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Unless otherwise indicated, all years referred to in this report are fiscal years. Details in the text and tables of this report may not add to totals because of rounding. The source of data concerning the President's budget is the Office of Management and Budget. The source of other data, unless otherwise noted, is the Congressional Budget Office. The Balanced Budget and Emergency Deficit Control Act of 1985 is also referred to in this volume more briefly as the Balanced Budget Act. |
This analysis of the President's budget for fiscal year 1987 was prepared at the request of the Senate Committee on Appropriations. The report discusses the President's policy proposals in terms of changes from the Congressional Budget Office (CBO) baseline budget projections for 1987-1991. It provides estimates of the budgetary impact of the Administration's proposals using CBO's economic assumptions and technical estimating methods.
This report was prepared by the staff of the Budget Analysis, Fiscal Analysis, and Tax Analysis Divisions under the supervision of James L. Blum, William J. Beeman, and Rosemary D. Marcuss, respectively. Paul Van de Water was responsible for the Summary; George Iden, John Peterson, and Frank Russek for Chapter I; Rosemary D. Marcuss for Chapter II; Michael A. Miller for Chapter HI; Charles E. Seagrave and Robert A. Sunshine for Chapter IV; Richard P. Emery for Appendix A; Kathleen M. O'Connell for Appendix B; and Kathy A. Ruffing for Appendix C. Principal contributors are listed in Appendix D.
The authors wish to thank the editorial staff for its assistance in
the final production of the report. Thelma L. Jones coordinated the preparation
of the report. The final manuscript was prepared for publication by Barbara
Bakari, Debra Blagburn, Linda Brockman, Cindy Cleveland, Judy Freeman,
Janice Johnson, Dorothy J. Kornegay, Simone McKay, and Earnestine Miles.
Rudolph G. Penner
Director
February 1986
SUMMARY
CHAPTER I - THE ADMINISTRATION'S ECONOMIC ASSUMPTIONS
CHAPTER II - THE ADMINISTRATION'S REVENUE PROPOSALS
CHAPTER III - THE ADMINISTRATION'S DEFENSE BUDGET
CHAPTER IV - THE ADMINISTRATION'S NONDEFENSE BUDGET
APPENDIX A - THE ADMINISTRATION'S CREDIT INITIATIVES
APPENDIX B - CBO REVENUE REESTIMATES
APPENDIX C - CBO OUTLAY REESTIMATES
APPENDIX D - MAJOR CONTRIBUTORS TO THE PREPARATION OF THIS REPORT
The Congressional Budget Office (CBO) estimates that the federal government deficit under Administration policies would decline from $204.7 billion in 1986 to $159.7 billion in 1987 and $40.1 billion in 1991. The Administration's program would reduce total spending and the deficit substantially compared with CBO's baseline projections. Using CBO's economic assumptions and technical estimating methods, however, the resulting deficit exceeds the 1987 target in the Balanced Budget and Emergency Deficit Control Act of 1985 (Public Law 99-177) by $15.7 billion (see Summary Figure 1 and Summary Table 1).
CBO has reestimated the Administration's deficit figures for two main reasons. First, CBO assumes a lower rate of real economic growth and, until 1991, higher inflation-adjusted interest rates than does the Administration. (CBO and Administration economic assumptions are compared in Chapter I.) Second, based on the historical relation between appropriations and outlays, CBO estimates that spending for national defense will be significantly greater than shown in the President's budget.
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