The Budget for Fiscal Year 2003

Publication Date: September 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Banking and finance

Type:

Abstract:

President Bush released his original fiscal year (FY) 2003 budget proposals on February 4, 2002. The proposals included a deficit of $80 billion. The President’s proposals included tax cuts and spending increases to stimulate the economy, rapid increases in defense and homeland security spending, and little growth in other areas of discretionary spending. The Congressional Budget Office (CBO) released its FY2003 annual budget report at the end of January 2002.

Since then, higher than planned spending and lower than expected receipts have raised the deficit estimates substantially. The Administration’s Mid-Session Review (July 2003) raised the estimated deficit to $455 billion for FY2003. CBO’s August 2003 Update had a baseline deficit estimate of $401 billion for the year.

The Bush Administration’s early 2002 economic stimulus proposal was superseded by stimulus legislation adopted by Congress on March 7, 2002 (The Job Creation and Worker Assistance Act of 2002; H.R. 3090, P.L. 107-147), that would increase the then estimated deficit (from baseline levels) by $43 billion in FY2003.

Also in early March 2002, CBO released reestimates of the President’s policy proposals Using CBO’s assumptions, which produced an estimated deficit of $121 billion for FY2003.

The House cleared its FY2003 budget resolution (H.Con.Res. 353) on March 20, 2002; the Senate did not pass the Senate Budget Committee’s budget resolution (S.Con.Res. 100). The resolutions contained deficits ranging from $46 billion (House) to $92 billion (Senate Budget Committee).

The Administration’s FY2004 budget (February 2003) submission, raised the FY2003 deficit estimate to $304 billion. The CBO January 2003 budget report estimated a $199 billion deficit for FY2003.

On February 13, 2003, four-plus months into the new fiscal year, Congress completed work on FY2003 appropriations with the adoption of the Consolidated Appropriations Resolution for FY2003 (CAR2003; H.J.Res. 2). The legislation funded the 11 remaining regular appropriations (out of 13; two were adopted in October 2002, Defense and Military Construction) for the remainder of the fiscal year. The President signed the resolution on February 20 (P.L. 108-7). This action followed the adoption of eight continuing resolutions on appropriations that funded those activities not covered by regular appropriations.

In late spring 2003, Congress adopted tax cut legislation as outlined in the reconciliation instructions in the FY2004 budget resolution (H.Con.Res. 95). The legislation (P.L. 108-27; May 28, 2003) would increase the deficit by an estimated $350 billion through 2013 and by $61 billion in FY2003. Somewhat earlier, Congress provided $79 billion in supplemental appropriations, which increased FY2003 outlays by an estimated $42 billion. The legislation (P.L. 108-11; April 16, 2003) provided funding for defense, homeland security, and financial relief to the States. On July 7, 2003, the President proposed a second, less than $2 billion, FY2003 supplemental.