Will CBO Find Another $1 Trillion?
November 15, 2000
By raising its economic growth forecasts, the Congressional Budget Office may wind up increasing its projected 10-year budget surplus forecasts by $1 trillion.
That's not good news for those politicians dedicated to reining in federal spending. They fear Congress will launch huge new spending initiatives.
- CBO economists may raise economic growth forecasts for the next decade to an annual rate of 3.3 percent from 2.7 percent -- which would result in significant growth in the expected surplus.
- In July, the CBO set the 10-year surplus at a projected $4.561 trillion.
- For each 0.1 percentage point increase in economic growth over the period, the 10-year surplus would be credited with an additional $211 billion in revenue.
- According to the Los Angeles Times, CBO economists have presented their latest draft of economic assumptions to a panel of independent advisers.
"There is a real risk having those numbers come out at this point, ahead of a lame-duck session," warned Rep. Mark Green (R-Wis.), a member of the House Budget Committee. "There will be a strong temptation to resolve the problems quickly by simply spending more money."
Source: Nicholas Kulish and Yochi J. Dreazen, "CBO May Boost 10-Year Growth Forecast and Add $1 Trillion to Projected Surplus," Wall Street Journal, November 15, 2000.
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