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CBO's Projections of Federal Receipts and Expenditures in the National Income and Product Accounts 1 (August 2014)

handle is hein.congrec/cbo1848 and id is 1 raw text is: AUGUST 2014 CBO's Projections of Federal Receipts and Expenditures in the National Income and Product Accounts The fiscal transactions of the federal government are recorded in two major sets of accounts. One is The Budget ofthe United States Government, prepared by the Office of Management and Budget. It is the framework generally used by executive branch agencies and the Congress and is the presentation of the federal government's budgetary activity that is most often discussed in the press. The other set of accounts is the national income and product accounts (NIPAs), produced by the Department of Commerce's Bureau of Economic Analysis (BEA).' The purposes served by the budget and the NIPA accounting frameworks, their conceptual differences, and the relationship between those two sets of data are examined briefly below and more thoroughly in previous publications by the Congressional Budget Office (CBO).2 CBO recently reported its latest baseline projections of federal revenues and outlays in the stan- dard structure for budget accounting.3 This report 1. See Mark S. Ludwick and Andrew L. Cook, NIPA Translation of the Fiscal Year 2015 Federal Budget, Survey of Current Business, vol. 94, no. 4 (Bureau of Economic Analysis, April 2014), www.bea.gov/scb/toc/0414cont.htm; and Bruce E. Baker and Pamela A. Kelly, A Primer on BEAs Government Accounts, Survey of Current Business, vol. 88, no. 3 (Bureau of Economic Analysis, March 2008), www.bea.gov/scb/toc/0308cont.htm. 2. See, for example, Congressional Budget Office, CBO's Projections ofPederal Receipts and Expenditures in the National Income and Product Accounts (May 2013), www.cbo.gov/publication/44140. 3. See Congressional Budget Office, An Update to the Budget and Economic Outlook: 2014 to 2024 (August 2014), www.cbo.gov/ publication/45653. presents those projections in the NIPA framework (see Table 1) and shows the differences between the two presentations (see Table 2 on page 4). The Federal Budget The budget of the federal government is best understood as an information and management tool.4 Its main objec- tives are to provide information that can assist lawmakers in their policy deliberations, to facilitate the management and control of federal activities, and to help the Treasury manage its cash balances and determine its borrowing needs. It focuses primarily on cash flows, recording the inflow of revenues and the outflow of spending over a given period. The main period of interest for the budget is the federal fiscal year, which runs from October 1 through September 30. The budget incorporates a few exceptions to cash-based accounting in cases in which lawmakers have decided that alternative approaches would improve the budget's usefulness as a decisionmaking tool. For example, when the federal government makes direct loans or provides loan guarantees, tracking annual cash flows provides a misleading view of the true costs or savings associated 4. Another approach to assessing the government's fiscal performance is reflected in the annual Financial Report ofthe United States Government (www.fms.treas.gov/fr), which uses an accrual basis of accounting to measure assets, liabilities, revenues, and expenses. See Congressional Budget Office, Comparing Budget and Accounting Measures of the Federal Government' Fiscal Condition (December 2006), www.cbo.gov/publication/ 18262. Note: Numbers in the text and tables may not add up to totals because of rounding.

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