Spending and Revenue in the Murray Budget

Yesterday, we presented an overview of the Murray budget, describing the policies of the budget and showing savings relative to different baselines. In this blog, we will look closer at where the budget resolution would leave the federal government in terms of its size and the size of its deficits and debt.

Compared to current law, the Senate budget resolution would increase spending slightly in the short term due to the infrastructure spending and the cancellation of the sequester. In the following years, though, the budget would reduce spending through its health and discretionary reductions, with outlays running about a percentage point of GDP below current law by 2023. Meanwhile, revenue increases gradually above the baseline throughout the next ten years, reaching nearly 20 percent of GDP by 2023, 0.7 percentage points above current law.

^{Source: SBC, CBO}

The graph below show spending and revenue in Murray's budget compared to the baseline that she uses (discussed more fully here).

^{Source: HBC, SBC, CBO}

Although Senator Murray does not provide long-term estimates, a plan like the one she presented is likely to keep the debt stable relative to the economy through the mid-2020s and then begin to rise, though much more slowly than the debt would under our realistic baseline. As the House and Senate continue to debate their budgets, stay tuned for our continued analysis.