A CBO Study. The Budget and Economic Outlook: An Update
CONGRESSIONAL BUDGET OFFICE (U S CONGRESS) WASHINGTON DC
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The deficit for 2006 will be notably lower than the Congressional Budget Office CBO estimated in March, when it issued its previous projections of the federal budget. The broad fiscal outlook for the coming decade, however, has not changed materially since then. The underlying projections of outlays and revenues for future years are similar to those presented five months ago, with the exception that the current projections of spending from this year years appropriations are now higher reflecting the extrapolation of recent supplemental funding primarily for the war in Iraq and hurricane relief. CBO now expects the 2006 deficit to total 260 billion a 58 billion decline from the deficit recorded for 2005 see Summary Table 1. Relative to the size of the economy, the deficit this year is expected to equal 2.0 percent of gross domestic product GDP, down from 2.6 percent in 2005. CBOs current estimate of the deficit for 2006 is 112 billion lower than the amount that it estimated when it analyzed the Presidents budgetary proposals in March. Higher-than-anticipated revenues, mostly from individual and corporate income taxes, account for the bulk of that improvement. CBO now expects 2006 revenues to exceed its March estimate including the Presidents proposals by 99 billion, or about 4 percent. At the same time, outlays this year are expected to be 13 billion or less than 0.5 percent below CBOs March estimate including the impact of proposed supplemental appropriations, primarily because of lower-than-anticipated spending on the governments major health care programs, Medicare and Medicaid.
- Economics and Cost Analysis