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1 CBO's Projections of Federal Receipts and Expenditures in the National Income and Product Accounts 1 (July 2018)

handle is hein.congrec/cbopjfrx0001 and id is 1 raw text is: JULY 2018 CBO's Projections of Federal Receipts and Expenditures in the National Income and Product Accounts The federal government's fiscal transactions are recorded in two major sets of accounts: The Budget ofthe United States Government, which is prepared by the Office of Management and Budget, and the national income and product accounts (NIPAs), which are produced by the Department of Commerce's Bureau of Economic Analysis (BEA).' The federal budget is the framework generally used by executive branch agencies and the Congress; it is the presentation of budgetary activity that is most often discussed in the press. The NIPAs, by contrast, are not intended to help the government plan or manage its activities. Instead, those accounts provide a general framework for describing the U.S. economy and show how the federal government fits into that framework. The different purposes served by the federal budget and the NIPAs are examined briefly below.2 Each year, the Congressional Budget Office reports 10-year projections of federal revenues and outlays developed using the standard structure for budgetary accounting.3 This report presents those revenue and 1. See Mark Ludwick and Brendan Brankin, NIPA Translation of the Fiscal Year 2019 Federal Budget, Survey of Current Business, vol. 98, no. 3 (Bureau of Economic Analysis, March 2018), https://go.usa.gov/xU2vK; 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), https://go.usa.gov/xU2v8. 2. For a more thorough discussion, see Congressional Budget Office, CBO Projections ofFederal Receipts and Expenditures in the National Income and Product Accounts (May 2013), www.cbo. gov/publication/44140. 3. For CBO's most recent projections, see Congressional Budget Office, The Budget and Economic Outlook: 2018 to 2028 spending projections translated to the NIPA framework (see Table 1), and it compares CBO's baseline budget projections with those projections on a NIPA basis (see Table 2 on page 4). The conceptual differences between the budget accounts and the NIPAs over the 2018-2028 period (CBO's most recent baseline projection period) cause cumulative receipts in the NIPAs to exceed projected revenues in CBO's baseline by about 5 percent and expenditures to exceed outlays by about 6 percent. In the NIPAs, pro- jected expenditures exceed projected receipts by a total of $14.5 trillion; the deficits in CBO's baseline budget projections total $13.2 trillion over the same period. The Federal Budget The budget of the federal government is best understood as an information and management tool.4 Its main objectives are to assist lawmakers in policy deliberations, facilitate the management and control of federal activ- ities, and help the Treasury manage cash balances and (April 2018), www.cbo.gov/publication/53651, and An Analysis ofthe President' 2019 Budget (May 2018), www.cbo.gov/ publication/53884, which includes updated budget projections. As specified in law, and to provide a benchmark against which potential policy changes can be measured, CBO constructs its baseline 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 measures assets, liabilities, revenues, and expenses on an accrual basis. For more discussion, 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 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 sum to totals because of rounding.

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