Welcome to the third and final survey article on the history of CBO Projections. This is a special one – Deficits.
Just as we defined the last time, the Congressional Budget Office is an agency in the legislative branch of the United States Government tasked with providing economic projections on legislative proposals. The CBO was first started during the Nixon administration in the Budget Control Act of 1974.
For this series, we look at The Economic and Budget Outlook, an annual production of the CBO. Although, as we stated last time, outlays are the most important in terms of measuring government size (governments have the most control over their spending). Still, deficits are the most important – combining reasonable outlays with an economy which can provide the revenues necessary to pay for them.
The Economic and Budget Outlook Projections
Since 1996, CBO predictions have taken the form of a one year estimate followed by 10 years of projections. (Before that there were mainly only 5 years of projections). Here’s the current report, giving predictions for 2013 outlays and revenues, followed by projections of budgetary effects through 2023.
Many reports include multiple estimates – one for the “Baseline”, followed by their predictions of the most likely revenue effects of laws. As we stated in the last article, this deals with things like the “Doc Fix”, a ‘temporary’ Government reimbursement change which hasn’t been codified into law since it was first seen in 1997.
Doc Fixes (and their ilk) aside, Deficits are the most interesting and important projections from the CBO. As they incorporate both the revenue and outlay sides of the ledger, the estimates of deficits (and in some cases, surpluses) guide policy to a degree revenues and outlays alone never have. Only recently have discussions about capping the rate of spending because of phenomena like Hauser’s Law even been proposed. For wonky folks, this is quite an interesting development – and we’ll certainly keep our eyes on trends in how governments control spending.
A History of CBO Outlay Projections, Graphed Against Actual Spending
And now, onto the chart you’ve been waiting for – outlays, surpluses, and everything in between since 1976.
Warning: give it a second – unless you’re short on RAM – whenever you switch options. There’s a lot of data encapsulated in this chart.
The above visualization encapsulates every single outlay estimate made by the CBO since 1976. It’s a motion chart – in the bar and bubble graph sections you can drag the timeline to see how the actual revenue lined up with projections. You can follow individual projections by checking the boxes on the right side. If you hit the ‘Play’ triangle, you can see a quick overview of projections over time.
The methodology hasn’t changed since the first article. Go read it there.
Just like the last two times – if these look weird, blame Google:
1995: http://www.cbo.gov/publication/15689 (* End of 5 year projections)
1978: http://www.cbo.gov/publication/21328 (Dec, ’77)
1977: http://www.cbo.gov/publication/21376 (Dec, ’76, using extended inflation expectation)
1976: http://www.cbo.gov/publication/21058 (Path A, 6% GNP Growth, TQ Estimate: 86, 101.7)