MidSession Budget Status

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Mid-Session Budget Status

• Jim Nussle
• Chairman
• House Budget Committee

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OMB Estimates Show Economy Delays Return to
Surplus
1

• Fiscal year 2002 deficit of 165 billion.
• Return to surpluses in fiscal year 2005.
• Almost all of the change in the surplus estimates
  this year is the result of slower-than-expected
  revenue collections.
• Return to surpluses contingent on sticking to the
  policies in the House budget resolution.

Prepared by the House Budget Committee.
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OMB Budget EstimatesJuly 2002 Update
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(By fiscal year in billions of dollars)
Prepared by the House Budget Committee. Figures
based on OMB Midsession Policy.
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3
Largest Cause of Deficits in 2002 and 2003 is the
Economy
Tax Cut
War Costs
Spending, Incl. Stimulus Package
Weak Economy
62
44
2002
2003
Source House Committee on the Budget. Figures
based on OMB Midsession Policy.
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Restraining Spending Key to Budget
Surpluses Taxes as Share of Economy Still High
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Prepared by the House Budget Committee. Figures
based on OMB Midsession Policy.
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Continuing Recent Spending Growth
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Leads to Perpetual Deficits
Billions of Dollars
Surplus
Presidents Budget Path
2.0 Trillion Surplus Reduction
Continued 1998-2003 Discretionary Growth of 7.4
Deficits
Fiscal Year
2003 is assumed to be level of Presidents
request.
Prepared by the House Budget Committee.
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Democrat Spending Proposals
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Would Make Matters Worse
Billions of Dollars
Surplus
Presidents Budget Path
Continued Discretionary Growth of 7.4 a year
Democrat Calls for Higher Spending
Deficits
Fiscal Year
Prepared by the House Budget Committee.
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10-Year Surplus Estimates Drop Sharply From
5.6 Trillion Last January to 1.7 Trillion
This July
Tax Cut
Economy
Spending
Remaining Surplus
Source House Committee on the Budget. Figures
based on OMB Midsession Baseline.
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Where Has the Surplus Gone?A Review of the Past
18 Months
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(By fiscal year in billions of dollars)
Prepared by the House Budget Committee. Figures
based on OMB Midsession Baseline.
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9
Factors Beyond Our Control Responsible for
Surpluses Becoming Deficits
Billions of dollars
February 2001 Baseline Surplus
February 2001 less Legislation
Unanticipated Changes Total 1 Trillion
July 2002 Baseline Surplus
Prepared by the House Budget Committee. Figures
based on OMB Midsession Baseline.
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Importance of Spending Restraint
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• The House Budget Resolution assumes that total
  appropriations will not exceed 759 billion for
  fiscal year 2003.
• Increased base levels of government spending will
  make balanced budgets unachievable in the
  near-term.
• Deficit spending will reverse the progress we
  have made in paying off the debt.

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A Record of Accomplishment 453 Billion in Debt
Paid Off Prior to War and Recession
(Cumulative Reduction in Billions of Dollars)
End of fiscal year reduction in Debt Held by the
Public. Prepared by the House Budget Committee.
Source 98-01 Actual.
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Continuing Recent Spending Growth Adds 2
Trillion in Public Debt
Trillions of Dollars
Continued 1998-2003 Discretionary Growth of 7.4
Additional 2 Trillion Public Debt
Presidents Budget Path
Fiscal Year
2003 is assumed to be level of Presidents
request.
Prepared by the House Budget Committee.