The Congressional Budget Office regularly publishes baseline budget projections that show how federal spending, revenues, and deficits would look under the assumption that the laws governing spending and taxes generally remain unchanged. This report shows how different assumptions about future legislated policies would affect those budget projections.
CBO’s projections are not intended to be a forecast of budgetary outcomes; rather, they are meant to provide a benchmark that policymakers can use to assess the potential effects of policy decisions. The projections follow procedures set in law as well as long-standing guidelines. For example, laws require the agency to incorporate the assumption that future discretionary funding will match amounts most recently provided, with adjustments for inflation. Those provisions also require CBO to incorporate the assumption that laws governing mandatory spending will generally continue beyond their statutory expiration. CBO must also incorporate the assumption that payments from trust funds would be made even after a fund’s balance was exhausted and annual dedicated revenues were inadequate to fund them. By contrast, projections of revenues generally reflect scheduled changes to provisions affecting the tax code, including changes in statutory tax rates.
This report analyzes the budgetary implications of alternative assumptions about future funding for discretionary programs and the continuation of certain revenue provisions currently scheduled to change. The estimated effects of the alternative assumptions do not account for any resulting changes to the economy or for how those changes could affect the budget. Some of the alternatives could result in significant changes to the economy that, in turn, would affect the budget. Such effects would depend on the combination of alternative assumptions that were considered because some assumptions would interact in ways that would change their economic and budgetary impact.
This report includes 10 alternative assumptions, 3 about discretionary spending and 7 about revenue policies. The effects on the deficit of any single alternative range from a decrease of $2.4 trillion to an increase of $2.5 trillion over the 2024–2033 period. Most of the alternatives examined in this report would increase projected deficits and debt.