CBO Projects Larger Budget
Deficits
August 30, 2002-New federal budget projections released
by the Congressional Budget Office (CBO) Aug. 27 indicate
that sharp declines in tax revenues and double-digit growth
in spending will produce an even larger than expected budget
deficit in FY 2002. CBO's mid-year review, The
Budget and Economic Outlook: an Update, projects deficits
of $157 billion for FY 2002 and $145 billion in FY 2003, assuming
current tax and spending policies remain unchanged. In March
of this year, CBO had projected surpluses of $5 billion for
FY 2002 and $6 billion for FY 2003.
CBO projects that tax revenues will fall by $131 billion
in FY 2002, a 6.6 percent decrease that is the largest percentage
decline in tax revenues since 1946. At the same time, CBO
predicts outlays will rise in FY 2002 by $153 billion (8 percent).
This includes a 13 percent increase in discretionary spending,
split almost evenly between defense (up $43 billion) and non-defense
(up $41 billion) programs.
The new deficit projections will likely help drive further
efforts by the White House and conservative Republicans on
Capitol Hill to limit spending. GOP conservatives in the House
are pressing the leadership to move the Labor-HHS appropriations
bill as soon as Congress returns from the August recess. However,
it now appears the House Labor-HHS-Education Subcommittee,
which was tentatively scheduled to consider the bill on Sept.
5, will not act until the second week of September at the
earliest.
Information:
Dave Moore, Senior Director
AAMC Government Relations
dbmoore@aamc.org
(202) 828-0525
Get Washington Highlights
in your Inbox!
| 
