 
 1st and 2nd July: Extrapolated 
 judgmentally, MTS. Highway Statistics, 
 "Gaming and Wagering Business," 
 State reports on off-track betting. 
 
 3rd July: COG/GF. COG/GF— CCMGR, 
 Highway Statistics,"Gam'\ng and 
 Wagering Business," State reports on 
 off-track betting, SF, Ret. Sys. 
 
 1st and 2nd July: Extrapolated 
 judgmentally. Highway Statistics. 
 "Gaming and Wagering Business," 
 State reports on off-track betting. 
 
 Receipts less expenditures 
 
 Receipts less expenditures 
 
 Receipts less expenditures 
 
 Receipts less expenditures 
 
 Receipts less expenditures 
 
 Receipts less expenditures 
 
 Receipts less expenditures 
 
 Receipts less expenditures 
 
 Reports from jurisdictions affected by 
 strikes. 
 
 Total receipts less total expenditures 
 
 Historical: Interpolated without indicator. 
 Current; Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator, 
 Mrs— X1 1.3 
 
 Current: Extrapolated judgmentally. 
 
 Historical: Interpolated without indicator. 
 Current: Extrapolated judgmentally. 
 
 Annual 
 Annual 
 Annual 
 Annual 
 Annual 
 Annual 
 Annual 
 Annual 
 
 estimates only 
 estimates only 
 estimates only 
 estimates only 
 estimates only 
 estimates only 
 estimates only 
 estimates only 
 
 Net sum of social insurance fund 
 
 components above. 
 Total less social insurance funds. 
 
 Reports from jurisdictions affected by 
 strikes. 
 
 Total receipts less total expenditures. 
 
 Net sum of social insurance fund 
 
 components above. 
 Total less social insurance funds. 
 
 1. Except as noted, quarterly seasonally adjusted and unadjusted estimates are the same. 
 
 2. Allocation between general government and government enterprises based on Public Em- 
 ployment. 
 
 3. Unadjusted quarterly estimates from same source as annual. 
 
 4. Before 1980. monthly data were available from the Departn-ent of Labor. 
 
 5. Medical vendor payments, mostly Medicaid; for remainder, only ad hoc studies available 
 after ^98Z 
 
 6. Before 1981, data available from HHS. 
 
 7. Emergency assistance and medical premium payments for indigents. 
 
 S. Scholarship funds for State universities and colleges; State grants to private educational in- 
 stitutions. 
 
 9. Since 1982, payments to nonprofit institutions administering training programs. 
 
 10. Data from California, New Jersey, New York, and Rhode Island. 
 
 Note. — "3rd July" and "1st and 2nd July" refer to the third annual revision and the first and 
 second annual revisions, respectively. 
 
 BLS tabulations BLS tabulations of average weekly hours and of employment and wages 
 
 reported by errployers covered by State unemployment Insurance 
 prograrre. 
 
 CCMGR 
 
 Census C-30 
 COG/GF 
 
 ETA 
 
 Federal grants 
 HCFA 
 
 MTS 
 OFA 
 
 ORS-SSA 
 Ret. Sys. 
 
 Selected 
 
 Retirement 
 SF 
 SSB 
 
 Current charges and miscellaneous general revenue. These, in COG' 
 GF, are a set of receipts data. Here, CCMGR includes both data 
 published by Census and the results of BEA analysis of underlying 
 unpublished detail. 
 
 Current Construction Reports: Value of New Construction Put in Place. 
 
 Governmental Finances and, in years ending in 2 or 7. census of 
 governments volumes, both from Census Bureau. This includes not 
 only the basic GF volume, but also State Government Finances and 
 County Finances. 
 
 Employment and Training Administration, U.S. Department of Labor. 
 
 Federal grants to State and local governments. See part II. 
 
 Health Care Financing Administration, U.S. Department of Health and 
 Human Services. 
 
 Monthly Treasury Statement. 
 
 Office of Family Assistance, U.S. Department of Health and Human 
 Services. 
 
 Office of Research and Statistics. Social Security Administration. 
 
 Finances of Employee-Retirement Systems of State and Local 
 Govemments. a specialized publication in the COG/GF series. 
 
 Finances of Selected Public Employee-Retirement Systems. 
 
 State GovemmenI Finances. 
 Social Security Bulletin. 
 
92 Government Transactions. 
 
 J-Jovember 1988 
 
 estimates are prepared by interpolating the annual es- 
 timates, using a seasonally adjusted measure of the 
 expenditure component or other related series as indi- 
 cator. (3) For those expenditures for which neither 
 quarterly data nor any indicator are available, the 
 quarterly seasonally adjusted estimates are prepared 
 by interpolating the annual totals quarterly without 
 an indicator and extrapolating the current quarterly 
 estimates judgmentally. 
 
 Quarterly unadjusted estimates also are prepared 
 in one of two ways: (1) Where quarterly data are 
 available, they are the quarterly unadjusted esti- 
 mates. (2) Where quarterly source data are unavail- 
 able, the quarterly unadjusted estimates are the same 
 as the quarterly seasonally adjusted estimates de- 
 scribed above. 
 
 In addition to the annual and quarterly estimates, 
 monthly estimates are prepared for transfer payments 
 to persons because they are components of the per- 
 sonal income and outlay account; although these esti- 
 mates are presented in the NIPA tables, they are not 
 covered in table III-4. 
 
 Purchases of goods and services 
 
 State and local government purchases are classi- 
 fied as durable goods, nondurable goods, services, and 
 structures. For estimation, two types of services are 
 treated separately. They are compensation of employ- 
 ees and services furnished without payment by depos- 
 itory institutions. The remaining services, along with 
 durable and nondurable goods, are first estimated in 
 total. The total is then distributed among durable 
 goods, nondurable goods, and other services. 
 
 With the exception of compensation, new construc- 
 tion, and imputed financial services, no comprehen- 
 sive direct measure of purchases, by commodity, are 
 available for State and local governments. Instead, 
 government expenditures in COG IGF are classified by 
 function — that is, by the purpose of the expenditure. 
 (The functions are listed in appendix B.) Therefore, 
 an indirect procedure is used to estimate purchases 
 of goods and services, by commodity, from the annual 
 COG IGF functional data on current operation, capi- 
 tal outlay, and general government sales. The proce- 
 dure uses benchmark information, by function, on the 
 commodity composition of State and local government 
 purchases from the BEA input-output (I-O) tables. 
 
 Table III-4 shows the sources used for the estimates 
 of compensation of employees, structures, services fur- 
 nished without payment by depository institutions, 
 and all other goods and services. The sources for the 
 last, summarized as COG IGF in table III-4, are more 
 extensive in fact, and the procedure in which they are 
 used is described more fully in table III-5. 
 
 Compensation of employees. — Compensation of 
 employees consists of wages and salaries, employer 
 contributions for social insurance, and other labor 
 income — that is, employer payments to private pen- 
 
 sion, group health insurance, and group life insurance 
 plans and several minor categories of employee com- 
 pensation (compensation of prison inmates and judi- 
 cial fees to jurors and witnesses). 
 
 For wages and salaries, the annual estimates are 
 based on BLS tabulations of employment and wages 
 reported by employers covered by State unemployment 
 insurance programs [50, 51]. For employer contribu- 
 tions for social insurance, the annual estimates are 
 based on the estimates described above for receipts 
 of employer contributions to State and local govern- 
 ment employee retirement funds [27] and on Social Se- 
 cixrity Administration data on old-age, survivors, dis- 
 ability and health insurance (OASDHI) contributions 
 [45]. For other labor income, the annual estimates 
 are based on COG data on the group health and life 
 insurance coverage of State and local government em- 
 ployees and on employer contributions to these pro- 
 grams [24] and annual Census Bureau data on State 
 and local government employment [30]; annual reports 
 of private pension and insurance carriers [1, 5, 15, 
 23, 43]; annual data on average compensation of Fed- 
 eral prison inmates and on numbers of State prison in- 
 mates [14, 47]; and GF data on judicial expenditures. 
 
 Quarterly seasonally adjusted estimates of compen- 
 sation are summed from monthly series, the basis on 
 which they are prepared. Wages and salaries, em- 
 ployer contributions for social insurance (other than 
 to Federal systems), and other labor income are inter- 
 polated using the preliminary estimates as indicator. 
 Employer contributions to Federal systems are inter- 
 polated using State and local wages and salaries as the 
 indicator. Current quarterly (and monthly) estimates 
 are extrapolated judgmentally. 
 
 The source data for compensation cover all State 
 and local government employees; they are distributed 
 between compensation paid to employees of govern- 
 ment enterprises and that paid to employees of gen- 
 eral government. (The former is part of the deriva- 
 tion of the surplus of government enterprises; enter- 
 prise current-account purchases are not included in 
 government purchases of goods and services.) Wages 
 and salaries is distributed using data on wages and 
 salaries from the Census Bureau's October survey of 
 public employment [30]. Certain supplements (chiefly 
 pension fund contributions and some health and life 
 insurance programs dedicated to education employees) 
 are assigned to the particular categories of employees; 
 the rest are allocated among employees of government 
 enterprises and general government essentially in pro- 
 portion to wages and salaries for the two groups. 
 
 Structures. — Purchases of structures consist of new 
 construction put in place and purchases (net of sales) 
 of existing structures. Compensation paid to State and 
 local government employees engaged in force-account 
 construction is subtracted from the value of new con- 
 struction put in place to avoid double-counting because 
 it is included in general government compensation. 
 
Government Transactions. 
 
 J\Iovember 1988 93 
 
 Estimates of piirchases of new constiniction put in 
 place are obtained, for the most part, from the Census 
 Bureau [26], which, since 1975, has conducted a direct 
 survey of construction projects in which information 
 is gathered about the value of construction completed 
 each month on a sample of projects. (Before 1975, data 
 on construction expenditures were collected monthly 
 and lagged 1 month to approximate the put-in-place 
 timing.) For nine types of construction, these monthly 
 unadjusted data are summed to a calendar year series. 
 Monthly seasonally adjusted estimates are prepared, 
 using the Census X-11 seasonal adjustment procedure. 
 Quarterly estimates are summed from the monthly se- 
 ries. 
 
 BEA departs from the Census Bureau construction 
 data because of evident underreporting in three cases. 
 (1) For the years 1972-75, as funds from the Federal 
 Clean Water Act become available, BEA modified the 
 Census Bureau sewer construction data because the 
 sample design for the expenditures survey was not to- 
 tally successful in capturing a representative compo- 
 nent of the new special districts created to build and 
 operate new systems. (2) For 1975 and later years, 
 BEA bases its annual estimates of highway construc- 
 tion on data from Highway Statistics [54], Federal 
 Highway Administration, because of known problems 
 in the put-in-place data for highways from the Census 
 Bureau construction statistics and the annual high- 
 way expenditures estimates from COG IGF. The Fed- 
 eral Highway Administration data are adjusted to re- 
 move expenditures for resurfacing, restoration, and re- 
 habilitation, which are classified as maintenance and 
 repair — not new construction — in the NIPA's. Monthly 
 estimates are prepared by interpolation and extrapo- 
 lation, using the Census Bureau construction series 
 as the indicator. Quarterly estimates are summed 
 from the monthly estimates. (3) For 1983 and later 
 years, BEA adjusts the Census Bureau estimate of 
 public electric generating plants to include the publicly 
 owned component of jointly constructed plants where 
 the State or local government is a minority partici- 
 pant. This component has been omitted in the Census 
 Bureau put-in-place compilation. The adjustments are 
 based on annual data from the Department of Energy 
 [37]; quarterly seasonally adjusted estimates are pre- 
 pared by interpolation, using the Census Bureau se- 
 ries as an indicator. 
 
 Estimates of net purchases of existing structures are 
 based on data from COG IGF. The Census Bureau re- 
 ports combined purchases of equipment, land, and ex- 
 isting structures and sales of property — that is, land 
 and existing structures — ^by function, for both States 
 and localities^. (Equipment purchases are purchases 
 of durable goods and are discussed below.) Because 
 land transactions are excluded from NIPA government 
 
 3. For years after 1978, the Census Bureau separates purchases of equip- 
 ment finm those of land and existing structures only for States. BEA esti- 
 mates equipment purchases of local governments, using pre- 1978 information 
 on the relationships, by function, among equipment, land, and existing struc- 
 tures. 
 
 purchases, BEA prepares estimates of the value of pur- 
 chases of existing structures, excluding land. Ratios, 
 from BEA input-output (I-O) tables, are used to sep- 
 arate purchases of structures from those of land, by 
 function. Sales of structures and land are separated 
 using the overall ratio of purchases of structures to 
 those of land. State sales of property are from State 
 Finances, and local sales are from a BEA analysis of 
 COG IGF miscellaneous general revenues. Sales are 
 netted against purchases to derive net purchases of 
 existing structures. Quarterly seasonally adjusted es- 
 timates are interpolated without indicator from the 
 annual estimates, and current estimates are extrap- 
 olated judgmentally. 
 
 Annual estimates of general government force- 
 account compensation — that is, compensation paid by 
 State and local government on own-workforce new 
 construction (other than enterprise construction) — are 
 prepared using the 1-0 tables, which have estimates 
 of this compensation by type of construction, by func- 
 tion. Ratios of force-account compensation to the value 
 of new construction, by type, are interpolated without 
 indicator between 1-0 years and extrapolated. The an- 
 nual estimates are the product of these ratios and an- 
 nual data on new construction put in place, by type. 
 Quarterly seasonally adjusted estimates of highway, 
 education, and all other force account construction are 
 prepared by interpolation, using seasonally adjusted 
 Census Bureau highway, education, and all other con- 
 struction as the indicators. Highway construction is 
 used as the indicator for the current estimates because 
 most force-account new construction compensation re- 
 lates to highway planning. 
 
 Financial services. — Government purchases of 
 services includes an imputation for the estimated 
 value of services rendered to State and local govern- 
 ments without payment by depository institutions — 
 that is, financial intermediaries except life insurance 
 carriers and private noninsured pension plans. 
 
 The derivation of the annual and quarterly esti- 
 mates of imputed interest is based on data from the 
 Federal Deposit Insurance Corporation and the Fed- 
 eral Reserve Board data on property income paid and 
 received by commercial banks and on the ownership 
 of deposits [6, 7, 13]; it is explained below in the dis- 
 cussion of the net interest component of expenditures. 
 
 Durable goods, nondurable goods, and other 
 services. — BEA prepares annual estimates of the re- 
 maining purchases from COG IGF and State Finances 
 data for expenditures on current operation and equip- 
 ment and for general government sales, separately 
 for States and for localities, for each of the functions 
 shown in appendix HI-B. 
 
 Table in-5 traces the derivation of the estimates of 
 purchases of other goods and services — that is, goods 
 and services other than compensation, structures, and 
 financial services — from COG data for: Current oper- 
 ating expenditures; expenditures on equipment, land. 
 
94 Government Transactions. 
 
 J^ovember 1988 
 
 and existing structures; and the government sales cat- 
 egories of COG "current charges and miscellaneous 
 general revenue." (If a noncensus year were used, the 
 data source would be GF, but the procedure would be 
 the same.) For brevity, table III-5 does not make ex- 
 plicit the functional detail or the separate treatment 
 for States and localities; where appropriate, the notes 
 cite the use of published functional detail, of unpub- 
 lished detail that underlies the published COG. 
 
 The derivation in table III-5 starts with COG data 
 for current operating expenditures. The first step is to 
 subtract salaries and wages (except for 1978-81, when 
 the COG IGF data classified them separately). The 
 second step is to subtract other current operating ex- 
 penditures that are not NIPA purchases of other goods 
 and services: Pay -related outlays that are included 
 in NIPA compensation (as other labor income), pay- 
 ments that are included in NIPA transfer payments, 
 enterprise expenditures for operations, and subsidies 
 paid to railroads. The third step is to separate pur- 
 chases of equipment from COG data on equipment, 
 land, and existing structures, as described in the dis- 
 cussion of structures above. The fourth step is to add 
 these equipment estimates to other current operating 
 expenditures, as modified in the first two steps; the 
 sum equals gross purchases. The fifth step is to sub- 
 tract government sales from gross purchases because 
 they are treated as offsets to purchases in the NIPA's; 
 the result equals net purchases. 
 
 The functional detail, which is not explicit in ta- 
 ble III-5, is used to distribute gross purchases, sales — 
 and, thus, net purchases — among durable goods, non- 
 durable goods, and other services. For each general 
 government function, steps one and two yield annual 
 current-dollar estimates of (1) the remainder of other 
 expenditures on current operation and (2) government 
 sales. For each general government function and each 
 enterprise function, step three yields annual current- 
 dollar estimates of equipment purchases. In addition, 
 data on libraries from the Association of American 
 Publishers [3] and from Bowker's [8] are used to es- 
 timate purchases of books and audiovisual materials 
 by four functions — elementary and secondary educa- 
 tion, higher education, public libraries, and general 
 control. For each of these functions, the estimates 
 of books and audiovisual equipment are classified as 
 gross purchases of diorable goods and are subtracted 
 from the remainder of other expenditures on current 
 operations. 
 
 The remainder of other expenditures on current op- 
 erations is distributed, by function, among gross pur- 
 chases of nondurable goods, gross purchases of other 
 services, and gross purchases of equipment parts, us- 
 ing benchmark information on the commodity compo- 
 sition of purchases, also classified by function, from 
 BEA's benchmark I-O tables [34].'' Purchases of equip- 
 ment parts are classified as gross purchases of durable 
 
 4. The 1-0 benchmark commodity detail and its use in this distribution is 
 described in the section on conBtant-dollar estimates. 
 
 goods, as are purchases of equipment and, as previ- 
 ously mentioned, books and audiovisual equipment. 
 Government sales are also distributed, by function, 
 among sales of durable goods, nondvu-able goods, and 
 other services, using the 1-0 benchmark commodity 
 detail. The estimates of (net) purchases of durable 
 goods, nondurable goods, and other services are de- 
 rived by subtracting sales from gross purchases. 
 
 Quarterly seasonally adjusted estimates are inter- 
 polated from the annual all-function totals of each of 
 the major categories without indicator. The current 
 quarterly estimates are derived, as explained below, 
 by extrapolating the constant-dollar estimates judg- 
 mentally and converting them to current dollars with 
 appropriate price indexes. 
 
 Transfer payments to persons 
 
 State and local government transfer payments to 
 persons consist of benefits from social insurance ftmds; 
 public assistance; and payments for education, em- 
 ployment and training, and other assistance. Esti- 
 mates are prepared monthly, as well as quarterly and 
 annually, because they are a component of the per- 
 sonal income and outlay account. The derivation of 
 these estimates is shown in table III-4. 
 
 Benefits from social insurance funds. — Benefits 
 from social insurance funds consist of State and local 
 employee retirement benefits, including withdrawals 
 from pension systems; temporary disability insurance 
 benefits; and workers' compensation benefits. BEA 
 prepares monthly seasonally adjusted estimates for 
 each of these by interpolating the calendar year to- 
 tals without an indicator and extrapolating the cur- 
 rent estimates judgmentally; quarterly estimates are 
 summed from the monthly estimates. 
 
 Annual data on benefits from State and local gov- 
 ernment employee retirement systems are from the 
 Census Bureau's Retirement Systems report, adjusted 
 to a calendar year basis as described above under con- 
 tributions for social insurance. Annual estimates of 
 temporary disability insurance benefits are from the 
 reports of the State-run systems providing these ben- 
 efits [45]. Annual estimates of workers' compensation 
 benefits are fi-om State Finances. 
 
 Public assistance. — Public assistance consists of 
 medical care, aid to families with dependent children 
 (AFDC), supplemental security income (SSI), cash gen- 
 eral assistance, low-income energy assistance, emer- 
 gency assistance, and medical insurance premiums 
 paid on behalf of indigents. 
 
 Medical care — that is, medical vendor payments — is 
 government payments on behalf of indigents for med- 
 ical services, drugs, and other medical supplies. Most 
 of these payments are for the federally assisted Medi- 
 caid program; the remaining payments are State and 
 local general assistance. Since 1983, calendar year 
 estimates of medical vendor payments are based on 
 quarterly data from the Health Care Financing Ad- 
 
Government Transactions. 
 
 J^ovember 1988 95 
 
 Table III-5. — Derivation of State and Local Government Purchases of Goods and Other Services, FY 1982 
 
 Census/NIPA Category 
 
 Table 1 1 1-2 
 referent 
 
 col. 
 
 line 
 
 FY 1982 
 estimate 
 (Billions 
 
 of 
 dollars) 
 
 Source 
 
 Notes 
 
 Current operating expenditures, 
 /.ess; Salaries and wages 
 
 375.1 
 190.3 
 
 Direct from COG/GF 
 Various 
 
 Less: Supplements to wages and 
 salaries. 
 
 OASDHI 
 
 11 
 
 Health and life insurance (includes 
 TIAA). 
 
 Retirement. 
 
 25.9 
 
 8.2 
 9.1 
 
 6.4 
 
 Various . 
 
 Workers' compensation, private. 
 
 Workers' compensation, public. 
 
 .6 
 
 Unemployment compensation . 
 
 Judicial system payments. 
 
 Less: Current operating expenditures 
 classified as transfers to persons. 
 
 14 
 
 30.2 
 
 COG/GF direct: 
 Federal NIPA data; 
 HHS. 
 
 Less: Enterprise operating expenditures 
 and subsidies paid to railroads. 
 
 17 
 
 35,1 
 
 COG/GF direct. 
 
 Plus: Equipment, land, and existing 
 structures. 
 
 13.1 
 
 COG/GF direct 
 measure. 
 
 Less: Land , 
 
 2.7 
 
 COG/GF-derived . 
 
 For years after 1981 , tfiese data are derived from: 1) 
 Data from the Census publication Public Employment, 
 2) direct measures within the context of COG/GF for 
 education wages and salaries: these data are 
 surveyed for the Department of Education. For 1977- 
 81, directly measured from unpublished GF data. For 
 years before 1978, only the first of these two 
 approaches is available. 
 
 Certain supplements to wages and salaries are included 
 in the COG/GF current operating expenditures; they 
 are identified here: 
 
 NIPA data on OASDHI contributions paid by State 
 and local governments as employers. 
 
 NIPA data on payments by State and local 
 governments as employer to private insurers 
 (benchmarked to Census of Governments surveys 
 of employee benefits). 
 
 Payments by local governments as employers to 
 State administered retirement systems, published 
 as an exhibit in COG/GF. 
 
 NIPA data from insurance industry sources. These 
 payments are by State and local governments as 
 employers to private insurers for workers' 
 compensation. 
 
 BEA estimate of payments by local governments as 
 employers to State-administered workers' 
 compensation systems. The estimate is based on 
 payments for State employees (published in State 
 Finances). An average payment per State 
 employee is derived, and multiplied by the number 
 of local employees. 
 
 NIPA data on unemployment compensation 
 contributions paid by State and local governments 
 as employers. 
 
 NIPA data, primarily for payments made to jurors 
 Estimated as a function of State judicial system 
 current operating expenditures, in State Finances. 
 
 $26.1 billion of this total is medical vendor payments 
 directly identified in GF. Another $2.5 billion is 
 identified from Federal data on two Federally assisted 
 programs: Low-income energy assistance and job- 
 training programs. Almost all of the remainder is 
 transfers for foster care programs: estimates are 
 based on unpublished Census Population Division 
 data and occasional studies by nonprofit 
 organizations. 
 
 Most of these expenditures are identified directly in 
 functional terms; e.g., all current operating 
 expenditures for the function air terminals, or parking, 
 are classified as enterprise operating expenditures. 
 About $1.5 billion (all in local governments) is not 
 directly available from COG/GF. Data on local toll 
 facilities are taken from DOT Highway Statistics; for 
 off-track betting and the DC. lottery by direct contact 
 with localities; and for miscellaneous commercial 
 activities from unpublished BEA research into Census 
 Bureau records for large local governments. 
 
 Until 1977, COG/GF identified equipment separately 
 from land and existing structures. For 1978 and later, 
 all three items are measured as one value in COG/ 
 GF. BEA estimates the equipment component, using 
 State Governments Finances and School Finances 
 where available, and historical relationships (by 
 function) from before 1977. 
 
 After equipment is identified, the residual land and 
 existing structures is further divided, using 
 relationships derived by function from l-O studies. 
 Land is separately identified so that it can be 
 excluded from NIPA expenditure measures. (Land 
 sales are also excluded from NIPA measures of 
 receipts). 
 
96 Government Transactions. 
 
 Jslovember 1988 
 
 Table III-5.— Derivation of State and Local Government Purchases of Goods and Other Services, FY 1982- 
 
 Continued 
 
 Census/NIPA Category 
 
 Table III-2 
 referent 
 
 FY 1982 
 estimate 
 (Billions 
 
 of 
 dollars) 
 
 Source 
 
 Notes 
 
 col. 
 
 line 
 
 Less: Existing structures 
 
 12 
 7 
 
 13 
 6 
 
 8 
 
 13 
 
 7 
 4 
 
 ■4 
 14 
 
 14 
 ' 1 
 
 1.5 
 0.6 
 
 103.1 
 13.0 
 
 .1 
 90.0 
 
 COG/GF-derived 
 
 Expenditures on existing structures are removed here 
 because in the NIPA's they are a part of the 
 structures component of purchases of goods and 
 services. 
 
 After purchases other than compensation and structures 
 are identified for a given GF year, the data are 
 retimed to calendar years. For State data, two 
 adjacent COG/GF reports are averaged to produce a 
 calendar year. Local governments are retimed by a 
 slightly different process, reflecting the fact that local 
 governments in any one COG/GFreport have many 
 different fiscal years. After calendar years are derived 
 for States and localities, quarters are derived by 
 interpolating without an indicator. The $0.6 billion is 
 the difference between the original COG/GF-derived 
 data, and the interpolated results averaged to a July- 
 June year. 
 
 This residual comprises purchases excluding 
 compensation, structures, and imputed financial 
 serv ces. 
 
 Partly direct identification in published source e.g., 
 school lunch charges. Remainder identified from 
 ubpublished BEA analysis of the published data. See 
 table A-1, analysis of current charges and 
 miscellaneous general revenue. 
 
 Made as required to conform results of calendar-year 
 interpolation to fiscal-year totals. 
 
 Gross all other purchases, less offsetting receipts. 
 Adjusted as required for timing. 
 
 Plus: Calendar-year adjustments 
 
 BEA 
 
 Equals: Gross all other purchases 
 
 
 Less: Census receipts treated in NIPA's 
 as offset to purchases. 
 
 Less; Timing and other adjustments 
 
 Equals: Other purchases of goods and 
 services, NIPA's. 
 
 COG/GF current 
 charges and 
 miscellaneous 
 general revenue. 
 
 BEA 
 
 
 
 1. Less: Financial inputation, column 5, line 4. 
 
 COd'GF Census of Governments and/or Governmental Finances 
 HHS U.S. Department of Health and Human Services 
 
 TIAA Teachers' Insurance and Annuity Association 
 
Government Transactions. 
 
 J^ovember 1988 
 
 97 
 
 ministration (HCFA), HHS [41]; previously, data were 
 available monthly from HCFA and predecessor orga- 
 nizations. From 1982 forward, the general assistance 
 component is estimated on the basis of a study for 
 1983 [12] and various information from States that 
 have such programs; previously, the HHS monthly 
 data for medicaid included general assistance medical 
 payments. For 1984 and later years, the monthly and 
 quarterly seasonally adjusted estimates are interpo- 
 lated from the annual data without an indicator. Be- 
 fore 1984, when the series exhibited measurable sea- 
 sonality, the monthly data were seasonally adjusted 
 using the Census X-11 seasonal adjustment procedure. 
 
 Monthly data for AFDC and for emergency assis- 
 tance are from the Office of Family Assistance, HHS 
 [40]; the AFDC data are supplemented by informa- 
 tion from the Administration for Children, Youth, and 
 Families, HHS [38]. The monthly data are season- 
 ally adjusted, using the Census X-11 seasonal adjust- 
 ment procedure. Annual and quarterly estimates are 
 summed from the monthly estimates. 
 
 Monthly data for SSI are from the Social Security 
 Administration, HHS [46]. In January 1974, the Fed- 
 eral SSI program replaced aid to the blind, old age 
 assistance, and aid to the permanently and totally dis- 
 abled. State governments that chose to continue their 
 own SSI program did so in one of two ways. Some 
 States make direct payments to individuals and some 
 deposit the payment with the Federal Government, 
 which then makes the supplemental payment to the 
 individual. The monthly data are seasonally adjusted, 
 using the Census X-11 seasonal adjustment procedure. 
 Annual and quarterly estimates are summed from the 
 monthly estimates. 
 
 Annual data for cash general assistance are extrap- 
 olated judgmentally from the 1984 level established 
 in an informal BEA survey of the States having such 
 programs. Before 1981, data were available from 
 HHS. Monthly seasonally adjusted estimates are in- 
 terpolated from the annual estimates and extrapolated 
 judgmentally. Quarterly estimates are summed from 
 the monthly estimates. 
 
 Transfer payments for energy assistance to low- 
 income individuals are recorded for 1977 and later 
 years. Annual estimates are derived from Federal 
 grants-in-aid, modified to exclude administrative costs 
 using information from the Social Security Bulletin: 
 Annual Statistical Supplement. The remainder is 
 transfer payments and includes both cash payments to 
 low-income individuals and vendor payments to sup- 
 pliers. Information on independent State programs is 
 from a study by the Maryland Energy Assistance Pro- 
 gram [39]. Monthly seasonally adjusted estimates are 
 interpolated from the annual estimates without indi- 
 cator and extrapolated judgmentally. Quarterly esti- 
 mates are summed from the monthly estimates. 
 
 The remainder of public assistance consists of emer- 
 gency assistance and medical insurance premiums 
 paid for indigents. Monthly data for emergency as- 
 
 sistance are supplied along with those for AFDC, as 
 stated above. Monthly data for medical insurance pre- 
 miums paid on behalf of indigents are from the So- 
 cial Security Administration, HHS [42]. The monthly 
 data are seasonally adjusted, using the Census X-11 
 seasonal adjustment procedure. Annual and quarterly 
 estimates are summed from the monthly estimates. 
 
 Education. — ^These payments are separately iden- 
 tified in State Finances as "assistance and subsidies." 
 These payments include scholarships, stipends, fel- 
 lowships, and similar payments to individuals and 
 State support for nonprofit educational institutions. 
 Monthly seasonally adjusted estimates are interpo- 
 lated from the annual estimates without an indica- 
 tor, and the current estimates are extrapolated judg- 
 mentally. Quarterly estimates are summed from the 
 monthly estimates. 
 
 Employment and training. — Since 1982, employ- 
 ment and training has consisted of payments to non- 
 profit institutions for training programs under the Job 
 Training Partnership Act of 1982. Annual data are 
 from the analysis of Federal grants in aid to State and 
 local governments described in part II. Monthly sea- 
 sonally adjusted estimates are interpolated from the 
 annual estimates without an indicator, and the cur- 
 rent estimates are extrapolated judgmentally. Quar- 
 terly estimates are summed from the monthly esti- 
 mates. 
 
 In earlier years, employment and training included 
 payments under the Comprehensive Employment and 
 Training Act (CETA) and its predecessor, the Public 
 Employment Program (PEP), which from 1971 until 
 1982 provided fiinds for employment in State and local 
 governments, for employment in nonprofit organiza- 
 tions, and for job training programs run by nonprofit 
 institutions. Emplojonent in State and local govern- 
 ments is included in the compensation component of 
 purchases; the remainder is included in transfer pay- 
 ments to persons. For employment in nonprofit in- 
 stitutions, estimates were based on occasional infor- 
 mal estimates of CETA employment in nonprofit insti- 
 tutions made by the Department of Labor's Employ- 
 ment and Training Administration (ETA) and on staff 
 studies done by the Urban Institute [58]. ETA esti- 
 mates of average pay per CETA participant were mul- 
 tiplied by monthly estimates of nonprofit employment 
 to derive dollar amounts for these transfers. For job 
 training programs run by nonprofit institutions, dollar 
 amounts for training grants were available quarterly 
 from ETA [53]. 
 
 Other transfer payments. — ^Transfer payments 
 compensating victims of crime are currently being paid 
 in 37 States. Since 1986, annual data have been 
 available, with a 1-year lag, from the Department of 
 Justice, Office for Victims of Crime [48]. Estimates 
 for 1979-85 are based on a compilation of data on 
 State benefits by the New York Crime Victims Board 
 [19]. Between 1968 and 1978, data were collected 
 
98 Government Transactions. 
 
 ^November 1988 
 
 by BEA on an informal basis from individual States. 
 Monthly seasonally adjusted estimates are interpo- 
 lated from the annual estimates without an indica- 
 tor, and the current estimates are extrapolated judg- 
 mentally. Quarterly estimates are summed from the 
 monthly estimates. 
 
 Since 1981, annual payments to bona fide residents 
 of the State of Alaska have been made from the earn- 
 ings of a fund that receives payments from companies 
 exploiting the North Slope fields. Monthly data on a 
 cvurent basis are available from the office of the Alaska 
 Department of Revenue. The monthly data are sea- 
 sonally adjusted using the Census X-11 seasonal ad- 
 justment procedure, and the annual and quarterly es- 
 timates are summed from the monthly series. 
 
 Calendar year estimates for the remaining trans- 
 fer payments are prepared, primarily from COG IGF 
 or State Finances. The estimates are summed, and 
 monthly seasonally adjusted estimates are interpo- 
 lated from the aggregate without an indicator; current 
 estimates are extrapolated judgmentally. The remain- 
 ing transfer payments are: (1) Veterans bonuses, from 
 State Finances; (2) other veterans benefits, from the 
 State of Massachusetts; (3) other public welfare, which 
 is extrapolated from the State Finances 1962 level, us- 
 ing other public welfare expenditures as an indicator; 
 (4) health, which is extrapolated from the State Fi- 
 nances 1962 level, using other health expenditures as 
 an indicator; (5) foster care payments to foster par- 
 ents, which are based on data on Federal Government 
 expenditures under Section IV-E of Title XX of the So- 
 cial Security Act [44], using relationships based on a 
 1984 survey of State payments for foster care [16]; and 
 (6) foster care payments to institutions, which are ex- 
 trapolated from a 1983 study by the American Public 
 Welfare Association [2]. 
 
 Net interest paid 
 
 Net interest paid is total interest paid by State and 
 local government less interest received, including that 
 received by social insurance funds and the imputed 
 interest received by State and local governments. 
 
 Calendar year estimates of interest paid and mone- 
 tary interest received by State and local government, 
 including that received by social insurance fimds other 
 than employee retirement funds, are prepared by ad- 
 justing COG IGF or State Finances fiscal year data by 
 the general procedure described earlier. For workers' 
 compensation and temporary disability systems, all in- 
 vestment earnings are taken to be interest. 
 
 Fiscal year data on total investment earnings of em- 
 ployee retirement systems, reported in the Census Bu- 
 reau's Retirement Systems, are converted to a calendar 
 year basis in the same way as contributions to these 
 systems. Annual estimates of the dividend earnings 
 of these systems (described below) and, from 1985 for- 
 ward, of their net realized capital gains are subtracted 
 
 to derive the interest earnings of retirement funds as 
 a residual. 
 
 For all of these monetary interest flows, data are 
 available only with a 2-year lag. For both the current 
 and the first annual revision estimates, the estimates 
 for each of these flows are extrapolated judgmentally. 
 
 Quarterly seasonally adjusted estimates for mone- 
 tary interest paid and received by State and local gov- 
 ernments, their retirement systems, and their other 
 social insurance funds are interpolated without indi- 
 cator and extrapolated judgmentally; the seasonally 
 adjusted and unadjusted estimates are the same. 
 
 The annual estimate of imputed interest paid to 
 State and local government is prepared as part of the 
 estimates of imputed interest and associated service 
 charges for the other sectors. It is limited to the State 
 and local government share of total imputed interest 
 paid by commercial banks. (Ibtal imputed interest 
 paid by commercial banks equals the sum of mone- 
 tary interest received on depositor's funds, dividends 
 received, income received on direct lease financing, 
 and imputed interest received from Federal Reserve 
 banks less interest paid on deposits.) Estimates are 
 from Federal Deposit Insurance Corporation and Fed- 
 eral Reserve Board data on property income paid and 
 received by commercial banks [6, 7]. The State and lo- 
 cal government share of this total is equal to the share 
 of State and local government deposits in commercial 
 bank deposit liabilities, from Federal Reserve Board 
 data on the ownership of deposits [13]. Quarterly esti- 
 mates are derived by interpolation, using flow of funds 
 account data on holdings as the indicator [7]; current 
 estimates are extrapolated judgmentally. 
 
 Dividends received 
 
 The dividends received by State and local govern- 
 ments, primarily by their retirement systems, are 
 treated as negative expenditures. With the excep- 
 tion of their retirement systems, most governments 
 do not routinely invest in equities, because liquidity 
 (after safety) is most often the primary concern of gov- 
 ernment financial managers. In recent years, some 
 State governments have reported small volumes of eq- 
 uity earnings in footnotes in State Finances. These 
 earnings (from current charges and miscellaneous gen- 
 eral revenue) are reported here together with dividend 
 earnings of retirement systems. 
 
 Estimates of dividends received by State and lo- 
 cal retirement systems have been prepared for 1968 
 and subsequent years; before 1968, they are assumed 
 to be small and included in interest received. Es- 
 timates are derived from Finances of Selected Pub- 
 lic Employee-Retirement Systems [28] data for end-of- 
 quarter holdings of corporate equity; beginning and 
 ending holdings are averaged to represent quarterly 
 holdings, which then are multiplied by quarterly av- 
 erages of the Standard and Poor's 500 stock dividend- 
 
Government Transactions- 
 
 J^ovember 1988 
 
 99 
 
 price ratio for common stocks [20]. Current estimates 
 are extrapolated judgmentally. 
 
 Subsidies 
 
 State and local subsidies consist of payments to rail- 
 roads. Before 1983, annual data, provided by the 
 Association of American Railroads [4], were interpo- 
 lated quarterly without indicator. From 1983 forward, 
 the estimates are extrapolated judgmentally from the 
 1982 level. 
 
 Current surplus of government enterprises 
 
 The current surplus of government enterprises is es- 
 timated primarily from COG IGF and State Finances 
 data for 11 categories of enterprises: Water, sewer- 
 age, gas, electricity, toll facilities, liquor stores, air ter- 
 minals, water terminals, housing and urban renewal, 
 public transit, and a residual category that includes 
 State lotteries, off-track betting, local parking, and 
 miscellaneous activities. 
 
 To estimate current operating receipts, BEA adds to 
 COG IGF utilities and liquor stores revenue an esti- 
 mate of other enterprise revenue, which is included in 
 COG IGF current charges and miscellaneous general 
 revenue, as shown in table III-4. An estimate of non- 
 operating receipts included in the COG IGF data for 
 electric utilities [36] is removed, as described earlier. 
 Quarterly seasonally adjusted estimates of current op- 
 erating receipts are interpolated from the annual es- 
 timates without indicator and extrapolated judgmen- 
 tally. 
 
 Estimates of subsidies paid by the Federal Govern- 
 ment to State and local government enterprises are 
 also added, because COG IGF does not include them 
 in enterprise revenues. Federal subsidy payments 
 to these enterprises are derived from analyses of the 
 Monthly Treasury Statement [56]. Quarterly season- 
 ally adjusted estimates are prepared using the Cen- 
 sus X-11 seasonal adjustment procedure. (See part II, 
 Federal Government Transactions.) 
 
 To estimate current operating outlays, BEA adds 
 to the COG IGF current operating expenditures, by 
 function, additional compensation outlays — that is, 
 employer contributions to social insurance funds on 
 behalf of enterprise employees. To avoid double- 
 counting, BEA subtracts data on State liquor store in- 
 ventory change from the current operating outlays of 
 liquor stores. This inventory change is derived from 
 State Finances and is included in purchases of goods 
 and services. Quarterly seasonally adjusted estimates 
 of current operating outlays are interpolated from the 
 annual estimates without indicator and extrapolated 
 judgmentally. 
 
 For specific types of enterprises, additional source 
 data augment COG IGF. Data on local toll facilities 
 are from Highway Statistics [54], Federal Highway 
 Administration. Sporadic reports from local govern- 
 ments in New York in which betting facilities are lo- 
 cated are used to assemble information on off-track 
 betting. Currently, information from Gaming and Wa- 
 gering Business [9] is used to estimate that part of en- 
 terprise surplus generated by lotteries; annual data 
 on lottery receipts and expenditures, with a 1-year 
 lag, and current quarterly data on gross lottery sales 
 supplement the receipts and expenditures data from 
 COG IGF. 
 
 For other enterprise revenues, enterprise compen- 
 sation, and other current expenditures, quarterly sea- 
 sonally adjusted estimates are interpolated without in- 
 dicator from the annual estimates and extrapolated 
 judgmentally. 
 
 Wage accruals less disbursements 
 
 The estimates of wage accruals less disbursements, 
 which convert wages and salaries from an accrual ba- 
 sis to a payments basis, are prepared along with the 
 other compensation estimates. Differences between 
 accruals and disbursements arise primarily because 
 of strikes. Estimates are based on contact with the 
 jurisdictions affected and are prepared as necessary. 
 
 Surplus or deficit (— ), national income and 
 product accounts 
 
 The NIPA surplus or deficit is the excess of total 
 receipts over total expenditures. The measure is di- 
 vided into two parts: The surplus generated by the 
 excess of receipts over outlays of the social insurance 
 funds and the surplus or deficit resulting from all other 
 government transactions. To accomplish this division, 
 the part of purchases that represents administrative 
 expenses of the social insurance funds must be identi- 
 fied. Data for administrative expenditures are avail- 
 able in State Finances for workers' compensation and 
 temporary disability systems; Retirement Systems has 
 similar data after 1981; prior to 1982, such data were 
 available only in the quinquennial censuses of govern- 
 ments. In all cases, these data are averaged to calen- 
 dar years, and quarterly seasonally adjusted estimates 
 are interpolated from the annual estimates without in- 
 dicator; current quarterly estimates are extrapolated 
 judgmentally. 
 
 The social insurance fund surplus is calculated as 
 the sum of contributions, interest, and dividends re- 
 ceived by social insurance funds, less the sum of social 
 insurance benefits and administrative expenses. 
 
 The other funds surplus or deficit equals the NIPA 
 surplus or deficit minus the social insurance fund sur- 
 plus. 
 
100 Government Transactions. 
 
 Jslovember 1988 
 
 Constant-Dollar Purchases of 
 Goods and Services 
 
 For the most part, constant-dollar estimates of State 
 and local government purchases of goods and services 
 are prepared by deflating current-dollar estimates by 
 suitable price indexes. The principal exceptions are 
 compensation and imputed financial services, both of 
 which are estimated by extrapolating base-year values 
 by quantity indicators. The price indexes are taken 
 primarily from: Current Construction Reports [26], 
 BLS Producer Prices and Price Indexes [52], and BLS 
 CPI Detailed Report [49]. The specific price indexes 
 used are shown in table III-6. The order of table III-6 
 is that used for the current-dollar estimates of pur- 
 chases of goods and services shown in NIPA table 3.8. 
 The advance estimates reflect preliminary BEA esti- 
 mates of the construction price indexes, 2 and occa- 
 sionally 3 months of PPI's, and 2 months of CFFs. The 
 price data are complete by the final estimates. 
 
 Compensation of employees 
 
 The constant-dollar estimates of the compensation 
 component are obtained by extrapolating base-year 
 compensation by an index of employee hours that is 
 adjusted, to the extent possible, for changes in expe- 
 rience and education — that is, in the quality of the 
 workforce. This procedure is designed to approximate 
 specification pricing for output produced by general 
 government. It assumes that, for a given type of em- 
 ployee, output per hour worked does not change over 
 time and that productivity changes occur for the work- 
 force only because of changes in the mix of employees 
 with respect to their level of experience, their educa- 
 tion, and the fiinctions in which they are employed. 
 The mix is defined, to the extent possible, by fiinction, 
 by level of experience, and by education. For each 
 type of employee for which BEA has data, constant- 
 dollar compensation in a given year is the product of 
 average base-year (1982) compensation and an index 
 of employee hours that is the product of employment 
 measured in full-time equivalent units and the ratio 
 of average weekly hours worked to base-year average 
 weekly hours worked. 
 
 Monthly and annual measures of full and part-time 
 employment and hours worked are derived for edu- 
 cation and for noneducation from BLS tabulations of 
 average weekly hours worked and of employment and 
 wages reported by employers covered by State unem- 
 ployment insurance programs [50, 51]. The annual 
 Census Bureau report. Public Employment [30], is 
 used to convert full- and part-time measures of em- 
 ployment to full-time equivalents. Before 1979, these 
 unemployment insurance data did not cover State and 
 local government employment. The estimates before 
 1979 were based on the annual Public Employment 
 
 report and on monthly data from BLS establishment 
 surveys. 
 
 For estimates of constant-dollar education compen- 
 sation, eight employee types are identified, six from 
 Public Employment and two from a 1973 study from 
 the Office of Education, Department of Health, Ed- 
 ucation, and Welfare [35]. For primary-secondary 
 teachers — the largest category — ^independent data are 
 available to adjust for changes in the composition of 
 employment. Demographic and salary data collected 
 in an annual National Education Association survey 
 of teachers [17] are distributed into 20 groups de- 
 fined by teacher characteristics — years of experience 
 and level of educational attainment. For each of the 
 20 groups, reported average base-year salary is mul- 
 tiplied by employment; the results are summed and a 
 measure of average salary (valued in base-year prices) 
 for primary-secondary teachers in the current period 
 is derived. The difference between this measure and 
 base-year average salary represents the shift; in the 
 composition of employment with respect to experience 
 and educational attainment. Average base-year com- 
 pensation is then multiplied by the product of this 
 composition shift and the index of employee hours 
 described above— that is, the product of employment 
 measured in full-time equivalent units and the ratio 
 of average weekly hours worked to base-year average 
 weekly hours worked. 
 
 For the remaining seven categories of education em- 
 ployment, average base-year compensation for each 
 category is multiplied by the index of employee hours 
 described above — that is, the product of employment 
 measured in full-time equivalent units and the ratio 
 of average weekly hours worked to base-year average 
 weekly hours worked. The results are summed over 
 all eight categories to constant-dollar education com- 
 pensation. 
 
 For noneducation compensation, the BLS data are 
 disaggregated into two categories: Federally fiinded 
 public service employment and other. Public service 
 employment was a component of State and local gov- 
 ernment employment from 1972 to 1981. Measures 
 of public service employment and an estimate of av- 
 erage 1982 compensation for these employees are de- 
 rived from internal documents of the Employment and 
 Training Administration, Department of Labor [53]. 
 
 The remainder of noneducation constant-dollar com- 
 pensation is estimated as the product of average base- 
 year compensation and the index of employee hours — 
 that is, the product of full-time equivalent employ- 
 ment and the ratio of average weekly hours worked to 
 base-year average weekly hours worked. For the years 
 1950-70, a factor designed to reflect rising educational 
 and technical attainments in the Federal workforce 
 was applied to State and local noneducation employ- 
 ment. 
 
Government Transactions. 
 
 JSIovember 1988 
 
 101 
 
 Table III-6.— Price Indexes Used in the Deflation of State and Local Government Purchases of Goods and 
 
 Services 
 
 Category 
 
 Price index (or quantity extrapolator of base-year value) 
 
 1982 
 
 weight 
 
 (Percent) 
 
 Purchases of goods and services 
 
 Durable goods 
 
 Textile housefurnishings 
 
 Tires, tubes, tread, and repair materials 
 
 Hand and edge tools and lawn and garden equipment. 
 
 Miscellaneous metal products 
 
 Agricultural machinery and equipment 
 
 Construction machinery and equipment 
 
 Metalworking machinery and equipment 
 
 General purpose machinery and equipment 
 
 Special industry machinery and equipment 
 
 Integrating and measuring instruments 
 
 Motors, generators, motor generator sets 
 
 Switchgear, switchboard, etc. equipment 
 
 Electronic components and accessories 
 
 Miscellaneous electrical machinery and equipment 
 
 Calculating and accounting machines . 
 
 Typewriters and office machines n.e.c 
 
 ^fachine shop products 
 
 Wood commercial furniture 
 
 Metal commercial furniture 
 
 Household appliances 
 
 Home electronic equipment 
 
 Motor vehicles 
 
 Motorcycles 
 
 Motor vehicle parts 
 
 Aircraft 
 
 Railroad equipment 
 
 Sporting and athletic goods 
 
 Small arms 
 
 Photographic and photocopying equipment., 
 
 Mobile homes 
 
 Musical instalments 
 
 Phonograph records and prerecorded tapes. 
 
 Books and other durable printed material 
 
 Other durable goods 
 
 Computers and peripherals 
 
 Nondurable goods 
 
 Alcoholic beverages... 
 Animal food and feed. 
 
 Finished fabrics 
 
 Apparel 
 
 Coal 
 
 Petroleum products.... 
 
 Industrial chemical products 
 
 Prepared paint and allied products 
 
 Drugs and pharmaceuticals 
 
 Agricultural chemicals and chemical products 
 
 Soap and synthetic detergents 
 
 Miscellaneous rubber products 
 
 Miscellaneous plastic products 
 
 Pulp, paper, and products excluding building paper. 
 
 Metal containers 
 
 Miscellaneous metal products 
 
 Electric lamps and bulbs 
 
 Glass and glass products 
 
 Construction sand, gravel, and crushed stone 
 
 Toys, games, and children's vehicles 
 
 Small arms ammunition 
 
 Cigarettes 
 
 Photographic supplies 
 
 Pens, pencils, and other marking devices 
 
 Brooms and brushes 
 
 Maintenance and repair materials 
 
 Printed materials 
 
 Food 
 
 Other nondurable goods 
 
 IPD calculated from detail below. 
 IPD calculated from detail below. 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 tor 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 PP 
 
 for 
 
 IPD 
 
 for 
 
 PP 
 
 for 
 
 IPD 
 
 for 
 
 r textile housefurnishings 
 
 r tires, tubes, tread, and repair materials 
 
 r hand and edge tools 
 
 r miscellaneous metal products 
 
 r agricultural machinery and equipment 
 
 r construction machinery and equipment 
 
 r metalworking machinery and eauipment 
 
 r general purpose machinery and equipment 
 
 r special industry machinery and equipment 
 
 r integrating and measuring instruments 
 
 r motors, generators, motor generator sets 
 
 r switchgear, switchboard, etc. equipment 
 
 r electronic components and accessories 
 
 r miscellaneous electrical machinery and equipment 
 
 r calculating and accounting machines 
 
 r typewriters 
 
 r machine shop products 
 
 r wood commercial furniture 
 
 r metal commercial furniture 
 
 r household appliances 
 
 r home electronic equipment 
 
 r motor vehicles 
 
 r motorcycles 
 
 r motor vehicle parts 
 
 r fixed wing, utility aircraft 
 
 r railroad equipment 
 
 r sporting and athletic goods 
 
 r small arms 
 
 r photographic equipment 
 
 r mobile homes 
 
 r musical instruments 
 
 r phonograph records and prerecorded tapes 
 
 r Federal Government purchases of nondefense printing. 
 
 r finished goods less food and energy 
 
 r computer equipment. (BEA computer price index.) 
 
 IPD calculated from detail below. 
 
 PPI for alcoholic beverages 
 
 PPI for prepared animal feeds 
 
 PPI for finished fabrics 
 
 PPI for apparel 
 
 PPI for coal 
 
 Composite index of PPI's for middle distillates, gasoline, and residual 
 fuels. 
 
 PPI for industrial chemicals 
 
 PPI for prepared paint 
 
 PPI for drugs and pharmaceuticals 
 
 PPI for agncultural chemicals and chemical products 
 
 PPI for soap and synthetic detergents 
 
 PPI for miscellaneous rubber products 
 
 PPI for plastic products 
 
 PPI for pulp, paper, and products excluding building paper 
 
 PPI for metal containers 
 
 PPI for miscellaneous metal products 
 
 PPI for electric lamps and bulbs 
 
 PPI for flat glass 
 
 PPI for construction sand, gravel, and cmshed stone 
 
 PPI for toys, games, and cnildren's vehicles 
 
 PPI for small arms ammunition 
 
 PPI for cigarettes 
 
 PPI for photographic equipment 
 
 PPI for pens and pencils 
 
 PPI for brushes 
 
 CPI for maintenance and repair commodities 
 
 IPD for Federal Government purchases of nondefense printing 
 
 PPI for finished consumer foods 
 
 PPI for finished goods less food and energy 
 
 100.000 
 
 3.979 
 
 .056 
 .067 
 .059 
 .090 
 .046 
 .224 
 ,039 
 .102 
 .138 
 .067 
 .076 
 .016 
 .034 
 .091 
 .019 
 .111 
 .010 
 .077 
 .300 
 .058 
 .084 
 .953 
 .013 
 .124 
 .004 
 .146 
 .073 
 .003 
 .067 
 .001 
 .034 
 .013 
 .497 
 .262 
 .012 
 
 9.064 
 
 -.003 
 .023 
 .026 
 .152 
 .049 
 
 2.780 
 
 .437 
 .053 
 .650 
 .206 
 .099 
 .141 
 .087 
 .562 
 .009 
 .060 
 .059 
 .132 
 
 -.015 
 .039 
 .015 
 
 -.006 
 .229 
 .026 
 .012 
 
 1.479 
 .847 
 .472 
 .442 
 
102 Government Transactions. 
 
 J^ovemher 1988 
 
 Table 1 11-6.— Price Indexes Used In the Deflation of State and Local Government Purchases of Goods and 
 
 Services— Continued 
 
 Category 
 
 Price index (or quantity extrapolator of base-year value) 
 
 1982 
 
 weight 
 
 (Percent) 
 
 Services 
 
 Compensation of employees 
 
 Education compensation 
 
 Other compensation 
 
 Other services 
 
 Electiic service 
 
 Air transportation 
 
 insurance 
 
 Automobile leasing, repair, and parl<ing 
 
 Educational services 
 
 Entertainment services 
 
 Transportation and warehousing 
 
 Lodging while out of town 
 
 Miscellaneous repair and other services 
 
 Medical care 
 
 Gas production and service 
 
 Postal services 
 
 Professional services 
 
 Rental services 
 
 Communication services 
 
 Local ti-ansportation 
 
 Water, sewerage, and sanitation services 
 
 Services furnished without payment by financial 
 
 intermediaries except life insurance carriers and private 
 
 noninsured pension (>lans. 
 
 Structures 
 
 New construction put-in-place 
 
 Residential buildings 
 
 Education buildings 
 
 Hospitals and health facilities 
 
 Other buildings 
 
 Highways and sti-eets 
 
 Conservation and development of resources 
 
 Sanitation and sewerage 
 
 Water supply facilities 
 
 Miscellaneous nonbuilding construction 
 
 Electiic supply facilities 
 
 Transit facilities 
 
 Net purchases of existing nonresidential structures 
 
 Net purchases of existing residential farm structijres 
 
 Net purchases of existing residential nonfarm sti-uctures 
 
 Government force-account construction compensation 
 
 IPD calculated from detail below 
 
 IPD calculated from detail below 
 
 Base year value extrapolated by full-time equivalent employment, 
 average work week, and (for primary and secondary teaching) 
 change in years of experience and level of educational attainment. 
 
 Base year value extrapolated by full-time equivalent employment and 
 average work week. 
 
 IPD calculated from detail below 
 
 PPI for commercial power, 40 kw demand 
 
 CPI for airline fares 
 
 CPI for automobile insurance 
 
 CPI for other automobile related fees 
 
 CPI for college tuition 
 
 CPI for entertainment services 
 
 IPD for Federal Government purchases of nondefense transportation 
 
 service. 
 
 CPI for lodging while out of town 
 
 CPI for maintenance and repair services 
 
 CPI for medical care services 
 
 CPI for utility piped gas 
 
 IPD for Federal Government purchases of nondefense parcel post 
 
 service. 
 
 CPI for professional services 
 
 CPI for residential rent 
 
 CPI for telephone services 
 
 CPI for inti-acity mass ti-ansit 
 
 CPI for water and sewerage maintenance 
 
 Base-year value extrapolated by paid employee hours of commercial 
 
 banks. 
 
 IPD calculated from detail below 
 
 IPD calculated from detail below 
 
 Bureau of the Census price index of new one-family houses sold, 
 
 excluding value of lot. 
 Average ofTurner Construction Company building cost index and 
 
 Bureau of the Census price index of new one-family houses sold, 
 
 excluding value of lot. 
 
 Turner Construction Company building cost index 
 
 Average of Turner Construction Company building cost index and 
 
 Bureau of the Census price index of new one-family houses sold, 
 
 excluding value of lot. 
 Federal Highway Administration composite highway construction index 
 
 Bureau of Reclamation composite construction cost trends index 
 
 Environmental Protection Agency sewage treatment and sewer 
 
 constixiction cost index. 
 Average of Federal Energy Regulatory Commission pipeline index and 
 
 Environmental Protection Agency sewage ti-eatment and sewer 
 
 consti-uction. 
 Average of the Bureau of Reclamation composite construction cost 
 
 trends index and Federal Highway Administi-ation composite 
 
 highway consti-uction index. 
 Bureau of the Census Handy-Whitinan index for electiic light and 
 
 power plants. 
 Federal Highway Administi-ation highway structures construction index. 
 
 IPD for purchases of new private nonresidential sti-uctures 
 
 IPD for purchases of new private residential farm stiuctures 
 
 IPD for purchases of new private residential nonfarm stiuctijres 
 
 CPI for maintenance and repair services 
 
 Mote. — This table reflects weights used for 1982. It should lie understood that the system is not IPD 
 
 totally stale; changes are made eis one index is replaced by another, or for other reasons. The PPI 
 
 most importajnt change since 1982 was for force-account compensation; for 1984 and later years, CPI 
 
 the implicit price deflator for noneducaiion compensation is used, rather than the maintenanoe 
 and repair services index. 
 
 Implicit price deflator. 
 Producer price index. 
 Consumer price index. 
 
Government Transactions. 
 
 JNovemher 1988 103 
 
 Structures 
 
 Constant-dollar estimates of State and local govern- 
 ment purchases of structures are derived by deflating 
 11 types of new construction, net purchases of existing 
 structures, and new construction force-account com- 
 pensation. 
 
 New construction. — ^The 11 types of new construc- 
 tion put in place are deflated by dividing the quar- 
 terly seasonally adjusted, current-dollar estimates by 
 the price indexes shown in table III-6. These indexes 
 are from Current Construction Reports [26]. These in- 
 dexes are smoothed by a three-quarter moving aver- 
 age or are seasonally adjusted using the Census X-11 
 seasonal adjustment procedure. There are two excep- 
 tions: The Census Bureau index for one-family houses 
 sold and the DOT highway composite index [55] are 
 smoothed by a three-quarter moving average (and the 
 latter is then seasonally adjusted). (Prior to 1985 the 
 Bureau of the Census index was used with seasonal 
 adjustment.) 
 
 Net purchases of existing structures. — ^Net pur- 
 chases of existing residential and nonresidential struc- 
 tures are deflated by BEA implicit price deflators for 
 new private nonfarm residential structures, for new 
 private farm residential structures, and for new pri- 
 vate nonresidential structures. These estimates are 
 prepared along with other components of gross private 
 domestic fixed investment. 
 
 New construction force-account compensa- 
 tion. — The value of new construction force-account 
 compensation is deflated by the implicit deflator for 
 noneducation compensation from 1984 forward. Be- 
 fore 1984, the deflator was the CPI for maintenance 
 and repair services. 
 
 Financial services 
 
 Constant-dollar estimates of the services rendered 
 without payment to State and local governments by 
 depository institutions — that is, financial intermedi- 
 aries except life insurance carriers and private non- 
 insured pension plans — are obtained by extrapolating 
 the base-year value by BEA estimates of the paid em- 
 ployee hours in commercial banks, based on BLS tab- 
 ulations of average weekly hours worked and of em- 
 ployment and wages reported by employers covered 
 by State unemployment insurance programs [50, 51]. 
 
 Durable goods, nondurable goods, and 
 other services 
 
 Deflation of purchases of durable goods, nondurable 
 goods, and other services is performed for approxi- 
 mately 80 types of purchases using detailed price in- 
 dexes, largely components of the PPI. The commod- 
 ity detail is estimated from COG IGF data on ex- 
 penditures for current operations and for equipment 
 
 and on general government sales, by function, as de- 
 scribed in the derivation of current-dollar purchases, 
 using commodity detail from BEA's benchmark I-O ta- 
 bles. Table III-6 shows the commodity composition 
 of durable goods, nondurable goods, and services, the 
 1982 weights, and the associated price indexes; nega- 
 tive entries in table III-6 indicate government sales. 
 
 In the absence of direct measures of the commod- 
 ity composition of State and local government pur- 
 chases of durable goods, nondurable goods, and ser- 
 vices, an indirect procedure is used to estimate the 
 commodity detail from the available annual data on 
 the major categories of purchases — that is, gross pur- 
 chases of equipment, books and audiovisual materi- 
 als, equipment parts, nondurable goods, and services; 
 and sales of durable goods, nondurable goods, and ser- 
 vices. For each function, the quarterly current-dollar 
 estimates for the major categories of purchases are dis- 
 tributed among commodities using the quarterly com- 
 modity price indexes shown in table III-6 and quar- 
 terly constant-dollar commodity weights, derived from 
 BEA's benchmark 1-0 tables for 1967, 1972, and 1977 
 [34 and references therein].^ Then, for each com- 
 modity, the current-dollar estimates are deflated by 
 the commodity price index shown in table III-6 and 
 summed over all functions. 
 
 The first step is to prepare the quarterly constant- 
 dollar commodity weights. The 1-0 benchmark com- 
 modity detail, classified by function, is converted to 
 constant base-year (1982) prices, using the price in- 
 dexes shown in table III-6. For each function, the 
 constant-dollar commodity weights are interpolated 
 annually between 1-0 benchmarks and held constant 
 after 1977. For the quarters within each year, the 
 constant-dollar commodity weights are held constant 
 at the annual level. 
 
 The second step is to prepare the quarterly current- 
 dollar estimates for each major category and fiinction. 
 The annual current-dollar estimates for each major 
 category are interpolated quarterly v/ithout indicator 
 at the aggregate — that is, all-function — level; the ag- 
 gregate quarterly pattern then is used to interpolate 
 the estimates of purchases by each function within the 
 major category. 
 
 The third step is to estimate the quarterly current- 
 dollar commodity detail for each function. Each quar- 
 terly constant-dollar commodity weight (from the first 
 step) is multiplied by the price of that commodity and 
 the product adjusted proportionately so that the sum 
 of these products over all commodities within the func- 
 tion and major category is equal to the given current- 
 dollar values (from the second step). 
 
 The fourth step is to derive constant-dollar pur- 
 chases of durable goods, nondurable goods, and other 
 
 1. The 1-0 commodity detail is based on an examination of information 
 from a very small sample of governments, on some direct estimates of expen- 
 ditures, and on inferences drawn from the expenditure patterns of private- 
 sector organizations engaged in similar activities. (Before 1959, estimates of 
 detailed purchases were prepared at the aggregate level only, without regard 
 to functional categories, using commodity weights from the 1958 1-0 table.) 
 
104 Government Transactions. 
 
 JSfovember 1988 
 
 services. Each current-dollar commodity estimate 
 (from the third step) is deflated using the appropri- 
 ate index shown in table III-6. Total constant-dollar 
 purchases of each commodity are derived by sum- 
 ming the commodity detail, by function, over all func- 
 tions. Constant-dollar purchases of durable goods, 
 nondurable goods, and other services are obtained by 
 summing the relevant commodity totals. 
 
 The preceding discussion applies to estimates for an- 
 nual revisions and comprehensive revisions. For cur- 
 rent estimates, a truncated procedure is used that re- 
 
 quires no functional detail. The aggregate constant- 
 dollar estimates of durable goods, nondurable goods, 
 and other services are extrapolated judgmentally from 
 the final quarter of the most recent full year of an an- 
 nual revision. The aggregate current-dollar estimates 
 of durable goods, nondurable goods, and other services 
 are obtained by multiplying the constant-dollar esti- 
 mates by price indexes constructed from the price in- 
 dexes shown in table III-6, using weights based on the 
 constant-dollar commodity distribution from the final 
 quarter of the most recent fiill year. 
 
Sources 
 
 This is a list of publicly available information used in preparing the estimates of State and local government 
 transactions. Wherever possible, a specific portion of a larger publication is cited — a chapter, a series, or table 
 number/title. In some cases, the information used is more detailed than that available in the listed source, 
 which is the publication most accessible to the public. 
 
 1. American Council of Life Insurance. "Annual 
 Statement of the Condition and Affairs of the U.S. 
 Legal Reserve Life Insurance Companies." Wash- 
 ington, DC: ACLI, annually. 
 
 2. American Public Welfare Association. A Statisti- 
 cal Summary of the VCIS Social Services Block 
 Grant (SSBG) Data for FY 83. Washington, DC: 
 APWA, October 1985. 
 
 3. Association of American Publishers. Annual Re- 
 port. New York, NY: Association of American Pub- 
 lishers, annually. 
 
 4. Association of American Railroads. Economics 
 and Finance Department. Analysis of Class 
 I Railroads. Washington, DC: AAR, annually. 
 (Data on railroad subsidies no longer identifiable 
 after 1982.) 
 
 5. Blue Cross and Blue Shield Associations. The 
 Blue Cross and Blue Shield Plan Fact Book. 
 Chicago, IL: Blue Cross and Blue Shield Associ- 
 ations, annually. 
 
 6. Board of Governors of the Federal Reserve Sys- 
 tem. Annual Report. Washington, DC: Board of 
 Governors, annually. 
 
 7. Board of Governors of the Federal Reserve Sys- 
 tem. Sector Tables. Flow of Funds Accounts. (Sta- 
 tistical Release Z.l.) Washington, DC: Board of 
 Governors, quarterly. 
 
 8. Bowker, R. R. The Bowker Annual of Library and 
 Book Trade Information. New York, NY: Bowker, 
 annually. 
 
 9. BMT Publications, Inc. Gaming and Wagering 
 Business. New York, NY: BMT Publications, Inc., 
 monthly. 
 
 10. The City of New York. Comprehensive Annual Fi- 
 nancial Report of the Comptroller. New York, NY: 
 City of New York, annually. 
 
 11. Commerce Clearing House, Inc. State Tax Guide. 
 Chicago, IL: Commerce Clearing House, biweekly. 
 
 12. Desonia, Randolph, and King, Kathleen M. State 
 Programs of Assistance for the Medically Indigent. 
 Washington, DC: Intergovernmental Health Pol- 
 icy Project, The George Washington University, 
 November 1985. 
 
 13. Federal Deposit Insurance Corporation. Annual 
 Report. Washington, DC: FDIC, annually. 
 
 14. Federal Prison Industries, Inc. Annual Report. 
 Marion, IL: Federal Penitentiary, annually. 
 
 15. Health Insurance Association of America. Group 
 Health Insurance Coverages in the United States. 
 New York, NY: HIAA, annually. 
 
 16. National Conference of State Legislatures. "State 
 Foster Care Payments to Individuals, 1984." Den- 
 ver, CO, 1986, unpublished. 
 
 17. National Education Association. Survey of NBA 
 K-12 Tzacher Members. Appendix B. Washington, 
 DC: National Education Association, annually. 
 
 18. National Industrial Conference Board. "Esti- 
 mates of Local Revenues Before 1942." New York, 
 NY, c. 1945, unpublished. 
 
 19. New York Crime Victims Board. "State Benefits 
 for Compensation for Victims of Crime, 1979-84." 
 Albany, NY, 1985, unpublished. 
 
 20. Standard & Poor's Corporation. "Yield on the 
 Composite 500 Stock Index." Statistical Service: 
 Current Statistics. New York, NY: Standard & 
 Poor's Corporation, monthly. 
 
 21. Tax Foundation, Inc. "Local Corporate Profits Tax 
 Revenues." Washington, DC, c. 1965, unpub- 
 lished. 
 
 22. Tax Policy League. Tax Yields. New York, NY: 
 Tax Policy League, various years before 1942. 
 
 23. Teachers Insurance and Annuity Association of 
 America/College Retirement Equities Fund. "Em- 
 ployer Contributions to TIAA/CREF." New York, 
 NY, annually, unpublished. 
 
 24. U.S. Department of Commerce. Bureau of the 
 Census. Census of Governments. Washington, 
 DC: U.S. Government Printing Office, quinquen- 
 nially. 
 
 25. U.S. Department of Commerce. Bureau of the 
 Census. Current Business Reports, Monthly Retail 
 Trade. (Series BR). Washington, DC: U.S. Govern- 
 ment Printing Office, monthly. 
 
 26. U.S. Department of Commerce. Bureau of the 
 Census. Current Construction Reports: Value of 
 New Construction Put in Place. (C 30). Wash- 
 ington, DC: U.S. Government Printing Office, 
 monthly. 
 
 27. U.S. Department of Commerce. Bureau of the 
 Census. Finances of Employee-Retirement Sys- 
 tems of State and Local Governments. (GF No. 
 
 105 
 
106 Government Transactions. 
 
 J^ovember 1988 
 
 2). Washington, DC: U.S. Government Printing 
 Office, annually. 
 
 28. U.S. Department of Commerce. Bureau of the 
 Census. Finances of Selected Public Employee- 
 Retirement Systems. (GR Nos. 1-4). Washington, 
 DC: U.S. Government Printing Office, quarterly. 
 
 29. U.S. Department of Commerce. Bureau of the 
 Census. Governmental Finances. (GF No. 5). 
 Washington, DC: U.S. Government Printing Of- 
 fice, annually. 
 
 30. U.S. Department of Commerce. Bureau of the 
 Census. Public Employment. (GE No. 1). Wash- 
 ington, DC: U.S. Government Printing Office, an- 
 nually. 
 
 31. U.S. Department of Commerce. Bureau of the 
 Census. Quarterly Summary of Federal, State, 
 and Local Tax Revenue. (GT Nos. 1^). Washing- 
 ton, DC: U.S. Government Printing Office, quar- 
 terly. 
 
 32. U.S. Department of Commerce. Bureau of the 
 Census. State Government Finances. (GF No. 3). 
 Washington, DC: U.S. Government Printing Of- 
 fice, annually. 
 
 33. U.S. Department of Commerce. Bureau of Eco- 
 nomic Analysis. Corporate Profits: Profits Be- 
 fore Tax, Profits Tax Liability, and Dividends. 
 (Methodology Paper Series MP-2). Washington, 
 DC: U.S. Government Printing Office, May 1985. 
 
 34. U.S. Department of Commerce. Bureau of Eco- 
 nomic Analysis. "The Input-Output Structure of 
 the U.S. Economy, 1977." Survey of Current 
 Business 64 (May 1984): 42-84. 
 
 35. U.S. Department of Education. "Education Em- 
 ployment and Hours." Washington, DC, 1973, un- 
 published. 
 
 36. U.S. Department of Energy. Energy Information 
 Administration. Financial Statistics of Selected 
 Electric Utilities. Washington, DC: U.S. Govern- 
 ment Printing Office, annually. 
 
 37. U.S. Department of Energy. Energy Information 
 Administration. Nuclear Power Plant Construc- 
 tion Activity. Washington, DC: U.S. Government 
 Printing Office, annually. 
 
 38. U.S. Department of Health and Human Services. 
 Administration for Children, Youth, and Families. 
 "Aid to Families with Dependent Children (AFDC) 
 Pajonents." Washington, DC, annually, unpub- 
 lished. 
 
 39. U.S. Department of Health and Human Services. 
 Office of Energy Assistance. Low Income Home 
 Energy Assistance: Report to Congress for Fiscal 
 Year 1986. Washington, DC: U.S. Government 
 Printing Office, 1986. 
 
 40. U.S. Department of Health and Human Services. 
 Office of Family Assistance. AFDC Flash Re- 
 port. Washington, DC: Office of Family Assis- 
 tance, monthly. 
 
 41. U.S. Department of Health and Human Services. 
 Health Care Financing Administration. "Medi- 
 cal Vendor Payments." Baltimore, MD, quarterly 
 (monthly before 1983), unpublished. 
 
 42. U.S. Department of Health and Human Services. 
 Social Security Administration. "Medical Pre- 
 mium Payments on Behalf of Indigents." Wash- 
 ington, DC, monthly, unpublished. 
 
 43. U.S. Department of Health and Human Services. 
 Health Care Financing Administration. "Private 
 Health Insurance Plans: Coverage, Enrollment, 
 and Financial Experience." Health Care Financ- 
 ing Review. Washington, DC: U.S. Government 
 Printing Office, annually. 
 
 44. U.S. Department of Health and Human Ser- 
 vices. Social Security Administration. "Feder- 
 ally Funded Foster Care Payments to Individu- 
 als." Washington, DC, annually, unpublished. 
 
 45. U.S. Department of Health and Human Services. 
 Social Security Administration. Social Security 
 Bulletin. Washington, DC: U.S. Government 
 Printing Office, monthly with annual statistical 
 supplement. 
 
 46. U.S. Department of Health and Human Services. 
 Social Secimty Administration. "Supplemental 
 Security Income Payments." Washington, DC, 
 monthly, unpublished. 
 
 47. U.S. Department of Justice. Bureau of Justice 
 Statistics. Prisoners in State and Federal Insti- 
 tutions on December 31. Washington, DC: Bureau 
 of Justice Statistics, annually. 
 
 48. U.S. Department of Justice. Office for Victims of 
 Crime. Victims of Crime Act of 1984: Report to 
 Congress by the Attorney General, December 31, 
 1987. Washington, DC: U.S. Government Printing 
 Office, 1988. 
 
 49. U.S. Department of Labor. Bureau of Labor 
 Statistics. CPI Detailed Report. Washington, DC: 
 U.S. Government Printing Office, monthly. 
 
 50. U.S. Department of Labor. Bureau of Labor 
 Statistics. Employment and Earnings. Wash- 
 ington, DC: U.S. Government Printing Office, 
 monthly. 
 
 51. U.S. Department of Labor. Bureau of Labor 
 Statistics. Employment and Wages: Annual Aver- 
 ages. Washington, DC: U.S. Government Printing 
 Office, annually. 
 
 52. U.S. Department of Labor. Bureau of Labor 
 Statistics. Producer Prices and Price Indexes. 
 Washington, DC: U.S. Government Printing Of- 
 fice, monthly. 
 
 53. U.S. Department of Labor. Employment and 
 Training Administration. "Comprehensive Em- 
 ployment and Training Act (CETA) Payments." 
 Washington, DC, quarterly until 1982, unpub- 
 lished. 
 
 54. U.S. Department of Transportation. Federal 
 Highway Administration. Highway Statistics. 
 
Government Transactions. 
 
 J\lovember 1988 107 
 
 Washington, DC: U.S. Government Printing Of- 
 fice, annually. 
 
 55. U.S. Department of Transportation. Federal 57. 
 Highway Administration. Price Trends for 
 Federal-Aid Highway Construction. Washington, 
 
 DC: FHWA, quarterly. 
 
 56. U.S. Department of Treasury. Financial Manage- 58. 
 ment Service. Monthly Treasury Statement of Re- 
 ceipts and Outlays of the United States Govern- 
 
 ment. Washington, DC: U.S. Government Print- 
 ing Office, monthly. 
 
 U.S. Executive Office of the President. Office 
 of Management and Budget. The Budget of the 
 United States Government. Washington, DC: U.S. 
 Government Printing Office, annually. 
 Urban Institute. "Staff Studies on Comprehensive 
 Employment and Training Act (CETA)." Washing- 
 ton, DC, c. 1976-78, unpublished. 
 
i 
 
Appendix III-A 
 
 Analysis of Charges and Miscellaneous General Revenue, COG, 1982 
 
 The first seven columns of table III-A-1 show the derivation of table III-l, column 1, lines 
 9 through 15. The entries in the first hne of table III-A-1 are the table III-l entries. 
 
 The entry in the first hne of table III-A-1, column 8, is the coverage adjustment shown in 
 table III-l, column 5, line 15. 
 
 The entry in the first line of table III-A-1, column 9, is the other taxes and nontaxes entry 
 shown in table III-l, column 12, line 15, minus the timing adjustment shown in table III-l, 
 column 8, line 15. 
 
 The entry in the first line of table III-A-1, column 10, is the indirect business tax and 
 nontax accruals entry shown in table III-l, column 14, line 15. 
 
 Table III-A-1. 
 
 -Distribution of Current Charges and Miscellaneous General Revenue Among Categories of Receipts and Expenditures, FY 
 
 1982 
 
 [Billions of dollars] 
 
 
 COG 
 Total 
 
 (1) 
 
 Govern- 
 nnent 
 sales 
 
 (2) 
 
 Sale of 
 property 
 
 (3) 
 
 Enter- 
 prise 
 revenue 
 
 (4) 
 
 Interest 
 earnings 
 
 (5) 
 
 Dividends 
 received 
 
 (6) 
 
 Other 
 
 
 Total 
 (7) 
 
 Coverage 
 
 adjust- 
 ment 
 
 (8) 
 
 Personal 
 nontaxes 
 
 (9) 
 
 Indirect 
 business 
 nontaxes 
 
 (10) 
 
 Charges and miscellaneous general revenue, COG 
 
 104.0 
 
 2.3 
 
 5.0 
 
 8.6 
 
 1.3 
 
 17.4 
 
 5.0 
 
 1.4 
 
 1.5 
 
 .8 
 
 1.5 
 
 2.0 
 
 1.0 
 
 2.3 
 
 .4 
 
 .6 
 
 5.2 
 
 1.6 
 7.1 
 2.6 
 5.2 
 .7 
 25.8 
 
 2.1 
 2.7 
 
 13.0 
 
 2.3 
 
 5.0 
 
 0.7 
 
 15.0 
 
 25.8 
 
 0.1 
 
 49.4 
 
 1.3 
 
 36.4 
 
 11.7 
 
 Current charges: 
 
 Education; 
 
 
 Institutions of fiigfier education: 
 Auxiliary enterprises ' 
 
 
 
 
 
 
 
 
 
 Other ' 
 
 
 
 
 
 8.6 
 .3 
 
 17.4 
 
 
 8.6 
 
 .3 
 
 17.4 
 
 
 
 1.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Sewerage 
 
 
 
 5.0 
 
 
 
 
 
 Sanitation other than sewerage (local only) * 
 
 1.0 
 
 
 
 
 .4 
 1.5 
 
 
 .4 
 1.5 
 
 
 Parks and recreation 
 
 
 
 
 
 
 
 
 .8 
 
 
 
 
 
 
 
 
 
 i.5 
 1.9 
 1.0 
 2.3 
 .4 
 .6 
 
 
 
 
 
 
 
 Highways ' 
 
 .1 
 
 
 
 
 
 
 
 
 Water transportation and terminals 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Parking facilities (local only) 
 
 
 
 
 
 
 
 
 
 Miscellaneous commercial activities ' 
 
 
 
 
 
 
 
 
 
 Other' 
 
 1.4 
 
 
 
 
 3.8 
 
 1.6 
 7.1 
 2.6 
 5.2 
 
 .3 
 
 1.6 
 
 1.9 
 
 Miscellar)eous general revenue: 
 
 
 
 
 
 1.6 
 
 
 
 
 
 
 
 .2 
 
 
 6.9 
 
 Donations ' 
 
 
 
 
 
 
 2.3 
 
 4.1 
 
 3 
 
 Fines and forfeits ' 
 
 
 
 
 
 
 
 1.1 
 
 
 
 .7 
 
 
 
 
 
 
 
 
 
 25.8 
 
 
 
 
 
 
 Other: 
 Lotteries (Stale only) and off-track betting (local only) 
 
 
 
 2.1 
 
 .1 
 
 
 
 
 
 
 All other' 
 
 1.5 
 
 
 
 .1 
 
 1.0 
 
 .9 
 
 .2 
 
 
 
 
 
 
 1. Published in Governmental Finances lor State; estimated by BEA for local (from underlying 
 unpublished detail). 
 
 2. Available in summary detail underlying Governmental Finances. 
 
 3. The distribution of the published total to NIPA categories is based on input-output analysis. 
 
 4. Data on current charges for local highways are available in underlying unpublished detail. 
 The distribution tjetween toll facilities revenues (enterprise revenues) and other charges (govern- 
 ment sales) is based on data from Highway Slalistics, Federal Highway Administration. 
 
 5. Distribution of "other" from BEA analysis of data from Census records for individucd large 
 governments. 
 
 6. Data on oil bonuses are from direct contact with States. Such payments are included in Gov- 
 ernmental Finances rents and royalties, but are excluded, as a coverage adjustnnent, from NIPA 
 transactions. 
 
 7, This represents sales of land and existing structures. The total is distributed between land 
 and structures, as are the purchases of land and existing structures. The sale of existing struc- 
 tures is a negative addition to gross purchases of structures. 
 
 Note. — Except where noted, these data can be found in Census of Governments, 1982. 
 COG Census ot Governments. 
 
 109 
 
Appendix III-B 
 
 State and Local Government Functions 
 
 General control 
 
 Financial administration 
 
 Police 
 
 Fire 
 
 Correction 
 
 Elementary and secondary education 
 
 Higher education 
 
 Other education (including libraries) 
 
 Health 
 
 Hospitals 
 
 Government employee retirement and disability 
 
 Workers' compensation 
 
 Temporary disability insurance 
 
 Public assistance 
 
 Veterans programs 
 
 Housing and urban renewal^ 
 
 Water supply^ 
 
 Sewerage^ 
 
 Sanitation 
 
 Parks and recreation . 
 
 Natural gas^ 
 
 Agriculture 
 
 Natural resources 
 
 Electricity supply^ 
 
 Regular highways 
 
 Toll highways^ 
 
 Water terminals^ 
 
 Air terminals^ 
 
 Transit^ 
 
 Protective inspection and regulation 
 
 Employment and training 
 
 Liquor stores^ 
 
 Miscellaneous commercial activities (includes lotteries, off-track betting, 
 
 parking, and other miscellany)^ 
 Other and unallocable 
 
 1. These are enterprise functions. In the national income and product accounts, purchases of goods and services by enterprises 
 consist of capital purchases only. Current operating purchases are included as an expense in the derivation of subsidies less current 
 surplus of government enterprises. 
 
 Ill 
 
-^z 
 
Methodology Papers: 
 The National Income and Product Accounts 
 
 Bureau of Economic Analysis 
 U.S. Department of Commerce 
 
 1. Introduction to National Economic Accounting. (1985) Methodology Paper Se- 
 ries MP-1, 19 pages, $1.00 (GPO Stock No. 003-010-00158-5). 
 
 2. Corporate Profits: Profits Before Tax, Profits Tax Liability, and Dividends. (1985) 
 Methodology Paper Series MP-2, 61 pages, $2.50 (GPO Stock No. 003-010- 
 00143-7). 
 
 3. Foreign Transactions. (1987) Methodology Paper Series MP-3, 52 pages, $2.75 
 (GPO Stock No. 003-010-00178-0). 
 
 4. GNP:An Overview of Source Data and Estimating Methods. (1987) Methodology 
 Paper Series MP-4, 36 pages, $2.00 (GPO Stock No. 003-010-00179-8). 
 
 5. Government Transactions. (1988) Methodology Paper Series MP-5, 120 pages, 
 (GPO Stock No. 003-010-00187-9). 
 
 Forthcoming: 
 
 Personal Consumption Expenditures. 
 Gross Private Domestic Fixed Investment. 
 
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