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 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.
It is a well-known fact that the U.S. spends a sizeable amount on defense, more than the next 15 countries combined, including China and Russia. But the Budget Control Act (BCA) discretionary spending caps will require the Pentagon to rein in spending levels, even if sequestration is replaced.
Last Friday, the CBO released a report showing how much the business cycle has affected budget deficits since 1960. The report shows the effect that automatic stabilizers -- features of the budget that tend to automatically push up/down spending and revenue based on cyclical economic effects -- have had and what the budget would look like assuming that the economy is operating exactly at its potential.
The last Congress attempted to work out a new farm bill but could never reach an agreement. The American Taxpayer Relief Act, the agreement reached after the fiscal cliff negotiations, only extended the 2008 farm bill for another year. With another expiration of the farm bill at the end of FY 2013, it remains and bipartisan priority to restructure the way government provides farm support.
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.
On the same day they released their February Baseline projection, the Congressional Budget Office (CBO) released a companion report on Macroeconomic Effects of Alternative Budgetary Paths. The report estimates the effects on the economy of different fiscal paths.
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.