The Economic and Budget Outlook: Fiscal Years 1998 - 2007.

After four years of sharp decline, the federal budget deficit will rise modestly over the next years if current laws and policies do not change, according to the latest projections of the Congressional Budget Office. CBOs overall economic outlook has changed little since its last forecast, published in May 1996. But its new projections of the deficit are significantly lower than last years. Four major factors account for the improved budget outlook revised estimates of the growth of spending for Medicare and Medicaid the enactment of welfare reform legislation higher projected revenues particularly in the near term and the lower debt-service costs that result from lower deficits and a lower level of publicly held federal debt.