Last week, the Government Accountability Office (GAO) released its long-term fiscal outlook, presenting both long-term projections and estimates of the fiscal gap. Since the last longer-term projections from CBO came out in June, the report provides a good measure of what the budget looks like after the American Taxpayer Relief Act and the challenge we face going forward.
CBO's latest Monthly Budget Review (MBR) for March means that we now have budget data for the first six months of FY 2013. The six-month deficit stands at $601 billion, down from $779 billion over the same period last year. For context, CBO previously projected that the deficit for FY 2013 would be $845 billion, compared to the actual FY 2012 deficit of $1.089 trillion.
The Economic Policy Institute's Ethan Pollack has a blog post questioning the accuracy and ultimate usefulness of long-term (75-year) budget projection, especially CBO's Alternative Fiscal Scenario (AFS).
The Congressional Budget Office has been busy on its blog lately, posting both snapshots of federal programs and also publishing responses to questions they have received from Members of Congress at hearings. Their latest post from director Doug Elmendorf is the latter variety, showing the sensitivity of budget projections to changes in interest rates.
With the new expectation that the House budget resolution will reach balance in 10 years -- more than 15 years earlier than was projected last year -- there has been much speculation about how House Budget Committee chairman Paul Ryan (R-WI) will modify last year's budget to reach the more aggressive target.
President Obama was recently quoted in the Washington Post as saying that an additional $1.5 trillion of deficit reduction would hit the $4 trillion total that many have cited as the target for total deficit reduction. While we agree on the enacted savings total, we disagree on the math.
Analyses of the CBO budget baseline generally focus on the current law baseline, the one that CBO presents in most detail. In the past, we constructed a CRFB Realistic baseline to account for many policies scheduled to expire/happen in current law that we thought were unrealistic. The Realistic baseline showed a much worse fiscal outlook than the current law baseline.
In CBO’s latest Budget and Economic Outlook, much has changed since their August baseline. As we explain in our report on the February baseline, the majority of change results from the American Taxpayer Relief Act (ATRA). However, there are several other legislative, technical, and economic revisions that for the most part cancel each other out but are still worth highlighting.
CBO's release of its annual Budget and Economic Outlook is a treasure trove of information, sometimes not easily digestible.
To help put all that information in a more accessible form, CRFB released a brief 6 page analysis of CBO's new economic and budget projections, which are first official look at future budget projections in light of the fiscal cliff deal and other developments.