CBO Figures Indicate Lower Revenues, Not Higher Spending, Account For The Large Deficit

Publication Date: January 2004

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Joel Friedman; Isaac Shapiro

Research Area: Banking and finance

Keywords: Economic projections; Fiscal future; Financial projections

Type: Report

Abstract:

The Congressional Budget Office’s new report on the federal budget demonstrates that the return of large budget deficits is more a reflection of diminished revenues than, as some have recently implied, of increased spending. CBO estimates that revenues in 2004 will drop to historically low levels, their lowest level as a share of the economy since the Truman Administration. Spending, in contrast, will not be at a particularly high level. As a share of the economy, spending will be lower in 2004 than it was in every year from 1975 through 1996.