Budget Impact on Economy
The Economic Impact of the President’s 2013 Budget
April 2012
CONGRESS OF THE UNITED STATES
Contents
Overview How the Government’s Fiscal Policies Can Affect the Economy Fiscal Policies and Output in the Short Run Fiscal Policies and Output in the Long Run How the President’s Budgetary Proposals Would Affect the Economy Effects on the Economy Through 2017 Effects on the Economy After 2017 Economic Models and Results Estimated Economic Effects and Their Budgetary Implications Through 2017 Estimated Economic Effects and Their Budgetary Implications After 2017 Comparison with CBO’s Estimate of the President’s 2012 Budget Appendix: CBO’s Methodology for Analyzing the Economic Impact of the President’s 2013 Budget About This Document 1 2 2 3 3 3 4 8 8 9 10 13 19
Tables
1. Projected Deficits Under CBO’s March 2012 Baseline and CBO’s Estimate of the President’s Budget With and Without Macroeconomic Effects 2. CBO’s Estimates of Effective Federal Marginal Tax Rates on Capital Income 3. CBO’s Estimates of Effective Federal Marginal Tax Rates on Labor Income 4. CBO’s Estimates of How the President’s Budget Would Affect Inflation-Adjusted Gross National Product 5. Difference in Projected Deficits Under CBO’s March 2012 Baseline and CBO’s Estimate of the President’s Budget With and Without Macroeconomic Effects A-1. CBO’s Estimates of How the President’s Budget Would Affect Inflation-Adjusted Gross National Product, 2018 to 2022 2 5 7 8 9 17
CBO
The Economic Impact of the President’s 2013 Budget
ach year, after the President releases his annual budget request, the Congressional Budget Office (CBO) analyzes the proposals and, using its own estimating procedures and assumptions, projects what the federal budget would look like over the next 10 years if those proposals were adopted. CBO usually provides those results in two parts: The first part presents an examination of the proposals’ budgetary impact without considering their effects on the U.S. economy.
April 2012
CONGRESS OF THE UNITED STATES
Contents
Overview How the Government’s Fiscal Policies Can Affect the Economy Fiscal Policies and Output in the Short Run Fiscal Policies and Output in the Long Run How the President’s Budgetary Proposals Would Affect the Economy Effects on the Economy Through 2017 Effects on the Economy After 2017 Economic Models and Results Estimated Economic Effects and Their Budgetary Implications Through 2017 Estimated Economic Effects and Their Budgetary Implications After 2017 Comparison with CBO’s Estimate of the President’s 2012 Budget Appendix: CBO’s Methodology for Analyzing the Economic Impact of the President’s 2013 Budget About This Document 1 2 2 3 3 3 4 8 8 9 10 13 19
Tables
1. Projected Deficits Under CBO’s March 2012 Baseline and CBO’s Estimate of the President’s Budget With and Without Macroeconomic Effects 2. CBO’s Estimates of Effective Federal Marginal Tax Rates on Capital Income 3. CBO’s Estimates of Effective Federal Marginal Tax Rates on Labor Income 4. CBO’s Estimates of How the President’s Budget Would Affect Inflation-Adjusted Gross National Product 5. Difference in Projected Deficits Under CBO’s March 2012 Baseline and CBO’s Estimate of the President’s Budget With and Without Macroeconomic Effects A-1. CBO’s Estimates of How the President’s Budget Would Affect Inflation-Adjusted Gross National Product, 2018 to 2022 2 5 7 8 9 17
CBO
The Economic Impact of the President’s 2013 Budget
ach year, after the President releases his annual budget request, the Congressional Budget Office (CBO) analyzes the proposals and, using its own estimating procedures and assumptions, projects what the federal budget would look like over the next 10 years if those proposals were adopted. CBO usually provides those results in two parts: The first part presents an examination of the proposals’ budgetary impact without considering their effects on the U.S. economy.