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1 Chris R. Edwards, The President's Fiscal Year 1995 Budget: Revenue, Entitlement Spending Rising Fast 1 (1994)

handle is hein.taxfoundation/srcixz0001 and id is 1 raw text is: TAXtll FOUNDATION February 1994 Number 28 The President's Fiscal Year 1995 Budget: Revenue, Entitlement Spending Rising Fast BY (hris R. F'd'ards 1ix loiFndatioln Figure 1 Federal Outlays and Receipts (Constant 1991 Dollars) $1,600 $1,500 $1,400 $1,300 0 0 6 $1,200 $1,100 $1,000 $900 $800 The Clinton administration has released its fiscal year 1995 budget anid good news about the nation's rebounding economy. The growing economy has led to substantial improvements in deficit projections compared to just one year ago. On outlays of $1,518 billion and receipts of $1,342 billion in fiscal year 1999, the FY'95 deficit is projected to be $176 billion. Last fall SoAul'C.: Tax FOnlll(1,tiOln ()MBII. the administration had projected the FY'95 deficit would be $207 billion. Fven though the president's budget does not make dramatic tax or spending changes, Figure 1 and 7able I show significant growth in both receipts and outlays over the five-year budget plan. Federal outlays will grow as demands on entitlement programs-including Social Security, Medicare, and Medicaid-continue to expand. Federal receipts are projected to grow as tax revenue flows into the Treasury from stronger economic growth and higher tax rates enacted in last year's budget. In fact, Figure 2 shows that per-capita federal taxes will rise from $4,824 in FY'94 to $5,146 in FY'99, in constant 1994 dollars. Per-capita individual income tax revenute, which grew a total of only 4.4 percent over the period FY'80 to FY'93, is projected to grow 9.9 percent over the five-year budget plan. Per-capita social insurance taxes, which take the form of payroll deductions and fund Social Security and Medicare, rise 7.1 percent in the five-year budget projections. (See lable 2.) (Figures and Tablcs in this report do not include changes in receipts or outlays that would occur tnder the president's health care plan. See page 5) The Deficit li uure . compares the deficit forecast made by the Congressional Budget Office (CBO) in March 1993 following the introduction of last year's budget, a forecast made by the Office of Management and Budget in September 1993 following enactment of the budget, and new projections released in the FY'99 budget. The difference between the latter two forecasts is primarily attriblutablc to a stronger cconomy than was anticipated. '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94e '95e '96e'97e'98e '99e -..j

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