Recently, the federal government has been recording the largest budget deficits, as a share of the economy, since the end of World War II. As a result of those deficits, the amount of federal debt held by the public has surged. At the end of 2008, that debt equaled 40 percent of the nation’s annual economic output (as measured by gross domestic product, or GDP), a little above the 40-year average of 36 percent.
June 2010
Yesterday CBO released estimates of average federal tax rates—households’ federal tax liability divided by their income—in 2007 for households with various amounts of income. For each income category, the report also presents estimates of average before-tax and after-tax household income; the number of households; and that category’s share of taxes and income.
Earlier this week, CBO’s Acting Assistant Director for National Security, Matthew Goldberg, spoke to the National Commission on Fiscal Responsibility and Reform on the topic of discretionary defense spending.
CBO’s greatest asset is its staff, committed not only to its important work supporting the Congress, but also to significant causes outside the office.
The federal budget deficit was $941 billion during the first eight months of fiscal year 2010, CBO estimates in its latest monthly budget review, $51 billion less than the shortfall recorded over the same period last year. Both revenues and outlays were lower than the corresponding amounts during the same period last year, by 2 percent and 3 percent, respectively.
Lenny Skutnik is a household name belonging to an unassuming Congressional Budget Office employee who insists he “wasn’t a hero” when one winter day in 1982 he jumped from the shore into the icy Potomac River to save a drowning woman after an Air Florida flight crashed on takeoff. “I was just someone who helped another human being,” Lenny said later. While his rescue of Priscilla Tirado that day was extraordinary, Lenny has been helping the employees at CBO for more than 30 years.
A short time ago, I received an interesting letter from a young man in Michigan asking about federal budget deficits. I thought that perhaps other students would be interested in the kinds of questions he asked and how I answered him, so I’ve decided to share my letter to him with all of you. Here’s what I wrote:
1. What are the primary causes of the current federal budget deficits?