CBO Analysis of President’s FY17 Budget Request
The Congressional Budget Office (CBO) released its analysis of the President’s FY17 budget request this week. The analysis is based on CBO’s economic projections and estimating models, rather than on the Administration’s. And the estimates of the effects of the President’s tax proposals were prepared by the staff of the Joint Committee on Taxation (JCT).
In its analysis, CBO estimates that under the President’s proposals, the federal budget deficit would decline in FY17 and FY18. CBO projects the 10-year deficit would be $2.4T smaller under the President’s FY17 budget primarily as a result of higher tax revenue that Republicans oppose. After that, however, outlays would increase more quickly than revenues so deficits would grow as would federal debt levels. CBO’s projections are not as “rosy” as the White House projects as CBO’s are based on assumptions that all current tax and spending policies remain unchanged while the White House assumes positive economic effects from its budget proposal.