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1 Analysis of the President's 2021 Budget 1 (March 30, 2020)

handle is hein.congrec/cboanlpb0001 and id is 1 raw text is: An AnMARCH 2020 An Analysis of the President's 2021 Budget On February 10, 2020, the Administration submitted its annual set of budgetary proposals to the Congress. In this report, the Congressional Budget Office examines how those proposals, if enacted, would affect budgetary outcomes over the 2020-2030 period relative to CBO's most recent baseline budget projections.1 CBO's baseline budget projections and its analysis of the Administration's proposals are based on the economic forecast that the agency developed in January 2020, and they incorporate legislation enacted through March 6, 2020, as well as technical adjustments based on certain new information (such as program details released in conjunction with the President's budget).2 They do not take into account any other economic or budgetary information. Specifically, CBO's latest budget projec- tions and this analysis do not account for changes to the nation's economic outlook and fiscal situation arising from the recent and rapidly evolving public health emer- gency related to the novel coronavirus. 1. For CBO's most recent baseline budget projections, see Congressional Budget Office, Baseline Budget Projections as of March 6, 2020 (March 2020), www.cbo.gov/publication/56268. Those projections extend from 2020 to 2030 and are based on the assumption that current laws governing federal spending and revenues will generally remain in place. CBO's baseline is intended to provide a benchmark that policymakers can use to assess the potential effects of future policy decisions on federal spending and revenues and, therefore, on deficits and debt. 2. See Congressional Budget Office, The Budget and Economic Outlook: 2020 to 2030 (January 2020), www.cbo.gov/ publication/56020. According to CBO's projections, the Administration's proposals would have the following major effects: The federal deficit would be $2.1 trillion smaller under the President's budget than in CBO's baseline over the 2021-2030 period, CBO projects (see Table 1). (That outcome would be the net result of a reduction in spending that would more than offset a reduction in revenues.) As a percentage of gross domestic product (GDP), federal debt held by the public would be 6 percentage points lower in 2030 under the President's budget than in CBO's baseline (but still 13 percentage points higher than it was in 2019). The cumulative deficit under the President's policies over the 2021-2030 period would total $11.0 trillion, according to CBO's calculations. That estimate is almost twice the Administration's estimate of $5.6 trillion, mostly because CBO projects lower revenues over that period as a result of differences between its economic forecast (which was finalized in January 2020) and the Administration's forecast. Total outlays would be reduced, relative to CBO's baseline, by $3.0 trillion (or 5 percent) over the 2021-2030 period. Outlays for nondefense discretionary programs would account for $1.7 trillion of that reduction. Mandatory spending for health care would be reduced by $0.6 trillion, in part by reducing some of Medicare's payments to health care providers. 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.

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