The United States continues to face profound budgetary and economic challenges. CBO discusses those challenges in the Budget and Economic Outlook: An Update—an annual report, released today, which presents the agency’s updated budget and economic projections for the current year and the next decade.
Last week the President signed into law the Budget Control Act of 2011, which establishes caps on discretionary spending through 2021. This blog post provides some background information about discretionary spending and a brief description of the new caps and how they will be enforced.
What is discretionary spending used for?
The federal budget deficit was about $1.1 trillion in the first 10 months of fiscal year 2011, CBO estimates in its latest Monthly Budget Review$66 billion less than the roughly $1.2 trillion deficit incurred through July 2010.
CBO projects that in fiscal year 2011, outlays for Social Security will total $733 billion, one-fifth of the federal budget. About 56 million people will receive Social Security benefits this year. Most are retired workers, their spouses, their children, or their survivors, who receive payments through Old-Age and Survivors Insurance (OASI).
The Energy Policy Act of 2005 established incentives to encourage private investment in innovative technologies, including advanced nuclear energy facilities. Much of the government’s support for the construction of nuclear power plants is offered in the form of federal loan guarantees.
Last night President Obama and Congressional leaders reached an agreement on a measure that would reduce future budget deficits and raise the limit on the public debt in a series of steps.
In a blog post on Wednesday, I discussed CBO’s analysis of plans to reduce future budget deficits put forward by House Speaker John Boehner and Senate Majority Leader Harry Reid as part of proposals to raise the limit on the national debt.
In less than a week, according to projections from the Treasury Department, the U.S. government will begin defaulting on some of its obligations unless the Congress and the President increase the statutory ceiling on federal debt.