CBO reviews its projections of federal revenues, outlays, and deficits at the end of every fiscal year and compares them with actual budgetary outcomes. The review incorporates the effects of legislation that was enacted after the projections were prepared.
Largely because of the uncertainties associated with the pandemic and the implementation of substantial legisla¬tion, some of CBO’s projections for 2021 differed from the actual results by much larger amounts than usual. In its March 2020 projections for fiscal year 2021, CBO underestimated revenues by 15 percent and overestimated outlays by 4 percent. As a result, CBO’s projection of the deficit in 2021 was off by 3.9 percent of gross domestic product (GDP). By comparison, the mean absolute error in deficit projections reported for 1985 to 2020 equaled 1.0 percent of GDP.