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CBOs Projections of Federal Receipts and Expenditures in the National Income and Product Accounts 1 (September 2016)

handle is hein.congrec/cbo3158 and id is 1 raw text is: i SEPTEMBER 2016 CBO's Projections of Federal Receipts and Expenditures in the National Income and Product Accounts he fiscal transactions of the federal government are recorded in two major sets of accounts that are conceptu- ally quite different. One set is the Budget of the United States Government, prepared by the Office of Management and Budget. The budget is the framework generally used by executive branch agencies and the Congress and is the presentation of the federal government's budgetary activ- ity 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 NIPAs and the relationship between the two sets of accounts are examined briefly below and more thoroughly in previous publications of the Congressional Budget Office.2 CBO recently reported its latest baseline projections of federal revenues and outlays using the standard structure for budget accounting.' This report presents those projections 1. See, for example, Mark S. Ludwick and Ann W. Miller, NIPA Translation of the Fiscal Year 2017 Federal Budget, Survey of Current Business, vol. 96, no. 4 (Bureau of Economic Analysis, April 2016), http://go.usa.gov/xWHT3 (PDF, 805 KB); and Bruce E. Baker and Pamela A. Kelly, BEA Briefing: A Primer on BEA's Government Accounts, Survey of Current Business, vol. 88, no. 3 (Bureau of Economic Analysis, March 2008), http://go.usa.gov/ xWHTA (PDF, 240 KB). 2. See Congressional Budget Office, CBO ' Projections of Federal Receipts and Expenditures in the National Income and Product Accounts (May 2013), www.cbo.gov/publication/44140. using the NIPA framework (see Table 1) and shows how the two presentations differ (see Table 2 on page 4). Over the 2016-2026 projection period spanned by CBO's baseline, conceptual differences cause receipts in the NIPAs to be greater than revenues in the budget by about 5 per- cent and expenditures in the NIPAs to exceed outlays in the budget by about 7 percent.4 Projected expenditures in the NIPAs exceed projected receipts by a total of $10.7 trillion, whereas deficits in CBO's baseline budget projections total $9.2 trillion. The Federal Budget The budget of the federal government is best understood as an information and management tool.5 Its main objec- tives are to provide information that can assist lawmakers 3. See Congressional Budget Office, An Update to the Budget and Economic Outlook: 2016 to 2026 (August 2016), www.cbo.gov/ publication/ 51908. 4. As specified in law, and to provide a benchmark against which potential policy changes can be measured, CBO constructs its baseline estimates of federal revenues and spending under the assumption that current laws generally remain unchanged. 5. Another approach to assessing the government's fiscal performance is reflected in the annual Financial Report of the 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 andAccounting Measures of the Federal Government's 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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