The FY2011 Federal Budget
LIBRARY OF CONGRESS WASHINGTON DC CONGRESSIONAL RESEARCH SERVICE
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While considering the FY2011 budget, Congress faces very large budget deficits, rising costs of entitlement programs, and significant spending on overseas military operations. In FY2008 and FY2009, the enactment of financial intervention and fiscal stimulus legislation helped to bolster the economy, though it increased the deficit. While GDP growth has returned in recent quarters, unemployment remains elevated and government spending on automatic stabilizer programs, such as unemployment insurance and income support, remains higher than historical averages. Between FY2000 and FY2009, federal spending accounted for approximately 20 of the economy GDP and federal revenues averaged 18 of GDP. In FY2009, the U.S. government spent almost 3.5 trillion 25 of GDP and collected 2.1 trillion in revenue 15 of GDP. Between FY2008 and FY2009, outlays increased by 535 billion, while revenues fell by 419 billion. The deficit in FY2009 was 1,413 billion, or 9.9 of GDP, sharply higher than deficits in recent years. The current economic climate poses a challenge to policymakers shaping the federal budget. Numerous actions taken by the federal government in FY2008 and FY2009 have had major effects on the budget, including two major economic stimulus measures and a variety of programs within the Federal Reserve, Treasury, and Federal Deposit Insurance Corporation FDIC. The impact of this legislation, along with any additional legislation enacted, will influence deficit levels in FY2010 and beyond. The final costs of federal responses to this turmoil will depend on the pace of economic recovery, how well firms with federal credit guarantees weather future financial shocks, and government losses or gains on its asset purchases.
- Administration and Management