The Budget and Economic Outlook: An Update
CONGRESSIONAL BUDGET OFFICE (U S CONGRESS) WASHINGTON DC
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Recently enacted legislation and the continued sluggish behavior of the U.S. economy have reduced the projected federal budget surpluses for fiscal year 2001 and future years. The Congressional Budget Office CBO projects that the total budget surplus in fiscal year 2001 will be 153 billion-122 billion lower than CBO estimated in May. About two-thirds of the decrease results from new legislation one-third comes from a weaker economy and other factors. Despite that drop, if the 153 billion surplus materializes in 2001, it will equal 1.5 percent of gross domestic product GDP, the second largest surplus as a share of the economy since 1951. With a smaller total surplus, CBO now projects a small on-budget deficit for this year. The on-budget accounts exclude the spending and revenues of Social Security and the Postal Service. If current tax and spending policies are maintained and the economy performs as CBO estimates, CBO projects small deficits or surpluses in on-budget accounts for the next four years however, steadily increasing on-budget surpluses reemerge by the middle of the decade. The projected surpluses would allow all public debt that is available for redemption to be retired by 2010.
- Economics and Cost Analysis