1. Benefit payments.-The Social Security Amendments of 1965 provide for a basic hospital insurance program which will pay benefits to most individuals age 65 and over to cover the costs of hospital and related services, effective July 1, 1966, and extended care facilities effective January 1, 1967. The benefit payments and administrative costs for those on the social security and railroad retirement rolls will be financed from a separate payroll tax effective January 1, 1966. Proposed legislation will shift from annual to quarterly contributions by the selfemployed and will increase tax receipts in 1966 and 1967. Costs of providing benefits to those not insured under the social security or railroad retirement program will be met from general revenues of the Treasury. Tax contributions and transfers from general revenues of the Treasury will be deposited in the newly created Federal hospital insurance trust fund. The excess of income over outgo will be invested in Government securities. 2. Construction and administration.-The Secretary of Health, Education, and Welfare determines, on a current estimated basis that portion of the administrative expenses of the Department of Health, Education, and Welfare which is a proper charge to this fund. Adjustment will be 1. Benefit payments.-The 1965 amendments to the Social Security Act provide for voluntary supplemental 93.0 medical benefits program. Effective July 1, 1966, benefit payments will be made to those electing coverage to cover the costs of physicians' services, home health services, and other related medical services. Costs of benefit payments and administrative expenses will be financed by premium payments of $3.00 per month by enrollees together with matching contributions from the general revenues of the Treasury. 2. Construction and administration.-Effective 1967, the Secretary of Health, Education, and Welfare, determines, on a current estimated basis, that portion of the administrative expenses of the Department of Health, Education, and Welfare which is a proper charge to this fund. Adjustment will be made in the subsequent year for the difference between actual costs and the estimated for the preceding year. For 1966 only, the administrative costs chargeable to the supplementary medical insurance trust fund will be borne by the old-age and survivors insurance trust fund with reimbursement for these costs plus interest lost to that fund to be made in 1967. 99.0 Payment to miscellaneous receipts as Payment to Federal old-age and sur- Administrative expenses: "Limitation on salaries and expenses," Social Se- Construction program....... Total obligations.. WELFARE ADMINISTRATION GIFTS AND DONATIONS Program and Financing (in thousands of dollars) 236 316 765,000 13 47,082 104,897 2,555 920,339 Identification code Financing: 21 Unobligated balance available, start of 24 Unobligated balance available, end of year.. 1,086,400 Cash transactions: 93 Gross expenditures 94 -9,000 -218,800 -24,250 -204,300 -13,600 -82,750 Net gain from sale of U.S. -10 -748,023 24.47 Unobligated balance available, end of year: Authorization to 269,523 25.47 Unobligated balance lapsing: Authorization to spend public debt receipts (sale of preferred stock) 2 Applicable receipts. 459,411 1,759,819 1,313,520 -367,943 -360,319 -813,520 1 Balance of selected resources are identified on the statement of financial condition. 2 Repayment of borrowings or purchase of preferred stock from Treasury represent obligations and expenditures of this fund but do not decrease the authority available to the fund since they may be reborrowed from or resold to Treasury at some future time. Similarly, borrowings from or sales of stock to Treasury represent receipts to this fund but do not increase the authority available to the fund. Under its secondary market operations, the Federal National Mortgage Association is authorized to provide limited liquidity for Government insured and guaranteed mortgages and to improve the distribution of investment capital available for home mortgage financing. Purchases of Federal Housing Administration-insured and Veterans Administration-guaranteed mortgages, or loans insured by the Farmers Home Administration, and shortterm loans secured by such mortgages and loans under these operations, are financed by the proceeds from (1) the sale of FNMA's obligations to private investors or the Secretary of the Treasury (the Secretary of the Treasury may not at any one time hold more than $2.25 billion of such obligations), (2) subscriptions by the Secretary of the Treasury for FNMA preferred stock ($92.8 million was authorized in 1955, $50 million in 1957 and $65 million in 1958, making a total of $207.8 million), (3) mandatory contributions into capital incident to subscriptions for the Association's common stock by FNMA sellers and borrowers, (4) the sale of mortgages or loans to the investing public, (5) repayments and prepayments of mortgage or loan principal, and (6) income from operations. Recommendations for such legislation as may be necessary or desirable to transfer ownership of the Association to the private holders of the common stock must be submitted to the Congress as promptly as practicable after all of the Treasury-held preferred stock has been retired. Meanwhile, the present interim program, financed by private as well as by Government investment funds, is treated as a trust fund. Operations are discussed in Part I of this document in connection with the pro135,000 gram's general fund financing and effect on budget expenditures. |