The United States faces daunting economic and budgetary challenges. The economy has struggled to recover from the recent recession: The pace of growth in output has been anemic compared with that during most other recoveries and the unemployment rate has remained quite high. Federal budget deficits and debt have surged in the past two years, owing to a combination of the severe drop in economic activity, the costs of policies implemented in response to the financial and economic problems, and an imbalance between revenues and spending that predated the recession.
January 2011
The nation’s network of highways plays a vital role in the United States. In 2007, the public sector spent $146 billion to build, operate, and maintain highways in the United States. About three-quarters of that total was provided by state and local governments. One-quarter was provided by the federal government, primarily through the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU).
To attract and retain the personnel it needs, the federal government must offer competitive compensation packages. For the military to recruit and retain qualified personnel, the compensation system must adequately reward service members for their training and skills as well as for the rigors of military life, particularly the prospect of wartime deployment.
The recent public discussion about the potential effects of repealing the major health care legislation enacted last March has revealed some misunderstandings about CBO’s procedures in analyzing legislation. Let me try to explain a bit.
CBO’s estimates of the budgetary impact of legislation can take a number of different forms:
I participated this morning in a panel discussion about budget deficits at the annual meeting of the American Economic Association. The panelists were asked to talk about what should, or will, or might, happen regarding the fiscal imbalance and the likely economic impact. Of course, CBO doesn’t make policy recommendations, so I couldn’t talk about what should happen. We also don’t make political forecasts—finding economic and budget projections quite difficult enough—so I couldn’t talk about what will happen.
The federal budget deficit was $371 billion in the first quarter of fiscal year 2011, CBO estimates in its latest Monthly Budget Review, $18 billion less than the shortfall in the same period of fiscal year 2010. Revenues were 9 percent higher than they were a year ago, whereas outlays were only 3 percent higher. Later this month, CBO will issue new budget projections for fiscal year 2011 and the following 10 years.
CBO and the staff of the Joint Committee on Taxation (JCT) have not yet developed a detailed estimate of the budgetary impact of H.R. 2, the Repealing the Job-Killing Health Care Law Act, which would repeal the major health care legislation enacted in March 2010. Yesterday, we released a preliminary analysis of that legislation indicating that, over the 2012-2021 period, the effect of enacting H.R.
The House of Representatives is planning to consider a bill (H.R. 2) to repeal the major health care legislation enacted last Marchthat is, the Patient Protection and Affordable Care Act (PPACA) and the provisions of the Health Care and Education Reconciliation Act of 2010 that are related to health care. CBO has not yet developed a detailed estimate of the budgetary impact of repealing that legislation, although it is working with the staff of the Joint Committee on Taxation (JCT) to complete such an estimate in the near future. Because Congressional deliberations on H.R.