EXHIBIT 5 Statement of Changes in Cash Balance from Unified Budget
Deficit and Other Activities for the Year Ended September 30, 2012 (in billions of dollars) Unified budget
The NIPA deficit and the unified budget
deficit have been criticized because they include both discretionary and automatic components.
If, for example, the accumulation of assets is avoided by eliminating unified budget
surpluses through tax and spending changes, public and presumably national saving may well fall from already low levels.
Projections of relatively large unified budget
surpluses over the next decade would have been viewed as highly implausible as recently as five years ago.
Surpluses or deficits of the unified budget
equal government saving or dissaving and are reflected in a decrease or increase in the stock of government debt held by the public.
As before, the unified budget
is exactly in balance: The federal government collects $200 in revenues ($100 each from the payroll and income tax) and has an outgo of $200 ($125 for public pension benefits and $75 in other expenditures).
At a broad level, the government's unified budget
is nothing more than a cash-flow identity that can be written
The challenge of balancing the unified budget
went very quickly from hard to easy, thanks to strong economic performance and a related but not yet fully understood jump in federal revenues.
surpluses, which would arise when the OASDHI surpluses exceed 1.
A modern budgeting system, for example, would keep the concept of a unified budget
(showing total federal income and expenditures).
Use these principles within the scope of your own department's situation, or lacking a unified budget
process, use them to manage better.
outlays by function: Four functions--national defense, social security, net interest, and medicare--more than account for the increase in total outlays; on balance, outlays for all other functions decline.