Thursday, April 17, 2014Tweet
[IWS] CBO: AN ANALYSIS OF THE PRESIDENT'S 2015 BUDGET [17 April 2014]
IWS Documented News Service
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
Congressional Budget Office (CBO)
AN ANALYSIS OF THE PRESIDENT'S 2015 BUDGET [17 April 2014]
[full-text, 23 pages]
This report by CBO presents an analysis of the proposals in the President’s budget request for fiscal year 2015, as submitted to the Congress on March 4, 2014. The analysis is based on CBO’s economic projections and estimating models (rather than the Administration’s), and it incorporates estimates of the effects of the President’s tax proposals that were prepared by the staff of the Joint Committee on Taxation (JCT).
In conjunction with analyzing the President’s budget, CBO has updated its baseline budget projections, which were previously issued in February 2014. Unlike its estimates of the President’s budget, CBO’s baseline projections largely reflect the assumption that current tax and spending laws will remain unchanged, and therefore the projections provide a benchmark against which potential legislation can be measured. Under that assumption, CBO estimates that the federal deficit would total $492 billion in 2014 and that the cumulative deficit over the 2015–2024 period would amount to $7.6 trillion.
How Would the President’s Proposals Affect Federal Deficits and Debt?
The President’s budget request specifies spending and revenue policies for the 2015–2024 period and includes initiatives that would have budgetary effects in fiscal year 2014 as well. CBO and JCT estimate that enactment of the President’s proposals would boost deficits from 2014 through 2016 but reduce them (by generally increasing amounts) from 2017 through 2024, relative to projected deficits under CBO’s baseline. In particular, the President’s policies are estimated to have the following consequences for federal deficits and debt:
-For 2014 and 2015, the deficit would be about $500 billion, or 3 percent of gross domestic product (GDP). Under the President’s policies, deficits would generally increase in subsequent years through 2024 in nominal dollars, growing to between roughly $700 billion and $800 billion at the end of the period.
-Deficits would be smaller than the amounts in CBO’s baseline each year from 2017 through 2024 (see the figure below). Although baseline deficits trend upward, to about 4 percent of GDP in the latter years of the projection period, under the President’s proposals the deficit would remain close to 3 percent of GDP throughout the decade—which is similar to the average deficit of 3.1 percent experienced over the past 40 years. By the end of the 10-year period, the deficit under the President’s budget would be below the projections in CBO’s baseline by nearly 1 percent of GDP.
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