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CBO's Projections of Federal Receipts and Expenditures in the National Income and Product Accounts 1 (September 2017)

handle is hein.congrec/cbo3739 and id is 1 raw text is: .... .... SEPTEMBER 2017 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 that are concep- tually quite different. One set is The Budget of the United States Government, prepared by the Office of Manage- ment 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 activity that is most often discussed in the press. The other set of accounts is the national income and prod- uct 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 pre- vious publications of the Congressional Budget Office.2 CBO recently reported its latest baseline projections of federal revenues and outlays using the standard struc- ture for budget accounting.3 This report presents those 1. See 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), www.bea.gov/scb/toc/0416cont.htm; and Bruce E. Baker and Pamela A. Kelly, BEA Briefing: 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 Congressional Budget Office, CBO' Projections of Federal 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: 2017 to 2027 (June 2017), projections using the NIPA framework (see Table 1) and shows how the two presentations differ (see Table 2 on page 4). Over the 2017-2027 projection period spanned by CBO's baseline, conceptual differences cause receipts in the NIPAs to be greater than revenues in the budget by about 6 percent and expenditures in the NIPAs to exceed outlays in the budget by about 7 percent. Projected expenditures in the NIPAs exceed projected receipts by a total of $12.2 trillion, whereas deficits in CBO's base- line budget projections total $10.8 trillion. The Federal Budget The budget of the federal government is best understood as an information and management tool.4 Its main objectives 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 www.cbo.gov/publication/52801. 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. 4. Another approach to assessing the government's fiscal performance is used in the annual Financial Report of the United States Government (www.fms.treas.gov/fr), which employs an accrual basis of accounting to measure assets, liabilities, revenues, and expenses. See Congressional Budget Office, Comparing Budget and Accounting Measures of the Federal Governments Fiscal Condition (December 2006), www.cbo.gov/publication/18262. Note: Unless otherwise indicated, all years referred to in this report 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.

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