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CONGRESSIONAL BUDGET OFFICE
REVISED BASELINE BUDGET PROJECTIONS FOR FISCAL YEARS 1999-2008
 
 
MARCH 3, 1998
 

In the course of preparing its annual analysis of the President's budget, the Congressional Budget Office (CBO) typically updates its baseline projections to take account of new information from the President's budget and other sources. The revised March projections usually become the baseline for the budget resolution.

CBO's new March projections are not materially different from those issued in its January 1998 report, The Economic and Budget Outlook: Fiscal Years 1999-2008. The only major change since January is an increase in revenues from 1998 through 2000 to reflect more rapid inflows into the Treasury than either CBO or the Administration had anticipated (see Table 1). That change, however, is enough to shift CBO's projections from small annual deficits to small annual surpluses during those years. CBO expects that the budget surplus for this year will be nearly $8 billion. Assuming that current policies do not change and that the economy stays on the anticipated course, surpluses are projected to rise eventually to $138 billion in 2008.

Both federal spending and revenues are expected to total around $1.7 trillion this year--or approximately 20 percent of gross domestic product (GDP). Under CBO's baseline assumptions, projected outlays as a percentage of GDP fall gradually to 18.3 percent by 2008. Revenues decline to 19.3 percent of GDP by 2003 and remain at that level through 2008 (see Table 2).
 

Table 1.
Changes in CBO Baseline Deficits or Surpluses Since January 1998 (By fiscal year, in billions of dollars)
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
January 1998 Baseline Deficit (-) or Surplus -5 -2 -3 14 69 54 71 75 115 129 138
 
Technical Changes
Revenues 15 10 5 a a a a a a a a
Outlays
Discretionary a a a a a a a a a a a
Mandatory a a 1 2 4 1 2 1 a a a
Net interest 1 a -1 -1 -1 -1 -1 a a a a
Subtotal 2 -1 a 1 3 1 1 1 a a a
 
Total Technical Changes 13 11 5 -1 -3 -1 -1 -1 a a a
 
March 1998 Baseline Surplus 8 9 1 13 67 53 70 75 115 130 138
SOURCE: Congressional Budget Office.
NOTE: Numbers in the table may not add to totals because of rounding.
a. Less than $500 million.
 
Table 2.
CBO Revised Baseline Projections (By fiscal year)
Actual
1997		 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
In Billions of Dollars
 
Revenues
Individual income 737 783 792 810 840 886 922 974 1,027 1,083 1,143 1,207
Corporate income 182 197 200 200 200 203 209 216 224 232 241 250
Social insurance 539 573 600 625 651 679 710 743 781 817 856 892
Other 120 127 147 149 155 161 167 173 177 181 187 191
 
Total 1,579 1,680 1,738 1,784 1,847 1,930 2,008 2,105 2,208 2,314 2,426 2,540
 
Outlays
Discretionarya 548 558 561 565 564 560 576 592 609 626 643 661
Mandatory
Social Security 362 376 391 409 428 449 471 495 522 551 582 614
Medicare 208 218 231 244 268 277 306 330 367 377 417 448
Medicaid 96 101 108 115 123 131 141 152 165 179 194 210
Other 231 257 273 293 305 319 332 344 362 370 378 399
Subtotal 896 951 1,004 1,060 1,123 1,176 1,250 1,322 1,417 1,477 1,570 1,672
 
Net interest 244 245 247 243 237 230 226 221 215 209 202 194
Offsetting receipts -87 -82 -82 -85 -91 -103 -97 -101 -107 -113 -119 -126
 
Total 1,601 1,672 1,730 1,782 1,833 1,863 1,954 2,035 2,134 2,199 2,297 2,402
 
Deficit (-) or Surplus -22 8 9 1 13 67 53 70 75 115 130 138
 
Memorandum:
On-budget Deficit (-) or Surplus -103 -92 -104 -121 -117 -72 -94 -88 -96 -64 -59 -59
Debt Held by the Public 3,771 3,774 3,781 3,793 3,795 3,743 3,706 3,651 3,591 3,491 3,375 3,251
 
As a Percentage of Gross Domestic Product
 
Revenues
Individual income 9.3 9.4 9.1 8.9 8.8 8.9 8.9 8.9 9.0 9.0 9.1 9.2
Corporate income 2.3 2.4 2.3 2.2 2.1 2.0 2.0 2.0 2.0 1.9 1.9 1.9
Social insurance 6.8 6.8 6.9 6.9 6.9 6.8 6.8 6.8 6.8 6.8 6.8 6.8
Other 1.5 1.5 1.7 1.6 1.6 1.6 1.6 1.6 1.5 1.5 1.5 1.5
 
Total 19.8 20.1 19.9 19.6 19.4 19.4 19.3 19.3 19.3 19.3 19.3 19.3
 
Outlays
Discretionarya 6.9 6.7 6.4 6.2 5.9 5.6 5.5 5.4 5.3 5.2 5.1 5.0
Mandatory
Social Security 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.6 4.6 4.6 4.7
Medicare 2.6 2.6 2.6 2.7 2.8 2.8 2.9 3.0 3.2 3.1 3.3 3.4
Medicaid 1.2 1.2 1.2 1.3 1.3 1.3 1.4 1.4 1.4 1.5 1.5 1.6
Other 2.9 3.1 3.1 3.2 3.2 3.2 3.2 3.2 3.2 3.1 3.0 3.0
Subtotal 11.2 11.4 11.5 11.7 11.8 11.8 12.0 12.1 12.4 12.3 12.5 12.7
 
Net interest 3.1 2.9 2.8 2.7 2.5 2.3 2.2 2.0 1.9 1.7 1.6 1.5
Offsetting receipts -1.1 -1.0 -0.9 -0.9 -1 -1.0 -0.9 -0.9 -0.9 -0.9 -0.9 -1.0
 
Total 20.1 20.0 19.8 19.6 19.3 18.8 18.8 18.7 18.7 18.4 18.3 18.3
 
Deficit (-) or Surplus -0.3 0.1 0.1 b 0.1 0.7 0.5 0.6 0.7 1.0 1.0 1.1
 
Memorandum:
On-budget Deficit (-) or Surplus -1.3 -1.1 -1.2 -1.3 -1.2 -0.7 -0.9 -0.8 -0.8 -0.5 -0.5 -0.5
Debt Held by the Public 47.3 45.1 43.3 41.7 39.9 37.7 35.6 33.5 31.4 29.2 26.9 24.8
SOURCE: Congressional Budget Office.
NOTE: Numbers in the table may not add to totals because of rounding.
a. The baseline assumes that discretionary spending will equal the statutory caps on discretionary spending in 1999 through 2002 and will increase at the rate of inflation in succeeding years.
b. Less than 0.05 percent.