Uncertainty in Budget Projections

Publication Date: February 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Banking and finance

Type:

Abstract:

January 2001 budget reports from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) project new 10-year (FY2002-2011) cumulative total baseline surpluses ranging from $4.996 trillion (OMB) to $5.610 trillion (CBO). The projections assume no changes in current policy, follow the constraints on baseline estimates imposed by law, include assumptions about underlying economic (and some budget) conditions over the next 10 years, and include assumptions about how the budget will interact with those underlying economic conditions.

These projections, as acknowledged by both agencies, are not meant to predict future budget outcomes. They provide a set of numbers against which proposed and adopted policy changes can be measured. CBO in its January 2001 budget report is very clear about the uncertainties surrounding its "midrange" baseline budget projections for the fiscal years 2002 through 2011.