NCPA - National Center for Policy Analysis

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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