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1 An Analysis of the President's 2019 Budget 1 (May 2018)

handle is hein.congrec/anypsb0001 and id is 1 raw text is: An Analysis of the President's 2019 Budget Summary On February 12, 2018, the Administration submitted its annual set of budgetary proposals to the Congress; subsequent amendments were transmitted on April 13.1 In this report, the Congressional Budget Office examines how budgetary outcomes under those proposals would compare with CBO's adjusted baseline budget projections. (Those projections extend from 2018 to 2028 and are based on the assumption that current laws regarding fed- eral spending and revenues will generally remain in place.) According to CBO's analysis, the Administration's pro- posals would have the following effects: a Federal debt held by the public would equal 86 percent of gross domestic product (GDP) in 2028 under the President's budget, compared with 96 percent that year in the agency's baseline and about 78 percent this year. 0 The federal deficit would be $2.9 trillion smaller under the President's budget than in CBO's baseline during the 2019-2028 period, CBO estimates. By contrast, the Administration estimates that the deficit would be $5.2 trillion smaller than the baseline amount during that period. 0 The two largest changes over the 2019-2028 period would be a $2.1 trillion reduction in nondefense discretionary spending (excluding that designated for overseas contingency operations, or OCO) and a $1.3 trillion reduction in mandatory spending for health care. 1. For more details about the subsequent amendments, see Office of Management and Budget, Supplementals, Amendments, and Releases: Fiscal Year 2019, Estimate #1 (April 13, 2018), https://go.usa.gov/xQQZt. CBO conducted this analysis in collaboration with the staff of the Joint Committee on Taxation (JCT). The analysis is based on CBO's economic projections and both agencies' budget estimates, rather than on the Administration's.2 Because of the analytical challenges created by the recent enactment of major legislation and the limited time available since then, the agency has not incorporated the macroeconomic effects of the President's proposals in this report and does not plan to do so this year. Moreover, some of the Administration's proposals were not specific enough for CBO and JCT to make their own estimates of the effects on the budget. Projections Under the President's Budget for 2018 and 2019 According to CBO's calculations, the proposals in the President's budget would have a very small effect on the deficit that the agency currently estimates for 2018. If the proposals were enacted, the deficit in 2018 would total $792 billion (or 3.9 percent of GDP), an amount nearly identical to the deficit in CBO's baseline projec- tions (see Table 1). By comparison, the deficit in 2017 was $665 billion (or 3.5 percent of GDP). In 2019, CBO estimates, the deficit under the President's budget would rise to $955 billion (or 4.5 percent of GDP)-about $17 billion less than the shortfall pro- jected in the baseline. That difference is largely attrib- utable to proposals to reduce funding for nondefense discretionary programs. Those proposals would lower such funding by $177 billion (or 24 percent) relative to the amount in the baseline, reducing discretionary 2. Those economic projections were published in Congressional Budget Office, The Budget and Economic Outlook: 2018 to 2028 (April 2018), www.cbo.gov/publication/53651. Since then, CBO has made a number of relatively small changes to its baseline budget projections. For more details, see page 11. Note: Unless otherwise indicated, all years referred to are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. Numbers may not sum to totals because of rounding.

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