June 7, 2012 Changes in CBOs Baseline Projections Since January 2001 Each year, the Congressional Budget Office

(CBO) issues baseline projections of federal spending and revenues for the following 10 years. Those projections are not intended as a forecast of future outcomes; rather, they are estimates of spending and revenues under the laws that are in effect at that time and are designed to provide a benchmark against which to measure future policy changes. In January 2001, CBOs baseline projections showed a cumulative surplus of $5.6 trillion for the 20022011 period. The actual results have differed from those projections because of subsequent policy changes, economic developments that differed from CBOs forecast, and other factors. As a result, the federal government ran deficits from 2002 through 2011. The cumulative deficit over the 10-year period amounted to $6.1 trilliona swing of $11.7 trillion from the January 2001 projections. The table below summarizes the differences between CBOs baseline projections in January 2001 and the actual results for each of the years over the 20022011 period. (CBO published a similar table in May 2011; this document updates the comparison using actual results for 2011.) The table divides changes to those baseline projections between those that stemmed from legislative actions and those that resulted from factors related to economic or other, technical assumptions. Such categorizations were done each year as new projections were preparedno new analysis has been done to compile this table. Thus, the revisions attributable to legislation represent CBOs estimates of costs or savings associated with new laws relative to the baseline projections that were current at the time of enactment. The effects of legislation may have turned out to be different from the original estimates either because those baseline projections were off-target or because the results of the legislation deviated from what CBO anticipated, but no adjustments have been made in this table to those initial assessments of the legislation. To illustrate this point, the table reports total outlays associated with the Troubled Asset Relief Program (TARP) of $189 billion, which reflects CBOs initial baseline estimate of the costs of the program. The agencys latest estimate of the costs of the TARP, released in March 2012, takes into account all activities that have occurred since the programs implementation and equals $32 billion (including some costs that will be incurred after 2011). The subsequent revisions to CBOs initial projection of TARP outlays were considered technical changes, and the entry in the table attributable to legislation has not been changed to reflect that updated estimate. In fact, for most legislation, there is no way to identify the actual impact on spending or revenues over time, and a retroactive analysis of actual costs is not possible. Consequently, the table is only a very rough approximation of how changes since January 2001 have contributed to the swing from projected surpluses to actual deficits over the 20022011 period and should not be interpreted as a precise tracking of all the components of that cumulative change over the past decade. Because the actual budget results are now known for all of the years covered by CBOs January 2001 baseline projections, this table is now complete and no further updates will be required.

Changes in CBO's Baseline Projections of the Surplus Since January 2001

(Billions of dollars, by fiscal year)

June 7, 2012
Total, 20022011 27,886 22,277 5,610

2001 January 2001 Baseline Projections Revenues Outlays Total Surplus Changes to Revenue Projections Legislative EGTRRA JGTRRA WFTRA Economic Stimulus Act of 2008 ARRA Tax Act of 2010 Other Subtotal, legislative Subtotal, economic and technical Total Revenue Changes Changes to Outlay Projections Legislative Discretionary Mandatory EGTRRA JGTRRA Medicare Prescription Drug Programa Economic Stimulus Act of 2008 TARP ARRA Tax Act of 2010 Other Mandatory Subtotal, mandatory Net Interest Subtotal, legislative Economic and Technical Discretionary Mandatory Net Interest Subtotal, economic and technical Total Outlay Changes Total Impact on Surplus Actual Surplus or Deficit (-) Memorandum: Total Legislative Changes Total Economic and Technical Changes 2,135 1,853 281

2002 2,236 1,923 313

2003 2,343 1,984 359

2004 2,453 2,056 397

2005 2,570 2,137 433

2006 2,689 2,184 505

2007 2,816 2,243 573

2008 2,955 2,320 635

2009 3,107 2,396 710

2010 3,271 2,475 796

2011 3,447 2,558 889

-70 0 0 0 0 0 -1 _____ -71 -72 _______ -143

-31 0 0 0 0 0 -43 _____ -75 -308 _______ -382

-84 -53 0 0 0 0 -42 _____ -179 -381 _______ -561

-101 -135 0 0 0 0 -29 _____ -265 -308 _______ -573

-100 -78 -27 0 0 0 -7 _____ -211 -205 _______ -416

-126 -21 -37 0 0 0 -6 _____ -190 -92 _______ -282

-142 -14 -20 0 0 0 -46 _____ -222 -26 _______ -248

-151 -17 -16 -114 0 0 -76 _____ -373 -58 _______ -431

-158 -11 -12 -12 -65 0 -104 _____ -363 -639 _______ -1,002

-176 -4 -8 12 -180 0 -58 _____ -414 -695 _______ -1,109

-117 4 -1 9 -8 -354 -50 _____ -517 -627 _______ -1,144

-1,186 -328 -121 -106 -253 -354 -460 _____ -2,808 -3,339 _______ -6,147

2 4 0 0 0 0 0 0 8 _____ 11 1 _____ 13

50 6 0 0 0 0 0 0 14 _____ 21 4 _____ 75

120 7 9 0 0 0 0 0 35 _____ 51 14 _____ 185

171 7 12 4 0 0 0 0 26 _____ 49 35 _____ 255

221 7 5 6 0 0 0 0 32 _____ 49 60 _____ 331

270 10 * 27 0 0 0 0 44 _____ 81 92 _____ 443

287 10 * 40 0 0 0 0 34 _____ 84 130 _____ 501

339 9 * 44 38 0 0 0 30 _____ 121 174 _____ 634

417 10 * 47 4 184 90 0 74 _____ 409 225 _____ 1,051

546 11 0 50 0 5 115 0 87 _____ 269 287 _____ 1,102

526 12 0 53 0 * 55 37 101 _____ 259 353 _____ 1,138

2,948 89 26 272 42 189 261 37 477 _____ 1,392 1,375 _____ 5,715

1 -6 1 _____ -4 _______ 10 -153 128

2 24 -13 _____ 13 _______ 88 -471 -158

-5 20 -24 _____ -9 _______ 176 -737 -378

-5 3 -16 _____ -18 _______ 237 -810 -413

-3 * 7 _____ 4 _______ 335 -751 -318

-20 3 45 _____ 28 _______ 471 -753 -248

-27 -34 47 _____ -15 _______ 486 -733 -161

-8 -15 52 _____ 28 _______ 662 -1,094 -459

-4 103 -29 _____ 71 _______ 1,122 -2,123 -1,413

-44 -37 -40 _____ -121 _______ 981 -2,089 -1,293

-45 -20 -28 _____ -93 _______ 1,045 -2,188 -1,300

-160 46 1 _____ -112 _______ 5,602 -11,749 -6,140

-85 -68

-150 -321

-364 -372

-520 -290

-542 -209

-633 -120

-723 -11

-1,007 -87

-1,413 -710

-1,516 -574

-1,655 -533

-8,523 -3,226

Sources: Congressional Budget Office, Joint Committee on Taxation (JCT). Notes: EGTRRA = Economic Growth and Tax Relief Reconciliation Act of 2001; JGTRRA = Jobs and Growth Tax Relief Reconciliation Act of 2003; WFTRA = Working Families Tax Relief Act of 2004; ARRA = American Recovery and Reinvestment Act of 2009; TARP = Troubled Asset Relief Program. Projections of outlays and revenues reflect CBO's and JCT's original scoring of legislation regarding spending and tax policies since 2001. * = between -$500 million and $500 million. a. Includes other effects of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.