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September 23, 2004 Honorable John M. Spratt Jr.
Dear Congressman: As requested in your letter of September 14, 2004, the Congressional Budget Office has estimated the effect on its most recent baseline projections of the policy alternatives that you specified. The attached table shows CBO's estimate of revenues, outlays, the total budget deficit, and debt held by the public incorporating the following adjustments to its September 2004 baseline:
If you would like further details on the information provided with this letter, we would be pleased to provide them. The staff contact is Jeff Holland. Sincerely, Douglas Holtz-Eakin
Attachment
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Budgetary Projections Incorporating the Assumptions Specified by Congressman Spratt in his Letter of September 14, 2004 | |||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | Total, 2005- 2009 |
Total, 2005- 2014 |
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In Billions of Dollars | |||||||||||||||
Revenuesa | 1,871 | 2,065 | 2,222 | 2,344 | 2,461 | 2,582 | 2,718 | 2,823 | 2,958 | 3,097 | 3,244 | 11,673 | 26,514 | ||
Outlays | |||||||||||||||
Discretionary spendingb | 888 | 940 | 946 | 958 | 977 | 991 | 1,004 | 1,027 | 1,042 | 1,070 | 1,096 | 4,812 | 10,052 | ||
Mandatory spendinga | 1,247 | 1,299 | 1,370 | 1,451 | 1,533 | 1,625 | 1,717 | 1,828 | 1,919 | 2,053 | 2,186 | 7,278 | 16,981 | ||
Net interest | 159 | 178 | 218 | 257 | 283 | 305 | 324 | 341 | 361 | 380 | 402 | 1,241 | 3,049 | ||
Total | 2,293 | 2,418 | 2,534 | 2,665 | 2,793 | 2,922 | 3,044 | 3,197 | 3,322 | 3,503 | 3,684 | 13,332 | 30,081 | ||
Deficit | -422 | -353 | -312 | -321 | -333 | -339 | -326 | -374 | -364 | -406 | -439 | -1,658 | -3,567 | ||
Debt Held by the Public | 4,334 | 4,699 | 5,027 | 5,361 | 5,706 | 6,058 | 6,397 | 6,782 | 7,157 | 7,575 | 8,027 | n.a. | n.a. | ||
As a Percentage of GDP | |||||||||||||||
Revenuesa | 16.2 | 16.8 | 17.2 | 17.3 | 17.4 | 17.4 | 17.5 | 17.4 | 17.5 | 17.5 | 17.6 | 17.2 | 17.4 | ||
Outlays | |||||||||||||||
Discretionary spendingb | 7.7 | 7.6 | 7.3 | 7.1 | 6.9 | 6.7 | 6.5 | 6.3 | 6.2 | 6.1 | 5.9 | 7.1 | 6.6 | ||
Mandatory spendinga | 10.8 | 10.6 | 10.6 | 10.7 | 10.8 | 10.9 | 11.1 | 11.3 | 11.3 | 11.6 | 11.9 | 10.7 | 11.1 | ||
Net interest | 1.4 | 1.4 | 1.7 | 1.9 | 2.0 | 2.1 | 2.1 | 2.1 | 2.1 | 2.2 | 2.2 | 1.8 | 2.0 | ||
Total | 19.8 | 19.6 | 19.6 | 19.7 | 19.7 | 19.7 | 19.6 | 19.7 | 19.6 | 19.8 | 20.0 | 19.7 | 19.7 | ||
Deficit | -3.6 | -2.9 | -2.4 | -2.4 | -2.3 | -2.3 | -2.1 | -2.3 | -2.1 | -2.3 | -2.4 | -2.4 | -2.3 | ||
Debt Held by the Public | 37.5 | 38.2 | 38.9 | 39.6 | 40.3 | 40.8 | 41.2 | 41.8 | 42.3 | 42.9 | 43.5 | n.a. | n.a. | ||
Memorandum: | |||||||||||||||
Deficit in CBO's Baseline | |||||||||||||||
In billions of dollars | -422 | -348 | -298 | -308 | -318 | -312 | -298 | -200 | -70 | -75 | -65 | -1,584 | -2,294 | ||
As a percentage of GDP | -3.6 | -2.8 | -2.3 | -2.3 | -2.2 | -2.1 | -1.9 | -1.2 | -0.4 | -0.4 | -0.4 | -2.3 | -1.5 | ||
Debt Held by the Public in CBO's Baseline | |||||||||||||||
In billions of dollars | 4,334 | 4,694 | 5,009 | 5,329 | 5,660 | 5,984 | 6,295 | 6,506 | 6,588 | 6,675 | 6,753 | n.a. | n.a. | ||
As a percentage of GDP | 37.5 | 38.2 | 38.8 | 39.4 | 39.9 | 40.3 | 40.5 | 40.1 | 38.9 | 37.8 | 36.6 | n.a. | n.a. | ||
SOURCE: Congressional Budget Office. | |||||||||||||||
a. Assumes enactment of revenue proposals contained in the President's budget for fiscal year 2005 and that the current exemption amount for the Alternative Minimum Tax is extended and, together with the AMT tax brackets, is indexed for inflation after 2004. Several of the proposals affect estimates of refundable tax credits, which are incorporated into the projections for mandatory spending. | |||||||||||||||
b. Reflects all discretionary budget authority enacted to date for fiscal years 2004 and 2005. Future funding is assumed at the levels proposed in the President's budget for 2005. (Since the Administration's budget only extended through 2009, CBO extrapolated such levels through 2014.) Discretionary outlays also include spending to reflect potential costs of military operations in Iraq and Afghanistan (see Table 1-6 in The Budget and Economic Outlook: An Update, September 2004). | |||||||||||||||