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1 Dan Ready, et al., Budgetary Outcomes under Alternative Assumptions about Spending and Revenues 1 (May 16, 2023)

handle is hein.congrec/bdgtocud0001 and id is 1 raw text is: he Congressional Budget Office regularly publishes baseline budget projections that show how federal spending, revenues, and deficits would look under the assumption that the laws governing spending and taxes generally remain unchanged.1 This report shows how different assump- tions about future legislated policies would affect those budget projections. CBO's projections are not intended to be a forecast of budgetary outcomes; rather, they are meant to provide a benchmark that policymakers can use to assess the potential effects of policy decisions. The projections follow procedures set in law as well as long-standing guidelines. For example, laws require the agency to incorporate the assumption that future discretionary funding will match amounts most recently provided, with adjustments for inflation. Those provisions also require CBO to incorporate the assumption that laws governing mandatory spending will generally continue beyond their statutory expiration.2 CBO must also incor- porate the assumption that payments from trust funds would be made even after a fund's balance was exhausted and annual dedicated revenues were inadequate to fund them. By contrast, projections of revenues generally 1. For CBO's most recent baseline projections, see Congressional Budget Office, An Update to the Budget Outlook: 2023 to 2033 (May 2023), www.cbo.gov/publication/59096. For details about how CBO constructs the baseline, see Congressional Budget Office, CBO Explains How It Develops the Budget Baseline (April 2023), www.cbo.gov/publication/58916. 2. For a list of the expiring programs assumed to continue in CBO's baseline, see Congressional Budget Office, 10-Year Budget Projections (May 2023), www.cbo.gov/publication/59096#data. reflect scheduled changes to provisions affecting the tax code, including changes in statutory tax rates.3 This report analyzes the budgetary implications of alter- native assumptions about future funding for discretion- ary programs and the continuation of certain revenue provisions currently scheduled to change. The estimated effects of the alternative assumptions do not account for any resulting changes to the economy or for how those changes could affect the budget. Some of the alternatives could result in significant changes to the economy that, in turn, would affect the budget. Such effects would depend on the combination of alternative assumptions that were considered because some assumptions would interact in ways that would change their economic and budgetary impact. This report includes 10 alternative assumptions, 3 about discretionary spending and 7 about revenue policies.4 The effects on the deficit of any single alternative range from a decrease of $2.4 trillion to an increase of $2.5 tril- lion over the 2024-2033 period. Most of the alternatives examined in this report would increase projected deficits and debt.5 3. The Joint Committee on Taxation publishes a list of scheduled changes to tax provisions. See Joint Committee on Taxation, List of Expiring Federal Tax Provisions 2022-2034, JCX-1- 23 (January 18, 2023), www.jct.gov/publications/2023/jcx-1-23/. 4. A complete list of the provisions included in each of the alternatives is available in the supplemental data that accompany this report at www.cbo.gov/publication/59154#data. 5. For a discussion of the consequences of higher deficits and debt, see Congressional Budget Office, The Economic Effects of Waiting to Stabilize Federal Debt (April 2022), www.cbo.gov/ publication/57867. Notes: Unless this report indicates otherwise, 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 in the text and tables may not add up to totals because of rounding. The Congressional Budget Office has updated this report since its original publication. The update is listed at the end of the report.

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