Budget Projections

Are We In For a (Tax) Cliff Hanger?

In honor of Tax Day on Tuesday, we will be doing blogs this week about the current shape of the tax code and what can be done to fix it. Our first blog will be about all the tax provisions that will expire at the end of the year, what has been labelled as "taxmageddon" (or the tax side of the fiscal cliff).

At Halftime, The Score is 829 to 777

CBO's latest Monthly Budget Review for March gives us a look at how the federal budget looks compared to last year halfway through the fiscal year. This year's deficit through six months is $777 billion, compared to $829 billion through the same period last year. The smaller deficit is the result of revenue being $46 billion higher and outlays actually being $7 billion lower compared to FY 2011.

GAO's Long Term Outlook

The Government Accountability Office (GAO) has released its Long Term Outlook for the federal budget, showing an ever-climbing debt path as a percentage of GDP over the long term. Under both its Baseline Extended and Alternative scenarios, debt rises rapidly as increasing health care spending, among other things, overtakes revenue. This is especially true of the Alternative, which assumes that expiring tax policies are extended and that revenue and discretionary spending are held to their historic averages over the long term.

The Ryan Budget in the Long Term

According to CBO’s report on the budget targets specified by Chairman Ryan and his staff (not a more traditional scoring of policies for whatever results those yield), Ryan’s budget targets would reduce the federal debt to 10 percent of GDP by 2050. By our calculations, these targets would transform deficits into surpluses starting in 2035.

Fiscal Fact Checker: What Has Happened to CBO's Estimate of the Affordable Care Act?

CBO's most recent estimate of the insurance coverage provisions of the Affordable Care Act has sparked a debate about how CBO's estimate of ACA has changed over time.

CBO and OMB In Tune on President's Budget

Today, the Congressional Budget Office (CBO) released its analysis of President Obama's FY 2013 budget proposals. In a somewhat surprising analysis, CBO is slightly more optimistic than the Office of Management and Budget (OMB) was in its analysis this past February.

CBO's Got a Brand New Baseline

Although CBO's analysis of the President's budget is the newsmaker in March in the budget world, CBO also updates its current law baseline, which shows slightly lower deficits from 2013-2022 than it projected in January. Compared to January, ten-year deficits have shrunk by $186 billion from $3.1 trillion to $2.9 trillion.

More on the Downside Risk of Changes to Budget Forecasts

Yesterday, we argued that to actually stabilize the debt as a share of the economy, you probably need to propose a plan with even more savings than what would stabilize the debt under current projections. The risks come from both the economic and political uncertainties:

Would the President's Submission Actually Stabilize Debt?

Last week, in our analysis of the President's submission, we noted how the President's submission to the Super Committee nearly stabilizes debt, but not fully, this decade and how much more will be needed to actually put debt on a clear downward path.

We stated that:

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