2020 to 2030 A Joint Seminar by the Congressional Budget Office and - - PowerPoint PPT Presentation

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2020 to 2030 A Joint Seminar by the Congressional Budget Office and - - PowerPoint PPT Presentation

Feb 21, 2024 226 likes •545 views

Congressional Budget Office February 6, 2020 An Overview of The Budget and Economic Outlook: 2020 to 2030 A Joint Seminar by the Congressional Budget Office and the Congressional Research Service Christina Hawley Anthony, Chief, Projections

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Congressional Budget Office

A Joint Seminar by the Congressional Budget Office and the Congressional Research Service

February 6, 2020

Christina Hawley Anthony, Chief, Projections Unit, Budget Analysis Division Robert Arnold, Chief, Projections Unit, Macroeconomic Analysis Division Joshua Shakin, Chief, Revenue Estimating Unit, Tax Analysis Division

An Overview of The Budget and Economic Outlook: 2020 to 2030

For more details, see www.cbo.gov/publication/56020.

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1 CBO

The Congressional Budget Office

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2 CBO

To provide the Congress with objective, nonpartisan, and timely analyses of legislative proposals and of budgetary and economic issues to support the Congressional budget process

CBO’s Role

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CBO’s Process for Developing the Budget Baseline

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  • A detailed projection for the current year and the ensuing 10 years of federal spending,

revenues, and the resulting deficits and surpluses

  • Based on CBO’s economic forecast
  • Incorporates the assumption that current laws governing taxes and spending generally

remain in place

  • Not a forecast of future budgetary outcomes; those depend on future Congressional

action and other factors

  • Generally provided two or three times a year
  • Reported in the annual Budget and Economic Outlook and subsequent reports

What Is CBO’s Baseline?

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  • Principles and rules mainly come from law, budget resolutions, House and Senate rules,

and the 1967 Report of the President’s Commission on Budget Concepts.

  • A key law is the Balanced Budget and Emergency Deficit Control Act, section 257.

– Defines the baseline – Sets out rules for projecting spending and revenues – Requires an assumption of full funding for entitlements – Directs the treatment of expiring programs and certain excise taxes

How Is the Baseline Constructed?

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  • A benchmark for measuring the budgetary effects of proposed changes in federal

revenues and mandatory spending

  • Basis for:

– Cost estimates for proposed legislation – CBO’s analyses of the President’s annual budget – CBO’s budget options volume – Other reports (including those describing CBO’s long-term budget projections) – Assessments of multiyear budget trends

  • Often a starting point for budget resolutions

How Do CBO and the Congress Use the Baseline?

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CBO’s Current Budget and Economic Outlook

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  • Deficits and debt
  • The economy
  • Revenues
  • Spending
  • Policy alternatives

Baseline Projections

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Deficits and Debt

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10 CBO

When October 1 (the first day of the fiscal year) falls on a weekend, certain payments that would have ordinarily been made on that day are instead made at the end of September and thus are shifted into the previous fiscal year. All projections presented here have been adjusted to exclude the effects of those timing shifts.

Total Deficits and Surpluses

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When October 1 (the first day of the fiscal year) falls on a weekend, certain payments that would have ordinarily been made on that day are instead made at the end of September and thus are shifted into the previous fiscal year. All projections presented here have been adjusted to exclude the effects of those timing shifts.

Total Deficit, Primary Deficit, and Net Interest

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When October 1 (the first day of the fiscal year) falls on a weekend, certain payments that would have ordinarily been made on that day are instead made at the end of September and thus are shifted into the previous fiscal year. All projections presented here have been adjusted to exclude the effects of those timing shifts.

Total Revenues and Outlays

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Federal Debt Held by the Public

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When October 1 (the first day of the fiscal year) falls on a weekend, certain payments that would have ordinarily been made on that day are instead made at the end of September and thus are shifted into the previous fiscal year. All projections presented here have been adjusted to exclude the effects of those timing shifts.

The Uncertainty of CBO’s Baseline Projections of the Budget Deficit

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Changes in CBO’s Baseline Projection of the 10-Year Deficit Since August 2019

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The Economy

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Real GDP and Real Potential GDP

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The Output Gap

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Composition of the Growth of Real Potential GDP

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The Unemployment Rate and the Natural Rate of Unemployment

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Inflation

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Interest Rates

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Revenues

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* = between zero and 0.05 percentage points.

Changes in Projected Revenues From 2020 to 2030

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Reasons for the Growth of Individual Income Tax Receipts in CBO’s Baseline Projections

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Outlays, Revenues, and Tax Expenditures in 2020

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Spending

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Federal Outlays, by Category

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  • a. Consists of outlays for Medicare (net of premiums and other offsetting receipts), Medicaid, the Children’s Health Insurance Program, premium tax credits, and related spending.

Changes in Projected Outlays From 2020 to 2030