An Analysis of the President’s Budgetary
Proposals for Fiscal Year 2009
March 2008
Unless otherwise indicated, the years referred to in this report are fiscal years.
Numbers in the text and tables may not add up to totals because of rounding.
Supplemental data for this analysis are available on the Congressional Budget Office’s Web site, under "Current Budget Projections."
Preface
This Congressional Budget Office (CBO) analysis of the President’s budgetary proposals for fiscal year 2009—prepared at the request of the Senate Committee on Appropriations—was produced by the staffs of CBO’s Budget Analysis, Macroeconomic Analysis, and Tax Analysis Divisions under the supervision of Peter Fontaine, Robert Dennis, and Thomas Woodward, respectively. CBO prepared the baseline revenue estimates and the estimates of selected revenue proposals; the Joint Committee on Taxation (JCT) prepared most of the estimates of the President’s revenue proposals. The report expands on CBO’s preliminary analysis, which was released on March 3, 2008.
Barry Blom of CBO’s Projections Unit was the lead author for Chapter 1 under the supervision of Jeffrey Holland; Pamela Greene and Robert Arnold wrote major portions of that chapter. Benjamin Page of the Macroeconomic Analysis Division coordinated the economic analysis and wrote Chapter 2 and Appendixes B and C under the supervision of Douglas Hamilton. Robert Arnold, Paul Burnham, Ufuk Demiroglu, Mark Lasky, Larry Ozanne, Frank Russek, Marika Santoro, Kurt Seibert, and Sven Sinclair carried out the modeling. Amber Marcellino wrote Appendix A with assistance from Pamela Greene. The contributors to the revenue and spending projections are listed in Appendix D.
Kate Kelly and Leah Mazade edited the report. Maureen Costantino designed and produced the cover and prepared the report for publication. Lenny Skutnik printed the initial copies, Linda Schimmel coordinated the print distribution, and Simone Thomas prepared the electronic version for CBO’s Web site.
Contents
CBO’s Estimates of the President’s Budget for Fiscal Year 2009
Policy Proposals Affecting Revenues
Policy Proposals Affecting Mandatory Spending
Policy Proposals Affecting Discretionary Spending
Differences Between CBO’s and the Administration’s Economic Forecasts and Budget Estimates
The Economy Under the President’s Budget and Under CBO’s Baseline Policy Assumptions
How Federal Budget Policies Affect the Economy
Changes in CBO’s Baseline Since January 2008
The Potential Economic Effects of Selected Proposals in the President’s 2009 Budget
Contributors to the Revenue and Spending Projections
1-2. CBO’s Estimate of the President’s Budget for 2009
1-3. CBO’s Estimate of the Effect of the President’s Budget on Baseline Deficits or Surpluses
1-5. CBO’s Estimate of the President’s 2009 Proposals Affecting Medicare
1-6. Proposed Changes in Discretionary Budget Authority in the President’s Budget, 2007 to 2009
2-2. CBO’s Estimates of Effective Federal Marginal Tax Rates on Labor Income
2-3. CBO’s Estimates of Effective Federal Marginal Tax Rates on Capital Income
2-4. CBO’s Estimates of How the President’s Budget Would Affect Real Gross National Product
2-5. Budgetary Implications of the Macroeconomic Effects
A-1. CBO’s Baseline Budget Projections
A-2. Changes in CBO’s Baseline Projections of the Deficit or Surplus Since January 2008
A-3. CBO’s Current and Previous Economic Projections for Calendar Years 2008 to 2018
1-1. Total Deficit or Surplus, 1965 to 2018
1-2. Discretionary Budget Authority in Recent Decades and Under Policies Proposed in the President’s 2009 Budget
1-3. CBO’s and the Administration’s Forecasts of Wages and Salaries
2-1. CBO’s Estimates, Using Various Models, of How the President’s Budget Would Affect the Deficit or Surplus After Accounting for Economic Effects
2-2. Estimated Effects of the President’s Budget on the Deficit or Surplus and on the Effective Tax Rates on Capital Income and Labor Income
