Fiscal Lab Glossary
712 budget, economic, and legislative terms in plain English. Search, browse A to Z, or ask the Fiscal Lab AI.
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2008 Financial Crisis
The 2008 Financial Crisis was triggered by the collapse of the US housing bubble that resulted from lax lending standards, subprime mortgages, low interest rates, and the growth of complex financial instruments like mortgage-backed securities. Treasury and the Fed arranged a takeover of Bear Stearns by JPMorgan Chase in the spring of 2008. At Lehman Brothers, this created expectations for similar help, but the help never came and the institution failed in the fall. Immediately thereafter, the Fed whipsawed and bailed out AIG, which had major exposure to credit default swaps insuring “toxic assets” at banks. These “toxic assets,” owing to their interplay with US bankruptcy law, risked a chain reaction of failures among many banks, leading to a 1930-style panic and complete freezing of credit in the United States.
302(a) Allocation
A Congressional Budget Act of 1974 section 302(a) allocation refers to the allocation of spending/budget authority in the congressional budget resolution among the committees having jurisdiction over either mandatory or discretionary/appropriated spending. Absent a budget resolution, the annual 302(a) number has been established by other means.
302(b) Allocations
Congressional Budget Act of 1974 section 302(b) allocations are the subdivisions of the 302(a) allocation among the appropriation committees’ subcommittee appropriations measures.
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ABS
ABS is an acronym for asset-backed security.
Account
An account is a record for budget or management purposes, tracking outlays and receipts.
Accounts Payable
Accounts payable are what is owed vendors for progress in performance on contracts, rents, and goods and services received.
Accounts Receivable
Accounts receivable is what is owed by entities for progress in performance of contracts, and goods and services rendered.
Accredited Investor
An accredited investor is someone deemed sufficiently wealthy, per Rule 501(a) of Regulation D, to invest in certain assets not available to those not meeting the threshold.
Accrual Accounting
Accrual accounting is a system with revenues and expenses recorded in real time, though payment may be made later.
Adjustable-Rate Mortgage
An adjustable-rate mortgage (ARM) is a loan in which the interest rate periodically adjusts based on a specific benchmark index like the Secured Overnight Financing Rate (SOFR).
Administration Budget
The administration budget was a method of budget presentation used by the executive branch, described in the 1967 President’s Commission on Budget Concepts as “a financial plan for receipts and expenditures of funds owned by the Federal Government, including general funds, special funds, public enterprise funds, and intragovernmental revolving and management funds.”
Advance Appropriation
An advance appropriation is budget authority that is made available for years after the year in which it was appropriated, with the outlay tallied in the fiscal year that funds are spent.
Advance Estimate (GDP)
An advance estimate of GDP is the first estimate of gross domestic product (GDP) for a quarter, based on data that may be incomplete and subject to revision.
Advance Funding
Advance funding is an appropriation of budget authority from a future year, with the outlay made in the current fiscal year, as might be the case in lieu of a supplemental appropriation. With advance funding, budget authority is increased in the current fiscal year and decreased in the future fiscal year.
Advance Payment
An advance payment is exchange of funds prior to receipt of goods, services, or assets.
Affordable Care Act (ACA)
The Affordable Care Act (P.L. 111-148) is the 2010 healthcare law, also known as Obamacare. The legislation substantially modified the American healthcare system.
Agency
An agency, within the federal government, may be thought of as an entity organized by government to carry out some function or functions.
Agency Debt
Agency debt is issued by federal agencies or Government Sponsored Enterprises (GSEs) either directly to the public or to other government accounts.
Agency Mortgage-Backed Security (agency MBS)
An agency mortgage-backed security (AMBS) is a mortgage-backed security issued or guaranteed by federal agencies and government sponsored enterprises.
Aggregate Measure
An aggregate measure is a summation of other measures or elements of the same measurement.
Allocation
An allocation is an authorization to obligate budget authority to another agency, often when a program’s administration is shared between agencies.
Allotment
An allotment is an agency authorization to incur obligations within a specified amount, guided by the general apportionment requirements in OMB Circular No. A-11.
Allowance
An allowance is an amount to cover possible additional proposals and contingencies for programs that remains undistributed until the proposal or contingency occurs.
Alternative Measures of Labor Underutilization
Alternative measures of labor underutilization are a range of measures designated U-1, U-2, and U-4 to U-6 by the Bureau of Labor Statistics. U-3 is the official unemployment rate. U-1, U-2, U-4, U-5, and U-6 limit or expand on the U-3 definition.
Amendment
An amendment is a legislative proposal that modifies part of a measure.
American Community Survey (ACS)
The American Community Survey (ACS) is an annual Census Bureau rolling survey of the country’s major population centers and a primary source for information regarding people and housing.
Antideficiency Act
The Antideficiency Act prohibits spending or incurring debt or accepting voluntary service absent appropriations or specific authorization in law (31 U.S.C. §§ 1341, 1342, 1512 - 1514 & 1517).
Antideficiency Act Violation
An Antideficiency Act violation happens when an obligation or spending is made in excess of appropriations. Penalties for a willful and knowing violation include fines and imprisonment, though no one has ever been convicted.
Apportionment
An apportionment is a plan to ensure spending does not exceed or prematurely exhaust budget authority.
Appreciation
Appreciation is an increase in value relative to some base value.
Apprenticeship
An apprenticeship is a relationship between a worker and a sponsor involving on-the-job training and occupation-specific skills development.
Appropriated Entitlement
An appropriated entitlement is a mandatory program funded by discretionary/annual appropriations, such as veteran’s compensation and Medicaid.
Appropriation
An appropriation provides discretionary spending, budget authority, to federal agencies to spend money from Treasury during a specific time period. Legislative appropriations originate in the House, and theoretically follow authorizing legislation. Typical appropriations include annual regular appropriations, emergency or supplemental appropriations, and continuing resolutions to extend prior appropriation measures.
Appropriation Anomaly
An appropriation anomaly is the flexibility in a Continuing Resolution to address urgent or unique funding needs that cannot be met under a straight extension of prior-year appropriations, and which is necessary for the functioning of an agency. Outside such anomalies, a uniform continuation of funding is applied to agencies without broader adjustments to the entire budget.
Appropriation Rider
An appropriation rider limits or requires actions regarding the expenditure of the appropriation to which the rider is attached.
Asset (Government)
Tangible or intangible items owned by the federal government, which would have probable economic benefits that can be obtained or controlled by a federal government entity. (See also, Liability.)
Asset-Backed Security (ABS)
An asset-backed security is a term debt instrument that is collateralized by specific financial assets, such as credit card receivables or auto loans, and that makes payments based on the performance of these assets.
Audit
An audit is an independent examination of records to verify accuracy, completeness, and compliance.
Authorization
An authorization is a legislative proposal or law that provides for a federal agency, activity, or program, including policies and restrictions, and provides a ceiling on the appropriations that actually fund and bring the authorized policy to life.
Authorizing Committee
An authorizing committee is a House or Senate standing committee, excluding appropriations, that has legislative jurisdiction in a particular area.
Automatic Stabilizer
An automatic stabilizer is a feature built into fiscal policy that promotes budget deficits in recessions and budget surpluses during expansions without the need for further policy change.
Automation
Automation usually refers to mechanical processes that reduce the amount of labor required to produce goods or services, and it is beneficial when it lowers the overall cost of production.
Average
Average is obtained by summing values and dividing by the quantity of numbers being summed.
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BA
BA is an acronym for budget authority.
Backdoor Authority/Spending
Backdoor authority/spending refers to budget authority (spending) that is provided in laws other than appropriation bills.
Balance of Payments
Balance of payments refers to the sum of transactions - debits and credits - between one country and other countries, over a period of time, broken into the current accounts, capital accounts, and financial accounts.
Balance Sheet
A balance sheet reflects an entity’s financial condition at a specific point in time.
Balanced Budget
A balanced budget occurs when receipts equal outlays.
Balanced Budget and Emergency Deficit Control Act of 1985
The Balanced Budget and Emergency Deficit Control Act of 1985, known as Gramm-Rudman-Hollings, established “maximum deficit amounts” and a sequestration procedure to reduce excessive spending to achieve the established targets. Though Congress acted to prevent or limit spending reductions that would have occurred under sequestration, the process served as a spending brake to force regular consideration of spending policy (P.L. No. 99 - 177, title II, 99 Stat. 1037, 1038).
Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987
The Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 (P.L. 100 - 119, 101 Stat. 754) was passed at the end of the fiscal year on September 29, 1987, and it amended the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm- Rudman-Hollings), revising sequestration procedures, among other provisions.
Bank for International Settlements (BIS)
The Bank for International Settlements (BIS) is an international financial organization, functioning as a bank for central banks and helping them pursue monetary and financial stability.
Bank Holding Company (BHC)
A bank holding company (BHC) is a company that directly or indirectly controls one or more banks, and is regulated and supervised by the Federal Reserve in accordance with the Bank Holding Company Act of 1956.
Bank Reserves
Bank reserves include the cash in a bank’s vaults and its deposits with Federal Reserve banks.
Bank Run
A bank run is when a large number of a bank’s depositors simultaneously withdraw deposits, contributing to a panic and the bank’s insolvency.
Barrier to Entry
A barrier to entry is an obstacle, such as a policy or monopoly, that restricts freedom to enter and compete in a market.
Base Period
The base period is the point in time used for comparing a change in data over time, such as may be involved in estimating changes to the price level (see CPI) or percent changes in GDP between two periods of time.
Base Realignment and Closure Commission (BRAC)
Base Realignment and Closure Commission (BRAC) was an independent federal advisory panel that met for five rounds between 1988 and 2005, in which the Department of Defense would recommend base closures that were reviewed by BRAC, with the Congress taking a single up-or-down vote to approve or reject the recommendations en bloc.
Base Year
A base year is a year that is used for comparing the change in data over time.
Basel Committee on Banking Supervision (BCBS)
The Basel Committee on Banking Supervision (BCBS) is the primary entity that develops and sets international standards on bank capital adequacy and prudential regulations. It introduced a capital measurement system in 1988, known as Basel I, which was revised as Basel II in 2004. After the 2008 Financial Crisis, BCBS issued new banking system standards, known as Basel III.
Baseline
A baseline is a projected level of spending, revenues, and surpluses or deficits for the coming year or years. The Congressional Budget Office (CBO) prepares an annual baseline Budget and Economic Outlook.
Bases of Budgeting
Bases of budgeting are methods for calculating budget figures, such as a cash equivalent basis or accrual basis.
Basis Point
A basis point is equal to one one-hundredth of a percentage point. For example, .01 equals one basis point of 1.00 (one percent), which is equal to 100 basis points.
BEA
BEA is an acronym for Bureau of Economic Analysis.
Biennial Budget
A biennial budget is a budget that covers two years instead of just one, which is the norm with the federal budget.
Bills
Bills, in the legislative context, are draft legislation introduced by a member of the House or Senate, typically designated “H.R.” in the House and “S.” in the Senate. Introduced bills do not carry over from Congress to Congress, and must be reintroduced after a new Congress convenes in January of odd-numbered years to be considered.
Birth Rate
The birth rate is the average annual number of births per 1,000 population.
Black Market
A black market is the selling of goods outside the legal system at illegal prices or with illegal terms.
BLS
BLS is an acronym for Bureau of Labor Statistics.
Borrowing Authority
Borrowing authority is budget authority that allows an agency to borrow money and obligate against amounts borrowed.
BRAC
BRAC is an acronym for the Base Realignment and Closure Commission.
Bretton Woods System
The Bretton Woods system was instituted after World War II, creating the International Monetary Fund (IMF) and the World Bank (and eventually the World Trade Organization (WTO)). It established what is known as the gold exchange standard for the US to exchange gold for US dollars only with foreign governments or their central banks, but not US households or firms.
Budget
A budget is a detailed statement of anticipated revenues and expenses during an accounting period called the fiscal year for the federal government, which has run from October 1 to September 30 since 1976.
Budget Act
Budget Act is the common name of the Congressional Budget and Impoundment Control Act of 1974.
Budget Aggregates
Budget aggregates are totals for on-budget spending, revenues, and Social Security levels in the congressional budget resolution, enforced by section 311 of the Congressional Budget Act.
Budget and Accounting Act of 1921
The Budget and Accounting Act of 1921 (P.L.67-13, 42 Stat. 20) provided much of the framework for the current budget process, including directing the president to submit a single, annual, consolidated budget proposal to Congress, establishing the Bureau of the Budget (renamed Office of Management and Budget (OMB)), and creating the General Accounting Office (renamed Government Accountability Office (GAO)) to provide Congress with the resources to ensure accountability.
Budget Deficit
A budget deficit occurs when spending or outlays exceed receipts.
Budget Enforcement Act of 1990
The Budget Enforcement Act of 1990 (P.L.101 - 508, title XIII, 104 Stat. 1388, 1388-573) amended the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings) and the Congressional Budget and Impoundment Control Act of 1974, modifying procedures and definitions for sequestration and deficit reduction, reforming budgetary credit accounting, maintaining the off-budget status of the Old-Age and Survivors Insurance and Disability Insurance Trust Funds, and removing Social Security receipts and outlays from deficit and sequestration calculations.
Budget Enforcement Act of 1997
The Budget Enforcement Act of 1997 (P.L.105 - 33, title X, 111 Stat. 251, 677) extended the 1990 BEA provisions through fiscal year 2002 and added new categories of discretionary spending.
Budget Estimates
Budget estimates are estimates of budget authority, outlays, receipts, and other budget measures that cover the current budget and future budget years.
Budget Function 050: National Defense
Budget Function 050 is a division of federal spending that includes the common defense and security of the United States.
Budget Function 150: International Affairs
Budget Function 150 is a division of federal spending that includes maintaining peaceful international relations and commerce.
Budget Function 250: General Science, Space, and Technology
Budget Function 250 is a division of federal spending that includes science and research activities, including National Science Foundation, National Aeronautics and Space Administration (NASA), and general science research supported by the Department of Energy.
Budget Function 270: Energy
Budget Function 270 is a division of federal spending that includes Energy Department programs, excluding atomic energy.
Budget Function 300: Natural Resources and Environment
Budget Function 300 is a division of federal spending that includes developing, managing, and maintaining the nation’s natural resources and environment, excluding water supply, sewer, and waste treatment.
Budget Function 350: Agriculture
Budget Function 350 is a division of federal spending that includes economic stability in agriculture.
Budget Function 370: Commerce and Housing Credit
Budget Function 370 is a division of federal spending that includes commerce, housing credit, and deposit insurance industries.
Budget Function 400: Transportation
Budget Function 400 is a division of federal spending that includes transportation.
Budget Function 450: Community and Regional Development
Budget Function 450 is a division of federal spending that includes development of physical facilities or financial infrastructures.
Budget Function 500: Education, Training, Employment, and Social Services
Budget Function 500 is a division of federal spending that includes enhancing employment opportunities.
Budget Function 550: Health
Budget Function 550 is a division of federal spending that includes health programs other than Medicare.
Budget Function 570: Medicare
Budget Function 570 is a division of federal spending that includes federal hospital insurance and federal supplementary medical insurance.
Budget Function 600: Income Security
Budget Function 600 is a division of federal spending that includes retirement, disability, unemployment, welfare, and similar programs, excluding Social Security and veteran’s benefits.
Budget Function 650: Social Security
Budget Function 650 is a division of federal spending that includes Social Security.
Budget Function 700: Veterans Benefits and Services
Budget Function 700 is a division of federal spending that includes benefits and services for veterans.
Budget Function 750: Administration of Justice
Budget Function 750 is a division of federal spending that includes judicial services, police protection, law enforcement, and other services to maintain domestic order.
Budget Function 800: General Government
Budget Function 800 is a division of federal spending that includes federal government overhead costs, including legislative and executive activities.
Budget Function 900: Net Interest
Budget Function 900 is a division of federal spending that includes transactions that directly give rise to interest payments, including interest paid on debt, on uninvested funds, and on tax refunds, offset by interest collections.
Budget Function 920: Allowances
Budget Function 920 is a division of federal spending that includes allowances, which are a category that may be included in a budget to ensure that the budget reflects the total estimated budget authority and outlay requirements for future years.
Budget Function 950: Undistributed Offsetting Receipts
Budget Function 950 is a division of federal spending that includes offsetting receipts classified as undistributed offsetting receipts. To avoid distortion of agency or subfunction totals, these offsetting receipts are deducted from totals for the whole government rather than from a single agency or subfunction.
Budget Function 970: Overseas Deployments and Other Activities
Budget Function 970 is a division of federal spending that includes military operations and deployments, and creates separation from core Function 050 spending.
Budget Function 999: Multifunction Account (used for accounts that involve two or more major functions)
Budget Function 999 is a division of federal spending that involves two or more major functions.
Budget Functions
Budget functions are divisions of federal spending across 20 policy areas from Function 050 (Defense) to Function 950 (Undistributed Offsetting Receipts). Further subdivision or subfunctions exist for most functions.
Budget Identification Code
A budget identification code is an 11-digit code attached to each appropriation or fund account in the president’s budget. The code identifies the agency, the account, the type of fund (e.g., regular or supplemental), and the account’s functional and subfunctional classifications.
Budget Points of Order
Budget points of order are a parliamentary tool to enforce budget resolution levels and rules. The Senate Budget Committee determines whether a measure violates a particular section of the Budget Act. In the House, a point of order can be raised under Rule XXI, such as an appropriation not authorized by law. Points of order can be waived by a majority in the House or a three-fifths vote in the Senate.
Budget Receipts
Budget receipts are collections from the public, including individual and corporate income taxes and social insurance taxes, excise taxes, duties, court fines, compulsory licenses, deposits of earnings by the Federal Reserve System, gifts, and contributions.
Budget Sub-Function 051: Department of Defense—Military
Budget Sub-Function 051 is a subdivision of Function 050 that includes most of the Department of Defense.
Budget Sub-Function 053: Atomic Energy Defense Activities
Budget Sub-Function 053 is a subdivision of Function 050 that includes Department of Energy programs devoted to national defense, including nuclear weapons.
Budget Sub-Function 054: Defense-Related Activities
Budget Sub-Function 054 is a subdivision of Function 050 that includes miscellaneous defense activities, like selective services.
Budget Sub-Function 151: International Development and Humanitarian Assistance
Budget Sub-Function 151 is a subdivision of Function 150 that includes humanitarian and development assistance.
Budget Sub-Function 152: International Security Assistance
Budget Sub-Function 152 is a subdivision of Function 150 that includes transferring defense articles and services to foreign governments.
Budget Sub-Function 153: Conduct of Foreign Affairs
Budget Sub-Function 153 is a subdivision of Function 150 that includes diplomatic and consular operations of State Department.
Budget Sub-Function 154: Foreign Information and Exchange Activities
Budget Sub-Function 154 is a subdivision of Function 150 that includes student and cultural exchange programs.
Budget Sub-Function 155: International Financial Programs
Budget Sub-Function 155 is a subdivision of Function 150 that includes export credit, the military sales trust fund, international commodity agreements, and international monetary programs.
Budget Sub-Function 251: General Science and Basic Research
Budget Sub-Function 251 is a subdivision of Function 250 that includes the National Science Foundation programs and Energy Department research.
Budget Sub-Function 252: Space Flight, Research, and Supporting Activities
Budget Sub-Function 252 is a subdivision of Function 250 that includes development and operation of space systems.
Budget Sub-Function 271: Energy Supply
Budget Sub-Function 271 is a subdivision of Function 270 that includes development of domestic energy resources and systems.
Budget Sub-Function 272: Energy Conservation
Budget Sub-Function 272 is a subdivision of Function 270 that includes prudent use of energy resources.
Budget Sub-Function 274: Emergency Energy Preparedness
Budget Sub-Function 274 is a subdivision of Function 270 that includes maintaining a stockpile of energy resources.
Budget Sub-Function 276: Energy Information, Policy, and Regulation
Budget Sub-Function 276 is a subdivision of Function 270 that includes overhead activities at Energy Department.
Budget Sub-Function 301: Water Resources
Budget Sub-Function 301 is a subdivision of Function 300 that includes water protection, conservation, and irrigation.
Budget Sub-Function 302: Conservation and Land Management
Budget Sub-Function 302 is a subdivision of Function 300 that includes maintaining national forests, conserving private land, and reclaiming surface mining areas.
Budget Sub-Function 303: Recreational Resources
Budget Sub-Function 303 is a subdivision of Function 300 that includes acquiring, improving, and operating recreational lands and facilities, and preserving historic areas.
Budget Sub-Function 304: Pollution Control and Abatement
Budget Sub-Function 304 is a subdivision of Function 300 that includes air, water, and land pollution, and enhancing the environment.
Budget Sub-Function 306: Other Natural Resources
Budget Sub-Function 306 is a subdivision of Function 300 that includes miscellaneous natural resource programs.
Budget Sub-Function 351: Farm Income Stabilization
Budget Sub-Function 351 is a subdivision of Function 350 that includes subsidies and other payments to stabilize agricultural prices.
Budget Sub-Function 352: Agricultural Research and Services
Budget Sub-Function 352 is a subdivision of Function 350 that includes all other agricultural programs.
Budget Sub-Function 371: Mortgage Credit
Budget Sub-Function 371 is a subdivision of Function 370 that includes cash transactions for homeownership and related loan and insurance programs.
Budget Sub-Function 372: Postal Service
Budget Sub-Function 372 is a subdivision of Function 370 that includes any net outlays of the Postal Service.
Budget Sub-Function 373: Deposit Insurance
Budget Sub-Function 373 is a subdivision of Function 370 that includes deposit Insurance programs.
Budget Sub-Function 376: Other Advancement of Commerce
Budget Sub-Function 376 is a subdivision of Function 370 that includes loan programs to aid specialized forms of business.
Budget Sub-Function 401: Ground Transportation
Budget Sub-Function 401 is a subdivision of Function 400 that includes ground transportation, encompassing roads and highways, railroads, and urban mass transit.
Budget Sub-Function 402: Air Transportation
Budget Sub-Function 402 is a subdivision of Function 400 that includes air transportation.
Budget Sub-Function 403: Water Transportation
Budget Sub-Function 403 is a subdivision of Function 400 that includes maritime commerce.
Budget Sub-Function 407: Other Transportation
Budget Sub-Function 407 is a subdivision of Function 400 that includes other transportation programs and overhead.
Budget Sub-Function 451: Community Development
Budget Sub-Function 451 is a subdivision of Function 450 that includes aid for urban community development.
Budget Sub-Function 452: Area and Regional Development
Budget Sub-Function 452 is a subdivision of Function 450 that includes aid for the economic development of depressed areas.
Budget Sub-Function 453: Disaster Relief and Insurance
Budget Sub-Function 453 is a subdivision of Function 450 that includes natural disaster assistance.
Budget Sub-Function 501: Elementary, Secondary, and Vocational Education
Budget Sub-Function 501 is a subdivision of Function 500 that includes preschool, elementary, secondary, and vocational education programs.
Budget Sub-Function 502: Higher Education
Budget Sub-Function 502 is a subdivision of Function 500 that includes college and graduate school programs.
Budget Sub-Function 503: Research and General Education Aids
Budget Sub-Function 503 is a subdivision of Function 500 that includes education research and assistance, including for the arts, the humanities, public libraries, and museums.
Budget Sub-Function 504: Training and Employment
Budget Sub-Function 504 is a subdivision of Function 500 that includes job and skill training and employment services and placement.
Budget Sub-Function 505: Other Labor Services
Budget Sub-Function 505 is a subdivision of Function 500 that includes labor services, such as gathering labor statistics and mediation and conciliation services.
Budget Sub-Function 506: Social Services
Budget Sub-Function 506 is a subdivision of Function 500 that includes social services to the poor and elderly that are not part of another function.
Budget Sub-Function 551: Healthcare Services
Budget Sub-Function 551 is a subdivision of Function 550 that includes medical services for individuals and families.
Budget Sub-Function 552: Health Research and Training
Budget Sub-Function 552 is a subdivision of Function 550 that includes all health and medical research programs.
Budget Sub-Function 554: Consumer and Occupational Health and Safety
Budget Sub-Function 554 is a subdivision of Function 550 that includes food and drug inspection, consumer product safety, and occupational health and safety.
Budget Sub-Function 571: Medicare
Budget Sub-Function 571 is a subdivision of Function 570 that includes the entire Medicare function.
Budget Sub-Function 601: General Retirement and Disability Insurance (Excluding Social Security)
Budget Sub-Function 601 is a subdivision of Function 600 that includes non-Social Security retirement and disability programs.
Budget Sub-Function 602: Federal Employee Retirement and Disability
Budget Sub-Function 602 is a subdivision of Function 600 that includes retirement and disability programs for federal workers.
Budget Sub-Function 603: Unemployment Compensation
Budget Sub-Function 603 is a subdivision of Function 600 that includes benefits for unemployed workers.
Budget Sub-Function 604: Housing Assistance
Budget Sub-Function 604 is a subdivision of Function 600 that includes housing assistance for individuals and families, excluding loans, loan guarantees, or insurance.
Budget Sub-Function 605: Food and Nutrition Assistance
Budget Sub-Function 605 is a subdivision of Function 600 that includes food or nutritional assistance to individuals and families.
Budget Sub-Function 609: Other Income Security
Budget Sub-Function 609 is a subdivision of Function 600 that includes other income security programs.
Budget Sub-Function 651: Social Security
Budget Sub-Function 651 is a subdivision of Function 650 that includes all of Social Security.
Budget Sub-Function 701: Income Security for Veterans
Budget Sub-Function 701 is a subdivision of Function 700 that includes veterans’ compensation, life insurance, pensions, and burial benefits.
Budget Sub-Function 702: Veterans’ Education, Training, and Rehabilitation
Budget Sub-Function 702 is a subdivision of Function 700 that primarily includes the “G.I. Bill” readjustment.
Budget Sub-Function 703: Hospital and Medical Care for Veterans
Budget Sub-Function 703 is a subdivision of Function 700 that includes Veterans Affairs Medicare care and research.
Budget Sub-Function 704: Veterans’ Housing
Budget Sub-Function 704 is a subdivision of Function 700 that includes housing programs for veterans and their dependents.
Budget Sub-Function 705: Other Veterans’ Benefits and Services
Budget Sub-Function 705 is a subdivision of Function 700 that includes Veterans Affairs’ administrative expenses.
Budget Sub-Function 751: Federal Law Enforcement Activities
Budget Sub-Function 751 is a subdivision of Function 750 that includes the Federal Bureau of Investigation (FBI), Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE), and the Drug Enforcement Administration (DEA).
Budget Sub-Function 752: Federal Litigative and Judicial Activities
Budget Sub-Function 752 is a subdivision of Function 750 that includes costs associated with the operation of the federal court system and legal proceedings.
Budget Sub-Function 753: Federal Correctional Activities
Budget Sub-Function 751 is a subdivision of Function 750 that includes incarceration, supervision, parole, and rehabilitation of federal prisoners.
Budget Sub-Function 754: Criminal Justice Assistance
Budget Sub-Function 754 is a subdivision of Function 750 that includes local government law enforcement and judicial assistance.
Budget Sub-Function 801: Legislative Sub-Functions
Budget Sub-Function 801 is a subdivision of Function 800 that includes most of the legislative branch.
Budget Sub-Function 802: Executive Direction and Management
Budget Sub-Function 802 is a subdivision of Function 800 that includes the executive office of the president.
Budget Sub-Function 803: Central Fiscal Operations
Budget Sub-Function 803 is a subdivision of Function 800 that includes Treasury Department general tax collection and fiscal operations.
Budget Sub-Function 804: General Property and Records Management
Budget Sub-Function 804 is a subdivision of Function 800 that includes most of the operations of the General Services Administration.
Budget Sub-Function 805: Central Personnel Management
Budget Sub-Function 805 is a subdivision of Function 800 that includes most operating costs of the Office of Personnel Management (OPM) and related agencies.
Budget Sub-Function 806: General Purpose Fiscal Assistance
Budget Sub-Function 806 is a subdivision of Function 800 that includes federal aid to state, local, and territorial governments, excluding payments for community development or social services programs.
Budget Sub-Function 808: Other General Government
Budget Sub-Function 808 is a subdivision of Function 800 that includes miscellaneous expenses.
Budget Sub-Function 809: Deductions for Offsetting Receipts
Budget Sub-Function 809 is a subdivision of Function 800 that includes offsetting receipts that are not closely related to other Function 800 sub-functions.
Budget Sub-Function 901: Interest on the Treasury Debt Securities (Gross)
Budget Sub-Function 901 is a subdivision of Function 900 that includes outlays for interest on the public debt.
Budget Sub-Function 902: Interest Received by On-Budget Trust Funds
Budget Sub-Function 902 is a subdivision of Function 900 that includes interfund interest collected by on-budget nonrevolving trust funds.
Budget Sub-Function 903: Interest Received by Off-Budget Trust Funds
Budget Sub-Function 903 is a subdivision of Function 900 that includes interfund interest collected by off-budget nonrevolving trust funds.
Budget Sub-Function 908: Other Interest
Budget Sub-Function 908 is a subdivision of Function 900 that includes other interest expenditures and offsetting receipts.
Budget Sub-Function 909: Other Investment Income
Budget Sub-Function 909 is a subdivision of Function 900 that includes the actual and estimated earnings on private securities of the Railroad Retirement Investment Trust.
Budget Sub-Function 921-929: Contingencies for Specific Requirements
Budget Sub-Functions 921-929 are subdivisions of Function 920 that vary from budget to budget.
Budget Sub-Function 951: Employer Share, Employee Retirement (On-Budget)
Budget Sub-Function 951 is a subdivision of Function 950 that includes on-budget federal agency payments to fund retirement systems of federal employees as intragovernmental transactions with both the payment and collection included in federal outlays.
Budget Sub-Function 952: Employer Share, Employee Retirement (Off-Budget)
Budget Sub-Function 952 is a subdivision of Function 950 that includes off-budget federal agency payments to fund retirement systems of federal employees as intragovernmental transactions with both the payment and collection included in federal outlays.
Budget Sub-Function 953: Rents and Royalties on the Outer Continental Shelf
Budget Sub-Function 953 is a subdivision of Function 950 that includes rents and royalties on the outer continental shelf.
Budget Sub-Function 954: Sale of Major Assets
Budget Sub-Function 954 is a subdivision of Function 950 that includes returns from the sale of major assets.
Budget Sub-Function 959: Other Undistributed Offsetting Receipts
Budget Sub-Function 959 is a subdivision of Function 950 that includes other undistributed offsetting receipts, including collections for the lease of federal lands for petroleum exploration.
Budget Summit at Andrews Air Force Base (1990)
The September 1990 Budget Summit at Andrews Air Force Base was conveyed to address budget deficits and fund the government. Agreement was reached on September 30 involving spending reductions that never materialized and a tax increase that broke President George H. W. Bush’s “read my lips: no new taxes” pledge.
Budget Surplus
A budget surplus occurs when total revenues exceed total spending during a given period, such as the fiscal year.
Budget Update
A budget update is a revised estimate of budget authority, receipts, and outlays and other budget measures that cover the current budget and future budget years.
Budget Year
A budget year is the fiscal year for which the referenced budgeting is taking place.
Budgetary Reserves
Budgetary reserves are portions of budgetary resources withheld through apportionment by the Office of Management and Budget (OMB) by authority of the Antideficiency Act (31 U.S.C. § 1512) to provide for contingencies or to effect savings.
Budgetary Resources
Budgetary resources are an amount available to enter into new obligations, and consists of new budget authority and unobligated balances of budget authority provided in previous years.
Budget Authority (BA)
Budget authority (BA) is authority provided by federal law, generally appropriations measures, for an agency to finance programs and activities.
Budget Resolution
A budget resolution is a concurrent resolution under the Congressional Budget Act that, when adopted by both House and Senate, sets a plan for Congress’s spending for the current year and the next five to 10 years. It is a resolution, and so is not signed into law. It may contain reconciliation instructions to authorizing committees that direct them to report legislation to make directed budgetary changes. To stay within the budget resolution’s plan, budgetary points of order may be made in the Senate against budgetary violations.
Bureau of Economic Analysis (BEA)
The Bureau of Economic Analysis (BEA) is a statistical agency within the Commerce Department that provides statistical estimates for such things as Gross Domestic Product (GDP), Personal Consumption Expenditures (PCE), and International Transactions and Trade.
Bureau of Labor Statistics (BLS)
The Bureau of Labor Statistics (BLS) is a statistical agency within the Labor Department that provides statistical estimates for labor and price topics such as employment and unemployment and the Consumer Price Index (CPI).
Bureau of the Budget
The Bureau of the Budget is the original name for what is now known as the Office of Management and Budget (OMB).
Burn Rate
Burn rate is the rate at which cash is spent over time.
Business Cycle
The business cycle is a concept in economics used to describe the timeline of periods of growth, tracking the movement of the economy from peak to trough and back again, often measured by changes in real GDP and employment.
Business Investment
Business investment is spending by private businesses and nonprofits on physical capital, such as machinery or computers, structures.
Business Sector
The business sector is a subsector of the total economy that excludes general government, private households, and nonprofit institutions.
Buyback
A buyback, in the context of federal debt, involves the Treasury purchasing marketable securities from the public prior to their maturity through a competitive redemption process.
Byrd Rule
The Byrd Rule, named after former Senator Robert C. Byrd, is a Senate rule that allows a senator to strike extraneous material in, or in amendments to, reconciliation legislation, and is currently found in Section 313 of the Congressional Budget Act (2 U.S.C. Section 644).
C
C-CPI-U
C-CPI-U is an acronym for the Chained Consumer Price Index for All Urban Consumers. This price index captures how consumers change the items they buy as prices and quality change.
Cap Adjustments
Cap adjustments are allowable increases in discretionary spending limits for purposes specified in statute, based on Section 251(b) of the Balanced Budget and Emergency Deficit Control Act of 1985.
Capital
Capital is a concept in economics used to describe an asset that can take several forms. Capital can be physical in nature, such as land or equipment, or intangible, such as intellectual property. Capital can take a financial form, such as funds raised by incurring liabilities such as bonds, mortgages, or stock certificates; or it can be embodied in the skills and other attributes of humans, thus reflecting their education, training, and work experience.
Capital Budget
A capital budget is a budget that segregates capital investments from the operating budget’s expenditures.
Capital Expenditures
Capital expenditures are those expenditures made to acquire, enlarge, or improve property, plant, and equipment (PP&E), and they are measured on a gross basis; sales and other dispositions of fixed assets are not netted against them.
Capital Investment
Capital investments are payments made to acquire capital assets to produce goods and services.
Capitalism
Capitalism is an economic system based on private ownership of productive resources and allocation of goods according to the signals provided by market prices.
CARFA
CARFA is an acronym for the Commission on the Accountability and Review of Federal Agencies.
Cartel
A cartel is a group that coordinates supply decisions to maximize the profits of group members.
Cash Accounting
Cash accounting is an accounting system with revenues recorded when cash is actually received, and expenses are recorded when payment is made.
CBDC
CBDC is an acronym for Central Bank Digital Currency.
CBO
See Congressional Budget Office.
CBO Baseline
The CBO baseline is the projected levels of federal receipts, budget authority, and outlays for the budget year and subsequent fiscal years.
Census
A census is an enumeration of an entire population, and possibly other entities like businesses, housing, etc.
Census Bureau
The Census Bureau is a statistical agency in the Department of Commerce that conducts censuses and surveys.
Census Division
A census division is one of nine geographic areas of the United States used by BLS and other statistical agencies for presenting regional data.
Census Region 1
Census Region 1 is the Northeast Region, which includes nine states: Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New Jersey, New York, and Pennsylvania.
Census Region 2
Census Region 2 is the Midwest Region, which includes 12 states: North Dakota, South Dakota, Nebraska, Kansas, Missouri, Iowa, Minnesota, Wisconsin, Illinois, Michigan, Indiana, and Ohio.
Census Region 3
Census Region 3 is the South Region, which includes 16 states plus Washington, DC: Maryland, Delaware, West Virginia, Virginia, Kentucky, Tennessee, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Arkansas, Louisiana, Oklahoma, Texas, and the District of Columbia.
Census Region 4
Census Region 4 is the West Region, which includes 13 States: Washington, Idaho, Montana, Wyoming, Oregon, California, Nevada, Utah, Colorado, Arizona, New Mexico, Alaska, Hawaii.
Census Regions
Census regions are four divisions of the United States by the Census Bureau: Northeast, Midwest, South, and West.
Census Tract
A census tract is a small, relatively permanent statistical subdivision of a county and contains about 4,000 people and 1,600 housing units.
Central Bank
A central bank is an institution that controls a country’s money supply and regulates the banking system.
Central Bank Digital Currency (CBDC)
A CBDC is a digital form of central bank money that is widely available to the general public. A CBDC would be a liability of the Federal Reserve, not of a commercial bank.
CFPB
CFPB is an acronym for Consumer Financial Protection Bureau.
CFTC
CFTC is an acronym for US Commodity Futures Trading Commission.
Chained CPI-All Urban Consumers (C-CPI-U)
The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) is one of the price indexes produced by BLS. It captures how urban consumers change the items they buy as prices and quality change.
Chained dollars
Chained dollars are the unit of measurement for real data. Real series adjust for inflation by holding the value of the dollar constant. One year is chosen as the base year, and dollar values from other years are adjusted to match the base year. Chained dollars get their name because adjustments for periods far from the base year are calculated by linking together period-by-period price changes. Using a chained method reduces distortion from substitution bias.
Chained Index
A chained index is an index with its value in any given period compared to its value in the preceding period. Such indexes, for example, are used in BEA National Income and Product Accounts (NIPA).
CHIMPs
CHIMPS is an acronym for “Changes in Mandatory Programs” that are found in appropriations bills, which change direct spending.
Civilian Labor Force
The civilian labor force is a statistical concept used to describe the population of people age 16 and above who are either employed or looking for work.
Civilian Population
The civilian population includes all US residents age 16 and above who are not in the active-duty military or otherwise institutionalized.
Clearing Account
A clearing account is an account that holds general, special, or trust fund federal receipts or disbursements temporarily, pending clearance to the appropriate account.
Coinage Act of 1834
In the Coinage Act of 1834, President Andrew Jackson devalued the US dollar by 6.6 percent to $20.67 per troy ounce in terms of gold, but not in terms of silver, thus increasing the gold-to-silver mint price ratio from 15:1 to 16:1, which by slightly overvaluing gold and undervaluing silver relative to prevailing market prices caused an inflow of gold, leading to a 42 percent increase in bank deposits and a 36 percent increase in prices from 1834 to 1836.
Collateral
Collateral is any asset pledged by a borrower to guarantee payment of a debt.
Collective Bargaining
Collective bargaining is a negotiation method where unions, representing employees, negotiate the conditions of employment for workers.
Collusion
Collusion is an agreement by individuals or entities that agree to avoid competitive practices to distort trade to their advantage.
Combined Statement of Receipts, Outlays, and Balances of the United States Government
The Combined Statement of Receipts, Outlays, and Balances of the United States Government is an annual Treasury publication providing an accounting of the unified budget and a summary accounting of agencies’ budget activities.
Commercial Bank
A commercial bank is a chartered and regulated financial institution that is allowed to offer checking and savings accounts, obtain FDIC deposit insurance, and is owned by stockholders who seek to operate at a profit.
Commercial Mortgage-Backed Security (CMBS)
Commercial mortgage-backed securities (CMBS) are investment products that pool commercial mortgage loans, and their returns are based on performance of those loans.
Commercial Paper (CP)
Commercial paper refers to short-term (maturity typically up to 270 days), unsecured corporate debt.
Commission on the Accountability and Review of Federal Agencies Act (CARFA)
The Commission on the Accountability and Review of Federal Agencies Act (CARFA) is a legislative proposal to implement and apply the principles of BRAC to all federal agencies, seeking to improve government efficiency by focusing on a narrow set of criteria to eliminate wasteful, duplicative, and outdated programs, coupled with a single up-or-down vote on all the recommendations together. CARFA’s most significant contribution to budgeting is its expedited fast-track procedure for considering final recommendations, which has been incorporated into various leadership proposals.
Commodity
A commodity is an economic good such as wheat, coffee, petroleum, or gold, or a customized or mass-produced article that is readily exchanged within the market.
Commodity Futures Trading Commission (CFTC)
The Commodity Futures Trading Commission (CFTC) is responsible for regulating commodity trading, futures exchanges, swaps dealers, and more.
Common Stock
Common stock is a security that represents ownership, or equity, in a corporation.
Community Bank
A community bank is a (normally) locally owned and operated depository institution that focuses on the needs of those where the bank is located.
Comparative Advantage
Comparative advantage is the ability to produce a good at a lower opportunity cost than others. Relative costs determine comparative advantage.
Comparative Statement of New Budget Authority
The Comparative Statement of New Budget Authority is a table in House or Senate Appropriations Committee reports that compares the appropriation recommended for each account, the president’s request submitted in the budget, and the amount enacted in the prior fiscal year.
Compensation
Compensation includes what employers pay for wages, salaries, and benefits of employees.
Compound Annual Rate
A compound annual rate increases and decreases over time, and is expressed as a constant rate of change.
Concurrent Resolution on the Budget
See Budget resolution.
Congressional Budget
See Budget resolution.
Congressional Budget Act
See the Congressional Budget and Impoundment Control Act of 1974, Titles I - IX.
Congressional Budget Act, Section 302
Section 302 of the Congressional Budget Act of 1974 provides for distribution of new budget authority as directed in a budget resolution. The overall annual number is provided under 302(a), and this number is subdivided in 302(b) among the appropriations subcommittee bills in each chamber.
Congressional Budget and Impoundment Control Act of 1974
The Congressional Budget and Impoundment Control Act of 1974 (P.L.93 - 344, 88 Stat. 297) created a process for Congress to consider federal spending and allocate resources; established the House and Senate Budget Committees and the Congressional Budget Office (CBO); and set forth procedures to review presidential impoundments - rescissions and deferrals.
Congressional Budget Office (CBO)
The Congressional Budget Office is a legislative branch agency, created by the 1974 Congressional Budget and Impoundment Control Act, that assists the legislative branch by providing analysis of budget and economic issues.
Congressional Budget Timeline
The congressional budget timeline sequence runs: (1) By the first Monday in February, the president submits his budget. (2) By February 15, the Congressional Budget Office (CBO) submits its Budget and Economic Outlook Report. (3) Not later than six weeks after the president submits the budget, authorizing committees submit their views and estimates to the House and Senate Budget Committees. (4) By April 1, the Budget Committee reports a concurrent resolution on the budget. (5) By April 15, Congress completes action on the concurrent resolution on the budget. (6) On May 15, annual appropriations bills may be considered in the House. (7) By June 10, the House Appropriations Committee reports the last annual appropriation bill. (8) By June 15, Congress completes action on reconciliation legislation. (9) By June 30, the House completes action on annual appropriations bills. (10) On October 1, the new fiscal year begins.
Consolidated Cash Budget
The consolidated cash budget was a method of budget presentation used by the executive, described in the 1967 President’s Commission on Budget Concepts as “a statement combining administrative budget transactions with those of trust funds, deposit funds, and Government-sponsored enterprises (with the elimination of certain intragovernmental transactions) to show the flow of cash between the Federal Government and the public.”
Consolidated Financial Statement
The consolidated financial statement for the federal government includes the executive, legislative, and judicial branches, and agencies that include all offices, bureaus, and activities.
Consolidation
Consolidation is the merger of two or more interests or entities into one.
Constant Dollars
Constant or real dollars are dollars adjusted to remove the effects of inflation to better compare price changes or prices over time. This is also called real or inflation-adjusted.
Consumer Financial Protection Bureau (CFPB)
The Consumer Financial Protection Bureau (CFPB) is a consumer protection regulator.
Consumer Price Index (CPI)
Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is used to adjust Social Security payments for inflation.
Consumer Surplus
Consumer surplus is a measure of the gains from trade. It is calculated as the difference between the highest price consumers are willing to pay and the price that they actually pay.
Continuing Resolution (CR)
A continuing resolution (CR) is a legislative appropriation measure to temporarily extend previously enacted levels of spending when a new fiscal year begins with one or more new appropriations measures have not been enacted. CR’s have sometimes covered full fiscal years.
Conventional Scoring
Conventional scoring in federal budgeting involves estimating the costs and effects of legislation while considering some behavioral, microeconomic changes, but not macroeconomic feedback. Conventional scoring is the main approach taken by CBO.
Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L.116-136) was a $2.2 trillion economic stimulus package providing direct payments to individuals, enhanced unemployment benefits, small business loans, and healthcare funding in response to the COVID-19 pandemic. The act, and its contemporary COVID-relief measures, lead to significant inflation.
Corporation
A corporation is a business firm owned by shareholders who possess ownership rights to the firm’s profits, but whose liability is limited to the amount of their investment in the firm.
Cost Estimates
Cost estimates are assessments of a legislative proposal’s effect on the federal budget and economy, and are provided by the Congressional Budget Office (CBO) under the Congressional Budget Act of 1974.
Cost of Living Adjustment (COLA)
A cost of living adjustment (COLA) is an annual change in benefit payments for the coming year, calculated by the Social Security Administration based on the average of BLS CPI data for the months of July, August, and September of each year.
Cost-Benefit Analysis
Cost-benefit analysis is a comparison of the costs and benefits of investments, programs, or policy actions to determine the best approach to get the most benefits (economic efficiency).
Countercyclical Policy
A countercyclical policy aims to moderate swings in economic activity by moving the economy in the opposite direction from the business cycle, stimulating demand during contractions and restraining demand during the expansions.
CPI-All Urban Consumers (CPI-U)
The Consumer Price Index for All Urban Consumers (CPI-U) is a monthly measure of the average change over time in the prices paid for a market basket of goods and services based on the spending patterns of urban consumers.
CPI-U
CPI-U is an acronym for the Consumer Price Index for All Urban Consumers.
CPI-Urban Wage Earners and Clerical Workers (CPI-W)
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is a monthly measure of the average change over time in the prices paid for goods and services most commonly purchased by urban wage earners and clerical workers.
CPI-W
CPI-W is an acronym for the Consumer Price Index for Urban Wage Earners and Clerical Workers.
CR
CR is an acronym for Continuing Resolution.
CRA
CRA is an acronym for either the Congressional Review Act or the Community Reinvestment Act.
Credit
Credit is funds acquired by borrowing.
Credit Default Swap (CDS)
A credit default swap (CDS) is a contract where one party agrees to make a payment to the other party in the event of a specified credit event, in exchange for one or more fixed payments, reducing risk for the borrower.
Credit Rating Agency
A credit rating agency is a private company that evaluates the credit quality of debt issuers and their securities. The largest rating agencies are Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s.
Credit Union
A credit union is a member-owned, not-for-profit cooperative financial institution to facilitate saving, borrowing, and financial services.
CRomni
A “CRomni” is a colloquial term for a legislative measure that is partly a continuing resolution for certain appropriation measures, and partly an omnibus that enacts full year appropriations for other measures.
Crypto-assets
Crypto-assets are private sector digital assets that depend primarily on cryptography and a distributed ledger or similar technology.
Cryptocurrency
See Digital Asset and Virtual Currency.
Current Authority
Current authority refers to the budget authority for the fiscal year when the funds are available for obligation.
Current Dollar
Current dollars is the price during the current year when a good or service is acquired or sold. It is not adjusted for the effects of inflation.
Current Level Estimate
A current level estimate projects the new budget authority, outlays, and revenues for a full fiscal year, based on current law.
Current Population Survey (CPS) (Household Survey)
Current Population Survey (CPS) is a national survey conducted by the Census Bureau for BLS that samples households monthly and collects information on labor force characteristics of the US civilian noninstitutional population.
Current Services Estimates
Current services estimates are projections submitted by the president of budget authority and outlays for the coming fiscal year based on the continuation of existing levels of service.
Current Tax Receipts
Current tax receipts include tax revenues from all sources, including personal and corporate income taxes, taxes on production and imports, and taxes from the rest of the world.
Current Year
Current year federal budgeting refers to the present year, preceding the coming budget year under consideration.
Cut-Cap-Balance (2011)
The Cut, Cap and Balance Act (2011) (112th Congress, H.R. 2560, not enacted)) proposed to raise the debt ceiling conditional on spending caps, a balanced budget amendment, and deep spending cuts. It passed the House but failed in the Senate.
D
Dawes Plan
The 1924 Dawes Plan addressed Germany’s inability to pay for World War I reparations; it reduced German reparations payments to $250 million in year one with gradual increases to $650 million in year five. With this concession, US commercial banks resumed lending to Germany.
Debt Held by Government Accounts (Intragovernmental Debt)
Debt held by government accounts (Intragovernmental Debt) is federal debt owed by the federal government to itself, most of which is in trust funds (e.g., Social Security Medicare).
Debt Held by the Public
Debt held by the public is federal debt held outside of the federal government by individuals, corporations, state or local governments, the Federal Reserve System, and foreign governments and central banks.
Debt Limit
See Statutory Debt Limit.
Debt Service
Debt service is the payment of interest, and repayment of principal, on borrowed funds.
Debt Subject to Statutory Debt Limit
Debt subject to statutory debt limit includes debt held by the public and debt held by government accounts.
Debt, Federal
Federal Debt is the amount borrowed by the government from the public or from government accounts to finance spending and interest payments on the debt. It is categorized as gross federal debt; debt held by the public; debt held by government accounts; and debt subject to statutory debt limit.
Decennial
Decennial means occurring every 10 years.
Decennial census
The decennial census is conducted by the Census Bureau every 10 years.
Decile
Decile is a division of values into 10 equal segments.
Deeming Resolution
A deeming resolution is a legislative resolution passed by one or both Houses of Congress that establishes the basis for budgetary enforcement actions in the absence of a budget resolution.
Deferral of Budget Authority
A deferral of budget authority is a type of impoundment that temporarily withholds or delays the obligation or expenditure of budget authority or any other type of executive action, and must be communicated to Congress by the president in a special message. Congress may disapprove a deferral by law.
Deficiency Appropriation
A deficiency appropriation is an appropriation made to pay obligations for which sufficient funds are not available.
Deficit-Neutral Reserve Fund
A deficit-neutral reserve fund under the Congressional Budget Act allows the Budget Committee chairman to adjust the levels in the budget to accommodate legislation that is fully offset, thereby avoiding a budget point of order.
Deficits
A deficit occurs when outlays exceed revenues in a particular year or period.
Defined Benefit Pension Plan
A defined benefit pension plan provides an employee with a guaranteed retirement benefit based on a predetermined formula.
Defined Contribution Retirement Plan
A defined contribution retirement plan sets the level of contributions from employer and employee into an individual employee account.
Deflation
Deflation occurs when prices decrease over time.
Deflator
A deflator is an index that removes the effects of inflation by adjusting a current dollar to an inflation-adjusted or real dollar equivalent. Thus, a nominal $1.5 divided by an inflation index number of 1.5 produces an inflation-adjusted or real number of $1.
Depreciation
Depreciation is loss in value of a tangible or fixed asset over its useful life.
Depression
A depression is a long and severe recession.
Digital Asset
A digital asset, also known as virtual currency, coin, token, or cryptocurrency, is an asset that is issued or transferred using distributed ledger or blockchain technology, which tracks ownership, and it may be considered a security depending on its characteristics. It is considered property, and not currency, by the IRS. Two categories of digital assets include CBDCs and crypto-assets.
Digital Currency
See Digital Asset and Virtual Currency.
Direct Spending
Direct spending is a term often used interchangeably with mandatory or entitlement spending, and it is defined as consisting of entitlement authority (including appropriated entitlements).
Disbursement
A disbursement is an amount paid by a federal agency and is used interchangeably with the term “outlay.”
Discount Rate
The discount rate is the interest rate that the Federal Reserve charges financial institutions for borrowing funds.
Discouraged Workers
In BLS jobs reports, discouraged workers are those marginally attached to the labor force who are not currently looking for work in the past year.
Discretionary Spending
Discretionary spending is budget authority spending that is controlled by the Appropriations Committees.
Displaced workers
In BLS jobs reports, displaced workers are those age 20 and older who lost or left jobs because of businesses closing or moving, or their positions were terminated due to insufficient work.
Distributed Ledger Technology (DLT)
Distributed ledger technology (DLT) is the technological infrastructure and protocols that allow simultaneous access, validation, and record updating across a networked database. DLT is the technology blockchains are created from, and the infrastructure allows users to view any changes and who made them, reduces the need to audit data, ensures data is reliable, and only provides access to those that need it.
Dividends
Dividends are payments made by US corporations to stockholders.
Dodd-Frank (2010)
The Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203) aimed to strengthen financial regulation, promote market stability, and protect consumers with the creation of the Consumer Financial Protection Bureau.
Dow Jones Industrial Average (DJIA)
The Dow Jones Industrial Average (DJIA) is a price-weighted index that tracks share prices for 30 large companies.
Dumping
Dumping is a foreign suppliers’ sale of a good into another country below the home market price.
Durable Goods
Durable goods are tangible products with a life of at least three years that can be stored or inventoried.
Dynamic Scoring
Dynamic, or economic, scoring is an estimate of how a legislative proposal affects the budget while also accounting for macroeconomic feedback from the proposal. In contrast, static and conventional scoring assumes that output, the price level, and other macroeconomic variables are unaffected by a proposal.
E
Earmarking
Earmarking is the process of designating parts of an appropriation for a specific purpose or program.
Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC) is a credit or rebate in the tax code for those with low wage income that phases out with increasing income.
Economic Growth and Tax Reconciliation Act (EGTRA) (2001)
The Economic Growth and Tax Relief Reconciliation Act (EGTRA) (P.L.107-16), also known as the first Bush Tax Cut, was a signature piece of legislation for President Bush that provided broad tax relief, including reduced income tax rates, doubling the child tax credit, phasing-out the estate tax, and introducing retirement savings incentives, all intended to stimulate economic growth.
Economic Scoring
See Dynamic Scoring.
Emergency
In budgeting, the modifier “emergency” preceding appropriations, supplemental, etc. can exempt any new budget authority, outlays, or receipts under the measure from specified enforcement provisions in the Congressional Budget Act.
Employed
In BLS jobs reports, employed means those who worked for pay or profit in the reference period, usually the past four weeks.
Employee Stock Ownership Plan (ESOP)
An Employee Stock Ownership Plan (ESOP) is a defined contribution plan with the employer contributing to a fund that invests primarily in company stock.
Employment
In BLS jobs reports, employment means that a person aged 16 and above is working for pay.
Employment Act of 1946
The Employment Act of 1946 (P.L.79-304) committed the government to achieving economic stability and full employment, and it created the Council of Economic Advisers (CEA) and established the Congressional Joint Economic Committee (JEC).
Equilibrium
Equilibrium is a state of balance between conflicting forces, such as supply and demand.
Equities
See Stocks.
Exchange Rate
An exchange rate is the price of one unit of foreign currency in terms of the domestic currency.
Exchange-Traded Fund (ETF)
An exchange-traded fund (ETF) is a security that is listed on an exchange, like a mutual fund pools money from investors to buy a variety of assets, but it can be traded like stocks.
Expansionary Fiscal Policy
An expansionary fiscal policy increases government expenditures or tax cuts leading to expanded deficits (or a decreased surplus).
Expansionary Monetary Policy
An expansionary monetary policy stimulates aggregate demand using tools like bank reserves and the growth rate of the money supply.
Expenditures
Expenditures are the transaction cost of goods or services acquired.
Expired Budget Authority
Expired budget authority is not available for new obligations, but it can be used for disbursements on obligations incurred while it was unexpired, for up to five fiscal years.
Export
An export is a good or service that residents of one country sell to residents of another country.
External Debt
External debt is the portion of the national debt owed to international investors.
F
Family
Family is defined by BLS as a group of two or more people residing together, related by birth, marriage, or adoption.
Farm Credit System
The Farm Credit System is a congressionally created government-sponsored enterprise (GSE) consisting of borrower-owned financial institutions that provide credit to farmers, ranchers, residents of rural communities, agricultural and rural utility cooperatives, and other eligible borrowers.
FDIC
FDIC is an acronym for Federal Deposit Insurance Corporation.
Fed
Fed is short for Federal Reserve.
Federal Credit
Federal credit consists of federal direct loans and federal loan guarantees.
Federal Deposit Insurance Corporation (FDIC)
The Federal Deposit Insurance Corporation (FDIC) is a banking regulator that oversees federally insured depository institutions, state-chartered thrifts, and state banks.
Federal Funds Rate
The Federal Funds Rate is the interest rate set by the FOMC that depository institutions use in lending their excess Federal Reserve deposits to each other.
Federal Housing Finance Agency (FHFA)
The Federal Housing Finance Agency (FHFA) oversees Fannie Mae, Freddie Mac, and Federal Home Loan Banks.
Federal Open Market Committee (FOMC)
The Federal Open Market Committee (FOMC) of the Federal Reserve manages open market operations, through which US monetary policy is implemented, influencing the availability and cost of money and credit. The body consists of seven members of the Board of Governors of the Federal Reserve System, the New York Federal Reserve Bank president, and four of the other 11 Reserve Bank presidents, on a rotating basis.
Federal Regulation
A federal regulation is a rule or administrative directive issued by a federal agency that interprets and implements laws passed by Congress, carrying the full force and effect of law.
Federal Reserve
The Federal Reserve is the current central bank in the US that is responsible for monetary policy and carrying out bank regulatory policies.
Federal Reserve Board of Governors
The Federal Reserve Board of Governors oversees the Federal Reserve System, consisting of the Federal Reserve chair, two vice chairs, and seven governors.
Federal Reserve Reform Act of 1977
The Federal Reserve Reform Act of 1977 (P.L.95-188) set forth what became known as the dual mandate, directing the Federal Reserve to “maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote the goals of maximum employment, stable prices, and moderate long-term interest rates.”
Fiat Money
Fiat money is money that has no intrinsic value and is not backed by a commodity like gold or silver. It functions as money because the government has declared it legal tender.
FICO Score
A FICO score indicates a borrower’s creditworthiness based on their credit history and data.
Final Estimate
The BEA’s third estimate, or final estimate of gross domestic product (GDP) for a quarter, is released about three months after a quarter’s end, though it can still be revised later.
Financial Assets
Financial assets are instruments that possess value and give rise to claims, liabilities, or equity investment, including deposits, stocks, bonds, notes, and currencies.
Financial Repression
Financial repression is when the Federal Reserve uses tools, such as paying higher interest excess reserves held by banks, to discourage banks from lending, and allowing money to naturally flow into the economy.
Financial Stability Oversight Council (FSOC)
The Financial Stability Oversight Council (FSOC) is a coordinating and oversight body chaired by the Treasury secretary with members including CFTC, CFPB, FDIC, FHFA, Federal Reserve, National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), and SEC.
First Bank of the United States (1791–1811)
The First Bank of the United States, pushed by Treasury Secretary Alexander Hamilton, “was a hybrid central-commercial bank, modeled on the Bank of England. It was a public-private partnership, in which private investors owned 80 percent of its stock while the federal government owned the rest, with the Treasury conducting regular examinations of the Bank for safety and soundness. In addition to issuing a uniform currency in the form of First Bank notes, the First Bank served as the depository and fiscal agent of the federal government; supported the credit of the federal government; and regulated state-chartered banks through the First Bank’s acceptance of state bank notes or demanding their redemption in specie (i.e., gold or silver coins and bullion).” Its charter was not renewed.
Fiscal Consolidation
A fiscal consolidation is a government policy aimed at reducing government deficits and debt.
Fiscal Dominance
Fiscal dominance exists when persistent budget deficits force the central bank to abandon a stable monetary policy and expand the supplies of money and credit to accommodate growing government debt. Fiscal dominance is associated with inflation that reduces the value of the outstanding debt.
Fiscal Policy
Fiscal policy consists of the government’s tax and spending policies to achieve policy goals.
Fiscal Year (FY)
The fiscal year (FY) for the federal government begins on October 1 and ends on September 30, and is designated by the year in which it ends. (e.g., FY2026 began on Oct. 1, 2025). This October to September timeline has been the fiscal year since Sept. 1, 1976. Previously, from 1843 to 1976, the fiscal year ran from July 1 to June 30. 1976 experienced a transition quarter (TQ) for quarter 3; 1843 experienced a transition “half year” from Jan. 1 to June 30, 1843. Prior to 1843, the fiscal year and calendar year were aligned.
FOIA
FOIA is an acronym for Freedom of Information Act.
Foreign Direct Investment (FDI)
Foreign direct investment (FDI) is an investment by a foreigner in which they obtain a lasting interest in, and influence over, a business enterprise in another country.
Form-Seasonal Elasticity Problem
The form-seasonal elasticity problem is a phenomenon that led to frequent financial panics in the US economy, particularly with the Panics of 1873, 1893, and 1907. In the late summer, cash would flow out of banks to pay farmers, and when this happened national banks could not easily expand the supply of national bank notes to meet the demand for cash, so national banks had to build large reserves in the winter and spring. If these reserves proved insufficient, national banks would demand immediate repayment on many of their outstanding loans to generate cash. Short-term interest rates could spike from less than 2 percent to more than 30 percent annualized rates; and asset fire-sales to generate cash resulted in depressed asset prices, leaving the US economy vulnerable to frequent shocks and panics in the fall. The severe Panic of 1907 provided momentum for the creation of the Federal Reserve.
Fractional Reserve Banking
Fractional reserve banking describes the system in which banks keep only a small percentage of their total deposits as cash-on-hand to pay depositors seeking to withdraw funds. A bank’s reserves can help it to meet unexpected surges in withdrawals, but no commercial bank is able to pay all of its depositors all of their deposits at the same time.
Freedom of Information Act (FOIA)
The Freedom of Information Act (FOIA) (P.L. 89-487) allows the public to request access to records from any federal agency, promoting government transparency while permitting exemptions for sensitive information like national security or personal privacy.
FTC
FTC is an acronym for Federal Trade Commission.
Full Employment
Full employment is not a fixed rate or percentage but an approximate rate when everyone (or almost everyone) willing and able to work in the labor force is employed. To allow for natural churn and turnover in jobs, the rate is around 95 percent employed.
Futures Contract
A futures contract is an agreement to purchase or sell a commodity in the future at a set price and is used to assume or shift price risk.
FY
FY is an acronym for Fiscal Year.
G
G-20
The Group of Twenty Finance Ministers and Central Bank Governors, known as G-20, is an international forum established to bring together officials of systemically important industrialized and developing economies to discuss key issues in the global economy.
Game Theory
Game theory is an exercise that analyzes the strategic choices made by competitors in a conflict situation. It is relevant for economic situations where one agent’s actions affect other agents’ payoffs.
GAO
GAO is an acronym for US Government Accountability Office.
GDP (Gross Domestic Product)
See Gross Domestic Product (GDP).
GDP Deflator
A GDP deflator is a price index derived from the ratio of nominal and real GDP. Changes in the deflator measure the cost, during the current period, of purchasing the items included in GDP relative to the cost during a base year, which is periodically adjusted by BEA. Presently, the base year is 2017, which was set in 2023. The base year is assigned a value of 100, and the GDP deflator showing values greater than 100 indicates that prices are higher than during the base year.
General Agreement on Tariffs and Trade (GATT)
The General Agreement on Tariffs and Trade (GATT) was an organization formed following the Second World War that set the rules for the conduct of international trade and reduced barriers to trade among nations.
Generation: Baby Boomers, Cohort
The baby boomer generation refers to individuals born from 1946 to 1964.
Generation: Generation Alpha, Cohort
Generation Alpha refers to individuals born in/after 2013.
Generation: Generation X, Cohort
Generation X refers to individuals born from 1965 to 1980.
Generation: Generation Z, Cohort
Generation Z refers to individuals born from 1997 to 2012.
Generation: The Silent Generation, Cohort
The Silent Generation refers to individuals born 1928 to 1945.
Global Systemically Important Bank (G-SIB)
A Global Systemically Important Bank (G-SIB) is a bank identified by regulators as being sufficiently important to the global financial system that its failure could trigger a financial crisis.
GNP (Gross National Product)
See Gross National Product (GNP).
Gold Exchange Standard
The gold exchange standard was created after World War II in the Bretton Woods system. It provided for the federal government to exchange gold for US dollars at $35 per ounce, but only with foreign governments or their central banks, and not the public. Hence it was a gold exchange standard, and not a gold standard.
Gold Reserve Act (1934)
The Gold Reserve Act of 1934 devalued the dollar by 59 percent and increased the price of gold from $20.67 to $35 per ounce. This act followed President Franklin D. Roosevelt’s April 5, 1933 Executive Order, which mandated US households and firms to sell gold to the government at $20.67 per ounce; his April 17, 1933 Executive Order, which prohibited the export of gold; and his June 5, 1933 Executive Order abrogating contracts in which the creditor could demand payment in gold.
Government Enterprise
Government enterprises are legal entities created by government to participate in commercial activities.
Government Performance and Results Act (GPRA)
The Government Performance and Results Act of 1993 (GPRA) (P.L.103 - 62, 107 Stat. 285) aimed to improve the efficiency and effectiveness of federal programs by requiring federal agencies to develop strategic plans, annual performance plans, and annual program performance reports.
Government Shutdown
A government shutdown is a temporary lapse in government funding for programs subject to annual appropriations when annual appropriation measures have not been enacted. Mandatory spending is not affected by a government shutdown, and presently, mandatory spending makes up about 75 percent of federal spending, meaning that only up to a maximum of about 25 percent of government spending is affected by a shutdown.
Government-Sponsored Enterprise (GSE)
A Government-Sponsored Enterprise (GSE) is a corporate entity that has a federal charter authorized by law but that is a privately owned financial institution. Their activities are not included in federal budget totals because they are classified as private entities.
Governmental Receipts
Government receipts are collections from the public, including individual and corporate income taxes and social insurance taxes, excise taxes, duties, court fines, compulsory licenses, deposits of earnings by the Federal Reserve System, gifts and contributions.
Gramm-Rudman-Hollings (GRH)
See the Balanced Budget and Emergency Deficit Control Act of 1985.
Grant
A grant is a federal financial assistance award to a state or local government or a nongovernmental recipient for a specified purpose.
Great Contraction (1929–1933)
The Great Contraction lasted from August 1929 to March 1933 and was the initial phase of the Great Depression. During which period the Federal Reserve failed to operate as a lender-of-last-resort - providing loans to otherwise solvent, but temporarily illiquid, commercial banks - resulting in the failure of otherwise solvent banks. GDP fell by about 30 percent, and unemployment reached around 25 percent.
Gross Domestic Product (GDP)
Gross Domestic Product (GDP) is the market value of all goods and services produced in a country in a given time period. It is the broadest measure of domestic economic activity. GDP is calculated by summing personal consumption expenditures, gross private domestic investment, net exports of goods and services, and government consumption expenditures and gross investment.
Gross Federal Debt
Gross federal debt is the total amount of federal government debt, and is the sum of debt held by the public and debt held by government accounts (intragovernmental debt).
Gross Investment
Gross investment is the sum of private domestic investment, government gross investment, and balance on current accounts, national income, and product accounts.
Gross National Product (GNP)
Gross National Product (GNP) is the total market value of all final goods and services produced by US residents (regardless of where they are located) in a given period, and it is equal to GDP minus the net income of foreigners. This was the primary measure of US production prior to 1991, when it was replaced by GDP.
Gross Output
Gross output is the current dollar value of output produced.
Growth Rate
The growth rate is the percent change in a value over a given period.
GSE
GSE is an acronym for Government-Sponsored Enterprise.
Guaranteed Loan
A guaranteed loan is a nonfederal loan to which a federal guarantee is attached.
Guidance Document
A guidance document is an agency-issued document that does not carry the force of law but carries great weight in advising the public on how an agency will interpret and administer law. While they do not carry the same force as a regulation, guidance documents can have the same effect in directing the actions of those affected by the interpretation, and guidance documents may become even more prominent following the Supreme Court’s reversal of its Chevron decision.
H
Hedge Fund
A hedge fund is a private fund that generally invests in a diverse range of securities with the potential for more flexible investment strategies than mutual funds.
Humphrey-Hawkins Full Employment Act (1978)
The Humphrey-Hawkins Full Employment Act (P.L.95-523) amended the Employment Act of 1946, set objectives for unemployment and inflation, and reinforced the dual mandate - stable prices and full employment - from the Federal Reserve Reform Act of 1977, directing the Fed chair to submit semiannual reports to Congress on monetary policy.
I
Impact Lag
An impact lag is the time between the implementation and primary effect of a policy.
Imports
Imports are goods and services produced by foreigners and purchased domestically.
Impoundment
An impoundment is an action that precludes obligation or expenditure of budget authority.
Income
Income is the total resources that accrue to an individual or business over a period of time.
Independent Agency
An independent agency is a federal agency established by Congress that operates outside executive branch oversight, ostensibly to provide regulatory or oversight functions with a degree of autonomy from political influence. However, as these agencies are not found in the Constitution, their constitutionality has long been questioned, including in recent cases that are pending before the Supreme Court, as of the fall of 2025.
Index
An index is a measure of change in quantity over time, typically setting a point in time to a base of 100.
Inflation
Inflation is the overall rise in the price of goods and services over time, with a decline in the purchasing power of the dollar.
Inflation Reduction Act of 2022
The Inflation Reduction Act of 2022 (P.L.117-169) was a signature piece of legislation for the Biden administration that advanced many Democrat priorities, including clean energy and climate initiatives. The legislation, with a total cost approaching $1 trillion over 10 years, arguably worsened inflation in the US economy.
Inflator
An inflator is an index that is used to express a current dollar amount in prices from another period.
Innovation
Innovation is the successful introduction and adoption of a new product or process.
Intangible Assets
Intangible assets are assets like a trademark, a copyright, a patent, or goodwill.
Interest
Interest is the cost of borrowing.
International Monetary Fund (IMF)
The International Monetary Fund (IMF) is an international banking organization designed to oversee the operation of the international monetary system.
Intragovernmental Fund Account
An intragovernmental fund account is a federal fund account to facilitate financing transactions primarily within and between federal agencies.
Intragovernmental Transfer
An intragovernmental transfer is a transfer between federal government accounts, often as payment for goods or services provided.
Investment
An investment is the purchase, construction, or development of capital resources - both nonhuman capital and human capital, like education.
Invisible Hand Principle
The invisible hand principle is the tendency of market prices to direct individuals who are pursuing their own interests toward activities that also promote a society’s economic well-being.
J
Jobs and Growth Tax Reconciliation Act (JGTRA) (2003)
The Jobs and Growth Tax Relief Reconciliation Act (JGTRA) (P.L.108-27), also known as the second Bush tax cut, was a signature piece of legislation for President Bush that accelerated the 2001 Economic Growth and Tax Reconciliation Act, lowered capital gains and dividend tax rates to 15 percent, and increased expensing for small businesses, intended to boost job creation and investment.
Joint Committee on Taxation (JCT)
The Joint Committee on Taxation (JCT), established by the Revenue Act of 1926, is a nonpartisan congressional committee that provides legislative services to members of the House Ways and Means Committee and the Senate Finance Committee, including legislative scoring with preparation of official revenue impact estimates for all tax legislation and assessing how proposed changes would affect federal revenues.
Justification
A budgetary justification is the materials prescribed by OMB that are submitted by an agency to the Appropriations Committees in support of its budget request. These materials explain changes between the current and requested appropriations for the next fiscal year.
L
Labor Force
The labor force is defined by BLS as civilians age 16 and over not in active-duty military or institutionalized, who are working for pay or looking for work.
Labor Force Participation Rate (LFPR)
The Labor Force Participation Rate (LFPR) is the percentage of the working age population, age 16 and older, that is either employed or unemployed and actively searching for work.
Laffer Curve
The Laffer curve is a curve illustrating the relationship between the tax rate and tax revenue. It shows that tax revenue is low not only when rates are low, but also when rates are high. It shows that more revenue is collected at a moderate tax rate than a high tax rate because a higher tax rate discourages economically productive activity.
Law of Comparative Advantage
The law of comparative advantage states that individuals, firms, regions, or nations can gain by specializing in the production of goods that they can produce more cheaply and exchanging those goods for other desired goods that would be more costly for them to produce.
Law of Demand
The law of demand holds that there is an inverse relationship between the price of a good and the amount buyers are willing to purchase. As prices increase, consumer demand for it will decrease.
Law of Diminishing Marginal Utility
The law of diminishing marginal utility is a basic economic principle that, as the consumption of a commodity increases, the marginal utility derived from consuming more of the commodity will eventually decline.
Law of Supply
The law of supply holds that there is a direct relationship between the price of a good and the amount of it offered for sale. As price increases, producers will increase the amount supplied to the market.
Legislative Reorganization Act (1946)
The Legislative Reorganization Act of 1946 (P.L.79-601) reorganized congressional committees through consolidating and reducing their number and increasing resources for the remaining committees. It marked a serious attempt at improving the federal budget by creating a super-committee, the Joint Committee on the Legislative Budget, with members from the Appropriations, Ways and Means, and Finance Committees to meet and produce a budget at the beginning of each congressional session. Agreement on a budget between the chambers was not reached in 1947, was reached but not adhered to in 1948, and the process was abandoned after agreement was not reached in 1949.
Lender of Last Resort
Lender of last resort is a function of the Federal Reserve that, by its nature, walks a fine line between enabling bad policy with bailouts and its appropriate function of helping to ensure solvent institutions, providing value to the economy, do not needlessly go bankrupt in a financial crisis. The principle, set forth by Walter Bagehot, is that a central bank should lend freely, at a penalty rate of interest, to solvent commercial banks with good collateral. In the US, the trouble is that the Fed has never formally defined its responsibilities, and the Fed has seemed to go further and further in the saving of institutions that took excessive risks.
Line Item
A line item in budgeting is a particular expenditure, such as program, subprogram, or object class.
Line Item Veto
A line item veto, which has been declared federally unconstitutional, is an executive power to veto or “cross out” only certain parts of legislation while allowing the rest of the legislation to become law. However, a majority of states do not prohibit the line item veto and their governors have power.
Lockbox
A lockbox in budgeting is an attempt to isolate, or “lock away,” funds of the federal government for purposes such as reducing federal spending, preserving surpluses, or protecting the solvency of trust funds.
Long-Term Unemployment
BLS defines long-term unemployment as affecting those who have been jobless for 27 weeks or more.
M
M1 (Money Supply)
M1 is a narrower definition of money supply that includes currency in circulation (including coins), checkable deposits maintained in depository institutions, traveler’s checks, and savings deposits.
M2 (Money Supply)
M2 is a broader definition of money supply that includes M1 plus time deposits held in depository institutions and money market mutual funds.
Macroeconomics
Macroeconomics studies the performance of key economic aggregates (for example, household consumption, business investment, total employment, the money supply) for the entire national economy.
Mandatory Spending
Mandatory spending, also referred to as “direct spending,” is controlled directly by authorizing committees and not subject to annual appropriations.
Marginal Cost
Marginal cost refers to the change in total cost required to produce an additional unit of output.
Marginal Tax Rate
Marginal tax rate is the percentage of an extra dollar of income that must be paid in taxes. As the tax rate increases on additional dollars earned, it may discourage production if the return on the worker’s time is less.
Marginal Utility
Marginal utility is the additional utility received from the consumption of an additional good.
Mark-to-Market
Mark-to-Market is the process of adjusting an asset’s reported value to reflect its actual market value.
Mark-Up
A mark-up is a congressional committee meeting where members debate, amend, and vote on legislation before it is sent to the full House and Senate for consideration.
Marketable Debt
Marketable debt are debt obligations that can be bought and sold on public secondary markets.
Maturity Date
A maturity date is the date by which a borrower must make the final payment on a loan or debt to the lender.
Mean
The mean is the mathematical average of a set of numbers. It is calculated by adding the numbers and dividing the total by the number of numbers summed.
Means-Tested Income Transfers
A means-tested income transfer is a transfer of funds that is limited to those with an income below a certain threshold.
Median
The median is a number that represents the middle value in a listed range of data values. For instance, the median of 9,9,4,3, and 2 is 4. The median can be higher or lower than or equal to the average.
Medium of Exchange
A medium of exchange is an asset that is used to buy goods or services.
Microeconomics
Microeconomics studies the behavior of individuals as they use their labor and capital to produce goods, earn income in order to consume goods, create business and other organizations that improve the efficient use of labor and capital, and trade for goods they do not produce in markets they design to reduce the costs of exchange.
Mid-Session Review of the Budget
The Mid-Session Review of the Budget is a statutorily required supplemental summary and update of the president’s budget submitted to Congress in January or February of each year, and it is due by July 15.
Midwest Region
The Midwest region, defined by the Census Bureau, includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.
Millennials, Cohort
The millennial generation refers to individuals born from 1981 to 1996.
Minibus Appropriation
A minibus appropriation is an appropriation bill that combines at least two appropriation bills, but is a smaller number than an omnibus appropriation bill, which may include all appropriation bills.
Minimum Wage
The Minimum wage is a statutory obligation that requires employers to pay workers at least the stated minimum hourly rate of pay.
Monetary Base
The monetary base is the sum of currency in circulation plus bank reserves.
Monetary Dominance
Monetary dominance is when the central bank raises interest rates to counter high inflation, which forces the legislature to adjust deficits to stabilize the budget.
Monetary Policy
Monetary policy is the control of the money supply, interest rates, and credit to achieve macroeconomic goals, such as price stability. It is directed by the Federal Reserve, which influences the cost and availability of bank reserves, through open-market operations (purchasing and selling securities), adjustments to commercial bank reserve requirements, changes to the discount rate, and changes in the federal funds rate.
Money Market
Money markets are the portion of financial markets involving short-term borrowing and lending with original maturities of one year or less.
Money Market Fund
A money market fund is a type of mutual fund that invests in low-risk securities, like government securities, certificates of deposit, commercial paper, or other highly liquid assets, and pays dividends that generally reflect short-term interest rates.
Money supply
The money supply is the supply of currency, checking account funds, and generally anything that is accepted in payment. A narrower definition (M1) includes currency and checking accounts, and a broader one (M2) includes M1 plus other types of assets, such as savings deposits and money market mutual funds.
Monopoly
A monopoly is a market structure characterized by a single seller of a product for which there are no substitutes and high barriers to the entry of competitors.
Monthly Treasury Statement (MTS)
The Monthly Treasury Statement (MTS) is a summary statement of receipts, outlays, surplus/deficit, and debt, which is prepared by Treasury from agency accounts.
Mortgage
A mortgage is a form of debt for which a property is pledged as security for payment of the debt.
Mortgage-Backed Security (MBS)
A Mortgage-Backed Security (MBS) is a security that is collateralized by a discrete pool of mortgage loans, which makes payments based on loan performance.
Most Favored Nation Status
Most favored nation (MFN) status is connected with international trade agreements where countries extend the same trade terms to each other on things such as low tariffs and quotas.
Multiyear Authority
Multiyear authority refers to budget authority that is available for a fixed period of time exceeding a single fiscal year.
Multiyear Budget Planning
Multiyear budget planning is a budget process - such as used to develop the president’s budget and the congressional budget resolution - that factors the longer-range effects of budget decisions, reflected in the budget totals.
Municipal Bond
A municipal bond is a security, primarily issued by states, cities, counties, or local governmental agencies, to finance general or project-related activities.
Mutual Fund
A mutual fund is a type of investment fund with a professional money manager making investments using the pooled money of the fund’s investors.
N
NAICS
NAICS is an acronym for North American Industry Classification System, which is an industrial classification system used by BLS to categorize establishments on the basis of the activity in which they are primarily engaged.
Nasdaq
The Nasdaq Composite Index (National Association of Securities Dealers Automated Quotations; usually called “the Nasdaq”) tracks prices for securities listed on the Nasdaq, which is closely associated with the technology sector, making up more than half its weight.
National Credit Union Administration (NCUA)
The National Credit Union Administration (NCUA) oversees federally chartered or insured credit unions, as FDIC does for banks.
National Debt
The national debt is the sum of federal government debt in the form of outstanding interest-earning bonds. It is the cumulative result of annual federal deficits and interest on the debt.
National Income
National income is the total of all incomes, net of consumption of fixed capital, earned in production by residents of a nation.
National Income Accounts (NIA) Budget
National Income Accounts (NIA) Budget was a method of budget presentation used by the executive described in the 1967 President’s Commission on Budget Concepts as “a measure of receipts and expenditures of the Federal Government sector of the national income and product accounts. It includes Federal trust fund transactions, but excludes loans and similar transactions since they consist of the exchange of financial assets or physical assets which are not newly produced and therefore do not contribute to current income.”
National Income and Product Accounts (NIPA)
National Income and Product Accounts (NIPA) are the comprehensive set of accounts published by the Commerce Department that measures the total value of goods and services (gross domestic product, or GDP) produced by the US economy and the total income earned in producing that output.
National Monetary Commission (1910)
The National Monetary Commission was established by the Aldrich Vreeland Act in the 60th Congress in response to the Panic of 1907. The Commission recommended creating a central bank that would hold the reserves of all commercial banks, using the central bank’s discount rate to regulate the money supply in the context of the gold standard, making the central bank the monopoly issuer of bank notes and a lender of last resort, adhering to “Bagehot principles.”
Native Born
BLS defines native born as those born in the US or in one of its outlying areas, such as Puerto Rico or Guam, or who were born abroad of at least one parent who was a US citizen.
Net Exports
Net exports is equal to exports minus imports.
Net Present Value
Net present value is the present value of the estimated future cash inflows minus the present value of the cash outflows.
New York City Potential Default (1975)
The potential New York City default in 1975, involved a situation which - though default was averted - played a role in broadening the Fed interpretation of its lender of last resort (LOLR) function. Congress sought an emergency loan from the Fed, which the Fed opposed, though it agreed to temporarily increase bank discounts aligned with the LOLR concept of protecting the broader financial system.
No-Year Authority
No-year authority means budget authority that remains available for obligation for an indefinite period of time (e.g., “to remain available until expended”).
Nominal Dollar
A nominal dollar is a dollar’s value in the current year. See Current Dollar.
Nominal Values
Nominal values are values expressed in current dollars.
Non-Fungible Tokens
Non-fungible tokens (NFTs) are unique assets, such as digital artwork, bought and sold on marketplaces.
Nonbank Financial Institution (NBFI)
A nonbank financial institution (NBFI) cannot accept deposits from the public as it does not have a full bank license, but it is a source of consumer credit. NBFIs include insurance firms and pawn shops.
Nonbudgetary
Nonbudgetary is a term that refers to government transactions that do not belong within the budget, typically because they do not represent net budget authority or outlays, but rather are a means of financing.
Nondurable Goods
Nondurable goods are tangible products that can be stored or inventoried with an average life of less than three years.
Nonperforming Loan
A nonperforming loan is a bank loan that is unlikely to be repaid by the borrower or is subject to late repayment.
Nonresidential Fixed Investment
Nonresidential fixed investment consists of purchases of nonresidential structures, equipment, and software.
North American Free Trade Agreement (NAFTA)
North American Free Trade Agreement (NAFTA) was a comprehensive trade agreement between the United States, Mexico, and Canada that went into effect in 1994.
Northeast Region
The Northeast region, defined by the Census Bureau, includes Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.
Not Seasonally Adjusted
Not seasonally adjusted means the data in question has not been subjected to the process by which a data series is adjusted to account for seasonal economic factors.
O
Obamacare (Affordable Care Act, ACA)
See Affordable Care Act.
Obligation
An obligation is a commitment that creates a legal liability of the government to pay for goods and services, and results in outlays.
Obligational Authority
Obligation authority is the sum of (1) enacted budget authority, (2) unobligated balances of unexpired amounts from prior years, (3) offsetting collections to be credited, and (4) transferred budget authority.
Obligations Basis
An obligations basis refers to a basis with the recording of financial transactions when goods and services are ordered, regardless of when the resources are acquired, received, consumed, or when cash is paid.
OCC
OCC is an acronym for Office of the Comptroller of the Currency.
Occupational Licensing
Occupational licensing is a requirement that one obtain permission from a governing body to perform a business activity or work in certain occupations.
Off-Budget
Off-budget is a designation for budgetary accounts designated by law as excluded from budgetary totals, such as Social Security.
Office of Financial Research (OFR)
The Office of Financial Research (OFR) is a bureau within the US Treasury, created by the Dodd-Frank Act in 2010 to promote financial stability by delivering high-quality financial data, standards, and analysis, principally to support the Financial Stability Oversight Council (FSOC).
Office of the Comptroller of the Currency (OCC)
The Office of the Comptroller of the Currency (OCC) is a banking regulator, overseeing institutions including national banks and federally chartered thrifts.
Offsetting Receipts and Collections
Offsetting receipts and collections are funds collected from the public primarily as a result of business-like activities (e.g., user fees) that are imposed on those availing themselves of, or directly subject to, a governmental service, program, or activity, and they are not an imposition on the general public. Such receipts and collections are recorded as negative amounts of spending rather than revenues.
OMB
OMB is an acronym for Office of Management and Budget.
OMB Circular No. A-11
OMB Circular No. A-11 is an Office of Management and Budget (OMB) document that provides detailed guidance to executive departments and establishments for preparing, submitting, and executing the president’s budget.
Omnibus Appropriation
An omnibus appropriation is an appropriation bill that combines most or all annual appropriation bills.
On-Budget
On-Budget is a designation for all budgetary accounts other than those designated in law as off-budget (see Off-Budget).
One Big Beautiful Bill Act (OBBB) (2023)
The One Big Beautiful Bill Act (OBBB) (2023) (P.L.119-21) was a signature piece of legislation for President Trump that provided comprehensive tax reform, overhauling federal taxes, credits, and deductions, including corporate and individual rate adjustments, aimed at simplifying the tax code and promoting economic expansion.
One-Year Authority
One-year authority refers to budget authority that is available for obligation only during a specific fiscal year.
Open market operations
Open market operations are a function of the central bank and involve the buying and selling of US government securities in the open market by the Open Market Trading Desk at the Federal Reserve Bank of New York and directed by the Federal Open Market Committee.
Operating Budget
An operating budget is a detailed projection of all estimated income and expenses during a given future period.
Opportunity Cost
Opportunity cost is the highest valued alternative that must be sacrificed as a result of choosing among alternatives.
Option
An option is a financial contract granting the holder the right (but not the obligation) to engage in a future transaction on an underlying security or real asset.
Outcome Measure
An outcome measure is an assessment of the result, effect, or consequence that will occur from carrying out a program or activity in relation to its intended purpose.
Outlays
Outlays are spending, or the disbursement of funds, from the Treasury.
Outlier
Outliers are observations that fall well outside of the expected range of results.
Output
Output is the amount of goods and services produced.
Outyear
An outyear in the concurrent resolution on the budget, or in the president’s budget, is any fiscal year beyond the budget year for which projections are made.
Oversight Committees
Oversight committees are congressional committees charged with oversight of an agency or program. Normally, oversight falls to an agency or program’s authorizing committee.
P
Panic of 1837
The Panic of 1837 was a policy-induced depression. It was the second longest and second deepest depression in US history, only superseded by the Great Depression of the 1930s. Its causes were President Andrew Jackson’s distribution of the federal surplus, in which funds were removed from banks and sent to states. This reduced aggregate reserves available to support loans and bank notes nationwide, and with the inefficient transfer over poor roads, it took considerable time for banks in the states to expand their loans. Further, Jackson’s 1836 Specie Circular required payment in gold or silver for the purchase of federal lands, increasing demand for gold and silver coins, thereby compounding the contractionary effects of the distribution of the surplus.
Panic of 1907
The Panic of 1907 was one of many panics resulting from the form-seasonal elasticity problem, and a particularly severe one that provided impetus for the process that resulted in the Federal Reserve. During the panic, President Theodore Roosevelt worked with banker J. P. Morgan to secure lines of credit from foreign banks and organize national banks to make loans to other solvent, but illiquid banks. Roosevelt sent Treasury Secretary George Cortelyou to Wall Street to supply liquidity, depositing $68 million in national banks in New York City and issuing $50 million of Panama bonds and $100 million of Treasuries to provide additional collateral for national bank notes. In essence, Roosevelt asked Morgan to perform the lender-of-last-resort function of a central bank on an ad hoc basis.
Part Time
BLS defines part-time employment as working fewer than 35 hours of work per week for pay.
Pay-As-You-Go (PAYGO)
Pay-as-you-go (PAYGO) is a budgetary enforcement mechanism established in the Budget Enforcement Act of 1990 that generally requires that projected deficit increases due to legislation must be offset by an equivalent amount of direct spending cuts or tax increases. In practice, PAYGO has often been waived for new or emergency spending and used to block tax increases.
Penn Central Crisis
The Penn Central Crisis in 1970 was a classic case of “too big to fail” involving the nation’s seventh-largest corporation. Rather than allowing the firm to fail while supplying reserves to the market to prevent the spread of the crisis, the fed bailed out the firm, signaling to other sizeable firms that they might not suffer harm from taking risks. The Fed suggested its action was justified due to impacts on the broader financial system, but it effectively signaled that sizable or politically connected firms would have a safety net.
Performance Measures/Indicators
Performance measures/indicators are particular values or characteristics used to measure output, outcome, or efficiency of an organization or program.
Permanent Authority
Permanent authority is budget authority that is available as the result of enacted legislation and without further legislative action.
Personal Consumption
Personal consumption is household spending on consumer goods and services in a fixed time period.
Personal Consumption Expenditures (PCE)
Personal Consumption Expenditures (PCE) is a measure of the value of goods and services purchased by households, calculated by BEA.
Personal Consumption Expenditures (PCE) Price Index
The Personal Consumption Expenditures Price Index (PCE) is released monthly by BEA.
Personal Consumption Expenditures, Excluding Food and Energy (Core PCE) Price Index
The Personal Consumption Expenditures Price Index, Excluding Food and Energy (Core PCE) is released monthly by BEA, and is used by the Federal Reserve to understand underlying inflation in the economy, excluding food and energy, which have more volatile prices.
Personal Income
Personal income includes income received by persons from all sources.
Personal Saving
Personal saving is personal income minus the sum of personal spending and taxes.
Personal Savings Rate
The personal savings rate is personal saving as a percentage of disposable personal income.
Phillips Curve
The Phillips curve illustrates an inverse relationship between the rate of change in prices and the rate of unemployment.
Population
Population consists of all people living in a particular geographic area.
Population Density
Population density is total population within a geographic entity divided by the land area of that entity, and expressed as people per square mile.
Population Growth Rate
Population growth rate is defined by Census as the average annual percent change in the population, resulting from a surplus (or deficit) of births over deaths and the balance of migrants entering and leaving a country.
Pork-Barrel Legislation
Pork-barrel legislation is legislation that directs federal spending projects to local areas at taxpayer expense.
Potential GDP
Potential GDP, as measured by CBO, is what GDP would be if the economy were operating at full employment without inflation.
Power of the Purse
The “power of the purse” is control of federal spending, and it is an authority of Congress, established in Article I, Section 9, Clause 7, which states that, “No money shall be drawn from the treasury, but in consequence of appropriations made by law, and a regular statement and account of receipts and expenditures of all public money shall be published from time to time.” James Madison wrote of this power in Federalist 58: “The House of Representatives cannot only refuse, but they alone can propose, the supplies requisite for the support of government. They, in a word, hold the purse . . . This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.”
President’s Budget
The president’s budget is a document sent to Congress by the president in January or February of each year, as required by law, requesting new budget authority for federal programs and estimating federal revenues and outlays for the upcoming fiscal year and four subsequent outyears.
President’s Commission on Budget Concepts (1967)
The 1967 President’s Commission on Budget Concepts addressed growing confusion in the budget process during a time when the executive branch was presenting various forms of the budget, such as an administrative budget, a consolidated cash budget, and a National Income Accounts budget. The commission recommended the adoption of a unified budget, under which Federal and trust funds are brought together to improve understanding of the budget and its effect on the economy. Recommendations from the commission created a framework for budgeting that is still in use today.
Price Controls
Price controls are government-mandated prices, which can be greater or less than the market price.
Price Deflator
A price deflator adjusts the value of currency over time.
Price Index
A price index measures an average of the prices of a bundle of goods and services.
Price Shock
A price shock is a type of supply shock where supply conditions are unexpectedly changed by an external event, causing prices of one or more commodities to rise.
Primary Outlays
Primary outlays are federal discretionary and mandatory spending, excluding interest payments to service the federal debt.
Principle of Diminishing Returns
The principle of diminishing returns holds that output increases when inputs increase, but increases in output slow with additional increases in input. Eventually more input increases may turn negative. Mathematically, the first derivative is positive, and the second derivative is negative. For instance, spending $1 on a program may generate $10 in results, but spending $2 on that same program may only generate $15 in results. Eventually, there could be no additional return (or a negative return) for additional dollars spent.
Prior Year
The prior year in federal budgeting refers to the fiscal year preceding the current fiscal year.
Private Equity Fund
A private equity fund is a type of private fund that is managed by a private equity firm that pursues investment strategies including buyouts, growth equity, and venture capital.
Private Fixed Investment
Private fixed investment is spending by private businesses, households, and nonprofits on buildings, equipment, software, and intellectual property products.
Private Nonfarm Business Sector
The private nonfarm business sector, as defined by BLS, includes privately owned (nongovernment) establishments outside of the farm sector that are operated for profit.
Privately Held Government Debt
Privately held government debt refers to the portion of the national debt owed to domestic and foreign investors, excluding bonds held by federal agencies or the Federal Reserve.
Producer Price Index
The Producer Price Index (PPI) measures the average change over time in selling prices received by domestic producers of goods and services.
Productivity
BLS produces two major productivity estimates: labor productivity, which is the average output produced per worker during a specific time period; and, total factor productivity, which measures the economy’s efficiency in turning the combination of labor and capital into output.
Profits
Profits are the portion of total income from the sale of goods and services that exceeds their total production cost.
Progressive Tax
A progressive tax is one where the average tax rate rises with income. Those with higher incomes pay a higher percentage of their income in taxes.
Projections
Projections are estimates of budget authority, outlays, receipts, or other budget amounts extending several years into the future.
Property Rights
Property rights, recognized since ancient times, are an exclusive right to own or possess and transfer things to others at the individual’s discretion, and this is a right that a government exists to protect. Property was part of John Locke’s formulation of “Life, Liberty, and Property,” which became the “Life, Liberty, and the Pursuit of Happiness” in the Declaration of Independence, with the Declaration’s phrase both including and being more expansive than just property.
Proportional Tax
A proportional tax is one where the tax rate is the same at all income levels.
Prudential Regulation
Prudential regulation refers to regulation aimed at ensuring the safe and sound operation of financial institutions.
Public Company Accounting Oversight Board (PCAOB)
The Public Company Accounting Oversight Board (PCAOB) is a nonprofit corporation established by Congress to oversee the audits of public companies to protect the interests of investors and further the public interest.
Public Debt
See Debt Held by the Public.
Public-Private Partnership (PPP)
A public-private partnership (PPP) is an arrangement between a federal, state, or local public agency and a for-profit corporation.
Purchasing Power
Purchasing power is a concept economists use when they discuss a person’s ability to buy the same amount of goods from one time period to the next with the same income. For example, a person with an income of $50,000 could buy a collection of goods worth $50,000. However, that person’s purchasing power will fall if inflation drives the prices for those same goods higher than $50,000. The buyer’s purchasing power has declined because that same $50,000 in income now buys less than $50,000 in goods.
Q
QE
QE is an acronym for Quantitative Easing.
Quantitative Easing (QE)
Quantitative easing (QE) is a monetary policy tool involving the large-scale purchase of assets by the Federal Reserve, including Treasury securities and mortgage-backed securities to provide liquidity to the financial system and lower longer-term interest rates.
Quartile
A quartile is division into four equal parts.
Quintile
A quartile is division into five equal parts.
R
Rate of Unemployment
Rate of unemployment, defined by BLS, is the percentage of persons in the labor force who are not working for pay and have looked for work in the past four weeks.
Rationing
Rationing is an allocation of a limited supply of a good or resource to users who would like to have more of it.
Real Dollar
Constant or real dollars are dollars adjusted to remove the effects of inflation to better compare price changes or prices over time. This is also called real or inflation-adjusted values.
Real Earnings
Real earnings are the average hourly and weekly earnings, adjusted for inflation.
Real Economic Growth
Real economic growth is the increase in GDP, adjusted for inflation.
Real Estate Investment Trust (REIT)
A Real Estate Investment Trust (REIT) is an operating company that manages income-producing real estate or real estate - related assets.
Real GDP
Real GDP is Gross Domestic Product (GDP) adjusted for inflation.
Real Interest Rate
The real interest rate is a measure of an interest rate adjusted to remove the effects of expected general inflation.
Real Values
Real values are values that have been adjusted for the effects of inflation.
Reapportionment
Reapportionment in federal budgeting is a revision of a previous apportionment of budgetary resources for an appropriation or fund account.
Reappropriation
A reappropriation is legislation that permits an agency to obligate all or part of the unobligated portion of budget authority that has expired or would otherwise expire if not reappropriated.
Reauthorization
A reauthorization is legislation that renews an expiring or expired authorization.
Receipts
Budget receipts are collections from the public, including individual and corporate income taxes and social insurance taxes, excise taxes, duties, court fines, compulsory licenses, deposits of earnings by the Federal Reserve System, gifts, and contributions.
Recession
A recession is a sustained reduction in economic activity. GDP is the broadest measure of economic activity, and recession is often defined as two consecutive quarters of negative GDP growth, though this is not an official designation, which is made by the private, nonprofit National Bureau of Economic Research (NBER).
Reconciliation
Reconciliation is an expedited procedure, provided in the Congressional Budget Act, for changing existing revenue or direct spending laws to implement budgetary policies established in a budget resolution.
Reconciliation Instructions
Reconciliation instructions are a provision in a budget resolution directing one or more committees to report legislation that changes existing laws or pending legislation to bring spending, revenues, or the debt limit into conformity with the budget resolution.
Regressive Tax
A regressive tax is a tax where the average tax rate falls with increase in income. Those with higher incomes will pay a lower percentage of their income in taxes.
Regulatory Budget
A regulatory budget is a policy planning tool Congress can use to determine and limit the economy-wide level of regulatory costs on businesses and households.
Reimbursement
A reimbursement is an amount received by an agency as a payment that is authorized by law to be credited directly to specific appropriation and fund accounts.
Rent Seeking
Rent seeking in economics consists of actions by individuals and interest groups designed to gain advantage for themselves in public policy, relative to others.
Reprogramming
Reprogramming is the shifting of funds within an appropriation account from one object class to another or from one program activity to another.
Repurchase Agreement (repo)
A repurchase agreement (repo) is a contract between two parties providing for the sale of a security and then its repurchase at a later date at a higher prearranged price.
Rescission
A rescission is the repeal of previously enacted budget authority. The president can send a message to Congress requesting a rescission, and the president can withhold funds from the obligation for 45 days of a continuous session if Congress fails to act. After inaction, funds are to be made available for obligation.
Reserve Requirement
Reserve requirement is the amount of reserves that depository institutions are required to hold.
Reserves
Reserves are funds that a depository institution holds against specified deposit liabilities.
Residential Fixed Investment
Residential fixed investment consists of the purchases of private residential structures and residential equipment that is owned by landlords and rented to tenants.
Residential Mortgage-Backed Security (RMBS)
A residential mortgage-backed security (RMBS) is a security that is collateralized by a pool of noncommercial, residential mortgage loans, making payments that are based on the performance of those loans.
Revenues
Revenues, as understood in federal budgeting, are governmental receipts, which are funds collected from the public as a result of the federal government’s exercise of its sovereign powers.
Russell 3000 Index
The Russell 3000 Index is a broad market cap-weighted index tracking share prices for the 3,000 largest publicly traded companies in the United States.
S
S&P 500
The Standard and Poor’s 500 (S&P 500) is a market-cap weighted index that tracks share prices for 500 large companies.
Saving
Saving is the portion of after-tax income that is not spent on consumption.
Savings and Loan Crisis (S&L Crisis)
The Savings and Loan Crisis of the 1980s was driven by interest rate spikes, deregulation, and aggressive and often poor-quality lending, which left mutual savings banks and thrifts suffering losses due to fixed-rate mortgage loans yielding less than the cost of the institution’s deposit liabilities. Though these institutions were not members of the Federal Reserve System, they appealed to Congress, which pressured the Fed. This resulted in the Fed embracing the position that it was the lender of last resort to all solvent financial institutions.
SBA
SBA is an acronym for US Small Business Administration.
Scarcity
Scarcity is an economic concept that relates to goods and services that are limited in quantity and exhaustible. This describes all known physical goods and services.
Scorekeeping
Scorekeeping, with respect to the budget, is the process of estimating the budgetary effects of legislative proposals compared to the baseline. CBO is the official scorekeeper for Congress, with the chairs of the House and Senate Budget Committees serving as scorekeepers in each House.
Scoring
Scoring is the process in which a legislative bill is “priced” to estimate the potential impact to the federal budget by increasing or decreasing outlays or revenues. For additional details, see Scorekeeping, Static Scores, Conventional Scores, and Dynamic Scores.
Seasonal Adjustments
Seasonal adjustments, as described by the BLS, are statistical adjustments that remove predictable, seasonable fluctuations from one time period to the next (for example, from month to month), thus enabling the user of data to see trends from which these predictable ups and downs have been removed.
SEC
SEC is an acronym for US Securities and Exchange Commission.
Second Bank of the United States (1816–1836)
The Second Bank of the United States was chartered after experiencing the difficulties of not having a bank during the War of 1812. The Second Bank had mixed results: It initially struggled with issues of incompetence, then returned to the good policies of the First Bank, and finally succumbed to the populist opposition of President Andrew Jackson. Its charter was not renewed.
Second Estimate
The BEA’s second estimate of GDP is released about two months after a quarter’s end, and it is based on more complete data than the advance estimate. It is followed a month later by the third and final estimate.
Secondary Effects
Secondary effects are the consequences of an economic change that are not immediately identifiable, but become evident as time passes.
Securities
Securities are stocks and bonds, notes, mortgages, and other formal evidence of indebtedness.
Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) is a federal government agency that was established to regulate and enforce the federal securities laws with a mission of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation. It oversees capital markets, including public companies, securities exchanges, and investment funds.
Securities Exchange Act of 1934
The Securities Exchange Act of 1934 (P.L.73-291) created the US Securities and Exchange Commission (SEC), empowered with the power to register, regulate, and oversee brokerage firms, transfer agents, clearing agencies, and the nation’s securities self-regulatory organizations (SROs).
Securitization
Securitization is the pooling of assets into securities backed by those assets.
Seigniorage
Seigniorage is the difference between the face value of minted circulating coins and the cost of their production, including the cost of metal used and transportation of the coins to Federal Reserve Banks for public distribution. It is the increase in value of government assets when metal is converted to a coin whose face value is higher than the cost of the metal.
Senate PAYGO
PAYGO is a Senate rule that prohibits the consideration of legislation that would increase on-budget deficits over the current fiscal year, the budget year; the current year, the budget year, and the ensuing four fiscal years; and the period of all fiscal years covered by the prevailing budget resolution.
Sequester
See Sequestration.
Sequestration
Sequestration in federal budgeting is a procedure in which the president is required to cancel spending to enforce a statutory budget requirement.
Severance Pay
Severance pay is pay by an employer to an employee upon the termination of employment.
Shadow Banking
Shadow banking refers to an alternate financial system that has functional characteristics of commercial banks, such as providing credit, liquidity, and other banking-like services, but operates outside the scope of standard banking regulations and oversight. It came to prominence in the 2008 Financial Crisis.
Socialism
Socialism is a system of economic organization in which ownership and control of the basic means of production rests with the state, and resources are allocated by means of centralized planning rather than by market forces.
South Region
The South region, defined by the Census Bureau, includes Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.
Special Fund Account
A special fund account in budgeting is a Federal Fund Account that is earmarked for a specific purpose.
Special-Interest
A special-interest is an issue that benefits a minority while imposing a cost on many others.
Spending Caps
Spending caps are overall limits on spending.
Stablecoins
Stablecoins are digital assets that aim to maintain a stable value relative to a national currency or other reference asset or assets.
Stagflation
Stagflation is an economic phenomenon with stagnant economic growth, high unemployment, and high inflation occurring at the same time.
Statement of Administration Policy (SAP)
A Statement of Administration Policy (SAP) is a document that communicates an administration’s official position of support, conditional support, or opposition to legislation pending in Congress.
Static Scoring
Static scoring in federal budgeting involves estimating the costs and effects of legislation on the baseline without giving weight to how the legislation may affect the economy, potentially resulting in additional changes in revenue and outlays.
Statistical Model
A statistical model is a mathematical description that accounts for randomness in events.
Statutory Debt Limit
The statutory debt limit is the ceiling on the amount of most Treasury and agency debt, established by section 3101 of title 31 of the United States Code.
Statutory PAYGO
PAYGO is law requiring that all new legislation affecting taxes, fees, or mandatory expenditures, taken together, must not increase projected deficits, and it is enforced through across-the-board reductions to selected mandatory programs after the end of a session of Congress.
Stocks
Stocks, also known as equities, are individual shares of businesses that represent part ownership of the business. Different classes of stock, such as common stock and preferred stock, have different voting and economic rights.
Strike
A strike is a temporary stoppage of work by a group of employees to protest work or contract provisions and push for a change.
Structural Unemployment
Structural unemployment is the presence of factors, like misaligned skills, that make it hard for workers to find jobs and employers to find workers.
Subfunction
A subfunction is a subdivision of a budget function.
Subsidy
A subsidy is a payment or benefit made by the federal government where the benefit exceeds the cost to the beneficiary.
Substitution Bias
Substitution bias is a potential complication that statistical agencies face when trying to calculate the cost of living. A straight-forward way to measure the cost of living is to pick a fixed basket of goods and track the increase in the cost of the basket over time. In practice, when some goods in the basket rise faster than others, consumers will buy less of the more expensive goods and more of the less expensive goods. If statistical agencies ignore consumers’ tendency to substitute more expensive goods with less expensive goods, they will tend to overstate the cost of living.
Sunk Costs
Sunk costs are those expenses that have already been incurred as a result of past decisions.
Super Committees
Super Committees have occasionally been formed by Congress to deal with specific situations, and often have touched on federal budgeting. One example is the Joint Committee on the Legislative Budget, with members from the Appropriations, Ways and Means, and Finance Committees created by the Legislative Reorganization Act of 1946. Another, more recent, example was the Joint Select Committee on Deficit Reduction, created in 2012, which was bicameral and bipartisan with the power to submit fast-track legislation to Congress if it reached an agreement, though agreement was not reached.
Supplemental Appropriation
A supplemental appropriation is legislation providing additional appropriations beyond that which has been enacted in annual appropriations.
Supply Shock
A supply shock is an unexpected event that temporarily either increases or decreases aggregate supply.
Surplus
A surplus in federal budgeting occurs when revenue exceeds outlays.
System Open Market Account (SOMA)
The System Open Market Account (SOMA) is the Federal Reserve’s portfolio of US Treasury and agency securities.
T
Tariff
A tariff is a tax on goods imported into a country.
TARP
TARP is an acronym for Troubled Asset Relief Program.
Tax
A tax is a compulsory contribution collected by a government for public purposes.
Tax Base
The tax base is the level or quantity of the economic activity that is taxed.
Tax Credit
A tax credit is an amount that offsets or reduces tax liability.
Tax Cuts and Jobs Act (TCJA) (2017)
The Tax Cuts and Jobs Act (TCJA) (2017) (P.L.115-97) was a signature piece of legislation for President Trump that overhauled the tax system, reducing the corporate tax rate to 21 percent, modifying individual deductions and brackets, and introducing international tax reforms intended to enhance competitiveness.
Tax Deduction
A tax deduction is an amount that is subtracted from the tax base before calculating tax liability.
Tax Expenditure
A tax expenditure is a subsidy provided through the tax system that results in revenue loss. In other words, it is a tax that could be collected on a good or activity but is not because the government has chosen to forego collecting the tax. Tax expenditures come in the form of exclusions, exemptions, or deductions from gross income; or credits, preferential tax rates, or deferrals of tax liability.
Tax Reform of 1986
The Tax Reform Act of 1986 (P.L.99-514) was a bipartisan reform that simplified the tax code by broadening the tax base, lowering individual and corporate rates, eliminating many deductions, and promoting fairness in taxation.
Taxonomy
Taxonomy is classification into ordered categories.
Taylor Rule
Taylor rule, named after Stanford economist John Taylor, is a monetary rule or equation, which prescribes a higher federal funds rate in response to higher inflation and lower economic slack and lower federal funds rate in response to lower inflation and higher economic slack. The Fed roughly followed this approach during the Great Moderation (1983 - 2000).
Technical and Economic Assumptions
Technical and economic assumptions are assumptions about factors affecting estimations of future outlays and receipts that are not a direct function of legislation, such as assumptions about inflation and interest rates, demography, immigration, birth rates, and morbidity.
The Accord (1951)
The Accord refers to the 1951 agreement that resolved friction between the Treasury and the Federal Reserve. Fed Chair Thomas B. McCabe and Treasury Secretary John W. Synder reached an agreement, brokered by Assistant Secretary of the Treasury William McChesney Martin Jr. on March 4, 1951, that began the Fed’s independent operations, providing for the Fed to conduct open market operations in Treasuries only, allowing the market to determine long-term Treasury bond rates.
The Banking Act of 1935
The Banking Act of 1935 centralized Federal Reserve decision-making powers in Washington. It established the Board of Governors, which was placed in charge of the Federal Reserve System, and the chairman was given an executive role. It also created the Federal Open Market Committee (FOMC), which was composed of regional Federal Reserve Bank presidents and members of the Federal Reserve Board.
The Federal Reserve Act (1913)
The Federal Reserve Act created a system with a monetary policy mandate to provide an “elastic currency,” within the context of a gold standard, to combat the form-seasonal elasticity problem. It established 12 regional Federal Reserve Banks and a Federal Reserve Board of Directors based in Washington, DC. Further, it required all national banks to join the Federal Reserve System, and replaced US and national bank notes with Federal Reserve notes.
The Great Depression
The Great Depression began in 1929 and lasted, on and off, until 1939 and the World War II defense build-up. It was the nation’s most severe economic downturn with unemployment soaring to about 25 percent and widespread bank failures, and it served as the backdrop for the institution of President Franklin D. Roosevelt’s New Deal program.
The Great Moderation (1983–2000)
The Great Moderation refers to the period under Fed Chairs Paul A. Volcker and Alan Greenspan from 1983 - 2000, during which the Federal Reserve pursued price stability through rules-based monetary policy, along the lines of the Taylor rule, devised by Stanford economist John Taylor. The period is known for two long economic booms, low inflation, and low unemployment rates.
The Revenue Act of 1926
The Revenue Act of 1926 (P.L.69-20) signed by President Calvin Coolidge, introduced progressive income tax rates, set a flat corporate income tax at 13.5 percent, reduced estate and inheritance tax progressivity, and it created the Joint Committee on Internal Revenue Taxation (known now as the Joint Committee on Taxation).
Third Estimate
See Final Estimate.
Total Fertility Rate
Total fertility rate, as defined by the Census Bureau, is “the average number of children that would be born per woman if all women lived to the end of their childbearing years and bore children according to a given set of age-specific fertility rates.”
Trade Deficit
A trade deficit occurs when a nation’s imports are greater than its exports.
Trade Surplus
A trade surplus occurs when a nation’s exports are greater than its imports.
Transfer
A transfer is a shift in budget authority between two appropriation accounts.
Treasury
Treasury is an acronym for US Department of the Treasury.
Treasury Bill
A Treasury bill is the shortest-term federal debt instrument or security, maturing within one year after the date of issue.
Treasury Bond
A Treasury bond is a federal debt instrument with a maturity of more than 10 years.
Treasury Note
A Treasury note is federal debt instrument with a maturity of at least one year but not more than 10 years.
Treasury Security
A Treasury security is a debt instrument issued to finance the operations of the government or refinance the government’s debt.
Troubled Asset Relief Program (TARP)
The Troubled Asset Relief Program (TARP) was a government program addressing the 2008 Financial Crisis. It allowed the government to purchase or insure up to $700 billion in assets and equity from financial institutions.
Trust Fund Accounts
Trust fund accounts are receipt, expenditure, or revolving fund accounts that typically do not impose a fiduciary responsibility on the federal government.
U
U-1 BLS Unemployment Measure
U-1 is the BLS measure of people unemployed 15 weeks or longer, as a percent of the civilian labor force. It is released at the beginning of each month in BLS Household Data Table A-15, Alternative measures of labor underutilization.
U-2 BLS Unemployment Measure
U-2 is the BLS measure of job losers and people who completed temporary jobs, as a percent of the civilian labor force. It is released at the beginning of each month in BLS Household Data Table A-15, Alternative measures of labor underutilization.
U-3 BLS Unemployment Measure (Official Unemployment Rate)
U-3 is the Official Unemployment Rate and the BLS measure of total unemployed, as a percent of the civilian labor force. It is the percent of people in the labor force who are not working but looked for work in the past four weeks. It is released at the beginning of each month in BLS Household Data Table A-15, Alternative measures of labor underutilization.
U-4 BLS Unemployment Measure
U-4 is the BLS measure of total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers. It is released at the beginning of each month in BLS Household Data Table A-15, Alternative measures of labor underutilization.
U-5 BLS Unemployment Measure
U-5 is the BLS measure of total unemployed, plus discouraged workers, plus all other people marginally attached to the labor force, as a percent of the civilian labor force plus all people marginally attached to the labor force. It is released at the beginning of each month in BLS Household Data Table A-15, Alternative measures of labor underutilization.
U-6 BLS Unemployment Measure
U-6 is the BLS measure of total unemployed, plus all people marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force. It is released at the beginning of each month in BLS Household Data Table A-15, Alternative measures of labor underutilization.
Underwriting Standards
Underwriting standards are the terms, conditions, and criteria used to determine the extension of credit in the form of a loan or bond.
Unemployed
Unemployed refers to those who were not employed during the reference period, though they were available for work, and had made specific efforts to find employment sometime during the prior four weeks.
Unemployment Insurance
Unemployment insurance is insurance that provides unemployment benefits to eligible workers who become unemployed through no fault of their own and who meet certain other eligibility requirements.
Unemployment Rate
The unemployment rate comes from BLS, and is the number unemployed who do not have jobs and are looking for work as a percent of the civilian labor force, also known as U-3.
Unexpired Budget Authority
Unexpired budget authority is budget authority that is available for incurring new obligations.
Unfunded Mandate
An unfunded mandate is a federal statute or regulation that requires state, local, or tribal governments or the private sector to expend resources to achieve legislative goals without being provided federal funding to cover the costs.
Unified Budget
Unified budget, set forth in the Report of the President’s Commission on Budget Concepts, is a comprehensive budget in which receipts and outlays from federal and trust funds are consolidated.
United States-Mexico-Canada Trade Agreement (USMCA)
The United States-Mexico-Canada Trade Agreement (USMCA) is a free trade agreement into which these countries entered in 2020 that replaced the North American Free Trade Agreement (NAFTA), promoting fairer labor practices, stronger intellectual property protections, and increased North American content in goods like automobiles.
Unobligated Balance
An unobligated balance is the portion of obligational authority that has not yet been obligated. Whereas budget authority expires after a certain point, its unobligated balance remains available for five additional fiscal years for recording and adjusting obligations that are chargeable to the appropriations period.
USAspending.gov
USAspending.gov is a website, maintained by the Treasury Department, that provides data on federal prime grant awards and first-tier subawards by state, county, city, and zip code.
User Fee
A user fee is a payment that consumers make to receive certain goods and services from the government.
V
Views and Estimates Report
Views and Estimates are reports providing each committee’s comments and recommendations on budgetary matters, for which each House and Senate committee has jurisdiction over federal programs. Submission of Views and Estimates Reports to the respective budget committee is required within six weeks of the president’s budget being submitted.
Virtual Currency
Virtual currency, held in a digital currency wallet, is digital currency that includes sovereign cryptocurrency, virtual currency (non-fiat), and a digital representation of fiat currency. Virtual currency is a digital representation of value whether as a medium of exchange; a unit of account; or a store of value.
W
Warrant
A warrant is an official document that the Treasury secretary issues upon enactment of appropriations that sets forth the amount of money authorized to be withdrawn from the central accounts that Treasury maintains.
West Region
The West region, defined by the Census Bureau, includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
Wilshire 5000 Index
The FT Wilshire 5000 Index tracks share prices for almost all US equity securities, and it is a market cap-weighted index.
World Trade Organization (WTO)
The World Trade Organization (WTO) is the new name given to GATT in 1994, and it is charged with monitoring and enforcing multilateral trade agreements.
Y
Yield Curve
A yield curve maps the relationship between bond yields and their respective maturities.
Glossary sources: Bureau of Labor Statistics, Congressional Research Service, Federal Reserve, Government Accountability Office, Joint Economic Committee, SEC, U.S. Treasury, Senate Budget Committee